For a period of time, federal and state agencies made concerted efforts to control the cost of prescription drug spending, agreeing to use a reimbursement methodology that best reflects actual drug costs. Many states, however, used different methodologies to calculate drug cost. According to the U.S. Health and Human Services (HHS), such fluctuations in methodologies actually inflate drug costs. As a result, HHS enacted rules that changed the basis of payment for Medicaid-covered drugs from an “estimated acquisition cost” (EAC) to an “actual acquisition cost” (AAC).  The states were given some discretion which benchmark to use to determine AAC. One of such benchmarks is National Average Drug Acquisition Cost (NADAC). The California Department of Healthcare Services (DHCS) conducted a study and determined that NADAC adequately reflects actual drug cost acquisition in the state. It promptly notified CMS of the intent to switch to NADAC in reimbursing the pharmacies and obtained CMS approval.

The DHCS, however, did not immediately implement the changes approved by CMS. Instead, it continued to pay pharmacies through the Medi-Cal claims processing system consistent with the rate methodology used prior to the use of AAC. This lead to overpayments to pharmacies. Currently, the DHCS is recouping the overpayments resulted from the state’s delay in switching to NADAC.

As a result, California pharmacies are facing large monetary recoupments (particularly for specialty medications). Many NADAC prices do not even cover acquisition cost.

And in May 2019, California pharmacies filed a law suit against DHCS and HHS alleging irreparable harm to pharmacies and “a looming public health crisis.” Pharmacies complain that  large numbers of Medi-Cal patients will be denied access to critical life-saving specialty drugs. A motion for preliminary injunction is currently scheduled to be heard on August 30th, 2019.

For more information, visit California Pharmacists Association webpage (where you can also support the action financially).

 

         A survey conducted by the National Community Pharmacists Association (NCPA) revealed that almost all independent pharmacies experience significant increase in drug acquisition cost while reimbursements are not simultaneously adjusted to reflect the increase. Often, reimbursements are adjusted but with remarkable delays. When pharmacies appeal these MAC reimbursements and delays in adjusting generic pricing, the appeals are often denied or not even considered.

(The most frequently cited generic medications for which pharmacists receive below-cost reimbursements include benazepril, clomipramine, digoxin, divalproex, budesonide, haloperidol, hydroxychroloquine, levothyroxine, methylphenidate, morphine, nystatin/triamcinolone, pravastatin, tamsulosin, and tizanidine).

A few years ago, 29 pharmacies filed an action in Pennsylvania against a major PBM to prevent unfair and below-cost MAC pricing arguing breach of contract and bad faith in carrying out contractual obligations. Because most of the pharmacies had an arbitration clause in their contracts, their cases were sent to arbitration. But one pharmacy – Lakeview Pharmacy – proceeded with litigation. Later in the proceedings, the court found that the PBM failed to promptly respond to the pharmacy’s appeals and to retroactively reimburse successful appeals.

This precedent opens a door to successfully alleging breach of contract claims against PBMs on arbitrary MAC pricing and appeals. The law firm who represented Lakeview Pharmacy considers California an ideal forum to continue the momentum. California has a strong precedent under the “Unfair Competition and Unfair Business practices” litigation as well as under California MAC law. The firm is looking for California pharmacies and pharmacy groups to step up and open an issue of the below-cost-reimbursement and reimbursement discrimination (where chains and PBM mail orders are reimbursed substantially more than independent pharmacies). Please note, the case will be based on contingency fee. Therefore, pharmacies are not required to make monetary contributions or advance costs.

If you want to know more on how you can participate, as a plaintiff or by submitting information on your reimbursements, please contact our firm. We want to reach as many pharmacies as possible, so please share this post. If we have enough pharmacies stepping up and escalating the movement across the nation – we could establish a similar precedent in California as Pennsylvania pharmacies did.

     The Medicare Modernization Act (2003) allows states to enact their own drug importation laws. The Act specifies that such laws would only be valid if the federal government reviewed and approved a state’s proposal to import prescription drugs. Despite the length of time since the passage of the Act, no state has enacted such law and submitted the proposal for federal approval.  In 2018, Vermont was the first state to enact a prescription-drug importation law but it has never submitted the law for federal approval.

