Supreme Court Ruling – Disclosure of Confidential Information

In a June 24th 6-3 decision, the U.S. Supreme Court reversed and remanded the lower courts’ decision to publicly disclose commercial information that previously had been submitted to the government.  At issue is an exemption in the Freedom of Information Act (FOIA) that permits the government to withhold trade secrets and commercial or financial information obtained from someone who considers the material to be confidential. As a result, the FDA regularly redacts portions of documents that pertain to, say, approval applications or review procedures.  “In the past, however, a company could argue that it could suffer substantial competitive harm if an agency released certain commercial information, but the June 24th decision effectively lowered the bar and removed that requirement. As a result, the FDA no longer has to weigh whether any harm could occur and instead can withhold information if it is considered confidential, or secret”, writes Ed Silverman in a July 9th article in STAT News.

The Supreme Court decision is significant because it will make it easier for companies to argue that their information is confidential and, therefore, should not be disclosed — without having to insist that disclosure will result in any substantial harm, according to Anne Walsh, an attorney at the Hyman & Phelps law firm and a former associate chief counsel at the FDA.  “The importance of this decision to FDA-regulated entities cannot be overstated”, states Walsh.  Now, a company that is required to submit commercial or financial information to FDA only needs to show its efforts to keep the information private, and the assurances from FDA that it would treat the information as such.  There is no requirement for showing any harm from the disclosure of that information, whether substantial or negligible.  “Although FDA regulation largely tracks the broad definition of confidential commercial or financial information {(“valuable data or information which is used in one’s business and is of a type customarily held in strict confidence or regarded as privileged and not disclosed to any member of the public by the person to whom it belongs”), 21 C.F.R. § 20.61}, FDA may need to scrub the reference to “competitive harm” in discussing its assessment of whether to provide notice to the submitter of commercial or financial information about a request for that information”, comments Walsh.

“Just because things were routinely marked confidential doesn’t mean that was always honored. Now all FDA needs to do is determine whether the information is confidential,” said Walsh. “I think it’s going to be more difficult for people who are making requests to obtain information. It’s also a weakening of the transparency of the agency.  “In practice, we’ll have to see how it turns out, but we expect the FDA will have to revise regulations to reflect this decision. And I think more FOIA requests will be rejected and you’ll see more redactions (in documents). This will impact companies that want to understand what others are doing. And media doing an investigation are going to be rebuffed. It starts to get more antithetical to the notion of transparency.”

An FDA spokeswoman stated that the Department of Justice will be issuing guidance to agencies (i.e., FDA, NIH). The FDA will review that guidance along with the court’s decision to determine what changes are needed related to the agency’s disclosure of commercial confidential information, and to understand what the impact might be.

The Supreme Court decision comes amid ongoing pressure on the FDA to be more transparent about releasing approval documents and other materials, such as clinical trial data.  The ruling by the Supreme Court also makes for an interesting interplay between clinical trial disclosure requirements in the US compared to that of Europe and Canada.  Even though it will be easier for companies to argue that clinical information is confidential when submitted to FDA, that same information will not be considered confidential under EMA Policy 0070 or Health Canada’s Public Release of Clinical Information regulation.


Leave a Reply