FDA: No lab-developed test final guidance in the near future

The FDA will not finalize its 2014 draft guidance on “FDA Notification and Medical Device Reporting of Laboratory Developed Tests” any time soon due to the changing political administration, according to a statement the agency provided to GenomeWeb. Intended to balance “patient protection with continued access and innovation,” the draft guidance is unpopular in the laboratory and pathologist communities, which view lab-developed tests (LDTs) as services that should be regulated under the Clinical Laboratory Improvement Amendments (CLIA) of 1988, rather than medical devices within the FDA’s regulatory purview. The FDA’s hesitation stems, in part, from the uncertainty of the new political landscape, including the views of the as-of-yet unnamed incoming HHS Secretary.

The FDA has taken the position that LDTs are subject to its enforcement discretion pursuant to the Medical Device Amendments because they are intended for clinical use and designed, manufactured, and used within one laboratory (see FDA seeks notification of lab developed tests, October 3, 2014). According to GenomeWeb, the FDA believes that gaps in the CLIA-authorized system present a public health risk. However, some senators from the Republican party—which will control Congress—believe the agency is “too plodding to keep up with innovation in the molecular diagnostics space.”

The agency continues to emphasize the importance of its role in regulating LDTs and is considering issuing best practices, rather than a final guidance. Senator Lamar Alexander (R-Tenn) and Representative Fred Upton (R-Mich) applauded the FDA’s decision not to finalize the guidance in the near future, while the American Clinical Laboratory Association (ACLA) called it “a victory for diagnostic innovation and most importantly, patients.”

FDA, CMS facilitate continuity between approval of, payment for medical products

Fragmentation in the process of approving and clearing drugs for marketing by the FDA and then clearing drugs for coverage by CMS has led to questions regarding whether FDA approval necessarily results in approval for coverage and payment under Medicare and Medicaid. In a Journal of the American Medical Association (JAMA) perspective written by CMS Acting Administrator Andy Slavitt, FDA Commissioner Robert Califf, and FDA Deputy Commissioner for Medical Products and Tobacco Rachel Sherman, the authors posit that, despite such challenges, changes in the organization of health care and the larger technology landscape should allow the FDA and CMS to move toward the use of shared sources of evidence while still applying the most appropriate criteria to decision making.

In product approval and clearance for marketing by the FDA and in coverage and payment determinations by CMS, the agencies use scientific evidence to make determinations. The use of shared sources of evidence would help to reduce gaps in information that could lead to uncertainty in the approval or clearance of new therapies, as well as their subsequent use in medical treatment. Shared information would also increase efficiency in medical product development and ensure the use of high-quality evidence.

It is standard practice to use in the approval and clearance for marketing process research examining the effects of therapeutics in narrow, strictly delineated populations that may not reflect the clinical practice settings in which the products will be used. The authors stressed that when a product demonstrates promise in this narrow setting, developers should pivot quickly toward evaluating the product, using “evidence about the risks and benefits of tangible health outcomes in clinical settings and among patients representative of those who will actually use these products.” The expansion of the scope of research used in the approval and clearance process will help show how a product is likely to perform and how to utilize the product in treatment.  Garnering early involvement of health systems and payers will help the agencies to determine what kinds of evidence are needed to incorporate the product in practice, where the product fits in formularies and device inventories, and whether or how much to pay for its use.

The FDA and CMS are focusing on the following to ensure that adequate evidence is available to guide patients, clinicians, and payers in their choices:

  • clarifying the need for including diverse populations and measuring relevant clinical outcomes within the trials conducted for regulatory approval and to inform labeling;
  • collaborating with other federal agencies to build functional links across a range of systems to make the best use of existing digital information captured in the course of health care delivery, such as electronic health records, insurance claims, and data within clinical registries; and
  • ensuring broad collaboration across public and private sectors.

