Seeking a Second Bite at the Apple? Lannett Petitions FDA on the “Grandfather” Status of Morphine Sulfate

By Kurt R. Karst –

Following a long court battle in which a three-judge panel of the U.S. Court of Appeals for the Tenth Circuit affirmed a November 2010 decision from the U.S. District Court for the District of Wyoming granting FDA’s Motion to Dismiss a lawsuit brought by Cody Laboratories, Inc. and Lannett Co., Inc. (collectively “Lannett”) concerning the alleged grandfather status of Lannett’s marketed unapproved Morphine Sulfate Solution, Lannett has submitted a citizen petition to FDA seeking the Agency’s determination on the subject.  As FDA Law Blog readers might recall, the Lannett lawsuit came about as a result of FDA’s March 2009 Warning Letters to Cody and Lannett (among other companies) to stop manufacturing certain unapproved narcotic drugs, including morphine sulfate oral solutions.  At that time, FDA concluded that marketed unapproved morphine sulfate products are “new drugs [under the FDCA] and not grandfathered and that manufacturing and marketing of these products without an approved application constituted a violation of the Act.”  Lannett ultimately submitted and obtained approval of a marketing application (NDA No. 201517) for Morphine Sulfate Oral Solution, 100 mg per 5 mL (20 mg per mL), which is subject to PDUFA user fees.

Although the Tenth Circuit agreed that the approval of NDA No. 201517 did not moot Lannett’s grandfather drug claim, because “[b]y prevailing on its grandfathering claim, Cody could still obtain meaningful relief in the form of freedom from [certain user fee and labeling]  burdens,” the Court refused to reach the merits of Lannett’s grandfather drug claim.  Importantly, the Court stated:

Mootness aside, we cannot reach the merits of [Lannett’s] grandfathering claim unless the FDA has engaged in “final agency action” under the APA. . . .  [Lannett’s] failure to avail itself of available administrative remedies [(i.e., use of the citizen petition process)] defeats its claim even if we were inclined to hold that the FDA’s action [(i.e., Warning Letters)] were otherwise final. . . .  Given that grandfathering status hinges on the fact-intensive history of the drug’s marketing and use, we do not anticipate that the agency will blindly refuse to consider evidence submitted by [Lannett].  Accordingly, we decline to consider [Lannett’s] grandfathering claim prior to exhaustion of the company’s administrative remedies.

The recent Lannett citizen petition would appear to be an attempt to obtain final agency action, perhaps on which to base a future lawsuit.  The citizen petition requests that FDA affirm, pursuant to the 1938 “grandfather clause” of the FDC Act, the grandfather status of morphine sulfate, which is marketed for the relief of severe acute and severe chronic pain.  In addition, FDA is asked to acknowledge that, in light of a grandfather affirmation, Lannett’s Morphine Sulfate drug product is not a “new drug” subject to premarket approval and PDUFA user fees.

Under the 1938 “grandfather clause,” a drug “shall not be deemed a ‘new drug’” requiring FDA approval if: (1) the drug was subject to the 1906 Food and Drugs Act at any time prior to June 25, 1938, when the FDC Act was enacted; and (2) “if at such time its labeling contained the same representations concerning the conditions of its use.”  The 1938 “grandfather clause” is different from the 1962 “grandfather clause,” which exempted manufacturers of pre-1962 drugs from the requirement to demonstrate effectiveness, in addition to safety under the 1938 FDC Act.

Lannett contends in its petition that morphine sulfate meets both of the 1938 “grandfather clause” requirements.  Along the way, Lannett addresses certain interpretations of the 1938 and 1962 “grandfather clauses” that might otherwise lead FDA to conclude that Lannett’s Morphine Sulfate drug product is not a grandfather drug.  For example, Lannett argues that:

The fact that a specific manufacturer’s morphine sulfate drug product was not introduced into interstate commerce in the United States prior to the enactment of the Act in 1938 does not disqualify its drug product from “grandfather” status.  The language of the first prong of the “grandfather clause” requires only that a drug be subject to the 1906 Act, not a specific manufacturer’s drug.  A more restrictive reading would preclude any other entity from marketing a drug that was on the market prior to 1938, with the same conditions of use, and claim that it was “grandfathered.” (Emphasis ion original)

Moreover, acknowledging that the labeling for its Morphine Sulfate drug product is not identical to that of pre-1938 product labeling, and that FDA and some courts have narrowly (and perhaps incorrectly) interpreted the 1938 “grandfather clause,” Lannett argues that the correct inquiry under the 1938 “grandfather clause” is whether the drug product contains “the same representations concerning the conditions of its use.”

The 1962 “grandfather clause” calls for a comparison of the drug products’ conditions of use, 
composition and labeling, while the 1938 clause focuses only on a comparison of their conditions of use.  Any attempt by FDA to impose the same requirements with respect to the applicability of the 1938 “grandfather clause” and the 1962 “grandfather clause”— despite the clear differences between the language used in the two provisions—is unsupported by the statutory language and is contrary to the above mentioned canons of statutory construction.

In that connection, says Lannett, FDA has incorrectly relied on its grandfather drug hearing regulations at 21 C.F.R. § 314.200(e) to establish the burden of proof necessary to qualify for grandfather status under the 1938 “grandfather clause.”  Those regulations, which Lannett says are related to the 1962 “grandfather clause,” state, in part, that “[a] contention that a drug product is exempt from part or all of the new drug provisions of the act under the exemption for products marketed before June 25, 1938, contained in section 201(p) of the act, or under section 107(c) of the Drug Amendments of 1962, is required to be supported by evidence of past and present quantitative formulas, labeling, and evidence of marketing.”  According to Lannett, however, the text of the FDC Act “sets forth the standard for when a drug product is not subject to the new drug requirements, and does not require FDA approval of such a claim before such old drugs can be marketed.  FDA cannot override or add to the unambiguous requirements of the statute. . . .  FDAs continued reference to §314.200(e) is misplaced and beyond its regulatory authority.”  For one example of where FDA has raised the Agency’s hearing regulations when faced with a 1938 “grandfather clause” issue, see FDA’s December 2000 response to a citizen petition concerning cannabis-containing drugs.