Porthole

Analysis

2018 Life Sciences Regulatory Outlook

Trends in life sciences and health care regulations

Gain insight into key regulations that life sciences companies should be monitoring and addressing in 2018.

Embracing complexity: 2018 trends in life sciences regulations

Most life sciences companies are forging ahead with their risk and compliance initiatives, even as regulatory uncertainty will likely remain a significant and ongoing challenge. Even if lawmakers and regulators make certain definitive changes, life sciences companies must continue to drive the effectiveness and efficiency of their risk and compliance programs so they meet applicable laws, regulations, and supervisory guidance. And in most cases, they don’t have the time or luxury of waiting to see how things will shake out.

Fortunately, many of the changes life sciences companies are making to achieve compliance are useful improvements that are worth doing from a risk and business perspective.

Read on to learn more about the life sciences and pharmaceutical regulations we’re tracking for 2018.

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Medical devices

There are many potential benefits associated with connecting medical devices to the internet, hospital networks, mobile products, and other devices or hospital systems. However, achieving those benefits requires effectively addressing the related cyber and patient safety risks.

Here are some actions companies should consider as they move forward:

  • Conduct security awareness training on the Food and Drug Administration's (FDA) pre- and post-market guidance
  • Ensure the cybersecurity team has a seat at the table with decision makers from product development, procurement, and sales throughout the product lifecycle
  • Establish a product-focused corporate cybersecurity organization to help implement cybersecurity processes universally across the enterprise
  • Adopt and integrate Technical Information Report 57 (TIR57) risk management principles for medical device security into the organization’s product security program

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European Union (EU) regulatory requirements

In May of 2017, both the EU Medical Device Regulation (MDR) and the EU In Vitro Diagnostic Regulations (IVDR) entered into force. After almost a decade of development and negotiation, new regulations will help advances in medical device technology and include:

  • Reclassification of some technologies and the inclusion of others that were previously exempted from regulation, as well as classification of software
  • Increase in the oversight of the medical device industry through enhanced authority of the Notified Bodies (NB) and independent review by the competent authorities of NB certification of certain high-risk devices
  • Elevated clinical requirements for higher risk devices
  • Imposition of more extensive post-market surveillance for many devices
  • Higher focus on control of a manufacturer’s supply chain and the inclusion of other entities, such as importers and distributors, under the regulation

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21st Century Cures Act

The 21st Century Cures Act (the Act) is intended to address a significant number of current challenges within the life sciences industry, including:

  • Reduction of barriers to research collaboration
  • Incorporation of the patient perspective into the drug development and regulatory review process
  • Earlier identification of diseases through personalized medicine
  • Modernization of clinical trials
  • Elimination of regulatory uncertainty for the development of new medical applications

Provisions of the Act relevant to the life sciences industry are within Titles I-IV, which have numerous provisions primarily affecting the National Institutes of Health (NIH) and the FDA.

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Customer relationships

After years of scrutiny on the life sciences industry’s relationships with physicians, the focus of government regulators, public advocates, and the media is increasingly turning to initiatives and relationships between pharmaceutical companies, their distribution channels, and health care providers.

Companies should determine what controls are in place to help mitigate the regulatory risk with current relationships and to identify the next risks that could emerge. Here are five controls for companies to consider:

  1. Justify the need
  2. Catalog all customer activities
  3. Justify the value
  4. Consider other in-process controls
  5. Audit and monitor

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FDA ORA program alignment

The FDA Office of Regulatory Affair’s (ORA) program alignment was an initiative announced on September 6, 2013, in response to the increasing technical, global, and legal challenges facing FDA scientists, investigators, and compliance officers. Medical mobile applications, cloud computing, and combination devices represent just a few examples of the increasing breadth and complexity of regulated products.

Regulatory authority and mandates have expanded recently with legislation such as:

  • Family Smoking Prevention and Tobacco Control Act (2009)
  • Food Safety Modernization Act (2011)
  • Food and Drug Administration Safety and Innovation Act (2012)

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Next-generation transparency reporting

With the advent of transparency reporting and the continued expansion of requirements, the industry faces the challenge of capturing spend data and providing a consolidated, holistic view. Most companies acknowledge the value of using transparency and engagement data for compliance monitoring, peer benchmarking, and general business analysis. But scarce resources, deficient technology, and disparate operating models and regional requirements make it challenging to harness this information.

