Trends and developments

Legal developments

Are there any notable trends or recent legal developments in your jurisdiction’s pharmaceutical industry?

Two significant developments in the pharmaceutical industry bear close scrutiny by in-house counsel: drug pricing and the potential pre-emption of personal injury claims against manufacturers.

First, in May 2018, President Trump’s administration released a drug pricing reduction plan outlining actions both Congress and the administration could pursue to reduce drug prices. The plan focused primarily on actions to increase competition, including:

  • increasing use of biosimilars;
  • addressing “perverse” incentives in pay-for-delay practices for on-patent drugs; and
  • overhauling Medicare’s approach to drug price transparency, shared savings with beneficiaries and drug plan price lock-in.

In October 2018, the US Department of Health and Human Services announced a proposed rule that would require pharmaceutical companies to disclose the ‘sticker’ price (also known as ‘list’ price) of any drug covered by Medicare or Medicaid via text in any advertisement for a drug.The rule also would allow companies to mention competitors’ list prices. Industry has raised significant concerns about the proposed rule, in part because consumers rarely pay the list prices due to insurance, financial assistance programmes and other rebates.The proposed rule may be subject to litigation and will be closely watched by industry.

Concerns about high drug prices are also driving enforcement activity at the federal and state level. In the absence of laws expressly prohibiting price gouging in the pharmaceutical context, government enforcement authorities have attempted to combat allegedly unfair pricing practices by advancing theories under the False Claims Act, the Anti-Kickback Act, antitrust law and state consumer protection statutes.  

Second, there have been significant developments recently in pre-emption jurisprudence. Federal law, including the Food, Drug and Cosmetic Act and Food and Drug Administration (FDA) regulations, may pre-empt state laws and provide an affirmative defence barring state law claims that challenge FDA-approved drug design and labelling. The scope of federal pre-emption varies depending on the state law cause of action and on whether the drug is brand name or generic. The Supreme Court recently granted certiorari in Merck Sharpe Dohme Corp v Albrecht (17-290), a case that will inform when federal law pre-empts a plaintiff’s state law claim that a manufacturer should have updated its drug label to reflect safety risks.

Legal framework


What is the primary legislation governing medicinal products in your jurisdiction?

The Food, Drug and Cosmetic Act, codified at 21 USC § 301 and following, is the primary federal legislation relevant to medicinal product development, testing, approval, and marketing. The Public Health Service Act, codified in Title 42 of the US Code, includes legislation that supplements the Food, Drug and Cosmetic Act in relation to biological products. Food and Drug Administration (FDA) implementing regulations are found in Title 21 of the Code of Federal Regulation.

Are any legislative changes proposed or expected in the near future?

President Trump’s administration released its drug price reduction plan in 2018. Since then, Congress has followed in tandem to propose legislation aligned with some of the policies suggested in the plan.

The plan included proposals to:

  • require drug company direct-to-consumer ads to include the price of the advertised drug;
  • prohibit pharmacy gag clauses;
  • allow pharmacists to inform patients of lower cost medication options; 
  • reform the FDA to make the review and approval of the process for generic medications faster; and
  • address Medicare Part D plan interaction with drug manufacturers and pharmacy benefit managers to achieve better price growth efficiency.

Near-future legislation and the potential for success in any case is otherwise highly uncertain as a result of the impending mid-term elections.


Which bodies regulate medicinal products in your jurisdiction and what is the scope of their powers?

The FDA has primary jurisdiction over the pre-market approval (where required) of pharmaceuticals, biological products and medical devices, and further regulates such products and their manufacturers with respect to ongoing safety and efficacy oversight, good manufacturing practices, promotional claims and marketing activities. The FDA also regulates the clinical research activities of sponsors testing drugs and devices on human subjects in support of a marketing application. Other agencies that regulate medicinal products include:

  • the Drug Enforcement Agency with respect to the manufacture, handling and distribution of controlled substances;
  • the Federal Trade Commission (FTC) with respect to advertising of certain over-the-counter drug products and many lower risk medical devices, as well as with respect to antitrust issues in the pharmaceutical industry; and
  • the Department of Health and Human Services and its sub-agencies, including the Centers for Medicaid and Medicare Services with respect to drug and device pricing and reimbursement under various federal healthcare programmes.

The individual states also have certain authorities to regulate medicinal products, including through state boards of pharmacy (typically with respect to the terms and requirements for business and professions involving the sale, distribution and dispensing of prescription drugs and in some cases prescription devices) and legislation regulating pharmaceutical sales representatives.

Are any other legal regimes applicable to the trade of medicinal products (eg, competition, international trade, data protection, consumer protection)?

Yes, these industries are highly regulated. The government in some cases provides payment or reimbursement for medicinal products or the procedures in which they are used, and there are laws intended to prevent fraud, waste and abuse when this is the case – including anti-kickback laws and laws prohibiting the presentation of false claims to the government. There are also laws intended to provide transparency regarding industry payments to healthcare professionals.

The industries are also subject to federal and state competition laws. Federal antitrust laws are enforced by the Department of Justice and the FTC. State attorneys general enforce the competition laws of their respective states, and often collaborate with each other and the federal regulators. Private parties can also pursue claims based on violations of antitrust law. Recent litigations and government investigations have focused on innovator and generic settlements that include a payment for delaying the generic’s entry into the market (ie, ‘pay-for-delay’ settlements), as well as potential pricing coordination between competing pharmaceutical companies.

