By Andrew J. Hull –

There has been an interesting development in the ongoing prosecution of a slew of former officers and employees of the New England Compounding Center (NECC). As you may recall, the NECC was responsible for shipping allegedly contaminated compounded steroid epidural products nationwide, allegedly resulting in widespread sickness and death (see our previous post here).

Last week, the federal district court in Massachusetts (Stearns, J.) dismissed the indictment as it pertained to two former NECC employees, Kathy Chin and Michelle Thomas. The indictment charged them with felony counts of dispensing drugs into interstate commerce without a valid prescription.  Under 21 U.S.C. § 353(b)(1), a drug is deemed misbranded while held for sale if it is dispensed by a pharmacist without a valid prescription.  The felony charge requires an intent to defraud or mislead.

The controversial aspect of indicting Chin and Thomas is that they were not pharmacists dispensing prescriptions in the way most people would understand that description. Rather, they were actually in charge of the final check of prescription drug packages for accuracy as to name, address, and contents. 

The indictment alleged that Chin and Thomas had to know these prescriptions were phony because the patient names were so unlikely, including celebrities, famous athletes, and fictional characters (e.g., “David Letterman,” “Jay Leno,” “Dale Earnhardt,” “Tony Tiger,” “L.L. Bean,” and “Filet O’fish”). The government took the position that their incidental role in checking the packages for the phony prescriptions made them just as guilty of the crime as the pharmacists who dispensed the drugs without a valid prescription.

The court, however, held that the FDC Act did not provide fair notice to the defendants that their activities would constitute “dispensing.” The court noted that the FDC Act does not define the word “dispensing,” and held that the word should be given its meaning in common parlance within the statutory context:

In the world of pharmacology, a pharmacist engages in the act of dispensing when she “fill[s] a medical prescription.” Stedman’s Medical Dictionary (28th ed. 2014).  In other words, a pharmacist dispenses a drug when she acts in her role as a licensed professional authorized to fill (put together) a medical prescription for delivery to a patient.

Order at 8.

Absent the constitutional due process that fair notice provides to defendants informing them that their activities are covered under a criminal statute, the court ruled that the indictment, as it pertained to Chin and Thomas, failed. Specifically, the court held that because the defendants’ conduct was only “incidental” to the activity of dispensing, the FDC Act did not provide them with fair notice that their conduct violated the FDC Act:

Returning to basics, the issue in this case is one of fair notice. Would a reasonable person, even a reasonable pharmacist, understand from the indictment that by matching orders to packages prior to their being shipped, she was criminally liable for participating in the filling of a prescription that she had never approved (or is even alleged to have seen), and as a result was guilty of dispensing (misbranding) the prescribed drug with the intent to defraud?  The answer, as best as I can determine, is that she would not.  Absent allegations of conduct amounting to fair notice of a crime under the [FDC Act], the indictment fails.

Id. at 11-12.

Criminal cases entertaining constitutional due process challenges of fair notice under the FDC Act are rare. See, e.g., Kordel v. United States, 335 U.S. 345, 348-49 (1948); United States v. Zenker, No. 94-50616, 1996 WL 468614 (9th Cir. Aug. 16, 1996).  We could only locate a single case in the long history of the FDC Act that actually dismissed criminal charges under a “fair notice” due process theory. United States v. Geborde, 278 F.3d 926, 932 (9th Cir. 2002) (holding that the FDC Act’s “held for sale” provision did not provide fair notice to a doctor that his conduct of providing friends with homemade (i.e., misbranded) drugs for free was covered under the FDC Act).  

Recent Supreme Court case law has expanded the “fair notice” concept as a check against government regulation and prosecution of people in the regulatory context. See generally FCC v. Fox Television Stations, Inc., 132 S. Ct. 2307 (2012).  We anticipate there may be other challenges to FDA enforcement cases on this ground.

By James E. Valentine & Karla L. Palmer –

On October 6, 2016, the Food and Drug Administration (FDA or the Agency) amended its regulations to update the list of drugs that may not used in compounding under the exceptions set forth in sections 503A and 503B of the Federal Food, Drug, and Cosmetic Act (FDCA).  This list reflects those drugs that have been withdrawn or removed from the market because the drugs or components of such drugs have been found to be unsafe or not effective. See 21 C.F.R. § 216.24.  FDA originally published its withdrawn or removed list back in 1999.  FDA states its primary focus since the 1999 final rule (and the 2014 proposed rule) has been on whether the drug products are unsafe.  FDA notes that it may add to the list to include products that are not effective, or update the list to include additional products that are unsafe.  These updates will continue to occur through notice and comment rulemaking; FDA will also (typically) only add to or modify the list after consultation with the Pharmacy Compounding Advisory Committee (PCAC).  FDA also states it will create and maintain a web page about proposed drugs that it is considering adding to the list.   A single list will apply to both sections 503A and 503B.

Revisions to the Withdrawn or Removed List

Consistent with the July 2, 2014 proposed rule (which we covered here), public comment thereon, and after soliciting input from FDA’s PCAC, the final rule adds the following  24 drugs to the withdrawn or removed list, which is codified at 21 C.F.R. § 216.24:

In addition, the rule creates an exception for ophthalmic solutions of bromfenac. No drugs previously listed were removed from the list. 

Exceptions to the List  

While most drugs on the list may not be compounded in any form, in FDA’s preamble to the rule, the Agency clarifies two exceptions. First, when FDA provides an exclusion for a particular formulation, indication, dosage form, or route of administration for a drug on the list (e.g., ophthalmic solutions of bromfenac), this indicates that there is an approved drug containing the same active ingredients that has not been withdrawn or removed from the market because it has been found to be unsafe or not effective.  As such, that particular formulation, indication, dosage form, or route of administration that is expressly excluded from the list may still be compounded under sections 503A and 503B.  

Second, some drugs are listed only with regard to certain formulations, concentrations, indications, routes of administration, or dosage forms because they have been found to be unsafe or not effective (e.g., oral and parenteral diethylstilbestrol containing 25 mg or more per unit dose).  As such, other formulations, concentrations, indications, routes of administration, and dosage forms not on the list may still be compounded.  

In addition, the preamble notes that just because a drug is on the withdrawn or removed list “does not mean it is banned completely and absolutely from compounding.” If warranted, FDA states that drugs on this list could be made available under an expanded access program under 21 C.F.R. part 312, subpart I. 

By Jennifer M. Thomas –

You might have read in our blog post two weeks ago that Quality Egg, LLC executives Austin (Jack) and Peter DeCoster had petitioned for panel rehearing and rehearing en banc of the Eight Circuit opinion affirming their three-month prison sentences.  Last Friday, the Eighth Circuit denied the DeCosters’ petitions.  Three judges voted to rehear the case en banc, but they were a minority of the ten active judges on the Eighth Circuit.

From the Eighth Circuit’s perspective, the case is over.  However, the DeCosters have the right to seek a writ of certiorari from the Supreme Court, and we expect they will.  We will keep you updated on any further developments in the case.

By Anne K. Walsh & Robert A. Dormer –

As we predicted it might, FDA effectively shut down a drug facility based solely on its conduct during an FDA inspection, without any observed GMP or safety concern related to the company’s products or procedures.  In a September 15, 2016 Warning Letter issued to Nippon Fine Chemical Co., Ltd., FDA cited the provision deeming drugs adulterated based on an owner or operator limiting or refusing inspection, 21 U.S.C. § 351(j), and tersely identified three ways in which the company violated this provision:

1. Barring access to areas – the quality control manager allegedly directed employees to “stand shoulder-to-shoulder” to bar access to portions of the laboratory and equipment.
2. Refusal to provide copies of documents – although the FDA investigator appears to have reviewed complaint records, the firm allegedly refused to provide take-home copies of these records for the investigator.
3. Limiting photography – the quality assurance manager allegedly prevented the investigator from taking photographs of a piece of equipment used to manufacture drugs; it is not clear from the Warning Letter how exactly the manager prevented pictures from being taken.

FDA has used this adulteration provision only a handful of times since it was added to the Federal Food, Drug, and Cosmetic Act (FDC Act) in 2012. In earlier Warning Letters, the refusal was an add-on violation to other GMP violations.  Here, FDA bases the entire Warning Letter solely on the firm’s refusals, without alleging any other issues.  Notably, the company’s refusal to allow photographs is identified as evidence of refusal.  As discussed in earlier posts (here and here), FDA’s authority to take pictures has never been tested by the courts, yet FDA asserts it has this power in its guidance and in Warning Letters as if it that authority is accepted in FDC Act jurisprudence.

