NNCO Releases NNI Supplement to President Biden’s 2025 Budget
On December 19, 2024, the National Nanotechnology Coordination Office (NNCO) released The National Nanotechnology Initiative Supplement to the President’s 2025 Budget, which also serves as the annual report for the National Nanotechnology Initiative (NNI). According to the report, President Biden’s fiscal year (FY) 2025 budget requests over $2.2 billion for NNI, with cumulative funding totaling over $45 billion since the inception of NNI in 2001 when Congress approved increased funding for nanotechnology in FY 2021 appropriations. The funding includes over $900 million in annual investments by the National Institutes of Health alone (along with other important contributions from the U.S. Food and Drug Administration, Centers for Disease Control and Prevention, Biomedical Advanced Research and Development Authority, and basic research agencies, e.g., the U.S. National Science Foundation and U.S. Department of Energy), as nanotechnology-enabled diagnostic and therapeutic technologies for a wide variety of human health threats successfully compete for funding. The report includes examples of how NNI participating agencies are harnessing nanotechnology research and development and education programs to reduce barriers and inequities, from workforce development to economic progress in historically underserved communities. The report states that NNI participating agencies support applied research, experimental development, pre-commercialization, and standards-related efforts that build economic competitiveness, facilitating the adoption of a wide range of nanotechnologies, and helping create good-paying jobs across the country, including in both traditional and emerging industries. The report notes that the coordination provided through NNI has facilitated the proactive responsible development of new technologies, thereby streamlining their adoption.
Rethinking Alcohol Labels: The Surgeon General Calls for Change
In a recent advisory, U.S. Surgeon General Dr. Vivek Murthy underscored the connection between alcohol consumption and increased cancer risk. Citing alcohol as the third leading preventable cause of cancer in the U.S., the advisory links it to at least seven types of cancer, including breast and colorectal cancers. Despite this, according to Dr. Murthy, less than half of Americans recognize alcohol as a cancer risk factor. Dr. Murthy notes that alcohol is implicated in around 100,000 cancer cases and 20,000 cancer deaths annually, exceeding alcohol-related traffic fatalities. The advisory recommends updating the health warning label on alcohol beverages, reassessing recommended limits for alcohol consumption, strengthening public educational awareness, and promoting alcohol screenings in the clinical setting.
The health warning label on alcohol products, mandated pursuant to 27 U.S.C. 215, has remained unchanged since 1988. Although Dr. Murthy provides his recommendation to update the warning, his advisory admits that the “power to change the label statement lies with Congress.” Notably, Dr. Murthy’s advisory does not provide a sample of the language he would recommend to add to the existing health warning label on alcoholic beverages. However, his advisory points out that Ireland has a new health label going into effect in 2026 that will state that “there is a direct link between alcohol and fatal cancers”. Given the existing research showing some benefit from limited consumption of some alcohol, we expect that if Congress adopted such language, it would be challenged in the courts.
While the advisory calls for a reassessment of alcohol consumption guidelines and increased public health education, critics might question whether the recommendations adequately consider the complexity of cancer risk factors. The advisory also suggests a significant role for health care providers in informing patients about the risks, which may be challenging given the nuanced nature of individual risk factors. Dr. Murthy explains the cancer risk is also heavily determined by complex factors– biological, environmental, social, and economic factors. For example, as explained in the advisory, individuals of East Asian descent have a genetic variant that results in flushing, producing a higher biological risk for certain alcohol-related cancers. Social factors includes social norms, such as cultural norms. Asking individuals to commit to long-term quitting could be difficult due to the role alcohol plays in different social backgrounds and cultures. Additionally, the practicality of implementing widespread label changes and public awareness campaigns could face logistical and economic hurdles, potentially limiting the advisory’s effectiveness. The effectiveness could also be limited by incomplete or conflicting scientific findings, as noted above.
Alcohol is not alone in being targeted for health warnings by government actors. For instance, recently the sugar-sweetened beverage segment undertook a multi-year fight against an ordinance passed in San Francisco requiring that outdoor signs advertising sugar-sweetened beverages include a warning label, covering twenty percent of the sign, advising of the negative health impact of consuming such products. Round one of that litigation ultimately went for industry, with the Ninth Circuit ruling that the ordinance likely violated industry’s First Amendment rights. In response, San Francisco passed a new ordinance in 2020 that imposed a similar warning requirement but which reduced the size requirement to ten percent. Litigation again ensued, but this time resulted in San Francisco repealing the ordinance in 2021.
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FDA Finalizes a New Definition of ‘Healthy’ for Food Labeling
On Dec. 19, 2024, the U.S. Food and Drug Administration (FDA) announced a long-awaited final rule revising the definition of “healthy” when used in the labeling of food products.
The rule revises the FDA’s criteria for use of terms like “healthy,” “healthful,” and “healthier,” terms that are implied nutrient content claims (NCCs) under FDA regulations in 21 CFR 101.65. To make a compliant “healthy” claim under the new criteria, a food product needs to (1) contain a specified amount of food from at least one of the food groups or subgroups identified, which include fruit, vegetables, grains, fat-free and low-fat dairy, and proteins recommended by the Dietary Guidelines for Americans and (2) contain levels of added sugars, saturated fat, and sodium below certain specified limits. The new definition of “healthy” also includes water, tea, and coffee with five calories or fewer per serving, without having to meet any other criteria.
The FDA, which has regulated the term “healthy” since 1994, noted that the definition needed an update “to be consistent with current nutrition science and Federal dietary guidance, especially the Dietary Guidelines for Americans (Dietary Guidelines), regarding how consumers can maintain healthy dietary practices.” While the effective date of this rule is 60 days from the Dec. 27, 2024, date of publication in the Federal Register, the industry will have over three years to evaluate this new definition of “healthy” and to change packaging and labeling as necessary, as the compliance date is Feb. 25, 2028.
The FDA issued a proposed rule in September 2022, soliciting comments from stakeholders on its revised definition of “healthy.” The FDA then issued its final rule after reviewing over 400 submitted comments. The final rule revises the criteria for determining when the term “healthy,” or derivative terms such as “healthful” and “healthier,” can be legally used as a NCC when labeling human food, beverage, and dietary supplement products to help consumers identify foods that are particularly useful as the foundation of a nutritious diet consistent with dietary recommendations. The FDA amended 21 CFR 101.65(d) by removing various upper limits pertaining to total fat and cholesterol, as well as certain minimums for at least one of fiber, protein, vitamin A, vitamin C, calcium, or iron. Instead, the new definition focuses on just three nutrients: saturated fat, added sugars, and sodium.
