By Jennifer D. Newberger –

With less than two months to go before the UDI compliance date for Class II devices, on July 26, 2016, FDA issued a draft guidance related to what would seem to be the most basic of concepts: the form and content of the UDI. More specifically, the draft guidance states that its intent is to “clarify” for industry and FDA-accredited issuing agencies the form and content of the UDI, and to “better ensure the UDIs developed under systems for the issuance of UDIs are in compliance with” the UDI rule.

The UDI rule was finalized in September 2013, and FDA accredited the first issuing agency soon thereafter. Since then, the issuing agencies have been working with labelers to issue UDIs for Class III and Class II devices. Though FDA does not state in the draft guidance that it is aware of the issuance of any non-compliant UDIs, that seems to be the implication of the draft guidance. For example, the draft guidance states: “It is critical that each FDA-accredited issuing agency develop and operate a system for the assignment of UDIs that allow labelers to confidently use the FDA-accredited issuing agency’s system to develop UDIs that are compliance with the UDI labeling requirements . . . . Therefore, the FDA-accredited issuing agencies’ systems for issuing UDIs should align with the UDI labeling requirements.”

For a labeler that has already obtained a UDI from an accredited issuing agency, this language in the draft guidance may cause some concern, as it seems to imply that the issuing agencies have in fact been issuing UDIs that are not in compliance with the UDI labeling requirements. Yet the draft guidance does not advise labelers to confirm compliance of the issued UDIs, nor does it explicitly state that FDA is aware the issuance of non-compliant UDIs. If FDA is aware of the such UDIs, it should so state, and should provide more direct guidance to labelers and issuing agencies about steps to take the remedy the non-compliance.

The draft guidance also introduces new concepts not discussed in the rule or in guidance issued by FDA since the rule was finalized. It is not clear if these concepts, such as “data delimiter” and “UDI carrier,” were already being used by the issuing agencies, or if they are entirely new ways of developing the form and content of a UDI. It may also be that these concepts are now being introduced as a means of remedying whatever concerns FDA may have about compliance of the UDIs that have been issued. The draft guidance simply does not say.

FDA should more explicitly discuss why the guidance was issued at this late stage, concerns about potential non-compliant UDIs, and why new terms are being introduced now. If labelers obtained non-compliant UDIs from issuing agencies, FDA should allow a grace period to come into compliance, and should not take enforcement actions against labelers that acted in good faith in obtaining a UDI.

By Dara K. Levy –

The Automated Commercial Environment (ACE), which went into effect for FDA-regulated products on June 15, 2016 (after several delays), is an electronic system operated by Customs and intended to automate import processing and expedite reviews for electronic import filings.  It replaces the Automated Commercial System (ACS) and is intended to implement the “single window” electronic submission requirement outlined in the International Trade Data System (ITDS) for import and export data provided to the U.S. Government.  The ITDS is “a partnership of government agencies committed to the modernization and facilitation of international trade.”  In February 2014, President Obama issued Executive Order 13659, Streamlining the Export/Import Process for America’s Businesses, which required this “single window” to go into effect by December 31, 2016 for all partner government agencies involved with the ITDS, which includes FDA.

The purpose of ACE, generally, is to improve the information flow to the U.S. Government about imports and exports and, ultimately, ease the burden on importers/exporters by reducing redundant submissions required by the different agencies that may review the entries.  As importers of FDA-regulated products already know, Customs may often release goods only for those goods to be held for substantial periods of time by FDA while it reviews entry information submitted.  FDA has acknowledged that the ACS system had allowed for incomplete and inaccurate data to be transmitted to FDA, which then required FDA to manually review entry information.  FDA estimates that it took approximately 28 hours for FDA to ultimately release an entry when it conducted a manual review under the legacy ACS system.  Not surprisingly, when complete and accurate information was submitted in ACS, and an automated review was sufficient, the release time was significantly quicker, taking approximately 24 minutes. 

FDA has estimated that with the implementation of ACE, and inclusion of the required (and optional) data elements, manual reviews of information are completed over 30% faster than previously with ACS.  The expectation is that review times will only improve.  Ultimately, the goal is to prioritize FDA resources for products that represent a greater public health risk, while automating the release of lower risk products.

On July 1, 2016, FDA published a proposed rule to establish certain data requirements for FDA-regulated import entries electronically filed in ACE.  Because ACE has already been implemented, much of the proposed rule is practically in effect.  FDA has confirmed that all but four ACE-required elements were previously captured in the legacy ACS system.  The four new elements include the following:  1) name, telephone number, and email address for one of the persons related to the importation of the product, which may include the manufacturer, shipper, importer of record, or Deliver to Party; 2) a telephone number and email address for the importer of record; 3) name and address of the ACE filer; and 4) brand name for tobacco products.

Where things may be different with ACE is in the level of detail that is now being requested as “optional” submission information.  FDA is strongly encouraging ACE filers to include certain “optional” information that will better enable FDA to make automatic admissibility determinations.  FDA is seeking comments on the advantages, disadvantages, and feasibility of requiring the submission of data elements currently identified as “optional,” such as the approval or clearance status of the product and intended use.  Comments are due August 30, 2016.

