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  • Letter Signed by 65 Members of Congress Urges FDA to Reconsider “Office Stock” Restrictions for Section 503A Compounders

    A recent letter from 65 members of Congress to FDA’s Commissioner Gottlieb has caused a bit of a buzz in the pharmacy compounding world. The letter, dated May 23, 2017, expresses the Congressional signers’ “strong disappointment” with FDA’s recently issued Final Guidance for Industry titled, “Prescription Requirement under 503A of the Food Drug and Cosmetic Act.” The Final Guidance, published on December 30, 2016 (see our previous post here), addresses the so-called “prescription requirement” in FDCA Section 503A, including FDA’s policies requiring compounding only after the receipt of a prescription for an identified individual patient, limited compounding before the receipt of such a prescription (referred to as “anticipatory compounding”), and the prohibition on compounding for office use (referred to as “office stock”).  FDA has consistently asserted since the passage of the 2013 Drug Quality and Security Act that, in order for compounders to obtain Section  503A’s exemptions from new drug, adequate directions for use and cGMP requirements, each compounded formulation must be prepared for an individually identified patient pursuant to a prescription or order, and the compounder may not engage in compounding for office stock.  Proponents of those that believe state-licensed pharmacies should be permitted to engage in compounding for office stock if it is permissible under state law assert that Congress’ plain use the term “distribution” in Section 503A and various Congressional statements prior to and at the time of the Act’s enactment demonstrate Congress’ clear intention to permit state-licensed pharmacies to engage in compounding for office stock.

    The bi-partisan letter (led by Rep. Chris Stewart (R-Utah) and Rep. Buddy Carter (R-Ga.), urges FDA to rethink its decision restricting pharmacies from engaging in compounding for office stock. The Letter  states that FDA’s policies are contrary to the plain language of Section 503A as amended by the DQSA.  In addition,  it asserts that FDA ignored congressional intent, stakeholder input, and clear directives in FY 2016 funding legislation about office use compounding, and added to the Final Guidance language that attempts to redefine the terms “dispense” and “distribute,” ignoring their commonly accepted “definitions both in existing law and in pharmacy practice.”  The Letter accuses FDA of “doubling down” on FDA’s “misinterpretation of the statute and will further exacerbate the patient access problems as more state licensed and compliant pharmacies are forced to cease compounding office-use medications to the providers in their communities who rely on them.”

    Calling the Final Guidance “regulatory overreach,” the Letter lastly seeks the rescission of the Final Guidance, and requests FDA to issue a proposed rule that adheres to “congressional intent” and “plain language of the underlying statute.”

    Amgen Sues FDA After Agency Denies Pediatric Exclusivity for SENSIPAR

    The drought is over! It’s been several months since we’ve seen a new dispute over non-patent exclusivity filed against FDA in a court.  But with a May 25, 2017 Complaint and a Motion for Temporary Restraining Order and/or Preliminary Injunction filed in the U.S. District Court for the District of Columbia, Amgen Inc. (“Amgen”) has ended the drought.  And the dispute concerns a rarely litigated statutory provision: 6-month pediatric exclusivity granted (or denied, as the case is here) under the Best Pharmaceuticals for Children Act (“BPCA”) (FDC Act § 505A).  In fact, we’re only aware of one similar case in the 20 years since FDC Act § 505A has been around: Merck & Co. v. FDA, 148 F. Supp. 2d 27 (D.D.C. 2001) (here) . . . and that case didn’t turn out too well for FDA.  (Of course, there was the initial case of National Pharmaceutical Alliance v. Henney, 47 F. Supp. 2d 37 (D.D.C. 1999) (here), but that case concerned the applicability and scope of, and not the eligibility for, pediatric exclusivity under FDC Act § 505A.)

    By way of background, FDC Act § 505A provides an additional six months of patent and non-patent exclusivity to pharmaceutical manufacturers that conduct acceptable pediatric studies of new and currently-marketed drug products identified by FDA in a Written Request (“WR”) for which pediatric information would be beneficial. Pediatric exclusivity extends all other types of Orange Book-listed patent and non-patent marketing exclusivity (e.g., 5-year, 3-year, and 7-year orphan drug exclusivity) an application holder may have under the FDC Act, provided that at the time pediatric exclusivity is granted there is not less than nine months of term remaining.  An important aspect of pediatric exclusivity is that it provides additional marketing exclusivity not just for the pediatric indications or formulations, but for all protected indications and formulations of that sponsor’s drug.  Thus, pediatric exclusivity attaches to the patent and non-patent marketing exclusivity for any of the sponsor’s approved drug products (including certain combination products) that contain the active moiety for which pediatric exclusivity was granted, and not to a specific drug product.

    Amgen’s lawsuit centers around FDA’s March 22, 2017 Letter Decision denying the company pediatric exclusivity for SENSIPAR (cinacalcet) Tablets (NDA 021688).  FDA approved SENSIPAR on March 8, 2004 for the treatment of secondary hyperparathyroidism in patients with Chronic Kidney Disease on dialysis, and for the  treatment of hypercalcemia in patients with parathyroid carcinoma.

    In May 2010, FDA issued Amgen a WR – a condition precedent to obtaining pediatric exclusivity – “to obtain the information needed to understand (and describe in labeling) the safety and effectiveness of the long term use of cinacalcet in children 28 days to < 18 years of age,” says FDA in the Agency’s Letter Decision. “The main objective of WR was to establish the benefits of  cinacalcet use for the chronic treatment of hyperparathyroidism (HPT) secondary to end-stage  renal disease in pediatric patients receiving either hemodialysis or peritoneal dialysis, and to adequately characterize the risks associated with this intended use in pediatric patients,” according to the Agency.  The WR was amended several times over the years, and, as finally amended, requested that Amgen conduct four pediatric studies.  Amgen conducted the studies – and an additional five studies – and submitted them to FDA last November.  But the company also had some difficulty with one of the studies.  “FDA’s [WR] asked that Study 3 involve a minimum of 15 patients who would be treated for either 26 weeks or, if a patient received a kidney transplant during the study, 12 weeks prior to transplant,” but Amgen was able to enroll only 11 patients for at least 12 weeks, and only four patients met all study completion criteria.

