Category: Biotech & Cleantech

BRAG Biobased Products Blog

USDA Requests Input On HBIIP

On January 16, 2020, the U.S. Department of Agriculture (USDA) announced the issuance of a Request for Information (RFI) to assist with the creation of its new program called Higher Blends Infrastructure Incentive Program (HBIIP). A USDA Rural Development project, HBIIP is designed to expand the availability of domestic ethanol and biodiesel by incentivizing the expansion of sales of renewable fuels. Requesting feedback from all interested parties, this RFI solicits information on options for fuel ethanol and biodiesel infrastructure, innovation, products, technology, and data derived from all HBIIP processes and/or science that drive economic growth, promote health, and increase public benefit. With an approaching deadline for comment submissions by January 30, 2020, thus far, only three parties have submitted comments to USDA.

DOE Announces Launch Of The 2020 Tibbetts Awards Program

On January 21, 2020, the U.S. Department of Energy’s (DOE) Small Business Innovation Research (SBIR)/Small Business Technology Transfer (STTR) Programs Office announced the launch of the U.S. Small Business Administration’s (SBA) Tibbetts Awards. The Tibbetts Awards recognize companies, organizations, and individuals exemplifying the best of the best in the SBIR and STTR programs. Named after the founder of the SBIR program, Roland Tibbetts, the awards also help DOE to document the economic, technical, and societal benefits from SBIR/STTR funding. Nominees can consist of an individual, a company, or an organization that promotes the mission and goals of the SBIR/STTR programs. The mission and goals include:

  • Stimulation of technological innovation;
  • Work with small businesses to meet federal development needs;
  • Encouragement of diverse participation in innovation and entrepreneurship;
  • Increase of private sector commercialization of innovations derived research and development (R&D); and
  • Foster technology transfer through cooperative R&D between small businesses and research institutions.

Nominations are open through February 21, 2020, and can be submitted via this website.

EU Funds Project To Develop Biobased Ropes For Aquaculture

On January 17, 2020, the European Union (EU) announced a new innovative project called BIOGEARS that will be funded under the European Maritime and Fisheries Fund (EMFF). The project focuses on the development of biobased gear solutions for the creation of an eco-friendly offshore aquaculture sector using a multitrophic approach and new biobased value chains. With the aim to address the gap of biobased ropes for offshore aquaculture, which is currently manufactured with 100 percent non-recyclable plastics, BIOGEARS will create a biobased value chain under the EU Bioeconomy Strategy framework. The European Bioeconomy Strategy aims to accelerate the deployment of a sustainable and circular European bioeconomy to maximize its contribution towards the 2030 Agenda and its Sustainable Development Goals (SDG), as well as the Paris Agreement. With the goal of increasing aquaculture marketable products, BIOGEARS uses an Integrated Multi-Trophic Aquaculture (IMTA) approach by integrating seaweed with mussel production. The BIOGEARS project’s intention is to develop biobased ropes that are tough, durable, and fit-for-purpose while still able to biodegrade in shorter time and managed by local composting facilities.

As part of the project, all project partners will participate in a BLUE LAB to enhance cooperation and enable tracking of innovation of the new biobased materials developed. Project coordinator, Leire Arantzamendi, expressed her hopes of boosting more eco-friendly mussel and seaweed production stating that BIOGEARS “will generate three rope prototypes with a highly reduced carbon footprint along the value chain.” The project will focus on the Atlantic Basin.

©2020 Bergeson & Campbell, P.C.

For more developments in the Biotech sphere, see the National Law Review Biotech, Food & Drug law section.

New Joint Website on Agricultural Biotechnology Products Launched by EPA, USDA, and FDA

On January 9, 2020, the U.S. Environmental Protection Agency’s (EPA) Office of Pesticide Programs (OPP) announced the launch of a new website created in coordination with the U.S. Department of Agriculture (USDA) and the Food and Drug Administration (FDA) that provides information about actions the federal government is taking to oversee the development of agricultural biotechnology products.  This “one-stop-shop” website was created under the direction of Executive Order (EO) “Modernizing the Regulatory Framework for Agricultural Biotechnology Products.”

EPA regulates biotechnology-based pesticides under the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), and residues from such pesticides under the Federal Food, Drug and Cosmetic Act (FFDCA).  EPA also regulates under the Toxic Substances Control Act (TSCA) certain new microorganisms that are not subject to regulation under other statutes.  USDA regulates certain new biotechnology products under the Plant Protection Act (PPA), including agricultural crops that have been modified to be resistant to conventional pesticides.  FDA regulates the safety of human and animal foods produced using biotechnology, including genetically modified agricultural crops and animals, and the safety of drugs and human biologics produced with biotechnology, under the FFDCA.

