FDA Announces Draft Supplemental Guidance on Menu Labeling

  • Today FDA announced an update to its Menu Labeling Supplemental Guidance which addresses implementation of menu nutrition labeling requirements. The menu labeling rules only apply to standard menu items offered by “covered establishments,” which are defined as restaurants and similar retail food establishments with 20 or more locations doing business under the same name and offering for sale substantially the same menu items, as well as restaurants and similar retail establishments that register to voluntarily subject themselves to the menu labeling requirements. (21 CFR 101.11).
  • The menu labeling regulations require disclosure of calories on menu and menu boards, and require that other nutrition information (e.g., fat, sugar, protein) be available in written form on the premises and provided to the customer upon request. Notably, the menu labeling regulations do not require disclosure of “added sugars” as is now required on packaged foods.
  • The draft update includes two new Q&As which (1) clarify that nutrition information can be provided on third party platforms (TPPs) through which food is ordered and delivered and (2) that added sugars may voluntarily be declared.
  • Although FDA accepts comments on any guidance at any time, comments on the draft new Q&As are due by February 12, 2024, to ensure they are considered before FDA begins work on final versions.

COVID Vaccine Class Action Reminds Employers to Individually Consider Accommodations

Tyson Foods, Inc. (“Tyson”) is no stranger to religious accommodation lawsuits over the impact of its COVID-19 vaccine mandate given its continued efforts to operate through the height of the pandemic in 2021—but the battle just heated up with a proposed class action complaint filed in the Eastern District of Arkansas.

Tyson’s recent troubles derive from its 2021 vaccine mandate (the “Vaccine Mandate”) requiring all leadership team members to be vaccinated by September 24, 2021, all corporate team members to be vaccinated by October 1, 2021, and all other team members to be vaccinated by November 1, 2021. The Vaccine Mandate coincided with an OSHA rule (which the Supreme Court subsequently ruled unconstitutional) requiring workers with at least 100 workers to be vaccinated or to produce weekly test results showing that they were virus-free. Tyson, a huge company with warehouse operations, clearly fell within its ambit and had strong incentives to keep its workforce safe.

Notably, while in place, the OSHA rule required employers to grant medical and religious exemptions from the mandate. Likewise, Tyson’s Vaccine Mandate required Tyson to afford reasonable accommodations to employees with sincerely-held religious beliefs that prevented them from receiving the vaccine, as required by the OSHA rule. However, various plaintiffs have alleged that the only accommodation typically offered to religious objectors was to be placed on an unpaid leave of absence called LOA+, which lasted approximately one year. Plaintiffs claim that requests to telework were refused in favor of this unpaid leave.

One of the first suits to be filed was Reed, et al., v. Tyson Foods, Inc., No. 21-CV-01155-STA-JAY, 2022 WL 2134410 (W.D. Tenn. June 14, 2022), in which several plaintiffs sought injunctive relief against the Vaccine Mandate in part on religious and disability theories under Title VII and the ADA. Though parts of the case were allowed to proceed, these specific claims were dismissed without prejudice for failure to exhaust administrative remedies. Tyson also succeeded on defeating religious claims based on the Religious Freedom Restoration Act (“RFRA”) on a motion to dismiss in another Tennessee case, after failing to secure dismissal in another, similar case based on Title VII and the RFRA. Compare Johnson v. Tyson Foods, Inc., No. 21-CV-01161-STA-JAY, 2023 WL 3901485 (W.D. Tenn. June 8, 2023) with Hayslett v. Tyson Foods, Inc., 636 F. Supp. 3d 900 (W.D. Tenn. 2022). The latter case settled out-of-court in July 2023.

Beyond these, Tyson also faced other single-plaintiff suits on religious vaccine accommodation grounds in Tennessee, Kentucky, and Missouri, with varying results. Matthews v. Tyson Foods, Inc., No. 1:22-CV-1192-STA-JAY, 2023 WL 25733 (W.D. Tenn. Jan. 3, 2023)(motion to dismiss denied under Tennessee state law); Collins v. Tyson Foods, Inc., No. 1:22-CV-00076-GNS, 2023 WL 2731047 (W.D. Ky. Mar. 30, 2023)(motion to dismiss granted under RFRA, ADA, and Kentucky state law, but denied under Title VII); Reese v. Tyson Foods, Inc., No. 3:21-05087-CV-RK, 2021 WL 5625411 (W.D. Mo. Nov. 30, 2021) (motion to dismiss granted as to public policy and invasion of privacy claims, but denied under state discrimination law). Some of these cases were subsequently settled, as well.

On November 16, 2023, plaintiff Sarah Pearson brought a proposed class action complaint in Pearson v. Tyson Foods Inc., 4:23CV01080, purporting to represent:

All Arkansas based Tyson employees or former Arkansas based Tyson employees who worked remotely (telework) prior to August 3, 2021, who requested a religious accommodation to continue working remotely (telework) in response to Tyson’s COVID Vaccine Mandate, and who were instead placed on LOA+ by Tyson;

and

All Arkansas based Tyson employees or former Arkansas based Tyson employees who worked remotely (telework) prior to August 3, 2021, who requested a religious accommodation when Tyson ended its COVID Vaccine Mandate on October 31, 2022, and who were subsequently not reinstated to the same job and terminated.

