A Look Ahead in Life Sciences: What We Are Tracking in the First Quarter of 2025 and Beyond

How Companies Develop Their Products

• The FDA’s rare pediatric disease priority review voucher program began to sunset on December 20, 2024, on failure to pass a continuing resolution package that included its reauthorization. Under the amended statutory sunset provisions, after December 20, 2024, the FDA may award a priority review voucher for an approved rare pediatric disease product application only if the sponsor has rare pediatric disease designation for the drug and if that designation was granted by December 20, 2024. After September 30, 2026, the FDA may not award any rare pediatric disease priority review vouchers. However, in the new Congress, there is still hope that this program could be reauthorized. This remains an area to watch in the new administration as its objectives are generally aligned with the Trump administration’s support for innovation in new treatments and cures.
• HHS published a list, updated on March 21, 2025, identifying grants terminated by the Trump administration. It is unclear whether this list will be further updated in the weeks and months ahead, so this remains an area to monitor. On February 7, 2025, the NIH also issued the immediately effective “Supplemental Guidance to the 2024 NIH Grants Policy Statement: Indirect Cost Rates,” deviating from the negotiated indirect cost rate for new and existing grant awards and setting a standard indirect cost rate of 15% across all NIH grants in lieu of a separately negotiated rate for indirect costs in every grant.
• In December 2024, the FDA issued a draft guidance titled, “Protocol Deviations for Clinical Investigations of Drugs, Biological Products, and Devices.” The draft guidance provides recommendations for defining, identifying, and reporting protocol deviations in clinical investigations. The FDA is accepting comments here through February 28, 2025.
• In December 2024, the FDA issued a draft guidance on accelerated approval (“Expedited Program for Serious Conditions – Accelerated Approval of Drugs and Biologics”), focusing on the additional requirements and authorities included under the Food and Drug Omnibus Reform Act (FDORA), which was enacted in late 2022. The draft guidance provides additional context on the types of surrogate and intermediate end points that can be used as a basis for accelerated approval, as well as considerations for designing and executing confirmatory studies (noting that sponsors may be able to use approaches such as adaptive designs, enrichment strategies, trials with pragmatic elements, or decentralized trials). The draft guidance also provides more procedural clarity around the process for “expedited withdrawal” established under FDORA, noting that the FDA will first discuss concerns with the sponsor and seek “an appropriate resolution” before initiating the multistep process. The FDA is accepting comments here through February 4, 2025. 
• In December 2024, the FDA issued a final rule establishing the requirements for a nonprescription drug product with an additional condition for nonprescription use (ACNU). The final rule addresses the application process, content and format of specific labeling statements, and postmarketing reporting requirements for such products, including submission of a report of an ACNU failure. As noted in the preamble, “in circumstances where a prescription drug product is already approved, the rule requires an applicant to submit a separate application for the approval of a nonprescription drug product with an ACNU, rather than a supplement to the existing application for the approved prescription drug product.” The final rule is effective January 27, 2025.
• In November 2024, the FDA issued a draft guidance titled, “Frequently Asked Questions — Developing Potential Cellular and Gene Therapy Products,” which also includes general information on the distinction between INTERACT and Pre-IND meetings, among other topics. This is a must-read document, especially for developers in the cell and gene therapy space. The FDA is accepting comments here through February 18, 2025.
• In November 2024, the FDA issued final guidance on the use of circulating tumor DNA for curative-intent solid tumor drug development “to help sponsors planning to use circulating cell-free plasma derived tumor DNA (ctDNA) as a biomarker in cancer clinical trials conducted under an investigational new drug application (IND) and/or to support marketing approval of drugs and [therapeutic] biological products for treating solid tumor malignancies in the early-stage (curative-intent) setting.” The FDA is accepting comments here on this final guidance.
• In November 2024, the FDA issued a draft guidance titled, “Assessment of Ovarian Toxicity in Premenopausal Adults During Drug Development for Oncologic Products,” providing recommendations to sponsors on the measurement of ovarian toxicity using clinical measures and biomarkers of ovarian function in relevant cancer clinical trials that enroll premenopausal adults. The draft guidance applies in the cancer setting, where patient life expectancy based on the tumor type makes ovarian toxicity relevant. The comment period remains open until January 27, 2025.
• In November 2024, the FDA issued draft guidance on nonclinical safety assessment of oligonucleotide-based therapeutics. The draft guidance addresses topics including on- and off-target safety assessments, pharmacology, pharmacokinetics, and toxicity studies. FDA notes that this draft guidance provides detailed recommendations “based on experience to date with this category of products.” Comments can be submitted here through January 14, 2025. 
