One in, Two Out: Potential FDA Uncertainty for Medical Device and Pharmaceutical Companies

On January 30, 2017, President Trump signed an executive order requiring all governmental agencies to eliminate two regulations for every one issued. The Order, captioned “Reducing Regulation and Controlling Regulatory Costs” specifically states that in an effort to “manage the costs associated with the governmental imposition of private expenditures required to comply with Federal regulation … for every one new regulation issued, at least two prior regulations be identified for elimination … “ According to President Trump, “the order will reduce the regulatory burdens on the private sector, particularly small businesses.”

This new executive order will likely affect the U.S. Food and Drug Administration (FDA) as its scope includes all agencies except for those related to the military, national security or those otherwise exempted by the Office of Management and Budget (OMB). The current challenge is in knowing how the order will affect the FDA. Many FDA regulations stand alone, so if the agency implements new regulation, it may have to reduce two potentially unrelated regulations.  This order may also affect FDA guidance documents, which could have a significant impact on medical device and pharmaceutical companies.

Transparency and predictability are key goals for companies in their dealings with the FDA. Some much sought after clarity will hopefully be forthcoming in guidance from the OMB on implementation of this order.  Such anticipated guidance is expected to address matters including “…. standards for determining what qualifies as new and offsetting regulations…” and “methods to oversee the issuance of rules with costs offset by savings at different times or different agencies” as well as “emergencies and other circumstances that might justify individual waivers of the requirements.”  Until the OMB clarifies implementation of the new order, questions on the impact to medical device and pharmaceutical companies as well as on issues such as user-fee reauthorization programs, pending rulemaking, and guidance will remain.