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Two Executive Orders Continue Trump Administration Efforts to Restrain Agency Policymaking

Last week, President Trump signed two executive orders designed to limit the ability of federal agencies to make and enforce policy through the use of guidance documents. While this may seem like a mere technical issue, the ramifications could be significant.

A federal agency may issue a guidance document for a variety of reasons. Some agencies, such as the U.S. Food and Drug Administration (“FDA”), use it as the primary instrument for announcing and explaining significant policies. Many FDA guidance documents clarify agency positions regarding complex and ambiguous laws and regulations governing the broad range of companies it regulates. This includes manufacturers and marketers of food, dietary supplements, cosmetics, drugs and medical devices.

Some question whether agencies (including FDA) have gone too far. Agencies are supposed to promulgate a regulation when creating a new rule. In contrast, an agency may convey an interpretation of a currently existing rule through the issuance of a guidance document or other, less formal means. While it is often challenging to distinguish a new rule from an interpretation, the distinction has serious implications. The cost, time and effort required to publish a guidance document are far lower. Notably, a regulation may only be finalized after the agency has received and addressed all public comments. No such requirement exists for guidance documents.Continue Reading A New Challenge for FDA?

Last week, the Federal Trade Commission issued a press release announcing that it had issued warning letters to three unnamed sellers of cannabidiol (CBD) products who marketed everything from gummies to creams with bold claims that the products could treat a wide variety of the most serious diseases known to man. This follows an earlier wave of letters that it issued jointly with the U.S. Food and Drug Administration (FDA) last March, which warned other CBD marketers of misbranding and introducing an unapproved new drug without prior approval, and of making unsupported claims about their CBD products’ ability to treat and cure serious diseases such as cancer and Alzheimer’s, among other medical conditions.

In the latest press release, the FTC reaffirms its interest in monitoring health-related advertising claims in the budding CBD industry. The FTC did not disclose the recipients of the warning letters, but the Commission quoted several problematic claims made by the undisclosed CBD companies. Examples of claims that the FTC appears focused on include 1) assertions that CBD products have been “clinically proven” to treat cancer, Alzheimer’s disease, or other serious medical diseases; 2) claims that CBD products are effective in relieving various types of pain; and 3) references to the amount of research companies have acquired to support these claims.Continue Reading Alzheimer’s and Cancer? FTC Announcement Shows That FDA Is Not the Only Agency That Is “Serious”

There is no denying that, at times, the express claims made on dietary supplement labels may seem to convey a broader implied claim to the consumer regarding the supplement’s performance benefits. While that may be true, last month the Ninth Circuit confirmed that plaintiffs cannot successfully allege that a lawful “structure/function” claim misleadingly implies that a dietary supplement will treat, cure, or prevent a disease under state law. In so deciding, the court found that Section 403(r)(6) of the Federal Food, Drug, and Cosmetic Act (“FDCA”) expressly permits dietary supplements to make claims that describe the role of a nutrient or dietary ingredient intended to affect the structure or function of the body (i.e., structure/function); and that Section 403A(a)(5) of the FDCA expressly preempts any California law that would differ from the FDCA’s allowance for structure/function claims.

While perhaps not surprising that the court reached this conclusion, a recent Ninth Circuit opinion is worth noting because it is the first time that the court has issued an opinion expressly confirming that lawful structure/function claims will have coverage against California’s strong consumer protection laws. We caution, however, that dietary supplement manufacturers may still face liability under state law if they fail to disclose material information about their products, including its safety profile.

The plaintiff alleged that the defendant’s Vitamin E supplement claims to “support cardiovascular health” and “promote[ ] immune function” were false and misleading in violation of California law because the Vitamin E supplements (1) did not prevent “cardiovascular disease” and (2) might increase the risk of all-cause mortality. The Ninth Circuit disagreed and affirmed the district court’s grant of summary judgment in favor of the defendant.Continue Reading Ninth Circuit Affirms FDA Preemption in Tossing Vitamin E Supplement Case

Earlier this week, the FTC and the FDA announced a joint effort to combat unsubstantiated health claims in the supplement space. In three warning letters—to Gold Crown Natural Products, TEK Naturals, and Pure Nootropics, LLC (collectively, the “Companies”)—the agencies explain that certain efficacy claims may lack competent and reliable scientific evidence for support.…

With the ink on the president’s signature barely dry, the commissioner of the U.S. Food and Drug Administration (FDA) – Dr. Scott Gottlieb – issued a statement letting everyone know that the agency is aware of the implications of the Agriculture Improvement Act of 2018 (a/k/a the Farm Bill). As we reported last month, CBD derived from hemp may not be “marijuana” any longer, but the laws that the FDA enforces continue to prohibit (at least, in the FDA’s view) the manufacture and distribution of foods and dietary supplements containing CBD. Dr. Gottlieb took this opportunity to reiterate the agency’s position, noting that “it’s unlawful under the [Federal Food, Drug and Cosmetic Act] to introduce food containing CBD or THC into interstate commerce, or to market CBD or THC products as, or in, dietary supplements, regardless of whether the substances are hemp-derived.”

The commissioner also indicated, however, that the agency will initiate a process for reexamining current policy, stating:Continue Reading CBD Update: The FDA Commissioner Cannot Ignore the Buzz – But Is Further Deregulation on the Horizon?