Things might change with the newly enacted Florida law allowing prescription drug importation from Canada and possibly other countries in the future. The law 1) authorizes a Canadian supplier to export drugs into Florida under certain circumstances, 2) establishes an international export pharmacy permit for participation in the International Prescription Drug Importation Program; 3) authorizes the state to inspect international export pharmacy permittees to ensure that the products are not adulterated or misbranded.

The governor of Florida is optimistic that there would be no hurdles in obtaining federal approval as President Trump is very vocal about his commitment to lower drug prices. In addition, the bill analysis cites that U.S. spends 30%-190% more on prescription drugs that other developed countries and pays up to 174% more for the same prescription drug. Therefore, Florida decided that an effective way to reduce prescription drug spending was to import cheaper drugs.

 

A pharmaceutical research group – representing the Big Pharma interest – expressed concerns that the law would allow the importation of potentially counterfeit, misbranded or ineffective prescription drugs. However, certain assurances and oversights are built in the law, such as licensure and inspections. Also, these medications are taken by Canadian folks and such medications are effective in treating their conditions. Why the same medications should receive an inflated price if sold in U.S.?

But will Canada permit its lower-cost drugs to be imported into the U.S. thereby reducing the overall supply available for Canadians? Because the U.S. population takes more drugs than its Canadian neighbor, the adequate supply simply might not be available. And how about enacting a law – as Canada has done – imposing limits on how much pharmaceutical companies can charge?

  Last month, the U.S. Supreme Court extended the time in which a private party may bring a suit under the False Claims Act (FCA). The decision – United States ex rel. Hunt v. Cochise Consultancy – extended the statute of limitation to bring an FCA action up to 10 years from the date of the alleged violation.

 The FCA permits a private person to bring a civil action in the name of the federal government against “any person” who “knowingly presents … a false or fraudulent claim for payment” to the Government or to certain third parties acting on the Government’s behalf. See 31 U.S.C. §§ 3729(a), (b)(2). Two limitations periods apply to a civil action under the FCA: (1) An action must be brought within either 6 years after the statutory violation occurred or (2) 3 years after “the official of the United States charged with responsibility to act in the circumstances” knew or should have known the relevant facts, but not more than 10 years after the violation. See 31 U.S.C. § 3731(b)(2). The period providing the later date serves as the limitations period.

In this case, Hunt brought an FCA suit more than six years after the alleged misconduct. But the suit was filed within three years of when Hunt informed federal government of the alleged misconduct and within ten years of such misconduct. The defendant argued that the suit is time-barred (it was not filed within the above 6-year period) because the government declined to intervene and therefore the suit was untimely. The Supreme Court disagreed holding that the 10-year limitation applies no matter if the government intervenes or not.

The holding means that now private parties have up to 10 years to file an FCA action, during which time more evidence of potential misconduct could be collected. A potential loophole still exists. Arguably, a party bringing the action must notify the government of the alleged misconduct starting the statute of limitation clock. If the action is not brought within 6 years, the defendant might have a good defense that the action should be dismissed under the Statute of Limitations.

 

    Despite many articles, seminars, and educational opinions written on compliance and legal implications of dispensing, ordering, and storing controlled substances, it still remains the number one reason for disciplinary actions across the nation. This article focuses on the most cited violations of state or federal laws pertaining to working with the controlled substances.

  1. Improperly performed inventories. It’s common for pharmacy inventory to omit
  • Time of the date the inventory was taken (beginning or end of the business day);
  • Finished form of the substance (e.g., tablet or vial).

Many states have updated or modified their requirements on proper inventory. California, for example, now requires a manual count of all Schedule II drugs at least every three months. For other schedules, the count could be estimated, unless the container holds more than 1,000 tablets or capsules.

