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YOUR GO-TO SOURCE FOR ANALYSIS OF ISSUES AFFECTING THE PHARMA & BIOTECH SECTORS

The FDA announced on March 18 that it is suspending onsite routine domestic inspections in an effort to slow the spread of the coronavirus (COVID-19) and help flatten the pandemic curve. This announcement follows a March 10 guidance that routine foreign inspections were suspended. For-cause inspections will proceed if deemed “mission-critical.” Dennis Gucciardo, Michele Buenafe, and Jaqueline Berman address the tools that FDA will use to oversee the safety and quality of FDA-regulated products during this emergency in their recently authored LawFlash.

Read the full LawFlash.

The US Court of Appeals for the Federal Circuit’s February 10 decision in Acetris Health, LLC v. United States provides important guidance regarding the determination of a product’s country of origin, which is a gating issue for prescription drug products the US government is permitted to buy.

As companies that have or intend to commercialize products, including drugs and biologics, for sale to the US government are aware, the Trade Agreements Act (TAA) generally prohibits government purchases of certain foreign products. The Trade Agreements clause and related Trade Agreements certification, which are prescribed by regulation, are the principal clauses in government contracts—such as the VA Federal Supply Schedule (FSS) contract from which all government agencies purchase drugs—that effectuate this requirement. The clauses require companies to certify that products delivered under the government contract will be either manufactured in the United States or “substantially transformed” in the United States or a designated country, e.g., countries with which the United States has entered into trade agreements.

The PRC Ministry of Finance has announced it will audit 77 randomly selected drug makers in China, examining the companies' costs and profits to determine the reasonableness of their drug pricing mechanisms, in a bid to drive down medical costs. The audit will include some of the largest domestic drug makers as well as Chinese subsidiaries of three international pharmaceutical conglomerates.

Read the full LawFlash for more insight on the audit's key areas of focus. This initiative marks the first time the Ministry of Finance has launched a nationwide audit specifically targeting pharmaceutical companies, and it could be expanded if evidence is found to suggest issues are prevalent across the industry.

In the wake of several high-profile incidents regarding data privacy and the misuse of genetic and personal information, including the case of a Chinese scientist who attracted worldwide criticism after reportedly creating the world’s first human babies whose DNA is genetically modified, the Chinese government has recently issued several top-level policy directives reaffirming its commitment to strengthening cybersecurity and the protection of personal data and human genetic information and material. Though driven by recent events, these policy directives are intended to build upon and further strengthen already existing protections enshrined in the country’s constitution and Tort Liability Law, a process that had already begun with the passage of the country’s Cybersecurity Law (CSL) and General Principles of Civil Law in recent years. Specifically, the recent policy directives place strict prohibitions on the unauthorized use of human genetic material for research purposes and create administrative penalties for the unlawful cross-border transfer of genetic information, while simultaneously streamlining the regulatory approval process for such transfers in an effort to mitigate the impact of increased regulation on international cooperation within the life sciences industry.

Read the full LawFlash.

President Donald Trump announced that, as of September 24, 2018, additional tariffs of 10% were imposed on hundreds of chemical ingredients, many of which are used in the manufacturing of dietary supplements, cosmetics, and over-the-counter (OTC) drug products. Manufacturers have had to develop contingency plans and strategies for dealing with the imposition of these tariffs. Such contingency plans may include renegotiating supplier contracts; re-sourcing the ingredients; and notifying distributors and customers of disruptions, delays, or price changes. A rise in the tariff rate to 25% for these products, scheduled for January 1, 2019, has been delayed pending current negotiations with China, and during this period no exclusion requests on particular products are being accepted by the Office of the US Trade Representative.

Read the full LawFlash.