• In October 2024, the FDA issued final guidance titled, “Core Patient-Reported Outcomes in Cancer Clinical Trials.” While the final guidance focuses on collection of a core set of patient-reported outcome (PRO) measures, the FDA notes that “some of these recommendations may be relevant to other clinical outcome assessments (i.e., clinician-reported outcome, observer-reported outcome, performance outcome) in cancer clinical trials.” The FDA is accepting comments here on this final guidance. 
• In September 2024, the FDA issued final guidance on conducting clinical trials with decentralized elements, which provides recommendations for drug, biologic, and device developers on how to conduct clinical trials in which certain trial-related activities occur remotely (e.g., via telehealth, through in-home visits with remote trial personnel, or by incorporating visits with local healthcare providers). The guidance notes that decentralized trials are one tool to potentially expand clinical trial access to more-representative patient populations, in keeping with the FDA’s focus on improving enrollment of underrepresented groups in clinical studies. Although the guidance notes that sponsor responsibilities are the same for trials that include decentralized elements and those that do not include decentralized elements, the guidance provides further details for sponsors on how recordkeeping and monitoring can be conducted in the decentralized context. The guidance also discusses how investigators can work with local healthcare providers to conduct trial assessments effectively. The FDA is accepting comments on this final guidance here.
• In September 2024, the FDA issued draft guidance, “Considerations for Generating Clinical Evidence From Oncology Multiregional Clinical Development Programs,” to provide “recommendations to sponsors who are planning global clinical development programs for drugs intended to treat cancer, on improving the evidence obtained from one or more multiregional clinical trials (MRCTs) intended to support a marketing application.” The FDA states that the draft guidance expands on existing guidance by providing “additional recommendations for the planning, design, conduct, and analysis of an oncology MRCT that may facilitate the FDA’s assessment of applicability of the data to the US population with the cancer being investigated and to US medical practice.”  
• The comment period has closed on the long-awaited draft guidance, “Diversity Action Plans to Improve Enrollment of Participants From Underrepresented Populations in Clinical Studies.” The draft guidance addresses the preparation of diversity action plans for Phase 3 or pivotal studies of drugs, biologics, and devices (whether conducted under investigational device exemptions or not), pursuant to Section 3601 of FDORA. The draft guidance describes the format and content of diversity action plans, the medical products and clinical studies for which a diversity action plan is required, and the timing and process for submitting diversity action plans to the FDA. The draft guidance also outlines the criteria and process that developers can use for seeking a waiver. Stakeholders had until September 26, 2024, to submit comments on the draft guidance, which the FDA will now review with the aim to issue final guidance. Under its current statutory requirements, the FDA is set to issue a final guidance by mid-2025; however, the future implementation of any diversity action plan requirements will be subject to any decisions by the Trump administration to stall implementation, such as through the use of enforcement discretion or otherwise. This remains an area to watch in the new administration.
• On December 12, 2024, the UK government introduced a legislative proposal — the Medicines for Human Use (Clinical Trials) (Amendment) Regulations 2024 — that, if implemented, will replace the current regulatory framework for clinical trials in the UK. The proposal aims to provide a more flexible regime to make it easier to conduct clinical trials in the UK, increase the transparency of clinical trials conducted in the UK, and make clinical trials more patient centered. The UK government has provided the legislative proposal to the UK Parliament for its review and approval. Once the legislative proposal is approved (with or without amendment), it will be adopted into UK law, which is expected in early 2026. 
• We are continuing to monitor the implementation of Executive Order 14117 and a related Advance Notice of Proposed Rulemaking issued by the US Department of Justice (DOJ). Both of these documents target foreign access to “bulk sensitive personal data” of US persons by countries of concern (i.e., the People’s Republic of China [including Hong Kong and Macao], Russia, Iran, North Korea, Cuba, and Venezuela) and certain entities and individuals connected to these countries. The proposed DOJ framework would prohibit or restrict certain transactions through which a country of concern or covered person could access human genomic data, personal health data, or biometric identifiers (among other types of data), subject to proposed volume thresholds ranging from 100 to 1 million US persons. These rules could implicate commercial relationships with counterparties that have ties to the listed countries, including for clinical trial data, depending on the thresholds to be determined in the rulemaking. We will continue to monitor these developments, which may inform updates to public company regulatory risk factors, particularly for companies with connections to China or another country of concern (for details, see our Client Alert).
• We are monitoring the effects of the Rare Therapies Launch Pad (RTLP) that was launched in November 2023 in the UK. The RTLP aims to help identify a sustainable and scalable approach to delivering individualized therapies for children with rare conditions, including establishing a proportionate regulatory pathway. This end-to-end pathway would cover diagnosis, the design and rapid manufacturing of these therapies, and treatment. The programme also aims to help establish potential reimbursement for these therapies.