    Amgen’s two-count Complaint alleges that FDA violated the Administrative Procedure Act (“APA”) in multiple ways, and that FDA’s interpretation of FDC Act § 505A (and the Agency’s failure to provide fair notice about its interpretation) violates the procedural due process guarantees of the Fifth Amendment to the United States Constitution. . . as well as the APA:

    FDA’s decision violated the [APA] in as many ways as that Act can be violated. First, the agency acted contrary to the plain terms of its governing statute by faulting Amgen for its failure to fulfill “one criterion” of several study requests, when the statute requires merely that the studies “fairly respond” to the Agency’s [WR]. Second, the agency also violated the statute by conflating the standard for accepting study reports with the different, separate, and more rigorous statutory standard for assessing a drug’s safety. Third, by denying pediatric exclusivity, FDA deviated from its treatment of similarly situated sponsors and broke with the agency’s longstanding practice, without explanation. Fourth, FDA’s denial of pediatric exclusivity lacks any logical basis, because it is premised on Amgen’s failure to achieve an impossible goal set by the agency – one that the agency itself cemented by refusing to accommodate amendments to the relevant study.  And fifth, FDA violated Amgen’s due process rights by changing the agency’s interpretation of the statute without providing Amgen advance notice of its newfound interpretation.

    To support its case, Amgen points to the Merck decision linked to above.  “In addition to text, context, and purpose, Amgen has precedent on its side,” says the company.  In that case, which concerned MEVACOR (lovastatin), FDA denied pediatric exclusivity because Merck met only 14% of the study enrollment requirement.  But the DC District Court concluded that Merck’s studies “fairly responded” to the WR, and that FDA impermissibly denied pediatric exclusivity for “failure to meet a single term of the [WR].”

    Amgen is seeking emergency relief, and a Temporary Restraining Order or Preliminary Injunction by June 6, 2017. Why that date?  Because June 8, 2017 is the date that is nine months before the March 8, 2018 expiration of U.S. Patent No. 6,011,068 listed in the Orange Book for SENSIPAR.  As noted above, the BPCA provides that pediatric exclusivity extends all other types of Orange Book-listed patent and non-patent marketing exclusivity, provided that at the time pediatric exclusivity is granted there is not less than nine months of term remaining.

    If Everyone’s Unhappy, Maybe You’re Doing Something Right… Comment Period on FDA’s Biosimilar Interchangeability Guidance Closes

    The comment period on FDA’s Draft Guidance Considerations in Demonstrating Interchangeability With a Reference Product recently closed (Docket No. FDA-2017-D-0154), and it seems like everyone has something to say about the guidance. With over 50 comments submitted, some very technical in nature, FDA has some deep reading to do before finalizing anything. Commenters ranged from biologics and biosimilar manufacturers to third-party payers and trade associations.

    Most commenters addressed the same points: the distinction between interchangeability and biosimilar, switching studies, use of foreign reference products, and the necessity of demonstrating interchangeability in all indications or uses and in all presentations. Questions are raised throughout the comments about what interchangeability actually means: is it a higher standard or just an additional data requirement? Is it therapeutic equivalence? And everyone is nervous about whether FDA will use labeling or nonproprietary naming or something totally new to indicate that a biosimilar is interchangeable. The commenters were also torn on the use of foreign reference products – mostly breaking down into a cost compared to safety argument.

    Interestingly, almost all of the comments complimented FDA on its “flexible approach” to interchangeability, but proceeded to ask FDA for more precise testing requirements. Some want more human factor requirements while others want more in-depth switching study requirements. And comments really want FDA to lay out its plan for post-marketing changes to innovators after findings of interchangeability.

    A lot of these questions are familiar to commenters, as they echo the questions that have arisen during the rocky implementation of the Hatch-Waxman Act and the abbreviated new drug pathway. Questions about whether interchangeability needs to apply to all conditions of use seem like they are a direct response to the common practice of skinny-labeled generics. And questions about exclusivity when multiple applications for interchangeability are submitted and ready for approval on the same day smacks of post-MMA questions that have taken FDA years to address. There is a lot of overlap in the biologic and drug industry, so a lot of these players have been burned before. Hence, the push for clarity, I presume.

    It’s clear that FDA is not going to be able to please everyone with its interchangeable procedures. With so many commenters asking for diametrically opposed standards, there will be some tough decisions to make. And as we have seen in the Hatch-Waxman context, the trade-off between innovation and access is complicated. The one thing that all of the commenters have made pretty clear though is that they want FDA to take action and give some clear direction to manufacturers here. With the plain language of the BPCIA already subject to multiple interpretations, industry is really relying on FDA for some semblance of clarity here. As the Rolling Stones so eloquently said “you can’t always get what you want, but if you try sometimes, well you just might find, you get what need.” Maybe these comments will push FDA to give industry the clarity it needs, but one can only hope.

    Coalition of Consumer Advocates Challenges FDA’s GRAS Notification Final Rule

    A coalition of consumer advocates filed a lawsuit challenging FDA’s final rule that formally established the GRAS notification system.  The complaint alleges that the rule “unlawfully subdelegates statutory authority to private parties,” that the “secret GRAS system is contrary to the FDCA,” and that the “criteria for GRAS determinations are contrary to the FDCA.”  Plaintiffs ask the court to vacate the rule and direct the agency to “correct the legal deficiencies found by the court.”

