A New Challenge for FDA?

By Todd Halpern

Two Executive Orders Continue Trump Administration Efforts to Restrain Agency Policymaking

Last week, President Trump signed two executive orders designed to limit the ability of federal agencies to make and enforce policy through the use of guidance documents. While this may seem like a mere technical issue, the ramifications could be significant.

A federal agency may issue a guidance document for a variety of reasons. Some agencies, such as the U.S. Food and Drug Administration (“FDA”), use it as the primary instrument for announcing and explaining significant policies. Many FDA guidance documents clarify agency positions regarding complex and ambiguous laws and regulations governing the broad range of companies it regulates. This includes manufacturers and marketers of food, dietary supplements, cosmetics, drugs and medical devices.

Some question whether agencies (including FDA) have gone too far. Agencies are supposed to promulgate a regulation when creating a new rule. In contrast, an agency may convey an interpretation of a currently existing rule through the issuance of a guidance document or other, less formal means. While it is often challenging to distinguish a new rule from an interpretation, the distinction has serious implications. The cost, time and effort required to publish a guidance document are far lower. Notably, a regulation may only be finalized after the agency has received and addressed all public comments. No such requirement exists for guidance documents.

The latest executive orders are generally designed to increase the accountability and transparency of federal agencies. The “Executive Order on Promoting the Rule of Law Through Transparency and Fairness in Civil Administrative Enforcement and Adjudication” is meant to curb the use of guidance documents as the basis for a statutory or regulatory violation in an agency enforcement action. The “Executive Order on Promoting the Rule of Law Through Improved Agency Guidance Documents” is meant to halt the creation of guidance documents without a public notice and comment period and mandate agencies to publicize these documents on a searchable website.

It is helpful to assess these executive orders in their historical context, where they can be seen as part of a larger strategy by President Trump to limit the size and authority of the federal bureaucracy. For example, President Trump in early 2017 issued Executive Order 13771, which required agencies to: (1) repeal two existing regulations for every proposed new regulation; and (2) offset costs from new regulations by eliminating costs from at least two existing regulations. One year later, the Department of Justice issued the Brand Memorandum, which barred the use of an agency guidance document as a basis for liability in affirmative civil enforcement cases.

It is not clear whether the executive orders will have any practical impact on the FDA’s use of guidance documents. Indeed, it is possible that neither will have any impact at all. However, given the significant public health issues that are the FDA’s responsibility, this is something worth watching. The clarity provided by a guidance document is often appreciated by FDA-regulated stakeholders, even if they do not necessarily agree with the policy. The agency routinely is required to resolve novel questions regarding the applicability of a rule to a new technology that has just emerged. A guidance document often is critical for the development of these technologies to proceed. Regulations can take several years to finalize.

This comes at an interesting time for the FDA stakeholders. There are a number of high profile issues that many are anxiously waiting for FDA to address, including vaping, CBD and drug importation. Did President Trump just make it more difficult for FDA — an agency that soon will likely have a new leader — to proceed on critical matters of public health? It may take years to fully understand the answer, but we will be watching closely.