Also, because the recipient of the instant Warning Letter is a foreign firm, the company’s refusal during the inspection results in a ban of that company’s products into the United States. As referenced in the Warning Letter, FDA placed the company on Import Alert 99-32 for the same reasons underlying the Warning Letter.  The Import Alert means that FDA can detain, without physical examination, products imported to the United States, and can continue to detain these products until it completes an inspection.  The Import Alert further states that inspection reports from third parties may help FDA prioritize inspection requests, but it is clear FDA will not permit product to enter the United States without conducting its own inspection.  Given the limited availability of foreign investigators, timing for relief of a firm placed on this list is unknown.  

One observation about Import Alert 99-32: although it includes companies from seven different countries (Canada, China, Hong Kong, Hungary, India, Italy, and Japan), the breakdown of countries placed on the list due to import refusals skews heavily to Chinese and Indian firms. We can only speculate as to why these countries have more targets, and note that companies in these highly scrutinized countries should be made aware of this provision and its dire implications.

Lastly, this is not an issue limited to foreign inspections. A domestic firm also received a Warning Letter in 2014 for, among other things, refusing to allow photographs of its medicated feed storage conditions.   That Warning Letter was closed out after eight months, which is lightning speed for any close-out letter.  This timing would be near impossible for a foreign firm, which would require a scheduled reinspection to be prioritized above the queue of other foreign establishment inspections.

By Kurt R. Karst –    

A mere 1 year and 8 months after FDA’s February 6, 2015 publication of a Proposed Rule to implement certain provisions of the December 8, 2003 Medicare Modernization Act (“MMA”), Pub. L. No. 108-173, 117 Stat. 2066, and 12 years and about 10 months after the MMA’s enactment, we finally have new Hatch-Waxman regulations. On October 6, 2016, FDA published in the Federal Register a Final Rule, titled “Abbreviated New Drug Applications and 505(b)(2) Applications,” that will forever alter the Hatch-Waxman landscape, and that will likely fuel controversies and provide fodder for litigation for years to come. The Final Rule is the latest – and most significant – in a series of actions intended by FDA to preserve the balance struck with the September 24, 1984 enactment of the Hatch-Waxman Amendments between benefits from the availability of low-cost and high quality generic drugs and the need to reward those manufacturers who bring innovative (i.e., brand-name) drug products to market.

While the focus of the Final Rule is only about 10 pages of MMA statutory text, the document spans 79 triple-column pages in the Federal Register, including about 22 pages of regulations that will be codified in the Code of Federal Regulations as of December 5, 2016.  Several proposals FDA made in February 2015 (see our previous post here) are retained in the Final Rule, while a few have been dropped (either because of court decisions, or because FDA decided to move in a different direction). Perhaps most significant is FDA’s decision to drop (at least for now) a proposal to defer to a 505(b)(2) or ANDA applicant’s interpretation of the scope of a patent that it does not own (and, in particular, for a method-of-use patent that is identified in the Orange Book with a patent use code and narrative).  Instead, FDA will institute a patent listing dispute mechanism whereby the “NDA holder must provide a narrative description (no more than 250 words) of the NDA holder’s interpretation of the scope of the patent that explains why the existing or amended ‘use code’ describes only the specific approved method of use claimed by the patent for which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner of the patent engaged in the manufacture, use, or sale of the drug product.”

As you can imagine, we’re still poring over the Final Rule. We’ll probably put together a Summary and Analysis. But for now, below are some highlights (courtesy of FDA) of the changes compared to the Proposed Rule (including references to the relevant section in the Final Rule). Also, we’ve put together a 100-page Regulation-by-Regulation Redline of the new regulations compared to FDA’s existing regulations. We hope you find it helpful in navigating the vast waters of FDA’s Final Rule.   

Final Rule Description of Change From Proposed Rule

21 C.F.R. § 314.3

Definitions (§ 314.3(b))

• Revises the definition of 505(b) applications to clarify that it is an NDA for which “at least some of” the investigations relied upon by the applicant for approval were not conducted by or for the applicant and for which the applicant has not obtained a right o f reference or use (see section V.P. 3). 
• Revises the definition of “acknowledgment letter” to delete the reference to 505(b)(F) applications and limit the applicability of this term to ANDAs (see section V.A.1).
• Revises the definition of “commercial marketing” to clarify that it includes the introduction or delivery for introduction into interstate commerce of the reference listed drug by the ANDA applicant (see section V.A.2).
• Revises the definition of “date of approval” to incorporate section 505(x) of the FD&C Act (see section V.A.3).
• Revises the definition of “listed drug” to clarify that a drug product is deemed to be a listed drug on the “date of approval” of the NDA or ANDA (see section V.A.3).
• Revises the definition of “substantially complete application”- to describe an ANDA that on its face is sufficiently complete to permit a substantive review and clarify that “sufficiently complete” means that the ANDA contains all the information required under section 505(j)(2)(A) of the FD&C Act and does not contain a deficiency described in § 314.101(d) and (e) (see section V.A.5).
• Revises the definition of “tentative approval” to include a notification that an NDA or ANDA otherwise meets the requirements for approval under the FD&C Act but cannot be approved because there is a period of exclusivity under section 505E of the FD&C Act (see section V.A.7).

21 C.F.R. § 314.50 

Patent claiming drug substance, drug product or method of use (§ 314.50(f)(1)(i)(C))

• Clarifies that the requirement for a 505(b)(2) applicant to provide an appropriate certification or statement for each patent listed in the Orange Book: for a pharmaceutically equivalent drug product applies to one such pharmaceutically equivalent drug product approved in an NDA before the date of submission of the original 505(b)(2) application and not a resubmission or a supplement (see section V.H).

Method-of-use patent (§ 314.50(i)(l)(iii)(A))

• Clarifies that a 505(b)(2) applicant may submit a statement under section 505(b)(2)(B) of the FD&C Act if the applicant is not seeking approval for an “indication or other condition of use claimed by a method-of-use patent rather than “any” indications or other conditions of use claimed by the method-of-use patent (see section V.C.1).

Untimely filing of patent information (§ 314.50(i)(4))

• Provides that an amendment to the description of the approved method(s) of use claimed by the patent will not be considered timely filing of patent information if the amendment is submitted within 30 days of a decision by the USPTO or a Federal court that is specific to the patent and alters the construction of a method-of-use claim(s) of the patent, and the amendment contains a copy of the decision (see section V.B.2.b).

21 C.F.R. §  314.52 

Sending the notice of paragraph IV certification (§ 314.52(b))

• Requires that a 505(b)(2) applicant send a notice of a paragraph IV certification on or after the date of filing described in § 314.101(a)(2) or (3), but not later than 20 days after the date of the postmark on the “paragraph IV acknowledgement letter” (see section V. D.1.a).
• Removes the requirement for a 505(b)(2) applicant to submit an amendment at the time it sends notice of a paragraph IV certification and permits submission of a single amendment that contains all required information within 30 days of the date on which the last notice is received (see section V.D.3.b).

Content of a notice of paragraph IV certification (§ 314.32(c))

• Omits the proposed requirement that notice of a paragraph IV certification must contain a statement that the 5O5(b)(2) applicant has received the paragraph IV acknowledgement letter (see section V.D.1.a).

Amendment or supplement to a 505(b)(2) application (§  314.52(d))

• Requires that after the date of filing of a 505(b)(2) application the applicant must send notice of a paragraph IV certification included in an amendment or supplement at the same time that the amendment or supplement is submitted to FDA (see section V.D.1.b).

21 C.F.R. § 314.53 

General requirements and  Reporting Requirements  (§ 314.53(b)(1) and (c)(2))

• Clarifies that if the method(s) of use claimed by the patent does not cover an indication or other approved condition of use in its entirety, the NDA holder’s use code must describe only the specific approved condition of use claimed by the patent for which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner of the patent engaged in the manufacture, use or sale of the drug product (see section V.B.1.c).
• Clarifies that the NDA ho1der submitting information on the method-of-use patent must identify with specificity the section(s) and subsection(s) of the approved labeling that describes the method(s) of use claimed by the patent submitted (see section V.B.1.c).

Other Reporting Requirements (§ 314.53(r)(2))

• Omits the proposed requirement for an NDA holder to include information on whether a patent is a reissued patent of a patent previously submitted for listing (see section V.B.1.e.).
• Maintains the current requirement for an NIDA holder to include information on whether the patent has been submitted previously for the NDA (see section V.B.1.d).
• Adds the requirement for an NDA holder to identify, for a patent that has been submitted previously  for listing, all changes from the previously submitted patent information and specify whether the change is related to the patent or related to an FDA action (see section V.B.2.b).

Supplements (§ 314.53(d)(2))

• Omits the proposal to require an NDA holder to submit a statement with an NDA supplement if the NDA holder is not received to resubmit patent information pursuant to § 314 53(d)(2)(ii)(A) (see section V.B.2.a).

