DEA Telemedicine Rules Further Delayed Until (Nearly) 2026
Those waiting anxiously for the rules expanding the prescribing of buprenorphine via telemedicine and the controlled substance prescribing for patients at the Department of Veterans Affairs to officially go into effect will now have to wait until New Year’s Eve—December 31, 2025.
Practitioners will, however, be allowed to continue prescribing via telemedicine without first having an in-person visit with the patient, owing to COVID-19 Telemedicine Flexibilities for Prescription of Controlled Medications, in effect through the same end-of-year date.
A seven-page document released by the Department of Justice’s Drug Enforcement Administration (DOJ, DEA) and Department of Health and Human Services (HHS)—scheduled to be published in the Federal Register on March 24—further delays the effective dates of the “Expansion of Buprenorphine Treatment via Telemedicine Encounter” Final Rule and the “Continuity of Care for Veterans Affairs Patients” Final Rule, both dated January 17, 2025 .
As we alerted you in February, these same two rules, collectively referred to as the “Buprenorphine and VA Telemedicine Prescribing Rules,” were originally scheduled to become final on February 18, 2025 but were delayed until March 21, 2025.
The first delay stemmed from the January 20, 2025, Presidential Memorandum titled “Regulatory Freeze Pending Review” (the “Freeze Memo”) that empowered federal departments and agencies to “consider postponing” the dates of rules published but not yet in effect.
After reviewing the 32 comments that the first delay generated, the DOJ now “wishes to further postpone the effective dates for the purpose of further reviewing any questions of fact, law, and policy that the rules may raise,” despite the fact that 13 of the 32 commenters wished to finalize the effective date of the two rules as soon as possible.
The Rules
The Buprenorphine and VA Telemedicine Prescribing Rules amended previous regulations to expand the circumstances under which:
practitioners registered by DEA are authorized to prescribe schedule III-V controlled substances approved by the FDA for treatment of opioid use disorder via a telemedicine encounter; and
VA practitioners acting within the scope of their VA employment are authorized to prescribe schedule II-IV controlled substances via telemedicine to a VA patient with whom they have not conducted an in-person medical evaluation, if another VA practitioner has, at any time, previously conducted an in-person medical evaluation of the VA patient, subject to conditions.
The EBG team continues to monitor any changes to the Buprenorphine and VA Telemedicine Prescribing Rules.
Additional Author: David Shillcutt
The Ketamine Administration Market: A Legal Guide for Healthcare Entities
Ketamine is rapidly gaining attention as a legitimate treatment for depression, PTSD, and chronic pain. While traditionally used as an anesthetic, its off-label therapeutic benefits have driven significant growth in ketamine infusion clinics and home-treatment models. This has created an exciting but complex opportunity for healthcare entities eager to expand into the market.
Key Considerations for Entering the Market
Before establishing a ketamine administration service, it’s crucial to understand the regulatory landscape. Ketamine is classified as a Schedule III controlled substance, meaning there are strict federal and state rules regarding its prescribing, storage, and administration. Healthcare providers must register with the Drug Enforcement Administration (DEA) and adhere closely to rules surrounding controlled substances. Additionally, federal telehealth regulations—which significantly impact home-based ketamine therapies—are evolving, meaning businesses must stay informed about changing compliance requirements.
In New York and similarly regulated states, only licensed healthcare professionals, typically physicians, can own or operate medical practices administering ketamine. Non-physician entrepreneurs must navigate carefully structured arrangements, like Management Services Organizations (MSOs), to legally participate in the business side without violating state regulations. It’s also critical to recognize that, beyond federal regulations, state laws and requirements can vary widely. Healthcare entities planning to operate across state lines must ensure compliance with each individual state’s rules.
Risks and Liabilities
Entering the ketamine treatment field brings significant responsibilities. Safety and patient oversight are primary concerns, especially given the drug’s potential side effects. Whether treatments are administered in-clinic or at-home, appropriate medical supervision and thorough patient monitoring are essential to protect patient health and mitigate legal risks. Moreover, improper handling or prescribing of ketamine can lead to serious regulatory penalties or malpractice claims. Ensuring strict adherence to patient screening, informed consent practices, secure drug storage, and detailed record-keeping is fundamental. Providers must also consider robust emergency protocols specifically tailored for ketamine administration.
Federal Circuit Decision Could Encourage More Reissue Patents
The Patent Term Extension (PTE) provisions of 35 U.S.C. § 156 compensate pharmaceutical patent owners for time they are not able to enjoy commercial market exclusivity because their products are not yet approved by the U.S. Food and Drug Administration (FDA). The length of a PTE award depends on how much time was spent under FDA review after the patent was issued. But which issue date is used for a reissued patent? In Merck Sharp & Dohme B.V. v. Aurobindo Pharma USA, Inc., the Federal Circuit decided that the earlier issue date of the original patent should be used to calculate PTE. By essentially preserving PTE awarded to original patents, this decision could encourage pharmaceutical companies to pursue reissue, especially if there are any concerns that broad original claims may not comply with the court’s recent Orange Book listing guidance.