In addition to allowing water, tea, and coffee with five calories or fewer to be identified as “healthy,” the FDA, for the first time, has recognized that certain food categories should be recognized as inherently “healthy” when comprising no added ingredients other than water. Those foods include vegetables, fruit, whole grains, fat-free or low-fat dairy, lean meat, seafood, eggs, beans, peas, lentils, nuts, and seeds. This means that companies selling products like avocados and cashews, which were previously excluded because of high levels of naturally occurring saturated fat, may now label these foods “healthy” under the new definition.
The FDA has also introduced the concept of food groups and food group equivalents (FGEs) as an aspect of the “healthy” definition, identifying different ceilings for allowable added sugars, sodium, and saturated fat, based on the food group. For mixed ingredient products, certain threshold levels of one or more of the food groups must be included, in addition to meeting the requisite levels of saturated fat, sodium, and added sugars, in order to use the term “healthy.” The FDA provides a table listing the various criteria for each type of food or group in the revised 21 CFR 101.65(d).
Included in the revised rule are obligations for manufacturers to make and keep written records to verify that any food promoted with a “healthy” claim meets the FGE requirements. The FDA is also exploring the development of a “healthy” symbol that manufacturers could use to market a product’s “healthy” characteristics, although no symbol has yet been finalized.
The Impact of Trump’s Tariffs on the Wine Industry: Past and Future
The wine industry faced significant challenges due to tariffs imposed by President Trump’s first administration. During the presidential campaign, and since his election on November 5, 2024, President Trump has made it clear that he will enact higher tariffs as a key part of the political agenda of his second administration. A few days ago, he nominated Jamieson Greer as his pick for U.S. Trade Representative as the nation’s top trade official, who served as chief of staff to Robert Lighthizer, then U.S. Trade Representative during Trump’s first term; if confirmed by the U.S. Senate, Mr. Greer is expected “to pursue an ambitious trade agenda.” This post highlights the history of Trump’s tariffs on wine, their effects, and what might be expected in his new term.
Trump’s First Term: A Retrospective
In October 2019, the Trump administration imposed a 25% tariff on still wines under 14% alcohol by volume from France, Germany, Spain, and the United Kingdom. These tariffs were part of a broader trade dispute with the European Union over subsidies to aerospace companies. The tariffs led to increased costs for importers, distributors, and ultimately consumers, causing significant disruption in the wine market.
Notable Effects of the 2019 Tariffs:
Increased Prices: The cost of European wines in the U.S. rose, leading to higher prices for consumers. The tariffs specifically targeted alcoholic beverages. However, supplies such as barrels and other equipment were not subject to them.
Market Shifts: Some European producers adjusted their products to avoid tariffs, such as by increasing the alcohol content of their wines.
Economic Impact: The tariffs strained relationships with European trade partners and led to retaliatory tariffs on American products. For instance, the European Union imposed a 25% tariff on American whiskey and Harley-Davidson motorcycles.
Potential Tariffs in Trump’s New Term
As Trump begins his new term, there is speculation about the potential for new tariffs and their impact on the wine industry. Trump has indicated a willingness to impose even higher tariffs on a broader range of products. Here are some possibilities:
Broader Tariffs: Trump has suggested tariffs as high as 100% on goods from China and 25% on goods from Mexico and Canada. When Trump imposed tariffs on China in his first administration, in April 2018, China retaliated by imposing a 15% tariff on U.S. wine. Thus, broader tariffs in Trump’s second administration could impact (directly or indirectly) the wine industry.
Economic Consequences: Higher tariffs could lead to a “long-term war” in trade, affecting thousands of jobs and causing economic instability.
Industry Response: The wine industry is already preparing for potential disruptions. Importers and retailers are considering stockpiling European wines to hedge against future price increases.
The Broader Economic Context
The potential for new tariffs comes at a time when the global economy is already facing significant challenges. The COVID-19 pandemic had already disrupted supply chains and led to economic slowdowns worldwide. In this context, additional tariffs could exacerbate existing problems and create new ones.
Supply Chain Disruptions: The wine industry relies on a complex global supply chain. Tariffs can disrupt this chain by increasing costs and creating uncertainty.
Consumer Behavior: Higher prices for imported wines may lead consumers to switch to domestic alternatives or reduce their overall wine consumption.
Global Trade Relations: Tariffs can strain relationships between countries and lead to retaliatory measures, further complicating international trade.
Industry Strategies and Adaptations
The wine industry has shown resilience in the face of past challenges and is likely to adapt to new tariffs as well. Some strategies that industry stakeholders might employ include:
Diversifying Supply Chains: Importers may seek to diversify their sources of wine to reduce reliance on countries subject to tariffs.
Product Adjustments: Producers might adjust their products to avoid tariffs, such as by changing the alcohol content or packaging size.
Advocacy and Negotiation: Industry groups may engage in advocacy efforts to influence trade policy and negotiate for more favorable terms.
Conclusion
The wine industry faces significant uncertainty as President Trump begins his new term. The tariffs imposed during his first term had far-reaching effects, and new tariffs could exacerbate these challenges. Industry stakeholders are bracing for potential economic fallout and preparing strategies to mitigate the impact. As the situation evolves, the wine industry will need to navigate these complexities to maintain stability and growth.
The future of the wine industry under Trump’s new term remains uncertain, but one thing is clear: the industry will need to remain adaptable and resilient in the face of ongoing challenges. By understanding the potential impacts of new tariffs and preparing accordingly, the wine industry can continue to thrive despite the obstacles it may encounter.
FDA Finalizes Lead Restrictions in Processed Foods for Babies and Young Children
On January 6, 2025, the U.S. Food & Drug Administration (FDA, or the Agency) issued a final guidance ,“Action Levels for Lead in Processed Food Intended for Babies and Young Children: Guidance for Industry” which aims to regulate lead levels in processed foods for infants and toddlers under two years old.
As we have previously blogged, in 2021, FDA initiated its Closer to Zero policy which identified actions the Agency will take to reduce exposure to toxic elements, including lead, to as low as possible while maintaining access to nutritious foods.
As part of this initiative, FDA has also evaluated mercury, cadmium, and arsenic in foods intended for babies and young children, as well as lead in juices. Under this initiative, FDA has prioritized babies and young children as they are especially vulnerable to lead exposure, which accumulates in the body over time.
Lead is naturally present in the environment, but human activities have also released elevated levels of lead, contaminating soil, water, and air. This contamination can affect crops used in food production.