Where to send submissions of Forms FDA 3542a and 3542 (§ 314.53(d)(4)

• Designate the CDER Central Document Room, rather than the OGD Document Room, as the official repository for submission of Form FDA 3542 and clarifies that Form FDA 3542 can be submitted electronically (see section V.B.2.c).

Submission date of patent information (§ 314.53(d)(5))

• Establishes that the submission date of patent information is the earlier of the date on which Form FDA 3542 is date-stamped by the CDER Central Document Room or officially received by FDA in an electronic format submission that complies with § 314.50(1)(5) (see section V.B.2.d).

Requests by persons other than the NDA holder (§ 314.53(f)(1))

• Requires that a person submitting a patent listing dispute for a method-of-use patent include a statement of dispute that is only a narrative description (no more than 250 words) of the person’s interpretation of the scope of the patent (see section V.B.4.a).
• Requires that a person submitting a patent listing dispute directed to a drug substance, drug product, or method-of use patent only include information in the statement of dispute for which the person consents to disclosure because FDA will send the text of the statement to the applicable NDA holder without prior review or redaction.
• Requires that the NDA holder’s response to a patent listing dispute directed to a drug substance, drug product, or method-of-use patent include a signed verification of the accuracy and completeness of the response (see section V.B.4.a).
• Requires that the NDA holder’s response to a patent listing dispute for a method of use patent also include a narrative description (no more than 250 words) of the NDA holder’s interpretation of the scope of the patent that explains why the existing or amended “use code” describes only the specific method of use claimed by the patent for which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner of the patent engaged in the manufacture, use, or sale of the drug product.  Requires that the narrative description only contain information for which the NDA holder consents to disclosure because FDA will send the text of the statement to the person who submitted the patent listing dispute without review or redaction (see section V.B.4.a).
• Provides that FDA will promptly post information on its Web site regarding whether a patent listing dispute has been submitted for a published description of a patented method of use for a drug product and whether the NDA holder has timely responded to the patent listing dispute (see section V.B.4.a).
• Omits the proposal to review a proposed labeling carve-out with deference to the 505(b)(2) and/or ANDA applicant(s)’ interpretation of the scope of the patent in certain circumstances, which is not being finalized at this time (see section V.B.4.a). 

21 C.F.R. § 314.54 

Procedure for submission of a 505(b)(2) application  requiring investigations for approval of a new indication for, or other change from, a listed drug (§  314.54(a)(l))

• Clarifies that the requirement for a 505(b)(2) applicant to identify one pharmaceutically equivalent drug product approved in an NDA as a listed drug (or an additional listed drug) relied upon applies before the date of submission of the original 505(b)(2) application and not a resubmission or a supplement (see section V.H.).

21 C.F.R. § 314.60 

Patent certification requirements (§ 314.60(f))

• Requires that if an amendment the 505(b)(2) application does not contain a patent certification or statement, the applicant must verify that the proposed change described in the amendment is not: (1) A new indication or other condition of use; (2) a new strength. (3) an other-than-minor change in product formulation; or (4) a change to the physical form or crystalline structure of the active ingredient (see section VF.1).

21 C.F.R. § 314.70 

Patent certification requirements (§ 314.70(i))

• Omits proposed § 314 70(i) on patent certification requirements for 505(b)(2) supplements, which is not being finalized at this time (see section V.F.2).

21 C.F.R. § 314.90 

Waivers (§ 314.90)

• No substantive changes from the proposed rule (see section V.L.).

21 C.F.R. § 314.93 

Petition to request a change from a listed drug (§ 314.93)

• No substantive changes from the proposed rule (see section V.I).

21 C.F.R. § 314.94 

Method-of-use patent (§ 314.94(a)(12)(iii)(A))

• Clarifies that an ANDA applicant may submit a statement under section 505(j)(2)(A)(viii) of the FD&C Act if the applicant is not seeking approval for “an” indication or other condition of use claimed by a method-of-use patent rather than “any” indications or other conditions of use claimed by the method-of-use patent (see section V.C.1).

Untimely filing of patent information (§ 314.94(a)(12)(vi))

• Provides that an amendment to the description of the approved method(s) of use claimed by the patent will not be considered untimely filing of patent information if the amendment is submitted within 30 days of a decision by the USPTO or a Federal court that is specific to the patent and alters the construction of a method-of-use claim(s) o f the patent, and the amendment contains a copy of the decision (see section V.B.2.b).
• After request to remove a patent or patent information from the list (§ 314.94(a)(12)(viii)(B)).
• Omits the proposed requirement for a first applicant to lawfully maintain a paragraph IV certification to an original patent that has been reissued, which is not being finalized (see section V.B.1.e and V.E.3).

21 C.F.R. § 314.95 

Sending the notice of paragraph IV certification (§ 314.95(b))

• Deletes the reference to an “acknowledgment letter” in § 314.95(b)(1) and (b)(2) because an ANDA applicant will now receive a “paragraph IV acknowledgment letter” if the ANDA contains a paragraph IV certification  before the ANDA is received (see section V.D.1 a).
• Removes the requirement for an ANDA applicant to submit an amendment at the time it sends notice of a paragraph IV certification and permits submission of a single amendment that contains all required information within 30 days of the date on which the last notice is received (see section V.D.3.b).

21 C.F.R. § 314.96 

Patent certification requirements (§ 314.95(d))

• Clarifies that a paragraph VI certification to a patent or patent claim for which an ANDA applicant previously submitted a paragraph IV certification is a “recertification” rather than an “amendment” of the paragraph IV certification (see section V.F.3).
• Requires that if an amendment to the ANDA does not contain a patent certification or statement, the applicant must verify that the proposed change described in the amendment is not:  (1) a new indication or other condition of use; (2) a new strength; (3) an other-than-minor change in product formulation; or (4) a change to the physical form or crystalline structure of the active ingredient (see section V.F.1).

21 C.F.R. § 314.97 

Patent certification requirements (§ 314.97(c))

• Omits proposed § 314.97(c) on patent certification requirements for ANDA supplements, which is not being finalized at this time (see section V.F.2).

21 C.F.R. § 314.99 

Other responsibilities of an applicant of an ANDA (§ 314.99)

• No substantive changes from the proposed rule (see section V.L.).

21 C.F.R. § 314.101 

Receiving an ANDA (§ 314.101(b))

• Clarifies current Agency practice that following a refuse-to-receive decision, an ANDA applicant may:  Withdraw the ANDA under § 314.99; correct the deficiencies and resubmit the ANDA; or take no action, in which case FDA may consider the ANDA withdrawn after 1 year (see section V.J.2).
• Omits the proposed administrative consequence for ANDA applicants who fail to send notice of paragraph IV certification within the statutory timeframe (see section V.J.3).

NDA or ANDA deficiencies (§  314.101(d))

• Clarifies that FDA will consider the nature (e.g., major or minor) of the deficiencies, including the number of deficiencies in the ANDA in determining whether an ANDA is incomplete on Its face (see section V.J.2).
  Regulatory Deficiencies (§ 314.101(e))
• Clarifies that FDA will refuse to file a 505(bX2) application or refuse to receive an ANDA if submission is not permitted under sections 505(c)(3)(E)(ii), 505(j)(5)(F)(ii), 505A(b)(1)(A)(i)(I), 505A(c)(1)(A)(i)(I), or 505E(a) of the FD&C Act (see section V.A.7).

21 C.F.R. § 314.105 

Approval of an NDA and an ANDA (§  314.105)

• Removes the proposed statement that an NDA is approved on the date of the issuance of the approval letter, and clarifies that a new drug product may not be marketed until the “date of approval,” rather than the “date of the approval letter” (see section V.A.3).
• Clarifies that approval of a 505(b)(2) application or ANDA also may be delayed by a period of  exclusivity for the listed drug under section 505E of the FD&C Act (see section V.A.7)

21 C.F.R. § 314.107 

Disposition of patent litigation (§ 314.107(b)(3))

• Revises § 314.107(b)(3)(v) to more dearly describe the timing of approval o f a 505(b)(2) application or ANDA when a preliminary injunction is entered by a Federal district court before the expiration of a 30-month stay (or 7-1/2 years where applicable) (see section V.M.2.g).
• Clarifies that the 30-month period (or 7-1/2 years where applicable) will be terminated if the court(s) enter(s) an order of dismissal without a finding of infringement in each pending suit for patent infringement brought within 45 days of receipt of the notice of paragraph IV certification sent by the 505(b)(2) or ANDA applicant (see section V.M.2.j).
  Delay due to exclusivity (§ 314.107(d)).
• Clarifies that approval of a 505(b)(2) application or ANDA also may be delayed by a period of exclusivity for the listed drug under section 505E of the FD&C Act (see section V.M.4).