The BRIDION® Patent And Regulatory Review Period at Issue
The patent at issue is listed in the Orange Book for Merck’s BRIDION® (sugammadex) product, which is indicated for the reversal of neuromuscular blockade induced by rocuronium bromide and vecuronium bromide in adult and pediatric patients undergoing surgery. The patent was first issued December 30, 2003, as U.S. Patent No. 6,670,340, and then reissued on January 28, 2014, as U.S. Patent No. RE44,733. The reissued patent amended a dependent claim to expressly recite the active ingredient of BRIDION®.
Merck applied for FDA approval of sugammadex on April 13, 2004 (four months after the ’340 patent issued), and it was approved on December 15, 2015. Thereafter, Merck sought, and the USPTO granted, the maximum five years of PTE available under § 156, using the issue date of the original ’340 patent for the PTE calculation. (If the issue date of U.S. Patent No. RE44,733 had been used, the PTE award would have been only 686 days.)
The challenge to the PTE award arose in the context of ANDA litigation brought by several companies seeking FDA approval to sell generic versions of BRIDION®. The district court agreed with the USPTO’s calculation, and on appeal the Federal Circuit did too.
The Federal Circuit Opinion
The Federal Circuit opinion was authored by Judge Dyk and joined by Judges Mayer and Reyna. As framed in the opinion, the issue on appeal was one of statutory construction—the meaning of “the patent” in §156(c):
The term of a patent eligible for extension under subsection (a) shall be extended by the time equal to the regulatory review period for the approved product which period occurs after the date the patent is issued …
The Federal Circuit agreed with the USPTO that the language of §156(c) itself was ambiguous in that it is “unclear whether ‘the patent’ refers to the original or reissued patent.” Thus, the Federal Circuit considered “the broader context of the statute as a whole,” stating:
[T]he purpose of [§ 156] is clear: to compensate pharmaceutical companies for the effective truncation of their patent terms while waiting for regulatory approval of new drug applications.
With this purpose in mind, the opinion reasons:
That purpose applies in this case, since construing “the patent” in subsection 156(c) as the original patent compensates Merck for the period of exclusivity lost due to regulatory delay. On the other hand, Aurobindo’s construction denies Merck compensation for all but a small period of the delay. There is no reason why the Hatch-Waxman Act’s purpose would be served by disabling extensions of the unexpired term solely based on a patent holder’s decision to seek reissue …
The opinion concludes:
We thus conclude that, in the context of reissued patents, “the patent” in subsection 156(c) refers to the original patent. A reissued patent is entitled to PTE based on the original patent’s issue date where, as here, the original patent included the same claims directed to a drug product subject to FDA review.
Reissue Patents and Orange Book Listings
As discussed in this article, the Federal Circuit decision in Teva v. Amneal may have patent owners taking a second look at their Orange Book-listed patents, to assess whether they “particularly point out and distinctly claim” the specific drug approved by the FDA. For patents that disclose but do not expressly claim the approved active ingredient, seeking a reissue patent could allay Orange Book listability concerns. The PTE decision in Merck indicates that obtaining a reissued patent would not lessen PTE, providing further reason to consider the reissue process as an opportunity to strengthen a patent portfolio.
What Vice Chancellor Strine Got Wrong In Massey Energy Co.
Vice Chancellor Leo Strine famously wrote that “Delaware law does not charter law breakers”. In re Massey Energy Co., 2011 WL 2176479, at *20 (Del. Ch. May 31, 2011). Professor William J. Moon picks up on this theme in a forthcoming essay, Havens for Corporate Lawbreaking:
Yet even the fiercest defenders of the firm’s profit motive concede that the corporation’s profit-seeking function cannot justify breaking the law. As a matter of American corporate law, directors and officers are in breach of their fiduciary duties if they facilitate or engage in profit-maximizing illegal activities. Or so we thought.
Professor Moon’s essay calls out Nevada and the Cayman Islands as “corporate lawbreaking havens”. But are Vice Chancellor Strine and Professor Moon correct that Delaware does not charter corporate lawbreakers? I think not.