Lead exposures can lead to developmental harm to children by causing learning disabilities, behavioral difficulties, lowered IQ, and may be associated with immunological, cardiovascular, and reproductive and or/developmental effects.
To address this concern, FDA established the following action levels in the final guidance for processed foods intended for babies and young children:
10 parts per billion (ppb) for fruits, vegetables (excluding single-ingredient root vegetables), mixtures (including grain- and meat-based mixtures), yogurts, custards/puddings, and single-ingredient meats;
20 ppb for single-ingredient root vegetables; and
20 ppb for dry infant cereals.
If a processed food intended for babies and young children reaches or exceeds the aforementioned levels of lead, the product will be considered adulterated within the meaning of section 402(a)(1) of the Federal Food, Drug, and Cosmetic Act (FD&C Act).
After publishing the final action levels, the Agency will establish a timeframe for assessing industry’s progress toward meeting the action levels and resume research to determine whether the scientific data supports efforts to further adjust the action levels.
How Will the Cannabis World Look When Marijuana Is Rescheduled?
A few weeks ago, someone at a holiday party asked “Whitt, why doesn’t Budding Trends take on the weighty legal issues of the day and instead resort to cheap pop culture references and puns?” I thought about responding with a quote from “Run Like an Antelope” but then it hit me: Maybe we should give some thought to a more high-minded discussion about the practical implications of marijuana rescheduling. (Editor’s note: This exchange did not actually happen.) So, I guess set the gear shift for the high gear of your soul, and let’s dive in.
It has been said that our greatest hopes and our worst fears are seldom realized. I think the recent efforts by DEA to reschedule marijuana from Schedule I to Schedule III is a good example of both. Those looking for news that marijuana is soon to be freely available nationwide will be disappointed, as, we suspect, will those who fear that rescheduling will immediately destroy the existing marijuana industry. It’s like Tom Petty reminded us, “most things I worry about, never happen anyway.”
None of This Matters if Marijuana Is Not Rescheduled, and That’s Far from a Settled Question
All of this is, of course, moot if marijuana is not rescheduled. While rescheduling is considered by many to be a fait accompli (oh yeah, Budding Trends dropping French on you) – and I agree it is more likely than not that marijuana will be rescheduled, although not in 2025 – there are a number of potential roadblocks standing in the way. We previously wrote about the process here.
But even if marijuana is not rescheduled in the near future, hopefully the discussion below will be helpful in thinking through the practical implications if marijuana is rescheduled in the future.
280E in the Rearview
It is widely assumed by many that one of the certain impacts of rescheduling is that marijuana operators would no longer be subject to the draconian tax consequences of 280E.
We previously wrote on the subject:
One of the most significant impediments to the growth of marijuana operators, and dispensaries in particular, is 26 U.S.C 280E. That one-sentence provision may be the biggest hurdle to the development of the marijuana industry in the United States. It dictates that:
“No deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.”
280E has crippled the marijuana industry, often exacting an effective tax rate north of 60% for operators. “Within the meaning of schedule I and II of the Controlled Substances Act” is the ballgame. If marijuana is rescheduled to Schedule III, 280E would no longer apply and marijuana operations would be taxed as normal businesses – provided that Congress did not specially enact a marijuana tax.
Obviously, state tax laws may still penalize marijuana businesses akin to 280E, but some states proactively exempted licensed cannabis businesses from those impacts.
One question that has stuck in my mind is whether rescheduling marijuana to Schedule III would remove state-legal operators from the ambit of 280E, or would that benefit only be afforded to businesses who manufactured, distributed, and sold FDA-approved Schedule III products (i.e., not most state-licensed operators at present)?
This is a question of statutory interpretation, and I think it comes down to how the government characterizes marijuana that is not compliant with Schedule III requirements. Is non-compliant marijuana still a Schedule III substance? If so, does it somehow become Schedule I or II? If not, then it would appear that that 280E does not capture non-compliant marijuana because that provision appears to be limited on its face to Schedule I and II substances. I think the better reading is that, while non-compliant marijuana operators may face consequences as discussed immediately below, 280E will no longer include marijuana.
Another related question of great interest to marijuana operators currently sitting on huge overdue tax bills is whether rescheduling marijuana would have a retroactive effect eliminating the existing tax liabilities for marijuana operators. Generally speaking, changes to tax laws are not retroactive unless Congress expressly says so. It strikes me as very unlikely that lawmakers will be interested in allowing marijuana operators who have not paid their full tax bills for years (and in some instances publicly admitted as much) to simply walk away from those obligations.
State Medical Programs
So, if marijuana is rescheduled, what happens to existing marijuana businesses operating under the auspices of state laws? This, as well as the fate of adult-use operators discussed immediately below, may be the most consequential yet unclear aspects of rescheduling.
State-licensed marijuana operators have existed in a sort of legal limbo since their inception. How, if at all, will the rules change for state-licensed operators if marijuana is rescheduled?
The way I see it, there are three paths forward for state-licensed marijuana operators if marijuana is rescheduled:
The federal government, in a break from more than a decade of quasi-official federal policy, could actually follow the Controlled Substances Act and require marijuana operators to meet the requirements for Schedule III substances.
There is no practical change and the federal policy of non-enforcement of most marijuana operations remains in place, along with a similar posture from the states with marijuana regimes.
There is no immediate change in federal enforcement policy, but states tighten marijuana rules over time to allow for a gradual change such that access to marijuana is not immediately shut off as the federal government and marijuana operators take the steps necessary to treat marijuana like other Schedule III substances.
In a nutshell, the path chosen will answer what I believe is the most interesting and critical question in this whole discussion: Does the government intend for marijuana scheduling to be a dead letter or does the government intend to regulate marijuana as a controlled substance?
That answer will govern whether and, if so, how the federal government will regulate state-licensed cannabis operators – including potential enforcement actions.
Of the three paths above, the first strikes me as the least likely and the last strikes me as the most likely. Why? I am skeptical that the federal government would shut down existing access to marijuana (i.e., state-licensed operators) under the guise of making marijuana more available. That certainly does not comport with the statements of the political supporters of rescheduling or the spirit of rescheduling. And make no mistake, it will take years of clinical trials and FDA approval for the first marijuana medication (in a specific formulation with a specific indication) to be approved for use by patients.
I do think, however, that there will be political pressure from certain companies that do develop FDA-approved marijuana medications to curtail the state markets. Why would a company spend the substantial time and money to develop a Schedule III medication for FDA approval for a specific indication when someone can just buy marijuana to be used for any purpose from a dispensary down the street?
