The American public knows that 2024 is a critical election year, with the next race for the presidency in November expected to be another face-off between President Biden and former President Trump. What the majority may not know quite as well, however, is how many important regulatory programs the Food and Drug Administration (FDA) has tasked itself with completing sometime this year. Given the centrality of much of FDA’s work to the average American consumer and all users of health care services, not to mention the various business stakeholders whose operations can be shaped in part by policy decisions executed by the agency, this blog post will preview upcoming milestones that FDA is expected to meet in 2024.
Today we also build on our December 2023 overview of many of FDA’s significant activities last year by looking forward into the coming months. By necessity, this summary of impending agency actions is selective; it also does not take into account FDA’s challenging oversight of tobacco manufacturers and retailers, or anything related to its mandate over animal foods and animal medicines. We hope that it provides a useful roadmap for our readers regarding some of the significant regulatory initiatives that are ongoing at our favorite federal agency.
Drugs, Biologics, and Regenerative Medicine
In addition to the often-difficult and ongoing enforcement work in the therapeutic product centers (an excellent snapshot of which you can read in the recent CDER Office of Compliance’s annual report for fiscal year 2023) that will continue in the new year, FDA has planned to undertake several significant rulemaking activities that are expected to have broad impacts on the industry.
One interesting upcoming notice of proposed rulemaking will seek to “establish registration and good importing practice requirements for commercial importers of drugs” – a mandate that Congress imposed on the agency with the 2012 amendments to the Food, Drug and Cosmetic Act (FD&C Act) but which has not yet been met, although FDA convened a public meeting in 2013 to gather relevant information from stakeholders. Based on the brief description of this expected rule, it will likely create several new regulatory burdens for importers, such as requirements for establishing a quality management system and for conducting more extensive due diligence on foreign drug suppliers and the drug products to be imported into the United States. In light of the reporting by CDER’s Office of Compliance that “95 new companies or facilities” were added to import alerts in FY2023 “to help stop drugs from entering the U.S.,” the agency appears to sorely need private company support to stem the influx of adulterated, misbranded, or unapproved drugs into the country. This proposed rule, if finalized, would be a critical step in that direction.
Another proposed rule that FDA has targeted for release this year is called “Distribution of Compounded Drug Products Under Section 503A of the [FD&C Act].” It would create regulations governing the statutory 5% limit on distribution of compounded human drug products out of a state in which they are compounded when the state does not sign a standard memorandum of understanding (MOU) that describes the responsibilities of a state Board of Pharmacy under the FD&C Act’s complex pharmacy compounding provisions. The agency and its state partners had been working on a standard MOU for compounding distributions for nearly two decades, with a pivot in the middle of that time period as a result of amendments made to the FD&C Act in late 2013 via a law called the Drug Quality and Security Act. But in 2021, a federal district court ruled that FDA had violated part of the Administrative Procedure Act (specifically, the Regulatory Flexibility Act) in its development of the final MOU. The agency responded to the court ruling by suspending its implementation of the program until it could do so through a notice-and-comment rulemaking process. FDA has now signaled its intent to initiate that rulemaking and to begin enforcing the interstate distribution limits following the effective date of any future Final Rule. This will be another crucial rulemaking for all compounding pharmacies (as well as larger institutions with in-house compounding pharmacies) to follow and comment on when the FDA’s proposed rule is published.
Finally, in the coming months we expect a ruling from the Ninth Circuit Court of Appeals in the agency’s 2022 appeal of a significant loss in an enforcement action against a California-based stem cell clinic initiated under FDA’s human cell, tissue, and cellular- and tissue-based product (HCT/P) regulations. We wrote about the agency’s HCT/P enforcement shift back in 2017 and since that time, FDA has sent numerous warning and untitled letters to purveyors of unapproved therapeutic products. It also has successfully defended another enforcement action against a stem cell clinic in Florida, which was upheld by the Eleventh Circuit Court of Appeals in mid-2021 (as FDA’s Dr. Peter Marks noted in this agency blog post reminding the public that regenerative medicine products need to be reviewed for safety and effectiveness like other medical products). The California district court decision being reviewed by the Ninth Circuit directly contradicts the outcome in the Florida/Eleventh Circuit case, so any further propagation of that circuit split could lead this matter to the U.S. Supreme Court. Oral arguments in the government’s appeal took place on February 7, 2024, and we are looking forward to the Ninth Circuit’s view of the relevant HCT/P implementing regulations and its opinion regarding whether FDA stepped out of bounds in the United States v. Cell Surgical Network et al. case.