The website, The Unified Website for Biotechnology Regulation, describes the federal review process for biotechnology products, outline’s each agency’s role in regulating biotechnology products, and allows users to submit questions to the three agencies.  EPA Administrator Andrew Wheeler states that the new website “will help provide regulatory certainty and clarity to our nation’s farmers and producers by bringing together information on the full suite of actions the Trump Administration is taking to safely reduce unnecessary regulations and break down barriers for these biotechnology products in the marketplace.”

Commentary

In recent years, a number of Non-Governmental Organizations (NGO) have raised concerns regarding the risks from products that have been genetically modified using biotechnology, including agricultural crops that have been genetically modified to improve pesticide or disease resistance, and agricultural animals that have been genetically modified to enhance food production.  In some instances, farmers have also expressed concern that crops with novel traits may exchange genetic information with other plant strains or species.  Implicit in all of this criticism is a presumption that the agencies with regulatory jurisdiction over these novel organisms have not adequately prevented or mitigated the risks associated with biotechnology.

In contrast, proponents of biotechnology have complained that regulatory requirements imposed by the responsible agencies have stifled useful innovation and have requested relief from regulatory requirements that they contend have impeded or slowed introduction of new products of agricultural biotechnology.  The Executive Order that underlies the new website seeks to streamline the administrative process for introducing novel agricultural products without increasing potential risks of biotechnology.

Additional information on how EPA regulates biotechnology products is available here.

©2020 Bergeson & Campbell, P.C.

For more on biotech, see the National Law Review Biotech, Food & Drug lawpage.

CMS’s Request for Information Provides Additional Signal That AI Will Revolutionize Healthcare

On October 22, 2019, the Centers for Medicare and Medicaid Services (“CMS”) issued a Request for Information (“RFI”) to obtain input on how CMS can utilize Artificial Intelligence (“AI”) and other new technologies to improve its operations.  CMS’ objectives to leverage AI chiefly include identifying and preventing fraud, waste, and abuse.  The RFI specifically states CMS’ aim “to ensure proper claims payment, reduce provider burden, and overall, conduct program integrity activities in a more efficient manner.”  The RFI follows last month’s White House Summit on Artificial Intelligence in Government, where over 175 government leaders and industry experts gathered to discuss how the Federal government can adopt AI “to achieve its mission and improve services to the American people.”

Advances in AI technologies have made the possibility of automated fraud detection at exponentially greater speed and scale a reality. A 2018 study by consulting firm McKinsey & Company estimated that machine learning could help US health insurance companies reduce fraud, waste, and abuse by $20-30 billion.  Indeed, in 2018 alone, improper payments accounted for roughly $31 billion of Medicare’s net costs. CMS is now looking to AI to prevent improper payments, rather than the current “pay and chase” approach to detection.

CMS currently relies on its records system to detect fraud. Currently, humans remain the predominant detectors of fraud in the CMS system. This has resulted in inefficient detection capabilities, and these traditional fraud detection approaches have been decreasingly successful in light of the changing health care landscape.  This problem is particularly prevalent as CMS transitions to value-based payment arrangements.  In a recent blog post, CMS Administrator, Seema Verma, revealed that reliance on humans to detect fraud resulted in reviews of less than one-percent of medical records associated with items and services billed to Medicare.  This lack of scale and speed arguably allows many improper payments to go undetected.

Fortunately, AI manufacturers and developers have been leveraging AI to detect fraud for some time in various industries. For example, the financial and insurance industries already leverage AI to detect fraudulent patterns. However, leveraging AI technology involves more than simply obtaining the technology. Before AI can be used for fraud detection, the time-consuming process of amassing large quantities of high quality, interoperable data must occur. Further, AI algorithms need to be optimized through iterative human quality reviews. Finally, testing the accuracy of the trained AI is crucial before it can be relied upon in a production system.

In the RFI, CMS poses many questions to AI vendors, healthcare providers and suppliers that likely would be addressed by regulation.  Before the Federal government relies on AI to detect fraud, CMS must gain assurances that AI technologies will not return inaccurate or incorrect outputs that could negatively impact providers and patients. One key question raised involves how to assess the effectiveness of AI technology and how to measure and maintain its accuracy. The answer to this question should factor heavily into the risk calculation of CMS using AI in its fraud detection activities. Interestingly, companies seeking to automate revenue cycle management processes using AI have to grapple with the same concerns.  Without adequate compliance mechanisms in place around the development, implementation and use of AI tools for these purposes, companies could be subject to high risk of legal liability under Federal False Claims Act or similar fraud and abuse laws and regulations.

