Nate: Welcome back to the second episode of the Comment Period, a podcast where we talk about all things related to health law, FDA, compliance, and really trying to draw a wide variety of audiences into the topics that we care about and we practice at Gardner Law. This week we want to start off with some current events and so we're going to learn a little bit more about sunshine
Amanda: Mm-hmm.
Nate: and and why that's in the news right now, Amanda.
Amanda: Yeah, thanks Nate and good to be back for episode two. but yeah, I just wanted to talk a little bit about there was a recent settlement announced August tenth with Veloxis Pharmaceuticals. And there's a lot going on with this case. It was actually it they ended up signing entered in entering into a deferred prosecution agreement. They agreed to pay, I think, forty-six million dollars. in connection with kind of interactions with HCPs and some specialty pharmacies. But really, you know, kind of there's a lot of garden variety AKS issues involved. There's lavish meals, resorts, gifts, you know, some alleged sham consulting arrangements. but they also admitted, they admitted to falsifying to some of their employees falsifying expense reports in ways that actually impacted open payments reporting or Sunshine Act reporting. and so they ended up paying the biggest civil monetary penalty to date from a Sunshine Act perspective. It was $1.55 million. so the DOJ really focused on that in their press release. so we're still kind of exploring, reading, you know, looking at the prosecution agreements. They also entered into a CIA, but just thought it was interesting to see, you know, kind of additional escalating enforcement from a Sunshine Act perspective. So yeah, I don't know you guys have any thoughts. I mean, I think it highlights just the importance again of making sure that you may have a great policy in place. I'm sure they had a policy that said, you know, you have to submit expense reports. but you know, companies have to do more than that. They have to monitor, they have to verify that, you know, their employees are actually following following those policies.
Nate: Yeah, interesting.
Mark Gardner: So
Nate: You know, you both practice sunshine more than I, so was gonna ask Mark a little bit more like so some who might not know what sunshine is and the purpose of it and why this is such a big deal, the one point five five million on that. I don't know if you can get into that.
Mark Gardner: Sure, you know, Sunshine Act is requires that you report the payments. It doesn't say you can't bribe doctors. That's the anti-kickback statute that prevents you from bribing doctors. so if you do bribe a doctor with a new Ferrari or something, you you need to report that per the Sunshine Act. So seems kinda silly,
Nate: Yeah.
Amanda: Yeah.
Mark Gardner: right? But that's how I ultimately back in the day when this law first came out, explained it to people because they were saying, this is like a an anti-kickback type of law. It's like there are no provisions in it. It just says you have to report the bribes you make if you were to bribe someone, which you should not. there's obviously lots of lawful ways to remunerate physicians and there's safe harbors on point for that. So if you are paying a doctor a a grant for research or ser paying them for services, where they're helping you develop a product, something like that. Those are all reportable payments. Any meals you provide, et cetera. So yeah, so the law what I find interesting about this case too is, you know, I don't a billion dollar fine doesn't necessarily shock the we don't see as many of those obviously. they were more common a few years back, but we will those are the those are that's the larger end of the range. If you're getting to the billions, it's kinda still funny to hear a sunshine act fine of a million something dollars. It's like okay.
Amanda: Right.
Mark Gardner: It's I I remember when the law first came out and I was explaining this to a management team, the CF CFO said, Well, it's it's only a million something max a year for fines, why don't we just
Amanda: Mm-hmm.
Nate: Mm-hmm.
Mark Gardner: pay the fines and not do anything because it's going to cost us more money to comply with this law and and I you know we all
Amanda: Right? Yeah.
Mark Gardner: he w I think this individual's actually somewhat serious but you know we all agree that that would not be a good look to just you know not try attempt to comply at all with the law. But it is interesting the fines are relatively
Amanda: Yeah.
Mark Gardner: low compared to an AKS FCA type of prosecution.
Amanda: Right. Yeah. I mean the total was forty six million or f a little bit over forty six million and one million of that was, you know, Sunshine Act, but I guess it still is important. You know, they can tack it on. Yeah.
Mark Gardner: It's important. Yeah. It sends a message that they're enforcing the law and of course we
Amanda: It does.
Mark Gardner: have a you know, the government's going to be enforcing the Sunshine Act more. The the changes being made to it are gonna allow them to increase their enforcement.
Amanda: Yeah. Yeah, I wanted to wanted to bring that up too, because I thought it was interesting. We've seen kind of we've written alerts on it as well, but they're really trying to step up their auditing. and as part of that, so previously this isn't implemented yet, but they've proposed a change to the law that would actually make failure to respond or, you know, provide documentation in response to a CMS audit as basically failing to report. So I just thought it was a little crazy because
Mark Gardner: Yeah.
Amanda: CMS when they issued kind of this this proposal, they had said that out of the companies that they've audited, a quarter of them didn't even respond.
Nate: Tough.
Amanda: and they really have no teeth to do anything right now. So that was kind of the impetus to to propose those, you know, failure to cooperate penalties. So, you know I I guess that again, kind of like a risk calculation. If you get audited and you just decide not to cooperate, I mean they can't really do anything. Probably not a good idea. but yeah, thought that was interesting.
Mark Gardner: Yes, so we're in a proposed rule state on that still, right? The final rule has not been issued. So yeah, we'll be keeping
Amanda: Yeah. Yep. Correct, yeah.
Nate: Yeah.
Mark Gardner: an eye on that.
Nate: But inactivity still brings, you know, the you within the governance radar, right? When you're in the governance radar, that's you know, other things can be found if they really wanna be
Amanda: Well, right, yeah. Yes.
Nate: be picky. So one other thought too I have is it's interesting, those data that are reported, you know, I don't know how many consumers might be listening know where they can go and find that and utilize that in their own kind of healthcare decision making.
Amanda: Mm-hmm.
Mark Gardner: Openpayments.gov. So if you have a family or friend that's a physician and that is you can go up and see if they've been paid by industry or if you're going
Amanda: Yeah.
Mark Gardner: to the doctor before you go, you can see if your physician has received a payment. And the the term physician is defined as an MD, a DO, a dentist, a patyr patiatrist, a chiropractor. It also includes
Amanda: Mm-hmm.
Mark Gardner: prescribing nurses, so NPs, PAs, yes,
Amanda: Right, some advanced practice. Yep.
Mark Gardner: optometrists, I believe, is in in the definition as well, Mand, if I remember right. But yeah, in FDA would excuse me, CMS, in order to impose greater fines they'd have to the law would have to be changed by Congress. And right now we're just looking this is a proposed rule, so no changes to the fines right now. But still interesting, keep an eye on that one.
Amanda: Yep,
Nate: Yeah.
Amanda: yeah, for sure.
Mark Gardner: I know we were gonna talk about our medical alley visit. All right, guys. We were recently
Nate: Yeah.
Mark Gardner: just two days ago we visited Medical Alley and participated on their podcast as well after a kind of an event with a lot of local executives where it was a a forum where we discussed various regulatory topics, and that was that was a lot of fun. What did you guys think of that event?
Nate: Yeah. I thought it was good. First off, you know, those listening, what is Metal Call Alley? You know, if you're not involved, maybe
Amanda: Right.
Nate: you want to get involved.
Mark Gardner: That's a great point. Yeah. So i if you're in California or Massachusetts, you may not be familiar with Medical Alley. It's a regional trade group. you know, kind of like a local ABMD pharma MDMA type of group. It's they they represent
Amanda: Yeah. Yeah.
Mark Gardner: the you know, life science is a a broad term. I I think they they cater mostly to medical products, but they they do a lot of work with the local med tech industry, biotech, f they also work with food. pharma, et cetera. But yeah, so medical elliot is really regional to the to the Midwest here, but they they represent a lot of manufacturers on lobbying aspects and things like that and do work with with Pharma and ABMED and MDMA and others. So yeah, we went to Yeah, thanks. Go ahead.
Amanda: Yeah, they put together really good events too. So yeah, one of we went to the FDA round table, which I think they have monthly and I think it's for members only or partners only. but yeah, it was really great. You know, we had a pretty full room. We kind of opened it up to to the attendees. We had a lot of regulatory quality, executive from all you know, all different types of companies, from startups to, you know, the huge names, big pharma companies. so it interesting kind of just getting to hear what they're thinking about and kind of what they what's on their minds. I know one of the kind of big topics that we talked about, and hopefully you guys can listen to the Medical Alley podcast, because we kind of debriefed a little bit more about what we talked about during the roundtable, but AI was a topic and you know, specifically how FDA is using AI and then kind of how companies should be thinking about maybe using AI themselves. And then also we talked about like clinical decision support and kind of AI in that context. I don't know, Nate or Mark, do you guys have any any thoughts here or any topics you wanna go over today?