In JCCrandall, LLC v. Cnty. of Santa Barbara, 328 Cal. Rptr. 3d 828, 831 (Ct. App. 2025), review denied and ordered not to be officially published (Mar. 19, 2025), a California Court of Appeal pointed out the cannabis is illegal:
It is often said that cannabis is legal in California. The statement is not true. Under federal law, cannabis is illegal in every state and territory of the United States. (See Controlled Substances Act, 21 U.S.C. § 801 et seq.; 21 U.S.C. § 812 (c)(10); City of Garden Grove v. Superior Court (2007) 157 Cal.App.4th 355, 377, 68 Cal.Rptr.3d 656.) Article VI, paragraph 2 of the United States Constitution, known as the Supremacy Clause, provides in part, “The Constitution, and the Laws of the United States . . . shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”
Therefore, any Delaware corporation engaged in the cannabis trade is potentially violating the law. Are the directors and officers of these corporation breaching their fiduciary duties when they allow the corporation to engage in the business for which it was formed?
It might be argued that Vice Chancellor Strine was referring only to Delaware law, but the Massey case involved violations of federal law. Thus, it cannot be said that he was referring only to state laws. Does this mean that Delaware charters the breakers of some laws? If so, how do directors and officers know which violations will support a breach of fiduciary duty claim and which will not?
More fundamentally, the immensity and complexity of state and federal laws and regulations mean that it impossible for most corporations to comply fully with all laws and regulations. Therefore, Delaware does indeed charter law breakers. This is most certainly true.
West Virginia Set to Ban Certain Food Additives and Colors
On March 19, 2025, the West Virginia Senate and House sent HB 2354 to the governor for final approval, which proposes banning various food additives and synthetic dyes.
The bill would prohibit the sale of any food product in the state that contains butylated hydroxyanisole (BHA), propylparaben, Red No. 3, Red No. 40, Yellow No. 5, Yellow No. 6, Blue No. 1, Blue No. 2, or Green No. 3. If enacted, the legislation would apply to food products in school nutrition programs beginning August 1, 2025, then extend to all food products in the state on January 1, 2028.
While there was some push back arguing that the state should wait for changes to come top down from the U.S. Food and Drug Administration (FDA) and that the ban will cause food prices to go up or limit the competitiveness of the state, the voting pattern shows that the opposition was minimal. This article by West Virginia Watch stated that Senator Barrett, who spearheaded the effort, feels confident that the Governor will sign HB 2354.
The West Virginia bill is the latest state legislative effort to regulate food dyes, following California, Utah, Florida, and Virginia.
FDA Plans to Extend Compliance Date for Food Traceability Rule
On March 20, 2025, the U.S. Food and Drug Administration (FDA) announced its intention to extend the compliance date for the Food Traceability Rule by 30 months. This extension aims to provide the food industry with additional time to fully implement the rule’s requirements.
The Food Traceability Rule, established under the FDA Food Safety Modernization Act (FMSA), mandates enhanced traceability recordkeeping for entities that manufacture, process, pack, or hold foods listed on the Food Traceability List (FTL) for the purpose of promptly identifying and removing potentially contaminated food from the market.
Notably, in its announcement, FDA made clear that the substance of the rule remains intact, and the only modification is extending the compliance deadline. The agency will continue to work with stakeholders to provide additional assistance and resources to address challenges with implementation.
HHS-OIG Highlights Anti-Fraud Safeguards of Drug Manufacturer’s Free Drug Program for Patients in Financial Need
Highlights
The HHS-OIG released a favorable opinion regarding free drugs offered to patients in financial need for a drug manufactured by the pharmaceutical company offering the assistance
The assistance offered under the proposed arrangement did not satisfy a safe harbor to the Anti-Kickback Statute (AKS)
The agency said the proposed arrangement included factors that limited concerns under the AKS and the civil monetary penalty laws
The U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) recently released OIG Advisory Opinion 25-01, a favorable opinion regarding the federal Anti-Kickback Statute (AKS) and civil monetary penalty laws (CMP) against beneficiary inducements as applied to a financial assistance program that would provide an intravenous drug at no cost or with no cost-sharing. The program was offered by a pharmaceutical manufacturer to patients who receive an intravenous drug and meet certain objective eligibility criteria.
The HHS-OIG concluded that the financial assistance offered to patients under the proposed arrangement constitutes remuneration under the AKS and the proposed arrangement did not satisfy a safe harbor under the AKS. However, due to sufficient safeguards in place to mitigate the risk of fraud and abuse, the HHS-OIG would not impose sanctions against the pharmaceutical manufacturer.
Further, the HHS-OIG found that the proposed arrangement would not implicate the CMP because pharmaceutical manufacturers are generally not considered “providers, practitioners, or suppliers” and, therefore, the arrangement is not likely to influence an enrollee’s selection of a provider, practitioner, or supplier. Further, the product is available free of charge to a patient, regardless of the patient’s selection of a prescribing provider or infusion provider, and patients are free to change providers at any time.