While medicinal product companies are not typically directly subject to the most stringent federal data protection law in the United States, the Health Insurance Portability and Accountability Act (HIPAA), the US FTC expects a company's data security measures to be reasonable and appropriate for the data they hold, so if a medicinal product company holds medical data, the FTC’s expectations for safeguards would be similar to what HIPAA requires. State privacy laws may also apply.

Are any medicinal products exempt from regulation (eg, complementary and alternative medicines)?

The Food, Drug and Cosmetic Act does not outright exempt complementary and alternative medicine (CAM) products and practices from regulation. Outside conventional medicine and FDA-regulated drugs, the FDA acknowledges CAM as covering a wide range of products and practices. Depending on the type of CAM, the product or practice may or may not be subject to regulation by the FDA under the Food, Drug and Cosmetic Act as a biological product, cosmetic, drug, device or food/dietary supplement. Which regulatory scheme applies depends on a variety of nuanced factors, such as the specific product or practice, context and related advertising and claims.



What is the authorisation procedure for the manufacture of medicinal products in your jurisdiction?

The manufacture of medicinal products is regulated primarily at the federal level, but a number of states impose parallel requirements. The manufacturing of a product triggers, among other things, the necessity for the facility or establishment where that activity is conducted to register with the Food and Drug Administration (FDA) and list the products they put into commerce. This is primarily an administrative matter and serves to identify regulated companies and goods; it does not necessarily indicate that the FDA has been on-site and inspected the facility, nor does it denote the FDA’s approval of the facility. The facilities must comply, however, with good manufacturing practices, and compliance with this standard may be evaluated during a routine or ‘for cause’ inspection by the FDA. In connection with pre-approval inspections (conducted while marketing applications are under review), the inspectors will make a recommendation to the application reviewers such as “recommend approval” or “recommend withholding approval” relative to the manufacturing aspects of the application (one of several aspects of an application). At the state level, a number of US states require that in-state manufacturing facilities, as well as out-of-state manufacturers which ship products into their state, obtain a state manufacturer or wholesaler licence.

What is the fee for obtaining authorisation?

Whether a fee is assessed on a manufacturing facility, and the amount of that fee, depends on the entity that is registering (eg, its role and status relative to regulated products) and the type of products manufactured. Device establishments are potentially subject to a registration fee. For pharmaceuticals and biological drugs, while there has historically been an establishment fee for a facility tied to new drug applications (NDAs) and biologics licence applications (BLAs), this is no longer the case. The prior establishment fee has been consolidated along with the historical product fee, becoming part of the post-approval programme fee. Thus for drug establishments (which may include facilities owned by either NDA/BLA holders who do their own manufacturing, and those owned by contract manufacturers), there is no “registration fee” comparable to the fee for device establishments States typically require a modest application fee for manufacturer licensure.

What is the validity period for authorisation?

An FDA drug establishment registration must be renewed annually between 1 October and 31 December. In addition to the initial registration fee, device establishments must also pay an annual registration fee before completing the renewal application. State renewal requirements vary.

How robust are the standard good manufacturing practices followed in your jurisdiction?

US good manufacturing practice (GMP) standards are quite robust. The core requirement for GMP compliance is established by statute under the Food, Drug and Cosmetic Act. More detailed requirements for finished pharmaceuticals are established in regulations at 21 CFR Parts 210 and 211, and for biological drugs these requirements are supplemented by requirements in Part 600 and following. Active pharmaceutical ingredients are subject to the statutory current GMP (CGMP) requirement, with information on FDA expectations set out in guidance documents. Device GMPs are set out in “quality system” regulations in Part 820. CGMP regulations set the minimum requirements, and many companies implement quality systems and controls that exceed these minimum standards. CGMP requirements apply to both investigational and approved pharmaceuticals, although most drug products for use in Phase I trials are exempt from Parts 210 and 211 and are instead subject to the statutory standard as informed by FDA guidance on the topic. Investigational devices manufactured under an investigational device exemption are not generally subject to Part 820 but must comply with the design control portion of these regulations, in 21 CFR 820.30.

What are the consequences of failure to obtain manufacturing authorisation and/or follow good manufacturing practices?

If an investigational drug fails to comply with CGMP requirements, the FDA may not authorise its commercial marketing in the United States (ie, may not approve the marketing application).

After marketing clearance or approval, if a company does not comply with CGMP requirements the product is considered adulterated and the FDA can take regulatory action. Possible enforcement actions by the FDA include:

  • issuing inspectional observations, which may escalate up to a warning letter notifying a company of a violation and requiring correction;
  • seizing specific products from the marketplace; or
  • obtaining an injunction from a court to require a company to do or refrain from doing a specific act.

The FDA also may recommend criminal prosecution in some instances.


How are the distribution and storage of medicinal products regulated?

Storage and distribution activities for medicinal products are regulated at both the federal and state level. Historically the FDA took a somewhat less active role in regulating entities if they were involved only in the storage and distribution (as opposed to the manufacture, packaging or labelling) of regulated products. In 2013, however, Congress enacted the Drug Supply Chain Security Act (DSCSA). The DSCSA established new licensing requirements and uniform national standards for the wholesale distribution of prescription drugs, and also added product track and tracing requirements. The DSCSA also encompasses third-party logistics providers or entities that play an increasingly important role in drug distribution. US states are evolving as they seek to adapt their historical approach to wholesale distribution to the newer framework that includes many ‘virtual’ manufacturers which outsource distribution activities to third-party logistics providers.