Nate: Yeah. Yeah. I you know, I think the the AI question one is is huge. And you know, I to to delve into it, you gotta take a quick step back. And I know you've heard us talk about it before, even on this podcast, of FDA's, you know, resourcing issues and resourcing being also human power, right? The ability to to get work done. And you know, a lot of projects that I've been involved with lately have seen delays, you know, from monthly months just to receive meeting minutes. and so FDA's looking to find ways to be more efficient, right? And so obviously many, many individuals right now, companies all over the place are taking advantage of AI and the proliferation of that technology. And so what does that mean? you know, FDA has a tool called ELTA, and they're really, you know, not always clear to industry when it's being used. There's not, you know, tons of detail on that, but you can kind of guess and surmise a little bit and and you can see that Maybe there's some things being missed that you wouldn't expect a reviewer to miss. You have to kind of repoint and say, hey, it's there. It's just you ask for it a specific way and it's in there. It's just not packaged that way, which to me might be a kind of more of a machine reading it and looking for certain key things that it's not seeing. And so, you know, deficiencies being sent back and forth that you wouldn't expect. And I also think that if ELSA picks something up, or AI pick something up, a reviewer might be a little bit jaded. They might think,
Amanda: Mm-hmm.
Nate: How can I overcome this? I have to say that this isn't an issue and maybe I don't have time to delve into it, so I'm gonna ask anyways, or I'm not certain and so it gets asked to business even though I'm thinking it might not be an issue and that creates time and resource spin. So ELSA and the FDA's use of AI is a huge topic and it's concerning to a lot of clients for some of those reasons. I
Amanda: Mm-hmm. Yeah.
Nate: know Mark interested in your thoughts or Amanda.
Mark Gardner: Yeah. what do you think, Amanda? Elsa's not just a figure from
Amanda: Yeah. yeah, I mean
Mark Gardner: what was the movie? Frozen, okay.
Amanda: Frozen, frozen, of course. Yeah. Let it go.
Nate: Frozen, frozen. Let it go.
Amanda: Yeah. yeah, I mean we've had a lot of clients ask about, you know, how do we counteract ELSA? What do we need to do to be prepared? and you know, there isn't really a magic answer to that. Like Nate said, we don't really know how ELSA works, but we do know just basically from how how we understand AI to work, like it does pick up on c some things that may not be material or it may kind of you know, hallucinate or ask for things that were already submitted. so, you know, b one of the things that we had talked about with some clients is making sure your writing is kind of for a robot. So instead of having that nice narrative storytelling, which some of you may be used to, you know, I remember writing submissions, you know, maybe 10 years ago, and it was kind of an art. And I feel like we kinda need to change our writing styles and our narratives. And I think ESTAR and that, you know, those type Pre-Star and ESTAR, those templates kind of have made us shift a little bit away from the narrative storytelling and a little bit more towards like just giving them very specific, concrete information. but kind of writing for a robot. using, you know, good naming conventions, consistently referring to things as the same, you know, whether we're talking about a test report or a product. You know, trying to minimize the gaps or inconsistencies that might trigger kind of a a machine learning or an LLM model to pick up on that kind of stuff. but yeah, I mean it's been a hot topic with clients for sure. And, you know, we're still learning and and seeing kind of ourselves how how ELSA's working and how FDA's, you know, how interactions with FDAs FDAs changing or evolving because of that. So I expect we'll continue to see that.
Mark Gardner: Yeah. Yeah, we visited a a company recently and they were very interested in this topic, how FDA was using ELSA specifically to review submissions and you know at the end of the day it y it's n it's a tool for FDA to use. I you I think you do, as Amanda stated, you wanna think about your audience and if the audience is part of the audience is this AI tool, you wanna be careful to not have the AI tool go down a rabbit hole or which is how can we predict that? Very difficult, right?
Amanda: Right. Yeah. I know, right.
Mark Gardner: But we might be able to, just like marketers now on Madison Avenue are are creating things for the AI to r to review on the internet, you might take a similar approach, like as you you guys stated, like you may have message or like titles to different sections that
Amanda: Right.
Mark Gardner: say maybe it's a question and Nate you had talked about this the other day that you're basically maybe you'll serve up the information for the AI to basically respond to. So that it's it hopefully you're steering it almost really, right? Like you
Amanda: Mm-hmm.
Mark Gardner: like a a lawyer
Nate: Yeah.
Mark Gardner: would steer a witness or lead a conversation. I know that there's issues with leading a witness and whatnot. but ultimately, I think just being careful with how you write and also using your own AI tools in a way that's
Amanda: Yeah, yeah.
Mark Gardner: that that makes sense and protects your company. Obviously you don't want to just put thing through everything into Gemini.
Amanda: Right.
Mark Gardner: you and that's confidential information about your company and whatnot, but you know, fight fire with fire so to speak, if ask that a your AI tool that's secure in your own environment, you know, what find weaknesses in my submission before you make your submission. And maybe it will help you. Yeah, yeah. Exactly. Yeah.
Amanda: Right. Pretend you're FDA. Look for, you know, re use prompts to
Nate: Yeah, yeah, yeah.
Amanda: refer to the guidance documents and other FDA resources. I think I think that's smart to do that. Yeah.
Nate: I think it's important too to realize a lot of reasons companies are so nervous is when they build a project plan, they're pretty good at saying, okay, the hardware's gonna take this long, the software's gonna take this long, we're gonna have our freeze here, we're gonna get our documentation ready, we're gonna hand it off to regulatory for a submission, and they're gonna get whatever type of submission it is, and then you kinda give your average amount of deficiencies, right? And
Amanda: Right.
Nate: and then there's launch plans built on that and there's spend and resources put into that. And if you have you know, random questions. Maybe it's a an issue on biocomp that you would have been okay, but somehow some issue was found and now you have to go and do s four or five months of testing that you really didn't think
Amanda: Yeah.
Nate: you'd have to do because all of your experts. Now that's a huge change for a company. Like that's you
Amanda: Mm.
Nate: know, that can really change the program and the program. and so that's also why companies get nervous because as we if you've been a regulatory, you know they don't give you a ton of time to begin with, right? Like you are the last stop
Amanda: Yeah, yeah. Yeah, the last last step.
Nate: and You've got five minutes to sign that submission and get it out. And now
Amanda: Ha ha.
Nate: you have to deal with even more unknowns and that unpredictability is terrible for business, right? Businesses, you know, don't thrive in unpredictability when it comes to timelines. And so that's you know why I think a lot of companies are nervous too. It's one thing to write for it, but another thing to try to say, hey, how can I have any predictability if I don't really understand what my audience is looking for? And you know, that's hard if you're a regulatory leader going back to the CEO saying, sorry, it's actually four more months. There's this issue we didn't foresee. We don't even think it's an issue, but it got flagged. And we don't have
Amanda: Right.
Nate: insight into why it was flagged because FDA is not going to tell us that, but now we have to deal with it. And that's a big burden.
Mark Gardner: Yeah. Yeah, that's
Amanda: Yeah.
Mark Gardner: one thing we did ma men mention to the audience at Medical Alley. you know, if you have if your burn rates say a few million dollars a year,
Amanda: Mm-hmm.
Mark Gardner: and and that's nowadays could be low depending on the type of company. you know, if you're delayed by even three months because of some testing requirements and maybe the testing house is backed up. that's real money, right? Like that's half a million dollars that your now your CEO has to go raise more funds for because ultimately everybody's and hopefully that you know the time's not totally lost, but ultimately it's delays. Delays cost startups especially a lot of money. And they cost the the in-house businesses, even if you're a one of the major drug or device companies out there,
Amanda: Mm-hmm.
Mark Gardner: if things are delayed it's going to cost those c it costs
Amanda: And
Mark Gardner: everyone money. so that was another thing we talked about was just being on top of the submission, right? And Nate, obviously you and Manda, you both have interacted on submission work really extensively
Amanda: Mm-hmm.
Mark Gardner: with the agency. Are there any tips you could give on what's the best way to prosecute a submission? I would assume it's really being on top with of things with the reviewer and getting back to them very quickly. But yeah, is there are there any other tips you can share in this AI
Amanda: Yeah
Mark Gardner: environment? So you talked about
Nate: Yeah.
Mark Gardner: writing the submission for AI, being aware of testing. It seems like I hear a lot about testing these days. And I don't know if that's a byproduct of newer reviewers because of post riff reviewers or what.
Nate: Yeah. Well one thing I like to have companies focus on, if they are going to do things different then maybe a a precedent has that has been set or some guidance that your expert really dig deep into why you can do of something different, right? Because AI is
Amanda: Mm-hmm.
Nate: gonna flag that. Hey, our guidance says this, they didn't do this. I don't know how much AI would even get to the reasoning of why. So now you're gonna have a conversation
Amanda: Right.
Nate: with FDA and you need to be able to have an expert at the table who's gonna show up and say, Hey, this is why we did this. If it's a one paragraph from an expert who's not going to be present at an FDA conversation or meeting or reply, you're really putting yourself at a lot of risk. And that's whether AI is there or not. But I think it's tr it's even more accentuated with AI because AI is going to be looking against FDA's quote unquote standard, even if though it's not a legal standard, and now you've got this presumption of not doing it right and you need an expert to overcome that. So that's one thing I'll talk, especially to smaller companies who maybe don't have that expertise in house, is make sure those SMEs who help you build in the beginning remain available. Otherwise it's gonna be a a heavy burden to move FDA off of their question.
