On October 29, 2021, the Department of Health and Human Services (HHS) issued a proposed rule to withdraw or repeal the final rule entitled “Securing Updated and Necessary Statutory Evaluations Timely” (SUNSET rule), which would require almost every regulation administered by HHS to be periodically reviewed, or else face automatic expiration. As we have previously blogged, in an April 2021 response to a lawsuit seeking to overturn the rule, HHS stated that it anticipated issuing a proposed rule to repeal the SUNSET rule; it has now done so.

As a brief recap, subject to certain limited (and unclear) exceptions, the final SUNSET rule provided that all HHS regulations would expire at the end of (1) five calendar years after the effective date of the SUNSET rule, (2) ten calendar years after the regulation’s promulgation, or (3) ten calendar years after the last year in which HHS assessed and/or reviewed a regulation. The first time period (review within five years) would apply to the estimated 12,400 HHS regulations that are over ten years old.

The proposed rule outlines HHS’ reasoning behind its proposal to withdraw/repeal the SUNSET rule, including the following rationales:

• The SUNSET rule would require a massive reallocation of resources to retrospectively review existing regulations. This resource intensive process would undermine HHS’ ability to fulfill its missions, promote national priorities, and respond to public health threats, including the COVID-19 pandemic.

• The SUNSET rule contains many ambiguities which would need to be operationalized, including the scope of the rule’s exceptions and the required timing of assessments.

• Given the massive scale of the required review (and its infeasibility), it is very likely that at least some regulations would automatically expire.

• The possibility of the expiration of regulations and their actual expiration would create great regulatory uncertainty that would be harmful to all stakeholders, including the public and industry, and in particular, small businesses who may not have the resources to keep track of and adjust to regulatory developments. Also, certain industries, including the drug industry, are particularly vulnerable to the consequences of regulatory instability because their products are developed over a lengthy multi-year period. Furthermore, states may respond to regulatory gaps at great cost by creating a regulatory patchwork of their own.

• The SUNSET rule potentially violated the Administrative Procedure Act (APA) by providing insufficient time for stakeholders to comment and by allowing regulations to expire without a particularized consideration of the expired regulation.

Comments to the proposed rule are due by December 28, 2021. HHS is requesting comment on whether it should modify, rather than repeal or withdraw, the SUNSET rule.