Medical Devices and Diagnostics
As we have discussed elsewhere (see here and here), in late 2023 the agency released a long-anticipated proposed rule to bring laboratory-developed tests (LDTs) more clearly within the scope of its medical device regulatory requirements. The LDT proposed rule is highly controversial but also, arguably, highly necessary in light of the exponential growth of an industry that is offering products that directly compete with FDA-authorized in vitro diagnostic tests without going through similar premarket review processes. FDA has indicated that it intends to finalize this proposed rule in April 2024, and although such self-imposed deadlines often are aspirational and may not be met, in this case it is likely that FDA will try hard to meet its goal.
More specifically, with the upcoming election and the possibility that the balance of power could shift in both Congress and the White House, any federal regulations finalized within 60 “legislative days” of the start of the 119th Congress in January 2025 could be subject to the possibility of being overruled under the Congressional Review Act (CRA). Critically, once an agency rule has been overruled using the CRA procedures, the law also prohibits the rule from being reissued in “substantially” the same form unless Congress subsequently passes new legislation that authorizes such a reissued (or new) rule by the agency. We therefore expect, given the importance of the LDT rulemaking to FDA and the agency’s desire not to have to go back to the drawing board all over again, that FDA will seek to publish the Final Rule well ahead of the cut-off date for a hypothetical future CRA action that would otherwise likely threaten its implementation. And indeed, on March 1 the agency’s Final Rule was received by the White House Office of Management and Budget for review, which is the last stop before it is published in the Federal Register for the public.
On the flipside of this anticipated FDA regulatory expansion is the upcoming effective date of a user fee waiver that was enacted by Congress over a year ago as part of the Food and Drug Omnibus Reform Act (FDORA). As we reported when FDORA was passed, the legislation amended the FD&C Act to permit FDA to grant waivers of the annual device establishment registration fee to qualified small businesses when the agency determines that paying the registration fee would be a financial hardship. For purposes of this program, a qualified small business was defined as an entity that reported $1 million or less of gross receipts or sales in its most recent federal income tax return. Congress directed that this new waiver program be in effect and available for small businesses to apply beginning on October 1, 2024 (i.e., start of federal fiscal year 2025). However, in a draft guidance titled Select Updates for the Medical Device User Fee Small Business Qualification and Certification Guidance published on February 22, 2024, FDA stated that the only situation meeting the financial hardship standard is when the small business applicant is in active bankruptcy, an implementation decision that severely limits the availability of fee waivers. Public comments on this draft guidance should be submitted before April 22, 2024.
Human Food
Another highly impactful Final Rule that FDA is planning to publish in April 2024 is one that would set forth modernized criteria for labeling a food product as “healthy.” The agency’s proposed rule was released in 2022 (see our previous discussion here), and it had to extend the comment period to ensure that all interested stakeholders had an opportunity to weigh in. Among other things, it will be interesting to see whether FDA provides a longer phase-in period following the effective date of the Final Rule. In its proposal, the agency suggested a three-year compliance deadline but many commentators requested additional time to ensure that affected products could be analyzed and re-labeled before enforcement of the updated “healthy” definition begins.
Cross-Agency Initiatives
Finally, one important non-rulemaking activity for all FDA-regulated stakeholders to be aware of is the significant reorganization that was announced in 2023 but that still needs to move through various levels of executive branch approvals and procedural steps before it is fully implemented. FDA officials have described these plans as “the largest reorganization in FDA’s history” that will affect a majority of the agency’s units (15 out of 21 offices) and streamline a multitude of internal agency processes.
Although a huge number of changes are included in the agency’s reorganization proposal, perhaps most visible will be the fact that the field-based Office of Regulatory Affairs (ORA) – which anyone managing a recall of an FDA-regulated product knows well – will be renamed the Office of Inspections and Investigations (OII). Certain ORA staff will be shifted over into the compliance functions that exist within the individual FDA Centers, such that the footprint of full-time OII staff will be smaller than what is currently in place at ORA. The Centers will also become solely responsible for receiving, managing, and closing consumer and whistleblower complaints, rather than this work being split between the Centers and field operations. These procedural and functional shifts are expected to improve FDA’s complaint-handling systems and ultimately its ability to identify and react to public health problems. Several new offices also will be created in an effort to modernize and expedite the agency ability to respond to both emerging medical threats and emerging scientific developments. Notably, FDA leadership has emphasized the clarity and consistency that these changes will provide to employees as well as all external stakeholders – coming in the wake of several high-profile “fails” by the agency that apparently resulted from antiquated and siloed administrative systems (for example, see this report on the recent infant formula crisis). Accordingly, whether FDA achieves the commendable goals of this upcoming reorganization will be something that regulated industry, public safety advocates, and policymakers will be watching closely.
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