Amanda: Yeah, I yeah, and that I mean that question's been kind of coming up over and over and over over the last twenty years. But anytime you're going to, you know, maybe modify something from what FDA is or even from a standard, you have to literally spoon feed them kind of the rationale and make sure that's robust. But I think it becomes even more important with ELSA and with tools, with AI tools, just because it is gonna be an easy flag. So having your rationale up front, very clear. robust, you know, like Nate said, having that expert, whoever helps with that rationale available if FDA does come back and ask more information about it. I think I think that's a really big one. And that continues to be important, you know, e even just even without AI. But yeah, that's another one. trying to think of what else we talked about at medical alley
Mark Gardner: Talked about Rapid and NTAP. You know, we had
Amanda: Yeah, yeah.
Mark Gardner: some pandemonium around NTAP, obviously,
Amanda: Mm-hmm.
Mark Gardner: with the government coming out and saying we're ending NTAP and and Rapid really being incomplete, you know, which was a product of the former commissioner and Dr. Oz. And that was concerning, right? Like how where are we going here? If you're an investor. if you're a CEO and a a team depending on NTAP to help you bridge that kind of no man's land between approval and ultimately convincing payers to provide adequate cut
Amanda: Yeah.
Mark Gardner: coding coverage and payment, how do you you know get through those years without just making life really difficult for your customers and your investors and then therefore limiting access of your new tech to patients. And so I We talked a lot about that. I know there's been we've written about that on our blog.
Amanda: Mm-hmm.
Mark Gardner: people watching, listening or watching this want to learn more about NTAP and the basics of it, go ahead and check out our website. But we we did get some good news that the the government said CMS said okay, we heard you. We submitted comments. MDMA others
Amanda: Yeah.
Mark Gardner: submitted comments. but yeah, we're what what do you guys think of where that's at right now with N tap and Bridge? What do you think of the news
Amanda: Yeah.
Mark Gardner: we received and and also what are your thoughts on Rapid?
Amanda: Yeah, okay. I mean, I think it's good news. They've at least grandfathered in I think it's through September thirtieth, twenty twenty six. So if you get breakthrough designation status on or before that date, I think you're still eligible to participate in kind of the existing programs, which is good news. I know we have some clients that have breakthrough designation requests under re review right now, and if everything goes well, they should meet that deadline. But Yeah, I mean I think it's it's interesting and good that we have that. I think there's still some uncertainty with Rapid. I mean we don't have kind of a a a rule yet. So we're we have a little bit more information based on their I can't remember what they it was like an unpublished rule. I think it is published now or a proposed outline of it. But yeah, I think there's still kind of some uncertainties. I personally am a little bit skeptical on how that will look with trying to wrangle FDA, CMS, and the sponsor together to try to design a clinical study. I I'm just I'm not sure what that study will look like. Kind of if you gave FDA free reign to design your study, I can imagine it would look different than what the company would probably put together. And I adding CMS in the mix, you know.
Nate: Yeah.
Amanda: I just I'm curious to see what that will look like. And I'm I'm a little worried that'll smaller companies won't be able to put together the the studies that CMS and FDA would want to would want. I mean, I just can't imagine what some of those costs might be. And then theoretically, like if all goes well, you get a proposed, I think, NCD on the day of marketing authorization. So that's you know, that's a lofty goal. But so I'm optimistic about it. I'm just a little bit I may have a little bit of skepticism in me.
Nate: Yeah, I I I think it's an example of where the meaning behind what's going on with rapid excuse me makes sense, right? Like if you look at breakthrough and the and we talked about this Tuesday, the success rate on getting to market, not great. and so FDA's C CMS are like, Well, why don't we just be more involved? Right? Why don't we just help them design a study where if they execute it successfully, well, they're gonna get coverage and they're gonna get market authorization as long as their bench testing looks good, right? But Clinical study is usually the biggest unknown. But I th the point you bring up is the point I was thinking of too, Amanda. Smaller companies have to design a clinical study considering their resources. They can't
Amanda: Yeah.
Nate: go for it all, right? Sometimes it's hey, well, let's go for this. And then as we make some money, if we're marketed, then we can add more and more. And so to have CMS and FDA, I mean I don't maybe it's a blank slate, I don't know, but get very excited, right? They love data. So like, well, let's look at this, this, this, and this.
Amanda: Yes. Yeah.
Nate: You're like, well, I six endpoints and five hundred patients, and I've got five million dollars. Like, this is just not gonna work out.
Amanda: Right, right.
Nate: So it might keep a lot more people out of the program who otherwise would have taken advantage of BDD. Maybe the same amount of devices make it to market. Who knows? Maybe just that success rate looks
Amanda: I know. Right.
Nate: better because less people want to get into the program because of the requirements for the pre-IDE submission. So I understand where it's coming from. I just, you know, this is the thing of we're gonna have to go too far. you know, not far enough maybe on c understanding what clinical data's would be required to maybe too far and maybe in ten years we'll get to the right spot. Who knows? There'll be a Goldilocks zone on this kind of a program. But that's my concern too, is it's it's i if you don't have the right capital, it's it could be scary to get in front of F D A and CMS and have them design
Amanda: Yeah.
Nate: the trial for you.
Amanda: Right. And try to negotiate a clinical study
Mark Gardner: Yeah, absolutely.
Amanda: with them. I just you don't have a lot of leverage, so it's just and then what do you do? You've
Nate: Yeah. Yeah. No. But if you've ever been in front of an FDA and asked a simple question on a study, you know that there's twelve other recommendations. here's your
Amanda: I right. Right. Right.
Nate: answer. By the way, we recommend these things. well we didn't need that, but thank you. You know, that's that's
Amanda: Right. Right, yeah.
Nate: just what they do, so
Amanda: Yeah.
Mark Gardner: Yeah, I was Reading something the other day that you know, a lot of people are writing about this 'cause it's a very hot topic and this person's perspective, and I I suggested this previously too, so I kind of joined this person's perspective is like, you know, FD is not necessarily in CMS or not really CMS driving this, not necessarily abandoning the the notion of paying for technology
Amanda: Right. Yeah.
Mark Gardner: that really advances the practice of medicine and therefore benefits patients. by you know, they're they're changing NTAP r drastically, right? Like you don't the companies that are going to apply NTAP will still exist. You just won't get a pass for the S CI prong of the three prong test. you'll have to actually prove that your product is better than standard care. The breakthrough designation doesn't merely give you meet that requirement. but they're this person and and it I share this belief again is like you know they're they're modernizing things and they're I think
Amanda: Mm-hmm.
Mark Gardner: they're ultimately trying to reduce the number of applicants and there is a limited amount of money right you can
Amanda: Mm-hmm.
Mark Gardner: that's just a reality in our system you can we cannot spend all of our money on healthcare. it would be great if we it'd be great if we could right but it's
Amanda: Right.
Mark Gardner: not practical So they're trying to limit the number of companies that they will provide this gap coverage, if you will, for and they're trying to say we're just really going to limit it to these devices that are really truly in improving the standard of care and with evidence. They want evidence to show that that's happening. So hopefully that's what Rapid becomes. But we don't have a final rule on Rapid yet. Although the government government just published something last CMS put something out last Friday you know hinting more that there's more to come. So we'll be watching that one closely.
Nate: Yeah. Good. Yeah, that was a that was a good conversation
Mark Gardner: yeah.
Nate: we had. and you know, I think it's always f good to get out with multiple members of industry at some of these trade associations and just see that, you know, your concerns are pretty much matched, right? It always gives
Amanda: Yeah.
Nate: you, you know, understanding that yep, these are these are the issues and that's why it's important to get together as industry and make sure we're putting our minds and then to be involved, right, into things like MDMA and to other things, medical out things that also have a a conduit to the decision makers so you can be heard, right? If you're a small startup, you've got to find your way to some of these. because, you know, they are pretty much filled with major players, but those startups also like to be able to hear your pain points and to be able to talk to something like Rapid, you know, the earlier you can get involved, the more likely it is that you can make an outcome decision. So it's always fun to get involved with those when the opportunity arises.
Amanda: Yeah. Yeah.
Mark Gardner: Absolutely. Do we want to talk a little bit about peptides? We had some news in the last recently with the panel.
Amanda: Nate, is that you? Nate, you probably know more about peptides than I do, so
Mark Gardner: Shifting gears.
Nate: Yeah, I mean I think you know with you know the panel basically kind of gave a go ahead on some peptides. which is standard. That's what panels do, right? Is they they look at them and they say, Hey, do we think there's enough to start pushing it forward? I think what's interesting in this case is this has been maybe a controversy coming for a little while where The members of this pharmacy board have been the previous members were replaced with maybe more pro-peptide people, I guess is the way to say it. And there's a lot in the scientific community. I've seen physicians, I've seen former FDA who really disagree with the suggestion to go forward. And I think what's interesting is they're not knocking the peptides. They're not saying the peptides are terrible. They're saying, and this is what FDA always says, right, is we don't know. Right? If you've gone in front of FDA for a pre-market submission, ID. Once there's something they don't know, that's what they hone out and like, well, we don't know. We need to burn this risk as far as possible. and that's not the same standard for a peptide, but that's kind of what they're looking at, right? Is what is what are the data that gives us safety considerations on these peptides? Because that's really what they're looking at. Is are there enough data to have a safety determination that, yep, we should allow this to be in the US population? We're not saying it's efficac its efficacy is proven, we're just saying, hey, you know. For certain types of individuals, physicians can go ahead and prescribe and compounding pharmacies can can make them. And so that's what's interesting here is it's a very controversial membership. And you know, I think that kind of really matches where we're at right now with a lot of some of the FDA leadership, HHS leadership is there's a lot of stances that you know are a little bit quicker, right? The scientific method, I think we even talked about this just on Tuesday, like Tuesday was a great conversation.