In addition to fraud detection, the RFI is seeking advice as to whether new technology could help CMS identify “potentially problematic affiliations” in terms of business ownership and registration.  Similarly, CMS is interested to gain feedback on whether AI and machine learning could speed up current expensive and time-consuming Medicare claim review processes and Medicare Advantage audits.

It is likely that this RFI is one of many signals that AI will revolutionize how healthcare is covered and paid for moving forward.  We encourage you to weigh in on this on-going debate to help shape this new world.

Comments are due to CMS by November 20, 2019.

©2019 Epstein Becker & Green, P.C. All rights reserved.

For more CMS activities, see the National Law Review Health Law & Managed Care page.

Ubers of the Future will Monitor Your Vital Signs

Uber has announced that it is considering developing self-driving cars that monitor passengers’ vital signs by asking the passengers how they feel during the ride, in order to provide a stress-free and satisfying trip. This concept was outlined in a patent filed by the company in July 2019. Uber envisions passengers connecting their own health-monitoring devices (e.g., smart watches, activity trackers, heart monitors, etc.) to the vehicle to measure the passenger’s reactions. The vehicle would then synthesize the information, along with other measurements that are taken by the car itself (e.g., thermometers, vehicle speed sensors, driving logs, infrared cameras, microphones, etc.). This type of biometric monitoring could potentially allow the vehicle to assess whether it might be going too fast, getting too close to another vehicle on the road, or applying the brakes too hard.  The goal is to use artificial intelligence to create a more ‘satisfying’ experience for the riders in the autonomous vehicle.

This proposed technology presents yet another way that ride-sharing companies such as Uber can collect more data from their passengers. Of course, passengers would have the choice about whether to use this feature, but this is another consideration for passengers in this data-driven industry.

Copyright © 2019 Robinson & Cole LLP. All rights reserved.

For more about self-driving cars, see the National Law Review Communications, Media & Internet law page.

Mississippi Sued Over Plant-Based, Cell-Based, and Insect-Based Meat Labeling Law

Like countless other states, earlier this year, Mississippi passed SB 2922, which stipulates that cell-based, plant-based, or insect-based foods cannot be labeled as “meat” or “a meat food product” (e.g., “hamburgers,” “hot dogs,” “sausages,” “jerky”, etc.). Specifically, SB 2922 amended Section 75-35-15(4) of the Mississippi Code to state “[a] food product that contains cultured animal tissue produced from animal cell cultures outside of the organism from which it is derived shall not be labeled as meat or a meat food product. A plant-based or insect-based food product shall not be labeled as meat or a meat food-product.” Such products still run afoul of the law even if the labels include claims like “100% vegan,” “plant-based,” or “meatless.”

SB 2922 came into effect on July 1, 2019. On that same day, vegan “meat” producer, Upton’s Naturals Co. and the Plant Based Foods Association (PBFA) filed suit in federal court against Mississippi’s Governor and Commissioner of the Department of Agriculture and Commerce arguing that the label restrictions violate their First Amendment right to free speech, among other claims. Upton’s and PBFA are seeking a declaratory judgment that SB 2922 violates the First and Fourteenth Amendments to the U.S. Constitution, a preliminary injunction prohibiting enforcement of SB 2922 throughout the duration of the litigation, a permanent injunction, and an award of nominal damages in the amount of $1.00.

Mississippi’s Department of Agriculture and Commerce, along with the state’s cattle and poultry associations, supported the state law. Indeed, in response to the lawsuit, the Department said it has a “duty and obligation to enforce the law” and that it wanted to ensure the consumer has “clear information on the meat and non-meat products they purchase.” However, supporters of the lawsuit, like the Good Food Institute, argued that “Mississippi is acting as word police” and that the law is a “slippery slope” that could open the door to restrictive labeling.

© 2019 Keller and Heckman LLP
For more on food regulation & labeling, see the National Law Review Biotech, Food & Drug law page.

Your Next Hamburger Could Be “Slaughter-Free”

In the face of an ever-increasing global population set to surpass 9 billion by 2050, agriculture and science have converged to create sustainable, innovative solutions to food production. Cellular agriculture is perhaps the most cutting edge of them all.

Producing meat, poultry and seafood through cellular agriculture promises to revolutionize the way we think about, grow and consume food. When rolled out to consumers in the coming years, these products are expected to have the same nutrition profile and organoleptic properties as their conventionally sourced counterparts.  Organoleptic properties refer to the sensory aspects of food, including taste, sight, smell, and touch.

What is Cellular Agriculture?

