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On May 27, 2021, the Department of Health and Human Services (HHS) and the Food and Drug Administration (FDA) issued a Federal Register notice (May 27 Notice) drastically reversing course from a previously issued and controversial decision by the Trump administration to end FDA’s Unapproved Drug Initiative (UDI).

As we previously wrote, the Trump administration announced back in November 25, 2020 in a Federal Register Notice (November 25 Notice) that they were ending UDI program because they believed that the program had caused an increase in the prices of drugs and they had concerns regarding the legality of how the UDI program was created.

With this new May 27 Notice, FDA and HHS are reinstituting the UDI program and making it clear that FDA will continue to take action against unapproved drugs. Notably, HHS and FDA also state that they are withdrawing the November 25 Notice because it “contained multiple legal and factual inaccuracies.” They also clarify that they disagreed with the previous administration’s analysis that the UDI program led to higher drug costs because the study relied upon for this conclusion was “only a single observational study of 26 products, which included pricing estimates that were not inflation adjusted over the four-year observational period, which could lead to an overestimation of real price changes.” Moreover, the notice points out that HHS never “consulted with, otherwise involved, or even notified FDA before issuing the [November 25 Notice]” noting that this was a violation of the law because the Commissioner of FDA is supposed to execute the Federal Food, Drug, and Cosmetic Act.

In light of these issues, HHS and FDA are withdrawing all previous statements regarding the November 25 Notice, and ending the submission period for comments to the previous November 25 Notice. Further, any comments that had been submitted to the government on this issue (as had been requested in the November 25 Notice) will not be considered.

Of particular interest, FDA notes in this May 27 Notice that the withdrawal of FDA’s CPG 440.100 by the November 25 Notice did not “represent a change in the legal obligations that apply to new drugs or to FDA’s existing enforcement authority over unapproved drugs.” Nevertheless, the Agency will be publishing a new guidance document on this issue. As FDA states: “Although the withdrawal of FDA’s CPG 440.100 guidance does not change the legal obligations that apply to new drugs, or FDA’s existing enforcement authority over unapproved new drugs, we recognize that the withdrawal of the CPG may have created confusion for the public, including regulated industry, as to how FDA intends to prioritize its enforcement resources in this area. FDA therefore plans to issue guidance on this topic consistent with good guidance practices.”

Because this is a dramatic reversal of the positions articulated by HHS and FDA just months prior, there may be legal challenges to FDA’s revised approach. Those companies that have business operations that are impacted by the regulatory status of unapproved drugs should consult their regulatory counsel about how best to proceed as a result of this announcement. The experienced FDA team at Buchanan Ingersoll & Rooney can assist any companies that have questions regarding this new policy.