Amanda: Yeah.
Nate: The scientific method Is kind of slow at times and it's laborious. It's you look at X, okay, now I need a new variable. You look at Y, now I need a new variable, you look at Z. And when that doesn't happen, I think your typical FDA reviewer gets uncomfortable. And that's probably why there's also been a struggle with AI, right? Getting things out quickly. You think about a predetermined change control plan as one way to try to head off that and try to get science out quicker, but it's still a very iterative process of FDA may not see something in the predetermined change control
Amanda: Yeah.
Nate: process. But you're still gonna do the science. You're not allowed to skip the science and put your AI piece out there before you have additional data that it is safe and effective in this new population, for example. And so I think that's what's you know, why p peptides are so interesting. Then they're also interesting because they're not fully approved yet, right? There's still additional steps. They're not saying you
Amanda: Yeah.
Nate: can go ahead and do this, they're not now listed. It's just that there's a strong signal. And so that strong signal, yeah. Go ahead, Madam. Yes.
Amanda: That's what I was gonna say. The panel the panel recommended I guess what was the panel? So they recommended something. I just yeah, it
Nate: Yeah, they recommended these peptides be listed. and so then they have to be listed in a in a regulation that says these peptides
Amanda: Okay. And who makes right.
Nate: are ones that are in this classification. This classification
Amanda: Okay.
Nate: means there's enough data to understand the safety essentially, and you can go ahead and produce those peptides. So that's
Amanda: Okay.
Nate: that's where we're at. But you know, I think people in industry are saying, well, is FDA really going to use its enforcement discretion on peptides when it's signaling that it's quite comfortable, especially from a top down, right? A very high leadership level is like, hey, let's get these peptides in the hands of people who want them. And so, you know, that's also an interesting kind of dynamic of, you know, enforcement doesn't just mean there's a law, right? We've seen that now. Laws aren't self-executing. Laws have to be enforced by something. They have to be prosecuted by something. And if there is no prosecution, is there that much different if there is no law at all? Maybe product liability is a little bit easier to come in when something says, hey, this this wasn't put forth by FDA yet. but interesting considerations when it comes to peptides.
Mark Gardner: That makes sense. Yeah, like if there was some sort of harm done t caused to by this peptide or or whatever was compounded, then the plaintiff's lawyer would say, Hey, you this is not an approved drug, or maybe you
Amanda: Right. Right.
Mark Gardner: did something outside the standard of care and therefore you're liable for negligence.
Nate: Yeah, you used this before it was officially listed. you know, and and I'm sure there's great consent, right? We all know you probably walk in and sign 10 forms to get those peptides. And so you also, if you're if you're a user of a peptide, you have to understand that it might be hard to sue. I'm not saying it's impossible, but I'm sure
Amanda: Yeah.
Nate: you're doing a lot of signing to make sure that that consent is clear. because physicians, you know, they may see something, right? That's the practice of medicine is not governed by FDA. And so if they
Mark Gardner: Right. Yeah. No.
Nate: see something that could help a patient, they're gonna want to utilize that. to help their patients. And so that's just so many different things intersect when you think about a topic like peptides.
Mark Gardner: Yeah. It's something like we talk about when we teach, right? Where we're saying people are very uncomfortable or when we're counseling clients even on off label use, they'll be thinking some people are in the misimpression that just off label use is illegal. It's not. And that's, you know, in itself sort of a regulator of how physicians practice, aside from state boards of pharmacy and whatnot, of course. But yeah.
Amanda: Right, yeah. Yeah, that's it, yeah.
Mark Gardner: Good. Yeah, well I think we'll be talking about peptides about every week on this podcast or every every time we do, if it's not weekly. but it it's because it's such a hot topic and there is yeah
Amanda: Yeah. Yep, exactly.
Nate: Yeah. Well it's an excellent real time example of high level policy working its way quickly. 'Cause there's not a lot of things that can work their way quickly in the FDA system, right? There's
Amanda: No.
Nate: notice in common or it takes years for this or that. This is an area where things move pretty quickly and you get to see it in real time.
Mark Gardner: Yeah, and and you see the larger drug companies starting to file lawsuits. they have they've been
Nate: Yes, yep.
Amanda: Yeah.
Mark Gardner: following the filing them for quite some time, but new ones that we're reading about right now, there's obviously huge amounts of money at at play here. And yeah, so more to come on that. I know we also talked at Medical Alley about about what's going on that was positive. I know an audience member said, Hey, what's what what do you see out there that i inspires you?
Amanda: Right.
Mark Gardner: And maybe that was actually that was not during the Q and A with the audience. That was that was
Nate: As a podcast yeah.
Amanda: Yeah, that was the podcast. Yeah.
Mark Gardner: Ben had asked that on the podcast. I thought was that was a fun question. and I'm happy to start on that one. You know, I think that the I know at in our jobs we get to see a lot of really cool technology that some of it's obviously and a lot of it's investigational, whether they're drugs or devices or we see peptides, we see foods and and supplements that are cutting edge and cosmetics and everything, but especially the medical medical products obviously are very exciting. Just seeing what's coming down the pike and the I'm very enthusiastic about Just the future of healthcare, but AI has been has put a lot of great tailwind on especially in med tech. we've seen that for years in radiology, for example, and it's it's finding its way into all sorts of technology. So, you know, what's good, I I do see a lot of excitement around it and continued despite being at what I heard at an investing conference a few weeks ago, a thirty year valuation low for med tech, for example. I don't know where the biotech valuations are at, but I know they're they're also under pressure. you know, we're even though th they we're at a 30 year low
Amanda: Hm.
Mark Gardner: in terms of valuations, you still see a lot of investment in the space. I don't think humans will ever stop trying to improve the the condition of of of human how you know health. so that's very exciting to me. I don't know if you have
Nate: Yeah.
Mark Gardner: y'all have any thoughts.
Nate: Yeah, you know, I I like thinking of ideas like the Ready program. you know, that's really
Amanda: Mm.
Nate: FDA, CMA like the government thinking in real time of, hey, we have kind of a health crisis in rural America, which some of it may be brought on by the government too and by different factors
Amanda: Mm, yeah.
Nate: at play in the healthcare environment. But you know, the ready program is really all about trying to help individuals focus more in rural areas when they go home from a hospital, stay at home, avoid readmissions and You know, people do better at home, people are happier at home, and you know, there's a lot of innovation
Amanda: Yeah.
Nate: and and there's a lot of great technology and knowledge in the world. Really money is often the limiting factor. So when you can find more ways to incentivize a certain area, you're gonna find people who work their way into that area because they have opportunity to get some support in their work. And so it's great to see, you know, individuals who can benefit from being at home, hopefully in the future staying at home because of this program.
Amanda: Yeah. Yeah, no, I I I echo everything you guys have said. I mean I I really like the kind of innovation, good ideas coming from a high level policy perspective. I mean maha, I l I I we should all I like the idea of making people healthier. I like the idea of giving individuals more kind of accountability and power to make decisions and and for themselves. I mean wearables is a good example of giving people you know, power and knowledge to make their own kind of lifestyle choices and make changes to to become healthier. like rapid and ready. I mean, I like those programs. I think rapid, you know, even if companies can't or aren't able to take advantage of it, I think it does start the conversation earlier in the process, thinking about reimbursement and coverage and payment and how, you know, their product is going to be reimbursed or paid for. Cause that's gonna be a critical element when you, you know, commercialize and hit the market. and I I mentioned this on Tuesday during the podcast, but I I like I really like the idea of getting rid of rid of synthetic dyes in our food source and in our medicines. you know, my son is sensitive to red 40 and it's in his pills that he has to take every day, which drives me crazy. so just things like that from a policy perspective. I mean, we'll see how kind of everything shakes out when it comes down to actually becoming a regulation, but I do like seeing kind of the new ideas, the fresh take on things and kind of the focus on just general wellness and health.
Mark Gardner: Yeah, that's a great point. Like with NTAP and Rapid, those are both rel relatively new programs. We had parallel review for a long time, which I think there was something like one successful applicant through that program.
Amanda: Right, yeah.
Mark Gardner: So it's just nice
Nate: Mm.
Mark Gardner: to see the government continue to attempt to improve things. Great. Nate, do you wanna lead us out? Close us out.
Nate: Yeah, well I appreciate everyone joining us for the second episode of the Common Period. Had a great
Amanda: Yeah.