Background
The pharmaceutical company manufactures the product, which treats a disease and is intended for use in patients with mild cognitive impairment and confirmed presence of amyloid pathology. Patients prescribed the product receive intravenous infusions every two weeks in an outpatient setting, which could be the treating physician’s office, an outpatient location affiliated with the treating physician, or an independent infusion center unaffiliated with the treating physician. There are currently two other drugs available to treat the disease and two additional such drugs are under development.
The Centers for Medicare & Medicaid Services reimburses for both the product and its administration, under certain circumstances, under Medicare Part B with a 20 percent coinsurance for enrollees, and all state Medicaid programs cover the product with various cost-sharing arrangements for patients.
The proposed arrangement provides the product at no cost to patients, including federal healthcare program beneficiaries, who meet the following eligibility criteria:
Reside in the United States
Be at least 18 years old
Be prescribed the product for an on-label indication
Be uninsured, be insured but with no insurance coverage for the product, or have Medicare coverage for the product but attest that they are unable to afford their out-of-pocket costs associated with the product
Have a household income equal to or below 500 percent of the federal poverty level
Patients must work with the patient’s treating physician to complete an application for assistance and submit the application to the pharmaceutical manufacturer. All eligibility determinations are made without regard to the patient’s insurer or insurance plan, prescribing provider, or infusion provider, and patients are free to change physicians or infusion providers at any time without becoming ineligible for the free product.
The provider who administers the free product is permitted to bill Medicare for the administration cost and may bill the patient for any cost sharing related to only the administration cost. If the provider is not able to administer free product to the approved patient, for any reason, the provider is required to return the free product to the manufacturer or certify its disposal pursuant to the manufacturer’s instructions.
Patients must certify that they 1) will not submit a request for payment for the product to any payor, including a federal healthcare program, and 2) understand that no part of the free product or the costs associated with the free product will count toward the patient’s out-of-pocket costs. Further, treating physicians must certify, in writing, that they prescribed the product for an on-label indication, based on the physician’s independent professional judgment of medical necessity taking into account patient safety considerations, and will not submit a request for payment for the free product to any payor and will not seek payment of the free product from the patient.
The facility where the product will be administered must provide an oral acknowledgement that it understands and agrees to follow all requirements associated with receiving the free product, and each shipment includes a letter describing such requirements.
In this request, the manufacturer certified that neither it, nor anyone acting on the manufacturer’s behalf, is permitted to promote the financial assistance program as a reason to prescribe the product to patients, and the manufacturer does not promote the program through direct-to-consumer advertising. Under the proposed arrangement, healthcare professionals may only learn about the program through 1) approved printed materials for general awareness or 2) reimbursement personnel who do not receive sales-based incentive compensation and are permitted to educate pharmacists, physicians, and physician office staff about the program.
Further, the manufacturer certified that it expects patients to learn about the program from 1) the patient’s treating physician, 2) the manufacturer’s patient support hub, or 3) the manufacturer’s patient support website.
The HHS-OIG’s Findings
The HHS-OIG found that the free product constituted remuneration to both patients and administering providers under the AKS, but relied on the following factors in determining that this posed little risk of fraud and abuse:
There are safeguards in place to avoid inappropriately increasing costs to federal healthcare programs. The only cost that could be billed to a federal healthcare program is the administration fee for the infusion, and only where Medicare could have otherwise been billed for the product. In addition, the requestor intends to offer the assistance program indefinitely to patients who continue to meet the eligibility criteria, even if Medicare were to cover the product in the future without the current limitations, so no product will be billed to Medicare for patients who attest that they cannot afford the cost-sharing amounts of the product.
There is a low risk that the program will interfere with clinical decision-making. The treating physician is not permitted to submit a request for payment of the free product to any payor, including but not limited to any federal healthcare program. Although the administering provider may charge the administration fee for patients where Medicare would otherwise reimburse for the product and there is a cost-sharing component for patients, there is a low risk that the administration fee would induct treating physicians to select the product over another product.
The program does not steer patients to a particular provider, practitioner, or insurance plan. Patients are free to change their treating physician or infusion provider at any time without impacting their eligibility for free product.
Ultimately, the HHS-OIG found that the arrangement poses low risk of fraud and abuse due to the safeguards, and the patient eligibility criteria.
Key Takeaways
This advisory opinion may be of significant interest to drug manufacturers of new pharmaceutical products. Notably, the HHS-OIG identified the risk that the arrangement could serve as a problematic “seeding” program for the product but determined it would not impose sanctions in part because there is no barrier to the patient switching to competing products and that eligibility for the free product is not contingent on past, present, or future purchases of the product.
McDermott+ Check-Up: March 21, 2025
THIS WEEK’S DOSE
Government Is Funded, Congress at Home for the Week. The continuing resolution signed by President Trump last Saturday funds the government through the rest of the fiscal year.