Notification of court actions or written consent to approval (§ 314.107(e))

• Requires submission of a copy of any “written consent to approval” by the patent owner or exclusive patent licensee, rather than any “.documented agreement,” and clarifies that a copy of any order entered by the court terminating the 30-month or 7-1/2.-y ear period includes an order described in § 314.107(b)(3)(vii) and (vii) (see section V.M.5).
• Provides that all information required by § 314 107(e)(1) must be sent to the applicant's NDA or ANDA rather than to OGD or the appropriate division in OND (see section V 3.1.5).

21 C.F.R. § 314.108 

New drug product exclusivity(§ 314.108)

• No substantive changes from the proposed rule.

21 C.F.R. § 314.125 

Refusal to approve an NDA (§ 314.125)

• Clarifies that FDA may refuse to approve a 505(6)(2) application if it does not contain a patent certification or statement pith respect to each listed patent for a drug product approved in an NDA that is pharmaceutically equivalent to the drug product for which the original 505(b)(2) application is submitted and that was approved before the original 505(b)(2) application was submitted (see section V.H).

21 C.F.R. § 314.127 

Refusal to approve an ANDA (§ 314.127)

• No substantive changes from the proposed rule (see section V.L.).

21 C.F.R. § 320.1 

Definitions (§ 320.1)

• No substantive changes from the proposed rule (see section V.A).

21 C.F.R. § 320.23 

Basis for measuring in vivo bioavailability or demonstrating bioequivalence (§ 320.23)

• No substantive changes from the proposed rule (see section V.N).

By Alexander J. Varond –

One day before the program’s sunset, President Obama signed a bill to temporarily reauthorize the rare pediatric disease priority review voucher program for 3 months.  The program has had significant interest from industry, and the program’s extension on September 30 was the product of substantial efforts on the part of stakeholders, including rare disease advocates. 

This is the second short-term reauthorization of the program, which was originally slated to end in March 2016. Unlike the first reauthorization (which we discussed here), the Advancing Hope Act (S. 1878) was a more ambitious undertaking.  As such, it amended the definition of “pediatric rare disease,” likely expanding eligibility for the program.  We discussed the law’s impact on the program’s scope in a post last week.

The law makes several other key changes. First, the Advancing Hope Act now requires Sponsors to notify FDA of the Sponsor’s intent to request a pediatric voucher upon the submission of a rare pediatric disease product application.  This requirement comes into effect 90 days after the enactment of the Advancing Hope Act, which incidentally is just a few days prior to the program’s December 31, 2016 sunset.  Second, Sponsors are now expressly prohibited from receiving more than one priority review voucher per drug.

Reading the law makes it abundantly clear that the September 30, 2016 reauthorization is a stop-gap measure. Congress’s effort to quickly pass the bill and avoid creating a gap in the program, meant making a last-minute amendment to the program’s end date of at least September 2022 to December 31, 2016.  As a result of the last-minute amendment, some parts of the bill are fairly nonsensical.  For example, by 2022, GAO will be required to issue another report on the program, similar to the one it issued in March 2016.  It would be odd if the pediatric voucher program was not reauthorized past 2016 and yet the GAO was required to report on the program in 2022 (more than 5 years after the end of the program).

Members of Congress have expressed a strong desire to address FDA-related legislation (including the 21st Century Cures Act, which we discussed here) during the lame duck session of Congress after the November elections.  Part of this attention will go towards discussing the pediatric voucher program and its long term or permanent reauthorization.

Voucher User Fees for FY2017

FDA also recently released its user fees for redeeming tropical disease and pediatric vouchers.  Effective from October 1, 2016 to September 30, 2017, the Fiscal Year 2017 user fee is $2,706,000.  This is $21,000 less than the fee in FY2016.  We discussed how FDA calculates the user fee here.

In May, HP&M released a comprehensive FDA Deskbook, prepared by the same authors who provide the expertise and analysis contained in this blog.  Since then, the Deskbook has been well-received by individuals at companies of all sizes and sophistication. HP&M has secured a 25% discount for readers of this blog using this link, which will expire on November 25.  

By Riëtte van Laack –

On Sept. 27, 2016, FDA announced the availability of several documents regarding the “healthy” claim on foods.

Under the current regulation, the term “healthy” (or similar terms) – when used with an explicit or implicit claim or statement about a nutrient in the manner described in the regulation – is an implied nutrient content claim. 21 C.F.R. § 101.65(d). A food must meet certain requirements to be eligible for the “healthy” claim.

The “healthy” claim as an implied nutrient content claim got new attention in 2015, when FDA issued a Warning Letter to Kind LLC (Kind).  According to FDA, the bar products marketed by Kind as “healthy” did not meet the requirements for this claim because the fat content of the bars exceeded the limit for low fat claims. Kind subsequently submitted a Citizen Petition asking that FDA update the regulation to be more in line with the current Dietary Guidelines.

In the Sept. 27 announcements, FDA acknowledges that the regulation for “healthy” as a nutrient content claim is in need of an update. Since 1993, science has evolved and, among other things, Dietary Guidelines now draw distinctions among the types of fat (unsaturated fats vs saturated fats) in the diet. Also, as reflected in the updated nutrition labeling requirements, FDA now recognizes vitamin D and potassium as nutrients that should be encouraged in the diet. Therefore, FDA will review and consider revising the regulation. FDA announced two actions, i.e., the issuance of a guidance document and a request for information and comments.

Guidance: FDA Intent to Exercise Enforcement

FDA issued an immediately effective guidance which lays out conditions under which FDA intends to “exercise enforcement discretion relative to foods that use the implied nutrient content claim ‘healthy’ on their labels” while FDA is reconsidering the regulation defining “healthy.” Specifically, FDA’s Guidance announces that it intends to exercise enforcement discretion for products labeled as “healthy” that are not low in total fat, as long as the fat predominantly consists of unsaturated fats, and provided that the nutrition facts box declares the amounts of the poly and mono unsaturated fats. In addition, FDA intends to exercise enforcement discretion when the food contains less than ten percent of the Daily Value (DV) per reference amount customarily consumed (RACC) of vitamin A, vitamin C, calcium, iron, protein, and fiber, but the food contains at least 10% of the DV per RACC of vitamin D or potassium. For labels that do not use the updated nutrition facts panel, the manufacturer may use the old DVs. If a manufacturer uses the updated nutrition facts panel, the updated DVs for potassium and vitamin D must be used. In addition, the relevant nutrient(s) must be declared in the nutrition facts box.

Request for Information and Comments

In the Federal Register notice requesting information and comments, FDA asks for input on the Citizen Petition by Kind and on a range of issues related to the “healthy” claim, including:

• Is the term “healthy” most appropriately categorized as a claim based only on nutrient content?
• What types of food, if any, should be allowed to bear the term ‘‘healthy?”
• What nutrient criteria should be considered for the definition of the term “healthy?”
• What are the public health benefits, if any, of defining the term “healthy” or other similar terms in food labeling?
• What is consumers’ understanding of the meaning of the term “healthy” as it relates to food?

FDA indicates that, in addition to this request, it will plan other forums for public input. These actions appear to be the first of various actions to update FDA regulations regarding nutrient content and health claims to conform to the updated nutrition labeling regulations published in May, 2016. The review and updating process will not happen overnight. As FDA stated, it “may take some time, but we want to get it right.”

Information and comments must be submitted by Jan. 26, 2017.

By Jenifer R. Stach –

How often do we hear this familiar story: I submitted a request to FDA under the Freedom of Information Act (FOIA) but years later I have received no responsive records? Recently, two groups challenged FDA’s delays in processing FOIA requests. The court’s ruling in the case is quite noteworthy.

On September 20, 2016, in Treatment Action Group et. al v. Food and Drug Administration et. al, the United States District Court for the District of Connecticut granted FDA’s Motion for Summary Judgment regarding its rules and policies for expedited processing of FOIA requests. However, the court also ordered FDA to immediately produce to the FOIA requesters all responsive records that FDA has gathered to date.

Plaintiffs, Treatment Action Group (TAG) and Global Health Justice Partnership (GHJP), are seeking documents of clinical trial data, communications regarding clinical trial design, and the FDA approval process for the Hepatitis C virus drugs Sovaldi (sofosbuvir) and Harvoni (sofosburvir/ledipasvir).

TAG and GHJP are non-profit organizations. TAG is an independent AIDS research organization, while GHJP is affiliated with Yale Law School and the Yale School of Public Health. In a statement on the Yale Law School website, TAG and GHJP are seeking document production, “to make this data broadly available so that interested scientists can independently review that data and verify the drugs’ safety, efficacy, and cost-effectiveness.” FDA approved Sovaldi in December 2013, and Harvoni in October 2014.