FDA has implemented a number of outreach programs to assist industry with the transition to ACE.  In addition to webinars, FDA has implemented the FDA ACE Support Center, staffed 24/7 and available to answer questions regarding the FDA Supplemental Guide, required data elements, and general ACE submissions.  FDA is also prioritizing assistance to industry through “Production Calls.”  A production call is a “meeting between the FDA, the entry filer and the entry filer’s software vendor (preferably) to walk through an entry that is being submitted via ACE.  These production calls allow FDA and the entry filer to talk about the entry submission in real time.”  While not mandatory, FDA encourages these calls and, upon request, will assist with a filer’s first ACE submission.  More information about ACE and FDA’s Facilitation of the ACE Transition can be found here and here.

By John A. Gilbert Jr. & Alan M. Kirschenbaum –

 On Friday, July 22, 2016, President Obama signed into law the Comprehensive Addiction and Recovery Act (“CARA” or “Act”) of 2016, which is intended to help reverse the serious prescription drug abuse trend in the United States. Although the Act’s primary objective is to address the serious problem of prescription drug abuse, CARA also includes several provisions related to pain management that reflect a recognition of the important need to treat pain. We hope that the implementation of CARA will strike the right balance between these two objectives so as to ensure a successful outcome on both fronts.

The following are some notable elements of the new law:  

The Act requires the Department of Health and Human Services (“HHS”) to convene a Pain Management Best Practices Inter-Agency Task Force. The goals of the Task Force are to update the best practices for pain management and prescribing pain drugs and to review medical alternatives to opioids. The Task Force is to include representatives of HHS, the Department of Defense (“DOD”), the Department of Veterans Affairs (“VA”), and the Office of National Drug Control Policy (“ONDCP”) as well as practitioners, pharmacists, and other experts. The Act also requires HHS, along with other agencies, to advance education and awareness of prescription drug abuse among providers and the public. The Act identifies specific issues to be addressed, including the link between heroin and prescription opioids and the dangers of mixing fentanyl and heroin.

A significant part of the law is directed at addressing the issue of opioid abuse at VA facilities by improving the Opioid Therapy Risk Report tool and generally improving the education and training on pain management and safe opioid prescribing practices. For example, the VA is required to designate a pain management team at each facility to coordinate pain management therapy for patients.

The Act also authorizes HHS to establish a grant program to support prescribing of opioid overdose reversal drugs such as naloxone. This program would be available to Federally qualified health centers, opioid treatment programs or other practitioners authorized to dispense narcotic drugs for office based treatment. HHS is also authorized to make grants available to states to implement programs for pharmacists to dispense an FDA approved drug or device for “emergency treatment of known or suspected opioid overdose, as appropriate, pursuant to a standing order.” CARA also provides for grants to states to allow first-responders to administer such drugs and for a GAO review of so-called state “Good Samaritan” laws that allow individuals to administer overdose drugs in emergency situations.

Section 705 of the Act removes a financial disincentive that currently discourages drug manufacturers from developing new abuse-deterrent formulations of pain medications. Under the Medicaid Drug Rebate Program, line extensions of existing oral dosage form innovator drugs may be subject to a higher Medicaid rebate than other newly introduced innovator drugs. (See p. 21 of our summary of CMS’s implementing regulation here.) The Act amends the Medicaid Rebate statute to specifically exclude a new abuse deterrent formulation from the definition of a “line extension” that may be subject to higher rebates.

CARA also amends the federal Controlled Substances Act to allow a pharmacist to partially fill a Schedule II controlled substance prescription based on the request of the prescriber or patient. The prior law and regulations allowed a partial fill of a Schedule II drug only where the pharmacy did not have enough to dispense the entire quantity prescribed. Under the new provisions, either the prescriber or patient can request that the prescription be partially filled at first. The remainder can then be dispensed within 30 days of the original prescription. The objective of this provision appears to be an attempt to limit the amount of pain medicine received by the patient to no more than necessary. However, the new provisions will also require more diligence on the part of pharmacists to ensure that they monitor dispensing, especially if the partial filling is directed by the practitioner rather than requested by the patient. In this case, the pharmacist may need to consult with the practitioner should the patient request to fill the remainder of the prescription.

The Act also authorizes nurse practitioners and physician’s assistants to administer, prescribe, and dispense narcotics in office-based opioid treatment programs. Previously, this practice was limited to physicians. It also authorizes HHS to increase the patient limit for office-based treatment from 30 to 100.

Finally, the Act contains provisions to expand the reporting requirements and access to state prescription drug monitoring programs by practitioners as well as law enforcement. This will likely not only increase access by practitioners to assist in treating patients, but also expand the use of monitoring programs as tool for law enforcement to investigate practitioners, pharmacies, and patients.

By Kurt R. Karst –      

We recently posted on an orphan drug clinical superiority precedent we came across: PURIXAN (mercaptopurine) Oral Suspension, 20 mg/mL, for the treatment of Acute Lymphoblastic Leukemia in pediatric patients. It’s the sixth “greater safety” orphan drug clincial superiority precedent we know of (see our scorecard of precedents here).  Today we give you the seventh precedent, as promised in our previous post: Hyperion Therapeutics Inc.’s (“Hyperion’s”) RAVICTI (glycerol phenylbutyrate) Oral Liquid, 1.1 grams/mL, which FDA approved on February 1, 2013 under NDA 203284 “for use as a nitrogen-binding adjunctive therapy for chronic management of adult and pediatric patients ≥2 years of age with urea cycle disorders (UCDs) that cannot be managed by dietary protein restriction and/or amino acid supplementation alone.”

We’ll spare you all of the legal background – you can refer to our previous posts (linked to above) for that – and cut right to the chase. . . .