State Adult-Use Programs
Like state-licensed medical marijuana operators, state-licensed adult use operators have also been operating in legal purgatory, albeit with probably less legal certainty than medical operators.
To be very clear: Rescheduling marijuana under the Controlled Substances Act will do absolutely nothing to the legality of adult-use marijuana. Schedule III regulates medications prescribed by physicians and does not contemplate the recreational use of any Schedule III product.
But what does this actually mean for adult-use programs and individual operators as a practical matter? Well, as with several of the points above, we’ll see.
It is certainly possible that the federal government will continue its hands-off approach to adult-use marijuana programs. It is also possible that the federal government – and potentially some state governments – will use the ability to access federally legal marijuana by prescription to scrap existing adult-use programs. But if I was a betting man (and I am), I would bet that at least in the short term there would not be much impact, if any, to adult-use regimes.
Interstate Commerce
When it comes to transporting marijuana across state lines with Schedule III approval and appropriate federal and state licenses, interstate commerce should not be a problem.
When it comes to transporting unlicensed marijuana, theoretically it would remain illegal, and it will come down to the federal government’s appetite to enforce interstate transportation of marijuana.
Banking
Here is another instance where it depends on whether the federal government insists that marijuana products comply with the rules of Schedule III.
If the federal government insists on strict compliance with Schedule III, then any non-conforming products would likely fall within the ambit of anti-money laundering statutes. If, on the other hand, the government treats all marijuana as Schedule III, then banks may be able (albeit perhaps uninterested initially) to bank all marijuana businesses.
Private Investment
I expect there will be an immediate influx of private capital to marijuana businesses if marijuana is rescheduled. Momentum will (at least appear to) be on the side of marijuana businesses. A number of funds that have formal or informal policies governing investment in marijuana businesses will immediately investigate the opportunities. And investors will be even more motivated because it appears that 280E would no longer provide a substantial tax headwind for growth of those businesses.
This could all be thwarted if the federal government immediately makes clear that it will vigorously enforce the requirements of Schedule III, meaning that it will be extremely cash-intensive to develop profit-generating products. As noted above, I think that is unlikely, but it would certainly be an impediment to obtaining private capital.
Big Pharma/Pharmacies
The multibillion-dollar question: What role, if any, will big pharmaceutical companies and pharmacies play in the event marijuana is rescheduled?
I suspect big pharma won’t rush into the marijuana space, in part because of all the uncertainties discussed above and in part for reputational reasons. But I will be on the lookout for quiet investments by Big Pharma in companies researching and developing marijuana formulations that meet the requirements of Schedule III.
If things break a certain way, you may be able to get the best weed ever made courtesy of a brand-name pharmaceutical company. But I do believe we are years away from that happening.
Intellectual Property
This area of the law could be particularly interesting because the USPTO will have a layer of input on top of the Department of Justice and state regulators. If a product complies with Schedule III, it will have the ability to be protected by United States intellectual property laws, including trademarks and patents. If it does not comply with Schedule III, the USPTO could independently conclude that such products may not avail themselves of those protections.
Conclusions
[Deep exhale] For years, cannabis activists and legal scholars have debated the possibility and the wisdom of rescheduling marijuana. Now that we may – and I stress may – be on the horizon, it seems there are just as many questions as answers about what the implications of that change would be. So much of those implications depend on things that we do not yet know. For example, will a Trump HHS/DOJ/DEA take a different position than the Biden HHS/DOJ/DEA? Will states change their rules in response to rescheduling? And how will financial institutions and private investors react to those developments.
McDermott+ Check-Up: January 10, 2025
THIS WEEK’S DOSE
119th Congress Begins. The new Congress began with key membership announcements for relevant healthcare committees.
Cures 2.1 White Paper Published. The document outlines the 21st Century Cures 2.1 legislative proposal, focusing on advancing healthcare technologies and fostering innovation.
Senate Budget Committee Members Release Report on Private Equity. The report, released by the committee’s chair and ranking member from the 118th Congress, includes findings from an investigation into private equity’s role in healthcare.
HHS OCR Proposes Significant Updates to HIPAA Security Rule. The US Department of Health & Human Services (HHS) Office for Civil Rights (OCR) seeks to address current cybersecurity concerns.
HHS Releases AI Strategic Plan. The plan outlines how HHS will prioritize resources and coordinate efforts related to artificial intelligence (AI).
CFPB Removes Medical Debt from Consumer Credit Reports. The Consumer Financial Protection Bureau (CFPB) finalized its 2024 proposal largely as proposed.
President Biden Signs Several Public Health Bills into Law. The legislation includes the reauthorization and creation of public health programs related to cardiomyopathy, autism, and emergency medical services for children.
CONGRESS
119th Congress Begins. The 119th Congress began on January 3, 2025. Lawmakers reelected Speaker Johnson in the first round of votes and adopted the House rules package. The first full week in session was slow-moving due to a winter storm in Washington, DC; funeral proceedings for President Jimmy Carter; and the certification of electoral college votes. Committees are still getting organized, and additions to key health committees include:
House Energy & Commerce: Reps. Bentz (R-OR), Houchin (R-IN), Fry (R-SC), Lee (R-FL), Langworthy (R-NY), Kean (R-NJ), Rulli (R-OH), Evans (R-CO), Goldman (R-TX), Fedorchak (R-ND), Ocasio-Cortez (D-NY), Mullin (D-CA), Carter (D-LA), McClellan (D-VA), Landsman (D-OH), Auchincloss (D-MA), and Menendez (D-NJ).
House Ways & Means: Reps. Moran (R-TX), Yakym (R-IN), Miller (R-OH), Bean (R-FL), Boyle (D-PA), Plaskett (D-VI), and Suozzi (D-NY).
Senate Finance: Sens. Marshall (R-KS), Sanders (I-VT), Smith (D-MN), Ray Luján (D-NM), Warnick (D-GA), and Welch (D-VT).
Senate Health, Education, Labor & Pensions: Sens. Scott (R-SC), Hawley (R-MO), Banks (R-IN), Crapo (R-ID), Blackburn (R-TN), Kim (D-NJ), Blunt Rochester (D-DE), and Alsobrooks (D-MD).