For each, Pearson recites the allegations required to sustain a class action: numerosity (in excess of 50 putative class members, per her complaint), commonality, typicality, and adequacy. These allegations can prove tricky in the case of sincerely-held religious beliefs and leaves of absence, but not necessarily impossible. Compare Robinson v. Gen. Motors Co., No. 4:15-CV-158-Y, 2015 WL 13731154 (N.D. Tex. Oct. 21, 2015) (denying class certification in part because “determining individual class members would require the Court to wade through thousands of leave requests and evaluate each individual’s circumstance . . . to determine whether a GM employee even qualifies . . .”) with Jennings v. St. Luke’s Health Network, Inc., No. 5:23-CV-1229, 2023 WL 5938755 (E.D. Pa. Sept. 12, 2023) (denying without prejudice motion to strike class action allegations in religious discrimination vaccine case, pending discovery).

Here, Pearson’s complaint reveals numerous specific allegations which are likely specific to her, including that Tyson offered her an in-person job in a different city once the Vaccine Mandate ended, which she declined.  However, it remains to be seen if Tyson’s alleged policy of placing all religious objectors on leave may break through the barriers to commonality, typicality, and adequacy otherwise posed by, e.g., different religions, belief systems, communications with human resources, and leave requests.

Following these recent developments, employers are advised to remember that religious discrimination accommodation requests should not be taken lightly, and should result in an individualized interactive process with each employee. Even apparently implausible religious beliefs, associated with religions that do not otherwise espouse such beliefs, may be (or be deemed by a court to be) sincerely-held.

Chicago Employers: Prepare for New Paid Leave Ordinance Effective 31 December 2023

On 9 November 2023, the Chicago City Council passed the Chicago Paid Leave and Paid Sick and Safe Leave Ordinance1(the Ordinance). The Ordinance takes effect on 31 December 2023, and replaces Chicago’s current paid sick leave ordinance.2 Under the Ordinance, starting 1 January 2024, Chicago employees are entitled to up to 80 hours of paid time off in a 12-month period, with 40 hours allocated to paid sick leave and 40 hours allocated to general paid leave.

The Ordinance comes eight months after the Illinois legislature’s enactment of the Illinois Paid Leave for All Workers Act (PLAWA),3 which goes into effect on 1 January 2024 and guarantees that Illinois workers can earn or accrue up to 40 hours of paid leave per year that may be used for any reason. Although employers covered by the Ordinance are exempt from PLAWA,the Ordinance adopts PLAWA’s purpose of providing general paid leave to employees in addition to paid sick leave.

METHOD FOR ACCRUAL, CARRYOVER, AND FRONTLOADING

The Ordinance provides that a covered employee5 will accrue one hour of general paid leave and one hour of paid sick leave for every 35 hours worked. Both general paid leave and paid sick leave are accrued in hourly increments and the total accrual for both forms of leave is capped at 40 hours in a 12-month period. At the end of the 12-month period, covered employees are allowed to carryover up to 16 hours of general paid leave and up to 80 hours of paid sick leave to the subsequent 12-month period. Chicago employers may also choose to “front-load,” or grant, 40 hours of paid leave or 40 hours of paid sick leave (or both) on the first day of employment or on the first day of the 12-month period.  If an employer elects to front-load general paid leave hours, the employer is not required to allow employees to carry over unused general paid leave hours to the following 12-month period. However, employers must allow employees to carry over up to 80 hours of paid sick leave into the next 12-month period even if the leave is front-loaded.

USE OF LEAVE

Employers must allow covered employees to use accrued paid sick leave after completing 30 days of employment, and use accrued general paid leave after completing 90 days of employment. An employer may set a reasonable usage minimum increment, not to exceed four hours per day for paid leave or two hours per day for paid sick leave. If a covered employee’s scheduled workday is less than such minimum increments, then the minimum increment of time cannot exceed the covered employee’s regular scheduled workday.

Similar to the PLAWA, general paid leave under the Ordinance may be used for any reason and employees cannot be required to provide a reason for or documentation to support the leave. Paid sick leave may be used for the same reasons set forth under the current Chicago paid sick leave ordinance, including:

  • For illness or injury, or for the purpose of receiving professional care, which includes preventive care, diagnosis, or treatment for medical, mental, or behavioral issues, including substance use disorders;
  • For a family member’s illness, injury, or order to quarantine, or to care for a family member receiving professional care;
  • For domestic violence, or if a covered employee’s family is the victim of domestic violence;
  • If the covered employee’s place of business is closed by order of a public official due to a public health emergency, or the employee needs to care for a family member whose school, class, or place of care has been closed; or
  • For the covered employee to obey an order issued by the mayor, the governor of Illinois, the Chicago Department of Public Health, or a treating healthcare provider requiring the employee to stay at home to minimize the transmission of a communicable disease; to remain at home while experiencing symptoms or sick with a communicable disease; and to obey a quarantine order or an isolation order issued to the employee.

REQUESTING LEAVE

For general paid leave, an employer may require a covered employee to provide reasonable notice not to exceed seven days prior to the need for leave and may require preapproval to ensure continuity of business operations. An employer may also require seven days’ notice for paid sick leave. If the need for paid sick leave is not reasonably foreseeable, an employer may require a covered employee to give notice as soon as is practicable by notifying the employer by phone, email, or other means. The Ordinance defines “reasonably foreseeable” as including, but not limited to, prescheduled appointments with health care providers and court dates in domestic violence cases.

If a covered employee uses paid sick leave to be absent for more than three consecutive work days, the employer may require certification that the paid sick leave was used for a qualifying purpose. For health-related paid sick leave, this certification can be documentation signed by a licensed health care provider. For domestic violence-related paid sick leave this certification can be a police report, court document, or a signed statement from an attorney, a member of the clergy, or a victim services advocate. An employer may not delay the commencement of paid sick leave or delay payment of wages based on not receiving the required documentation or certification. However, an employer can take disciplinary action, up to and including termination, against a covered employee who uses paid sick leave for purposes other than those described in the Ordinance.