Wright Medical agrees to pay $240 M to settle metal-on-metal hip revision claims

Wright Medical Technology, Inc. (WMT), a wholly owned subsidiary of Wright Medical Group N.V., has entered into a Master Settlement Agreement (MSA) on November 1, 2016, pursuant to which the medical device manufacturer will pay $240 million to settle claims brought by patients as part of a metal-on-metal hip revision multi-district litigation known as In re: Wright Medical Technology, Inc., CONSERVE® Hip Implant Products Liability Litigation, MDL No. 2329 (MDL) and the consolidated proceeding pending in state court in California known as In re: Wright Hip System Cases, Judicial Council Coordination Proceeding No. 4710 (JCCP). In addition, on October 28, 2016, the medical device manufacturer entered into a Settlement Agreement with three of its insurance carriers. Of the $240 million, approximately $180 million will be funded from cash on hand and $60 million will be funded from insurance recoveries (Wright Press Release, November 2, 2016).

Under the terms of the MSA, the parties have agreed to settle 1,292 specifically identified CONSERVE, DYNASTY or LINEAGE revision claims which meet the eligibility requirements of the MSA and are either pending in the MDL or JCCP, or are subject to tolling agreements approved in the MDL or JCCP. Eligibility requirements of the MSA include that the claimant has a pending or tolled case in the MDL or JCCP, has undergone a revision surgery within eight years of the original implantation surgery, and that the claim has not been identified by WMT as having possible statute of limitation issues. Claimants who have had bilateral revision surgeries will be counted as two claims but only to the extent both claims separately satisfy all eligibility criteria.

The MSA, which includes a 95 percent opt-in requirement, may be terminated by WMT prior to any settlement disbursement if claimants holding greater than five percent of eligible claims in the Final Settlement Pool elect to “opt-out” of the settlement. No funding of any individual plaintiff settlement will occur until the 95 percent opt-in requirement has been satisfied or waived.

Although the MSA will help bring to a close significant metal-on-metal litigation activity in the United States, WMT has declared its intention to continue to defend vigorously all metal-on-metal hip claims not settled pursuant to the MSA. As of September 25, 2016, the company estimated that there were close to 600 outstanding metal-on-metal hip revision claims that would not be included in the MSA settlement, including approximately:

  • 200 claims with an implant duration of more than eight years,
  • 300 claims subject to possible statute of limitations preclusion,
  • 30 claims pending in U.S. courts other than the MDL and JCCP,
  • 50 claims pending in non-U.S. courts, and
  • 20 claims that would be eligible for inclusion in the settlement but for the participation limitations contained in the MSA.

The company also estimated that there were nearly 700 outstanding metal-on-metal hip non-revision claims, which are excluded from the MSA, as of September 25, 2016.

In announcing the company’s third quarter earnings, WMT disclosed the loss range applicable to a substantial portion of revision cases of $150 million to $198 million and, in accordance with U.S. generally accepted accounting practices (US GAAP), the company recognized $150 million as a charge within discontinued operations in the second quarter of 2016. This second-quarter loss represented the low end of the range of probable loss for these cases. During the third quarter of 2016, the company recorded charges of roughly $39 million in order to increase its accrual from the low end of probable loss range that had been recognized during the second quarter to amounts more in line with the final agreements and to record accruals for certain other revision cases.

FDA opens portal to future science and tech trends

The FDA is lending additional support behind “horizon scanning,” a practice in which government and business entities collaborate to gather information broadly about emerging trends in science and technology. Horizon scanning helps these entities develop better capabilities to react to the quickly changing field. The FDA set up its own intra-agency horizon scanning group back in April 2015 – the Emerging Sciences Working Group – comprised of representatives from various FDA product and research centers.

Along those lines, the FDA is asking science and technology experts in the private sector to submit predictions on the next “new” items in their field of specialization. The agency stressed that it is not looking for advances already under discussion, but instead is seeking information about scientific and technological advances under the radar–so far under that a web search would have difficultly finding it. The FDA’s ability to achieve its stated agency mission relies on awareness of, and proactive preparedness for, emerging issues and scientific advances, which will impact the development of regulated products well in advance of formal FDA regulatory submissions, which can be anywhere from five to 10 years prior to when the regulatory submissions arrive at the FDA.

The information should be submitted electronically to the FDA’s Emerging Sciences Idea Portal. The portal is public, so confidential information should only be provided in writing. The FDA makes no promises on response, but did note that it would ask for more information if the submission sufficiently interested the agency. The FDA will use this information gathering to assist in the agency’s science-based planning, programs, policies, reporting, and communication within and outside the FDA. The public docket will be available for comment submissions through October 2019.