Deciding Whether a Company Can Market or Sell a Specific Product

Pharmaceuticals and Biologics

• In October 2024, the FDA issued a draft guidance, “Drug Interaction Information in Human Prescription Drug and Biological Product Labeling,” with recommendations to assist applicants in “determining the appropriate placement and content of drug interaction (DI) information in labeling.” The FDA is accepting comments here through January 21, 2025.
• In June 2024, the FDA issued draft guidance, “Considerations in Demonstrating Interchangeability With a Reference Product: Update,” which describes the FDA’s evolution in thinking about considerations for switching studies intended to support a demonstration of interchangeability with a reference product. Specifically, the FDA notes that “currently available analytical technologies can structurally characterize highly purified therapeutic proteins and model in vivo functional effects with a high degree of specificity and sensitivity using in vitro biological and biochemical assays.” As such, the FDA notes that it will update its interchangeability guidance to reflect that applicants can “choose to provide an assessment of why the comparative analytical and clinical data provided in the application or supplement support a showing that the switching standard … has been met.” Sponsors developing biosimilars should consider how this draft guidance may alter their development plans and regulatory strategies, and public companies developing biologics or biosimilars should review any current risk factor or government regulation descriptions to determine whether updates are needed to reflect the acceptance of analytical data for interchangeability demonstrations. 
• We are continuing to monitor the implementation of the European Commission’s legislative proposals — Regulation 2023/0131 and Directive 2023/0132 — to replace the current EU regulatory framework for medicines (including those for rare diseases and for children). The proposals, announced on April 26, 2023, aim to reduce costs, expedite the introduction of new medicines, and prevent medicine shortages. Read our summary of these proposals here. The European Commission provided the legislative proposals to the European Parliament and the European Council for their review and approval, and in April 2024, the European Parliament proposed amendments to the legislative proposals. Read our summary of these proposed amendments here. Once the European Commission’s legislative proposals are approved (with or without amendment), they will be adopted into EU law.
• We are continuing to monitor the implementation of the Windsor Framework in the UK. On February 27, 2023, the UK government and the European Commission announced a political agreement in principle to replace the Northern Ireland Protocol with a new set of arrangements, known as the Windsor Framework. The Windsor Framework was approved by the EU-UK Joint Committee on March 24, 2023, and the medicines aspects of the Windsor Framework have applied since January 1, 2025. This new framework fundamentally changes the existing system under the Northern Ireland Protocol, including the regulation of medicines in the UK. In particular, the Medicines and Healthcare products Regulatory Agency (MHRA) is responsible for approving all medicines destined for the UK market (i.e., Great Britain and Northern Ireland), and the European Medicines Agency (EMA) no longer has a role in approving medicines destined for Northern Ireland. The MHRA may grant a single UK-wide marketing authorization for all medicinal products sold in the UK, enabling medicines to be sold in a single pack and under a single authorization throughout the UK. Medicines marketed in the UK are also required to carry a “UK only” label to differentiate them from those sold within the EU. 
• We are continuing to monitor the effects in the UK of the International Recognition Procedure (IRP) (effective January 1, 2024), which replaced the European Commission Decision Reliance Procedure. The IRP allows the MHRA to consider the expertise and decision-making of medicine regulators in Australia, Canada, the EU, Japan, Singapore, Switzerland, and the US when approving a new medicine. The decentralized and mutual recognition reliance procedure, which allowed the MHRA to have regard for approvals in the EU, has been incorporated under the umbrella of the IRP.

