Notice & Comment

Corporate Integrity Agreements, Agency Speech, and Unmoored Guidance

Nicholas Parrillo’s Federal Agency Guidance and the Power to Bind provides an important window into the perspectives of diverse stakeholders on the use, structure, and influence of agency guidance. Parrillo ultimately argues that agencies adopt, and regulated or interested stakeholders internalize, guidance through a complex process that belies simplistic assertions that agencies, more or less, wield guidance to circumvent the APA’s notice-and-comment requirements.

Parrillo wants to move the debate on guidance past the “accusation and blame” that characterizes current discourse.  To this end, Parrillo no doubt succeeds, portraying the guidance issuance and internalization process as one driven by well-meaning regulators, fearful firms who nevertheless demand equal treatment, and incentives that roughly correspond to agency size and strength (e.g. EPA and FDA very powerful, FTC and OSHA not so much).

The major challenge for reform is the fragility of Parrillo’s analysis once any one particular agency, and its practices, comes into focus.  Even within the article, Parrillo refers to guidance to be as broad as “advisories, circulars, bulletins, memos, interpretive letters, enforcement manuals, fact sheets, FAQs, highlights” or a far more limited subset thereof (footnote 6 clarifies that the article is limited to policy statements and interpretive rules but even at that interviewees largely filled in the gap themselves for agency communications that were technically nonbinding but nevertheless influential).  For purposes of developing reforms, if any, once specific guidance comes into play, the forms become idiosyncratic quickly.

Take, for example, corporate integrity agreements that abound in the context of CMS and FDA enforcement. The underlying enforcement action may be grounded in statute or legislative rule, like misbranding or adulteration, but the ensuing negotiations over corporate integrity terms (and breaches in corporate integrity usually cause the underlying violation) fall within clearly delineated statutory enforcement authority.  Because, as Parrillo notes in the context of regulatory flexibility, word gets out, it is not clear that changing prospective guidance formation and issuance practices would change much (at least outside the pre-approval sphere).  Agencies may accomplish through corporate integrity agreements what is otherwise achieved through guidance, at least for a significant measure of agency action.

Similarly, the ability of agencies, their leaders or agents, to author scholarly publications of interest to researchers and firms, provides both “guidance” technically defined, as well as an important source of academic information.  Then-FDA Commissioner Scott Gottlieb and CBER Director Peter Marks, for example, recently published an article in the New England Journal of Medicine on the regulatory environment for cell-based regenerative medicine in light of adverse events experienced by patients at stem cell clinics. In 2015, and in light of the spread of the Zika virus, Jeffery Roberts and Marion Gruber of FDA’s Office of Vaccine Research and Review published an important article in Vaccine on how immunizations seeking an indication for pregnant women specifically might converge or diverge through regulatory pathways that typically used clinical trials that excluded pregnant women. To be sure, government speech doctrine is a mess, but it is only with difficulty that courts might coherently and consistently prohibit persons who are both regulators and scholars from publishing relevant research on topics of public concern.

In other words, guidance is not only heterogeneous in form, but also with respect to non-APA sources from which its legitimacy may be derived.  This may provide a useful starting point for prioritizing the reforms that might follow Parrillo’s analysis.

This post is part of a symposium on federal agency guidance. The rest of the posts in this symposium can be viewed here.