Cellular agriculture refers to the production of agricultural products from cell cultures. Through cellular agriculture, meat, poultry, and fish can be produced ex vivo, or grown outside the animal. The finished product – commonly referred to as cultured, clean or cell-based meat – replicates the characteristics of muscle harvested from food-producing animals.

How Are Cell-Cultured Foods Made?

The production process is quite complex and varies across producers. At a high level, there are four core elements to production: (1) cell cultures, (2) scaffolds, (3) media and (4) bioreactor (cultivator).

Cells are obtained from food-producing animals, healthy at the time of biopsy. The cells are subsequently separated and transferred in a sterile environment and placed in a bioreactor also referred to as a cultivator. Once placed in the cultivator, the cell cultures are fed nutrients referred to as media. Media is a mixture of ingredients that works as a food source for cell lines. The cultivator controls food supply inputs and temperature, the cells are continuously monitored, and once the meat is cultivated, meat tissues are harvested and stored under appropriate conditions. See Figure 1, below (P.D. Edelman, D.C. McFarland, V.A. Mironov, and J.G. Matheny. Tissue Engineering. May 2005).

Scaling Up Production

Product development efforts are well underway across the globe. In 2016, for example, San Francisco-based Memphis Meats unveiled the first meatball produced with clean meat technology. In late 2018, Aleph Farms debuted the very first cell-cultured steak. Significant investments from Tyson Foods’ venture capital arm Tyson Ventures, Cargill, Bill Gates and Richard Branson — among others — are driving innovation in the field and helping startups to reduce costs and scale up production.

Cell-based meat could hit supermarket shelves within the next 5 years. Before that happens, stakeholders must confront a number of questions. Among those – Who will be the key regulators? How will the regulators work to ensure product safety? And will consumers actually want to eat hamburgers, chicken nuggets and fish fillets produced in such a novel way and perhaps pay a premium to do so?

The Regulatory Conversation

Cellular agriculture came to life in 2018 – from Capitol Hill to the halls of the FDA and USDA. Given the novelty of the production process, the regulators engaged stakeholders to think through an appropriate regulatory pathway for meat, poultry and seafood produced from cell cultures.

A recently issued Memorandum of Understanding (March 7, 2019) outlines the U.S. government’s current thinking regarding a proposed pathway for cell-based meat and poultry. The MOU provides that the FDA and USDA will jointly regulate human food produced using cell culture technology derived from cell lines of USDA-amenable species. In other words, cell-based meat and poultry will be subject to joint FDA-USDA oversight. Seafood products will generally be subject to FDA oversight (except in limited instances where the species is considered to be USDA-amenable, e.g., catfish). This builds on existing precedent as current American food law places the production and processing of meat and poultry under USDA jurisdiction. FDA regulates regulates all seafood except for Siluriformes (catfish) which fall under USDA oversight.

So what will joint regulation look like? The MOU indicates that the FDA will oversee cell collection, cell banks, and cell growth and differentiation. Oversight then shifts to the USDA during the cell harvest stage. USDA’s core tasks will be inspection and labeling. Upon harvest, USDA will conduct inspection activities at cell-based food processing facilities. This means that any establishment engaged in the business of processing harvested USDA-amenable, cell-based foods will need to obtain a federal grant of inspection from the USDA and all such foods will need to bear a USDA mark of inspection.

Many critical questions core to developing a functioning regulatory review process remain to be answered: How will the FDA and USDA initiate their respective application processes, how long will it take to obtain premarket approval, and what will inspections of production facilities look like? Further, how should these products be labeled? The devil will be in the details.

Regulators are currently reviewing comments submitted to the FDA and USDA following two public meetings: (1) An FDA meeting held on July 12, 2018 focused on safety considerations and (2) A joint FDA-USDA meeting held on October 23 and 24, 2018 focused on potential hazards and labeling.

Safety Considerations & Potential Hazards

Regulators are focused on working with stakeholders to:

  • Consider and develop appropriate controls for potential hazards that may arise during all stages of production, i.e., culturing and harvesting, processing, and packaging.
  • Understand the safety profile of the cell culture media used to produce cell-based foods.
  • Leverage best practices from the traditional meat, poultry and seafood production context, as well as the biomedical arena as appropriate, to ensure that meat and poultry produced by way of cellular agriculture are safe and wholesome.
  • Consider how these products will compare to traditionally produced meat and poultry from a compositional, nutritional and organoleptic standpoint.