Medical Devices and Medtech

• We are monitoring the FDA’s implementation of the action items identified in its “CDRH 2024 Safety Report” and “CDRH 2024 Innovation Report.” The action items identified in the reports include advancing improved device quality, enhancing the medical-device recall program, and modernizing premarket review.
• In November 2024, the FDA announced a new pilot program to provide early alerts of potentially high-risk device removals or corrections for certain devices. The pilot is limited to five device categories: cardiovascular, gastrorenal, general hospital, obstetrics and gynecology, and urology. We are monitoring the FDA’s implementation of the pilot program.
• In November 2024, the FDA issued a new direct-to-final guidance to provide a transitional enforcement discretion policy to anticipated changes in ethylene oxide (EtO) sterilization activities as certain manufacturers are transitioning to compliance with new requirements of the Environmental Protection Agency (EPA). The guidance sets forth a framework wherein the FDA will determine, on a case-by-case basis following an “informal notification,” whether to exercise enforcement discretion related to the sterilization of Class III devices at a proposed new sterilization location and subsequent distribution of devices sterilized at such location prior to approval of the requisite site change supplemental application. We are monitoring the FDA’s implementation of the transitional enforcement discretion policy.
• We are monitoring the FDA’s implementation of its authority to accept predetermined change control plans (PCCPs), an authority the FDA gained through the passage of FDORA in late 2022. PCCPs provide a mechanism through which the FDA may preauthorize certain modifications of a device that generally would otherwise require a new marketing submission. In August 2024, the FDA issued draft guidance, “Predetermined Change Control Plans for Medical Devices,” which covers PCCP content and process for all device types and for all types of device marketing submissions. In addition, in December 2024, the FDA issued a final guidance on PCCPs for artificial-intelligence-enabled device software functions. The FDA will host a webinar on the final guidance on January 14, 2025.
• In December 2024, the FDA issued a final guidance updating and superseding its June 2014 guidance on the Global Unique Device Identification Database, which contains information for device labelers. The option to use FDA Preferred Term codes is being removed from the database, and users must instead use Global Medical Device Nomenclature codes. Additional information is provided in the linked guidance. 
• In August 2024, the FDA issued final guidance on the Voluntary Malfunction Summary Reporting (VMSR) Program for Manufacturers, which allows manufacturers to submit malfunction summary reports on a quarterly basis for certain malfunctions related to certain types of devices, instead of individual 30-day malfunction reports. The final guidance generally reflects the draft version of the guidance issued in 2022 and provides an explainer of the VMSR Program. We are continuing to monitor how the program is implemented by the FDA and industry.
• In September 2024, the FDA issued draft guidance on incorporating voluntary patient preference information over the total product life cycle. The draft guidance proposes updates to the FDA’s final guidance on the subject issued in 2016, and when finalized, it will provide updated recommendations for designing, collecting, and evaluating patient preference information in the context of benefit-risk assessments of devices. 
• We are continuing to monitor the implementation of new cybersecurity authorities for software-containing or internet-connected devices, enabling the FDA to require sponsors to develop cybersecurity plans for post-market implementation, as mandated in section 3305 of FDORA. In March 2024, the FDA issued draft guidance with select updates to the September 2023 final guidance related to cybersecurity considerations for cyber devices and for documentation in device premarket submissions.
• We are continuing to monitor the effects of Regulation (EU) 2017/745 (the European Medical Device Regulation, or MDR), which has been applicable in the EU since May 26, 2021. Medical devices with a valid certificate under the previous EU Medical Devices Directive must be fully transitioned to the MDR (subject to fulfillment of certain conditions) by December 31, 2027, for higher-risk medical devices (except for custom-made Class III implantable devices, for which the relevant date is May 26, 2026), and by December 31, 2028, for lower-risk medical devices. The MDR also requires the use of the EU’s medical-device database, EUDAMED, which effectively outlines the life cycle of medical devices by collating and processing information about those medical devices and related companies, such as the manufacturers of those devices. EUDAMED will contain six modules related to: (1) actor registration (e.g., manufacturer, authorized representative, distributor, or importer); (2) unique device identification/device registration; (3) notified bodies and certificates; (4) clinical investigations and performance studies; (5) vigilance and post-market surveillance; and (6) market surveillance. Modules (1), (2), and (3) are already available, and modules (4), (5), and (6) are under development. The use of EUDAMED is not yet mandatory. There will be a gradual rollout of EUDAMED, requiring manufacturers to provide information about their products to available EUDAMED modules without needing to wait for the remaining modules to be developed. This mandatory registration is expected to take effect in late 2025.