Congress has a busy year ahead. The continuing resolution (CR) enacted in December 2024 included several short-term extensions of health provisions (and excluded many others that had been included in an earlier proposed bipartisan health package), and these extensions will expire on March 14, 2025. Congress will need to complete action on fiscal year (FY) 2025 appropriations by this date, whether by passing another CR through the end of the FY, or by passing a full FY 2025 appropriations package. The short-term health extenders included in the December CR could be further extended in the next appropriations bill, and Congress also has the opportunity to revisit the bipartisan, bicameral healthcare package that was unveiled in December but ultimately left out of the CR because of pushback from Republicans about the overall bill’s size.
The 119th Congress will also be focused in the coming weeks on advancing key priorities – including immigration reform, energy policy, extending the 2017 tax cuts, and raising the debt limit – through the budget reconciliation process. This procedural maneuver allows the Senate to advance legislation with a simple majority, rather than the 60 votes needed to overcome the threat of a filibuster. Discussions are underway about the scope of this package and the logistics (will there be one reconciliation bill or two?), and we expect to learn more in the days and weeks ahead. It is possible that healthcare provisions could become a part of such a reconciliation package.
Cures 2.1 White Paper Published. Rep. Diana DeGette (D-CO) and former Rep. Larry Bucshon (R-IN) released a white paper on December 24, 2024, outlining potential provisions of the 21st Century Cures 2.1 legislative proposal expected to be introduced later this year. This white paper and the anticipated legislation are informed by responses to a 2024 request for information. The white paper is broad, discussing potential Medicare reforms relating to gene therapy access, coverage determinations, and fostering innovation. With Rep. Bucshon’s retirement, all eyes are focused on who will be the Republican lead on this effort.
Senate Budget Committee Members Release Report on Private Equity. The report contains findings from an investigation into private equity’s role in healthcare led by the leaders of the committee in the 118th Congress, then-Chair Whitehouse (D-RI) and then-Ranking Member Grassley (R-IA). The report includes two case studies and states that private equity firms have become increasingly involved in US hospitals. They write that this trend impacts quality of care, patient safety, and financial stability at hospitals across the United States, and the report calls for greater oversight, transparency, and reforms of private equity’s role in healthcare. A press release that includes more documents related to the case studies can be found here.
ADMINISTRATION
HHS OCR Proposes Significant Updates to HIPAA Security Rule. HHS OCR released a proposed rule, HIPAA Security Rule to Strengthen the Cybersecurity of Electronic Protected Health Information (ePHI). HHS OCR proposes minimum cybersecurity standards that would apply to health plans, healthcare clearinghouses, most healthcare providers (including hospitals), and their business associates. Key proposals include:
Removing the distinction between “required” and “addressable” implementation specifications and making all implementation specifications required with specific, limited exceptions.
Requiring written documentation of all Security Rule policies, procedures, plans, and analyses.
Updating definitions and revising implementation specifications to reflect changes in technology and terminology.
Adding specific compliance time periods for many existing requirements.
Requiring the development and revision of a technology asset inventory and a network map that illustrates the movement of ePHI throughout the regulated entity’s electronic information system(s) on an ongoing basis, but at least once every 12 months and in response to a change in the regulated entity’s environment or operations that may affect ePHI.
Requiring notification of certain regulated entities within 24 hours when a workforce member’s access to ePHI or certain electronic information systems is changed or terminated.
Strengthening requirements for planning for contingencies and responding to security incidents.
Requiring regulated entities to conduct an audit at least once every 12 months to ensure their compliance with the Security Rule requirements.
The HHS OCR fact sheet is available here. Comments are due on March 7, 2025. Because this is a proposed rule, the incoming Administration will determine the content and next steps for the final rule.
HHS Releases AI Strategic Plan. In response to President Biden’s Executive Order on AI, HHS unveiled its AI strategic plan. The plan is organized into five primary domains:
Medical research and discovery
Medical product development, safety and effectiveness
Healthcare delivery
Human services delivery
Public health
Within each of these chapters, HHS discusses in-depth the context of AI, stakeholders engaged in the domain’s AI value chain, opportunities for the application of AI in the domain, trends in AI for the domain, potential use-cases and risks, and an action plan.
The report also highlights efforts related to cybersecurity and internal operations. Lastly, the plan outlines responsibility for AI efforts within HHS’s Office of the Chief Artificial Intelligence Officer.
CFPB Removes Medical Debt from Consumer Credit Reports. The final rule removes $49 billion in unpaid medical bills from the credit reports of 15 million Americans, building on the Biden-Harris Administration’s work with states and localities. The White House fact sheet can be found here. Whether the incoming Administration will intervene in this rulemaking remains an open question.
President Biden Signs Several Public Health Bills into Law. These bills from the 118th Congress include:
H.R. 6829, the HEARTS Act of 2024, which mandates that the HHS Secretary work with the Centers for Disease Control and Prevention, patient advocacy groups, and health professional organizations to develop and distribute educational materials on cardiomyopathy.
H.R. 6960, the Emergency Medical Services for Children Reauthorization Act of 2024, which reauthorizes through FY 2029 the Emergency Medical Services for Children State Partnership Program.
H.R. 7213, the Autism CARES Act of 2024, which reauthorizes, through FY 2029, the Developmental Disabilities Surveillance and Research Program and the Interagency Autism Coordinating Committee in HHS, among other HHS programs to support autism education, early detection, and intervention.
QUICK HITS
ACIMM Hosts Public Meeting. The HHS Advisory Committee on Infant and Maternal Mortality (ACIMM) January meeting included discussion and voting on draft recommendations related to preconception/interconception health, systems issues in rural health, and social drivers of health. The agenda can be found here.
CBO Releases Report on Gene Therapy Treatment for Sickle Cell Disease. The Congressional Budget Office (CBO) report did not estimate the federal budgetary effects of any policy, but instead discussed how CBO would assess related policies in the future.
CMS Reports Marketplace 2025 Open Enrollment Data. As of January 4, 2025, 23.6 million consumers had selected a plan for coverage in 2025, including more than three million new consumers. Read the fact sheet here.
CMS Updates Hospital Price Transparency Guidance. The agency posted updated frequently asked questions (FAQs) on hospital price transparency compliance requirements. Some of the FAQs are related to new requirements that took effect January 1, 2025, as finalized in the Calendar Year 2024 Outpatient Prospective Payment System/Ambulatory Services Center Final Rule, and others are modifications to existing requirements as detailed in previous FAQs.
GAO Releases Reports on Older Americans Act-Funded Services, ARPA-H Workforce. The US Government Accountability Office (GAO) report recommended that the Administration for Community Living develop a written plan for its work with the Interagency Coordinating Committee on Healthy Aging and Age-Friendly Communities to improve services funded under the Older Americans Act. In another report, the GAO recommended that the Advanced Research Projects Agency for Health (ARPA-H) develop a workforce planning process and assess scientific personnel data.