PAYMENT OF PAID LEAVE AND PAID SICK LEAVE

The Ordinance sets forth general requirements relating to the payment of general paid leave and paid sick leave. General paid leave and paid sick leave must be compensated at the employee’s regular rate of pay, including health care benefits. The regular rate of pay for nonexempt or hourly employees is calculated by dividing the employee’s total wages by total hours worked in full pay periods of the prior 90 days of employment.  Wages do not include overtime pay, premium pay, gratuities, or commissions. Employers must pay an employee for their general paid leave and paid sick leave by the next regular payroll period after the time off was taken.

PAYMENT OF PAID LEAVE UPON TERMINATION

Under the Ordinance, an employer with 50 covered employees or less is not required to pay out any accrued, unused general paid leave upon termination. An employer with 51 to 100 covered employees (Medium Employer) must pay out accrued, unused general paid leave, up to 16 hours, until 31 December 2024. On or after 1 January 2025, a Medium Employer must pay all accrued, unused paid general leave upon an employee’s termination for any reason. Unless otherwise provided in a collective bargaining agreement, an employer cannot enforce a contract or a policy that requires the employee to forfeit any earned general paid leave upon separation from employment. Employers are not required to pay out accrued, unused paid sick leave.

Further, all unused paid sick leave and paid general leave is retained by the covered employee if the employer sells, transfers, or assigns the business to another employer and the employee continues to work in the City of Chicago.

EXISTING LEAVE POLICIES AND UNLIMITED PAID TIME OFF PROGRAMS

If a covered employee accrues paid sick leave before 1 January 2024 and the employer’s existing paid time off policy does not comply with the Ordinance, then on 1 January 2024, any paid sick leave that the covered employee is entitled to will rollover to the next 12-month period.

For employers that have recently adopted “unlimited paid time off policies,” the Ordinance provides that employers may offer unlimited paid time off policies and so long as the covered employer provides unlimited paid time off at the beginning of employment or the start of a 12-month period, there is no requirement to permit carryover of unused general paid leave to the next year. However, employees must still be allowed to carry over up to 80 hours of paid sick leave. Although the covered employer may still require reasonable notice for both foreseeable and unforeseeable reasons for leave, it may not require preapproval for such leave. Further, if the employer has an unlimited paid time off policy, upon separation from employment (or transfer outside of the City of Chicago’s boundaries), employers must pay the monetary equivalent of 40 hours of general paid leave less the amount of general paid leave used by the covered employee during the prior 12-month period preceding separation of employment (or transfer outside of the City of Chicago’s boundaries). Finally, employers must still comply with the other requirements in the Ordinance related to the administration of general paid leave and paid sick leave.

NOTICE AND POSTING

Similar to the current Chicago paid sick leave ordinance, a covered employer must post in a conspicuous place a notice advising covered employees of their right to paid time off. The Ordinance also sets the following requirements:

  1. The employer must provide the same notice to the covered employee with the first paycheck issued to the employee, as well as on an annual basis with a paycheck issued within 30 days of 1 July.
  2. In every pay stub or wage statement to the covered employee, the employer must provide a written notification stating the updated amount of paid leave and paid sick leave available to the employee.
  3. The employer must notify employees at least five calendar days before any changes to the employer’s paid time off policy are made.
  4. The employer must provide employees with a 14-day written notice of changes to its paid time off policies that affect the employees’ final wages.
  5. The employer must notify the covered employee in writing that the employee may request payout of their accrued, unused paid leave time when the employee has not been offered a work assignment for 60 days.

PENALTIES FOR VIOLATION, DAMAGES, AND PRIVATE CAUSE OF ACTION

Any employer who violates the Ordinance may be subject to fines between US$1,000 and US$3,000 for each separate offense. If the employer violates the notice requirements, then the employer may be fined US$500 for the first violation and US$1,000 for any subsequent violation. Each day a violation occurs constitutes a separate and distinct offense.

Further, an employer who violates the Ordinance may be liable to the affected employee for damages equal to three times the full amount of any leave denied or lost by reason of the violation, plus interest, costs, and reasonable attorney’s fees paid by the employer to the covered employee. The Ordinance also provides for a private right of action, which is available to covered employees on 31 December 2023 for violations related to paid sick leave and 1 January 2025 for violations related to general paid leave.

Chicago employers should review their current paid time off policies and payroll systems for compliance and should consider consulting their labor and employment attorneys for assistance in developing a policy that meets the requirements of the Ordinance. The lawyers of our Labor, Employment, and Workplace Safety practice regularly counsel clients on a wide variety of issues related to paid leave policies and are well positioned to provide guidance and assistance to clients on this significant development in Illinois.


FOOTNOTES

Chi., Ill., Mun. C. Chi. § 6-130 (2023).

Chi, Ill., Mun. C. Chi. § 6-105 (2023).

Paid Leave for All Workers Act, Pub. Act No. 102-1143 (Jan. 1, 2024).

See Sang-yul Lee, et al., Illinois Guarantees One Week of Paid Leave for All Workers, K&L Gates (Mar. 15, 2023), https://www.klgates.com/Illinois-Guarantees-One-Week-of-Paid-Leave-for-All-Workers-3-15-2023. Employers covered by local paid sick leave ordinances, such as the Ordinance, are exempt from PLAWA so long as such municipality has an ordinance in place on January 1, 2024. See 820 ILCS § 192/15(p).