In Vitro Diagnostics and Laboratory Testing

• We are monitoring the FDA’s efforts to reclassify most in vitro diagnostics (IVDs) that are currently Class III (high risk), including infectious disease and companion diagnostic IVDs, into Class II (moderate risk). According to a press release dated January 31, 2024, the FDA intends to propose reclassification of IVDs for which it believes there is sufficient information to establish special controls that, in combination with general controls, provide a reasonable assurance of safety and effectiveness for the tests. For example, on September 25, 2024, the FDA issued a proposal to reclassify antigen, antibody, and nucleic acid-based Hepatitis B virus assay devices from Class III to Class II. 
• New Regulation 2024/0021 became applicable on June 13, 2024, in the EU. The new regulation extends the transition periods under the In Vitro Diagnostic Medical Devices Regulation (subject to fulfillment of certain conditions) for in vitro diagnostic medical devices until December 31, 2027, for higher-risk IVDs, and until December 31, 2029, for lower-risk IVDs. The IVDR requires manufacturers to submit all applications for higher-risk IVDs that they want to transition to the IVDR by May 26, 2025, and by May 26, 2027, for lower-risk IVDs. The IVDR also requires manufacturers to have in place a quality management system in accordance with the IVDR by May 26, 2025, and a signed contract with an EU notified body for review and conformity assessment by September 26, 2025, for higher-risk IVDs, and by September 26, 2027, for lower-risk IVDs.
• On December 12, 2024, the European Commission launched a public consultation on the EU’s Medical Devices Regulation and In Vitro Diagnostic Medical Devices Regulation as part of a targeted evaluation of these rules. The evaluation will look at how effective the rules are, and the costs and administrative burden of the rules. The consultation will be open until March 21, 2025, and it is accessible here.

How Companies Manufacture, Promote, and Monitor Their Approved Products

• The FDA issued an updated final guidance on nitrosamine impurities in September 2024. This guidance expands the agency’s 2021 guidance and provides recommendations for risk assessments, testing, and implementation of controls to prevent or reduce nitrosamine impurities in active pharmaceutical ingredients (APIs) and drug products. Importantly, the guidance explains that nitrosamine drug substance-related impurities (NDSRIs) (e.g., a scenario in which the API itself may be a nitrosamine precursor) are considered nitrosamine impurities. The guidance also notes that investigational new drug (IND) sponsors, not just sponsors of approved products, should be mindful of potential nitrosamine impurities in drug products so these impurities can be addressed before submission of a new drug application (NDA) or biologics license application (BLA). The FDA is accepting comments here on this final guidance.
• In July 2024, the FDA issued draft guidance titled, “Addressing Misinformation About Medical Devices and Prescription Drugs: Questions and Answers,” with recommendations for industry on voluntarily addressing misinformation about or related to their approved/cleared medical products. In the draft guidance, the FDA interprets the term “misinformation” to refer to “implicit or explicit false, inaccurate, or misleading representations of fact about or related to a firm’s approved/cleared medical product.” The FDA expresses as its primary concern with misinformation the potential public health harm that it may cause.
• The FDA issued an “exemption from the enhanced drug distribution security requirements of section 582 of the FD&C Act for eligible trading partners” beyond the prior-issued stabilization period for the Drug Supply Chain and Security Act (DSCSA). The FDA defined “eligible trading partners” as “trading partners who have successfully completed or made documented efforts to complete data connections with their immediate trading partners, but still face challenges exchanging data.” The FDA indicated its goal was to avoid supply chain disruptions to medicine distributions. Importantly, trading partners utilizing the exemption do not need to notify the FDA. The exemption period varies by eligible trading partner as follows: 
  • Manufacturers and Repackagers: May 27, 2025
  • Wholesale Distributors: August 27, 2025
  • Dispensers with 26 or more full-time employees: November 27, 2025
  The FDA has also issued exemptions for small dispensers (pharmacies) and their trading partners, providing additional time for implementation until November 27, 2026. Specifically, the FDA defines small dispensers as those where, as of November 27, 2024, the company owning the dispenser had 25 or fewer full-time employees licensed as pharmacists or qualified as pharmacy technicians. Importantly, the FDA notes that pharmacies must make their own determination whether they qualify as a small dispenser under this definition, and no submission is necessary to inform the FDA of utilization of this exemption. Trading partners that do not qualify under one of these exemptions that require additional time can submit a request for a waiver or exemption to the FDA, but while such exemption or waiver is pending must still continue efforts to meet FDA’s requirements. 
• In February 2024, the FDA published its final rule harmonizing its device good manufacturing practice requirements to align more closely with the international consensus standard for devices by converging with the quality management system requirements used by other regulatory authorities from other jurisdictions. The final rule will take effect February 2, 2026.