    The lawsuit was foreshadowed in critical press releases issued by two of Plaintiffs shortly after issuance of the final rule, and is the latest parry in Plaintiffs’ years-long battle to call attention to alleged deficiencies in FDA’s oversight of the GRAS exception.  The central allegations and arguments in the complaint have been previously raised and addressed in one or another context, so we won’t belabor them here (see, for example, FDA’s memorandum submitted to the court in prior litigation, and our prior postings here and here).  Essentially, Plaintiffs fault FDA for not imposing certain requirements on industry that FDA lacks any apparent statutory authority to impose.  For those seeking an antidote in the form of a more constructive take on the GRAS system, we suggest this supplemental issue of Regulatory Toxicology and Pharmacology.

    The merits of Plaintiffs’ case may be entirely beside the point.  Industry should expect that the litigation will be used as a cudgel in the court of public opinion as it unfolds.  In the interim, FDA will be forced to expend its scarce resources to defend Plaintiffs’ dubious claims – a result that seems unlikely to advance the cause of food safety.

    DEA Administrative Decisions Update: Has DEA Established New Grounds for Summary Disposition?

    Numerous prior DEA final orders have been based on a summary disposition. Summary disposition is a procedure used by government counsel to seek a recommended decision by the Administrative Law Judge (“ALJ”) to revoke a DEA registration without proceeding to a hearing on the facts. It is similar to summary judgment in federal court, and is used when there are undisputed facts that are dispositive of a matter. The aforementioned DEA cases have all used summary disposition in cases where it is undisputed that a practitioner has lost state authority to handle controlled substances (see our previous post here).

    However, a recent administrative decision by the DEA Acting Administrator appears to expand the basis whereby DEA will grant summary disposition to allegations of material falsification of an application for DEA registration. To our knowledge, DEA has never used summary disposition to adjudicate a matter other than loss of state authority. Yet the Administrator’s decision in Richard J. Blackburn, D.O., 82 Fed. Reg. 18669 (Apr. 20, 2017), holds that an allegation of material falsification of an application—at least in that case—can be properly decided on summary disposition.

    Material falsification of an application for DEA registration is an independent and discretionary ground for granting an application or revoking a registration. 21 U.S.C. § 824(a)(1). The Administrator’s decision in this case is noteworthy because, unlike loss of state authority where the agency believes state licensing is a prerequisite to maintaining a DEA registration, proof of material falsification can be overcome by acceptance of responsibility by the registrant and remedial actions. See The Lawsons, Inc., 72 Fed. Reg. 74334, 74338-39 (Dec. 31, 2007).

    In the present matter, DEA issued an Order to Show Cause to the physician in September 2016, proposing the denial of the physician’s application for DEA registration on two separate grounds: loss of state authority and material falsification of his application. The physician requested a hearing, and explained in his request that “any irregularities in his application were done by mistake.” 82 Fed. Reg. at 18670. DEA moved for summary disposition on both grounds, though it had originally indicated that it believed a hearing was necessary for the material falsification allegation. The physician failed to respond to DEA’s motion, and the ALJ deemed the summary disposition motion as unopposed.

    The ALJ granted the summary disposition motion as to the loss of state authority, but declined to grant the motion on the material falsification allegation because the physician had earlier specifically denied this allegation. The government contended in its exceptions to the ALJ’s recommended decision that there was no dispute that multiple answers to the physician’s application were false (the physician had surrendered a state license, but indicated that he had never surrendered a professional license for cause, and had provided a state license number when, in fact, he did not hold a state license).

    On review, the Administrator agreed with the ALJ regarding the summary disposition related to loss of state authority. However, finding that the practitioner had falsified his application, he ruled that the ALJ erred in not granting summary disposition on the material falsification allegation, and stated that the “Government was entitled to summary disposition on the allegation that Respondent materially falsified his . . . application.” Id. at 18673. He also held that the physician had waived his right to present evidence refuting the government’s prima facie showing on material falsification and on the issue of remediation by failing to respond to the government’s motion. Id. at 18671-72.

    There are a few important takeaways. First, the issue of whether the material falsification allegation should be decided on summary disposition had little immediate practical effect as the Administrator was still going to deny the application on loss of state authority. The government likely sought a ruling on this ground so that the final order could have preclusive effect in a future hearing if the physician ever reobtained his state license and applied again for a DEA registration. So, the intent may not have necessarily been to establish a new standard.

    Second, the physician likely would have saved himself from summary disposition on the material falsification ground if he had responded to the government’s summary disposition motion as directed by the ALJ.

    Third, and finally, regardless of whether the facts of this case may have been unique in providing a basis for summary disposition on the material falsification issues, all registrants, including manufacturers, distributors, and practitioners, should be on notice of DEA’s potential use of summary disposition on material falsification grounds in future cases. In our opinion, the bright line where a practitioner either does or does not have a current state license is not the same case as responses to DEA liability questions on an application related to whether the applicant has been subject to prior disciplinary actions, suspensions, surrenders, or even convictions. Often, it is not as evident whether the answer to these questions is “Yes” or “No.” Thus, a broad application of summary disposition in cases where DEA believes that an applicant has provided the wrong answer to such questions and where the registrant is not permitted the opportunity to put on evidence of acceptance of responsibility and remedial actions, would shortcut current agency precedent and due process protections.

    For the Love of Money: The Trump Administration’s Fiscal Year 2018 FDA Budget Plan

    Cue up “For The Love of Money” by The O’Jays (and theme song of The Apprentice) . . . The Trump Administration’s Fiscal Year 2018 Budget Proposal is out!