On December 17, 2014, TAG and GHJP filed a FOIA request with FDA, including a request for expedited processing, a public interest fee waiver for duplication fees, and a fee limitation. On December 22, 2014, FDA denied the expedited processing request, stating that it would process the request in the order in which it was received. On January 26, 2015, TAG and GHJP filed an administrative appeal. On February 19, 2015, HHS sent a letter affirming the denial for expedited processing, stating that there was a failure to show a “compelling need” under 21 C.F.R. § 20.44(a). HHS stated that the FOIA request was in a queue at the Center for Drug Evaluation and Research (CDER) with an estimated processing time of 18 to 24 months. On April 1, 2015, TAG and GHJP sent a letter requesting reconsideration of the denial, to which FDA and HHS did not respond. On June 25, 2015, TAG and GHJP filed their complaint in court.        

Some interesting facts about the CDER FOIA process were revealed in the court’s September 20, 2016 decision. Between 2012 and 2014, CDER received over 8,000 FOIA requests. Between January 1st and September 30th 2015, CDER received 2,522 requests. During this latter period, CDER processed 2,507 requests. As of September 30, 2015, CDER had a backlog of 600 FOIA requests.

FDA submitted a Declaration in the court case that noted that in addition to responding to FOIA requests, CDER also responds to document requests from Congress, the United States Government Accountability Office (GAO), other Federal agencies, and foreign, state, and local government agencies. FDA asserted that responding to these other types of requests requires the attention of three employees, who are not able to respond to FOIA requests. The Declaration also asserted that CDER is burdened with production requests from litigation, and obligations imposed on CDER under the Food and Drug Administration Amendment Act of 2006 (FDAAA). CDER currently employs 40 full time employees and one full time contractor to deal with FOIA requests. FDA also asserted that CDER has implemented a new review process to increase efficiency and the quality of the work under review.

Under 5 U.S.C. § 552(a)(6)(E)(i) and FDA's regulation, 21 C.F.R. § 20.44(a), a requestor may demonstrate a “compelling need” for expedited treatment of the release of records because either, 1) “[a] failure to obtain requested records on an expedited basis could be expected to pose an imminent threat to life or physical safety of an individual,” or 2) “[w]ith respect to a request made by a person primarily engaged in disseminating information” there is an “urgency to inform the public concerning actual or alleged Federal Government activity.” The Connecticut court concluded that categories of records that fit within the “compelling need” exception to normal processing of FOIA requests are “narrowly applied.” Slip Op. at 12.

The court ruled that because Sovaldi and Harvoni may be used to treat a population of over 250,000 patients in 2015, there was not an “imminent threat to the life or safety of an individual” which would warrant expedited processing. Moreover, plaintiffs did not allege that there were specific medical problems that were caused or exacerbated by Sovaldi or Harvoni that could result in harm to patients absent access to the records requested from FDA. Slip Op. at 12-14.

With regard to whether there is an urgent need to inform the public concerning actual or alleged federal government activity, the court ruled that generally a requestor must be primarily engaged in the dissemination of information, to the exclusion of other main activities. Slip Op. at 15. TAG is an independent AIDS research and policy think tank, and GHJP is a science-based, non-profit initiative dedicated to “improving health systems and justice” with a primary objective of facilitating “open science, community engagement, and public health.” The court ruled that neither TAG nor GHJP were in the business of disseminating information as their primary activity. Slip Op. at 14-17.

With respect to the urgency to inform the public, the court noted that Sovaldi and Harvoni were approved in December 2013, and October 2014, respectively, and that by the time the plaintiffs filed their FOIA request in December 2014, there was no longer a sense of urgency to inform the public. Slip Op. at 17-19.

FDA unsuccessfully asserted that the case was moot because FDA had represented that plaintiffs’ FOIA request had reached the top of the queue. The court ruled that the case was not moot because FDA had not provided plaintiffs with any records. Slip Op. at 9-11.     

FDA also moved for a stay under Open America v. Watergate Special Prosecution Force, 547 F.2d 605 (D.C. Cir. 1976). FOIA requires an agency to determine whether to respond to a document request within 20 working days. The agency may also request an additional 10 working days for “unusual circumstances,” for instance when there is a need to examine a large volume of documents which are demanded in a single request. Once the agency has provided notice of the extension, if the request cannot be processed within 30 days, then the agency must notify the requestor either to limit the scope of the request or arrange an alternative time frame. Under 5 U.S.C. § 552(a)(6)(C)(i), if the Government can show that exceptional circumstances exist, and the agency is exercising due diligence, then a court may allow the agency additional time to complete a review of the records. To show exceptional circumstances, the agency must show that “(1) it is deluged with a volume of requests for information on a level unanticipated by Congress; (2) existing agency resources are inadequate to deal with the volume of the requests within the time limits established; and (3) the agency can show that it is exercising due diligence in processing the request.”  Slip Op. at 21. The court noted that other courts have ruled that FDA has been unable to show a deluge of unanticipated requests. Slip Op. at 23-26.  The Connecticut court concluded that the number of FOIA requests at FDA has actually decreased over the years, and that the additional non-FOIA requests were not unanticipated by Congress. As a result, the court denied the FDA motion to stay the proceedings. Because FDA “is both dealing with a predictable workload and not significantly understaffed, the court finds that the FDA is unable to show that its existing resources are inadequate.” Slip Op. at 25.  However, because FDA indicated that the FOIA request was the top of its queue, the court ordered FDA to produce all responsive documents gathered to date, and report back to the court by October 21, 2016, as to the documents yet to be produced, and a timeline for the remaining production. Slip Op. at 28.

In sum, the court largely adopted FDA’s arguments that the court should not give expedited treatment to this FOIA request. We expect FDA will rely on this ruling and other previous court rulings as a justification to process FOIA requests in a “first in-first out” queue system, without expediting most FOIA requests. Nevertheless, there are certain portions of the court’s ruling that may encourage other organizations to sue FDA if a FOIA request is not timely answered, and perhaps even seek expedited treatment for the processing of the request.  

By Serra J. Schlanger & Alan M. Kirschenbaum –

Judge Rya Zobel of the Federal District Court for the District of Massachusetts has dealt another blow to the Federal health care program antikickback statute (“AKS”) discount safe harbor, which drug and device manufacturers and their customers use to protect procompetitive discount arrangements. As we previously reported, on August 23, 2016, Judge Zobel denied Omnicare’s motion for summary judgement after concluding that Omnicare could not satisfy the second elements of either the AKS statutory discount exemption or the regulatory safe harbor for discounts (United States ex rel. Banigan v. Organon USA, Inc., et al.  (Case 1:07-cv-12153-RWZ)).

Just one day after issuing her opinion in the Omnicare case, Judge Zobel used similar reasoning to reverse her prior decision to dismiss the False Claims Act (“FCA”) allegations against defendant CCS Medical Inc. in the on going qui tam case, United States ex rel. Herman v. Coloplast Corp., et al. (Case 1:11-cv-12131-RWZ).  In this case, the relators allege that Coloplast gave CCS price discounts in exchange for CCS’s conversion of patients from a competitor’s product to Coloplast’s product.

Judge Zobel had ruled in favor of CCS on July 29, 2016 after CCS argued that its discount arrangement with Coloplast fell within the protection of the discount safe harbors.  The relators filed a Motion for Reconsideration on August 3, 2016, arguing that CCS could not rely on the safe harbor or discount exemption when the intent of the price reduction was to induce referrals or patient conversions.  Although the United States declined to intervene in the case, the government filed a Statement of Interest on August 8, 2016 to “state its position on the confines of the ‘discount’ exception to the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b)(3)(A).”  The government argued that “if a price reduction is conditioned on more than the purchase of a product, then it is not a mere discount and it is irrelevant whether that price reduction was ‘properly disclosed.’”

On August 24, 2016, Judge Zobel reversed her prior decision that had dismissed the FCA allegations against CCS.  Following the logic in her Omnicare opinion, Judge Zobel found that CCS had not met the second elements of either the statutory discount exemption or the regulatory safe harbor for discounts by showing that the discounts were “‘appropriately reflected in the costs claims or charges made’ to a federal healthcare program, or that CCS has provided certain information concerning the discounts to a governmental agency pursuant to its request.”  In reinstating the FCA allegations against CCS, Judge Zobel again ignored the fact that (1) there is no established mechanism for charge-based providers to identify their costs or the discounts they receive in the claims they submit to Medicare or Medicaid, and (2) buyers receiving discounts do not have control over government investigations or requests for documentation.