Import and export

How are the import and export of medicinal products regulated?

These activities are regulated through coordination by the FDA and Customs and Border Protection. Imports generally must fully comply with FDA law, except in limited circumstances, such as products qualifying for the ‘import for export’ exemption. At ports of entry, actual or suspected violations of import requirements may trigger a range of enforcement actions, including detentions, import alerts, import refusals and import bans. For exports, products that are fully FDA-compliant may be exported freely without prior FDA notification or approval. Companies may request a certificate from the FDA confirming the regulatory status of the product to meet documentation requirements of an ex-US destination jurisdiction. A more complex framework applies to the export of products that are not fully FDA-compliant, and procedures vary depending on the circumstances.

Are parallel imports permitted in your jurisdiction?

Strictly from a trademark perspective, as a general matter, parallel imports (also known as ‘grey market goods’ – goods legitimately sold abroad under a particular trademark, imported into the United States without the authorisation of the US trademark owner and sold in competition with goods offered by the trademark owner in the United States) are permitted unless they are physically and materially different from the goods authorised by the US trademark owner for importation or sale in the United States, in which case the owner may have claims under the Lanham Act or the Tariff Act. As a practical matter, however, in light of the FDA’s requirements that only companies holding marketing authorisation may distribute most FDA-regulated goods (other than, for example, certain low-risk devices and over-the-counter drugs that comply with the FDA’s monograph for the product), and in light of the detailed and strict FDA standards that apply for product labelling, composition and quality (to avoid illegal misbranding and adulteration), attempts at parallel imports of FDA products are likely to be challenged.

Sale and purchase

What rules govern the dispensing, sale and purchase of medicinal products?

Prescription drugs are generally dispensed to patients through a state-licensed pharmacy, although healthcare providers may also dispense drugs directly to patients. To purchase such drugs, the patient must present a valid prescription to the pharmacy. For some high-risk drugs, a risk evaluation and mitigation strategy may be in place that requires tighter controls on:

  • the verification of the patient;
  • certification for drug-specific training by the prescribing healthcare provider; and
  • dispensing solely through a designated certified pharmacy.

Over-the-counter (OTC) drugs are generally available for direct purchase at the patient’s discretion, although some OTC drugs (specifically pseudoephedrine, due to its ability to be easily converted to the controlled substance methamphetamine) must be dispensed ‘behind the counter’ by a pharmacist with the patient providing identification and total monthly purchases tracked by the federal government.

The sale of prescription drugs is regulated by the FDA with respect to advertising and promotional claims, the provision of free samples to healthcare providers and for risk evaluation and mitigation strategy drugs (as discussed above). The Drug Enforcement Administration regulates the sale and distribution of controlled substance drug products.

Are there any restrictions on the online sale and purchase of medicinal products?

OTC drugs may be advertised and sold via online services, but prescription drugs require a doctor’s order and thus may not be ordered online directly by patients. Many prescription drugs may be dispensed via mail order pharmacies, some of which may have online portals for refills and ordering, but the requirement for a valid prescription remains in effect.

Named patient supply

What rules govern named patient supply of pre-launch medicinal products?

Named patient programmes for unapproved investigational drugs are available in the United States under various forms of expanded access pursuant to FDA regulations at 21 CFR § 312 Subpart I. In all cases, FDA regulations require that the patient or patients seeking access have a serious or immediately life-threatening disease or condition for which there is no comparable or satisfactory alternative therapy. Such access must also be deemed by the FDA to not pose an unreasonable risk, and must not interfere with the initiation, conduct or completion of clinical investigations that could support marketing approval. These expanded access options include:

  • single patient/emergency use exemptions;
  • intermediate-size patient population exemptions, where numerous requests for individual patient access have been received; and
  • treatment investigational new drug exemptions allowing for widespread treatment use of an unapproved drug, where all clinical registration studies have been completed and the applicant is “actively pursuing marketing approval” for the expanded access use.

Clinical trials


What is the authorisation procedure for conducting clinical trials in your jurisdiction?

In the United States, the sponsor of a clinical trial involving a Food and Drug Administration (FDA)-regulated product must generally seek FDA authorisation for the research, unless specific exemption or risk-related criteria are met. For a pharmaceutical or biological drug, the sponsor submits an investigational new drug (IND) application, and for a significant risk device study the sponsor submits an investigational device exemption (IDE) application to the FDA. Research may begin 30 days after the FDA receives the application, unless the FDA advises the applicant otherwise, and provided that approval has also been obtained from an Investigational Review Board (IRB).  For non-significant risk device studies, the sponsor must comply with abbreviated IDE requirements and obtain IRB (but not FDA) approval to proceed. In some additional cases, even if an IND or IDE is not required because a study does not meet the triggering criteria under those regulations, the study may still be subject to IRB review and FDA informed consent requirements if the data will be submitted to or held for inspection by the FDA. Most research that is conducted or supported by federal government agencies or departments is also subject to the Common Rule, a set of human subject protection regulations that are similar but not identical to FDA rules. Steps have been taken towards harmonisation of these rules, but these efforts are still in progress. 