    On May 23, 2017, The White House Office of Management and Budget released President Trump’s Fiscal Year 2018 Budget.  We pored over the volumes of analytical perspectives, supplemental materials, and what not to get a better sense of how FDA is proposed to be funded in the coming fiscal year.  Of course, we had some sense of where the Trump Administration would land on FDA funding.  After all, in the “America First Budget Blueprint” released in March, here’s what the Administration said about FDA:

    Recalibrates [FDA] medical product user fees to over $2 billion in 2018, approximately $1 billion over the 2017 annualized CR level, and replaces the need for new budget authority to cover pre-market review costs. To complement the increase in medical product user fees, the Budget includes a package of administrative actions designed to achieve regulatory efficiency and speed the development of safe and effective medical products. In a constrained budget environment, industries that benefit from FDA’s approval can and should pay for their share.

    True to the budget blueprint, the proposed FY 2018 Budget would slash discretionary FDA funding by $854 million, but would make up that ground (and more) by doubling user fee funding – a proposal that FDA supports in the Agency’s own budget justification document.  In a volume titled “Major Savings and Reforms,” FDA is tagged for a “reduction” (though it’s really a shift in funding source):

    The Budget recalibrates the level of [FDA] medical product user fees to over $2.4 billion in 2018, approximately $1.2 billion over 2017 annualized [Continuing Resolution] level, replacing the need for new appropriated funding to cover pre-market review costs. . . .

    Currently, medical product user fees cover an average of 60 percent of FDA premarket review costs, ranging from 30 percent for animal drug review to 70 percent for prescription drugs. Ensuring that FDA has the capacity to carry out its mission is a priority for the Administration.  Industries that directly benefit from FDA’s medical product premarket approval and administrative actions can and should pay more to support FDA’s continued capacity.

    The Fiscal Year 2018 Budget includes $5.1 billion in total resources for FDA, which, with the doubling of user fees, would mean an increase of $456 million (or 10%) above the Fiscal Year Continuing Resolution level (see here).  But, as the Alliance for a Stronger FDA points out, FDA would see an $871 million (or 31%) cut in the taxpayer-funded budget authority compared to the final FY2017 Omnibus Appropriations bill.

    The Budget also includes a package of “administrative actions” that are “designed to achieve regulatory efficiency and speed the development of safe and effective medical products.” Although details on the “administrative actions” aren’t provided, the proposed actions include:

    1. Encouraging the use of 21st Century Cures Act tools for drug evaluation, review, and approval;
    2. Simplifying administrative requirements to reduce drug and device manufacturers’ reporting burden;
    3. Clarifying treatment of value-based purchasing arrangements; and
    4. Improving predictability for payers and enhancing dissemination of evidence by fostering the exchange of scientifically sound information between manufacturers and payers’ pre-approval to reduce uncertainty and improve payer ability to more accurately set premiums.

    Earlier this month, HHS Secretary Tom Price penned a letter to Senate Health, Education, Labor and Pensions (“HELP”) Committee members as they considered legislation to reauthorize several user fee programs. “[A]s Congress reauthorizes FDA’s medical product user fee programs, we strongly urge you to include the medical product user fee policy set forth in the President’s Budget Blueprint so that the industries which benefit from these review processes pay the full cost of FDA’s evaluation activities of their products,” wrote Secretary Price.  But Secretary Price’s request was met with resistance.  HELP Committee Chairman Senator Lamar Alexander (R-TX) reportedly commented that while the doubling of user fees is an “interesting proposal,” this is not the time to consider such a proposal.  The request “can be considered the next time the FDA negotiates the user fee agreements with the manufacturers of drugs and devices, but it is way too late to have an impact on this year’s agreements,” said Sen. Alexander.

    The Supreme Court Refuses to Hear Park Doctrine Case

    After a lengthy struggle that began with a major Salmonella outbreak in 2010, Jack and Peter DeCosters’ criminal case came to an end on May 22, 2017 when the U.S. Supreme Court denied their petition for writ of certiorari. We have followed this case with great interest, as it tested the limits (and the very existence) of the Park doctrine, also known as the “responsible corporate officer” doctrine.

    In refusing to hear the case, the Supreme Court leaves in place a fractured Eighth Circuit Court decision upholding the DeCosters’ three-month prison sentences – one that we previously called the most significant Park doctrine ruling in over four decades. We described the Eighth Circuit’s ruling in some detail here.

    Beyond the obvious critical importance of food safety, and the gravity of an outbreak of food-borne illness, the DeCosters’ saga provides useful reminders for all industry executives about potential criminal liability.

    Importantly, a supervisory liability conviction may justify a penalty of imprisonment without violating due process only where “blameworthiness” exists, either inherent in the offense, or based on case-specific findings of fact. However, according to at least one judge of the Eighth Circuit, a misdemeanor Park doctrine conviction, implicates sufficient “blameworthiness” to justify a penalty of imprisonment, because the corporate officer in question is being held responsible “for his own failure to prevent or remedy ‘the conditions which gave rise to the charges against him.’” United States v. DeCoster, 828 F.3d 626, 633 (8th Cir. 2016). Even if the Park doctrine itself does not implicate “blameworthiness,” however, the facts of the DeCosters’ case demonstrate that pleading guilty to a Park offense without admitting knowledge or negligence does not preclude the sentencing judge from going on to find facts that support scienter.

    Based on its position in this case and subsequent official statements, the DOJ under Jeff Sessions continues to favor aggressive prosecution and sentencing of strict-liability offenses. The government’s brief urged the Supreme Court to refuse to review the DeCosters’ case, and argued that strict Park doctrine liability, without further finding of fact, would justify the prisons sentences imposed on the DeCosters. More generally, Attorney General Sessions has stated that DOJ “will continue to emphasize the importance of holding individuals accountable for corporate misconduct” and that “those who choose to disregard the law will be caught and punished.” See Attorney General Jeff Sessions, Remarks at Ethics and Compliance Initiative Annual Conference (Apr. 24, 2017).

    Given the stated importance of individual responsibility to the DOJ, and the unsettled nature of the Eighth Circuit’s seminal ruling, we would not be surprised to see another case testing the limits of Park. When it does, you will read about it here.

