By Justin M.L. Stern and Frederick R. Ball
For consumers, the widespread availability of products containing cannabidiol (CBD) is old news. But for those in the cannabis industry—and in particular, those monitoring applicable regulatory developments—the state of CBD remains largely in flux and continues to be marred by uncertainty.
Under the 2018 Farm Bill, the U.S. Food and Drug Administration (FDA) retained its regulatory authority over products derived from hemp, including CBD incorporated into products it traditionally regulates, such as food, dietary supplements, and cosmetics. Unfortunately for the industry, FDA has yet to propose or issue formal regulations concerning the manufacture, distribution, or sale of such products. At the same time, FDA has issued numerous warning letters to producers and retailers incorporating CBD into products operating in the complex gray area between state and federal law. Nevertheless, recent events occurring across all three federal branches of government may reflect an impetus for change in FDA’s approach to CBD products.
To read the full article, please visit the FDLI website.
By Patrick C. Gallagher, Ph.D. and Sandra G. Stoneman
Emerging growth biotechnology companies often need to rely on third-party vendors and collaborators to fuel their research and development efforts. These vendors and collaborators may perform crucial aspects of the R&D process, such as candidate screening, assay development and validation, and lead generation. To enable this work, biotechnology companies may be required to share their “secret sauce” (or the building blocks to an eventual secret sauce), like antibodies and their targets. The following recommendations should be taken to account when working with third parties to balance the need to advance R&D with limited internal capacity and the need to maintain confidentiality of trade secrets and other proprietary information:
- Strong work-product language—Ensure the contract has strong invention assignment and “work-for-hire” language. Consider calling out specific antibodies and their targets as your “background intellectual property” or your materials.
- Confidentiality—Confidentiality obligations in the contract for trade secrets should survive for so long as the information qualifies as a trade secret under applicable law.
- Subcontracting—Limit the ability of the vendor or collaborator to use subcontractors. Understand the full supply chain and work flow, and the companies involved in each step. For example, often vendors and collaborators want the ability to assign/subcontract to affiliates. If that affiliate not qualified, this could present regulatory and IP protection issues. Make sure you know who will actually have access to your confidential information and proprietary biological material.
- Material transfer—If biological material is being transferred, consider entering into a separate “material transfer agreement” because most contract service agreements may not adequately address protections around sharing of material, and each time biological material is shared there likely will be specific limitations that will be appropriate to specify for the vendor. At a minimum, ensure the contract limits the scope and nature of what the vendor is allowed to do with the biological material. Also ensure that the contract requires return of all physical materials (often, the return obligations only apply to confidential information), and prohibits copying or replication except to the extent necessary for the contracted work.
- Diligence your vendor or collaborator—ask for references, visit their location, periodically exercise audit and inspection rights under the contract.
It almost goes without saying that if a company is going to outsource R&D functions, there is some inherent risk that cannot be eliminated, but a good deal of the risk can be mitigated.
On March 16, 2020, the U.S. Food & Drug Administration (FDA) issued new guidance aimed at accelerating the availability of COVID-19 diagnostic tests developed by laboratories and commercial manufacturers. The guidance, which took immediate effect upon release, contains recommendations for clinical laboratories and commercial manufacturers regarding development of diagnostic tests for COVID-19 during the current public health emergency.
As the guidance recognizes, there is currently an outbreak of a respiratory virus named SARS-CoV-2, which causes a disease named Coronavirus Disease 2019 (hence COVID-19). The guidance also acknowledges that COVID-19 poses a high potential public health threat “both globally and to the United States.” Effectively responding to the COVID-19 outbreak requires “rapid detection of cases and contacts, appropriate clinical management and infection control, and implementation of community mitigation efforts.”
To that end, the guidance describes a number of important policies concerning the circumstances under which certain entities may perform laboratory testing or distribute test kits on a more expedient timeline than would normally be permitted under FDA regulations and policies.
View the full Alert on the Duane Morris LLP website.
In an effort to encourage development of drugs, devices and biologics useful for the treatment, diagnosis, and prevention of COVID-19 respiratory illness, the Secretary of Health and Human Services has issued a declaration providing statutory immunity under the Public Readiness and Emergency Preparedness (PREP) Act. This declaration is separate from the Public Health Emergency declared under Section 319 of the Public Health Service Act on January 31, 2020, and is a part of the continued effort by the federal government to expedite development and distribution of medical products that can address the COVID-19 pandemic.
Declaring a public health emergency under the PREP Act provides covered persons with immunity from liability under federal or state law for all claims arising from administration to or use by an individual of a Covered Countermeasure. Under the statute, 42 U.S.C. § 247d-6d, immunity applies if the medical countermeasure:
View the full Alert on the Duane Morris LLP website.