  1. Records of receipt and dispensing. Dispensing records must state number of units dispensed, name and address of the person to whom it was dispensed, the date of dispensing, the name or initials of the individual who dispensed. Very often, pharmacy records omit patient addresses or/and the DEA number of the prescriber (or state an incorrect number).

Invoices and ordering records (such as 222s) must be properly prepared and have the information on the supplier, date of receipt, number of containers.

  1. Power of attorney. All ordering personnel must properly execute a power of attorney with the registrant. Often, the power of attorney is not dated, not coming from the registrant, or missing altogether.
  2. Physical controls. It is recommended that all Schedule II drugs be locked and Schedules III-V be separated from the rest of the inventory in some high-visibility place (not at the back of storage or by the bathroom or a locker room). The keys to the controls should be in the possession of a pharmacist at all times.
  3. Employee screening.Per federal regulations, a pharmacy shall not employ anyone who has access to controls, if such person has been convicted of a felony relating to controls or whose application with the DEA had been denied, revoked, or surrendered for cause. Pharmacy should run state, county, and federal background checks on all employees with access to controls.
  1. Reporting theft/loss. Pharmacy must report any theft or substantial loss of controls within one day of discovery by filing Form-106. If not filed timely, the DEA may “visit” the pharmacy to investigate the delay. It is common to delay filing 106 while the investigation is pending. However, the DEA requires that the registrant file the report first and then perform the investigation. If the pharmacy determines that there was no loss or it was not significant, the report may be withdrawn or amended. States vary on reporting requirements.

7. Security features on prescriptions. Many states have updated their requirements on what information should be stated on a prescription. California – for example – now requires a new security feature, a uniquely serialized number attributable to a prescriber.

If a prescription for Schedule III-V medications is missing any of the security features, a pharmacist may treat a noncompliant form as an oral prescription. The pharmacist, however, must verify the order with the prescriber and include notations on the prescription form.

  1. Corresponding Responsibility. Pharmacists usually run into this problem when they do not run PDMP reports on new and existing patients or they are filling scripts coming from problematic prescribers who are already on the DEA’s or Medical Board’s radar.

Remember,every record-keeping violation could potentially turn into a monetary penalty. Therefore, training staff on proper record-keeping, following every state requirement and regulation of Title 21 Code of Federal Regulations (starting with § 1300) and incorporating them into your policies and procedures is a part of a solution to comply with state and federal regulations on dispensing and handling controls and avoiding potential disciplinary actions, DEA’s administrative actions, and monetary penalties.

 

 In 2015, the owner and pharmacist-in-charge of Lane Pharmacy passed away. The Pharmacy, however, carried on as nothing had happened. Allegedly, the Pharmacy continued to operate without a pharmacist. This “unusual” Pharmacy operated until 2017, when the California Board of Pharmacy received a complaint that non-licensed individuals were dispensing medications. The Board investigation revealed that pharmacy technicians continued to operate the pharmacy after its owner’s death and that these non-pharmacists purchased and signed for drug deliveries, including controlled substances.

To determine the amount of controlled substances purchased and illegally dispensed, the Board partnered with the Drug Enforcement Agency (DEA). The joint investigation showed that the pharmacy purchased its controlled substances mostly through Cardinal Health (dba Parmed Pharmaceuticals LLC).

On March 1, 2019, the Board filed Accusation against Cardinal alleging violations of:

  • Health & Safety Code 11209: no person shall deliver controlled substances to a pharmacy unless a pharmacist signs a receipt; and
  • 16 Cal. Code of Regulations 1783(a): a wholesaler must furnish dangerous drugs only to an authorized person. Prior to furnishing dangerous drugs to an unknown person, the wholesaler shall contact the Board to confirm that the recipient is an authorized person.

The Board alleges that Cardinal delivered the drugs despite obvious red flags: the former pharmacist no longer accepted the deliveries, and instead deliveries were signed by several people using the deceased pharmacist’s name. Cardinal allegedly failed to spot this issue or failed to inquire into the suspicious activity.

The case illustrates that proper policies and procedures on drug delivery and training staff on spotting red flags is a must if you operate a wholesale pharmacy business.  To avoid similar allegations from the Board (and potentially DEA), a wholesaler must document who accepts the products and scrutinize any deviations from the standard procedure.