Senate Finance Committee Holds CMS Administrator Nomination Hearing. Centers for Medicare & Medicaid Services (CMS) administrator nominee Mehmet Oz, MD, testified.
President Trump Issues EO on Domestic Preparedness. Implementation of this executive order (EO) will likely have implications for drug supply chains and pandemic preparedness.
CONGRESS
Government Is Funded, Congress at Home for the Week. On March 15, 2025, President Trump signed a continuing resolution (CR) into law that funds the government and provides short-term extensions of certain healthcare programs and provisions, including Medicare telehealth flexibilities and community health center funding, through September 30, 2025, the end of the fiscal year. The CR did not include a Medicare physician payment fix. Instead, Republican leadership committed to include a fix in the upcoming budget reconciliation bill to secure votes from the GOP Doctors Caucus. Given the timeline of a potential reconciliation bill, it is uncertain whether Congress will consider any mitigation to the 2025 Medicare physician payment cut that is currently in effect. The House passed the CR mostly along party lines in a 217 – 213 vote. In the Senate, after much internal debate, 10 Democrats joined all but one Republican in a 62 – 38 vote to advance the CR to a final vote, ultimately allowing Republicans to pass it with a simple majority. Congress then went home for a recess week. Both the House and Senate return on March 24, 2025, for a three-week stint until they hit a two-week April recess around the Easter and Passover holidays.
Senate Finance Committee Holds CMS Administrator Nomination Hearing. In the hearing on March 14, 2025, members from both parties discussed concerns about access to care in rural areas as well as high prior authorization and upcoding usage by Medicare Advantage (MA) insurers. Mehmet Oz, MD, agreed with members and stated that he would seek to address upcoding in MA as CMS administrator – which is notable in light of his previous outspoken endorsements of the program. Republicans focused on the insights Oz can bring to CMS as a physician, while Democrats pressed to see if Oz supports reforming or cutting Medicaid, including through work requirements.
ADMINISTRATION
President Trump Issues EO on Domestic Preparedness. The “Achieving Efficiency Through State and Local Preparedness” EO seeks to expand the role of states and localities in preparedness, which will likely have impacts on drug supply chain issues and future pandemic response. The EO directs the Assistant to the President for National Security Affairs, in coordination with other relevant agencies, to:
Publish a national resilience strategy within 90 days
Review critical infrastructure policies, including the following EOs, and recommend a risk-informed approach within 180 days:
EO 14017, “America’s Supply Chains”
EO 14123, “White House Council on Supply Chain Resilience”
Review all national continuity policies, including the following, and recommend options to modernize and streamline the current approach within 180 days:
National Security Memorandum 32, National Continuity Policy
Review the findings of the Federal Emergency Management Agency Council and provide recommendations to edit policies, including the following, to reformulate the process and metrics for federal responsibility within 240 days:
Presidential Policy Directive 8, National Preparedness
Create a National Risk Register within 240 days
The EO also directs the secretary of homeland security to propose policy changes to improve federal-state communication. A fact sheet can be found here.
QUICK HITS
House Democrats Launch Congressional Doctors Caucus. The Congressional Doctors Caucus will work to advance “pragmatic healthcare policy.” This caucus joins the long-established and larger GOP Doctors Caucus in the House. The new Democratic caucus comprises:
Ami Bera, MD (CA) – internal medicine
Herb Conaway, Jr., MD (NJ) – internal medicine
Maxine Dexter, MD (OR) – pulmonary and critical care
Kelly Morrison, MD (MN) – obstetrics and gynecology
Raul Ruiz, MD (CA) – emergency medicine
Kim Schrier, MD (WA) – pediatrics
CMS Announces Manufacturer Participation in Current Round of Medicare Drug Price Negotiation. CMS stated that agreements have been signed with the manufacturers of the 15 drugs chosen for participation in the second cycle of Medicare drug negotiations.
FDA Study Shows Impact of E-Cigarette Prevention Campaign. The US Food and Drug Administration (FDA) study found that “The Real Cost” campaign successfully prevented 450,000 new youth e-cigarette users between 2023 and 2024. Read the press release here.
HHS Renews Opioid Crisis PHE Declaration. US Department of Health & Human Services (HHS) Secretary Kennedy renewed the opioid crisis public health emergency (PHE) declaration for another 90 days. The PHE was set to expire on March 21, 2025, and allows more federal coordination efforts and flexibilities.
HHS, FDA Announce Operation Stork Speed. This initiative seeks to address the safety, reliability, and nutrition of infant formula by starting the statutorily required nutrient review, increasing testing for heavy metals, and extending the personal importation policy. HHS Secretary Kennedy was outspoken in support of these steps.
