Comment period ending for proposal to automatically sunset HHS/FDA/CMS regulations

Under the proposal, the HHS review of regulations would consider a variety of factors, including:

• The continued need for the regulation;
• The nature of complaints or comments about the regulation received from the public;
• The complexity of the regulation;
• The extent to which the regulation overlaps, duplicates or conflicts with other governmental rules; and
• The degree to which technology, economic conditions, or other factors have changed in the area affected by the regulation since the regulation was promulgated or last reviewed by HHS.

The proposed rule would set expiration dates for all regulations issued by HHS in CFR Titles 21 (Food and Drugs), 42 (Public Health), and 45 (Public Welfare). If not assessed and reviewed, each regulation would expire at the later of:

• two calendar years after the proposed rule becomes effective;
• ten calendar years after the regulation was originally promulgated (i.e., irrespective of amendments); or
• ten calendar years after HHS assesses and reviews the regulation.

Exemptions from this proposed rule are likely to be rare; they are permitted only for regulations that (1) “are jointly issued with other agencies,” (2) “legally cannot be rescinded,” or (3) “issued with respect to a military or foreign affairs function or addressed solely to internal management or personnel matters.” Many regulations issued by CMS under the Affordable Care Act would be exempt because they were issued with other agencies, but most other CMS regulations would fall within the proposed rule. For these regulations, as well as most FDA regulations, the proposed rule could have a significant effect. Much of the Federal Food, Drug, and Cosmetic Act is implemented through FDA regulations, including, by way of example, regulations pertaining to clinical trials, product approvals, manufacturing, and safety reporting.

Beyond the regulations themselves, many agency guidance documents are based on regulations that could be sunsetted under the proposal. Further, if the rule was implemented, and if the Department delegates to FDA the obligation to conduct the retrospective reviews, this additional workload could easily derail FDA’s proactive regulatory agenda and even interfere with its day-to-day work. Thus, in addition to the direct impact of any regulations being revoked, the proposed rule could affect FDA’s ability to fulfill its obligations in any number of areas, including to consult with industry, review and approve products, issue guidance, or propose (or adopt) regulations.

As a practical matter, however, even if the rule was finalized, the new Administration may not allow the rule will go into effect. Among other things, for example, the effective date could be delayed by administrative action and a rulemaking could be undertaken to rescind or significantly revise the rule. But even if the rule is finalized and becomes effective, the impact may be limited by assessments determining that sections of the CFR do not have a significant economic impact on a substantial number of small entities, and thus are not subject to the contemplated review.

Further, even if it is finalized before the end of the Trump administration (i.e., essentially within the next two months), the proposed rule quite possibly would not be implemented, for a number of reasons. In the first instance, we anticipate strong objections to finalizing the rule, including concerns under the Administrative Procedure Act (APA) about letting regulations expire by default. Indeed we would anticipate litigation challenging the rule and/or any rule that is deemed “expired” by default in the absence of a retrospective review. Rescinding a rule that was lawfully promulgated under APA without notice and comment rulemaking, or even a reasoned explanation, would appear to be unlawfully “arbitrary and capricious” under the APA.

The proposal has a 30-day comment period, which means written comments must be submitted by Friday, December 4. It is unusual for a proposal of this potential scope and magnitude to be published with only 30 days for public comment, even before taking into account the impact of the COVID-19 pandemic. There may be an argument that such a truncated comment period fails to meet the requirements for a rulemaking of this sort. At the very least, there is a good argument to extend the comment period.

In announcing the proposal, HHS Chief of Staff Brian Harrison called it “the boldest and most significant regulatory reform effort ever undertaken by HHS.” HHS estimates that nearly 2,500 rulemakings would need to be reviewed in a two-year period, and projects the cost of implementing these reviews each decade would be between $10 million and $26 million. The notice calls for comments on 16 different topics, each of which warrants careful review and scrutiny, and all of which suggest that this proposal is unlikely to be implemented in anything close to the proposed form, if at all.

HHS will hold a public meeting for interested stakeholders to provide input on this proposed rule on Monday, November 23, 2020, and requests for participation must be submitted by Thursday, November 19. Requests to speak should be emailed to James Lawrence at [email protected].

If you would be interested in submitting questions for the meeting, or comments on the proposed rule, please urgently contact your Hogan Lovells attorney or any of the authors of this alert.

Authored by Philip Katz, Randy Prebula, Stuart Langbein, David Horowitz, and Heidi Gertner