Based on our conversations with cell-based meat producers, it is clear that in many cases the production process for cell-based foods will likely not be vertically integrated. That is, each step in the production process could be an end point — i.e., the collection, characterization and qualification of cell-lines could be conducted by Company A; Company B could then grow the meat in a cultivator (bioreactor) with media supplied by Company C; Company D could, in turn, market the meat once harvested at Company B. Hazards could conceivably emerge at each step, and especially during the transportation phase. Thus, regulators and producers will need to consider those transitions and outline where hazard control responsibilities begin and end and how best the FDA and/or USDA should go about verifying compliance.

Labeling

As of this writing, no set nomenclature has been settled upon for meat, poultry or seafood produced through cellular agriculture.

The labeling of cell-based meat and poultry is a hot button issue that came to the forefront in February 2018. That month, the United States Cattlemen’s Association (USCA) filed a petition with USDA’s Food Safety and Inspection Service (FSIS) requesting that USDA undertake rule-making on beef labeling to clarify the difference between beef derived from cattle and “beef” products created through cell culture technology. To date, the USDA has received over 6,100 comments on this petition.

Cell-based meat and conventional agriculture stakeholders have expressed a range of views. Among conventional animal agriculture interests, some contend that terms such as “meat” and “beef” should not be used to describe products produced through cellular agriculture. Others have expressed some openness to using “meaty” terms provided that the labeling clearly indicates how the product was produced. In this regard, some commenters called for the establishment of standards of identity for cell-cultured foods to distinguish them from their conventionally produced counterparts.

At a recent industry meeting and in recent industry trade press, USDA has indicated that the Agency is strongly considering proposing such standards of identity within the next 12 months.

© 2019 Foley & Lardner LLP
Learn more about food production on the National Law Review Biotech, Food and Drug page.

CBD Risk Management

Advising companies on CBD (cannabidiol) risk management is made challenging by the rapid pace of developments and frequent confusion caused by often false or misleading online information. This article attempts to provide a concise analysis of critical CBD legal and risk management issues.

Do Not Conflate “Legality” under the 2018 Farm Bill with U.S. Food and Drug Laws

The 2018 Farm Bill, which was signed in to law in December 2018, exempts hemp and hemp-derived products, including hemp-derived CBD, from the Controlled Substances Act (CSA). In the lead-up to passage of the Farm Bill, there was widespread confusion in the public as to the extent of the “legality” of hemp-derived CBD, with many commentators and even some legal experts conflating legality under the CSA with legality under the Food Drug and Cosmetics Act (FDCA) and state food and drug laws. This confusion prompted former FDA Commissioner Scott Gottlieb to issue a public statement clarifying that Congress had explicitly preserved the FDA’s authority to regulate products containing cannabis or cannabis-derived compounds under the FDCA, regardless of whether they are derived from cannabis or hemp. 

Identify How the CBD Product Will Be Defined under the FDCA

A product containing a cannabinoid could be considered a drug, food, food additive, dietary supplement or cosmetic depending on how the product is marketed and sold. How aggressively these products are policed by FDA and state agencies depends on the nature of the product and how it is defined under the FDCA and state law.

CBD as “Food” or “Dietary Supplement”

FDA’s position since at least 2015 is that certain cannabinoids, including CBD, are impermissible additives that adulterate food and dietary supplements for both humans and animals. Under the FDCA’s drug exclusion rule, once a substance that was never previously in the food supply is (1) an active ingredient of an approved drug product or (2) an active ingredient of a product in clinical trials that have been made public, a food or supplement containing that substance cannot be shipped in interstate commerce. FDA has cited Epidiolex® as an example of a clinical investigation regarding CBD that has been made public. Epidiolex was approved by FDA in June 2018 for treatment of childhood seizures associated with two rare forms of epilepsy. FDA has therefore concluded that CBD products are in fact drugs and require FDA approval under the FDCA. The new drug-approval process is exorbitantly expensive; in 2016, the Journal of Health Economics estimated the average cost per approved drug at well over $1 billion.

CBD as a “Cosmetic”

Cosmetics are generally less heavily regulated by FDA than food or drugs, and until recently the agency has remained silent on the use of CBD in cosmetic products. On April 2, 2019, FDA provided much-needed insight, stating that although certain cosmetic ingredients are prohibited or restricted by regulation, “currently that is not the case for any cannabis or cannabis-derived ingredients.” However, FDA warned that no ingredient − including cannabis-derived ingredients – can be used in a cosmetic if “it causes the product to be adulterated or misbranded.” A cosmetic may be considered adulterated “if it bears or contains any poisonous or deleterious substance which may render it injurious to users under the conditions of use prescribed in the labeling.” FDA cautions that a product may be considered both a cosmetic and a drug, even if it affects the appearance, if it is “intended to affect the structure or function of the body, or to diagnose, cure, mitigate, treat or prevent disease.”