Whether Government or Commercial Payers Are Willing to Pay for a Product, How Much They Are Willing to Spend, and Under What Circumstances

Pharmaceuticals and Biologics

• Via our Inflation Reduction Act (IRA) web page, we are continuing to follow how the IRA of 2022 will affect Medicare and commercial reimbursement for pharmaceutical and biologic products. On August 14, 2024, the Centers for Medicare & Medicaid Services (CMS) released the first round of “maximum fair prices” for the first 10 drugs selected for negotiation. These prices will go into effect on January 1, 2026. CMS should release its statutorily mandated public explanation of these prices by March 1, 2025. The release of this information will provide the industry with a better understanding of how low CMS set the first prices under the drug price negotiation program, including potentially how closely CMS adhered to the pricing of therapeutic alternatives identified for each of the selected drugs. This will come approximately one month after CMS identifies the next 15 drugs subject to negotiation on February 1, 2025 (with pricing going into effect January 1, 2027). We are also actively tracking ongoing constitutional challenges to the IRA’s drug price negotiation program, as detailed on our IRA web page. 
• We are monitoring any future litigation developments in the Genesis HealthCare v. Becerra ruling in November 2023, which deemed the interpretation of eligible 340B patients by the Health Resources and Services Administration (HRSA) to be too narrow. In response to this case, the HRSA issued a new web page with program policies, guidance documents, and regulations for stakeholders to assist 340B-covered entities with the meaning of “eligible patient” under the 340B program. Here is a link to the web page for 340B Patient Definition Compliance Resources.
• Congress is considering numerous proposed pharmacy benefit manager (PBM) reforms in both the House and the Senate. Legislative proposals include, but are not limited to, eliminating rebates; divorcing service fees from the price of a drug, discount, or rebate; prohibiting spread pricing; limiting administrative fees; requiring PBMs to report formulary placement rationale; promoting transparency; requiring health insurers that own PBMs to divest those PBMs; and many others. PBM reform and transparency measures have become a key policy topic in Washington and continue to be front and center for policymakers.
• On September 26, 2024, CMS published a final rule in the Federal Register titled, “Medicaid Program; Misclassification of Drugs, Program Administration and Program Integrity Updates Under the Medicaid Drug Rebate Program” (the Final Rule). In issuing the Final Rule, CMS declined to finalize parts of its May 2023 proposed rule such as best price stacking, defining “vaccine,” broadening the term “manufacturer,” or implementing a drug price verification survey. However, the Final Rule adopts other significant changes to the Medicaid Drug Rebate Program that may alter manufacturers’ rebate obligations. Of note, CMS finalized new definitions of “covered outpatient drug,” “internal investigations,” and “market date.” The Final Rule also implements a future requirement that Medicaid managed care beneficiary identification cards include Medicaid-specific billing identifiers, which may support curbing 340B duplicate discounts.
• We are monitoring the implementation of Regulation (EU) 2021/2282 (the HTA Regulation) on health technology assessment (HTA), which came into force on January 11, 2022, in the EU and will apply as of January 12, 2025. An HTA is a multidisciplinary process that summarizes information about the medical, social, economic, and ethical issues related to the use of a health technology in a systematic, transparent, unbiased, and robust manner. Currently — and until the applicability of the HTA Regulation in 2025 — after obtaining the respective authorization for health technologies, a manufacturer must apply to different HTA agencies in various EU member states before new health technologies are broadly accessible. The HTA Regulation aims to harmonize various procedures and standards by ensuring that health technology developers can submit only once and at the EU level any information, data, analyses, and other evidence required for the contemplated joint clinical assessment. The HTA Regulation will have a phased rollout but will eventually become applicable for all medicines with a new active substance that receives a marketing authorization in the EU under the centralized procedure. The rollout will be as follows: (i) January 12, 2025, for oncology and advanced therapy medicinal products; (ii) January 12, 2028, for orphan medicinal products; and (iii) January 12, 2030, for all other applicable medicinal products.