 

 

   In 2018, CMS proposed a Medicare rule that would eliminate retroactive DIR fees. One of the rationales for the rule was a colossal growth of DIRs between 2010 and 2017. During this period of time, DIRs grew by 45,000%.

As a result of this aggressive “performance enforcement” by PBMs, many pharmacies are reimbursed below cost and many have closed their doors. The American Medical Association has published a study showing that many patients with cardiovascular problems cannot access their medications due to significant pharmacy closures across the country. (Access the study).

The proposed rule would implement a definition of ‘‘negotiated price’’ that is intended to ensure that the prices available to Part D enrollees at the point of sale are inclusive of all pharmacy price concessions. In CMS’s opinion, this rule will be in line with the Trump Administration Blueprint to lower drug prices and reduce out-of-pocket costs.

CMS explained that when price concessions are applied to reduce the negotiated price at the point of sale, some of the concession amount is apportioned to reduce beneficiary cost-sharing. In contrast, when price concessions are applied after the point of sale, as DIR, the majority of the concession amount accrues to the plan, and the remainder accrues to the government. For further discussion on this matter, please see the CMS Fact Sheet from January 19, 2017 ‘‘Medicare Part D Direct and Indirect Remunerations.’

According to CMS, pharmacy price concessions applied as DIR can lower plan premiums and increase plan revenues, result in cost-shifting to beneficiaries and the government, and reduce consumer and government knowledge about the true costs of prescription drugs. To avoid such outcomes, CMS has issued the proposed rule and is expected to rule on it shortly.

In addition, most DIR fees have migrated into private plans. While the legality of these fees is questionable, the ambiguity surrounding such DIRs is troublesome. Many pharmacies do not understand what the fees are for, how they are allocated, and do not request the break-down of DIR fees.

For example, in 2015 – when I first started researching the issue – the following DIR fees were in place:

 

DIR No DIR
The majority of Caremark plans calculated DIRs as:

1. a difference between adjudicated amount and contractual rate, or

2. 2.75%-9.5% of ingredient cost

OptumRx
Catamaran

DIR was $2.80

Some Caremark plans
Some ESI plans

DIR was $3.25

Majority of ESI plans
EnvisionRx

DIR was $5

Prime Therapeutics

DIR: $2

If you ask me now, I will not be able to tell you how DIRs are currently calculated and which plans/PBMs do not implement DIRs. This ambiguity and lack of any explanations make conducting pharmacy business impossible. As a pharmacy owner or a manager, you are entitled to reports describing all DIRs and how they are calculated. Your PSAO should be able to obtain this information directly from the PBMs and guide you through your contractual obligations. The problem is… many PSAOs also have no idea about how DIRs are calculated.

 

 

This month, I will be presenting a series of webinars organized by Nova Biomedical aimed to educate healthcare practitioners on what constitutes off-label use of blood-glucose meters (BGM). My part of the presentation will focus on the risks associated with the off-label use of BMGs and the ways to avoid potential liabilities.

Why did we choose this topic?

According to the FDA’s statistics there were thousands of serious injuries in critically ill patients due to the erroneous glucose meters’ readings. During the most recent FDA’s public meeting on BGM, FDA stated that BGM have one of the highest number of device adverse events reported per year.

A number of adverse events reported to the FDA resulted in deaths in the healthcare settings. The investigations showed that most of these patients were acutely ill, medically fragile, and were taking medications that interfered with glucose measurements (e.g. some patients were receiving Extraneal, and some were on maltose-containing substances). Patients were treated with insulin doses that were guided by falsely elevated results. Insulin is a high-alert medication, meaning that it bears a heightened risk of causing significant patient harm when used in error. Inappropriate insulin dosing may result in hypoglycemia, coma, and even death.