Hyperion initially requested orphan drug designation of RAVICTI, which is also referred to as “GT4P,” in March 2005 for “maintenance treatment of patients with deficiencies in enzymes of the urea cycle.” But FDA’s Office of Orphan Products Development (“OOPD”) didn’t grant designation – at least not initially.  FDA’s previous approvals of BUPHENYL (sodium phenylbutyrate) under NDA 020572 (Tablets; approved on May 13, 1996) and NDA 020573 (Powder; approved on April 30, 1996) for use “as adjunctive therapy in the chronic management of patients with urea cycle disorders” were an obstacle to obtaining orphan drug dersignation. Although BUPHENYL and RAVICTI contain different active ingredients, glycerol phenylbutyrate is an esterified prodrug of phenylbutyrate, and is considered by OOPD to be the same drug under FDA’s orphan drug regulations.  As such, Hyperion needed to provide a plausible hypothesis of clinical superiority to obtain orphan drug designation. 

In September 2006, OOPD informed Hyperion that the company failed to provide a plausible hypothesis of clinical superiority to BUPHENYL under any of the three available bases (i.e., greater efficacy, greater safety, or a major contribution to patient care):

We find no reason to believe that GT4P may confer greater safety or greater effectiveness than Buphenyl in the treatment or urea cycle disorders. Moreover, we find a lack of objective evidence to support your claim that GT4P, at the proposed dosages, would have comparable safety and effectiveness profiles as those of Buphenyl. . . .

You indicate that GT4P is clinically superior to phenylbutyrate since it can be administered in smaller daily dosing volume, is odorless and tasteless, and lacks the inherent sodium load. At issue is whether these advantages, in light of the current lack of preclinical and/or clinical evidence showing that the drug is as safe and effective as Buphenyl, are sufficient for considering that GT4P makes a major contribution to patient care for purposes of orphan-drug designation under § 316.3(b)(3)(iii), or they just simply render the drug an acceptable alternative to Buphenyl.  First, with respect to the daily dosing volume, while four teaspoons of liquid GT4P may be better received than 40 Buphenyl tablets, it is difficult to believe that they really represent a significant advantage over four tablespoons of Buphenyl powder per day.  Second, while the sodium burden and the objectionable taste and odor of phenylbutyrate are obvious drawbacks, we find no evidence that these disadvantages prevent the use of phenylbutyrate in an extraordinary number of patients, nor is there any evidence to show that a substantial proportion of patients discontinue treatment as a result. Hence, it is not readily apparent that these advantages of GT4P, per se, rise to the level of a major contribution to patient care to be considered a different drug than Buphenyl for purposes of orphan-drug designation.

Therefore, for us to consider your request to designate GT4P on the basis of a major contribution to patient care, you should first demonstrate with reasonable certainty that GT4P, at the proposed dosages, would offer at least comparable safety and effectiveness profiles as those of Buphenyl, and that it would be well tolerated by most patients in chronic use. Second, you need to present clear and convincing evidence that Buphenyl, due to its taste, odor, and sodium load, cannot be used, or is so poorly tolerated that its effectiveness is significantly compromised, in a substantial number of patients with urea cycle disorders.

Hyperion got back to OOPD several months later, in May 2006, with new information and clinical superiority arguments. But OOPD shot Hyperion down for a second time, in October 2006, saying, among other things, that “no clinical evidence [supports] your suggestion that the currently recommended doses of Buphenyl produce too high a level of [phenylacetate] in UCD patients.”

Some time passed, and Hyperion eventually went back to OOPD (in December 2008) for a third time, but armed with new data and analyses. According to Hyperion:

HPN-100 is not just a re-formulation of sodium phenylbutyrate. It is a new chemical structure, a triglyceride that exhibits delayed release characteristics.  It is a nearly odorless and tasteless, more concentrated drug (providing three 4-phenylbutyrate molecules for every mole of drug), which enables the overall drug volume to be reduced and eliminate the need for G-Tubes that are placed solely for drug administration.  It will ease the comfort of drug administration thereby reducing the emotional/psychological trauma that patients/caregiver deal with on a daily basis due to drug administration issues.  Because it is a triglyceride, it should the symptoms consistent with oral mucositis and the upper GI side effects patients struggle with on a regular basis due to BUPHENYL® (sodium phenylbutyrate).  In addition HPN-100 removes the noxious excipient sodium.  Finally, data suggests that has the potential to offer more effective nitrogen-scavenging and superior ammonia control compared to BUPHENYL.

Out of all of this, OOPD latched on to the last point above: sodium load. OOPD states in an April 2009 Memorandum:

The sponsor claims that HPN-100 is different than the approved product because it is more efficacious, safer, and a major contribution to patient care. However, the only salient aspect of the amendment that is relevant to the potential designation of HPN-100 for the maintenance treatment of patients with deficiencies in enzymes of the urea cycle is the difference in the sodium content of the approved product, Buphenyl, compared to HPN-100. The approved labelingfor Buphenyl states that each tablet contains 62 mg of sodium (corresponding to 124 mg of sodium per gram of sodium phenylbutyrate) and that Buphenyl powder contains 11.7 gm of sodium, corresponding to 125 mg of sodium per gram of sodium phenylbutyrate.  The recommended total daily dose of Buphenyl is 9.9 to 13.0 g/M2/d in patients weighing more than 20 kg.  For an average size adult (1.7M2), this means that a person would need to take as many as 44 tablets per day which would contain 2.728 g of sodium.  This is a significant sodium load and in the Warnings section of the labeling for Buphenyl, it states that “Buphenyl should be used with great care, if at all, in patients with congestive heart failure or severe renal insufficiency, and in clinical states in which there is sodium retention with edema.” In contrast, HPN-100 contains no sodium. The current recommended daily allowance of sodium is less than 2.4 g per day.  When dietary intake of sodium is added to the sodium intake from Buphenyl, a person could be taking over 5 gm of sodium every day.