    Categories: Uncategorized

    Implementation of 340B Final Rule Postponed Until October 1, 2017

    Today the Health Resources and Services Administration (“HRSA”), the federal agency responsible for overseeing the 340B Drug Discount Program, published in the Federal Register a rule delaying until October 1, 2017 the implementation of a final regulation establishing the methodology for calculating the 340B ceiling price (including so-called penny pricing) and civil monetary penalties (CMPs) for knowing and intentional overcharges of 340B covered entities.

    The history of these regulations is a tortured one. The final regulation in question was published on January 5, 2017 (see our post here) with an effective date of March 6, 2017. On March 6, 2017, HRSA issued a rule delaying implementation to start of the following quarter.  Later, to comply with the new administration’s regulatory freeze memorandum (see our previous post here), HRSA further postponed the effective date until May 22, 2017, and invited comment on whether the effective date should be even further delayed until October 1, 2017 (see also our post here).  HRSA has opted for the latter effective date to implement the ceiling price methodology and CMP regulation, explaining that the delay was “necessary to provide adequate time for compliance and to mitigate implementation concerns.” 82 Fed. Reg. 22893, 22894 (May 19, 2017).

    Categories: Health Care

    Schrader Amendment to House UFA Package Creates New “Competitive Generic Therapy” Pathway and 180-Day Exclusivity

    Earlier this week, the Subcommittee on Health of the House Energy and Commerce Committee held a mark-up session of several bills, including H.R. 2430, the FDA Reauthorization Act of 2017 (“FDARA”). (The Senate version of FDARA, S. 934, passed out of committee earlier this month.)  Initially proposed as a “clean” user fee bill, several riders were added to the bill during the mark-up session, including provisions concerning over-the-counter hearings aids, requiring risk-based device inspections, restricting drug imports . . . . and, of particular interest to this blogger, provisions creating a new class of competitive generic drugs, including associated 180-day exclusivity.

    Introduced by Representative Kurt Schrader (D-OR), the amendment, which passed by voice vote, would amend the FDC Act to add Section 505H, titled “Competitive Generic Therapies.” As explained by Rep. Schrader in his opening remarks:

    We know that when generic drugs compete in the market, drug prices come down dramatically. Although nine out of every ten prescriptions is for a generic drug, generic drugs only make up 28% of the total prescription drug spending in the United States.  Unfortunately, though, some drugs for small patient populations may not attract the same interest from generic drug manufacturers due to market and regulatory uncertainty.  This amendment takes many steps to encourage competition where there is none today.

    First, the amendment requires greater communication between the FDA and manufacturers for these competitive generic products before and during the application process. We have seen great strides toward faster drug approvals in the brand drug breakthrough process, and this is modeled after that.

    The amendment also creates an incentive for this select set of particular generic drugs to come to market by guaranteeing them the same six months of exclusivity that the vast majority of first generic drugs receive. Under current law, if a first generic drug challenges a patented drug, they get this treatment.  This would extend that treatment for new generic drugs competing with off-patent brand drugs where there is no competition.

    The “competitive generic therapy” pathway described in the amendment is a new (and we think much improved) take on Rep. Schrader’s “Lower Drug Costs Through Competition Act” (H.R. 749), which was introduced earlier this year (see our previous post here).

    Under the new pathway, a generic drug sponsor would request, either before or upon the submission of an ANDA, that FDA designate, within 60 calendar days of receipt of the designation request, a drug as a “competitive generic therapy.” The designation process would be described in draft guidance provided by FDA not later than 18 months after enactment of the provisions, and, if necessary, in new regulations.

    A drug would be eligible for designation if FDA determines that there is “inadequate generic competition.” The term “inadequate generic competition” is defined in the bill to mean that:

    there is not more than one approved drug product on the list of products described in section 505(j)(7)(A) (not including products on the discontinued section of such list) that is—

    (A) the reference listed drug; or

    (B) a generic drug with the same reference listed drug as the drug for which designation as a competitive generic therapy is sought.

    In other words, there is “inadequate generic competition” if the “active” section of the Orange Book does not show generic competition for an NDA-approved RLD, or if there is a single ANDA approved (presumably identified as the “reference standard”) and the NDA RLD is no longer marketed (and identified in the “discontinued” section of the Orange Book).

    Designation as a “competitive generic therapy” carries with it several benefits. FDA would be required to:

    (1) Hold meetings with the sponsor and the review team throughout the development of the drug prior to submission of the application for such drug under section 505(j).

    (2) Provide timely advice to, and interactive communication with, the sponsor regarding the development of the drug to ensure that the development program to gather the nonclinical and clinical data necessary for approval is as efficient as practicable.

    (3) Involve senior managers and experienced review staff, as appropriate, in a collaborative, cross-disciplinary review, including with respect to drug-device combination products and other complex products.

    (4) Assign a cross-disciplinary project lead for the Food and Drug Administration review team— (A) to facilitate an efficient review of the development program and application, including manufacturing inspections; and (B) to serve as a scientific liaison between the review team and the sponsor.

    Rep. Schrader’s amendment would also incentivize competitive generic therapy development by creating a new 180-day exclusivity provision applicable to such drug products. Specifically, FDC Act § 505(j)(5)(B) would be amended to add the following:

    (v) 180-DAY EXCLUSIVITY PERIOD FOR COMPETITIVE GENERIC THERAPIES.—

    (I) EFFECTIVENESS OF APPLICATION.—If the application is for a competitive generic therapy, the application shall be made effective on the date that is 180 days after the date of the first commercial marketing of the competitive generic therapy.

    The term “competitive generic therapy” in the exclusivity provision above is further defined to mean a drug “that is designated as a competitive generic therapy under section 506H,” and “for which there are no blocking patents or exclusivities” identified in the Orange Book.