Nate: discussion. you know, what we will be doing is keeping you up to date on what's going on with the government and we look forward to seeing you next time on the Common Period.
Amanda: Mm-hmm.
Nate: and and why that's in the news right now, Amanda.
Amanda: Yeah, thanks Nate and good to be back for episode two. but yeah, I just wanted to talk a little bit about there was a recent settlement announced August tenth with Veloxis Pharmaceuticals. And there's a lot going on with this case. It was actually it they ended up signing entered in entering into a deferred prosecution agreement. They agreed to pay, I think, forty-six million dollars. in connection with kind of interactions with HCPs and some specialty pharmacies. But really, you know, kind of there's a lot of garden variety AKS issues involved. There's lavish meals, resorts, gifts, you know, some alleged sham consulting arrangements. but they also admitted, they admitted to falsifying to some of their employees falsifying expense reports in ways that actually impacted open payments reporting or Sunshine Act reporting. and so they ended up paying the biggest civil monetary penalty to date from a Sunshine Act perspective. It was $1.55 million. so the DOJ really focused on that in their press release. so we're still kind of exploring, reading, you know, looking at the prosecution agreements. They also entered into a CIA, but just thought it was interesting to see, you know, kind of additional escalating enforcement from a Sunshine Act perspective. So yeah, I don't know you guys have any thoughts. I mean, I think it highlights just the importance again of making sure that you may have a great policy in place. I'm sure they had a policy that said, you know, you have to submit expense reports. but you know, companies have to do more than that. They have to monitor, they have to verify that, you know, their employees are actually following following those policies.
Nate: Yeah, interesting.
Mark Gardner: So
Nate: You know, you both practice sunshine more than I, so was gonna ask Mark a little bit more like so some who might not know what sunshine is and the purpose of it and why this is such a big deal, the one point five five million on that. I don't know if you can get into that.
Mark Gardner: Sure, you know, Sunshine Act is requires that you report the payments. It doesn't say you can't bribe doctors. That's the anti-kickback statute that prevents you from bribing doctors. so if you do bribe a doctor with a new Ferrari or something, you you need to report that per the Sunshine Act. So seems kinda silly,
Nate: Yeah.
Amanda: Yeah.
Mark Gardner: right? But that's how I ultimately back in the day when this law first came out, explained it to people because they were saying, this is like a an anti-kickback type of law. It's like there are no provisions in it. It just says you have to report the bribes you make if you were to bribe someone, which you should not. there's obviously lots of lawful ways to remunerate physicians and there's safe harbors on point for that. So if you are paying a doctor a a grant for research or ser paying them for services, where they're helping you develop a product, something like that. Those are all reportable payments. Any meals you provide, et cetera. So yeah, so the law what I find interesting about this case too is, you know, I don't a billion dollar fine doesn't necessarily shock the we don't see as many of those obviously. they were more common a few years back, but we will those are the those are that's the larger end of the range. If you're getting to the billions, it's kinda still funny to hear a sunshine act fine of a million something dollars. It's like okay.
Amanda: Right.
Mark Gardner: It's I I remember when the law first came out and I was explaining this to a management team, the CF CFO said, Well, it's it's only a million something max a year for fines, why don't we just
Amanda: Mm-hmm.
Nate: Mm-hmm.
Mark Gardner: pay the fines and not do anything because it's going to cost us more money to comply with this law and and I you know we all
Amanda: Right? Yeah.
Mark Gardner: he w I think this individual's actually somewhat serious but you know we all agree that that would not be a good look to just you know not try attempt to comply at all with the law. But it is interesting the fines are relatively
Amanda: Yeah.
Mark Gardner: low compared to an AKS FCA type of prosecution.
Amanda: Right. Yeah. I mean the total was forty six million or f a little bit over forty six million and one million of that was, you know, Sunshine Act, but I guess it still is important. You know, they can tack it on. Yeah.
Mark Gardner: It's important. Yeah. It sends a message that they're enforcing the law and of course we
Amanda: It does.
Mark Gardner: have a you know, the government's going to be enforcing the Sunshine Act more. The the changes being made to it are gonna allow them to increase their enforcement.
Amanda: Yeah. Yeah, I wanted to wanted to bring that up too, because I thought it was interesting. We've seen kind of we've written alerts on it as well, but they're really trying to step up their auditing. and as part of that, so previously this isn't implemented yet, but they've proposed a change to the law that would actually make failure to respond or, you know, provide documentation in response to a CMS audit as basically failing to report. So I just thought it was a little crazy because
Mark Gardner: Yeah.
Amanda: CMS when they issued kind of this this proposal, they had said that out of the companies that they've audited, a quarter of them didn't even respond.
Nate: Tough.
Amanda: and they really have no teeth to do anything right now. So that was kind of the impetus to to propose those, you know, failure to cooperate penalties. So, you know I I guess that again, kind of like a risk calculation. If you get audited and you just decide not to cooperate, I mean they can't really do anything. Probably not a good idea. but yeah, thought that was interesting.
Mark Gardner: Yes, so we're in a proposed rule state on that still, right? The final rule has not been issued. So yeah, we'll be keeping
Amanda: Yeah. Yep. Correct, yeah.
Nate: Yeah.
Mark Gardner: an eye on that.
Nate: But inactivity still brings, you know, the you within the governance radar, right? When you're in the governance radar, that's you know, other things can be found if they really wanna be
Amanda: Well, right, yeah. Yes.
Nate: be picky. So one other thought too I have is it's interesting, those data that are reported, you know, I don't know how many consumers might be listening know where they can go and find that and utilize that in their own kind of healthcare decision making.
Amanda: Mm-hmm.
Mark Gardner: Openpayments.gov. So if you have a family or friend that's a physician and that is you can go up and see if they've been paid by industry or if you're going
Amanda: Yeah.
Mark Gardner: to the doctor before you go, you can see if your physician has received a payment. And the the term physician is defined as an MD, a DO, a dentist, a patyr patiatrist, a chiropractor. It also includes
Amanda: Mm-hmm.
Mark Gardner: prescribing nurses, so NPs, PAs, yes,
Amanda: Right, some advanced practice. Yep.
Mark Gardner: optometrists, I believe, is in in the definition as well, Mand, if I remember right. But yeah, in FDA would excuse me, CMS, in order to impose greater fines they'd have to the law would have to be changed by Congress. And right now we're just looking this is a proposed rule, so no changes to the fines right now. But still interesting, keep an eye on that one.
Amanda: Yep,
Nate: Yeah.
Amanda: yeah, for sure.
Mark Gardner: I know we were gonna talk about our medical alley visit. All right, guys. We were recently
Nate: Yeah.
Mark Gardner: just two days ago we visited Medical Alley and participated on their podcast as well after a kind of an event with a lot of local executives where it was a a forum where we discussed various regulatory topics, and that was that was a lot of fun. What did you guys think of that event?
Nate: Yeah. I thought it was good. First off, you know, those listening, what is Metal Call Alley? You know, if you're not involved, maybe
Amanda: Right.
Nate: you want to get involved.
Mark Gardner: That's a great point. Yeah. So i if you're in California or Massachusetts, you may not be familiar with Medical Alley. It's a regional trade group. you know, kind of like a local ABMD pharma MDMA type of group. It's they they represent
Amanda: Yeah. Yeah.
Mark Gardner: the you know, life science is a a broad term. I I think they they cater mostly to medical products, but they they do a lot of work with the local med tech industry, biotech, f they also work with food. pharma, et cetera. But yeah, so medical elliot is really regional to the to the Midwest here, but they they represent a lot of manufacturers on lobbying aspects and things like that and do work with with Pharma and ABMED and MDMA and others. So yeah, we went to Yeah, thanks. Go ahead.
Amanda: Yeah, they put together really good events too. So yeah, one of we went to the FDA round table, which I think they have monthly and I think it's for members only or partners only. but yeah, it was really great. You know, we had a pretty full room. We kind of opened it up to to the attendees. We had a lot of regulatory quality, executive from all you know, all different types of companies, from startups to, you know, the huge names, big pharma companies. so it interesting kind of just getting to hear what they're thinking about and kind of what they what's on their minds. I know one of the kind of big topics that we talked about, and hopefully you guys can listen to the Medical Alley podcast, because we kind of debriefed a little bit more about what we talked about during the roundtable, but AI was a topic and you know, specifically how FDA is using AI and then kind of how companies should be thinking about maybe using AI themselves. And then also we talked about like clinical decision support and kind of AI in that context. I don't know, Nate or Mark, do you guys have any any thoughts here or any topics you wanna go over today?