A “covered employee” is defined as an Employee who works at least two hours for a Chicago employer in any particular two week period. See Chi., Ill., Mun. C. Chi. § 6-130-010 (2023).

Legal Considerations for Healthcare Providers

Navigating the Physician and Non-Physician Relationship

Relationships between physicians and other healthcare professionals are highly regulated and can be complex to navigate. With non-physicians performing more services, including medical services with physician supervision, a variety of questions arise. What scope of services can be provided? What level of supervision is required? Can a non-physician have an ownership or related
interest in the entity providing services? With licensure on the line, it is critical to understand the legal requirements of the state where your practice operates.

What is the Corporate Practice of Medicine Doctrine (CPOM)?

Aimed at protecting patients, the CPOM restricts private ownership of medical corporations in an effort to prevent interference with a physician’s medical judgment. Although most states prohibit the corporate practice of medicine, every state provides exceptions. As with most laws, the exceptions vary by state.

Is it a Medical Service or Not?

What may seem like a simple question can be anything but. For example, a standard facial may be performed at a spa by a non-physician, but if the facial includes treatment that effects the tissue beneath the skin it crosses into the area of medical services. These nuances inform who can perform the service and with what level of physician supervision. What constitutes physician supervision is an additional area for consideration necessary to defining the physician/non-physician relationship and compensation.

Can Healthcare Providers Manage a Practice?

A Non-medical services provided by a healthcare professional require additional consideration with respect to corporate structure and compensation. Management services agreements are one way to afford a non-physician a greater stake in the practice. These agreements define the relationship and compensation associated with the provision of managerial and administrative services for a practice.

What Should I Know About Restrictive Covenants?

In the competitive medical field of today, healthcare providers should have a clear understanding of any restrictions before entering into a relationship with a physician or non-physician, switching practices, creating a new practice, forming
a relationship with multiple practices or terminating a relationship. It is important to understand any potential restrictive covenants and their impact, as you may want to challenge or negotiate those terms.

For more news on Legal Considerations for Healthcare Providers, visit the NLR Health Law & Managed Care section.

A Time for Clauses – Santa and No Gag

As we approach December, the impending arrival of Santa Claus is no doubt dominating discussions in many households.  However, there is another, perhaps lesser known, “clause”-related item that health plan sponsors need to keep top of mind in the coming month.

Specifically, as discussed in our blog found here, health plan sponsors must remember to file their first annual “no gag clause” attestation on December 31, covering the period from December 27, 2020 through the attestation date.

Here are some quick reminders about the requirement, along with some next steps for plans that are catching up:

  • What is the “No Gag Clause” Attestation?

The “no gag clause” attestation, which must be filed annually by December 31, requires group health plans and issuers to certify that they are not subject to agreements that directly or indirectly restrict them from disclosing provider-specific cost or quality-of-care information to certain parties, electronic accessing de-identified claims and encounter information (consistent with privacy laws) or sharing this information with a business associate.

  • How to File an Attestation

The attestation is filed electronically on CMS’s dedicated website, found here.  Instructions, frequently asked questions and a user manual can be found on CMS’s website here.

  • Who is Responsible for the Attestation?

While self-insured plans retain the ultimate responsibility for ensuring that the attestation is submitted, they can contract with their third-party administrators to file on their behalf.

For fully-insured plans, the insurance issuer’s submission of an attestation will satisfy the attestation requirement for both the plan and the issuer.

  • What Should Plan Sponsors Do Now?

For plans that have not yet begun to address the attestation, there is still time to take the necessary steps as follows:

  • If they have not already done so, plans should review their service agreement(s) to ensure that they do not contain any gag clauses.
  • Plans may also wish to obtain written confirmation from their administrators that no prohibited gag clauses are included in their applicable contracts (and, if any are, that the contracts are amended to remove them effective December 27, 2020).
  • Self-insured plans should contact their administrator(s) to coordinate who will be filing the submission.  At this stage, many administrators already have their processes in place and may not wish to file on the behalf of the plan, in which case the plan will need to do the filing.  This will make accomplishing the first two steps more important.

Getting these tasks accomplished as soon as possible will allow plan sponsors to put these prohibited clauses behind them and focus on the good Clauses of the season—Santa and Mrs.

Sharing Scientific Information with HCPs on Unapproved Uses of Medical Products: Dos and Don’ts Under FDA’s New Draft Guidance

In October 2023, the FDA released draft guidance entitled “Communications From Firms to Health Care Providers Regarding Scientific Information on Unapproved Uses of Approved/Cleared Medical Products: Questions and Answers Guidance for Industry” (“2023 Draft Guidance”).[1] The 2023 Draft Guidance supersedes previous draft guidance from 2014 entitled “Distributing Scientific and Medical Publications on Unapproved New Uses–Recommended Practices” (“2014 Draft Guidance”), which was a revision of a 2009 final guidance entitled “Good Reprint Practices for the Distribution of Medical Journal Articles and Medical or Scientific Reference Publications on Unapproved New Uses of Approved Drugs and Approved or Cleared Medical Devices.”

All three of these FDA guidance documents provide recommendations for industry regarding the sharing of scientific information with Health Care Providers (“HCPs”)[2] on unapproved uses of approved or cleared drugs and medical devices, termed “SIUU communications” by the 2023 Draft Guidance. HCPs are permitted to prescribe medical products for unapproved uses when the unapproved use is determined to be medically appropriate for a given patient. However, manufacturers may not promote their products for an unapproved use. For this reason, FDA’s position (which is articulated to some extent across all of the above-mentioned guidance documents, but most clearly and emphatically in the 2023 Draft Guidance) is that firm[3] communications to HCPs regarding unapproved uses of approved or cleared products should include all of the information necessary for HCPs to evaluate the strengths, weaknesses, validity, and utility of the information about the unapproved use in order to make determinations regarding medical appropriateness.

