The COVID-19 Report is a compilation of coronavirus news, analysis, and insights from around the world to help life sciences and health care companies stay current in this challenging time.

In Tuesday's Report: FDA guidance on "mission critical" inspections, HHS rescinds FDA premarket review requirement for laboratory developed tests, new Chinese policies favorable to foreign debt funds, an analysis of European national payment moratoria measures, FDA issues EUA for investigational convalescent plasma, and other U.S .Congressional moves.

Tuesday, 25 August 2020

• On 19 August, the U.S. Food and Drug Administration (FDA) issued guidance providing some additional insight into how the agency will determine which drug and biologic inspections may take place during the COVID-19 pandemic because they are viewed as "mission critical." As we have previously discussed, the agency temporarily halted most inspections in March 2020 due to the COVID-19 pandemic and announced that the agency would evaluate “mission critical” inspections on a case-by-case basis. In July 2020, the agency announced that it would work toward resuming “prioritized” domestic inspections, where safe to do so. This new guidance document provides additional insight into FDA’s current thinking on prioritized and mission critical inspections and also explains steps to ensure the safety during domestic inspections, including pre-announced inspections. Foreign pre-approval and for-cause inspection assignments that are not deemed mission-critical remain temporarily postponed, and it remains unclear whether FDA will be doing. Read more here. (Authored by Jim Johnson)

• Also on 19 August, the U.S. Department of Health and Human Services (HHS) announced the rescission of guidances and other FDA issuances concerning premarket review of Laboratory Developed Tests (LDTs). HHS said FDA will not require premarket review of LDTs “absent notice-and-comment rulemaking, as opposed to through guidance documents, compliance manuals, website statements, or other informal issuances.” HHS added that those clinical laboratories seeking approval, clearance, or an emergency use authorization (EUA) for an LDT may still submit a premarket approval application/premarket notification/EUA request, but they are not required to do so. Although we expect FDA may continue to assert authority over LDTs – primarily through its authority to regulate device components used to make LDTs – this HHS announcement immediately upends more than 30 years of established FDA policy and constructively ends the agency’s authority over a wide variety of LDTs (including a large number of COVID-19 LDT diagnostic tests with already-issued EUAs) unless and until FDA completes a notice-and-comment rulemaking, or Congress changes the law. In any event, no matter what steps are taken by FDA or Congress in the future, the HHS notice will likely have additional, significant, and immediate implications. Read more here. (Authored by Randy Prebula)

• The Hogan Lovells Government Relations and Public Affairs group is tracking all of the latest developments in the U.S. Congress and relevant news stories. The House of Representatives, in a 257-150 vote, passed legislation providing US$25 billion to the United States Postal Service and bans any operational changes to the agency, while reversing already-enacted measures such as removing mail-sorting machines and collection boxes. The FDA reversed course and issued an EUA for investigational convalescent plasma for the treatment of COVID-19. The FDA had previously put the EUA on hold, but FDA Commissioner Hahn tweeted Monday afternoon that they reevaluated the EUA “based upon new incoming data” that the agency received. The move comes after President Trump and White House trade advisor Peter Navarro accused senior health officials at the FDA of being part of the “deep state” and halting the live-saving treatment to keep him from winning the 2020 election. Former Vice President Joe Biden accepted his party's nomination for president, laying blame for the scale of the COVID-19 pandemic in the U.S. squarely at President Trump's feet. Biden's plan includes a nationwide mask mandate, dramatically ramping up the production of coronavirus tests, ensuring ample amounts of personal protective gear and medical equipment, and securing medical supply chains. Read about these and other updates online here. (Authored by Ivan Zapien)

• This note summarizes key national payment moratoria measures and other reliefs related to the COVID-19 pandemic which have been introduced in various European countries and which are relevant in the context of structured finance transactions. (Authored by Julian Craughan)

• Even before the impact of COVID-19 took its toll, many Chinese companies were in desperate need of debt financing, leading foreign funds to seek out opportunities to invest in China's burgeoning private debt market. China recently put forward a slew of "opening-up" policies favorable to foreign debt funds, both onshore and offshore. China's non-performing loan market is already huge and, with the additional financial stresses brought about by the pandemic, is set to become even bigger. In the second of three extracts from their recent conversation, Hogan Lovells partners Andrew McGinty and Jonathan Leitch discussed with Wang Ping, the founder of Fujian Fidelity Law Firm, the trends and opportunities for foreign investors to become involved in China bankruptcy and insolvency processes. Read more here. (Authored by Jun Wei)

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