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Modernizing compliance

Compliance is an enabling component for any regulated industry. In life sciences, it’s a cornerstone of both product development and commercialization, giving the business a framework by which commercial objectives and patient access can be appropriately maximized.

Effective compliance management is increasingly becoming a source of competitive advantage. Moving forward, compliance officers will need to demonstrate the value their function contributes to the organization. They will also need to demonstrate the effectiveness of the organization’s compliance approach to external stakeholders. Modernizing compliance through the use of technology, with a focus on efficiency and value creation, can shape the future compliance landscape and transform how the compliance function is viewed.

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Identification of medicinal products (IDMP)

IDMP is a set of five International Organization for Standardization (ISO) standards, supported by European legislation and regulation, which allows for unique identification of regulated pharmaceutical products throughout their entire lifecycle, from development to authorization to marketing. The standards facilitate exchange of medicinal product information in a robust and reliable manner.

The availability of ISO IDMP provides a blueprint that allows system and process owners to become “IDMP aware” and plan for future adoption. Having an agreed-upon strategy is critical as some vendors are building the IDMP data model into their systems, a move that’s challenging the status quo of data ownership and information flow across functions and systems, typically impacting manufacturing/product lifecycle management/enterprise resource planning (ERP) solutions, as well as a host of Regulatory Information Management (RIM) solutions.  

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Scientist using iPad

Case for Quality

The FDA launched the Case for Quality in 2011 following an in-depth review of device quality data and feedback from both the FDA and industry stakeholders. It represents a major initiative to engage the medical technology industry and FDA in a collaboration to focus manufacturers and regulators on the design and manufacturing elements that have the greatest impact on improving product quality and patient safety.

Companies with an established quality culture are able to use the increased capacity that results from avoiding quality failures to accelerate device design, innovation, and introduction of new products to the marketplace. A maturity model assessment can help a company understand its true costs and effectiveness related to quality, as well as how much time it takes to do all the work around the 30-day notices. 

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Crop farmers in the field

Pricing and market access

Few areas in the US life sciences industry are getting more attention from the public, Congress, and regulators than pricing and market/patient access. The United States, unlike most other countries, has a multi-payer system that largely allows commercial prices to be set by the “free market.” However, this market environment has been met by growing criticism that drug prices are creating an undue burden for patients and government programs alike.

Given the challenges of generating revenues to fuel future, life-saving therapies while responding to growing scrutiny and evolving regulatory requirements, manufacturers must take steps to understand and manage this growing risk area that threatens their reputations (and potentially their finances).

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Chemistry set

340B drug pricing program

The 340B drug pricing program (340B) continues to receive heightened attention from life sciences manufacturers and the broader health care industry, with the size of the program continuing to increase at a significant rate—growth that shows no signs of abating in 2018.

The Health Resources and Services Administration (HRSA) Office of Pharmacy Affairs (OPA), which administers the 340B program, generated significant activity in 2017, including issuance and delays of new regulations and launch of a new online OPA Information System (OPAIS). Additional OPA activity and regulatory changes are expected in 2018, for which manufacturers need to prepare.

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Focus on research and development (R&D)

R&D organizations in life sciences are consistently challenged to increase productivity and pipeline throughput, but they must contend with the challenges of a changing regulatory landscape. Industry go-to-market strategies and tactics have shifted to focus on the patient to an unprecedented degree, and government investigators have followed suit.

As a result, the compliance function has become increasingly accountable for managing risks that touch R&D operations. In particular, new legislation and new regulatory scrutiny have brought greater attention to two key areas: expanded access programs, and health care economic information.

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Taking decisive action in uncertain times

Regulatory uncertainty remains a fact of life. But in most cases, waiting for absolute certainty isn’t a viable option.

Senior management will need to take decisive action while also paying close attention to emerging regulatory developments and staying as flexible as possible. The good news is that many of the changes life sciences companies are currently implementing make good sense from a business perspective—not just a regulatory perspective—and are worth doing no matter how the future unfolds.

To read the full report, download Navigating the year ahead: 2018 life sciences regulatory outlook.

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Look again

In today’s rapidly evolving marketplace environment, key business issues are converging with impacts felt across multiple industry sectors. What are the key trends, challenges, and opportunities that may affect your business and influence your strategy? Look for more perspectives and insights from some of Deloitte’s forward thinkers.

Discover more Industry Outlooks.

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