Several large national retailers, including CVS, Walgreens and Rite-Aid, recently announced they will begin selling CBD-infused cosmetics in certain stores.

FDA Currently Uses “Enforcement Discretion”

Other than issuing letters to companies that sell CBD-infused oils and food products warning them to refrain from making impermissible health claims, FDA has to date taken no other visible enforcement action in that regard. Former FDA Commissioner Scott Gottlieb recently testified before a Senate appropriations subcommittee that “we are using enforcement discretion right now,” and that “I will take enforcement action against CBD products that are on the market if manufacturers are making what I consider over the line claims.” This would certainly include the egregious health claims at issue in the recent warning letters, such as that CBD can cure cancer or prevent Alzheimer’s disease. Gottlieb nevertheless acknowledged that FDA has not taken action against numerous products on the market given its enforcement priorities and limited resources. He cautioned, however, that FDA’s lack of enforcement is “not an invitation for people to continue marketing these products.”

State Enforcement of CBD

Authorities in several states have stepped up enforcement actions, including unannounced inspections and CBD product embargos ordered by authorities in California, New York, Texas and other states. Several states and cities, including California, Maine, North Carolina, Ohio and New York City, have banned CBD-infused food products under state and local laws.

Notwithstanding this state-led crackdown, certain states are working to provide greater legal access to CBD products under state law. Lawmakers in California and Texas, for example, are working on bipartisan legislation to allow sales of CBD products in those states, notwithstanding FDA’s prohibition.

CBD’s Pathway to Legality

As a result of significant pressure by industry groups and members of Congress, FDA has signaled a willingness to consider a potential easing of restrictions on CBD. On April 2, 2019, FDA issued a press release that announced new steps for advancing the potential regulatory pathways for CBD products. The press release explains that FDA primarily is concerned that permitting widespread commercial availability of CBD products negatively impacts research that may otherwise be performed to support regulatory approval through FDA’s drug review process. Similarly, FDA does not want to incentivize patients to forgo appropriate medical treatment by substituting unapproved products for FDA-approved medicines. Also of concern is the potential for liver injury and cumulative exposure to CBD if accessed by consumers across a range of products.

Notwithstanding the intense pressure on FDA to fast-track the CBD approval process, without congressional action that exempts CBD from FDA’s regular rulemaking process, it is likely that the approval process for use of CBD in foods or supplements will take years. In Gottlieb’s recent Senate testimony, he explained that “we don’t have a clear route to allow [CBD] to be lawfully marketed short of promulgating new regulations.” He noted, however, that there is precedent for Congress to issue legislation in the context of a single ingredient, similar to prior legislation for human growth hormone. Gottlieb also has appeared to embrace the idea of legislation that classifies CBD according to defined concentration levels, whereby CBD would be classified as a dietary supplement up to a defined concentration threshold, above which it would be considered a pharmaceutical drug. This is similar to the way fish oil has been regulated.

A public hearing scheduled to take place on May 31, 2019, will cover a range of CBD-related topics, including (1) health and safety, (2) manufacturing and product quality and (3) marketing/labeling/sales. FDA is encouraging public comments and participation at the hearing.

Acting FDA Commissioner Ned Sharpless is now leading the agency. Some have expressed concern over how Sharpless will approach CBD because he is a former cancer drug researcher who has less experience with the dietary supplement and food regulation side of FDA’s mandate. According to a recent interview with former associate FDA Commissioner Peter Pitts, Sharpless is expected to manage the process already in place with respect to CBD for the time being.  How much attention Sharpless will give to CBD issues in the future “depends on the priorities and the new commissioner’s stomach for battle.”

CBD Risk Management … in the Meantime

Until the legal pathway for CBD is clear, companies that market most CBD products must tread carefully. Some, such as the large national retailers that recently announced the sale of CBD products, are focused on safer cosmetic products. Others choose to market and sell CBD-infused foods and supplements based on a higher appetite for risk and a “safety in numbers” assessment in the face of no visible FDA enforcement.

No matter how a company chooses to participate in the CBD industry, it must be counseled on FDA regulatory risk based on the product type in addition to the risks of marketing and selling CBD products on a state-by-state basis. Because the legality of CBD products varies widely by state and is changing so rapidly, providing accurate counsel can be a challenge. In addition, CBD product labels must be carefully reviewed for compliance under both federal and state law. Some states have specific and onerous labeling requirements for CBD products.