Even though Judge Zobel did not discuss the specifics of the discount arrangement between Coloplast and CCS in her Opinion, the government’s Statement of Interest explicitly stated the government’s view that “a price reduction conditioned on promotional or conversion campaign activities is not a ‘discount’ within the meaning of the discount exception at 42 U.S.C. § 1320a-7b(b)(3).” The government argued that “this exception is narrow and ‘covers only reductions in the product’s price.’”  The government further stated that “[r]emunerations to health care providers for switching patients from one product to another, and for other efforts to increase a product’s utilization do not qualify as protected price reductions, even if the parties label the remuneration as ‘rebates’ or ‘discounts.’” 

The utility of the statutory discount exemption and the regulatory safe harbor for discounts is currently under attack in Judge Zobel’s court.  Similar to Omnicare, CCS has filed a motion requesting that the Court reconsider Judge Zobel’s Order or alternatively certify the matter for immediate review by the First Circuit. CCS has also joined Omnicare’s request for certification for interlocutory appeal on the discount issues.  Interest in “proper, consistent, and fair enforcement” led the Pharmaceutical Research and Manufacturers of America (PhRMA) to file an amicus brief on September 23, 2016 in support of CCS’ motion.  In addition to objecting to Judge Zobel’s perplexing interpretation of the disclosure elements of the discount exemption and safe harbor, PhRMA raised significant constitutional concerns about the government’s attempt to “regulate through a statement of interest in litigation.” PhRMA explained that “[d]ue process considerations prohibit the Government from adding new terms to the safe harbor – or from carving out certain types of discounts arrangements from the safe harbor – in a litigation brief when the defendants did not have advance notice of the Government’s position and an opportunity to respond.”  We will continue to monitor the Omnicare and Coloplast cases and to keep our readers informed about this litigation and its implications on the future use of the discount exemption and safe harbor.

By Anne K. Walsh & Andrew J. Hull – 

A problematic decision from the Ninth Circuit appears to impermissibly grant FDA authority to regulate the practice of medicine, and to further muddy the regulatory morass governing off-label use of products. We hope other courts recognize this decision for what it is: a bad set of facts that led to bad law.

Earlier this month, the U.S. Court of Appeals for the Ninth Circuit affirmed the felony conviction and 48-month imprisonment of Dr. Michael Stanley Kaplan, a Nevada urologist, for conspiracy to commit adulteration under the Federal Food, Drug, and Cosmetic Act (“FDC Act”). Based on a complaint by Dr. Kaplan’s own medical assistants to the Nevada State Medical Board, FDA’s Office of Criminal Investigations (“OCI”) opened an investigation and confirmed that Dr. Kaplan used plastic single-use needle guides in multiple invasive prostate procedures.  These procedures involve a physician injecting a needle via a needle guide to pierce the rectal wall and to remove tissue from the prostate for analysis.  During the procedure, the needle guide comes into contact with “tissue, blood, and fecal matter, along with any bacteria and viruses.”  Decision at 5.  Although the plastic needle guides were indicated for single use only, and contained clear warnings against reuse, Dr. Kaplan attempted to sterilize the needle guides so that he could reuse them in subsequent procedures.  The medical assistants complained that they could not remove “brown scratches” on the guides during the disinfecting process and that the used guides became “discolored.” Id. at 8.

Section 301(k) of the FDC Act prohibits “the doing of any . . . act with respect to . . . [a] drug [or] device . . . if such act is done while such article is held for sale . . . after shipment in interstate commerce and results in such article being adulterated.” 21 U.S.C. § 331(k).  A product is adulterated if, inter alia, it “has been prepared, packed, or held under insanitary conditions whereby it may have been contaminated with filth, or whereby it may have been rendered injurious to health.”  21 U.S.C. § 351(a)(2)(A).  At trial, Kaplan argued that the needle guides were not “held for sale” because he never transferred their ownership to the patients, but merely used them in the treatment of a patient.  The district court rejected this argument.  

On appeal, Dr. Kaplan renewed his objection to the “held for sale” provision, and also contended that his reuse of single-use needle guides constituted the allowable off-label use of a device under the FDC Act. While noting that the “held for sale” argument Kaplan posed was “an issue of first impression,” rather than taking the opportunity to draft a well-reasoned opinion in an area where case law is scarce, the Ninth Circuit simply affirmed the lower court’s decision citing the handful of cases broadly touching the issue.  Decision at 13 (citing United States v. Evers, 643 F.2d 1043, 1050 (5th Cir. 1981); United States v. Diapulse Corp. of Am., 514 F.2d 1097, 1098 (2d Cir. 1975); United States v. Rhody Dairy, LLC, 812 F. Supp. 2d 1239, 1244 (W.D. Wash. 2011); United States v. Device Labeled “Cameron Spitler Amblyo-Syntonizer,” 261 F. Supp. 243, 246 (D. Neb. 1966)).  

The court attempted to distinguish the single case from the Ninth Circuit that held the opposite, United States v. Geborde, 278 F.3d 926 (9th Cir. 2002), by explaining that Dr. Geborde engaged in noncommercial transactions when he distributed his homemade recreational drugs free of charge to patients.

The district court in [Kaplan’s] case, therefore, properly focused on the commercial nature of Kaplan’s business, a medical practice operated for profit, reasoning that patients who paid Kaplan for the medical services he performed were also paying for the cost of products used in the course of treatment, including biopsies, and that the patients were therefore the ultimate consumers of the guides. Kaplan is a physician engaged in the business of providing medical services in exchange for payment: a commercial actor in a commercial setting, using a commercial product.  We hold that his use of the plastic guides is covered by the “held for sale” provision of § 331(k).

Id. at 16. 

Although the outcome for Dr. Kaplan may have been based on the nature of his conduct, the decision unfortunately clouds, rather than clarifies, important issues. There can be no dispute that Congress did not intend FDA to regulate the practice of medicine via the FDC Act:  “Nothing in this Act shall be construed to limit or interfere with the authority of a health care practitioner to prescribe or administer any legally marketed device to a patient for any condition or disease within a legitimate health care practitioner-patient relationship.”  21 U.S.C. § 396. 

One of the reasons for this carve out was to recognize there are robust traditional means to redress harms caused by physicians, either through state medical boards or medical malpractice suits. Here, the matter was appropriately referred to the Nevada State Board of Medical Examiners, which took action to suspend Dr. Kaplan’s license to practice medicine (the license was later reinstated by stipulation, but a new amended complaint is pending).

The Ninth Circuit holding, however, criminalizes Dr. Kaplan’s practice of medicine via a logically tortuous path by characterizing his use of a device in treating patients as a commercial act (i.e., holding for sale).  And the court left open questions such as whether a physician’s use of a device in the provision of free medical services or the use of general office equipment to treat a patient would be covered under § 331(k).

The court also dismissed Dr. Kaplan’s contention that his actions constituted permissible off-label use under the FDC Act:

[O]ff-label use does not immunize a physician who uses adulterated products. Though off-label use “allow[s] physicians to prescribe . . . lawful drugs for unapproved uses,” [citing Evers], off-label use of adulterated products is beyond the scope of the privilege.  While a physician may exercise professional judgment in the off-label use of unadulterated products, nothing in the FDCA or caselaw suggests that the use of adulterated products is ever permissible.

Id. at 18-19.

This less-than-clear explanation carries a strong risk of being taken out of context. The court’s “bright-line” rule prohibiting the use of adulterated products fails to consider the nuances of the FDC Act, which considers a device adulterated if it has a new intended use for which it is required to, but lacks, pre-market approval. See 21 U.S.C. § 351(f).  What the Kaplan court should have clarified is that its holding is limited to products that are adulterated under section 351(a)(2)(B) because they were held under insanitary conditions, which is what was charged here, and not because they were adulterated under section 352(f) for being used off-label use (i.e., single use versus reuse).  This distinction was discussed at oral argument (watch the spirited debate between the court and Dr. Kaplan’s counsel on this issue – starting at minute 6:30), but did not work its way into the published opinion.  Presumably if Dr. Kaplan had shown that his protocol worked to sanitize the needle guides, it may not have met the standard for adulteration.  Unfortunately, the court’s holding may be used by less-discerning audiences to hold a doctor guilty of violating the FDC Act if she uses a device for an off-label purpose.

One final point: FDA’s Office of Criminal Investigations recently has come under renewed scrutiny by the media and Congress over its questionable use of resources and investigative practices. Query whether OCI’s involvement in this matter, which may have been more appropriately adjudicated by the state medical board and medical malpractice suits, is another example of OCI’s misplaced attention.  