Nate: Yeah. Yeah. I you know, I think the the AI question one is is huge. And you know, I to to delve into it, you gotta take a quick step back. And I know you've heard us talk about it before, even on this podcast, of FDA's, you know, resourcing issues and resourcing being also human power, right? The ability to to get work done. And you know, a lot of projects that I've been involved with lately have seen delays, you know, from monthly months just to receive meeting minutes. and so FDA's looking to find ways to be more efficient, right? And so obviously many, many individuals right now, companies all over the place are taking advantage of AI and the proliferation of that technology. And so what does that mean? you know, FDA has a tool called ELTA, and they're really, you know, not always clear to industry when it's being used. There's not, you know, tons of detail on that, but you can kind of guess and surmise a little bit and and you can see that Maybe there's some things being missed that you wouldn't expect a reviewer to miss. You have to kind of repoint and say, hey, it's there. It's just you ask for it a specific way and it's in there. It's just not packaged that way, which to me might be a kind of more of a machine reading it and looking for certain key things that it's not seeing. And so, you know, deficiencies being sent back and forth that you wouldn't expect. And I also think that if ELSA picks something up, or AI pick something up, a reviewer might be a little bit jaded. They might think,
Amanda: Mm-hmm.
Nate: How can I overcome this? I have to say that this isn't an issue and maybe I don't have time to delve into it, so I'm gonna ask anyways, or I'm not certain and so it gets asked to business even though I'm thinking it might not be an issue and that creates time and resource spin. So ELSA and the FDA's use of AI is a huge topic and it's concerning to a lot of clients for some of those reasons. I
Amanda: Mm-hmm. Yeah.
Nate: know Mark interested in your thoughts or Amanda.
Mark Gardner: Yeah. what do you think, Amanda? Elsa's not just a figure from
Amanda: Yeah. yeah, I mean
Mark Gardner: what was the movie? Frozen, okay.
Amanda: Frozen, frozen, of course. Yeah. Let it go.
Nate: Frozen, frozen. Let it go.
Amanda: Yeah. yeah, I mean we've had a lot of clients ask about, you know, how do we counteract ELSA? What do we need to do to be prepared? and you know, there isn't really a magic answer to that. Like Nate said, we don't really know how ELSA works, but we do know just basically from how how we understand AI to work, like it does pick up on c some things that may not be material or it may kind of you know, hallucinate or ask for things that were already submitted. so, you know, b one of the things that we had talked about with some clients is making sure your writing is kind of for a robot. So instead of having that nice narrative storytelling, which some of you may be used to, you know, I remember writing submissions, you know, maybe 10 years ago, and it was kind of an art. And I feel like we kinda need to change our writing styles and our narratives. And I think ESTAR and that, you know, those type Pre-Star and ESTAR, those templates kind of have made us shift a little bit away from the narrative storytelling and a little bit more towards like just giving them very specific, concrete information. but kind of writing for a robot. using, you know, good naming conventions, consistently referring to things as the same, you know, whether we're talking about a test report or a product. You know, trying to minimize the gaps or inconsistencies that might trigger kind of a a machine learning or an LLM model to pick up on that kind of stuff. but yeah, I mean it's been a hot topic with clients for sure. And, you know, we're still learning and and seeing kind of ourselves how how ELSA's working and how FDA's, you know, how interactions with FDAs FDAs changing or evolving because of that. So I expect we'll continue to see that.
Mark Gardner: Yeah. Yeah, we visited a a company recently and they were very interested in this topic, how FDA was using ELSA specifically to review submissions and you know at the end of the day it y it's n it's a tool for FDA to use. I you I think you do, as Amanda stated, you wanna think about your audience and if the audience is part of the audience is this AI tool, you wanna be careful to not have the AI tool go down a rabbit hole or which is how can we predict that? Very difficult, right?
Amanda: Right. Yeah. I know, right.
Mark Gardner: But we might be able to, just like marketers now on Madison Avenue are are creating things for the AI to r to review on the internet, you might take a similar approach, like as you you guys stated, like you may have message or like titles to different sections that
Amanda: Right.
Mark Gardner: say maybe it's a question and Nate you had talked about this the other day that you're basically maybe you'll serve up the information for the AI to basically respond to. So that it's it hopefully you're steering it almost really, right? Like you
Amanda: Mm-hmm.
Mark Gardner: like a a lawyer
Nate: Yeah.
Mark Gardner: would steer a witness or lead a conversation. I know that there's issues with leading a witness and whatnot. but ultimately, I think just being careful with how you write and also using your own AI tools in a way that's
Amanda: Yeah, yeah.
Mark Gardner: that that makes sense and protects your company. Obviously you don't want to just put thing through everything into Gemini.
Amanda: Right.
Mark Gardner: you and that's confidential information about your company and whatnot, but you know, fight fire with fire so to speak, if ask that a your AI tool that's secure in your own environment, you know, what find weaknesses in my submission before you make your submission. And maybe it will help you. Yeah, yeah. Exactly. Yeah.
Amanda: Right. Pretend you're FDA. Look for, you know, re use prompts to
Nate: Yeah, yeah, yeah.
Amanda: refer to the guidance documents and other FDA resources. I think I think that's smart to do that. Yeah.
Nate: I think it's important too to realize a lot of reasons companies are so nervous is when they build a project plan, they're pretty good at saying, okay, the hardware's gonna take this long, the software's gonna take this long, we're gonna have our freeze here, we're gonna get our documentation ready, we're gonna hand it off to regulatory for a submission, and they're gonna get whatever type of submission it is, and then you kinda give your average amount of deficiencies, right? And
Amanda: Right.
Nate: and then there's launch plans built on that and there's spend and resources put into that. And if you have you know, random questions. Maybe it's a an issue on biocomp that you would have been okay, but somehow some issue was found and now you have to go and do s four or five months of testing that you really didn't think
Amanda: Yeah.
Nate: you'd have to do because all of your experts. Now that's a huge change for a company. Like that's you
Amanda: Mm.
Nate: know, that can really change the program and the program. and so that's also why companies get nervous because as we if you've been a regulatory, you know they don't give you a ton of time to begin with, right? Like you are the last stop
Amanda: Yeah, yeah. Yeah, the last last step.
Nate: and You've got five minutes to sign that submission and get it out. And now
Amanda: Ha ha.
Nate: you have to deal with even more unknowns and that unpredictability is terrible for business, right? Businesses, you know, don't thrive in unpredictability when it comes to timelines. And so that's you know why I think a lot of companies are nervous too. It's one thing to write for it, but another thing to try to say, hey, how can I have any predictability if I don't really understand what my audience is looking for? And you know, that's hard if you're a regulatory leader going back to the CEO saying, sorry, it's actually four more months. There's this issue we didn't foresee. We don't even think it's an issue, but it got flagged. And we don't have
Amanda: Right.
Nate: insight into why it was flagged because FDA is not going to tell us that, but now we have to deal with it. And that's a big burden.
Mark Gardner: Yeah. Yeah, that's
Amanda: Yeah.
Mark Gardner: one thing we did ma men mention to the audience at Medical Alley. you know, if you have if your burn rates say a few million dollars a year,
Amanda: Mm-hmm.
Mark Gardner: and and that's nowadays could be low depending on the type of company. you know, if you're delayed by even three months because of some testing requirements and maybe the testing house is backed up. that's real money, right? Like that's half a million dollars that your now your CEO has to go raise more funds for because ultimately everybody's and hopefully that you know the time's not totally lost, but ultimately it's delays. Delays cost startups especially a lot of money. And they cost the the in-house businesses, even if you're a one of the major drug or device companies out there,
Amanda: Mm-hmm.
Mark Gardner: if things are delayed it's going to cost those c it costs
Amanda: And
Mark Gardner: everyone money. so that was another thing we talked about was just being on top of the submission, right? And Nate, obviously you and Manda, you both have interacted on submission work really extensively
Amanda: Mm-hmm.
Mark Gardner: with the agency. Are there any tips you could give on what's the best way to prosecute a submission? I would assume it's really being on top with of things with the reviewer and getting back to them very quickly. But yeah, is there are there any other tips you can share in this AI
Amanda: Yeah
Mark Gardner: environment? So you talked about
Nate: Yeah.
Mark Gardner: writing the submission for AI, being aware of testing. It seems like I hear a lot about testing these days. And I don't know if that's a byproduct of newer reviewers because of post riff reviewers or what.
Nate: Yeah. Well one thing I like to have companies focus on, if they are going to do things different then maybe a a precedent has that has been set or some guidance that your expert really dig deep into why you can do of something different, right? Because AI is
Amanda: Mm-hmm.
Nate: gonna flag that. Hey, our guidance says this, they didn't do this. I don't know how much AI would even get to the reasoning of why. So now you're gonna have a conversation
Amanda: Right.
Nate: with FDA and you need to be able to have an expert at the table who's gonna show up and say, Hey, this is why we did this. If it's a one paragraph from an expert who's not going to be present at an FDA conversation or meeting or reply, you're really putting yourself at a lot of risk. And that's whether AI is there or not. But I think it's tr it's even more accentuated with AI because AI is going to be looking against FDA's quote unquote standard, even if though it's not a legal standard, and now you've got this presumption of not doing it right and you need an expert to overcome that. So that's one thing I'll talk, especially to smaller companies who maybe don't have that expertise in house, is make sure those SMEs who help you build in the beginning remain available. Otherwise it's gonna be a a heavy burden to move FDA off of their question.