    As with the “standard” form of 180-day exclusivity, eligibility for competitive generic therapy 180-day exclusivity could also be forfeited . . . but only on a single “failure-to-market” basis:

    (iv) SPECIAL FORFEITURE RULE FOR COMPETITIVE GENERIC THERAPY.—The 180-day exclusivity period described in subparagraph (B)(v) shall be forfeited by the holder of the approved abbreviated application for the competitive generic therapy involved if the holder fails to market the competitive generic therapy within 75 days after the date on which the approval of the application is made effective.

    In addition to “clos[ing] a loophole and improv[ing] program integrity in the Tropical Disease priority review voucher program,” Rep. Schrader’s amendment would make other modifications intended to enhance ANDA review transparency and to study what can be done “to get more first-cycle approvals in the generic drug review program,” according to Rep. Schrader. For example, FDC Act § 505(j) would be amended to require FDA to provide ANDA applicants with application review updates:

    Upon the request of an applicant regarding one or more specified pending applications under this subsection, the Secretary shall—

    (A) by telephone or electronic mail, provide review status updates; and

    (B) indicate in such updates the categorical status of the applications by each relevant review discipline.

    Earlier this year, Office of Generic Drugs Director Dr. Kathleen (Cook) Uhl, during her keynote address at the annual meeting of the Association for Accessible Medicines, reported that for the Fiscal Year 2015 cohort of ANDAs covered under GDUFA, the rate of first cycle approval/tentative approvals was only 9%.  Rep. Schrader’s amendment would require the Government Accountability Office to study first-cycle approval rates under GDUFA and determine “whether there are ways the review process for generic drugs could be improved to increase the rate of first cycle approvals and tentative approvals for generic drug applications.”

    FDA, Under New Leadership, Seeks More Comments on Rules Affecting Off-Label Communications

    Dr. Scott Gottlieb was sworn in as FDA’s 23rd Commissioner on May 11, 2017. There has been a lot of speculation about what policies he will prioritize for the Agency during his tenure.  A review of his background shows he has been an advocate for autonomy in the practice of medicine and the use of medical products for off-label uses.  He has opined that doctors are appropriately trained to make medical decisions based on the best interest of their patients.  Dr. Gottlieb is well-versed on the controversies surrounding FDA’s current restrictions on drug and device manufacturers from discussing off-label uses with health care practitioners.

    Given his expertise, he may be poised to loosen FDA’s enforcement of off‑label communications and to provide clarity to industry on these issues. Perhaps it is telling that one of the first actions the Agency has undertaken since his confirmation was to further extend the time period for reviewing the rules defining “intended use.”  As reported here, FDA derives authority to regulate a product based on its intended use. Although FDA first proposed changes to the “intended use” rules back in 2015, it was not until after the 2016 election but before the inauguration, that FDA issued its final rule.  It is not uncommon for a former administration to fast-forward pending rules before the political climate shifts; nor is it uncommon for a new administration to stay the most-recently implemented rules until it has time to consider them.

    In the case of the “intended use” rules, FDA issued the final rule on January 9, 2017, with a stated effective date of March 21, 2017. The proposed version of the rule was markedly different from the January 9 version because it permits FDA to look at the “totality of the evidence” in determining a manufacturer’s intended use for its drug or device.  Pharmaceutical groups filed a Citizen Petition requesting reconsideration of the language, and FDA without the benefit of a confirmed Commissioner, agreed to delay the effective date of the rule for a year.  FDA solicited comments on the decision to postpone the effective date, as well as on its regulation of product distribution in light of First Amendment considerations.  The 60-day comment period was expected to end on May 19, 2017.

    Yet on May 18, 2017, without substantive explanation, FDA further extended the comment period until July 18, 2017. According to the Federal Register notice, FDA “has received a request for a 30-day extension and another request for a 90-day extension of the comment period . . . . The requests conveyed concern that the current 60-day comment period does not allow sufficient time to develop a meaningful or thoughtful response to issues FDA raised in the Final Rule Extension.”  The 90-day extension request was submitted on April 5, 2017, by the same group that filed the Citizen Petition leading up to the initial comment period: the Medical Information Working Group, the Pharmaceutical Research and Manufacturers of America, and the Biotechnology Innovation Organization.  We were unable to find in the docket the request FDA referenced that sought a 30-day extension.

    It is unclear why FDA felt compelled to honor requests for more time in this case. The additional time could signal that the new Commissioner seeks to weigh in before FDA takes further action related to these rules affecting off-label communications.  We will continue to monitor these developments closely.

    A New Orange Book Tool: Reference Listed Drugs by ANDA Reference Standard List

    Since it was first published in 1980, the Orange Book has undergone a lot of change. Over the decades we’ve seen the publication transform and evolve from a paper edition to an electronic database, and now to an app (see our previous post here).  Although the Orange Book has become more complex to navigate, the first edition was rather simple, with two primary sections and several subsections:

    I.    Preface

    A.    Introduction

    B.    Definitions

    C.    General Policies Governing the List

    D.    Legal status of the List

    E.    Precautions to Users of the List

    F.    Codes and Specific Policies for Therapeutic Equivalence Evaluations

    G.    Description of Special Situations

    H.    Updating Procedures

    II.    Listings

    A.    Format Guide

    B.    Drug Product List

    C.    Trade Name Index

    D.    Application Holder Index

    E.    Application Holder Abbreviation List

    F.    Appendix: Prescription Drug Products Deemed Approved – Pending Resolution of Safety or Effectiveness Issues

    Today, the Orange Book contains a preface and six Drug Product Lists, either in their entirety, or by reference to an FDA website containing the full list:

    1. Prescription Drug Product List
    2. OTC Drug Product List
    3. Drug Products with Approval under Section 505 of the Act Administered by the Center for Biologics Evaluation and Research List
    4. Discontinued Drug Product List
    5. Orphan Products Designations and Approvals List
    6. Drug Products Which Must Demonstrate in vivo Bioavailability Only if Product Fails to Achieve Adequate Dissolution

    (Although the Orange Book used to contain a list of ANDA suitability petitions approved by FDA, that list is now posted separately on FDA’s website. . . . but the list has not been updated in nearly three years!)