Clinical practices

How robust are the standard good clinical practices followed in your jurisdiction?

The requirements are quite robust. The FDA enforces good clinical practices for the conduct of clinical trials through regulations and draft guidance documents.

The following regulations govern the conduct of clinical trials:

  • 21 CFR § 11 (electronic records/signatures);
  • § 50 (protection of human subjects);
  • § 54 (financial disclosure);
  • § 56 (IRBs);
  • § 312 (Investigational New Drug); and
  • §§ 812 (Investigational Device Exemption).

FDA draft guidance on good clinical practices includes the types of informed consent term that constitute prohibited exculpatory language (see example) and expanded access to investigational drugs (see example).

The FDA has issued warning letters for violations of good clinical practices, including:

  • the failure to follow IRB procedures (see example);
  • deviations from the investigational plan (see example); and
  • failure to maintain adequate records (see example).

Reporting, disclosure and consent

What are the reporting and disclosure requirements for the results of clinical trials?

The responsible party must register an “applicable clinical trial” on, as well as disclose certain types of information including:

  • a summary of clinical trial results;
  • updates on changes to the clinical trial; and
  • adverse event information.

The Department of Health and Human Services issued final implementing regulations governing the registration and disclosure requirements, and these requirements are codified in 42 CFR Part 11. For clinical trials funded by the National Institutes of Health (NIH), the responsible party must also comply with the NIH’s Policy on Dissemination of NIH-Funded Clinical Trial Information.

What are the informed consent obligations with respect to clinical trial subjects?

Investigators must obtain legally effective informed consent before involving subjects in a clinical trial, pursuant to 21 CFR § 50.20. The required elements of informed consent are outlined in Section 50.25, which serves to ensure that potential subjects make a voluntary and fully informed decision based on key study details such as the purpose of research, experimental procedures, foreseeable risks and benefits, and alternative courses of treatment, among other required disclosures. Informed consent must be documented in accordance with Section 50.27.

The FDA has issued warning letters for consent infirmities, such as:

  • failure to meet regulatory requirements (see example);
  • initiating testing prior to the date of consent (see example); and
  • not providing a copy of signed consent forms to subjects (see example).

Informed consent also must be obtained before screening and randomising subjects (see example).


What are the insurance requirements for clinical trials?

There is no regulatory requirement that a sponsor of clinical trials in the United States purchase clinical trial liability insurance. However, such insurance is purchased to manage risks associated with patient injury. This includes potential defence and indemnification obligations that the sponsor may have to study sites, participating physicians, contract research organisations (CROs) and investigators. Insurance requirements are also part of the contracts that a sponsor will have with study sites, CROs and investigators, as well as with licensors and joint venture entities.

Clinical trial insurance can also be purchased in conjunction with product liability insurance to cover liability associated with product sales. Policies can cover multiple products across both approved and studied uses.

Data protection

What data protection issues should be considered when conducting clinical trials?

Depending on the circumstances and the types of information collected, a myriad of federal and state laws may govern data protection in the context of a clinical trial. At the federal level, for example, clinical trials conducted in the United States must conform to FDA regulations embodying good clinical practices and adequate human subject protection (HSP). HSP includes requirements to obtain informed consent from clinical trial participants (21 CFR Part 50); the informed consent must include a statement describing the extent, if any, to which confidentiality of records identifying the subject will be maintained and that notes the possibility that the FDA may inspect the records. In addition, if the data is collected from a Health Insurance Portability and Accountability Act covered entity (which is typically the status of clinical study sites), each clinical trial participant must grant authorisation to disclose his or her protected health information (PHI) unless an exception is met (45 CFR § 164.502(a)). If certain requirements are satisfied, an Institutional Review Board or Privacy Board may waive, in whole or part, the authorisation requirement (45 CFR § 164.512(i)). Typically, the authorisation will include:

  • information regarding disclosure of PHI when it is required by law;
  • sharing of PHI to prevent or control injury or the spread of disease;
  • protection of patient identity in publications or public presentations regarding the trial; and prohibition on patient access to PHI before completion of the trial.

Additionally, 21 CFR Part 11 mandates standards for electronic records and systems to ensure accuracy, reliability and consistency of data. The Confidentiality of Alcohol and Drug Abuse Patient Records (CFR Title 42: Part 2) regulation also specifies restrictions concerning the disclosure and use of patient records that include information on substance use diagnoses or services.

To promote robust sharing of human and non-human data from a wide range of genomic research and to provide appropriate protections for research involving human data, the NIH issued the NIH Genomic Data Sharing Policy. The policy applies to all NIH-funded research (eg, grants, contracts and intramural research) that generates large-scale human or non-human genomic data, regardless of the funding level, as well as the use of this data for subsequent research.

Certificates of confidentiality, issued by the NIH, protect the privacy of research subjects by prohibiting disclosure of identifiable, sensitive research information to anyone not connected to the research except when the subject consents or in a few other specific situations. Certificates of confidentiality allow researchers to avoid being compelled to release research data in civil or criminal proceedings. They can be particularly helpful in protecting sensitive data that, if revealed, could lead to discrimination or reputational or other harm to research participants.