As noted by the sponsor, there are no reports of the clinical effects of the high sodium content of Buphenyl in patients with urea cycle disorders. However, Buphenyl has been used to treat other diseases in which the sodium content of the drug adversely impacted patient health. . . . 

Although [reports provided by Hyperion] are not in patients with urea cycle disorders, the clinical effects attributed to the sodium content in Buphenyl highlight the risk associated with the drug. The risk of high sodium intake leading to hypertension and eventual heart disease is well recognized in the medical community.  Therefore, HPN-100, with no sodium in the formulation, is safer than Buphenyl and should be considered a different drug for purposes of orphan designation.

Hyperion’s persistence paid off. FDA approved RAVICITI on February 1, 2013 and granted a period of orphan drug exclusivity that expires on February 1, 2020.

By McKenzie E. Cato* and Jeff N. Gibbs –

As we reported previously (see previous post here), FDA has issued two long-awaited draft guidances on next generation sequencing (NGS) diagnostic tests.  The first, “Use of Standards in FDA Regulatory Oversight of Next Generation Sequencing (NGS)-Based In Vitro Diagnostics (IVDs) Used for Diagnosing Germline Diseases,” provides recommendations for designing, developing, and validating NGS in vitro diagnostics (IVDs) and discusses the use of standards as part of the regulatory controls.  The second, “Use of Public Human Genetic Variant Databases to Support Clinical Validity for Next Generation Sequencing (NGS)-Based In Vitro Diagnostics,” describes how publicly available databases can be used as a source of valid scientific evidence to support the clinical validity of an NGS IVD. 

These topics have been extensively discussed already.  NGS is playing an increasingly prominent role in research and diagnosis.  Prior to releasing these draft guidances, FDA held three public meetings and released a discussion paper on regulation of and standards relating to NGS IVDs (see previous post).  Further efforts by FDA on this front include the creation of “precisionFDA,” an online research and development portal “that allows for testing, piloting, and validating existing and new bioinformatics approaches to NGS processing.”

The key features of each draft guidance are outlined below.

Use of Standards in FDA Regulatory Oversight of Next Generation Sequencing (NGS)-Based In Vitro Diagnostics (IVDs) Used for Diagnosing Germline Diseases

The scope of this draft guidance is limited to targeted and whole exome human DNA sequencing (WES) NGS-based tests for suspected germline diseases.  The recommendations are not intended to apply to NGS-based tests for stand-alone diagnostic purposes, screening, microbial genome testing, risk prediction, cell-free DNA testing, fetal testing, pre-implantation embryo testing, tumor genome sequencing, RNA sequencing, or use as companion diagnostics.  In other words, the proposal covers only a small subset of potential applications.  Furthermore, this draft guidance addresses only analytical validity, not clinical validity.  Both analytical and clinical validity are required to demonstrate a reasonable assurance of safety and effectiveness of an NGS-based test.  (FDA has also just issued a draft guidance on co-development of companion diagnostics which stresses this point for diagnostics.) 

The few cleared NGS-based tests are single-gene, disease-specific, and targeted.  Because FDA has not yet classified NGS-based tests with a broad intended use for suspected germline diseases, they are automatically classified into class III as a matter of law.  However, FDA notes that it believes an NGS-based test for germline disease would be a suitable candidate for de novo classification, and encourages applicants to use the pre-submission process to discuss anticipated de novo requests.  Since FDA cannot guarantee that any particular device will be granted de novo status, this is about as strong endorsement as FDA can give of the de novo pathway.  The draft guidance states that if FDA were to classify NGS-based tests as class II in response to a de novo request, it would consider exempting the tests from premarket notification requirements.  The factors FDA considers in determining whether a class II device may be exempt from premarket notification are outlined in a 1998 guidance.  Once finalized, this guidance will supersede the 1998 guidance with respect to NGS-based tests for germline diseases.

FDA explains in the draft guidance that one way to show the analytical validation of an NGS-based test is through conformity to FDA-recognized standards or special controls.  In order for a standard to be recognized by FDA, it should at a minimum include the design, development, and validation activities outlined in this draft guidance.

Test Design Considerations:

Satisfying FDA’s data requirements will not be a trivial task.  Test developers are advised to prospectively define and document the indications for use statement, the features necessary to address specific user needs, the acceptable specimen types, and the region(s) of the genome that will be tested.  To demonstrate performance, FDA recommends that test developers define and document the test metrics, performance thresholds for the metrics, the degree to which interrogated regions that do not meet test run quality metrics can be included, the use of secondary procedures, and possible limitations to test performance.

In addition, FDA recommends that developers specify and document all test components, set technical specifications for each step of an NGS-based test, and document the limitations of each component for critical factors.  The draft guidance identifies several specific test design considerations for the sequencing platform, controls and reference materials, and bioinformatics components.

Developers are advised to develop and document methods for each step of the test; procedures for using instruments, consumables, reagents, and supporting methods; any limitations for each step; and the type of sequencing that will be used.  The draft guidance includes specific recommendations for sample preparation and input, multiplexing (i.e., simultaneous testing of multiple samples), library preparation and target enrichment, and follow-up procedures to be used when a test run fails.