By McKenzie E. Cato* & Allyson B. Mullen –

In May 2015, FDA issued a draft guidance addressing how FDA might consider patient preference information (PPI) in review of premarket approval applications (PMA), humanitarian device exemption (HDE) applications, and de novo requests; the types of data and information to include in a submission; and how to incorporate PPI into a product’s labeling (see our previous post here).  On August 24, 2016, FDA finalized this guidance, titled “Patient Preference Information – Voluntary Submission, Review in Premarket Approval Applications, Humanitarian Device Exemption Applications, and De Novo Requests, and Inclusion in Decision Summaries and Device Labeling.”

This guidance is the result of a Patient Preference Initiative launched by FDA in 2013 to engage patients in medical device regulatory processes.  Additionally, FDA created the first-ever Patient Engagement Advisory Committee in September 2015, following the release of the draft guidance.  The Committee is designed to provide advice to the Commissioner on a variety of patient-related topics regarding medical devices, including patient preference study design, benefit-risk determinations, and device labeling.

The objectives of this guidance are to:

1. Encourage the submission of PPI by sponsors or stakeholders and to aid in FDA decision making;
2. Outline recommended methods for patient preference studies;
3. Provide recommendations for collecting and submitting PPI to FDA; and
4. Discuss FDA’s inclusion of PPI in its decision summaries and provide recommendations for the inclusion of PPI in device labeling.

The guidance states that PPI may not be relevant or appropriate for all devices, and clarifies that the guidance “does not change the review standards for PMAs, HDE applications, or de novo requests” and does not “create any extra burden on sponsors of premarket submissions.”  The submission of PPI is voluntary.  This guidance is meant to provide recommendations relating to the collection of PPI which may be submitted for consideration as part of FDA’s benefit-risk determination.

There are several significant changes and additions incorporated in the final guidance, which are outlined below.

The final guidance distinguishes the different ways patients can provide input to FDA. “Patient input” includes anecdotal comments (e.g., testimony at Advisory Committee meetings), patient opinions expressed publicly (e.g., through social media), qualitative responses to surveys, and quantitative measurements of patient-reported outcomes.  “Patient perspectives” include patients’ experiences with a disease or condition and its management.  PPI, the subject of this guidance, is a type of patient perspective.  The guidance states that PPI is particularly useful when patient decisions are “preference sensitive.”  Treatment decisions are “preference sensitive” when (1) there is no clinically superior option for all patients; (2) evidence supporting one treatment option is uncertain or variable; and/or (3) patients’ views about the most important benefits and risks vary within a population or differ from those of healthcare professionals.

The final guidance includes a new section describing how patient input can impact decision making. The guidance explains that patient input can be useful for improving understanding of a disease or condition, defining design inputs to meet patient needs, and assessing the outcomes that are most important to patients.  This section references a new appendix and flowchart with suggestions for how sponsors and FDA can incorporate PPI and other patient input into the total product lifecycle (i.e., nonclinical, clinical, and postmarket stages).  The appendix includes a lengthy discussion of how PPI can be used in the earliest stages of development (the “discovery and ideation phase”) to inform study design, product development, and ultimately, FDA’s assessment of product benefit versus risk. 

The draft guidance did not contemplate the use of PPI in the public decision summaries that FDA posts on its website when it approves a PMA, approves an HDE application, or grants a de novo request; it only discussed the inclusion of PPI in device labeling.  The final guidance references the use of PPI in decision summaries throughout the document.  The guidance notes that “[i]nclusion of PPI in FDA’s public decision summaries can be helpful to healthcare professionals and patients in making healthcare decisions involving difficult benefit-risk tradeoffs or novel treatments.”  This information also has the potential to be useful for sponsors in deciding whether and how to incorporate PPI in their premarket applications.

The draft guidance included, as an appendix, proposed modifications to the “Worksheet for Benefit-Risk Determinations” from FDA’s Benefit-Risk Guidance to incorporate PPI.  This guidance was also finalized on August 24.  While the proposed modifications in the draft patient preference guidance were not adopted exactly as written, the Worksheet in the final Benefit-Risk Guidance now includes an extensive new section on “patient perspectives,” which has many questions related to PPI.

The final guidance appears to contemplate use of PPI throughout the total product lifecycle from device initiation through approval and beyond. We assume that FDA will begin utilizing the guidance and revised worksheets now that they are finalized.  However, it will be assessing devices that were conceived and designed long before initiation of the Patient Preference Initiative.  Neither the final guidance nor the worksheet address how much weight FDA will place on PPI during the premarket review process and whether it is possible for PPI to outweigh traditional benefit-risk factors, on which manufacturers may have relied when designing and developing a device years before it is ready for submission to the Agency.  That is, if a device undergoing premarket review meets traditional benefit-risk, why would a company need to consider PPI?  According to the guidance, submission of PPI is voluntary, and thus, it should add to rather than modify the traditional factors considered in the benefit-risk analysis.

Also, because this guidance is part of a broader initiative by FDA to include patient input in medical device regulatory processes, it will be interesting to see how this initiative incorporates patient preference into other guidance documents or FDA procedures moving forward. For example, for now, PPI has not been contemplated in the 510(k) process, however, FDA could attempt to incorporate it into that review process as well for at least some 510(k)s.

* Law Clerk

By Alexander J. Varond –

Late last week, the Senate voted unanimously to extend the rare pediatric disease voucher program until December 31, 2016. In doing so, it also voted to amend the definition of “rare pediatric disease” set forth in Section 529 of the Federal Food, Drug, and Cosmetic Act.  As discussed in greater detail below, the new definition of “rare pediatric disease” would likely expand eligibility for the program.

The version of the Advancing Hope Act (S. 1878) passed by the Senate last week closely tracks earlier versions of the bill.  However, instead of reauthorizing the program until at least September 30, 2022, the current version only extends the pediatric voucher program by three months.  It is clearly a stopgap measure.

In keeping with earlier versions of the bill, the Advancing Hope Act would amend the current definition of “rare pediatric disease,” which requires that:

(A) The disease primarily affects individuals aged from birth to 18 years, including age groups often called neonates, infants, children, and adolescents. (Emphasis added.)

S. 1878 amends the definition to require that:

(A) The disease is a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years, including age groups often called neonates, infants, children, and adolescents. (Emphasis added.)

We discussed an earlier version of the Advancing Hope Act and several other reauthorization bills last week.

The newly proposed definition of “rare pediatric disease” places greater emphasis on disease burden, rather than on disease prevalence. Indeed, many stakeholders had expressed concern that the current definition’s emphasis on prevalence was misguided.  These concerns are easily understood when considering, for example, diseases with varying forms of severity.  If patients with the most severe forms of the disease die while they are young but patients with less severe forms live long lives, the disease might not be eligible under the current definition.

The Advancing Hope Act has been referred to the House and efforts are underway to seek a vote on the measure this week. If the Advancing Hope Act passes the House and is signed into law, it would likely expand eligibility for pediatric vouchers.  For example, diseases with varying degrees of severity (i.e., diseases with very serious forms with very short life expectancy and less serious forms with much longer life expectancy) would be eligible.  In addition, diseases that are extremely severe in childhood but tend to be less severe in adulthood may qualify.

FDA’s interpretation the revised definition of “rare pediatric disease” will be critical. One of FDA’s first tasks would be to provide clarity around what constitutes “serious or life-threatening manifestations.”  Focusing on “manifestations” of a disease is somewhat novel, compared to FDA’s typical paradigm, which focuses on whether the disease itself is “serious or life-threatening.”

By Kurt R. Karst –       

Last Friday, FDA announced that the Agency licensed the fourth biosimilar biological product under the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”): Amgen, Inc.’s (“Amgen’s”) AMJEVITA (adalimumab-atto) (BLA 761024), a biosimilar version of AbbVie Inc.’s (“AbbVie’s”) (BLA 125057) blockbuster product HUMIRA (adalimumab). The licensure follows PHS Act Section 351(k) licensures for ERELZI (etanercept-szzs) (BLA 761042; licensed on August 30, 2016), INFLECTRA (infliximab-dyyb) (BLA 125544; licensed on April 5, 2016), and ZARXIO (filgrastim-sndz) (BLA 125553; licensed on March 6, 2015).  Amgen and AbbVie are still embroiled in patent infringement litigation under the BPCIA’s so-called “patent dance” procedures (which our friends over at the Big Molecule Watch Blog have been closely following), so it’s not entirely clear when AMJEVITA will be commercially available.  But another litigation front may now open that holds the potential to delay AMJEVITA, and possibly wipe away the biosimilar licensure.