A part of the problem is that healthcare providers are using glucose meters, which are unable to distinguish between glucose and other sugars. As a result, in 2008 – after receiving a report of a patient who suffered irreversible brain damage following an aggressive insulin treatment – FDA mandated that BGM labels state that the product was not evaluated for use with the critically ill (if that’s the case). FDA issued warning letters to manufacturers reminding of this new labeling requirement.

In 2016, FDA issued a guidance differentiating between self-monitoring blood glucose test systems for over-the-counter (OTC) use and point of care use of the meters in the professional healthcare settings.

Following FDA’s recommendations, the New York State Department of Health, the Veteran’s Health Administration (VHA), and CMS each issued communications alerting labs, the public, and others of the patient safety and regulatory consequences of the off-label use of point-of-care BGM on critically ill patients. New York initially got involved because two patients died in the state’s hospital based on erroneous glucose reading.

What’s the problem with the off-label use of BGM?

The problem with BGM is that most of OTC meters migrated into the clinical setting,

but the manufacturers continued to seek FDA clearance for these devices as intended for home use. By obtaining OTC clearance, the BGMS devices were automatically waived (under CLIA). However, manufacturers generally performed accuracy studies more suited to an OTC population rather than a sicker hospitalized population. Accuracy studies were performed in a relatively healthy, ambulatory population even though the devices were used in a wide variety of patient populations.

Therefore, FDA created two classes of GM with two different classification codes.  And FDA encouraged manufacturers of hospital use BGMS to seek FDA clearance and CLIA waiver for use in all hospital patient populations. As FDA stated in its guidance, self-monitoring readers are intended for use at home not in healthcare settings. And FDA requires an additional warning on the self-monitoring meters that they are not intended for use in professional settings. Self-use meters should not be used on critically ill patients in healthcare setting due to a high risk of error. Continuing to use meters that were intended and designed for self-monitoring may subject healthcare providers to unnecessary legal exposure.

What is off-label use of a medical device?

In a nutshell, using a device for a non-cleared indication constitutes an off-label use. If you use BGM for purposes or in populations beyond the “Intended Use,” you are using it off-label. Intended use is what had been cleared or approved by the FDA and you can usually find it in the package inserts or device manual.

FDA’s 2016 guidance reemphasized the need for clinical testing in “vulnerable” patient populations to support clearance for use of glucose meters in such populations. Manufacturers of blood glucose meters should study their devices in each sub-population for whom the device is labeled. And the meters should be used only in those sub-populations in which the device has been studied and for which the device has a labeled indication. Otherwise, the devices are used off-label.

CLIA requirements

The CMS administers CLIA and has delegated the authority to FDA to assign all in vitro diagnostic tests to one of three CLIA complexity categories: high complexity, moderate complexity, and waived.

Glucose blood reading is a waived test if you follow the manufacturers’ instructions. All testing should strictly adhere to “intended use” or “limitations of the procedure,” which are described in the device’s manual or the insert. If a device has “Intended use” or “limitations” that state that the product has not been evaluated on critically ill patients and you are using it in a healthcare setting on critically ill patients, you are engaging in a non-waived testing or off-label. You are modifying the test. By default, it becomes a high complexity test and you must meet additional CLIA regulatory requirements.

What are some other legal consequences when you use BGM off-label?

 If off-label use results in patient’s injury, the patient or the estate is likely to bring a legal action against the healthcare provider for medical malpractice (also called negligence). Patient’s attorney will analyze and scrutinize the standard of care used. When the device was used off-label when other safer alternatives existed, the patient will argue that the provider breached the standard of care (especially considering FDA’s guidance on the topic as well as CMS, VA, and some state health departments’ warnings regarding inaccurate BGM reading in healthcare settings).

To succeed under a negligence theory for off-label use, a patient must establish that the prescriber has deviated from the standard of practice. As far as I know, more and more hospitals and providers stopped using BGM not intended for critically ill patients due to the error rate. We also have guidance from federal and state agencies to stop using GM which are not specifically intended for vulnerable population groups. All these makes plaintiff’s job of proving a deviation from the standard of care much easier.