Specific issues that arise include notice and consent, secondary uses of data and specimen collection. Where there are sites outside the United States, many countries have data protection, health data or clinical trial laws that will impose different requirements in terms of transparency, consent and security.

Marketing authorisation


What is the marketing authorisation procedure for medicinal products in your jurisdiction?

In the United States, the US Food and Drug Administration (FDA) marketing authorisation procedures vary,  depending on the nature of the product and in some cases nuances of the statutes, regulations, and guidance documents – and, in practice, the FDA’s interpretation and application of these standards.  Below we summarise the procedures that typically apply for new drugs (including biological drugs) and medium- to high-risk devices.


In most cases the FDA’s Center for Drug Evaluation and Research (CDER) is responsible for the review and approval of pharmaceutical drugs, and the Center for Biologics Evaluation and Research (CBER) is responsible for the review and approval of biological drugs. Following the completion of clinical trials, the sponsor (also referred to as the applicant) must submit a New Drug Application or Biologics Licence Application. These applications incorporate data from animal studies and human clinical trials from the Investigational New Drug Application (the authorisation for the clinical trials for drugs and biological drugs), as well as additional clinical trial information; chemistry, manufacturing and controls (CMC) data; and proposed labelling. A team of FDA physicians and scientists conducts a scientific review of the submitted data and proposed medication label. For biological drugs there is particular attention to the manufacturing process and facilities, to ensure they are capable of meeting continued safety, purity and potency standards for the product. If the FDA evaluation team determines the medicine is safe and effective for its intended uses, the FDA approves the medication for marketing. The FDA may also seek the input of an advisory panel prior to approving a product, and the recommendations of this panel are in most cases followed by the agency.

Medical devices

The procedure for obtaining marketing authorisation of a medical devices is dependent on the type of device involved. Most Class I devices (eg, surgical gloves) are subject to general controls and may be marketed without pre-authorization. Some Class I devices and most Class II devices (devices for which general controls alone cannot assure safety and effectiveness − eg, infusion pumps) are required to undergo the pre-market notification (or 510(k)) process, in which the manufacturer must demonstrate to the FDA that the device is “substantially equivalent” to a legally marketed predicate device – meaning, at least as safe and effective as that device. To obtain an order declaring a device a “substantially equivalent” under the pre-market notification process, the manufacturer must submit evidence that the device:

  • has the same intended use as a device already on the market;
  • has the same technological characteristics as the predicate device, or different characteristics which do not raise different questions of safety and effectiveness; and
  • is at least as safe and effective as the predicate device.

Most Class III devices (eg, devices that support or sustain human life, are of substantial importance in preventing impairment of human health, or present a potential, unreasonable risk of illness or injury − eg, implantable pacemakers) require pre-market authorisation. To obtain pre-market authorisation approval, the sponsor must supply the FDA with scientific evidence, including clinical data, indicating a reasonable assurance of safety and effectiveness. The FDA conducts a scientific review of the data and renders pre-market authorisation, if warranted.

For devices that are of a novel type (eg, there is no suitable predicate for 510(k) purposes) but the applicant believes are of low or moderate risk, the applicant may pursue the de novo process, which typically requires a level of data greater than that for a 510(k) but less than for a pre-market authorisation.

What criteria are considered in granting marketing authorisation?

In determining whether to grant marketing authorisation, the FDA uses different factors for medications and medical devices.

Medicines In evaluating whether marketing authorisation should be granted, the CDER assesses:

  • whether the medicine is safe and effective for its proposed uses;
  • whether the benefits of the medication outweigh its risks;
  • whether the medication’s proposed label is appropriate; and
  • whether the methods used in manufacturing the medication and the controls used to maintain the medication’s quality are adequate to preserve its identity, strength, quality and purity.

In assessing these factors, the CDER considers:

  • the data and information submitted in the investigational new drug application;
  • clinical trial data for trials completed pursuant to the investigational new drug application;
  • the ingredients in the medicine;
  • how the medication behaves in the body;
  • how the medicine is manufactured, processed and packaged; and
  • the content and format of the label or package insert to accompany the medicine.

Medical devices

Pre-market approval of Class III medical devices requires that the FDA determine that valid scientific evidence exists to ensure that the device is safe and effective for its intended use. The application requires the sponsor to describe non-clinical laboratory studies, such as toxicology, biocompatibility, stress/wear and shelf-life, and clinical investigations, including study protocols, safety and effectiveness data, adverse reactions and complications, device failures and replacements, and patient complaints.

What is the fee for obtaining marketing authorisation?

US law imposes various user fees in connection with marketing applications for new drugs, generic drugs, biologics and biosimilars, and medical devices. For FY 2019, a new drug application containing clinical data incurs a user fee of $2,588,478, while a new drug application not containing clinical data has a fee of $1,294,239, and there is an additional program fee of $309,915. Abbreviated new drug application use fees are $178,799, with other fees imposed for drug master file filers, active pharmaceutical ingredient manufacturers and finished dosage form manufacturers. Generic drug programme fees vary depending on the size of the company, from $186,217, to $1,862,167 for large company applicants. Applications for biosimilar drug products are $1,746,745 for applications containing clinical data and $873,373 for applications without clinical data. Other programme fees also apply.

What is the validity period for marketing authorisation?