    The Orange Book also contains three appendices (Product Name Index; Product Name Index Listed by Applicant; and Uniform Terms) and a Patent and Exclusivity Information Addendum (divided into Patent and Exclusivity Lists and Patent and Exclusivity Terms) that are updated monthly. (In the first few editions of the Orange Book, FDA listed in an appendix – later named the “DESI Addendum” – those drug products still in the Drug Efficacy Study Implementation program administrative process.)

    But in addition to what appears in the printed version of the Orange Book, there is other information FDA maintains that is important to drug manufacturers and that we consider to be an extension of the Orange Book. Some of that information is identified on FDA’s Orange Book website as “Additional Resources.”  Thus, for example, for many years now FDA has published “Additions/Deletions for Prescription and OTC Drug Product Lists” and has provided monthly “Orange Book Data Files.” Those files can be quite helpful in pinpointing when a particular change occurred with respect to a particular drug product listing. (Other extensions of the Orange Book include the daily updated “Newly Added Patents or Delisted Patents” electronic Orange Book search function . . . and perhaps even the recently published ANDA “Program Fee List,” which FDA prepared for GDUFA II user fee purposes, but that can assist with determining what ANDAs listed in the discontinued section of the Orange Book have merely been discontinued and which have had their approval withdrawn.)

    FDA’s latest additional resource is a list called “Reference Listed Drugs by ANDA Reference Standard List.”  Dated April 2017 and published last week for the first time, the new list is described by FDA as follows:

    This list refers to drug products approved under an Abbreviated New Drug Application (ANDA) that FDA has selected as reference standards and the associated reference listed drugs (RLDs). The purpose of this list is to assist applicants submitting an ANDA to seek approval of a generic drug in identifying an RLD when an ANDA RS has been selected. If the applicant has a question about which listed drug it should refer to as the RLD, the applicant may consult with FDA (refer to section 1.4 Reference Listed Drug and Reference Standard of the Orange Book Preface for more information).

    This list is updated monthly. Information in this list is sorted by Active Ingredient(s), Dosage Form, Route, Trade Name, Applicant Name and Strength. Additional information included are marketing status (RX, OTC, DISCN), Application Number, Product Number, and approval date of the Reference Standard.

    The new list is an outgrowth of FDA’s retooling of the 37th (2017) edition of the Orange Book to identify RLDs (i.e., NDA-approved drug products) and Reference Standards (i.e., an NDA- or ANDA-approved drug product used for bioequivalence testing purposes) and carves out of the Orange Book a select category of ANDA-approved Reference Standards. We previously posted on the retooling of the Orange Book and FDA’s guidance document, titled “Referencing Approved Drug Products in ANDA Submissions,” which delves into the details of RLD and Reference Standard status and designation.

    FDA Extends the Future Compliance Deadlines for Newly Deemed Tobacco Products by 90 Days

    As we previously reported, FDA issued a final rule in May 2016 that extended the agency’s authority to regulate all tobacco products, including e-cigarettes, cigars, hookah tobacco and pipe tobacco, among others. The final rule contained numerous compliance deadlines for manufacturers and retailers of these products.

    As FDA explained in a “Web Statement” dated May 3, 2017, in lawsuits over the final rule involving e-cigarettes, cigars, and pipe tobacco, FDA had stated that it would defer enforcement of all future compliance deadlines for these particular products for three months. The Web Statement explains that the three-month extension applies to the future compliance deadlines for all categories of newly regulated products, not just those products involved in the lawsuits. FDA said that the extension “will allow new leadership at the FDA and the Department of Health and Human Services additional time to more fully consider issues raised by the final rule that are now the subject of multiple lawsuits in federal court,” and said that it would “issue guidance describing its position in the near future.”

    FDA has now announced the availability of that guidance. The extension applies to compliance deadlines set for May 10, 2017 or later, and includes deadlines for the submission of cigar warning label plans, registration of manufacturers and listing of products, ingredient listing, the submission of health documents, substantial equivalence exemption requests, substantial equivalence applications, premarket tobacco product applications, and harmful and potentially harmful constituent reports. However, any compliance deadline that occurred before May 10, 2017, such as mandatory age and photo-ID checks, is not affected. The new compliance dates are detailed in a chart that accompanies the guidance.

    Categories: Tobacco

    DEA Administrative Decisions Update: What’s Prescribed in Vegas . . . Has Got to Stay in Vegas

    On April 17, 2013, Dr. David A. Moon was held up at a TSA checkpoint at a Las Vegas airport. Law enforcement officers stopped the physician—the holder of DEA registrations in Tulsa, Oklahoma, and Las Vegas, Nevada—carrying an unregistered firearm, and found in his carry-on luggage drugs in pill bottles labeled for other individuals, drugs in unlabeled pill bottles, and other loose drugs.  The physician was placed under arrest, and a subsequent DEA investigation ensued.

    On December 8, 2015, DEA issued an order to show cause (OSC) alleging that the physician (1) possessed controlled substances with intent to redistribute them to individuals for whom they were not originally dispensed, (2) accepted controlled substances from patients (i.e., non-DEA registered sources) and redistributed them to other patients, (3) failed to conduct a biennial inventory, (4) had shortages of controlled substances and was missing purchase records, and (5) issued prescriptions in Nevada under his Oklahoma license. On top of that, DEA alleged that both Oklahoma and Nevada’s medical boards had revoked his state license to handle controlled substance.