Additionally, the doctrine of informed consent requires that health care providers disclose the nature of a proposed procedure, its benefits and risks, as well as any feasible alternatives. If a health care provider uses a BGMS off-label and does not inform a patient of the known risks of an inaccurate glucose reading, there is a risk that the patient’s consent does not meet the informed consent standard.

Physicians usually do not disclose to patients if a drug or device prescribed is for off-label use. As a result, patients often bring claims for lack of informed consent arguing that if they knew that the drug was not approved for a particular use – they would not had taken it in the first place.

Courts, however, do not require physicians to disclose, through an informed consent process, the off-label use of a drug or device. Courts usually hold that off-label prescribing is a “matter of medical judgment.” This position was confirmed by the U.S. Supreme Court, holding that “physicians can prescribe approved items for any use they deem reasonable.”

But, if a patient can establish that the non-disclosure was material to the patient’s decision, the patient may prevail under the informed consent theory. And under the theory of respondeat superior or vicarious liability, the medical facility could be liable for these and other actions of its physicians, nurses, staff or laboratories with respect to the off- label use of BGMS in critically ill patients.

 

Some other compliance risks associated with the off-label use of BGM in critically ill population:

– potential issues with CLIA-waived status;

– losing Medicare reimbursement because you are not properly performing a high complexity testing;

– issues with state agencies (e.g. Medicaid’s reimbursements and citations).

To recoup all the above, using a device off label when there is no justification and where there is evidence that using such device may lead to serious injuries, may cause legal actions and Board’s investigations. It may also affect federal accreditation and reimbursements. To learn more about the webinars and how you can join, please contact our office.

 

 

 

More and more states are mandating e-prescribing. Some states require e-prescribing only for CII controlled substances, some for all controlled substances, and some require e-scripts for all medications.

States with current e-Rx mandate laws are:

    • Connecticut (e-prescribing for controlled substances only, no penalties for non-compliance)
    • Maine (e-prescribing for controlled substances only, penalties provided)
    • Minnesota (all prescriptions, no penalties)
    • New York (all prescriptions, penalties)

State with future e-Rx mandate laws are:

    • Arkansas (e-prescribing for controlled substances only, provides for penalties, starts in 2021)
    • Arizona (CIIs only, no penalties, starts in 2020)
    • California (all prescriptions, starts January 1, 2022)
    • Iowa (all prescriptions, starts in 2020)
    • Kentucky (e-prescribing for controlled substances only, starts in 2021)
    • Massachusetts (e-prescribing for controlled substances only, starts in 2020)
    • New Jersey (EHR must be able to accept, process, and transmit prescriptions for CIIs, starts May 1, 2019)
    • North Carolina (applies to highly abused CIIs and CIIIs, starts January 1, 2020)
    • Oklahoma (e-prescribing for controlled substances only, starts in 2020)
    • Pennsylvania (e-prescribing for controlled substances only, starts October 24, 2019)
    • Rhode Island (e-prescribing for controlled substances only, starts in 2020)
    • Tennessee (CIIs only, starts in 2020)
    • Virginia (for opioids only, starts in 2020)
    • Wyoming (e-prescribing for controlled substances only, starts in 2021)

States with pending legislation on e-prescribing:

  • Colorado (CII-IV only)
  • Florida (all prescriptions)
  • Kansas (all controlled substances)
  • Michigan (all prescriptions)
  • Missouri (all prescriptions)
  • South Carolina (all controlled substances)
  • Texas (all controlled substances)
  • Washington (all prescriptions)
  • West Virginia (all prescriptions)

If you are not in one of the above states, it is likely that your state will be added to this list next. If not, e-prescribing is unavoidable anyway because Medicare will require all Part D scripts to be transmitted electronically starting in 2021.

The Drug Enforcement Administration (DEA) has allowed e-prescribing since 2010. But a practitioner must use a EPCS-certified software. In order to be EPCS-certified, the system must meet strict DEA requirements for credentialing, software certification and dual factor authentication (among others). Therefore, it is important to know your vendors, their certifications, and their audit records. Surescripts – for example – is one of the platforms facilitating e-prescribing. However, the company was investigated and charged with illegal monopolization of e-prescription markets. Read FTC’s announcement here.