Medical Devices and Medtech

• On August 6, 2024, CMS released its final Transitional Coverage for Emerging Technologies (TCET) rule, which describes a process for leveraging the current national coverage determination and coverage with evidence development protocols to speed up Medicare coverage of medical technology that has been granted “breakthrough” status by the FDA. Notably, CMS anticipates accepting around five TCET candidates each year, with quarterly review cycles depending on when applications are received. 

Companies’ Interactions With Their Customers and Other Stakeholders

• Recent Fraud and Abuse and Compliance-Related Actions:
  • On December 13, 2024, ASD Specialty Healthcare — a drug distributor — agreed to pay $1.67 million to settle allegations that it violated the Anti-Kickback Statute and False Claims Act by providing inventory management systems to providers at no charge to induce the purchase of drugs. The DOJ’s press release is available here: United States Settles False Claims Act Allegations Against Pharmaceutical Distributor for Paying Kickbacks Through Inventory Management Systems.
  • On December 13, 2024, McKinsey & Company entered a settlement to resolve criminal and civil investigations into the firm’s work with Purdue Pharma, resulting in a five-year deferred prosecution agreement and a $650 million fine. The DOJ’s press release is available here: Justice Department Announces Resolution of Criminal and Civil Investigations into McKinsey & Company’s Work with Purdue Pharma L.P.; Former McKinsey Senior Partner Charged with Obstruction of Justice.
  • On November 15, 2024, drug company QOL Medical agreed to pay $47 million to resolve allegations that it caused the submission of false claims to federal government healthcare programs by providing kickbacks in the form of free Carbon-13 breath testing services to induce claims for QOL’s rare disease drug, Sucraid. According to the government, QOL distributed free breath test kits to HCPs and asked HCPs to give the kits to patients with common gastrointestinal symptoms to “rule in or out” the rare genetic condition QOL sought to treat. QOL paid a laboratory to analyze the tests and report the results to HCPs and to QOL. Sales reps also made claims to HCPs regarding the test’s ability to definitively diagnose the genetic disorder. The government alleged that these tests were free goods designed to induce prescriptions for an expensive drug. The DOJ’s press release is available here: Pharmaceutical Company QOL Medical and CEO Agree to Pay $47M for Allegedly Paying Kickbacks to Induce Claims for QOL’s Drug Sucraid.
  • On November 1, 2024, compound ingredient supplier Medisca agreed to pay $21.75 million to resolve allegations of having established false and inflated average wholesale pricing for two ingredients, causing pharmacies that purchased these agreements to submit false prescription claims to TRICARE for reimbursement. The DOJ’s press release is available here: Compound Ingredient Supplier Medisca Inc., to Pay $21.75M to Resolve Allegations of False and Inflated Average Wholesale Prices for Ingredients Used in Compounded Prescriptions.
  • On October 10, 2024, Teva agreed to pay $450 million to resolve allegations that the company (a) paid Medicare patients’ copays for one of the company’s multiple sclerosis drugs while steadily increasing the drug’s price, including conspiring with a specialty pharmacy and two independent copay assistance foundations; and (b) conspired with other generic companies to fix prices for certain drugs. The DOJ’s press release is available here: Drug Maker Teva Pharmaceuticals Agrees to Pay $450M in False Claims Act Settlement to Resolve Kickback Allegations Relating to Copayments and Price Fixing.
  • On October 2, 2024, Precision Toxicology — a diagnostic testing company — agreed to pay $27 million to resolve allegations that it violated the False Claims Act by billing government healthcare programs for medically unnecessary urine tests and/or providing free items to physicians who agreed to refer expensive laboratory testing business to Precision. The DOJ’s press release is available here: Precision Toxicology Agrees to Pay $27M to Resolve Allegations of Unnecessary Drug Testing and Illegal Remuneration to Physicians.
  • In addition, on December 12, 2024, the Office of Inspector General released a new advisory opinion — AO 24-10 — that approved a dental supply distributor’s customer loyalty program for purchases of dental-related items and services.