Amanda: Yeah, I yeah, and that I mean that question's been kind of coming up over and over and over over the last twenty years. But anytime you're going to, you know, maybe modify something from what FDA is or even from a standard, you have to literally spoon feed them kind of the rationale and make sure that's robust. But I think it becomes even more important with ELSA and with tools, with AI tools, just because it is gonna be an easy flag. So having your rationale up front, very clear. robust, you know, like Nate said, having that expert, whoever helps with that rationale available if FDA does come back and ask more information about it. I think I think that's a really big one. And that continues to be important, you know, e even just even without AI. But yeah, that's another one. trying to think of what else we talked about at medical alley
Mark Gardner: Talked about Rapid and NTAP. You know, we had
Amanda: Yeah, yeah.
Mark Gardner: some pandemonium around NTAP, obviously,
Amanda: Mm-hmm.
Mark Gardner: with the government coming out and saying we're ending NTAP and and Rapid really being incomplete, you know, which was a product of the former commissioner and Dr. Oz. And that was concerning, right? Like how where are we going here? If you're an investor. if you're a CEO and a a team depending on NTAP to help you bridge that kind of no man's land between approval and ultimately convincing payers to provide adequate cut
Amanda: Yeah.
Mark Gardner: coding coverage and payment, how do you you know get through those years without just making life really difficult for your customers and your investors and then therefore limiting access of your new tech to patients. And so I We talked a lot about that. I know there's been we've written about that on our blog.
Amanda: Mm-hmm.
Mark Gardner: people watching, listening or watching this want to learn more about NTAP and the basics of it, go ahead and check out our website. But we we did get some good news that the the government said CMS said okay, we heard you. We submitted comments. MDMA others
Amanda: Yeah.
Mark Gardner: submitted comments. but yeah, we're what what do you guys think of where that's at right now with N tap and Bridge? What do you think of the news
Amanda: Yeah.
Mark Gardner: we received and and also what are your thoughts on Rapid?
Amanda: Yeah, okay. I mean, I think it's good news. They've at least grandfathered in I think it's through September thirtieth, twenty twenty six. So if you get breakthrough designation status on or before that date, I think you're still eligible to participate in kind of the existing programs, which is good news. I know we have some clients that have breakthrough designation requests under re review right now, and if everything goes well, they should meet that deadline. But Yeah, I mean I think it's it's interesting and good that we have that. I think there's still some uncertainty with Rapid. I mean we don't have kind of a a a rule yet. So we're we have a little bit more information based on their I can't remember what they it was like an unpublished rule. I think it is published now or a proposed outline of it. But yeah, I think there's still kind of some uncertainties. I personally am a little bit skeptical on how that will look with trying to wrangle FDA, CMS, and the sponsor together to try to design a clinical study. I I'm just I'm not sure what that study will look like. Kind of if you gave FDA free reign to design your study, I can imagine it would look different than what the company would probably put together. And I adding CMS in the mix, you know.
Nate: Yeah.
Amanda: I just I'm curious to see what that will look like. And I'm I'm a little worried that'll smaller companies won't be able to put together the the studies that CMS and FDA would want to would want. I mean, I just can't imagine what some of those costs might be. And then theoretically, like if all goes well, you get a proposed, I think, NCD on the day of marketing authorization. So that's you know, that's a lofty goal. But so I'm optimistic about it. I'm just a little bit I may have a little bit of skepticism in me.
Nate: Yeah, I I I think it's an example of where the meaning behind what's going on with rapid excuse me makes sense, right? Like if you look at breakthrough and the and we talked about this Tuesday, the success rate on getting to market, not great. and so FDA's C CMS are like, Well, why don't we just be more involved? Right? Why don't we just help them design a study where if they execute it successfully, well, they're gonna get coverage and they're gonna get market authorization as long as their bench testing looks good, right? But Clinical study is usually the biggest unknown. But I th the point you bring up is the point I was thinking of too, Amanda. Smaller companies have to design a clinical study considering their resources. They can't
Amanda: Yeah.
Nate: go for it all, right? Sometimes it's hey, well, let's go for this. And then as we make some money, if we're marketed, then we can add more and more. And so to have CMS and FDA, I mean I don't maybe it's a blank slate, I don't know, but get very excited, right? They love data. So like, well, let's look at this, this, this, and this.
Amanda: Yes. Yeah.
Nate: You're like, well, I six endpoints and five hundred patients, and I've got five million dollars. Like, this is just not gonna work out.
Amanda: Right, right.
Nate: So it might keep a lot more people out of the program who otherwise would have taken advantage of BDD. Maybe the same amount of devices make it to market. Who knows? Maybe just that success rate looks
Amanda: I know. Right.
Nate: better because less people want to get into the program because of the requirements for the pre-IDE submission. So I understand where it's coming from. I just, you know, this is the thing of we're gonna have to go too far. you know, not far enough maybe on c understanding what clinical data's would be required to maybe too far and maybe in ten years we'll get to the right spot. Who knows? There'll be a Goldilocks zone on this kind of a program. But that's my concern too, is it's it's i if you don't have the right capital, it's it could be scary to get in front of F D A and CMS and have them design
Amanda: Yeah.
Nate: the trial for you.
Amanda: Right. And try to negotiate a clinical study
Mark Gardner: Yeah, absolutely.
Amanda: with them. I just you don't have a lot of leverage, so it's just and then what do you do? You've
Nate: Yeah. Yeah. No. But if you've ever been in front of an FDA and asked a simple question on a study, you know that there's twelve other recommendations. here's your
Amanda: I right. Right. Right.
Nate: answer. By the way, we recommend these things. well we didn't need that, but thank you. You know, that's that's
Amanda: Right. Right, yeah.
Nate: just what they do, so
Amanda: Yeah.
Mark Gardner: Yeah, I was Reading something the other day that you know, a lot of people are writing about this 'cause it's a very hot topic and this person's perspective, and I I suggested this previously too, so I kind of joined this person's perspective is like, you know, FD is not necessarily in CMS or not really CMS driving this, not necessarily abandoning the the notion of paying for technology
Amanda: Right. Yeah.
Mark Gardner: that really advances the practice of medicine and therefore benefits patients. by you know, they're they're changing NTAP r drastically, right? Like you don't the companies that are going to apply NTAP will still exist. You just won't get a pass for the S CI prong of the three prong test. you'll have to actually prove that your product is better than standard care. The breakthrough designation doesn't merely give you meet that requirement. but they're this person and and it I share this belief again is like you know they're they're modernizing things and they're I think
Amanda: Mm-hmm.
Mark Gardner: they're ultimately trying to reduce the number of applicants and there is a limited amount of money right you can
Amanda: Mm-hmm.
Mark Gardner: that's just a reality in our system you can we cannot spend all of our money on healthcare. it would be great if we it'd be great if we could right but it's
Amanda: Right.
Mark Gardner: not practical So they're trying to limit the number of companies that they will provide this gap coverage, if you will, for and they're trying to say we're just really going to limit it to these devices that are really truly in improving the standard of care and with evidence. They want evidence to show that that's happening. So hopefully that's what Rapid becomes. But we don't have a final rule on Rapid yet. Although the government government just published something last CMS put something out last Friday you know hinting more that there's more to come. So we'll be watching that one closely.
Nate: Yeah. Good. Yeah, that was a that was a good conversation
Mark Gardner: yeah.
Nate: we had. and you know, I think it's always f good to get out with multiple members of industry at some of these trade associations and just see that, you know, your concerns are pretty much matched, right? It always gives
Amanda: Yeah.
Nate: you, you know, understanding that yep, these are these are the issues and that's why it's important to get together as industry and make sure we're putting our minds and then to be involved, right, into things like MDMA and to other things, medical out things that also have a a conduit to the decision makers so you can be heard, right? If you're a small startup, you've got to find your way to some of these. because, you know, they are pretty much filled with major players, but those startups also like to be able to hear your pain points and to be able to talk to something like Rapid, you know, the earlier you can get involved, the more likely it is that you can make an outcome decision. So it's always fun to get involved with those when the opportunity arises.
Amanda: Yeah. Yeah.
Mark Gardner: Absolutely. Do we want to talk a little bit about peptides? We had some news in the last recently with the panel.
Amanda: Nate, is that you? Nate, you probably know more about peptides than I do, so
Mark Gardner: Shifting gears.
Nate: Yeah, I mean I think you know with you know the panel basically kind of gave a go ahead on some peptides. which is standard. That's what panels do, right? Is they they look at them and they say, Hey, do we think there's enough to start pushing it forward? I think what's interesting in this case is this has been maybe a controversy coming for a little while where The members of this pharmacy board have been the previous members were replaced with maybe more pro-peptide people, I guess is the way to say it. And there's a lot in the scientific community. I've seen physicians, I've seen former FDA who really disagree with the suggestion to go forward. And I think what's interesting is they're not knocking the peptides. They're not saying the peptides are terrible. They're saying, and this is what FDA always says, right, is we don't know. Right? If you've gone in front of FDA for a pre-market submission, ID. Once there's something they don't know, that's what they hone out and like, well, we don't know. We need to burn this risk as far as possible. and that's not the same standard for a peptide, but that's kind of what they're looking at, right? Is what is what are the data that gives us safety considerations on these peptides? Because that's really what they're looking at. Is are there enough data to have a safety determination that, yep, we should allow this to be in the US population? We're not saying it's efficac its efficacy is proven, we're just saying, hey, you know. For certain types of individuals, physicians can go ahead and prescribe and compounding pharmacies can can make them. And so that's what's interesting here is it's a very controversial membership. And you know, I think that kind of really matches where we're at right now with a lot of some of the FDA leadership, HHS leadership is there's a lot of stances that you know are a little bit quicker, right? The scientific method, I think we even talked about this just on Tuesday, like Tuesday was a great conversation.