    The physician never responded to the OSC, and the Acting Administrator issued a Final Order over a year later on April 27, 2017. Unfortunately, the Administrator declined to rely in his opinion on most of the juicy facts—i.e., the attempted escape from Vegas, the illicit drugs and weapons, and the airport arrest—and determined that DEA had failed to provide sufficient factual or evidentiary support for many of the allegations (e.g., the arrest report submitted on evidence by DEA did not identify that the pills in the physician’s possession were controlled substances).

    The Administrator likely left out the interesting facts because he did not need to rely on them to render a decision: The Administrator found that there was evidence that the physician lacked state authority to handle controlled substances (see our previous post here on state authority cases) after both medical boards revoked his state licenses, and that the physician’s improper recordkeeping and issuance of prescriptions in states without proper registration were evidence that his continued registration was not in the public interest. Accordingly, the Administrator revoked the physician’s registration.

    Probably the most interesting takeaway from this decision is the Administrator’s discussion of Factor One of the CSA’s public interest factors for practitioners found in 21 U.S.C. § 823(f), specifically the “recommendation of the appropriate State licensing board or professional disciplinary authority.”

    Historically, DEA has taken a broad interpretation of this factor to include any form of disciplinary action taken against the registrant (e.g., probation, suspension, revocation, restoration). See, e.g., Tyson D. Quy, M.D., 78 Fed. Reg. 47412, 47417 (Aug. 5, 2013); Daniel Koller, D.V.M., 71 Fed. Reg. 66975, 66981 (Nov. 17, 2006); Saihb S. Halil, M.D., 64 Fed. Reg. 33319, 3320-21 (June 22, 1999); William E. Brown, D.O., 58 Fed. Reg. 64004, 64005 (Dec. 3, 1993).

    The plain language of the statute suggests a stricter interpretation, such as an actual recommendation from the state board to DEA, and this interpretation is more consistent with 21 U.S.C. § 824(a)(3)’s separate ground for revocation based on a loss of state authority. (See this law review article for a fuller analysis and critique of DEA’s historic Factor One precedent.)

    Breaking from tradition, the Administrator made an interesting statement, perhaps signaling an agency switch in precedent to a strict reading of Factor One. In a footnote, the Administrator noted that there was no evidence relating to a Factor One analysis, despite the prior disciplinary actions by the state boards:

    As to factor one, there is no evidence that either the Oklahoma State Board of Osteopathic Examiners or the Nevada State Board of Osteopathic Medicine made a recommendation to DEA; both, however, revoked Registrant’s licenses to practice osteopathic medicine.

    82 Fed. Reg. 19385, 19389 n.9 (Apr. 27, 2017).

    This development may be a positive one for practitioner registrants, or it may be a distinction without a difference. The more strict, plain language interpretation of Factor One could allow a practitioner in an administrative hearing to request a recommendation from the appropriate state licensing board (even after a license suspension or probation), and an adverse state action will not necessarily count against the registrant in the public interest determination.  However, that specific determination did not need to be made here, because the practitioner ultimately lacked state authority continue to handle controlled substances.

    LDTs: The Saga Continues

    Over its ten years the FDA Law Blog has posted numerous stories about FDA's regulation of laboratory developed tests (LDTs) (see, e.g., here, here, and here)  Yet, the story of FDA's efforts to regulate LDTs goes back even further than the FDA Law Blog, to 1992.  While there have been other regulatory initiatives that have lasted longer – the OTC review, DESI review, and the program to end Class III 510(k) devices spring to mind– the 25 year LDT saga has had a healthy run.  
     
    Hyman, Phelps & McNamara, P.C. Director Jeff Gibbs recently published in the FDLI Update an article that summarizes this 25-year history.  The article, titled "LDTs: The Saga Continues," summarizes the tale of LDT regulation, from FDA's initial statement of authority through developing a plan to regulate to LDTs, culminating in FDA's issuance of a Discussion Draft about how LDTs might someday be regulated in the future.  For devotees of LDTs – or of epic efforts to regulate a class of products – it will be riveting reading.  And for those who have not read about laboratory developed tests before, and never thought about them, this succinct summary is the one to read.

    ACI’s 5th Annual FDA Boot Camp: Devices Edition

    The American Conference Institute’s (“ACI’s”) 5th annual “FDA Boot Camp: Devices Edition” conference is coming up fast! The conference will take place from July 26-28, 2017 in Chicago, Illinois.

    ACI’s FDA Boot Camp: Devices Edition delivers in-depth coverage of FDA regulatory law to professionals who work in conjunction with the medical device industry. In addition to providing a “basic training,” ACI’s brand new 2017 agenda offers “advanced training” sessions covering the “ins and outs” of applying this knowledge to real-life situations.  Highlights from this year’s program include a “Ripped from the Headlines” section covering the recent hot issues of 21st Century Cures Act, Cybersecurity, and Digital Health, and their impact on FDA practice, and an in-depth Post-Conference Skills session, providing an interactive, step-by-step journey through the submission process with strategies and tips for success.

    A distinguished faculty of top FDA regulatory device experts — a “Who’s Who of the FDA Bar” — will share their knowledge and give you critical insights on:

    • The organization, jurisdiction, functions, and operations of FDA
    • An overview of medical device regulations and classification
    • Clinical trials and IDEs
    • The 510(k), PMA, and de novo pathways and choosing the right one
    • Device labeling, promotion, and related First Amendment concerns
    • General post-market controls and MDRs
    • Quality Systems Regulation and UDI
    • Understanding FDA’s Enforcement authority and how to remain compliant
    • Recalls and Withdrawals

    Hyman, Phelps & McNamara, P.C.’s Jeffrey N. Gibbs will be speaking at a session titled “Low to Moderate-Risk Devices: Weighing the Pros and Cons of 510(k) Clearance vs. De Novo Pathways.” FDA Law Blog is a conference media partner. As such, we can offer our readers a special 10% discount.  The discount code is: P10-670-FDALB17.  You can access the conference brochure and sign up for the event here.  We look forward to seeing you at the conference.

    Categories: Medical Devices