Companies’ Interactions With Patient Data

• As the second Trump Administration assumes office and Republicans control both chambers of Congress, states are expected to move to protect consumer health information, particularly, though not only, in the context of reproductive health or gender affirming care. Already we’ve seen a reproductive data privacy geofencing bill in New York (A 5517); a bill specifically scoped to reproductive data privacy in Michigan (SB 1082); a bill on AI and mental health data in Texas (HB 1265); multiple bills on location health data in California (AB 45 and AB 67); and a bill on privacy in the context of reproductive rights and gender-affirming care in Virginia (SB 754).
• With AI legislation proliferating across states, policymakers are focusing on AI making “consequential decisions”. AI laws define decisions concerning health care services as high risk consequential decisions, subject to prescriptive obligations, for example under Colorado’s AI Act.   With companies collecting patient data on a global basis, we closely follow the latest privacy law developments around the world. In the EU, the UK, and Switzerland, we are tracking evolving case law and guidance surrounding the EU and UK General Data Protection Regulation and the Swiss Federal Act, as well as implications for companies collecting and handling patient data. 
• In the US, the post-Dobbs era is marked by intense regulatory focus on health data. This trend is expected to accelerate at the state level, as a result of Republican control of Congress and the new Trump Administration. This includes state consumer privacy legislation protecting sensitive health information; health-data-specific laws, such as the state of Washington’s My Health My Data Act, which came into force on March 31, 2024 (see Goodwin’s client alert for more information); and a wave of Federal Trade Commission enforcement actions against digital health providers. To protect information related to reproductive health services, the Health and Human Services Office for Civil Rights (HHS-OCR) issued regulations amending the Privacy Rule of the Health Insurance Portability and Accountability Act (HIPAA) to prohibit covered entities and business associates from disclosing information about reproductive health services to law enforcement in cases where the procedures were lawful in the state in which they occurred. The amendments became effective in December 2024. 
• On June 20, 2024, the US District Court for the Northern District of Texas in American Hospital Association (AHA), et al., v. Xavier Becerra, et al., vacated the portion of HHS-OCR’s bulletin on tracking technologies that states that an IP address combined with an unauthenticated visit to a website could constitute protected health information (PHI). The ruling left intact the remainder of the bulletin, which clarifies that HIPAA applies to a covered entity’s or business associate’s use of website cookies and other tracking technologies, when the data collected by such technologies relates to identifiable patients. HHS-OCR will not appeal the ruling.
• As discussed in the Preclinical and Clinical Research section above, the DOJ has recently promulgated rules under Biden’s Executive Order 14117 on Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government-Related Data by Countries of Concern. These new rules regulate access to certain sensitive data categories — including, notably, health data, human “omic” data, and, potentially, biospecimens — by people and entities associated with “countries of concern,” including the People’s Republic of China.
• The European Council and European Parliament have reached a provisional agreement on the European Health Data Space (EHDS). The European Commission published a proposal for the EHDS back in May 2022, and the European Parliament approved the text of the provisional agreement earlier in 2024. Whilst the regulation has been approved, it has yet to be officially published. It is expected to be published in early 2025, marking the official start of the process. The next phase (between 2025-2027) will focus on drafting secondary legislation, including implementing and delegating Acts which will define the technical specifications required for EHDS operations. Following this (between 2027-2029), the process will involve member states preparing to meet their obligations under the EHDS (such as creating data hubs and integrating with EU-wide data frameworks). The main objectives of the EHDS are to improve individual access to and control over patient health data in the EU and to facilitate cross-border research and innovation in health. The European Council and European Parliament will need to endorse the provisional agreement before it is formally adopted. See Goodwin’s blog posts here and here for further details.
• Last year, the number of proposed class actions under Illinois’ Genetic Information Privacy Act (GIPA) of 1998 has increased, with dozens of cases filed or moved to federal court. These cases challenge the practice of businesses to require medical exams to ensure job seekers would be able to handle job requirements. Plaintiffs claim certain family medical history questions could trip GIPA. In two major cases, involving United Airlines and Union Pacific, the U.S. District Court for the Northern District of Illinois declined defendants’ motions to dismiss GIPA class actions by job seekers.