On March 20, 2017, FDA announced a further delay of the effective date of its January 9, 2017, Final Rule entitled Clarification of When Products Made or Derived From Tobacco Are Regulated As Drugs, Devices or Combination Products; Amendments to Regulations Regarding “Intended Uses,” and requested comments on the industry petition filed in February requesting a stay and reconsideration of the Final Rule. 82 Fed. Reg. 14319; 82 Fed. Reg. 2193. The effective date of the Final Rule had already been delayed once by the incoming Administration. As a result of this most recent announcement, the expansive interpretation of intended use proposed by FDA will not be enforceable until at least March 19, 2018, although the controversial accompanying preamble language could be invoked now, including in False Claims Act (FCA) cases based on alleged violations of the Federal Food, Drug, and Cosmetic Act (FDCA).

“Intended use,” a cornerstone doctrine of food and drug law, determines whether a product is subject to regulation under the FDCA. It also determines whether a drug or device is misbranded under Section 502(f)(1) of the FDCA, which provides that such a product “shall be deemed to be misbranded” unless its labeling contains “adequate directions for use.” 21 U.S.C. § 352(f)(1). FDA has interpreted “adequate directions” in regulations, including a definition of intended use based on a manufacturer’s promotional claims. The regulatory definition for drugs is codified at 21 C.F.R. § 201.128 and for medical devices at 21 C.F.R. § 801.4.

In response to industry requests, FDA had proposed in 2015 to remove language from those two regulations that purported to define intended use based on a manufacturer’s mere knowledge of off-label use—an interpretation that FDA had explicitly disavowed in litigation several years earlier. The Final Rule, however, seeks to amend these provisions by adding a “totality of the evidence” standard, significantly expanding the scope of evidence on which the government would be permitted to rely in asserting that a product has a new “intended use” for which adequate directions are statutorily required. This novel “totality” standard would give FDA (or the Department of Justice (DOJ), which enforces the FDCA and FCA) extraordinarily broad discretion in determining a product’s “intended use.”

FDA’s decision to add a totality standard in the Final Rule was not foreshadowed by the Proposed Rule. In the Notice of Proposed Rulemaking published on September 25, 2015, FDA had explained that changes to 21 C.F.R. §§ 201.128 and 801.4 were needed “to reflect how the agency currently applies them to drugs and devices.” 80 Fed. Reg. 57756. Citing its own briefing in the Allergan case, FDA stated that it did not “regard a firm as intending an unapproved new use for an approved or cleared medical product based solely on that firm’s knowledge that such product was being prescribed or used by doctors for such use.” 80 Fed. Reg. 57756, 57757. Accordingly, FDA proposed to delete the last sentence of the intended use definitions at 21 C.F.R. §§ 201.128 and 801.4 to “better reflect FDA’s interpretation and application of these regulations.” When the Final Rule was published in the Federal Register, however, it did much more than simply remove the “knowledge prong” from the prior definition. The totality standard had not been mentioned (or even hinted at) as part of the proposed rulemaking. Nor had it been suggested by any of the comments submitted to the docket following publication of the Proposed Rule.

The Final Rule represents a logical outgrowth problem from an agency-law perspective. See Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 549 (D.C. Cir. 1983) and Envtl. Integrity Project v. EPA, 425 F.3d 992, 996-97 (D.C. Cir. 2005). Moreover, the Final Rule exceeds the scope of FDA’s authority under the FDCA, as neither the text of the statute, nor its legislative history, nor the decades of case law on intended use provide support for the new totality standard. See, e.g., NNFA v. FDA, 504 F.2d 761, 789 & n.35 (2d. Cir. 1974) and ASH v. Harris, 655 F.2d 236, 238-39 (D.C. Cir. 1980). Indeed, the Fourth Circuit has observed – twice – that “no court has ever found that a product is ‘intended for use’ or intended to affect’ within the meaning of the [FDCA] absent manufacturer claims as to the product’s use.” See Sigma-Tau Pharms., Inc. v. Schwetz, 288 F.3d 141, 146-47 (4th Cir. 2002) (emphasis added); Brown & Williamson Tobacco Corp. v. FDA, 153 F.3d 155, 163 (4th Cir. 1998) (same), aff’d 529 U.S. 120 (2000). FDA itself agreed with that conclusion in 2002 and in 2004. See Letter from Daniel E. Troy, Chief Counsel, FDA to Jeffrey N. Gibbs, Esq., 3 (Oct. 17, 2002); Citizen Petition Response, Docket No. 2003P-0321, 23-24 (Apr. 6, 2004).

The effective date of the Final Rule was delayed (until March 21) by the Priebus Memorandum issued by the new Administration. Under the March 20 notice, the effective date has been pushed back a second time, until March 19, 2018. But the preamble language in the Final Rule has not been expressly disavowed and is potentially problematic even as the Final Rule remains suspended. Moreover, the preamble itself states that the “totality” standard has always been the law, which suggests that the March 20 notice would not necessarily preclude a federal prosecutor or even FDA from seeking to rely on an expansive intended use theory. The broad impact of the preamble language is clear from FDA’s discussion of the range of evidentiary sources the agency deems relevant to intended use determinations.

According to the preamble: “FDA’s longstanding position is that, in determining a product’s intended use, the Agency may look to any relevant source of evidence. . . . In the context of medical products, generally, varied types of evidence, . . . often enables [sic] FDA to pursue medical product manufacturers who attempt to evade FDA jurisdiction by avoiding express claims with respect to their products.” 82 Fed. Reg. at 2207. Accordingly, a manufacturer could be held liable in a FCA case with an FDCA predicate based on any or all of the following types of evidence, as identified by the preamble:

  • Evidence of the manufacturer’s knowledge of off-label use (id. at 2206, 2206 n.18);
  • “[E]vidence of a manufacturer’s marketing plans” (id. at 2207);
  • “[E]vidence of a manufacturer’s . . . directions to its sales force” (id. at 2207, 2208)
  • “[E]vidence of the well-known uses and abuses of [a manufacturer’s] . . . products” (id. at 2207);
  • “[C]ircumstantial evidence relating to the sale and distribution of the product” (id.);
  • Evidence that a product “contain[s] a pharmacological ingredient” (id. at 2208);
  • “[I]nternal firm documents and circumstances surrounding the sale of products” (id.);
  • “[C]onsumer intent” (id.);
  • Evidence of claims that were never communicated to the public (id.); and/or
  • The “overall circumstances” (id.).

Implicitly recognizing that the “totality” interpretation would preclude manufacturers from communicating any off-label information, even under existing safe harbor policies, the preamble also refers to FDA’s “taking into account [of] First Amendment issues.” According to the preamble, therefore, information communicated by manufacturers in accordance with these safe harbors would not be regarded as “evidence of intended use.” Unfortunately, the policy documents in which FDA has identified categories of activities that would not be treated as evidence of intended use generally have been non-binding guidance documents, whereas agency statements describing activities as evidence of intended use have appeared in binding documents, such as the preamble itself.

Comments on these issues must be submitted to FDA by May 19, 2017.

A copy of the Proposed Rule may be found here.

A copy of the Final Rule may be found here.

A copy of the Petition to Stay and for Reconsideration may be found here.

A copy of the Priebus Memorandum may be found here.