There is no expiration date for FDA authorisation of a drug or medical device, but all regulated medical products may be removed from the market by the FDA for cause (eg, newly discovered safety concerns; fraud or misconduct by the applicant in the authorisation), or may be withdrawn voluntarily by the sponsor.

What are the consequences of failure to obtain marketing authorisation?

The FDA is responsible for protecting public health by approving the marketing of drugs (including biological drugs) and medical devices. Marketing FDA-regulated products without first obtaining FDA approval or clearance can result in the FDA bringing a civil regulatory or criminal enforcement action against an entity or individual. The FDA may take a number of enforcement actions to correct and prevent violations, remove violative products or goods from the market and punish offenders. These enforcement actions include issuing warning letters, seizing illegal products, seeking a court-ordered injunction or initiating a criminal prosecution.  



What post-market monitoring mechanisms are in place to ensure the ongoing safety and efficacy of medicinal products after marketing authorisation has been granted?

Under US regulations, life sciences companies are required to report adverse events involving pharmaceuticals (21 CFR 314.80), biologic products (21 CFR 600.80) and medical devices (21 CFR 803). The Food and Drug Administration(FDA) maintains two post-market monitoring systems: the FDA Adverse Event Report System (FAERS) for pharmaceuticals and biologic products and the Manufacturer and User Facility Device Experience (MAUDE) database for medical devices. A key difference is that FAERS generally includes all reported adverse events, whereas MAUDE generally includes only serious or life-threatening adverse events or device malfunctions that could potentially lead to serious or life-threatening adverse events.

Data protection

What data protection issues should be considered when conducting pharmacovigilance activities?

Under the Health Insurance Portability and Accountability Act (HIPAA), covered entities (which includes most healthcare providers) may disclose protected health information to a person subject to FDA jurisdiction, for public health purposes related to the quality, safety or effectiveness of an FDA-regulated product or activity for which that person has responsibility. Examples of purposes or activities for which such disclosures may be made include, but are not limited to:

  • collecting or reporting adverse events (including similar reports regarding food and dietary supplements), product defects or problems (including problems regarding use or labelling), or biological product deviations; 
  • tracking FDA-regulated products; 
  • enabling product recalls, repairs, replacement or lookback (which includes locating and notifying individuals who received recalled or withdrawn products or products that are the subject of lookback); and 
  • conducting post-marketing surveillance (45 CFR § 164.512(b)(1)(iii)).

The “person” subject to the jurisdiction of the FDA does not have to be a specific individual, and instead may be an entity, such as a partnership, corporation or association including a pharmaceutical manufacturer of the FDA-regulated product. Based on applicable guidance, covered entities may identify the party or parties responsible for an FDA-regulated product from the product label, from written material that accompanies the product (ie, the product labelling) or from sources of labelling, such as the Physician’s Desk Reference.

The disclosures described above may be made in the absence of patient consent. However, covered entities are required to provide a privacy notice to patients that describes their uses and disclosures of protected health information and make a good-faith effort to obtain an acknowledgement of receipt of the notice from patients.

Importantly, HIPAA does not pre-empt stricter state laws. Some state privacy laws that restrict the processing of medical information may require a healthcare provider to obtain individual consent to disclose such information to a pharmaceutical manufacturer for pharmacovigilance purposes.

Pricing and reimbursement


Are there rules governing the pricing of medicinal products in your jurisdiction?

As a general matter, there are few laws designed to control prescription drug prices in the United States. There are some exceptions, however, when certain federal and state healthcare programmes are involved. For example, brand name drug manufacturers must provide statutory rebates to the Medicaid programme such that it pays the lowest price offered to the rest of the drug marketplace. This Medicaid ‘best price’ requirement has been in place for decades. A more recent trend involves state legislatures passing drug price transparency laws, some of which require drug makers to give advance notice and specific justifications for significant price increases. 


What is the structure for state reimbursement of medicinal product costs?

Government reimbursement of medicinal products in the United States is available through myriad, complex federal healthcare programmes. Where prescription drugs are at issue, reimbursement may be available through Medicare (patients aged 65 and older), Medicaid (patients with limited income), TRICARE (military personnel, retirees and dependents), CHAMPVA (beneficiaries of disabled veterans) and FEHBP (federal government employees). Separate reimbursement of medical devices is more limited, but is sometimes available for ‘durable medical equipment’ as defined under government programmes, including Medicare Part B and Medicaid. 

Advertising and labelling


How is the advertising of medicinal products to healthcare professionals and the general public regulated in your jurisdiction?

The Food and Drug Administration (FDA) regulates the advertising of all prescription drugs, whether directed to healthcare providers or direct-to-consumer, while the Federal Trade Commission (FTC) regulates OTC drug product advertising. The FDA similarly regulates the advertising of higher-risk medical devices (a category called “restricted devices,” which FDA law defines more precisely). While the FTC asserts jurisdiction over advertisements for many lower-risk devices (“non-restricted devices”), the FDA maintains jurisdiction over “promotional labelling” for all devices, which it has interpreted quite broadly.  

