The Union of AI and Drug Discovery and Development Requires New Thinking for Structuring and Negotiating Strategic Transactions, and a Rigorous Analysis of Applicable Regulatory Considerations

The use of artificial intelligence and machine learning (AI/ML) in drug discovery and development is well established and here to stay. With AI tools developing the potential to impact virtually every stage of the life sciences product life cycle, the FDA continues to refine its framework for the use of AI to support regulatory decision-making. On April 7, the FDA ended its consultation period on two draft guidance documents, one containing recommendations on the use of AI to support FDA regulatory decision-making and another providing a “comprehensive approach” to the management of risk throughout the total product life cycle of AI-enabled devices. We also saw, in January of this year, the U.S. administration issue the Executive Order Removing Barriers to American Leadership in Artificial Intelligence. These developments, and potential developments, need to be carefully taken into account by life sciences companies that are considering transacting with an AI/ML tool provider.

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Securities Litigation Against Life Sciences Companies: 2024

Securities class actions against life sciences companies are mostly second-order problems. The first-order problem is a business or regulatory setback that, when disclosed by the company or a third party, triggers a stock price decline. Following the decline, plaintiffs’ class-action attorneys search the company’s previous public statements and seek to identify inconsistencies between past positive comments and the current negative development. In most cases, plaintiffs’ attorneys then seek to show that any arguable inconsistency amounts to fraud—that is, they will claim that the earlier statement was knowingly or recklessly false or misleading. When the challenged statement appears in a public offering document (that is, a registration statement or prospectus), plaintiffs need only show that the statement was materially false or misleading, not that it was made with scienter or caused their losses.

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“Refreshed” UK-wide Innovative Licensing and Access Pathway (ILAP) Applications Now Open

Commercial and pre-commercial developers of potentially transformative medicines or drug-device combination products can now utilize a unique accelerated regulatory pathway in the UK. Article authored by Marie Manley and Victoria Kerr. Read more

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Unauthorized Drug Importation by Alternative Funding Programs: What Pharmaceutical Companies Need to Know and Options on How to Respond

Some entities known as Alternative Funding Programs (AFPs) are engaged in the unauthorized importation of specialty drugs into the United States and may pose a growing threat to the U.S. drug supply. Article authored by Benjamin B. Correa and Kathy P. Lee.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.

Referral Payments Targeted in New Special Fraud Alert

A Special Fraud Alert has been issued by the U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG), warning that certain marketing arrangements relating to Medicare Advantage beneficiary referrals could potentially result in “abusive arrangements.” Jon Zucker explains.

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How Life Sciences Companies Can Respond To DOJ’s Focus on Clinical Trial Fraud

For the past two years, clinical trial fraud has been a key enforcement area for the U.S. Department of Justice’s (DOJ) Consumer Protection Branch (CPB). David Ludlow and Julea Lipiz set out considerations for life sciences companies to help mitigate scrutiny of their trial results and related products. 

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The AI Revolution and the FDA: Becky Wood and Deeona Gaskin’s Fireside Chat with Former FDA Commissioner Dr. Scott Gottlieb

AI tools are already advancing patient care by opening up new avenues for drug and product discovery, evaluation, and pharmacovigilance. But they also raise regulatory challenges as our panelists discuss.

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SEC Interest in FDA-Related Disclosures by Life Sciences Companies Highlighted

A recent SEC enforcement action against Cassava Sciences over misleading statements made to the FDA about clinical trial (CT) results highlights the importance of life sciences companies exercising care in how they disclose FDA-related information to investors. Lara Mehraban explains.

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Risks and Benefits of Generative AI for Pharma Supply Chain Management

As the life sciences sector grapples with complex challenges around sustainability and Environmental and Social Governance (ESG) compliance, Generative AI (GenAI) is emerging as a potentially powerful tool for enhancing efficiency and sustainability. Michele Tagliaferri, Eva von Mühlenen, and Anna-Shari Melin explain. Read more

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European Court of Justice Judgment Relating to Orphan Market Exclusivity

In a recent judgment, the Court of Justice of the European Union (CJEU) has shed light on the scope of the ‘clinical superiority’ criteria providing for a derogation to orphan market exclusivity which is key to protect the orphan molecule from competition for the period of market exclusivity (10 or 12 years as the case may be). Marie Manley, Chris Boyle, and Alix Vermulst examine the impact of this judgment on pharmaceutical companies.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.