Test Performance Characteristics:  The draft guidance recommends the following performance metrics for analytical validation of NGS-based tests for germline diseases:

• Accuracy: Demonstrate accuracy by measuring positive percent agreement, negative percent agreement, technical positive predictive value, and the rate of “no calls” or “invalid calls.”
• Precision: Evaluate precision (i.e., reproducibility and repeatability) for both variant and wild type calls.
• Limit of Detection: Establish and document the minimum and maximum amount of DNA that will enable the test to provide expected results in 95% of test runs with an acceptable rate of “no calls” or “invalid calls.”
• Analytical Specificity: Document any interfering substances, the potential for cross-reactivity of known cross-reactive alleles and homologous regions, and methods to detect cross-contamination between samples.

Test Run Quality Metrics:  Test developers are advised to establish and document performance thresholds for average and minimum depths of coverage, uniformity of coverage, and percentage of bases in the target region(s) above the minimum depth of coverage for the test.  The draft guidance states that FDA will not recommend specific thresholds for coverage metrics.  However, FDA indicates that thresholds should not be set below the levels specified in the draft guidance.

The draft guidance includes a list of factors for establishing test run metrics and performance thresholds for the following test elements: specimen quality, DNA quality and processing, sequence generation and base-calling, mapping or assembly metrics, and variant calling metrics.

General Recommendations for Performance Evaluation Studies:  The draft guidance includes an extensive list of features that FDA recommends incorporating into performance evaluation studies.  This list includes recommendations regarding performance test design and configuration, recommendations for evaluating NGS-based test accuracy, and recommendations for documenting the results of validation studies.  If test developers deviate from, delete, or add to these recommendations, FDA requests that they provide a “detailed justification.”  As always, companies that deviate from the “guidance” should do so thoughtfully and for non-trivial reasons.

Supplemental Procedures:  The draft guidance recommends including any applicable supplemental procedures (i.e., procedures that are not a part of the main process for generating variant calls from input specimens) whose reflex use will be directed in the test’s instructions in design, development and validation activities, and documentation.

Variant Annotation and Filtering:  Test developers are advised to select filtering algorithms appropriate for the indications for use, establish and document filtering thresholds, and document how and when filtering will be used.  The draft guidance recommends documenting any filtering criteria and their purpose.

Presentation of Test Performance:  The draft guidance provides a list of recommendations for the presentation of test performance and design.  Of note, the draft guidance recommends providing public access to the test’s indications for use statement, limitations, and summary performance information “via a prominent link on the company website.”  This, of course, is not a typical expectation for a device.

Test Reports:  The draft guidance recommends that the following information be included in test reports: the relationship between reported variants and the clinical presentation of the patient, a description of genomic and chromosomal regions detected by the test, a summary of the results of performance studies, a “prominently-placed” list of pathogenic or actionable variants on the first page of the report, test limitations, and risk mitigation elements.  One of the recurring issues in the Laboratory Developed Test debate has been the extent to which FDA could regulate test reports.

Modifications:  Finally, the draft guidance addresses modifications to NGS-based tests.  It states that, in order to stay within the scope of the guidance, any modifications to targeted and WES NGS-based tests should retain the intended use of aiding in the diagnosis of suspected germline diseases.  FDA offers the following recommendations for sponsors when making modifications: document all modifications to the test; prepare a detailed standard operating procedure (SOP) for revalidation; conduct revalidation using a sufficient number of well-characterized samples; document the types of validation studies that will be conducted after modification; where appropriate, revalidate the test end-to-end, not just the modification; assess each modification separately and in aggregate; when adding new genes to an existing panel, evaluate test performance for the original genes on the panel; and include a procedure to account for updates to internal and external databases and their potential impact on clinical interpretation of variants.  Undoubtedly questions will arise over the regulatory obligations, including the need for a new submission, when FDA germline tests are modified – which they will be.

Use of Public Human Genetic Variant Databases to Support Clinical Validity for Next Generation Sequencing (NGS)-Based In Vitro Diagnostics

Unlike the other draft guidance, this draft guidance addresses clinical validity, albeit in one specific manner.  It describes FDA’s considerations in determining whether a publicly available genetic variant database can serve as a source of valid scientific evidence to support the clinical validity of an NGS-based test in a premarket submission and the process by which administrators of such databases can voluntarily apply to FDA for recognition.  The draft guidance notes that, depending on the sufficiency of the evidence from genetic variant databases, FDA may determine that the submission of additional valid scientific evidence is not necessary.  That, of course, would substantially facilitate an application that could use a database.  The devil, though, is in the details.

Recommendations to Support Recognition of Genetic Variant Databases as Sources of Valid Scientific Evidence Supporting Clinical Validity of NGS Tests:

FDA believes that a genetic variant database which could serve as a source of valid scientific evidence to support clinical validity of a test would have the following characteristics:

• Provide sufficient assurances regarding the quality of the source data;
• Provide transparency regarding its data sources and operations;
• Collect, store, and report data in compliance with all requirements regarding protected health information, patient privacy, research subject protections, and data security; and
• House sequence information generated by validated methods.

The draft guidance recommends that genetic variant databases make sufficient information regarding data sources and SOPs publicly available.  Asking that SOPs be made publicly available is unusual, and may not be well-received.  The draft guidance further states that the SOPs should define how variant information is aggregated, curated, and interpreted.  Database administrators are advised to have processes in place for assessing database stability and to back up the database on a regular basis.  Additionally, the draft guidance recommends that database administrators use commonly accepted data formats.