For prescription drug advertising and promotion to healthcare providers, numerous detailed rules, regulations and policies apply.  The principal imperative is that all advertising must be truthful and non-misleading, and to ensure that prescription drug advertising is not false or misleading, FDA regulations and policies require, among other things, that the ads include “fair balance”, also known as important safety information (ISI), in the form of the major contraindications, warnings, precautions, and side effects of the drug, all presented in a manner and context that is reasonably commensurate in prominence with any affirmative performance claims for the drug.  In printed advertisement or sales aids presented to healthcare providers, this fair balance is presented in graphic and textual formats, while in television advertising the ISI can be presented both in text and oral format.

Moreover, the FDA nominally requires that prescription drug advertising be limited to uses that are FDA-approved, or that, while not specifically included in the approved labelling, statements are otherwise consistent with the labelling and not otherwise false or misleading. However, the FDA’s policies on “off-label” promotional claims has come under legal attack in recent years, with many courts rejecting the FDA’s broad prohibition against the promotion of unapproved uses.  As a result, the FDA’s enforcement activities (in the form of warning letters or untitled letters) has fallen dramatically over the past five to 10 years. The risk to sponsors of promoting unapproved uses has not gone away, however, as the Department of Justice has been very active over at least the past 15+ years in bringing criminal and civil prosecutions against companies that promoted unapproved uses, based on the legal theory that such promotion caused other actors in the healthcare system to submit “false claims” to Medicare, Medicaid or other federal healthcare plans for reimbursement of the unapproved uses. These prosecutions have led to multibillion dollar penalties and burdensome corporate integrity agreements against such companies.

A specialised form of prescription drug promotion involves the use of healthcare economic information (HEI) which is often provided to payors, formulary committees and other institutional actors in the healthcare system. HEI promotion usually focuses on the ancillary or extended benefits to the use of a drug, for example, the cost savings associated with shorter hospital stays for certain antibiotic drugs, or the longer-term systemic cost savings derived from the ability of a drug to prevent a particular disease or adverse health consequence. Under statute and recent FDA guidance, sponsors have significant leeway to present such claims even when wholly outside the scope of the approved labelling provided that the claims are appropriately supported and specified limitations are observed in terms of the audience to and context in which such information is disseminated.

Whereas the FTC has jurisdiction over advertising for over-the-counter (OTC) drugs products, its enforcement actions against OTC drugs is somewhat limited. If an OTC drug was approved under a New Drug Application, or is marketed pursuant to the standards of one of the FDA’s OTC monographs, claims within the scope of the New Drug Application approved labeling or the monograph are unlikely to attract FTC attention. For other claims, the FTC applies a standard requiring “competent and reliable” scientific substantiation, which the FTC equates to replicated well-controlled clinical trials. The most frequent FTC enforcement in the OTC drug area, however, tends to be with respect to products that qualify as “drugs” based on their therapeutic or medical claims, but which are neither FDA approved nor monograph compliant. FTC enforcement in any false advertising cases includes the ability to seek monetary penalties and court judgments (via settlement or after trial) enjoining the continued false advertising by the company and individual responsible persons.

The specific statutory and regulatory standards and requirements that apply to device advertising and promotional labelling vary somewhat from those applicable to drugs, but many of the principles are the same or similar. 

For drugs and devices, presentation of risk information is an important aspect, discussed in guidance here.


What are the packaging and labelling requirements for medicinal products?

The packaging and container-closure systems of prescription drugs must be approved by the FDA as part of a new drug application. The primary concerns are to ensure that the packaging adequately preserves the quality and integrity of the drug product and does not introduce deleterious substances into the drug (leaching). The labelling for prescription drugs is limited on the commercial containers as the prescribing physician, as a learned intermediary, is expected to be familiar with the technical medical characteristic, appropriate uses and risks and benefits of the drugs they prescribe to patients. Commercial prescription drug shipments to pharmacies typically are accompanied by the full FDA-approved prescribing information. When dispensed by a pharmacy to a patient, the pharmacy-provided drug container has just the basic dosing information and relevant significant patient warnings, and may be accompanied by a pharmacy-provided summary sheet of use and safety information.

Over-the-counter drug labelling is governed by detailed FDA regulations in 21 CFR § 201 Subpart C and must provide, among other things, adequate directions for use, including safety information, in prescribed “Drug Facts” format, in language that can readily understood by lay persons.

How is the promotion of off-label use regulated?

The Food, Drug and Cosmetic Act (FDCA) requires manufacturers to demonstrate that their products are safe and effective for their intended uses, and they must provide adequate labelling information concerning these uses. However, following FDA approval a doctor may lawfully prescribe a product for both approved and unapproved (‘off-label’) uses.

The FDCA does not explicitly ban off-label promotion, but it does prohibit the distribution of any product that is “misbranded”, which includes a product lacking “adequate directions for use”. Misbranding is a criminal offence. For many years, the government has taken the position that the off-label promotion of a product constitutes a misbranding violation. Several recent court decisions have appeared to limit –though not eliminate – this theory of prosecution.

Relations with healthcare professionals

Gifts and incentives

What rules apply to the provision of gifts, discounts and other incentives to healthcare professionals?

The federal Anti-Kickback Act (42 USC § 1320a-7b(b)) is a criminal statute prohibiting the offer, payment, solicitation or receipt of remuneration for:

  • the referral of patients or arranging for the referral of patients to receive services for which payment may be made under a federal or state healthcare programme; or
  • the purchase, lease, order or arranging for the purchase, lease or order of any good, facility, service or item for which payment may be made under a federal or state healthcare programme.