In the 2023 Draft Guidance, FDA seeks to balance the interests of HCPs in learning, and manufacturers in sharing, truthful and non-misleading information about unapproved uses of approved medical products, with the intent to inform clinical practice decisions against the government’s interest in protecting patients from medical product uses that have not met applicable safety and effectiveness standards required under FDA’s premarket approval framework.

While the 2023 Draft Guidance reiterates many of the recommendations from the 2014 Draft Guidance, the 2023 Draft Guidance leverages a new “Q&A” format to provide firms with more detailed and specific recommendations, including hypothetical scenarios, around SIUU communications. Below, we restate the four Q&A questions included in the 2023 Draft Guidance and then highlight key aspects of the responses provided by FDA through brief commentary and recommended Dos and Don’ts.

Q1. What should firms consider when determining whether a source publication is appropriate to serve as the basis for an SIUU communication?

According to the 2023 Draft Guidance, any study or analysis described in a source publication that serves as the basis for an SIUU communication should be scientifically sound,[4] and should provide information that is relevant to HCPs engaged in making clinical practice decisions for the care of an individual patient; in other words, these sources should be clinically relevant.[5] While the 2014 Draft Guidance suggested that scientific or medical journal article reprints intended for distribution to HCPs should describe studies that are considered “scientifically sound” by appropriate experts, the 2023 Draft Guidance builds out this standard and provides greater insight into what types of source material would meet (and not meet) the standard.

Do:

  • Choose scientifically sound studies that provide clinically relevant information to support your SIUU communications
    • For human and animal drugs, randomized, double-blind, concurrently controlled superiority trials are most likely to provide both scientifically sound and clinically relevant information (though other well-designed and well-conducted studies may also be appropriate)
    • For medical devices,[6] look to well-controlled investigations, partially controlled studies, studies and objective trials without matched controls, well-documented case histories conducted by qualified experts, reports of significant human experience with a marketed device as sources of scientifically sound and clinically relevant information
  • Consider studies with real-world data and associated real-world evidence, which may meet the scientifically sound and clinically relevant threshold depending on the nature of the data and underlying analyses

Don’t:

  • Rely on studies without an adequate control group, isolated case reports, or studies that lack sufficient detail to permit scientific evaluation as the sole basis for an SIUU communication
  • Rely on studies with “unreliable” data, even if you include disclaimers noting the limitations (e.g., studies that fail to control for confounding factors or fail to clearly define study endpoints)
  • Rely on articles focused on non-clinical studies as the sole basis for an SIUU communication
  • Rely on scientific data generated in early stages of medical product development as the sole basis for an SIUU communication, as such data can produce results that are inconsistent with later studies
  • Distort studies in SIUU communications or base SIUU communications on publications that distort studies or include fraudulent data
  • Continue to share an SIUU communication that is based on a study or analysis that is no longer clinically relevant (ex: subsequent research has established the findings from the study are not reliable)

Q2. What information should firms include as part of SIUU communications?

Like the 2014 Draft Guidance, the 2023 Draft Guidance emphasizes the importance of providing certain disclosures with SIUU communications to ensure such communications are not misleading and provide all the information necessary for HCPs to interpret the strengths and weaknesses and validity and utility of the information. The recommended disclosures in the 2023 Draft Guidance are similar to those recommended in the 2014 Draft Guidance, but are more detailed and extensive.

Do:

  • Provide a disclosure statement with any SIUU communication, which should include:
    • A statement that the use described in the communication is unapproved and the safety and effectiveness of the medical product for the unapproved use(s) has not been established
    • Disclosure of the FDA approved use of the medical product, including any limitations and contraindication(s) specified by the product’s FDA-required labeling[7]
    • Disclosure of any limitations, restrictions, cautions, warnings, or contradictions described in the FDA-required labeling about the unapproved use(s)
    • Disclosure of any serious, life-threatening, or fatal risks posed by the medical product that are relevant to the unapproved use(s) (that are either in the FDA-required labeling or known by the firm and relevant to the unapproved use)
    • Disclosure of any financial relationships between the firm and any authors, editors, or other contributors to the publications in the SIUU communication
    • A copy of the most current FDA-required labeling (or a mechanism for obtaining the labeling)
    • The publication date of any referenced or included publication(s) (if not specified in the publication or citation)
  • For an SIUU communication based on a source publication that is primarily focused on a particular scientific study or studies, for each such study where the following information is not included in the publication, provide a description of:
    • All material aspects of study design, methodology, and results
    • All material limitations related to the study design, methodology, and results
    • Any conclusions from other relevant studies, when applicable, that are contrary to or cast doubt on the results shared, including citations for any such studies

Don’t:

  • Omit any risk evaluation and mitigation strategy (REMS) applicable to the medical product (firms should disclose any REMS and should describe the goal(s) of the REMS)

Q3. What presentational considerations should firms take into account for SIUU communications?

The 2023 Draft Guidance offers a number of presentation-focused recommendations to ensure that SIUU communications are conveyed in a manner that enhances and does not interfere with HCP understanding of the underlying scientific information, and to avoid such SIUU communications being confused with promotional communications about approved uses.