To promote data quality, the draft guidance recommends that databases use consistent nomenclature that is widely accepted by the genomics community.  The draft guidance also states that all variant data should be accompanied by metadata, including the number of laboratories or studies reporting the variant classification, the names of the laboratories that reported the variant, the name of the test used to detect the variant, variant characteristics, and details of the technical characteristics of the test used.  The draft guidance recommends that database operations include methods to ensure that individual data points are not represented more than once.

The draft guidance recommends that all SOPs for curation and variant interpretation be publicly available.  Additionally, FDA recommends that the SOPS include validated decisions matrices, such as those based on well-recognized professional guidelines.  FDA recommends that databases define the types of evidence that personnel interpreting variants may use for an interpretation. 

The draft guidance states that assertions (i.e., assessments of a genotype-phenotype correlation for a particular variant) should be adequately supported and appropriate for the level of certainty and nature of the genotype-phenotype relationship.  However, the draft guidance cautions that in order to be FDA-recognized, a genetic variant database should not include and recommendations regarding clinical treatment or diagnosis.

Database administrators are advised to ensure that all personnel who are interpreting variants have adequate training and expertise.  The draft guidance also recommends that there be methods in place, such as proficiency testing, to make sure that personnel continue to maintain high quality standards over time.  In order to be considered for FDA-recognition, database administrators should make efforts to minimize and make transparent any potential conflicts of interest regarding the database or its personnel.  FDA’s proposal to provide guidance to database administrators represents an intriguing potential expansion of FDA’s reach to a new class of entities.

Genetic Variant Database Recognition Process:

The draft guidance states that FDA intends for the recognition process to involve three steps: (1) voluntary submission of detailed information about the database; (2) FDA review of genetic variant database policies and procedures for obtaining and maintaining data and making variant assertions; and (3) maintenance of FDA recognition of a database.

Database administrators who are seeking to have their variant assertions recognized by FDA as valid scientific evidence to support clinical validity of NGS-based tests can make a voluntary submission to FDA which demonstrates that the database conforms to the recommendations in the guidance.  The draft guidance includes a list of the types of documents which can be included in this submission (e.g., policies, data preservation plans, validation studies for interpretation SOPs). 

The draft guidance states that, where appropriate, FDA may verify variant assertions to make sure they are supported and that the database is following its SOPs.  FDA will treat these voluntary submissions as confidential prior to recognition.  FDA intends to post on its website a list of all FDA-recognized genetic variant databases “and other relevant, public information about those databases.”

FDA stated that it plans to review FDA-recognized databases regularly to verify that they continue to follow their SOPs and the recommendations in this guidance.  FDA will consider the following factors when evaluating whether a genetic variant database for NGS-based tests may maintain FDA recognition:

• Processes should incorporate multiple lines of scientific evidence with appropriate weights.
• Processes should use a tiered system of assertions and adequately describe the meanings of each tier.
• Databases should implement a decision matrix based on validated SOPs or rigorous professional guidelines that incorporate details of the gene or disease evaluated.
• Databases should include validations of the decision matrix.
• Guidelines, decision matrices, and details supporting each variant’s interpretation should be publicly available.

FDA does not discuss what happens to applicants who are in the midst of the review process of the database they are relying upon to keep its recognition.

The draft guidance notes that FDA may consider using third parties to assist with genetic variant database recognition in the future, as it does with the third party 510(k) review program.  This, too, is intriguing, because it would entail use of third party review beyond the statutorily enumerated categories.

In theory, the ability to use curated databases in lieu of clinical validity studies is appealing to would-be applicants.  A separate question is whether undergoing FDA scrutiny will be sufficiently appealing to database administrators.

* Summer Associate

By Riëtte van Laack –  

Last week, FTC announced a settlement agreement with Herbalife International of America Inc., Herbalife International, Inc. and Herbalife Ltd. (Herbalife) under which Herbalife is to pay 200 million dollars and restructure its business (see FTC press release here).

In the Complaint filed on the same day, FTC asserts that Herbalife deceived consumers into believing that they could earn substantial amounts of money selling Herbalife products.  FTC claims that Herbalife was presented as a multilevel marketing (MLM) business opportunity.  The advertising represented the opportunity as one in which participants could earn money through sale of dietary supplements and personal care products and recruiting new participants.  However, according to FTC, Herbalife’s compensation structure was based primarily on participants recruiting others to join and purchase product, rather than on sale of products.  Allegedly, Herbalife misrepresented the business opportunity as an opportunity to get substantial income.  Yet, the FTC claimed that, in reality, the business was not about selling product; allegedly profit from retail sale of product was negligible.  According to FTC, the small number of participants that made significant amounts of money did so not by retail sale of product but by recruiting large numbers of new members.  Those new members would pay a fee, purchase training materials, and goods at wholesale price.  Although led to believe otherwise, most of the distributors/members made little to no money through sale of product.   

FTC claimed that the compensation structure incentivized distributors to purchase (not sell) product and to recruit new participants apparently resulting in overrecruitment of participants and an oversupply of product, making it even more difficult for participants to sell product.  According to FTC, there was no or limited possibility to make money from retail sales of the product. 

FTC obtained a permanent injunction that includes reorganization of Herbalife’s marketing structure (and associated contractual relationships), restitution, disgorgement etc.  Herbalife settled for $200 million.

