Trump’s ‘Two Out, One In’ Regulatory Policy May Apply to Some FDA Guidance

Posted 06 February 2017 By Zachary Brennan

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The Office of Management and Budget (OMB) late last week offered guidance to federal agencies, including the US Food and Drug Administration (FDA), trying to figure out how the new “two out, one in” executive order (EO) will impact their issuance of guidance and rulemakings moving forward.

The Q&A offers some clarity and boundaries for the EO signed last Monday, noting: “The EO’s requirements for Fiscal Year 2017 apply only to those significant regulatory actions, as defined in Section 3(f) of Executive Order 12866, an agency issues between noon on January 20 and September 30, 2017.”

A look back at what significant regulatory actions were released from the US Food and Drug Administration (FDA) in the past year offers a glimpse of what types of regulations President Donald Trump and his EO will eliminate at FDA (Trump said last week he wants to cut 75-80% of all FDA regulations), presumably including the 24 final rules and one proposed rule issued in the last year, covering topics including:

But the OMB guidance does offer some wiggle room for FDA in terms of issuing draft or final guidance (2017 guidance plans for FDA's Center for Drug Evaluation and Research are here) noting that “significant guidance or interpretive documents will be addressed on a case-by-case basis.”

As far as what existing regulations if repealed would be considered part of the “two out” part of the EO, OMB notes, “Any existing regulatory action that imposes costs and the repeal or revision of which will produce verifiable savings may qualify.”

Rachel Sachs, an associate professor of law at Washington University in St. Louis, said she thinks the guidance "significantly restricts" and "walks back" the reach of the EO, particularly as it exempts big classes of regulations required by law and appreciates that regulations may be deregulatory in nature so the costs and issuance of such regulations will be considered accordingly.

The guidance also offers FDA, which is an agency that deals with public health and safety, some ways to waive the “two out, one in” requirements of the EO.

“Emergencies addressing critical health, safety, or financial matters, or for some other compelling reason, may qualify for a waiver from some or all of the requirements of Section 2,” the guidance notes.

But for a new regulation is the result of implementing a new law from Congress (for instance, with FDA’s pending implementation of the 21st Century Cures Act), OMB clarifies that agencies should still “identify additional regulatory actions to be repealed in order to offset the cost of the new significant regulatory action, even if such action is required by law.”

According to Politico, a senior FDA official said there is still a lot of uncertainty over who the agency can hire and what regulations move forward. An FDA spokesperson referred Focus questions on implementation of the EO to the White House.

Interim Guidance Implementing Section 2 of the Executive Order of January 30, 2017, Titled “Reducing Regulation and Controlling Regulatory Costs”

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Categories: Crisis management, Compliance, Due Diligence, Ethics, Government affairs, Regulatory strategy, Regulatory intelligence

Tags: "two out, one in, " Trump regulatory policy, FDA regulations

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