Do:

  • Clearly and prominently present all recommended disclosures, considering type size, font style, layout, contrast, graphic design, headlines, spacing, volume, articulation, pace, and any other techniques to achieve emphasis or notice
  • For SIUU communications with both audio and visual components, present disclosures in both the audio and in text at the same time using the same/substantially similar language
  • Keep SIUU communications (including those relayed via email) separate and distinct from promotional communications about approved uses of medical products
  • Use dedicated vehicles, channels, and venues for sharing SIUU communications that are separate from the vehicles, channels, and venues used for promotional communications about approved uses of medical products. For example –
    • Present SIUU communications on a separate web page from the web page that hosts promotional communications about approved uses
    • At conferences and similar venues, ensure that SIUU communications are clearly identified and distinct from promotional communications about approved uses (e.g., by dividing booth space to allow a dedicated space for SIUU communications)
  • Use plain language in the content developed for SIUU communications to facilitate comprehension (i.e., clear and concise language that does not include technical jargon and clearly explains any scientific or technical terms)

Don’t:

  • Use persuasive marketing techniques, such as the use of celebrity endorsements, premium offers, and gifts. According to FDA, a firm’s choice to use persuasive marketing techniques suggests an effort to convince the HCP to prescribe or use the product for the unapproved use based on elements other than the scientific content of the communication
  • Include direct links from web pages that host promotional communications about approved uses to webpages that host SIUU communications
  • Utilize platforms with character limits that do not enable the firm to include the recommended disclosures for sharing SIUU communications (however, such platforms could be used to direct an HCP to an SIUU communication, subject to certain restrictions)

Q4. What additional recommendations apply to specific types of SIUU communications?

The 2023 Draft Guidance offers additional recommendations related to certain specific types of SIUU communications including journal reprints and clinical reference resources (such as clinical practice guidelines and reference texts). Of note, the 2023 Draft Guidance provides recommendations for a category of SIUU communications that is not specifically addressed in the 2014 Draft Guidance – “firm-generated presentations of scientific information from an accompanying published reprint.”

Discussion of such firm-generated presentations in the 2023 Draft Guidance represents a departure from the 2014 Draft Guidance, which stated that reprints (as well as clinical reference resources) regarding unapproved uses (of cleared or approved medical products) should not be “marked, highlighted, summarized, or characterized” by medical product manufacturers to emphasize or promote an unapproved use. The 2023 Draft Guidance provides new flexibility in this regard, expressly acknowledging that firms may develop their own presentations of scientific information from an accompanying reprint provided such presentation is truthful, non-misleading, factual, unbiased, and provides all the information necessary for HCPs to interpret the strengths and weaknesses and validity and utility of the presented information. The 2023 Draft Guidance includes a number of recommendations for firms to follow to prepare and distribute firm-generated presentations of information from an accompanying reprint.

Do:

  • Include the full reprint with the firm-generated presentation
  • Include the disclosures outlined above in Q2, and clearly disclose what portions of the communication are firm-generated
  • Follow the presentational considerations outlined in Q3

Don’t:

  • Imply that the study, analysis, or underlying data or information from the reprint(s) represents larger or more-general experience with the medical product than it actually does
  • Present information, such as excerpts, quotes, etc., from the reprint(s) out of context, without the information necessary for HCPs to interpret the strengths and weaknesses and validity and utility of the information
  • Include representations or suggestions about the safety or effectiveness of the medical product for the unapproved use(s) that are not consistent with the reprint
  • Present any conclusions or representations about safety or effectiveness for the unapproved use without expressly attributing such statements to the reprint, and without immediately following such statements with a disclosure of any financial relationships between the firm and any authors, editors, or other contributors to the publications in the SIUU communication
  • Use statistical analyses or techniques to indicate clinical significance or validity of a finding not supported by the data or information in the reprint
  • Use tables or graphs or other presentational elements to distort or misrepresent the relationships, trends, differences, or changes among the outcomes evaluated in the reprint

Conclusion

While the 2023 Draft Guidance veers from the 2014 Draft Guidance in some respects, many of the same principles have been pulled through into the current guidance. As such, a medical product manufacturer who has already implemented the recommendations from the 2014 Draft Guidance should not face too heavy of a lift to adjust its activities to align with the 2023 Draft Guidance. While the landscape has not shifted drastically overall, firms should still closely review the additional detail and clarifications provided by the 2023 Draft Guidance to mitigate potential risk in navigating the often murky regulatory waters of engaging in off-label and pre-approval communications.

ENDNOTES

[1] Comments on the 2023 Draft Guidance are due by December 26, 2023.

[2] The 2023 Draft Guidance only applies to HCPs engaged in making clinical practice decisions for the care of an individual patient. Per the 2023 Draft Guidance, HCPs include physicians, veterinarians, dentists, physician assistants, nurse practitioners, pharmacists, or registered nurses who are licensed or otherwise authorized by law to prescribe, order, administer, or use medical products in a professional capacity. The 2014 Draft Guidance applied to “health care professionals,” but the term was not specifically defined.

[3] As defined by the 2023 Draft Guidance, firms are the “persons legally responsible for the labeling of medical products, and includes applicants, sponsors, requestors, manufacturers, packers, and distributors of medical products, and licensees of such persons, and any persons communicating on behalf of these entities.”

[4] To be “scientifically sound,” at a minimum, studies should meet generally accepted design and other methodological standards for the particular type of study performed, taking into account established scientific principles and existing scientific knowledge.