OCR Takes Action Against Maine for Alleged Title IX Violation. Following an investigation, the HHS Office for Civil Rights (OCR) stated that Maine’s Department of Education and other entities in the state are in violation of President Trump’s “Keeping Men out of Women’s Sports” EO because they allegedly allowed transgender female students to play in women’s sports. OCR’s letter to the entities requires them to voluntarily commit to resolve the matter within 10 days or risk referral to the US Department of Justice. Read the press release here.
FTC Requests Stay of Noncompete Rule, Citing New Administration. The Federal Trade Commission (FTC) filed motions requesting a 120-day stay of the agency’s appeal of district court decisions blocking the Biden-era FTC proposed ban on noncompete agreements. This is a signal that FTC’s new leadership is rethinking the agency’s defense of the proposed rule. FTC Chairman Ferguson also released a memo creating the Joint Labor Task Force, which will evaluate policy options related to noncompete agreements.
NEXT WEEK’S DIAGNOSIS
Congress will return to session on Monday to continue work on budget reconciliation. While each body has passed a budget resolution, they must now agree to and pass a unified budget resolution through both bodies in order for reconciliation to proceed. The House Veterans’ Affairs Health Subcommittee will hold a hearing on healthcare access and a markup of several healthcare-related bills, and the House Energy and Commerce Subcommittee on Commerce, Manufacturing, and Trade will hold a hearing on online safety. On the regulatory side, we await the release of the inpatient prospective payment system proposed rule.
Federal Circuit Confirms Calculation of PTE for Reissue Patents Under Regulatory Review
Highlights
Calculation of patent term extension for drug products under regulatory review is based on the issue date of the original patent, not the reissue patent (if there is one), a recent court ruling said
Calculation of PTE based on the original patent’s issue date is consistent with purpose and legislative intent of Hatch Waxman Act, which is to compensate for patent exclusivity lost while patented drug products are under regulatory review
Cancellation of claims covering drug products under regulatory review in a reissue patent will result in forfeiture of any patent term extension
In Merck Sharp & Dohme B.V. et al. v. Aurobindo Pharma USA, Inc. et al, the U.S. Court of Appeals for the Federal Circuit addressed the narrow question of whether patent term extensions (PTE) for patents covering drug products that are under regulatory review pursuant to 35 U.S.C. § 156(c) is based on the issue date of the original patent or the reissue patent. The Federal Circuit sided with the district court and the patent owner, Merck, finding that the term “patent,” as used in Section § 156(c), refers to the original patent and not the reissued patent. As a result, patent term extension (PTE) is calculated based on the issue date of the original patent.
Merck’s ʼ340 patent covering sugammadex, the active ingredient in BRIDION®, was issued on Dec. 30, 2003. Merck applied for a reissue patent while sugammadex was under regulatory review, adding 12 narrower claims. The reissue patent was issued as the REʼ733 patent on Jan. 28, 2014, and sugammadex was approved by the Food and Drug Administration (FDA) on Dec. 15, 2015. The U.S. Patent and Trademark Office (PTO) granted Merck’s request for a five-year patent term extension—the maximum allowed under Section 156(c)—based on the ʼ340 patent’s original issue date.
Aurobindo, which submitted an Abbreviated New Drug Application for sugammadex, argued that the PTO should have calculated Merck’s PTE based on the issue date of Merck’s reissue patent and not the original patent (in which case Merck would only have been entitled to 686 days of PTE and not the full five years), because the original patent is “dead” upon reissue. The Federal Circuit flatly rejected this argument, relying heavily on the purpose and legislative intent underlying the Hatch Waxman Act, which was “to compensate pharmaceutical companies for the effective truncation of their patent terms while waiting for regulatory approval of new drug applications.”
Adopting Aurobindo’s argument, the court said, would eviscerate this purpose and compensate patent owners for only a small period of delay caused by FDA review. The Federal Circuit emphasized that Merck was entitled to the full PTE based on the original patent’s issue date because the reissue patent included all of the original claims of the ʼ340 patent that was subject to FDA review.
Takeaways
Because the Federal Circuit’s decision only applies to reissue patents with the same claims as the original patent, patent owners with drug products under regulatory review should think twice before canceling claims in a reissue application, as doing so will result in forfeiture of PTE if the canceled claims cover the drug product that is under review. However, the Federal Circuit did not address how PTE should be calculated when a reissue patent significantly modifies the scope of the original claims but does not cancel them, which remains an open question.