“Remuneration” is anything of value. Conviction carries fines of up to $100,000 and imprisonment for up to 10 years. Statutory and regulatory safe harbours, if satisfied in their entirety, will immunise the parties from liability (regulatory safe harbours at 42 CFR § 1001.952).

Anti-Kickback Act violations form the basis for a federal False Claims Act violation, carrying penalties between $11,181 and $22,363 for each false claim submitted, as well as treble damages and administrative penalties (31 USC §§ 3729-3733). The government also can impose additional civil monetary penalties for violations of the Anti-Kickback Act of up to $50,000 for each prohibited remuneration (42 CFR § 1003.310(a)(3)). US states have enacted similar laws covering the provision of remuneration to referral sources.

Under the Physician Payments Sunshine Act (Section 6002 of the Patient Protection and Affordable Care Act), manufacturers of drugs, medical devices and biologics that participate in federal healthcare programmes must track and report annually remuneration given to physicians and teaching hospitals (See and the Final Rule).


Defect products

How can a liability claim for a defective medicinal product be brought?

In the United States, pharmaceutical product liability claims are governed by state law and vary to some extent in each jurisdiction. Generally, a plaintiff may seek compensation for injuries sustained from the use of a medicinal product under one of the following theories:

  • defective design;
  • manufacturing defect;
  • failure to warn;
  • breach of warranty;
  • fraud or misrepresentation; and
  • certain consumer protection laws.

To succeed under these theories, a plaintiff typically must establish that:

  • the manufacturer breached a duty of care; and
  • the breach caused or contributed to the plaintiff’s alleged injury.

Punitive damages are available in certain situations, usually limited to cases where wrongful conduct is intentional or reckless.

Which parties can be held liable for a defective medicinal product?

US product liability laws vary from state to state. In general, any entity involved in the manufacture, distribution or sale of a defective product may be liable for injuries caused by the defect. Potentially liable parties for a defective medicinal product include the manufacturer, the distributor and the retailer of the product. These parties may be found to be liable on theories of design defect, manufacturing defect, failure to warn, breach of warranty, negligence or some combination. The manufacturer may be required to indemnify the distributor or retailer for any losses resulting from the defective medicinal product.


What remedies are available to successful claimants?

A successful claimant in a product liability suit is generally entitled to damages for past and future medical expenses, lost earnings, lost or impaired future earning capacity and lost services from a spouse. They can also recover amounts for pain and suffering, disfigurement, loss of enjoyment of life, mental anguish and loss of consortium. If a physical injury has not yet manifested, a claimant may be able to recover the cost of medical monitoring under very limited and unique circumstances. In certain jurisdictions, a successful claimant may also be able to recover punitive damages if it can show a defendant acted wilfully, recklessly or maliciously. Attorneys’ fees are generally not recoverable.

Exclusion and limitation

On what grounds can liability be excluded?

In the United States, parties may contractually agree to exclude or limit the liability of one or both parties, and various terms may be used to describe this arrangement, such as exculpatory clauses, release of liability agreements and liability waivers. Whether an exculpatory provision will be enforced, however, depends on state legislation and case law developed by courts in that jurisdiction.

What preventive steps can be taken to limit liability?

Potential defendants can attempt to limit their liability by working collaboratively with regulators to ensure the product labelling and warnings are adequate and the design of their product is state of the art.

Compliance and enforcement


What measures are in place to enforce the laws governing medicinal products?

In the United States, there are many laws and regulations relevant to the pharmaceutical and medical device industries, such as the Food Drug and Cosmetic Act and its implementing regulations, federal and state anti-kickback laws, federal and state false claims acts (FCAs), pricing laws and regulations, and the Foreign Corrupt Practices Act (FCPA), to name a few. The US government agency chiefly responsible for regulating pharmaceutical and medical device products is the Food and Drug Administration (FDA). The FDA is responsible for oversight of the clinical investigation and marketing approval of new products, regulating promotional activities and regulating and inspecting the manufacturing process. Additionally, other government agencies such as the US Department of Health and Human Services, the US Department of Justice and state attorneys general investigate issues of fraud and abuse involving federal and state healthcare programmes.

Dishonest practices

What mechanisms are in place to combat bribery, fraud, collusion, counterfeiting and other dishonest practices in the pharmaceutical sector?

The federal Anti-Kickback Act and the FCA are common mechanisms used to combat fraud that affects federal healthcare programmes such as Medicare and Medicaid. The Anti-Kickback Act prohibits exchanging value (or offering) to attempt to induce or reward the referral of federal healthcare programme business (eg, a manufacturer may not reward a physician who prescribes its drug to a Medicare patient). The FCA prohibits anyone from submitting – or causing to be submitted – a false claim to the government for payment. Manufacturers potentially engaged in dishonest practices, including violating the Anti-Kickback Act, face liability – and substantial financial penalties – under the FCA. Individuals may also file an FCA lawsuit on behalf of the government and, if successful, recover a percentage of any damages award.

Concerning bribery, the FCPA prohibits offering money or anything of value to a foreign official to obtain or retain business. Under its terms, the FCPA has a broad jurisdictional reach and applies both to US entities and foreign entities whose shares are listed or traded in the United States. Pharmaceutical companies operating in foreign countries face significant and varied risks under the FCPA.