At the same time FDA licensed AMJEVITA, the Agency formally denied a Citizen Petition (FDA-2012-P-0317) AbbVie (formerly Abbott Laboratories) submitted to the Agency in April 2012.  As we previously reported,  AbbVie’s petition requests that FDA not accept for filing, file, approve, or discuss with any company any application or any IND for any biosimilar that cites as its reference product any product for which the BLA was submitted to FDA prior to the March 23, 2010 date of enactment of the BPCIA.  Although the petition focuses on HUMIRA, it requests the same treatment for all BLAs submitted to FDA prior to March 23, 2010.  According to Abbvie, licensing a biosimilar that relies on a reference product licensed under a BLA pursuant to section PHS Act § 351(a) would constitute a taking under the Fifth Amendment to the U.S. Constitution that requires just compensation.  After all, didn’t those reference product sponsors reasonably expect, on the basis of applicable law and FDA statements in the pre-BPCIA era, that the trade secrets and confidential commercial information contained in their BLAs would not be used to benefit a competitor through the licensure of another company’s biosimilar application?

Given all of the FDA activity over the past few years around biosimilar versions of pre-BPCIA reference products, FDA had effectively denied AbbVie’s petition; but a formal FDA response remained pending. FDA’s 22-page petition denial addresses in detail each of the arguments raised by AbbVie.  According to FDA, AbbVie lacks a protected property interest in information available to the public.  “The Fifth Amendment does not protect information that Abbott describes as trade secrets but that was available for public disclosure under FDA’s information disclosure regulations after the Agency approved the Humira BLA in 2002,” writes FDA.  “Such publicly available information cannot satisfy the second element under the [Uniform Trade Secrets Act (‘UTSA’)] definition of a trade secret, i.e., that the information ‘is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.’”

And even assuming that a property interest could be identified, FDA concludes that AbbVie fails to identify a use of the company’s information by FDA that would give rise to a taking:

We note that Abbott does not base its takings argument upon any direct use by FDA of any particular trade secret in Abbott’s BLA or approval of a biosimilar application. Specifically, Abbott has not identified any particular trade secret that has been “used” but instead argues that all ofthe trade secrets in the reference product’s BLA are used when a biosimilar is approved. . . .

FDA disagrees with Abbott’s contention that the Agency’s reliance on FDA’s prior finding that the reference product is safe, pure, and potent constitutes a “use” of Abbott’s information that could give rise to a taking. Abbott has no protected property interest in FDA’s finding regarding the safety, purity, and potency of the reference product.  The BPCI Act requires biosimilar applications to include “publicly-available information regarding [FDA’s] previous determination that the reference product is safe, pure, and potent.”  There is no property interest, including any interest that Abbott could assert, in publicly available information about FDA’s prior determination regarding the reference product.  Where there is no property interest, there cannot be a taking. [(Emphasis in original)]

Going one step further, FDA says that “even if Abbott were to identify both (1) property that is eligible for Fifth Amendment protection and (2) a use of that property by FDA when FDA approved a biosimilar product,” the three factors laid out by the U.S. Supreme Court in Penn Central Transportation Co. v. New York City, 438 U.S. 104 (1978) (here), “demonstrate that FDA’s approval of a biosimilar product that references a BLA approved before the enactment of the BPCI Act does not give rise to a regulatory taking.” Those three Penn Central factors – and the first of which the Supreme Court held to be decisive in rejecting an alleged taking of a trade secret – are: (1) “the extent to which the regulation has interfered with distinct investment-backed expectations,” (2) “the economic impact of the regulation on Abbott,” and (3) “the character of the governmental action.”

As to the first Penn Central factor, FDA says that Abbvie failed to establish that when the company submitted its BLA to FDA in 2002 for HUMIRA that the company had a reasonable investment-backed expectation “that the trade secrets in that application would not be used by [FDA] in any manner to support approval of another company’s product or disclosed to other applicants to guide their research efforts.”  Abbvie’s 2012 petition discussed in some detail the jurisprudence under the takings clause of the Fifth Amendment, describing Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984) (here), as holding that “when an applicant submits trade secret data as part of a license application, at a time when the government has provided assurances through law, regulation and/or agency guidance that the data will not be used by the agency to benefit a competitor of that applicant, later ‘consider[ation of] those data [by the agency] in evaluating the application of a subsequent applicant’ would frustrate the applicant’s ‘reasonable investment-backed expectation’ that the data would, instead, remain inviolate.”  Petition at 11 (quoting Monsanto, 467 U.S. at 1011). 

FDA addresses AbbVie’s arguments head-on:

• First, Monsanto holds that statutory silence cannot support a reasonable investment-backed expectation, so the absence of statutory language expressly authorizing a proposed biosimilar product to reference a previously licensed BLA at the time the Abbott BLA was submitted does not provide the foundation for the expectation that Abbott claims. . . .
• Second, FDA’s disclosure regulation, promulgated in 1974, could not support a reasonable investment-backed expectation because that regulation is silent with respect to any use of data by FDA and makes the analytical, preclinical, and clinical data in a BLA available for public disclosure upon the approval of the BLA. . . .
• Third, Abbott claims that it relied upon statements by FDA officials that the Agency lacked authority to approve a biosimilar product prior to the enactment of the BPCI Act. None of those statements, however, suggests that FDA never would have such authority. Nor does Abbott cite any legal support for the claim that such Agency statements amount to “an explicit governmental guarantee [that] formed the basis of a reasonable investment-backed expectation.” 

Will AbbVie take FDA to the mat and challenge in court the Agency’s petition denial and AMJEVITA licensure? We’re waiting on the edge of our seats to find out. 

By Alexander J. Varond –

FDA’s rare pediatric disease priority review voucher program is set to expire on October 1. If this happens, FDA will no longer award pediatric vouchers to otherwise eligible sponsors. Expiration of the pediatric voucher program would mean the end (at least temporarily) of Congress’s program to encourage investment and development of new drugs for rare pediatric diseases.

A number of pieces of legislation have been proffered to stave off the program’s imminent sunset. Notably, each piece of legislation has proposed changes to the definition of “rare pediatric disease,” which is currently defined, in part, as a “disease primarily affect[ing] individuals aged from birth to 18 years, including age groups often called neonates, infants, children, and adolescents.”

Recap of the Pediatric Voucher’s Evolution

Before diving into a discussion of the current legislation, a recap of the pediatric voucher program is in order.

The sales price of pediatric vouchers has ranged between $67.5 million and $350 million.

Proposed Legislation

The primary drivers for reauthorization have been the 21st Century Cures Act (H.R. 6) and Senate and House versions of the Advancing Hope Act (S. 1878 and H.R. 1537). We previously discussed versions of these proposals here and here.

21st Century Cures Act

The 21st Century Cures Act was passed in the House on July 10, 2015, but it has subsequently stalled and the Senate HELP Committee has proposed instead to issue less sweeping legislation. If passed, the 21st Century Cures Act would extend the pediatric voucher program such that marketing applications submitted by December 31, 2018, provided they meet the requirements in the statute, would be eligible for a pediatric voucher. The definition of a qualifying “rare pediatric disease” would also be amended to “a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years, including age groups often called neonates, infants, children, and adolescents.”

Advancing Hope Act (S. 1878)

Introduced on July 28, 2015, the Senate version of the Advancing Hope Act has had considerably more interest from stakeholders than the House version (discussed below). On April 5, 2016, the bill was amended and reported by Senator Alexander of the Committee on Health, Education, Labor, and Pensions. If passed, the pediatric voucher program would be extended until September 30, 2022, with the caveat that if a drug is designated as a drug for a rare pediatric disease by September 30, 2022, it remains eligible for a pediatric voucher so long as it is approved by September 30, 2027. The definition of “rare pediatric disease” would be amended to “a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years, including age groups often called neonates, infants, children, and adolescents.” The Senate version omits the controversial ex-US bar on the tropical disease voucher program contained in the House version of the bill.

Advancing Hope Act (H.R. 1537)

The House version of the Advancing Hope Act was introduced on March 23, 2015. It proposes to make the pediatric voucher program permanent and to specifically designate pediatric cancers and sickle cell anemia as rare pediatric diseases. It also modifies the tropical disease voucher program, making drugs approved outside of the U.S. for more than 24 months prior to submission of a marketing application to FDA ineligible for a tropical disease voucher.

Where Do We Go From Here?

As the week draws to an end, it appears increasingly unlikely that the 21st Century Cures Act or the Senate’s accompanying effort will be passed in time to reauthorize the pediatric voucher program. The best hope for authorization may be a last push for the passage of the standalone Senate version of the Advancing Hope Act via the “hotline” process or by attaching reauthorization to the continuing resolution to fund the government. If efforts to reauthorize the pediatric voucher program before October 1 fail, the program could be reinstated as part of the 2017 user fee reauthorization package or other legislation. Whether this would retroactively extend the program to eliminate a gap between the sunset date and subsequent reauthorization remains to be seen.