Executive Order Affects Federal Guidances

NEWS TRENDS

President Bush in January signed an executive order that allows the White House to review guidance documents from federal agencies, including FDA. The order could have a significant effect on industry, as it could serve as a check against overly burdensome guidances.

Under the order, agencies must have any guidance that could cost industry $100 million or more reviewed by the Office of Management and Budget. They must also justify such guidances publicly and cite a “specific market failure” that the guidance would correct.

Some media reports portrayed the order as a power grab. These reports indicated that the order would curtail federal agencies' ability to regulate through guidance and wrest control of the authority to oversee the regulatory process from Congress. But FDA observers in Washington don't see it that way. They say FDA guidances are already reviewed heavily by the agency and the public. The order merely grafts one more review onto the existing process. The order, in fact, is merely a revision of one signed by President Clinton in 1998 covering procedures for proposed rules, final rules, and notices. It clarifies that Clinton's order applies to guidances, too.

“It sounds like it's just another layer of review,” says Jonathan Kahan, a partner at Washington, DC–based law firm Hogan & Hartson. “And knowing what we know about CDRH's guidance documents, I'm not sure that many of them would meet the $100 million threshold anyway. Anyone saying it's a case of the White House hamstringing federal agencies is probably crying wolf. But anyone saying it would have no effect probably doesn't know what they're talking about, either.”

Larry Pilot, a partner at another DC law firm, McKenna, Long & Aldridge, says the order could prove quite useful if it pushes FDA to think harder about whether a guidance is really necessary. “A good question that needs to be asked more often is this: ‘Is the time that will be invested in preparing this guidance worth the investment?'” he says. “Does it fulfill a need? How is that need established? If there are only three manufacturers of a type of device, why prepare a guidance document? Who benefits?”

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