FDA’s Semaglutide Shortage Resolution: Legal Implications and Risks for Compounding Pharmacies
Last month, the U.S. Food and Drug Administration (the “FDA”) announced in a Declaratory Order the resolution of the shortage of semaglutide injection products Wegovy and Ozempic (the “February Declaratory Order”). On March 10th, the FDA issued guidance clarifying that 503A and 503B drug compounders must soon cease compounding semaglutide injection products[i] or risk enforcement action.[ii] This has a significant impact on compounding pharmacies as, under the Federal Food, Drug, and Cosmetic Act (the “FD&C”), drug compounders are permitted to compound their own copies of a patented drug if the FDA determines it is in shortage. Due to high demand for the drugs, Wegovy was added to the FDA’s drug shortage list in March 2022, and Ozempic in August 2022.[iii] Wegovy and Ozempic are the only FDA-approved semaglutide injection products.[iv]
Legal Challenges and Practical Impacts of the FDA’s Declaratory Order
After the February Declaratory Order was issued, the Outsourcing Facilities Association (the “OFA”) promptly filed a lawsuit against the FDA over its decision and a motion for a preliminary injunction to prevent the FDA from removing semaglutide from the drug shortage list.[v] U.S. District Court Judge Mark Pittman, who is hearing the case in a federal court in Texas, accepted Novo Nordisk’s renewed motion to intervene in the case to support its claim that the company can meet the high demand for its products.[vi]
In light of the OFA’s lawsuit, the FDA issued clarifying guidance on when compounders must cease compounding semaglutide. For compounders that have relied on the drug shortage to compound semaglutide, the FDA indicated that it will delay any enforcement action until the following dates, in order to avoid unnecessary disruption to patient treatment:
For state-licensed pharmacists or physicians compounding under Section 503A of the FD&C: April 22, 2025, or until the District Court issues a decision on the OFA’s preliminary injunction motion, whichever is later; and
For outsourcing facilities compounding under Section 503B of the FD&C: May 22, 2025, or until the District Court issues a decision on the OFA’s preliminary injunction motion, whichever is later.
The FDA noted that this delay in enforcement will allow patients a reasonable amount of time to transfer their prescriptions to different pharmacies to obtain the FDA-approved drug as well as to allow local pharmacies to adjust their stocking and ordering patterns to account for shifts in patient demand.
Bases for the FDA’s Decision
The FDA is required to “maintain an up-to-date list of drugs that are determined by [the FDA] to be in shortage in the United States”[vii] with a “shortage” being “a period of time when the demand or projected demand for the drug within the United Sates exceeds the supply of the drug.”[viii] To reach its decision, the FDA noted its consideration of information from numerous stakeholders, including individuals, telehealth companies, pharmacy compounders, associations representing pharmacy compounders, outsourcing facilities, and Novo Nordisk, the manufacturer of Wegovy and Ozempic. Novo Nordisk provided the FDA with information related to its production and inventory of the drugs, including quantities supplied and demanded, projected supply and demand in future months, and wholesaler inventory data. The FDA concluded that Novo Nordisk successfully demonstrated that its supply currently meets or exceeds the demand for its semaglutide injection products, and Novo Nordisk has developed sufficient reserves such that supply will meet or exceed projected future demands. The decision memorandum “Resolution of Semaglutide Injection Product Shortage and Supply Status”, dated February 21, 2025, sets forth the FDA’s full legal analysis upon which the February Declaratory Order is based.[ix]
The FDA acknowledged that it has received reports that some patients and pharmacists are not able to obtain the semaglutide injection products through the normal supply chain. However, the FDA reasoned these instances of inaccessibility are likely caused “by the practical dynamics of the part of the supply chain between Novo Nordisk and [its] customers, including wholesale distributors and pharmacies” rather than by a national shortage of supply.[x]
What’s Next for Compounders of Semaglutide?
While the OFA’s lawsuit and request for a preliminary injunction has yet to be decided, recent similar lawsuits inform the probable outcome. Specifically, the OFA previously filed a lawsuit against the FDA in October regarding the removal of tirzepatide from the shortage list. The OFA’s October suit delayed enforcement for a few months while the FDA reconsidered its decision, but on March 5th, the court upheld the FDA’s determination that the tirzepatide shortage had ended.[xi] While it is possible that the OFA’s suit challenging the February Declaratory Order could end differently, it is likely to have a similar outcome as the OFA’s challenge of tirzepatide’s removal from the shortage list. That is, enforcement may be delayed slightly, but the FDA will likely affirm its declaration that the semaglutide shortage is over.
It is expected that some compounding pharmacies, despite the February Declaratory Order, may continue to compound modified versions, such as in alternative doses or by adding additional ingredients, taking the position that it is different than the patented versions of semaglutide. However, this is a complex area of law currently being litigated with respect to tirzepatide. In addition, drug manufacturers have been actively issuing cease and desist letters and filing lawsuits against compounding pharmacies that produce tirzepatide. It is reasonable compounders of semaglutide will be met with similar action if they continue to compound modified versions of semaglutide after April 22nd or May 22nd, as applicable. As such, any compounding of drugs not on the shortage list, including semaglutide injection products, should be approached with caution given the current legal and regulatory landscape.