Amanda: Yeah.
Nate: The scientific method Is kind of slow at times and it's laborious. It's you look at X, okay, now I need a new variable. You look at Y, now I need a new variable, you look at Z. And when that doesn't happen, I think your typical FDA reviewer gets uncomfortable. And that's probably why there's also been a struggle with AI, right? Getting things out quickly. You think about a predetermined change control plan as one way to try to head off that and try to get science out quicker, but it's still a very iterative process of FDA may not see something in the predetermined change control
Amanda: Yeah.
Nate: process. But you're still gonna do the science. You're not allowed to skip the science and put your AI piece out there before you have additional data that it is safe and effective in this new population, for example. And so I think that's what's you know, why p peptides are so interesting. Then they're also interesting because they're not fully approved yet, right? There's still additional steps. They're not saying you
Amanda: Yeah.
Nate: can go ahead and do this, they're not now listed. It's just that there's a strong signal. And so that strong signal, yeah. Go ahead, Madam. Yes.
Amanda: That's what I was gonna say. The panel the panel recommended I guess what was the panel? So they recommended something. I just yeah, it
Nate: Yeah, they recommended these peptides be listed. and so then they have to be listed in a in a regulation that says these peptides
Amanda: Okay. And who makes right.
Nate: are ones that are in this classification. This classification
Amanda: Okay.
Nate: means there's enough data to understand the safety essentially, and you can go ahead and produce those peptides. So that's
Amanda: Okay.
Nate: that's where we're at. But you know, I think people in industry are saying, well, is FDA really going to use its enforcement discretion on peptides when it's signaling that it's quite comfortable, especially from a top down, right? A very high leadership level is like, hey, let's get these peptides in the hands of people who want them. And so, you know, that's also an interesting kind of dynamic of, you know, enforcement doesn't just mean there's a law, right? We've seen that now. Laws aren't self-executing. Laws have to be enforced by something. They have to be prosecuted by something. And if there is no prosecution, is there that much different if there is no law at all? Maybe product liability is a little bit easier to come in when something says, hey, this this wasn't put forth by FDA yet. but interesting considerations when it comes to peptides.
Mark Gardner: That makes sense. Yeah, like if there was some sort of harm done t caused to by this peptide or or whatever was compounded, then the plaintiff's lawyer would say, Hey, you this is not an approved drug, or maybe you
Amanda: Right. Right.
Mark Gardner: did something outside the standard of care and therefore you're liable for negligence.
Nate: Yeah, you used this before it was officially listed. you know, and and I'm sure there's great consent, right? We all know you probably walk in and sign 10 forms to get those peptides. And so you also, if you're if you're a user of a peptide, you have to understand that it might be hard to sue. I'm not saying it's impossible, but I'm sure
Amanda: Yeah.
Nate: you're doing a lot of signing to make sure that that consent is clear. because physicians, you know, they may see something, right? That's the practice of medicine is not governed by FDA. And so if they
Mark Gardner: Right. Yeah. No.
Nate: see something that could help a patient, they're gonna want to utilize that. to help their patients. And so that's just so many different things intersect when you think about a topic like peptides.
Mark Gardner: Yeah. It's something like we talk about when we teach, right? Where we're saying people are very uncomfortable or when we're counseling clients even on off label use, they'll be thinking some people are in the misimpression that just off label use is illegal. It's not. And that's, you know, in itself sort of a regulator of how physicians practice, aside from state boards of pharmacy and whatnot, of course. But yeah.
Amanda: Right, yeah. Yeah, that's it, yeah.
Mark Gardner: Good. Yeah, well I think we'll be talking about peptides about every week on this podcast or every every time we do, if it's not weekly. but it it's because it's such a hot topic and there is yeah
Amanda: Yeah. Yep, exactly.
Nate: Yeah. Well it's an excellent real time example of high level policy working its way quickly. 'Cause there's not a lot of things that can work their way quickly in the FDA system, right? There's
Amanda: No.
Nate: notice in common or it takes years for this or that. This is an area where things move pretty quickly and you get to see it in real time.
Mark Gardner: Yeah, and and you see the larger drug companies starting to file lawsuits. they have they've been
Nate: Yes, yep.
Amanda: Yeah.
Mark Gardner: following the filing them for quite some time, but new ones that we're reading about right now, there's obviously huge amounts of money at at play here. And yeah, so more to come on that. I know we also talked at Medical Alley about about what's going on that was positive. I know an audience member said, Hey, what's what what do you see out there that i inspires you?
Amanda: Right.
Mark Gardner: And maybe that was actually that was not during the Q and A with the audience. That was that was
Nate: As a podcast yeah.
Amanda: Yeah, that was the podcast. Yeah.
Mark Gardner: Ben had asked that on the podcast. I thought was that was a fun question. and I'm happy to start on that one. You know, I think that the I know at in our jobs we get to see a lot of really cool technology that some of it's obviously and a lot of it's investigational, whether they're drugs or devices or we see peptides, we see foods and and supplements that are cutting edge and cosmetics and everything, but especially the medical medical products obviously are very exciting. Just seeing what's coming down the pike and the I'm very enthusiastic about Just the future of healthcare, but AI has been has put a lot of great tailwind on especially in med tech. we've seen that for years in radiology, for example, and it's it's finding its way into all sorts of technology. So, you know, what's good, I I do see a lot of excitement around it and continued despite being at what I heard at an investing conference a few weeks ago, a thirty year valuation low for med tech, for example. I don't know where the biotech valuations are at, but I know they're they're also under pressure. you know, we're even though th they we're at a 30 year low
Amanda: Hm.
Mark Gardner: in terms of valuations, you still see a lot of investment in the space. I don't think humans will ever stop trying to improve the the condition of of of human how you know health. so that's very exciting to me. I don't know if you have
Nate: Yeah.
Mark Gardner: y'all have any thoughts.
Nate: Yeah, you know, I I like thinking of ideas like the Ready program. you know, that's really
Amanda: Mm.
Nate: FDA, CMA like the government thinking in real time of, hey, we have kind of a health crisis in rural America, which some of it may be brought on by the government too and by different factors
Amanda: Mm, yeah.
Nate: at play in the healthcare environment. But you know, the ready program is really all about trying to help individuals focus more in rural areas when they go home from a hospital, stay at home, avoid readmissions and You know, people do better at home, people are happier at home, and you know, there's a lot of innovation
Amanda: Yeah.
Nate: and and there's a lot of great technology and knowledge in the world. Really money is often the limiting factor. So when you can find more ways to incentivize a certain area, you're gonna find people who work their way into that area because they have opportunity to get some support in their work. And so it's great to see, you know, individuals who can benefit from being at home, hopefully in the future staying at home because of this program.
Amanda: Yeah. Yeah, no, I I I echo everything you guys have said. I mean I I really like the kind of innovation, good ideas coming from a high level policy perspective. I mean maha, I l I I we should all I like the idea of making people healthier. I like the idea of giving individuals more kind of accountability and power to make decisions and and for themselves. I mean wearables is a good example of giving people you know, power and knowledge to make their own kind of lifestyle choices and make changes to to become healthier. like rapid and ready. I mean, I like those programs. I think rapid, you know, even if companies can't or aren't able to take advantage of it, I think it does start the conversation earlier in the process, thinking about reimbursement and coverage and payment and how, you know, their product is going to be reimbursed or paid for. Cause that's gonna be a critical element when you, you know, commercialize and hit the market. and I I mentioned this on Tuesday during the podcast, but I I like I really like the idea of getting rid of rid of synthetic dyes in our food source and in our medicines. you know, my son is sensitive to red 40 and it's in his pills that he has to take every day, which drives me crazy. so just things like that from a policy perspective. I mean, we'll see how kind of everything shakes out when it comes down to actually becoming a regulation, but I do like seeing kind of the new ideas, the fresh take on things and kind of the focus on just general wellness and health.
Mark Gardner: Yeah, that's a great point. Like with NTAP and Rapid, those are both rel relatively new programs. We had parallel review for a long time, which I think there was something like one successful applicant through that program.
Amanda: Right, yeah.
Mark Gardner: So it's just nice
Nate: Mm.
Mark Gardner: to see the government continue to attempt to improve things. Great. Nate, do you wanna lead us out? Close us out.
Nate: Yeah, well I appreciate everyone joining us for the second episode of the Common Period. Had a great
Amanda: Yeah.
Nate: discussion. you know, what we will be doing is keeping you up to date on what's going on with the government and we look forward to seeing you next time on the Common Period.