While e-prescribing is supposed to resolve ambiguities in prescriptions, sometimes it creates them. For example, e-prescriptions have “Notes” section. Prescribers may add additional information that is relevant in this field. This field, however, is often a source of miscommunication. For example, “Notes” may state “dispense 60 tablets” but there is already a quantity field indicating 60 tablets. This creates some uncertainty regarding the prescriber’s intent and therefore a pharmacist must call to verify and resolve the uncertainty. In addition, pharmacy must train staff and offer tech support at all times. And when dealing with any healthcare technology, it must comply with HIPAA and all relevant regulations, such as security breach notification and similar state laws. If you work with e-scripts, what are your hurdles?

 

Is CBD a drug, a dietary supplement, or food (or all/none)? Can it be marketed under any of these labels?

Recently, the FDA clarified one aspect of this puzzle: CBD products should not be marketed as drugs unless they went through a rigorous regulatory scrutiny.

This month, the FDA – together with the FTC – issued warning letters to three CBD manufacturers making unsubstantiated medical claims about their products’ ability to treat various conditions. For example, some of the claims included such statements as:

  • “CBD successfully stopped cancer cells in multiple different cervical cancer varieties.”

  • “For Alzheimer’s patients, CBD is one treatment option that is slowing the progression of that disease.”

  • “Cannabidiol May be Effective for Treating Substance Use Disorders.”

  • CBD may be used to avoid or reduce withdrawal symptoms.”

Note that none of the manufacturers used concrete statements, such as “CBD cures/helps /relieves, etc.” They were simply stating that there is a possibility that CBD may relieve the symptoms or improve a condition or is a treatment option. Even in this form, such statements constitute health claims. The FDA must pre-approve all health claims, and requires that they be supported by evidence from scientific studies.

If you are thinking: how about the Farm Bill that was recently signed? Know that it has not changed the way how the FDA looks at health-claims on non-approved (by the FDA) products.

Agriculture Improvement Act of 2018 (the Farm Bill) established a new category of cannabis classified as “hemp” – defined as cannabis with extremely low (no more than 0.3%) concentrations of the THC. The Bill removed hemp from the Controlled Substances Act, which means that it is no longer a controlled substance under federal law.

Congress explicitly preserved the FDA’s current authority to regulate products containing cannabis or cannabis-derived compounds under the Federal Food, Drug, and Cosmetic Act (FD&C Act) and section 351 of the Public Health Service Act. The FDA – however – is struggling with hemp classification and marketing requirements. It will hold a public hearing on May 31 to discuss CBD health claims and whether they are justified and explore potential pathways for dietary supplements and/or conventional foods containing CBD to be lawfully marketed. If you are in the CBD business, this is your opportunity to be heard.

On multiple occasions, the FDA stressed that it now treats CBD products as any other FDA-regulated product. Therefore, the FDA requires a CBD product that’s marketed with a claim of therapeutic benefit to be approved by the FDA for its intended use before it may be introduced into interstate commerce.

The FDA also announced that it is unlawful to introduce food containing added CBD, or the psychoactive compound THC, into interstate commerce, or to market CBD or THC products as dietary supplements. This is because CBD and THC are active ingredients in FDA-approved drug products (e.g. Epidiolex) and were the subject of substantial clinical investigations before they were marketed as food. In such situations, with certain exceptions that are not applicable here, the only path that the FD&C Act allows for such substances to be added to foods or marketed as dietary supplements is if the FDA first issues a regulation, through notice-and-comment rulemaking, allowing such use.

There is no clear definition – however – of “unauthorized claims” that would put CBD companies at risk of enforcement actions. The FDA hopes the stakeholders submit additional scientific and researched evidence of the CBD’s potential at its May 31st hearing.  Meanwhile, if you are a producer or manufacturer – do not make any health-related claims on your products. The only claim which you can currently make is “claims of well-being” (e.g. statements that a product can “make you feel better”). Such claims do not require FDA’s pre-approval.