[5] Additionally, statistical robustness is generally necessary, though not sufficient, to determine if a study or analysis is appropriate for an SIUU communication. While statistical robustness factors into the rigor of the design and methodology of a study, it does not assure that the study relates to outcomes of clinical relevance to HCPs.

[6] Notably, while the 2014 Draft Guidance stated that journal articles discussing significant non-clinical research could fall within FDA’s enforcement discretion policy under the guidance, the 2023 Draft Guidance clarifies that, generally, sharing articles focused on non-clinical studies alone would not be consistent with FDA’s enforcement discretion policy as a non-clinical study alone is unlikely to provide information that is clinically relevant.

[7] “FDA-required labeling” includes, but is not necessarily limited to, the labeling reviewed and approved by FDA as part of the medical product premarket review process. For a prescription human drug (including biological products), this consists of the FDA-approved prescribing information that meets the requirements of 21 CFR 201.100. For a device, it includes the labeling approved during the review of a premarket approval application or De Novo classification.

States Continue to Adopt the “Continuous-Trigger” Theory of “Occurrence” Under Commercial General Liability Insurance Policies

A growing number of states, including Ohio, Pennsylvania, and Virginia, and most recently, West Virginia, now follow the “continuous-trigger” theory when examining coverage under an occurrence-based Commercial General Liability (CGL) insurance policy.
The West Virginia Supreme Court of Appeals recently confirmed in Westfield Ins. Co. v. Sistersville Tank Works, Inc., No. 22-848 (Nov. 8, 2023), that West Virginia law recognizes the “continuous trigger” theory to determine when insurance coverage is activated under a CGL policy that is ambiguous as to when coverage is triggered.
In 2016 and 2017, former employees of Sistersville Tank Works, Inc. (STW), filed three separate civil lawsuits West Virginia state court alleging personal injuries as the result of exposure to various cancer-causing chemicals while working around tanks that STW supposedly installed, manufactured, inspected, repaired or maintained between 1960 and 2006. STW purchased CGL policies from Westfield each year for the period 1985 to 2010. Typical of virtually all CGL policies, the Westfield CGL policies issued to STW were occurrence-based and provided coverage for bodily injury and property damage “which occurs during the policy period.”  Under the Westfield CGL policies, the bodily injury or property damage must be caused by an “occurrence,” defined under the policy as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.”
Westfield denied coverage for the three underlying lawsuits and filed a declaratory judgment complaint in the United States District Court for the Northern District of West Virginia seeking a declaration that it owed no duty to provide a defense or indemnification to STW because the former employees were diagnosed after the expiration of the last CGL policy, and, therefore, STW could not establish that an “occurrence” happened within the policy period.
The District Court granted summary judgment to STW and found that Westfield owed a duty to defend and indemnify under all the Westfield CGL policies in effect between 1985 and 2010. Specifically, the District Court concluded that Westfield’s obligation to cover a bodily injury that “occurs during the policy period” was ambiguous because the language in Westfield’s CGL policies did not clearly identify when coverage was “triggered” when a claimant alleged repeated chemical exposures and the gradual development of a disease over numerous policy periods. The District Court predicted that the West Virginia Supreme Court of Appeals would apply the continuous-trigger theory to clarify the ambiguous language in the policies at issue, which resulted in each occurrence-based CGL policy insuring the risk from the initial exposure through the date of manifestation being triggered.
Westfield appealed to the United Stated Court of Appeals for the Fourth Circuit and argued that a “manifestation trigger” of coverage should apply to determine coverage, under which only the CGL policy in effect when an injury is diagnosed, discovered, or manifested provides coverage for the claim. The Fourth Circuit, recognizing that West Virginia had not address the issue, then certified the following question to the West Virginia Supreme Court of Appeals:

At what point in time does bodily injury occur to trigger insurance coverage for claims stemming from chemical exposure or other analogous harm that contributed to development of a latent illness?

The West Virginia Supreme Court began its analysis of the certified question by observing that “in the context of latent or progressive diseases,” the definition of “occurrence” was ambiguous and subject to interpretation by the Court. The Court then examined the history of the insurance industry’s adoption of “occurrence” language in CGL policies in the 1960s including the specific intent of drafters of the “occurrence” language to include “cases involving progressive or repeated injury” in which “multiple policies could be called into play.”
The Court also observed that most courts that have examined the “continuous-trigger” theory have expressly adopted it, including Ohio (Owens-Corning Fiberglas Corp. v. Am. Centennial Ins. Co., 660 N.E.2d 770, 791 (Ohio Com. Pl. 1995); Pennsylvania (J.H. France Refractories Co. v. Allstate Ins. Co., 626 A.2d 502, 506 (Pa. 1993); and Virginia (C.E. Thurston & Sons, Inc. v. Chi. Ins. Co., No. 2:97 CV 1034 (E.D. Va., Oct. 2, 1998)). Conversely, the Court noted that no jurisdiction has adopted the “manifestation” trigger advocated by Westfield.
The Court concluded by expressly adopting the “continuous-trigger” theory of coverage to determine when coverage is activated under the insuring agreement of an occurrence-based CGL policy “if the policy is ambiguous as to when coverage is triggered.”  In doing so, the Court observed that the continuous trigger theory of coverage “has the effect of spreading the risk of loss widely to all of the occurrence-based insurance policies in effect during the entire process of injury or damage[,]” which includes the time of “the initial exposure, through the latency and development period, and up to the manifestation of the bodily injury, sickness, or disease[.]”
The Westfield decision ensures that West Virginia law concerning the activation of coverage under occurrence-based CGL policies aligns with the law in other states around the country. It also should be a reminder to businesses that purchase occurrence-based CGL policies to establish and maintain a repository of insurance policies for as long as possible, and especially for businesses that may be subject to personal injury claims that involve long latency periods between exposure and manifestation. Having copies of those policies will increase the chance of finding at least one insurer (and potentially more) that owes a defense and indemnification for such claims.

