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HHS’s Last Ditch Policy Moves – What is the End Game?

Earlier this month, the Department of Health and Human Services (HHS) published a proposed rule that would require sunset dates for its regulations, including regulations under its agencies like the Food and Drug Administration (FDA) and the Centers for Medicare and Medicaid Services (CMS). The proposed rule, “Securing Updated and Necessary Statutory Evaluations Timely,” flew under the radar for most as it was pre-published on Election Day and finalized on November 4th.  If enacted, HHS regulations would sunset pursuant to a specified schedule unless the Department or its agencies preform a retrospective review to assess the economic impact of the requirements consistent with the Regulatory Flexibility Act (RFA).  The first assessment would be required two years after the proposed rule is finalized.

To avoid the sunsetting of regulations, HHS would have to determine whether the requirements have a significant economic impact on a substantial number of small entities and assess how to minimize any such significant impact by considering:

  • a continued need for such regulation;
  • public comments received;
  • complexity of the requirements;
  • overlap with other regulations; and
  • technology considerations.

The agency then may conclude whether the regulation should be amended or rescinded and would have two years to do so. 

With only a one-week notice, HHS held a public hearing on Monday to receive stakeholder comments.  While the stakeholders who presented were diverse, they did not represent all HHS-regulated industries, let alone all FDA-regulated industries. HHS did not otherwise publicize the rulemaking.  None of the commentors supported implementation of the rule as proposed.   Most requested that the agency rescind the proposed rule and, if not, to extend the December 4th public comment deadline.  Stakeholders voiced concerns that the rule, if implemented as proposed, would divert important agency resources away from mission critical work that is needed to protect the public health and would, in fact, burden industry with constantly changing regulatory requirements, would harm patients, and undermine consumer confidence in products and services subject to HHS requirements.

On November 20, HHS’s Chief of Staff also announced that it was ending the FDA’s decades-old “Unapproved Drugs Initiative.”   HHS, rather than FDA, decided that FDA would no longer prioritize enforcement action against unapproved drugs on the market, arguably because unapproved drugs were as safe and effective as approved drugs, but cheaper.  While stating that “Nothing in this announcement prevents FDA from protecting Americans from unapproved drugs that purport to treat, mitigate, or cure COVID-19,” would allow “FDA to devote its limited resources to reviewing innovative potential COVID-19 treatments, as opposed to reviewing older drugs with longstanding use.” This would seem to suggest, for instance, that FDA should be looking the other way at, and ignoring, approved drugs making unproven COVID-19 claims, such as the September 22 Warning Letter issued to of Nephron Pharmaceuticals regarding its unproved claim that its Budesonide Inhalation product could treat COVID-19. 

Then, yesterday, HHS published three notices on:

  • A new Department policy regarding “Redundant, Overlapping or Inconsistent Regulations” which requires HHS and its agencies, when finalizing regulations, to “ensure that any rule is not inconsistent with, and does not overlap with, any regulation that has already been issued through an agency within the Department.”  As with the Unapproved Drugs Initiative, the policy was signed by the HHS Chief of Staff.
  • Requesting information by December 21 on redundant, overlapping or inconsistent HHS regulations, and how such redundancies, inconsistencies, and overlap can be eliminated.  Apart from the impractically short comment period for stakeholders to identify such regulations, we note that the administration already solicited comments on this topic in its Regulatory Reduction Docket.
  • A new policy on “Public Access to Materials Underlying Impact Analyses” which requires HHS and its agencies to post on HHS’s website all data underlying any impact analysis associated with the rulemaking when finalizing it.  We note that this information is typically publicly available in the docket to agency rulemakings to assure compliance with the Administrative Procedure Act, or is otherwise made available to the public on an agency website or via a Freedom of Information Act request.

The above actions raise very basic questions: What is the likelihood of any of the above being implemented, or remaining in place after January 20, 2020, when President-Elect Biden is sworn in?  If the likelihood is small, why have these initiatives been launched?

In the case of finalizing the proposed rule on sunsetting regulations, HHS is on a very tight timeline.   Even if HHS ignored the unanimous requests to extend the comment deadline 60 to 180 days, the Department would still have to respond to comments, finalize the rule, and get the final rule through the Office and Budget and Management (OMB) review before January 19, 2021 – the day before the new administration takes over.  We note that OMB is itself in the midst of a profound upheaval as a result of the implementation of an Executive Order that purportedly classified over 80% of OMB’s current workforce under a newly created “Schedule F” that removes most civil service protections and makes them terminable at will. 

In the case of the Unapproved Drugs Initiative, a global pandemic does not seem to be an appropriate time further encourage a marketplace rife with fraudulent cures, nor to disincentivize those companies that are seeking to bring therapies through the FDA approval process.

We return again to, what is the point?  It seems likely (to these bloggers) that the above policy moves are motivated mostly by optics and politics and are unlikely to achieve any meaningful improvement in the regulatory environment.  Indeed, in our view, these measures are more likely to harm patients and consumers than help them and, for regulated industry, create needless confusion and burdens.  While rational regulation is critically important, a flurry of notices wedged between a national election and Thanksgiving, amid a global pandemic, is not, in our view, a considered way to examine and, where needed, update or rescind regulatory requirements. OFW Law will continue to track these efforts.  Watch this space for more updates.

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