On February 26, 2020, the United States Department of Agriculture (USDA) took a significant step toward allaying industry concerns by announcing that it delaying enforcement of the interim final rule (IFR) requirement that hemp producers only use testing laboratories registered with the Drug Enforcement Administration (DEA).
When the IFR was published in late October of 2019, it faced near-immediate criticism from industry participants and stakeholders who, among other things, voiced concerns that the DEA registration requirement would create a bottleneck given capacity issues. Appearing to respond to those critiques, the USDA explained that its enforcement discretion “will allow additional time to increase DEA registered analytical lab capacity.”
Notwithstanding other applicable provisions of law, the requirement that hemp testing labs be DEA-registered largely foreclosed the potential for a single laboratory facility to test both hemp and marijuana, as the DEA, which is a division of the U.S. Department of Justice, continues to treat marijuana as an illegal, Schedule I controlled substance. While this delay may provide an opportunity for labs that currently test medical and recreational marijuana pursuant to state law to also test hemp for compliance with the 2018 Farm Bill, it is not certain that the DEA registration requirement will not be reinstated. It is also not clear what further requirements states may impose.
Under the USDA’s guidance, hemp testing may be “conducted by labs that are not yet DEA registered until the final rule is published, or Oct. 31, 2021, whichever comes first.” Until that time, labs conducting hemp testing are still subject to the other compliance requirements of the IFR, including those related to methods of testing.
Congratulations to our colleague and corporate partner, Sandra Stoneman, who was recently selected by her peers for inclusion in U.S. News/Best Lawyers “The Best Lawyers in America” 2020 in the field of Biotechnology and Life Sciences. Sandra serves as a team lead for the Duane Morris Life Sciences and Medical Technologies industry group.
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Before a medical device is brought to market, the FDA requires a premarket submission. For low risk devices, that submission is often via a 510(k), demonstrating that the device is at least as safe and effective as (substantially equivalent to) an already legally marketed device that is not subject to premarket approval.
As of December 30, 2019, certain Class I and Class II medical devices and systems that previously required a 510(k) submission are now, based on certain criteria detailed in the FDA’s rule, exempt from that requirement. The regulatory adjustment will mean that the dozens of medical devices and test systems identified will no longer have to comply with the premarket clearance, subject to certain conditions.
For example, among the impacted items are numerous drug detection systems, such as amphetamine test systems, barbiturate test systems, benzodiazepine test systems, codeine test systems, and methamphetamine test systems, all of which are exempt unless they are intended for any other use than employment, insurance, or federal drug testing programs. The new rule also affects other categories of devices and tests, such as unscented menstrual pads, assisted reproduction accessories and microtools, and breath-alcohol test systems.
Despite recent bipartisan calls on the FDA to regulate hemp-derived CBD products, the U.S. Food & Drug Administration appears to be adhering to the status quo, at least with respect to issuing warning letters to companies deemed noncompliant with existing regulations. Case in point: on September 18, 2019, the FDA issued a warning letter (posted to the FDA’s website last week) to Alternative Laboratories, a dietary supplement manufacturer based in Naples, Florida.
According to the letter, the FDA conducted an inspection of Alternative’s dietary supplement manufacturing facility over five days in May and June; the inspection focused on the adequacy of labels for certain products manufactured and distributed by the company.
To read the full text of this blog post by Duane Morris attorney Justin M. L. Stern, please visit the Duane Morris Cannabis Industry Blog.
This was originally published in Law360.
With the advancements in technology and the advent of artificial intelligence, the medical device industry is flourishing. But regardless of the type of technology involved, the U.S. Food and Drug Administration must clear the device for marketing before any commercialization of a medical device.
There are typically three mechanisms for seeking FDA clearance for a medical device: a 510(k) submission, a de novo classification request and a premarket approval application. The FDA will not accept a 510(k) application unless the applicant can demonstrate that the device is at least as safe and effective (i.e., substantially equivalent to) a device that has already obtained FDA clearance (i.e., a predicate device).
For the full article by Frederick R. Ball and Carolyn A. Alenci, visit the Duane Morris LLP website.
Duane Morris LLP was honored for its role in a Hatch-Waxman Impact Case of the Year at the Legal Media Group (LMG) Life Sciences Awards 2019. The case was Teva Pharmaceuticals et al v. Sandoz et al. (Fed. Circ. 2018), where the firm represented Amneal.
Duane Morris was also shortlisted as a “Firm to Watch – Financial & Corporate” and partner Anthony J. Fitzpatrick in Boston was named a finalist for “General Patent Litigator of the Year – New England.”
For more information, read the news release.