VA Expands Cancers Covered by PACT Act. The US Department of Veterans Affairs (VA) will add several new cancers to the list of those presumed to be related to burn pit exposure, lowering the burden of proof for veterans to receive disability benefits. Read the press release here.
HHS Announces $10M in Awards for Maternal Health. The $10 million in grants from the Substance Abuse and Mental Health Services Administration (SAMHSA) will go to a new community-based maternal behavioral health services grant program. Read the press release here.
Surgeon General Issues Advisory on Link Between Alcohol and Cancer Risk. The advisory includes a series of recommendations to increase awareness of the connection between alcohol consumption and cancer risk and update the existing Surgeon General’s health warning label on alcohol-containing beverages. Read the press release here.
SAMHSA Awards CCBHC Medicaid Demonstration Planning Grants. The grants will go to 14 states and Washington, DC, to plan a Certified Community Behavioral Health Clinic (CCBHC). Read the press release here.
HHS Announces Membership of Parkinson’s Advisory Council. The Advisory Council on Parkinson’s Research, Care, and Services will be co-chaired by Walter J. Koroshetz, MD, Director of the National Institutes of Health’s National Institute of Neurological Disorders and Stroke, and David Goldstein, MS, Associate Deputy Director for the Office of Science and Medicine for HHS’s Office of the Assistant Secretary for Health. Read the press release here.
NEXT WEEK’S DIAGNOSIS
The House and Senate are in session next week and will continue to organize for the 119th Congress. Confirmation hearings are expected to begin in the Senate for President-elect Trump’s nominees, although none in the healthcare space have been announced yet. On the regulatory front, CMS will publish the Medicare Advantage rate notice.
Transparency Is the Best Medicine: Device Parts Don’t Justify Orange Book Listing
The US Court of Appeals for the Federal Circuit affirmed a district court’s delisting of patents from the Orange Book because the patent claims did not “claim the drug that was approved” or the active ingredient of the drug that was approved. Teva Branded Pharmaceutical Products R&D, Inc., et al. v. Amneal Pharmaceuticals of New York, LLC, et al., Case No. 24-1936 (Fed. Cir. Dec. 20, 2024) (Prost, Taranto, Hughes, JJ.)
Teva owns the product that Amneal sought to delist, ProAir® HFA Inhalation Aerosol. The ProAir® HFA combines albuterol sulfate (the active ingredient) with a propellant and an inhaler device to administer the drug. Although the US Food and Drug Administration (FDA) approved Teva’s ProAir® HFA as a drug, the ProAir® HFA contains both drug and device components (the device components being the physical machinery of the inhaler). Teva lists nine nonexpired patents in the Orange Book for its ProAir® HFA.
Amneal filed an abbreviated new drug application (ANDA) seeking approval to market a generic version of the ProAir® HFA that uses the same active ingredient. Amneal asserted that it did not infringe Teva’s nine patents listed for the ProAir® HFA. Teva sued for infringement of six of those patents. Amneal filed counterclaims for antitrust and for a declaratory judgment of noninfringement and invalidity and sought an order requiring Teva to delist the five patents that it asserted against Amneal. Amneal moved for judgment on the pleadings on the ground that Teva improperly listed the asserted patents. The district court granted Amneal’s motion, concluding that Teva’s patents “do not claim the drug for which the applicant submitted the application.” The district court ordered Teva to delist its patents from the Orange Book. Teva appealed.
On appeal, Teva argued that a patent can be listed in the Orange Book if the claimed invention is found in any part of its new drug application (NDA) product. Teva argued that a patent “claims the drug” if the claim reads on the approved drug (i.e., if the NDA product infringes that claim). Teva also argued that according to the Federal Food, Drug, and Cosmetic Act’s broad definition of the word “drug,” any component of an article that can treat disease meets the statutory definition of a “drug.” With this interpretation, Teva’s patents “claim the drug” as the claim dose counter and canister components of the ProAir® HFA.
The Federal Circuit rejected Teva’s interpretation as overbroad because it would allow the “listing of far more patents than Congress has indicated.” The Court rejected Teva’s argument that a patent claiming any component of a drug is listable, explaining that Teva cannot list its patents just because they claim the dose counter and canister parts of the ProAir® HFA.
The Federal Circuit also rejected Teva’s argument that even if Teva’s statutory arguments were rejected, the Federal Circuit must remand the case to the district court to construe the claims. In doing so, the Court rejected Teva’s interpretation of the word “claims” in the listing and counterclaim/delisting provisions, explaining that the listing provision identifies “infringing” and “claiming” as two distinct requirements, and that to be listed, a patent must both claim the drug and be infringed by the NDA product.
The Federal Circuit explained that “infringing the claimed invention has several distinct features that differentiate it from claiming the invention.” In contrast to infringement, which is assessed by facts “out in the world,” claims require “examining the intrinsic meaning of the written patent document.” A product can infringe a patent “without meeting all of the claim elements” and often has additional features.
Teva further argued that a claim qualifies as claiming a drug “even if it only claims device parts.” The Federal Circuit rejected this contention, stating that “it is apparent that a product regulatable and approvable as a drug contains an active ingredient” and noting that “devices have a distinct approval pathway.” The presence of distinct drug and device pathways means that even if a product can simultaneously satisfy the linguistic elements of both, it can only be regulated as a drug or a device, and devices are “characterized more by their purely mechanical nature” (as was the case with Teva’s patents). The Court determined that the “active ingredient” ultimately classifies a drug or biological product, and not the “dosage form.”
Teva further argued that since the FDA designated ProAir® HFA as a combination product, the device components were statutorily a drug. In rejecting this contention, the Federal Circuit again noted the statutory focus on a drug’s active ingredient: an “approved drug” is “an active ingredient,” and to be listed it must meet several requirements, “including that it was identified in an NDA and that the FDA considered whether the active ingredient is safe and effective.” The Court concluded that “including a drug in a combination product does not transform each and every component of that combination product into a drug,” and that “a combination product does not become a drug just because it is regulated as a drug.”
Finally, Teva argued that its patents did claim an active ingredient since each patent has one claim that requires “an active drug.” The Federal Circuit explained that the FDA does not approve drugs based on “reference to some vague active ingredient in the abstract” and that the mere presence of those words was far too broad and would permit “any active ingredient in any form.”