In particular, Herbalife must restructure its marketing system to comply with certain parameters laid out in the consent decree.  The new marketing system may no longer primarily reward participants for recruiting distributors, but only for sale of products.  The consent decree details the requirements for the new MLM program and compensation structure.  In addition, it specifies that Herbalife is enjoined from making misrepresentations regarding business opportunities, such as the likelihood of earning substantial income and the amount that can be earned.  Herbalife is also enjoined from advertising the business opportunity as likely to result in “lavish lifestyle.”  For example, claims that participants can ‘quit [their] job,’ are ‘set for life,’ can ‘earn millions of dollars,’ and images showing expensive cars and other indicators of wealth are prohibited.

A third party compliance auditor will be appointed.  For seven years, this compliance auditor has the “duty and responsibility to diligently and competently review, assess, and evaluate Defendants’ compliance with [various] provisions” of the consent decree and report its findings to FTC.  In addition, Herbalife is subject to certain compliance reporting requirements.

Multilevel marketing is a popular business model in the dietary supplement industry.  Any company involved in this type of business should review the complaint and consent decree and consider the structure of its own MLM business.

By Karla L. Palmer –

FDA posted a “Notice” on July 12, 2016, advising compounding pharmacies regulated under Section 503A that, effective August 1, 2016, FDA is changing inspection procedures for Section 503A pharmacies (see Notice here). FDA announced that it now will make a “preliminary assessment” whether compounders are compounding in accordance with the conditions in Section 503A.  If a FDA Form 483 is issued upon completion of the inspection, then FDA will not include those observations including a violation of FDA’s current good manufacturing practices (“cGMP”), unless (importantly), based on the investigator’s preliminary assessment, the pharmacy is operation outside the scope of Section 503A.  In past inspections, FDA has more often than not inspected compounding pharmacies (deemed a “producer of sterile drug products”) in accordance with a cGMP standard used for drug manufacturers and from which (lawful) compounders are statutorily exempt.  FDA has at times held a compounder to this standard because, for example, it (unlawfully) compounded preparations for office use, or not solely for individually identified patients.  For other compounders, FDA determined that they were not exempt from cGMP for the circular reason that they may have engaged in compounding under allegedly insanitary or filthy conditions in violation of Section FDCA Sections 501(a)(1) and (a)(2) — based on an inspection conducted pursuant to cGMP.  For still other compounders, FDA would not articulate at the exit interview exactly what standard – USP<795>, USP<797>, cGMP or any other standard – it had relied on during the pharmacy inspection. 

FDA states that it is changing its inspection procedures based on “stakeholder input.”  That “input” could be the position set forth in the 2017 House Agriculture Appropriations Committee Report (April 2016) related to inspections.  The statement directed FDA not to inspect state licensed pharmacies under cGMP.  The text of that directive is as follows: 

Drug Compounding Inspections.—The Committee understands that the FDA is interpreting provisions of Section 503A of the FDCA to inspect state-licensed compounding pharmacies under current Good Manufacturing Practices (cGMPs) instead of under the standards contained in the United States Pharmacopeial Convention (USP) for sterile and non-sterile pharmaceutical compounding or other applicable pharmacy inspection standards adopted by state law or regulation. The Committee reminds the FDA that compounding pharmacies are not drug manufacturers, but rather, are state licensed and regulated health care providers that are inspected by state boards of pharmacy pursuant to state laws and regulations that establish sterility and other standards for the pharmacies operating within their states. Compounding pharmacies are more appropriately inspected using USP standards or other pharmacy inspection standards adopted by state law or regulation in the state in which a pharmacy is licensed.          

Notwithstanding this directive,  FDA states at page 2 of the Notice that, “Importantly,” drug compounders remain subject to all other FDCA provisions “that apply to conventional drug manufacturers.  Because FDA “does not contain an exemption from the prohibition on insanitary conditions,” investigators will continue to include observations related to these conditions without regard to the preliminary assessment of the firm’s “status” under Section 503A.  But what remains unclear from FDA’s Notice is whether FDA’s “preliminary assessment” of “insanitary conditions” itself will be pursuant to cGMP, USP, or standards otherwise applicable to a compounding pharmacy.  It is similarly unclear exactly what standard, other than cGMP, FDA investigators will use for pharmacy inspections generally after August 1.  For example, will FDA hold pharmacies to certain state board of pharmacy requirements, USP<795> and USP<797>, or another inspection standard?  We are curiously awaiting the wave of FDA Form 483 observations issued after August 1, 2016 to see whether the changed inspection standard actually results in changes in FDA’s Form 483 observations issued to Section 503A pharmacies. 

By Riette van Laack and Ricardo Carvajal –

On Thursday July 14, the House approved legislation authorizing USDA to establish and administer a National Bioengineered Food Disclosure Standard. The bill, S.764, was previously approved by the Senate.  The bill had been promoted as an urgent and necessary compromise by its supporters.  Upon enactment, it will immediately preempt any state GMO disclosure laws, thereby preventing a state-by-state patchwork of such requirements.  Among the state laws preempted will be Vermont’s Act 120, which went in effect on July 1, 2016. 

The disclosure requirement will apply to many food products for human consumption, except for food served in restaurants or similar retail establishments.  The disclosure requirement appears to apply broadly to food subject to FDA labeling requirements; there is no explicit exemption for subcategories of food such as dietary supplements and infant formula.  The disclosure requirement will also apply to foods subject to FSIS labeling requirements if (1) the most predominant ingredient in the food is subject to FDA labeling requirements, or (2) the most predominant ingredient is broth, stock, water, or a similar solution, and the second most predominant ingredient is subject to FDA labeling requirements.  Thus, products that contain meat, poultry, or egg products as the most predominant ingredient will not be subject to the disclosure requirement.  Not surprisingly, this can be expected to result in anomalies familiar to anyone accustomed to navigating the dividing line between FDA and FSIS jurisdiction (e.g., a cheese pizza containing bioengineered ingredients may be required to bear a disclosure, whereas a similar pizza containing meat as the most predominant ingredient would not be required to bear the disclosure). 

