Dive Brief:

• A slate of actions previewed in the Spring 2019 Unified Agenda Wednesday foreshadow a slew of forthcoming regulations that have the potential to reshape the landscape of the medical device industry. 
• Two proposed rules set to be released in tandem by the HHS Office of Inspector General and CMS in July are poised to overhaul safe harbors to the anti-kickback statute and boost the ability of physicians, insurers and manufacturers to coordinate value-based care arrangements. 
• On the FDA front, efforts include revamping medical device software regulations to exclude certain functions from the definition of a device, harmonizing domestic and international quality system regulations and promulgating regulations establishing over-the-counter hearing aids by year-end. Notably, the agency doesn't plan to finalize regulations implementing a new framework for the De Novo classification process for medical devices until June 2020, relegating the regulation's development to its long-term action list.

Dive Insight:

HHS' proposal to revise safe harbors to the AKS comes after AdvaMed lobbied OIG to promulgate changes to better allow device companies to receive reimbursement in a healthcare system shifting towards value-based models rather than fee-for-service arrangements. 

Specifically, the medical device lobby asked OIG last October to include three new safe harbors in the proposed rule for value-based warranty arrangements, value-based pricing arrangements and value-based risk-sharing arrangements. It is unclear how disruptive the proposal will be; the Unified Agenda notice states the changes to the AKS are not likely to result in an annual effect on the U.S. economy of $100 million or more. 

The agenda for FDA is largely driven by requirements of recent laws passed by Congress. The proposed rule to exclude certain medical device functions from FDA regulations, set for release by December, aligns with changes to the Federal Food, Drug, and Cosmetic Act by the 21st Century Cures Act.

And the proposal to establish a new regulatory category for over-the-counter hearing aids to boost access to new devices for age-related hearing aid loss, scheduled for a November release, fulfills a requirement under the The Over-the-Counter Hearing Aid Act of 2017 passed into law as part of the FDA Reauthorization Act of 2017. 

Starkey Hearing Technologies and Bose have both heavily lobbied the federal government over the regulation. Massachusetts-based Bose gained marketing authorization last October for the first self-fitting hearing aid and is trying to break into the market, while Starkey and other hearing aid companies are trying to protect themselves from disruption from the new product class.

FDA also plans to issue a proposed rule in July that would discontinue publishing a quarterly list of premarket approval applications and humanitarian device exemption applications approvals and denials in the Federal Register if finalized. The agency said it would continue to provide the information on the its website. The same month, the agency is scheduled to finalize its proposed rule implementing procedures and a timeline for companies to request CDRH leadership review of significant decisions.  

The agency also plans to establish a proposed regulatory framework and procedures formalizing how it imposes clinical holds on medical device investigations involving human subjects by February 2020. 

The decision to delegate the De Novo classification process final rule to the long-term actions list follows harsh industry feedback on the proposed rule. AdvaMed wrote in March it is concerned the proposed rule, as written, would replicate the more onerous PMA approval pathway and not allow for timely review of De Novo submissions.