The Food and Drug Administration (FDA) has communicated a commitment to ensuring that firms marketing dietary supplements are not misleading particularly vulnerable consumers (e.g., elderly, cancer patients, or children) with baseless disease treatment or prevention product claims. Prior FDA leadership was vocal about the need to closely monitor the dietary supplement industry because of the significant footprint the industry has established. Couple the bustling supplement industry with the awakening cannabis and cannabis derived industry, and there is colossal business opportunity. The opportunity, however, must be married with measured restraint, particularly in advertising and marketing claims.

Trailing the 2018 Farm Bill, FDA is pushing forward with its information-gathering efforts to determine if it will embark on a rule making process to allow the marketing of cannabidial (CBD) as a dietary supplement. Currently, dietary supplement products containing CBD cannot be legally marketed in the United States. As previously explained, under current federal law, marketing is prohibited because CBD is an active ingredient in an FDA approved drug that was the subject of substantial clinical investigations.

On July 22, Curaleaf Inc., a Massachusetts firm, received a warning letter from the FDA, citing the company for marketing products containing CBD (i.e., CBD lotion, pain-relief patch, tincture and vape pen) in violation of the Food Drug and Cosmetic Act (FD&C Act). Curaleaf operates online and has dispensaries in 12 states. The company markets medical marijuana and sells dietary supplement products containing CBD derived from hemp, under its Curaleaf Hemp brand and Bido brand for pets. This is the fourth letter this year that the agency has issued to a firm that markets products containing CBD. The Agency’s letter identified a number of statements from Curaleaf’s website that FDA says establishes that the “products are drugs under section 201(g)(1) of the FD&C Act, 21 U.S.C. 321(g)(1), because they are intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease and/or intended to affect the structure or any function of the body.” The FDA specifically called out product claims and social media promotion that touted these products as treating Alzheimer’s disease, anxiety, depression, cancer, opioid withdrawal and Parkinson’s disease. Curaleaf was also cited for marketing CBD products for use in pets that suffer from arthritis and pain associated with aging.


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In 2016, Congress passed the 21st Century Cures Act (Cures Act), which contained provisions to help accelerate medical product innovation while reducing regulatory burden, as well as to increase efforts for critical research and increase the involvement of patients and their perspectives in research and the product development process. The Cures Act specifically provided the US Food and Drug Administration (FDA) authority to modernize product development and review, and create greater efficiencies and predictability in product development and review. In June 2018, in response to this congressional mandate and corresponding new authorities, as well as reauthorizations of FDA’s user fee agreements, FDA made a series of announcements for a proposal to modernize new drug development.

Highlights of FDA’s initial proposal included:

  • Focusing on recruiting talent across disciplines;
  • Building multidisciplinary teams for more efficient collaboration;
  • Prioritizing operational excellence through a single and consistent review process;
  • Improving knowledge management through enhancements to information technology and honed expertise within review divisions;
  • Emphasizing safety and risk-benefit analysis before and after approval; and
  • Incorporating the patient voice into product development.

As articulated by former FDA Commissioner Scott Gottlieb, “[a] principal aim of these proposed changes is to elevate the role of . . . scientists and medical officers to take on even more thought leadership in their fields.”  The agency contemplates implementing organizational and structural changes that make drug review divisions more therapeutically-focused to promote efficient review and transparency in – as well as patient and stakeholder access to – the review process. According to the agency, these and other changes that are part of the Cures Act will result in a 20 percent improvement in efficiency.


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In today’s competitive and fast-paced life sciences dealmaking environment, buyers and investors are often unable to spend as much time on due diligence as they might like. Market players are often highly focused on the science itself and, as a result, may pay less attention to issues such as supply chain, intellectual property components and

On October 10, 2018 President Trump signed two bills that ban “gag clauses” in pharmacy contracts. Congress passed the two bills—one for Medicare prescription drug plans (“Know the Lowest Price Act”) that will go into effect in January 2020, and another for commercial employer-based and individual policies (“Patient Right to Know Drug Prices Act”) effective

WHAT HAPPENED

On July 18, 2018, US Food and Drug Administration (FDA) Commissioner Scott Gottlieb delivered a speech at The Brookings Institution in Washington, DC, discussing how to bolster competition from biosimilars while maintaining innovation.

The Commissioner noted the absence of true competition among biologics from biosimilar products in the United States, similarly to what

McDermott is gearing up for an exciting week of programming during the 2018 BIO International Convention. A number of McDermott partners will on the ground as panelists and moderators across a range of programs during BIO and we hope to see you there!

Thursday, May 31 | Al Sokol will moderate a panel discussion on

Specialty pharmacy is not going away any time soon – by 2020, it’s expected that the pharmacy industry’s revenue will exceed $483 billion, with almost all growth as a result of specialty drugs (high-cost medications used to treat chronic conditions, such as cancer). It’s also estimated that the next generation of pharmaceutical “blockbusters” will be primarily specialty products. As the make-up of the pharmaceutical market shifts, we’re also seeing changes with the role of pharmacy benefit managers and other medical groups in the process. How are these shifts in specialty pharmacy impacting the health care system as a whole?

We asked Karen Gibbs, McDermott partner and former VP and Senior Counsel at CVS, to share her expertise on the subject and her thoughts on what’s to come.

Q.  Investments in niche sectors of pharmacy services, specialty pharmacy and pharmacy benefit management have gained huge traction recently. What’s driving the shift away from more traditional pharmacies?   

A.  Traditional pharmacies are retail establishments and have been suffering from the same earnings pressure that all retail establishments have endured. Pharmacy benefit managers (PBMs) typically own mail and specialty pharmacy operations, which generate revenue in a manner complementary to that derived from the pharmacy benefit management services. The margin on specialty pharmacy and PBM services is significantly more than retail pharmacy.
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