FOOTNOTES
[i] Rybelsus (semaglutide) tablets are FDA-approved for oral use and were not in shortage. The FDA’s February Declaratory order specifically addresses the compounding of semaglutide injection products that are “essentially a copy of a commercially available drug product” on the basis of the drug shortage exception.
[ii] U.S. Food and Drug Administration, Declaratory Order: Resolution of Shortages of Semaglutide Injection Products (Ozempic and Wegovy) (Feb. 21, 2025) [hereinafter “February Declaratory Order”].
[iii] February Declaratory Order, page 1.
[iv] February Declaratory Order, page 4.
[v] Outsourcing Facilities Ass’n v. United States Food & Drug Admin., 4:25-cv-174 (N.D. Tex. Feb. 24, 2025).
[vi] Kevin Dunleavy, In FDA obesity drug battle with compounders, Texas court allows Novo Nordisk to weigh in, Fierce Pharma (Mar. 6, 2025, 8:45 AM).e
[vii] February Declaratory Order, page 3 (citing Federal Food, Drug, and Cosmetic Act § 506E(a)).
[viii] February Declaratory Order, page 3 (citing Federal Food, Drug, and Cosmetic Act § 506C(h)(2); 21 C.F.R. 314.81(b)(3)(iii)(f)).
[ix] February Declaratory Order, page 1.
[x] February Declaratory Order, page 2.
[xi] Outsourcing Facilities Ass’n v. United States Food & Drug Admin., 4:24-cv-0953-P (N.D. Tex. Mar. 5, 2025).
Listen to this article
President Trump Revokes 2022 EO on Advancing Biotechnology and Biomanufacturing
On March 14, 2025, President Trump signed Executive Order (EO) 14236, rescinding 19 executive actions, including former President Biden’s September 2022 EO 14081, “Advancing Biotechnology and Biomanufacturing Innovation for a Sustainable, Safe, and Secure American Bioeconomy.” 90 Fed. Reg. 13037. According to the White House’s March 14, 2025, fact sheet, EO 14081 “funneled Federal resources into radical biotech and biomanufacturing initiatives under the guise of environmental policy.” As reported in our September 13, 2022, blog item, Biden’s EO created a National Biotechnology and Biomanufacturing Initiative to accelerate biotechnology innovation and grow America’s bioeconomy across multiple sectors in industries such as health, agriculture, and energy. EO 14081 called for the Secretary of Agriculture, the Administrator of the U.S. Environmental Protection Agency (EPA), and the Commissioner of Food and Drugs to identify areas of ambiguity, gaps, or uncertainties in the January 2017 Update to the Coordinated Framework for the Regulation of Biotechnology or in the policy changes made pursuant to the June 2019 EO 13874, “Modernizing the Regulatory Framework for Agricultural Biotechnology Products.” To update the Coordinated Framework, the U.S. Department of Agriculture (USDA), EPA, and the U.S. Food and Drug Administration (FDA) prepared The Coordinated Framework for the Regulation of Biotechnology: Plan for Regulatory Reform under the Coordinated Framework for the Regulation of Biotechnology, an ambitious plan to update, streamline, and clarify their regulations and oversight mechanisms for products of biotechnology. While the USDA, EPA, and FDA intended to release an updated Coordinated Framework in December 2024, the agencies did not do so. More information on the 2017 Update to the Coordinated Framework is available in our January 9, 2017, memorandum. More information on the 2024 Plan for Regulatory Reform is available in our May 16, 2024, memorandum.
Maine Considers Bill to Establish Maximum Levels of PFAS in Farm Products
If passed, Maine’s SB130, titled An Act to Establish the PFAS Response Program and to Modify the Fund To Address PFAS Contamination, would be the first state law to establish PFAS limits in food (PFAS limits have been established for other categories of goods).
The bill would formally establish a PFAS response program to “respond to and address PFAS contamination affecting agricultural producers in the State, to assist commercial farms affected by PFAS contamination and to safeguard public health.” We note that the bill would in part codify existing portions of Maine’s PFAS response program, which has already set an action level for PFOS (a type of PFAS) in milk of 210 ppt.
Specifically, under the proposed bill, the PFAS response program would, among other things:
Establish maximum levels for PFAS in farm products (defined as “plants and animals useful to humans” and includes, by way of example, products ranging from grains and food crops to Christmas trees).
Provide PFAS testing support to help agricultural producers understand the extend of PFAS contamination and provide technical support to assist in mitigation efforts.
Provide financial assistance to PFAS-impacted agricultural producers.
Establish baseline criteria that agricultural producers would have to adhere to in order to receive technical and financial assistance, including granting property access to conduct PFAS investigations and providing relevant information to program staff.
We will continue to monitor and report on PFAS regulation.