Practice Note: In the slip opinion, at pp 4-12, the Federal Circuit delivers extraordinarily detailed treatise on FDA practice, NDA process, the Hatch-Waxman Act (ANDA practice), Paragraph IV certification, the delisting statute (21 U.S.C. § 355(j)(5)(C)(ii)(I)) and the Orange Book Transparency Act of 2020 (21 U.S.C. § 355(b)(1)(A)(viii)).
FDA Proposes New Rule on Testing Talc-Containing Cosmetic Products
Key Takeaways
What Happened: The Food and Drug Administration proposed a rule to require manufacturers of talc-containing cosmetic products to test their products for asbestos using specific testing methods.
Who’s Impacted: Manufacturers of talc-containing cosmetic products.
What Should You Do: Consider submitting comments on this proposed rule by March 27, 2025.
Mandatory testing of talc-containing cosmetic products is coming. At the end of December, the Food and Drug Administration (FDA) proposed a cosmetics rule and test method for asbestos in talc that was required under Section 3505 of the Modernization of Cosmetics Regulation Act of 2022 (MoCRA). 89 Fed. Reg. 105492 (Dec. 27, 2024). MoCRA added substantial new cosmetics provisions to the Federal Food, Drug, and Cosmetic Act (FFDCA), including a requirement for the FDA to establish and require the use of standardized testing methods for detecting and identifying asbestos in talc-containing cosmetic products. For more details on MoCRA, see here.
Talc is mined as naturally occurring hydrous magnesium silicate and is used in many cosmetic products to absorb moisture, prevent caking, render makeup opaque, or improve product texture. However, the rock types that host talc deposits often also contain asbestos, which is a known carcinogen when inhaled. As noted in the Environmental Protection Agency’s latest risk evaluation for asbestos (November 2024), “If vermiculite or talc are mined from ore that also contains asbestos fibers, it is possible that the resulting vermiculite or talc minerals are contaminated with asbestos fibers.” (EPA’s risk evaluation did not consider asbestos in talc for use in cosmetics.) FDA has repeatedly monitored for asbestos in talc-containing cosmetic products, and though it found none in the products sampled in 2010 and 2023, the agency detected asbestos in 9 of 52 products it tested in 2019.
As laboratories lacked standardized testing methods that can be followed without modification to test for asbestos in talc-containing cosmetic products, MoCRA required that FDA develop such methods. This proposed rule aims to standardize testing in the industry so that the public can rely on talc-containing cosmetic products without concerns of asbestos contamination. This standardization would apply to all manufacturers of talc-containing cosmetic products, including cosmetic products that are subject to the requirements of Chapter V of the FFDCA, such as cosmetic products that are also drugs.
Proposed Testing Requirements
The proposed rule would require manufacturers to test a representative sample of each batch or lot of a talc-containing cosmetic product for asbestos using both Polarized Light Microscopy (PLM) (with dispersion staining) and Transmission Electron Microscopy (TEM)/Energy Dispersive Spectroscopy (EDS)/Selected Area Electron Diffraction (SAED). FDA proposes defining “representative sample” as “a sample that consists of a number of units drawn based on rational criteria, such as random sampling, and intended to ensure that the sample accurately portrays the material being sampled.” This definition is intended to provide flexibility and to align with the definition of “representative sample” in other FDA-covered product areas.
Under the proposed rule, a sample would be deemed to contain asbestos if asbestos is detected at or above the applicable detection limit using either method. FDA has specifically requested comment on this issue.
Additionally, the proposed rule would require manufacturers to either test each batch or lot of the talc cosmetic ingredient or rely on a certificate of analysis for each batch or lot from a qualified talc supplier. If a manufacturer chooses to rely on a talc certificate of analysis, the manufacturer must annually qualify the supplier by verifying the reported asbestos test results based on their own testing or that of a third-party laboratory to establish the certificate’s reliability.
Recordkeeping
The proposed rule would require manufacturers to keep certain records to demonstrate compliance. Manufacturers would need to keep records of testing for asbestos that show test data, including raw data, and to describe in detail how samples were tested. If a manufacturer relies on a certificate of analysis from its talc supplier, records must include any certificate of analysis received from the supplier for testing of the talc used to make the finished product, and documentation of how the manufacturer qualified the supplier by as described above.
The proposed rule would also require that these records be made available to the FDA within one business day of a request from the agency. The records would need to either be in English or have an English translation available and would need to be retained for three years after the date that the record was created. FDA is specifically soliciting comment on the timeframe for retention. The agency wants to ensure the timeframe is sufficient given the timing from testing to when the product containing the tested talc makes it to consumers and the average length of time consumers keep or use the product.
Enforcement
FDA proposes to enforce the new rule’s requirements under the FFDCA’s prohibition on the sale or distribution of adulterated cosmetics products, 21 U.S.C. § 331(a). As there is no established safe level below which asbestos could not cause adverse health effects, FDA will consider asbestos at any level in talc-containing cosmetic products to be injurious to users. Therefore, the proposed rule would codify in regulations that if asbestos is present in a talc-containing cosmetic product, or if a manufacturer fails to test its talc-containing cosmetic or its talc ingredient for asbestos or to maintain records or such testing, that cosmetic is adulterated under the FFDCA and illegal to sell or distribute.
FDA proposes that this rule become effective 30 days after the date of publication of the final rule in the Federal Register. For those interested in commenting on the proposed rule, parties must should submit comments to the docket by March 27, 2025.
As noted, MoCRA requires FDA to publish a final rule on testing talc-containing cosmetic products. With a new administration soon to take office, it is unclear whether the Trump FDA will proceed to final rulemaking once the comment period ends or take other action.
US Surgeon General Advises on Link Between Alcohol and Cancer, Recommends Cancer Warnings on Alcohol Labels
On January 3, the US Surgeon General issued an advisory on the association between alcohol and the risk of cancer.
The advisory outlines current scientific literature and concludes that alcohol consumption is the third leading preventable cause of cancer in the United States. Among other things, the advisory recommends updating the “Government Warning” statement on alcohol beverage labels to warn consumers about the cancer risk.
Potential Changes to Mandatory Government Warning
Since 1988, federal law has required a “Government Warning” statement on every alcoholic beverage sold in the United States. Under existing law, the Government Warning must state that (1) pregnant women should not drink alcohol because of the risk of birth defects and (2) that alcohol may impair one’s ability to drive a car, operate machinery, and could cause health problems. It is also subject to strict formatting and placement requirements.