Signed into law on December 20, 2018, the 2018 Farm Bill may present a tremendous opportunity for banks and payments companies to provide banking, processing, and other services to the hemp industry. We expect a variety of companies to move swiftly in developing, marketing, and selling products (including CBD oil) that, until yesterday, were controlled substances. This means that banks and payment processors should be prepared for a flood of inquiries from the industry about opening bank, merchant processing, and other financial accounts.

While the Farm Bill “legalizes” hemp, there remain a number of open questions that financial institutions should consider before they start serving the industry. This article provides a brief overview of the Farm Bill’s impact on the legal status of hemp, highlights some of the open questions, and provides suggested best practices for banks and processors seeking to work with the hemp industry.Continue Reading New Farm Bill Cracks Open Door to Processing for Legalized Hemp and CBD Oil

Previously on the blog, we noted that federal government agencies don’t always play well together. So, when these agencies synchronize their efforts, the industry would do well to take notice. One such coordination effort is well underway. The FDA and the USDA just announced that they will jointly oversee cell‑cultured food production derived from livestock and poultry.

The FDA and the USDA’s announcement follows the agencies’ October 2018 public meeting, where they met with consumers and members of the agricultural industry to discuss safety considerations, possible hazard controls, and labeling concerns related to cell‑cultured foods. Cell‑cultured food production is a burgeoning industry. It continues to raise questions about what will be regulated, what the regulatory process will look like, and which agencies will manage the regulatory process.Continue Reading Cell Cultured Food—FDA and USDA Reach Agreement on Splitting Up Oversight

New compliance rulesOn consecutive days last month, both the Consumer Product Safety Commission (CPSC) and the U.S. Food and Drug Administration (FDA) made clear that delays in reporting potential product hazards or defects could significantly damage a company’s reputation and bottom line. The message from these agencies is clear—manufacturers and distributors of products regulated by CPSC and/or FDA would be wise to ensure their product quality processes and compliance programs enable swift communication to regulators and the public. On January 18, FDA Commissioner Scott Gottlieb announced the publication of a draft guidance that “better describes the FDA’s policy on public warning and notification of recalled products as part of [the agency’s] effort to ensure better, more timely information reaches consumers.” The next day, the U.S. Department of Justice announced that a federal district court awarded $5 million in civil penalties in an action brought on behalf of the CPSC against a pharmaceutical company for alleged violations of the Poison Prevention Packaging Act (PPPA) and Consumer Product Safety Act (CPSA), including its failure to “immediately” notify the CPSC once it discovered that its products were not compliant with the PPPA.

The FDA’s draft guidance applies to voluntary recalls of all products under FDA’s purview, including food, drugs, medical devices, and cosmetics. It comments on a variety of issues associated with product recalls, including whether the general public should be informed, and, if so, what the content and method for communication should be. With respect to timing, the draft guidance notes that the agency’s expectations will be driven largely by the nature of the risk presented by the individual recall, although it generally expects firms to issue a public warning within 24 hours of FDA notifying the firm that it believes a public warning is appropriate.Continue Reading FDA, CPSC & the Need for Speed: Recent Actions Highlight Importance of Promptly Reporting Product Safety Issues

While there are many questions surrounding the regulation of marijuana and related products, the FDA has made it clear where it stands on at least one issue.  For the third year in a row, the FDA has issued a rash of warning letters to the makers of products containing cannabidiol (“CBD”) for marketing unapproved new drugs. CBD is a non-psychoactive compound derived from marijuana, which we’ve heard is used by many to treat symptoms including pain, anxiety, depression and insomnia.[1] The FDA letters assert that each of the companies’ claims regarding their CBD products cause them to be considered drugs, because they purport to be intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease and/or because they are intended to affect the structure or any function of the body. Such claims are a trap for the unwary because a sloppy marketer can inadvertently cause a relatively innocuous product to be subject to strict regulation as a drug. In this case, however, even a novice would conclude that the companies’ claims were disease related:
Continue Reading FDA Harshes the Vibe of CBD Makers, Warns Them to Stop Making Drug Claims

jelly donutThe Affordable Care Act (ACA) gave our nation “Obamacare.” The ACA also gave the FDA the obligation to adopt regulations requiring “a restaurant or similar retail food establishment that is part of a chain with 20 or more locations doing business under the same name” to disclose the calories contained in “standard menu” items. This largely ignored ACA requirement, except by the chain restaurant industry, has yet to be implemented. It may never be.

The public health premise of requiring calorie disclosure is that it will affect positively consumer choice. Consumers will, so the theory goes, be less likely to eat what is “bad” for them (or more likely to eat what is “good” for them) if they are told that a jelly donut with a dollop of whipped cream on top is so loaded with calories that eating it will far exceed one’s daily calorie requirements.

The public health need for trying to influence consumers (restaurant eaters) to choose lower calorie items is clear. FDA’s Commissioner Dr. Scott Gottlieb wrote recently that “more than a third of U.S. adults are obese.” The question is not the need, but the practical feasibility, of addressing obesity and related health issues through a national system of menu labeling.Continue Reading Will FDA Be Forced To Eat Menu Labeling?