Although many companies tend to downplay the risk and potential financial severity of regulatory enforcement by federal or state agencies when it comes to CBD, they ignore at their own peril the risk presented by potential civil tort exposure. CBD products may be considered adulterated, contaminated or mislabeled under federal and state law. This may give rise to financially ruinous lawsuits, including consumer class actions or competitor suits that allege false advertising or unfair competition under state consumer protection statutes. It is essential for every CBD company to have a solid grasp of both the CBD regulatory risks and the unfair competition laws to fairly compete in the new CBD marketplace, and to avoid unwittingly being named as a defendant in an expensive and potentially company-ending lawsuit.

To this end, it also is important for any company that markets and sells CBD products to conduct an insurance coverage review with an attorney and broker that understand the nuances of the CBD insurance market. With passage of the 2018 Farm Bill, insurance coverage for hemp-derived products, including CBD, is expanding rapidly. Problematic endorsements and exclusions remain, however, with respect to limitations on coverage as a result of regulatory penalties, product seizures, resulting business interruption and tort damages premised on violations of law.

Most importantly, CBD risk management requires constant education and vigilance to stay abreast of an area of the law changing more rapidly than any other in recent history.

 

© 2019 Wilson Elser
This post was written by Ian A. Stewart of Wilson Elser. 
Read more on marijuana and CBD policy on the National Law Review’s Biotech page.

There’s a New Sheriff in Town: The Food and Drug Administration’s Move to Regulate CBD

Hemp has wide commercial application and appeal with a viable market for nearly every part of the plant, from the seeds, to the roots, to the flower.

And with the passage of the Agriculture Improvement Act of 2018 (the “AIA”), the American hemp industry is poised for exponential growth.  Cannabidiol or “CBD” represents one of the fastest growing – and, perhaps, the most controversial and commercially profitable – segments of the hemp industry today.

There is no shortage of claims about CBD’s helpful properties, with commonplace industry acceptance that the cannabinoid can be used to, among other things, alleviate inflammation and anxiety.  CBD has been, and it continues to be, incorporated into a wide variety of consumer products, including lozenges, honey, and even an FDA-approved prescription medicine.  But, as the legal and regulatory landscape surrounding hemp and CBD continues to develop, there remains uncertainty – at least for now – about the legality of using hemp-derived CBD to produce food, cosmetic, and dietary supplement products.

For nearly 50 years, the Drug Enforcement Agency (“DEA”) was primarily responsible for law enforcement efforts relating to hemp and its derivatives, including CBD.  The DEA’s enforcement authority was derived from hemp’s classification as “marihuana” and CBD’s classification as a Schedule I substance under the Controlled Substances Act of 1972 (“CSA”).  That changed on December 20, 2018, when President Trump signed the AIA into law.  Among other things, the AIA broadened the definition of “hemp” on the Federal level, and it stripped both hemp and hemp-derived CBD from the CSA itself.  As a result, the DEA is no longer the primary enforcement agency with respect to hemp and hemp-derived CBD.

On the same day that President Trump signed the AIA into law, the Food and Drug Administration (“FDA”) released a press release on the matter.  The FDA statement is not binding or controlling, but it does forecast the FDA’s clear intention to take an active role in regulation and enforcement for hemp and CBD products going forward.

By issuing that press release, the FDA has publicly stated that:

  • It will continue to enforce the law (including the Federal Food, Drug, and Cosmetic Act, or “FD&C Act”) in an effort to protect patients, the public, and to promote the agency’s overall public health role.
  • Products containing cannabis or cannabis-derived compounds (like CBD) will be subject to the same authorities and requirements as other non-cannabis FDA regulated products.
  • Hemp or hemp-derived CBD products that are “marketed with a claim of therapeutic benefit, or with any other disease claim” must be approved by the FDA before being introduced to interstate commerce.
  • Hemp or hemp-derived CBD products marketed “for use in the diagnosis, cure, mitigation, treatment, or prevention of diseases” are considered drugs and must be approved by the FDA before they are marketed for sale in the U.S.
  • It is “unlawful under the FD&C Act to introduce food containing added 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 FDA has the authority to introduce regulation that would allow the use of CBD in foods and dietary supplements, but that has not happened yet, and it remains to be seen whether (or when) that will happen.

For now, questions remain.  Will CBD ultimately be regulated entirely as a drug?  Will it be treated as an additive not subject to FDA approval?  Or perhaps the specific application of CBD to a product will drive how it is treated?  We do not yet know the answers to these questions.  But we do know, for now, that the FDA sits in the regulatory driver’s seat for the CBD industry moving forward.

 

© 2019 Ward and Smith, P.A.. All Rights Reserved.
This post was written by Tyler J. Russell and Allen N. Trask, III of Ward and Smith PA.