If enacted, the Surgeon General’s recommendation would require alcohol beverage suppliers to update the Government Warning statement for the first time since the statement became mandatory nearly four decades ago. Nonetheless, only Congress has the power to update existing federal law to require alcohol labels to warn of the risk of cancer. Therefore, alcohol beverage companies should continue to closely monitor congressional action for potential changes to the mandatory governmental warning.
Globally, the advisory notes that there are currently 47 countries that require alcohol warning labels related to health and safety. Of those, South Korea currently requires a cancer-specific warning, and Ireland will require the following cancer warning starting in 2026: “There is a direct link between alcohol and fatal cancers.”
Conclusion
While it would take an act of Congress to change the current mandatory Government Warning statement on alcohol beverage labels, the Surgeon General’s advisory is likely to increase scrutiny on the potential links between alcohol consumption and cancer risk. Additionally, this advisory may signal new regulatory requirements for alcohol beverage suppliers in the future.
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This Week in 340B: December 17, 2024 – January 6, 2025
Find updates on 340B litigation from December 17, 2024 – January 6, 2025 to help you stay in the know on how 340B cases are developing across the country. Each week we comb through the dockets of more than 50 340B cases to provide you with a quick summary of relevant updates from the prior week in this industry-shaping body of litigation.
Issues at Stake: HRSA Audit Process, Contract Pharmacy; Other
In a Health Resources and Services Administration (HRSA) audit process case, the government filed a brief in opposition to the plaintiff’s motion for preliminary injunction and the plaintiff filed a reply brief in support of the same motion.
In four HRSA audit process cases, the plaintiffs filed responses to the defendants’ motions to dismiss and briefs in opposition to Johnson & Johnson Health Care System Inc.’s motions for leave to file as amicus curiae.
In an appealed case challenging a proposed state law governing contract pharmacy arrangements, the appellants filed their opening brief.
In a breach of contract claim filed by a 340B Covered Entity against several related party Medicare Advantage plans, plaintiffs filed a second amended complaint under seal with jury demand. Additionally, defendants filed an answer and defenses to plaintiffs’ second amended complaint
In a case challenging HRSA’s policy prohibiting manufacturer rebate models, defendants filed a consent motion to vacate the answer deadline and set summary judgment briefing schedule.
A covered entity filed a breach of contract claim against an insurance company, alleging that it failed to pay the covered entity the proper amounts because it relied on an outpatient prescription reimbursement rate ruled unlawful by the US Supreme Court.
A group of drug manufacturers filed a claim against HRSA, alleging that HRSA’s decision to certify a group of entities as 340B-eligible was arbitrary, capricious, and not in accordance with law.
In seven cases challenging a proposed state law governing contract pharmacy arrangements in West Virginia, Missouri, and Mississippi:
WV: In three cases, the court issued a memorandum opinion and order granting plaintiffs’ preliminary injunction motions, denying defendants’ motions to dismiss, and ordering defendants to file answers to plaintiffs’ complaints. In three of the cases, the court granted the parties’ joint motion for extension of time for plaintiff to respond to defendants’ motions to consolidate. In another one of the cases, plaintiffs filed a memorandum in opposition to defendants’ motion to consolidate and stay deadlines pending the court’s ruling on motions for preliminary injunction. In one of the cases, defendants filed an answer to plaintiff’s complaint.
MS: The court denied the plaintiff’s motion for preliminary injunction.
MO: The court denied defendant’s motion for transfer in two cases. In one case, plaintiff filed reply suggestions in support of the motion for preliminary injunction. In another case, plaintiff filed suggestions in opposition to a motion to dismiss for failure to state a claim.
FDA Releases Draft Guidance for Low-Moisture Ready-to-Eat Foods
Earlier this week FDA published a draft guidance titled Establishing Sanitation Programs for Low-Moisture Ready-to-Eat Human Foods and Taking Corrective Actions Following a Pathogen Contamination Event. (See publication notice at 90 Fed. Reg. 1052 (January 7, 2025)). Examples of low-moisture, ready-to-eat (LMRTE) foods include powdered infant formula, peanut butter, nut butters, powdered drink mixes, chocolate, medical foods in powdered and paste forms, processed tree nuts, milk powders, powdered spices, snack foods such as chips and crackers, granola bars, and dry cereal.
The draft guidance is intended to help manufacturers/processers of LMRTE human foods comply with 21 CFR part 117 (Current Good Manufacturing Practice (CGMP), Hazard Analysis, and Risk-Based Preventive Controls (HARPC) for Human Food) and, in the case of infant formula manufacturers, the requirements in 21 CFR part 106. In particular, the draft guidance provides FDA’s current thinking regarding:
Establishing and implementing a sanitation program and environmental monitoring program
Conducting root cause investigations following a pathogen contamination event
Applying a sanitizing treatment when remediating a pathogen contamination event
Taking steps to identify affected food; and
The limitations of relying solely on a product testing program to verify that pathogen contamination has been eliminated
The draft guidance includes a discussion of CGMPs necessary to control pathogens in LMRTE foods. Controlling water and maintaining a dry production site is a key feature of FDA’s recommended approach. The draft guidance notes that cleaning— removing residue from a food contact surface (FCS) — is distinct from sanitizing treatments (designed to kill pathogens) and that in dry processing conditions, cleaning and sanitizing is usually done sequentially. The draft guidance cautions that “material flush techniques,” which clean a FCS by pushing product or other materials (e.g., hot oil) through the FCS, are ineffective methods to kill pathogens.
Among the points raised in its discussion of HARPC components applicable to a sanitation program, the draft guidance recommends the identification of Salmonella spp. as a hazard requiring a preventive control for products which are exposed to the environment before packaging and which are not treated. Similarly, the draft guidance recommends the identification of Cronobacter spp. as a hazard in the case of powdered infant formula products exposed to the environment before packaging that do not receive a kill step or other control measure.
In its discussion of preventive control step verification activities and root cause analysis, the draft guidance expresses a strong preference for identifying pathogens using whole genome sequencing (WGS) because of its much greater specificity and ability to discriminate between different pathogenic strains. Where WGS is not used, FDA recommends maintaining samples so that they can be characterized by WGS later if necessary (e.g., in a root cause investigation following a contamination event).
The draft guidance also indicates in several sections that finished product testing has limitations and should not be solely relied upon for verification of preventive controls or identifying affected food. Finished product testing will be particularly ineffective at identifying hazards which are present at low levels and which are unevenly distributed.
Comments to the draft guidance should be submitted by May 7, 2025.