Surge in Class Actions Under the Illinois Genetic Information Privacy Act

This year has seen a substantial increase in the number of class action lawsuits filed against employers under the Illinois Genetic Information Privacy Act (GIPA). More than 20 suits have been filed this year, a stark contrast to zero filed in 2022 and only two in 2021.

Like its federal counterpart the Genetic Information Nondiscrimination Act (GINA), GIPA prohibits employers, and agents acting on their behalf, from “directly or indirectly” soliciting, requesting, requiring or purchasing genetic information from a person as a condition of employment or from using genetic information in a discriminatory manner against an employee or applicant. Genetic information is defined to include information from genetic tests or the manifestation of a disease or disorder of an individual or their family members.

Under the claims filed, plaintiffs allege that during the hiring process prospective employers collected family medical history and required pre-employment physicals or health interviews, which sought the protected information. These exams and interviews were often conducted by third-party occupational health services providers. The damages sought included “statutory damages” under the Act of $15,000 for each intentional and/or reckless violation and $2,500 for each negligent violation. In addition, GIPA has no statutory cap on punitive or compensatory damages and no statute of limitations, exposing employers to potentially massive damage awards.

Because these cases are in their infancy and currently only in Illinois, there is little guidance on the scope of GIPA and any exceptions that may exist. This means that we will need to wait and see how courts will interpret the Act and what impact the cases will have beyond Illinois.

In light of these developments, all employers should consider the following:

  • Disclaimer Use on Authorizations and Information Packets: Consider adding a written disclaimer to any authorization and pre-employment questionnaires that requests applicants not to provide any genetic information when responding to requests for medical information. The disclaimer should be provided to the applicant/employee for their information.
  • Review Third-party Provider Practices: Evaluate the practices of third-party medical providers, including documents provided to applicants/employees in their evaluation process, and request that family medical history not be obtained.
  • Assess Contracts/Indemnification Obligations: Review and assess the indemnification provisions of contracts with third-party medical providers. It is important that the hold harmless and indemnification obligations of the provider include reference to GIPA obligations in the scope of protection for the employer.

Does the “Patent Eligibility Restoration Act of 2023” Revive Diagnostic Claims?

On June 22, Senator Chris Coons, along with Thom Tillis introduced the “Patent Eligibility Restoration Act of 2023” (hereinafter “the Act”) to amend 35 USC s. 101 to clarify the scope of patent-eligible subject matter. Section 101(b) would be amended to delete “includes a new use of a known process” and insert “includes a use, application, or method of manufacture of a known or naturally occurring process.” A section (k) would be added to define the term “useful” as meaning that the invention or discovery has a “specific and practical utility” from the perspective of a POSA. So far, so good. The use of a naturally occurring process can be read to cover the use of a naturally occurring correlation, an “If A then B” claim. The recognition of the discovery of the utility of a naturally occurring correlation, which leads to a diagnostic conclusion would seem to be included in this broad language.

But now things get a bit sketchy. The Act would abolish all the current judicial, e.g. Chakrabarty, exclusions but would add a set of statutory exclusions that overlap the judicial exclusions in some places. The exclusions include “an unmodified human gene”—good-bye Myriad—and an unmodified natural material as that material exists in nature, e.g., water. This exclusion would not jeopardize diagnostic claims since a per se is not being claimed.

More troublesome, Section C of the exclusions would include a process that “occurs in nature wholly independent of, and prior to, any human activity.” Diagnostic claims are process claims that are based on the recognition of the utility of a correlation that takes place in the body. The utility of the diagnostic claim lies solely in the recognition of the utility of the correlation. If a man has an elevated level of PSA he is at risk of developing, or may already have, prostate cancer. But isn’t the relationship between PSA levels and cancer/no cancer a process that occurs in nature wholly independent of, and prior to, any human activity, such as sampling and measuring the level of PSA in the blood? Please read the Act and tell me why I am wrong.

© 2023 Schwegman, Lundberg & Woessner, P.A. All Rights Reserved.

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CMS Takes Steps to Lower SNF Medicare Payment Error Rates

With the Medicare Comprehensive Error Rate Testing program projected error rate for skilled nursing facilities (SNFs) showing a significant increase in 2022 (15.1%, up from 7.9% in 2021), the Centers for Medicare and Medicaid Services (CMS) has instructed each of its Medicare Administrative Contractors (MACs) that review SNF Medicare claims to initiate a five-claim probe and educate medical review for each SNF in the MAC’s jurisdiction.

CMS surmises that the source of the increase in improper payments may lie with the change from resource utilization group (RUG) IV to the patient driven payment model (PDPM) and has noted that the primary root cause of SNF errors is missing documentation.

MACs are instructed to implement the five-claim probe on a rolling basis beginning with the top 20% of SNFs that show the highest risk. If any improper payments are identified, the MAC will adjust (or deny) the claim(s) and offer either widespread education or 1:1 individualized education depending on the error rate. 1:1 education will include claim specific information and allow the SNF to review the claim decision, ask questions and receive feedback.

Beginning June 5, 2023, SNFs nation-wide should be on the lookout for a prepayment probe and educate record request from the MAC and be prepared to respond within 45 days.

Copyright © 2023, Sheppard Mullin Richter & Hampton LLP.

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