New Report Reveals Sources of Foodborne Illnesses

  • On November 9, 2018, the Interagency Food Safety Analytics Collaborations (IFSAC) released a report on foodborne illnesses caused by four pathogens. The data in the report, titled, “Foodborne illness source attribution estimates for 2016 for Salmonella, Escherichia coli O157, Listeria monocytogenes, and Campylobacter using multi-year outbreak surveillance data, United States,” came from 1,255 foodborne disease outbreaks that occurred from 1998 through 2016. According to the report:
    • Salmonella illnesses came from a wide variety of foods;
    • E. coli O157 illnesses were most often linked to Vegetable Row Crops (such as leafy greens) and Beef;
    • Listeria monocytogenes illnesses were most often linked to Dairy products and Fruits; and
    • Campylobacter illnesses were most often linked to Chicken after removing Dairy outbreaks from the estimates.
  • The analysis to develop the report involved a method developed by IFSAC to estimate foodborne illness source attribution (see our blog on IFSAC research on how to categorize foods linked to foodborne disease outbreaks). IFSAC includes the Centers for Disease Control and Prevention (CDC), the U.S. Food and Drug Administration (FDA), and the U.S. Department of Agriculture’s Food Safety and Inspection Service (USDA-FSIS).
  • Each year in the United States, foodborne disease caused by known pathogens results in an estimated 9 million people becoming sick, 56,000 hospitalizations, and 1,300 deaths, according to the report. The pathogens in the report were chosen because of the frequency or severity of the illnesses they cause. CDC estimates that, combined, the four pathogens cause 1.9 million foodborne illnesses in the United States each year. The four pathogens also were selected because targeted interventions can have a major impact in reducing foodborne illness caused by these pathogens.
© 2018 Keller and Heckman LLP

War on Weed: AG Jeff Sessions Creates Reefer Madness

Attorney General Jeff Sessions has caused chaos in the marijuana industry and is forcing those who have made efforts to create legalized businesses in compliance with state laws to ponder whether their anticipated profits will go up in smoke. In a memo to all U.S. attorneys, Sessions rescinded Obama-era decrees that restrained prosecutors from enforcing federal drug laws in states that acted to legalize marijuana under their own laws. The decrees created an environment in which states felt they had the freedom to legalize marijuana without interference from federal authorities. Nonetheless, all aspects of the marijuana industry – for example, growing, manufacturing related products, distributing, advertising, and managing property used to grow, manufacture or distribute marijuana – have remained illegal. The updated guidance from Sessions now encourages federal prosecutors to resume enforcing these laws.

It is no coincidence that Sessions, a longtime opponent of the legalization of marijuana for recreational use, issued his guidance just days after California allowed recreational marijuana businesses to open their doors. Those who follow this issue know Sessions also has his sights set on enforcing federal drug laws against those engaged in the medical marijuana industry. Sessions requested Congress remove a budgetary provision currently prohibiting the Department of Justice (DOJ) from using funds to “prevent certain states ‘from implementing their own State laws that authorize the use, distribution, possession or cultivation of medical marijuana[.]’”[1]

This new guidance highlights the conflict that exists between federal law and the laws of state, local and tribal governments that have seemingly legalized marijuana both recreationally and medically. This should be cause for concern for those involved in the marijuana industry. Federal drug laws prevail over the comparable laws of states, cities and tribal communities; so, compliance with those laws is not a defense to the violation of federal laws prohibiting every aspect of the fast-growing marijuana industry. A key factor for its future is what happens to the Rohrabacher-Blumenauer Amendment, also known as the Rohrabacher-Farr Amendment, which prohibits the DOJ from spending federal funds to interfere with state medical marijuana laws. The law will expire on January 19 absent its annual re-authorization from Congress.

Ultimately, the manner in which the guidance from Sessions will be implemented by federal prosecutors around the country is uncertain. However, now that the prosecutors have the freedom and the instruction to enforce the drug laws against the marijuana industry, it is likely they will flex their muscles. This will result in substantially adverse legal and economic consequences for the businesses and individuals engaged in that industry. If you are concerned about the impact this new guidance may have on you, your business or an investment of yours, please contact your Dinsmore attorney. We have many attorneys experienced in this area, including multiple former federal prosecutors, who can assist you with your needs and concerns.

[1] Jeff Sessions’ letter regarding Department of Justice Appropriations is available at https://www.scribd.com/document/351079834/Sessions-Asks-Congress-To-Undo-Medical-Marijuana-Protections.

 

© 2017 Dinsmore & Shohl LLP. All rights reserved.
This post was written by Robert G. Marasco and Marisa K. Fenn of Dinsmore & Shohl LLP.