Although FDA and USDA-FSIS are the two federal agencies that generally regulate mandatory labeling requirements for foods, the bill gives the USDA Agricultural Marketing Service (AMS) the responsibility for establishing the disclosure standard within 2 years of enactment.  Among other things, AMS will be charged with determining the threshold of bioengineered content that triggers the disclosure requirement, establishing a process for determining whether a product is bioengineered, and defining “small food manufacturers” and “very small food manufacturers” (the latter would be exempt).  The AMS regulations must provide various options for disclosure, including the use of a symbol denoting genetically engineered ingredients, a “quick response” (Q.R.) code that people with smartphones can scan to retrieve the information, and for certain labels, a 1-800 number.  The regulations must also provide other reasonable disclosure options for food in small or very small packages.   

With respect to enforcement, the bill makes it a prohibited act to knowingly fail to make a required disclosure.  Also, the bill requires a company subject to the disclosure requirement to keep records demonstrating compliance, and authorizes USDA to examine or audit those records.  USDA must provide the company notice and an opportunity for a hearing on the results of any examination or audit, after which USDA must make public a summary of that examination or audit.  Thus, companies that fail to comply can expect to have that failure made public.  Also, the bill disclaims preemption of “any remedy created by a State or Federal statutory or common law right.”  However, recalls are off the table; the bill makes clear that USDA has no authority to recall a food that does not provide a required disclosure. 

In comments to Congress, FDA and USDA put forward different interpretations of certain provisions in the bill. See FDA’s comments here and USDA’s comments here.  For example, FDA commented that the definition of bioengineering seems to be limited to foods that include genetic material, and therefore would not apply to foods from which all such material has been removed, such as soybean oil.  In apparent disagreement – but without explanation – USDA stated that the definition authorizes the inclusion in the national disclosure program “all of the commercially grown GMO corn, soybeans, sugar, and canola crops used in food today and reviewed and approved by USDA’s Biotechnolgy Regulatory Service.”  USDA also asserted that the definition authorizes inclusion in the national disclosure program of “products of certain gene editing techniques,” including “novel gene editing techniques such as CRISPR when the are used to produce plants or seeds with traits that could not be created with conventional breeding techniques.”  However, FDA noted that “[i]t may be difficult to demonstrate that a particular modification could not be obtained through conventional breeding” (emphasis in original).

Once the bill becomes law, USDA will have the opportunity to put forward its interpretations in the context of rulemaking to establish the national disclosure standard.  That rulemaking is likely to be contentious, given the tenor of the GMO labeling debate over the past couple of years.  Thus, the Congressionally mandated 2-year timeframe for establishment of the disclosure standard could prove unduly optimistic. 

By Mark I. Schwartz –

The Mutual Reliance Initiative was announced by FDA a couple of years back.  It has as its goal “…to increase…[FDA’s]…exchange, with the European Commission and the European Medicines Agency, of information that is critical to making decisions that protect our public health.” 

What this cryptic statement is actually describing is FDA’s interest in exploring the possibility of relying on Europe’s inspections of EU drug facilities so that the agency will not have to inspect these facilities themselves, in the hope of economizing a significant fraction of its inspection budget.  According to Howard Sklamberg, FDA’s Deputy Commissioner for Global Regulatory Operations and Policy, “…we cannot be the inspectors for the world.  Hence, we need to effectively direct our resources in a risk-based manner as we grapple with this tremendous volume of imported goods.”

The Food and Drug Administration Safety and Innovation Act of 2012 (FDASIA) allows FDA to enter into arrangements with foreign governments to recognize the inspection of foreign establishments that are registered under the FDCA “…in order to facilitate risk-based inspections…”

FDASIA section 712 (FDCA section 809):

(a) INSPECTION.—The Secretary—

(1) may enter into arrangements and agreements with a foreign government or an agency of a foreign government to recognize the inspection of foreign establishments registered under section 510(i) in order to facilitate risk-based inspections in accordance with the schedule established in section 510(h)(3);

(2) may enter into arrangements and agreements with a foreign government or an agency of a foreign government under this section only with a foreign government or an agency of a foreign government that the Secretary has determined as having the capability of conduction inspections that meet the applicable requirements of this Act; and

(3) shall perform such reviews and audits of drug safety programs, systems, and standards of a foreign government or agency for the foreign government as the Secretary deems necessary to determine that the foreign government or agency of the foreign government is capable of conducting inspections that meet the applicable requirements of this Act.

(b) RESULTS OF INSPECTION.—The results of inspections performed by a foreign government or an agency of a foreign government under this section may be used as—

(1) evidence of compliance with section 501(a)(2)(B) or section 801(r); and

(2) for any other purposes as determined appropriate by the Secretary.

[Emphasis added.]

For well over a decade now (in other words, this predates the explicit grant of authority under FDASIA) the EU and FDA have been interested in reaching an agreement on cGMP inspections that would allow the regulatory bodies to avoid duplication of their surveillance activities and lower the overall costs of their respective programs.  And the savings would not be negligible, as close to half of FDA’s drug inspections (43% to be precise) are performed in EU countries, according to Dara Corrigan, FDA’s Associate Commissioner for Global Regulatory Policy.  It should be noted that Ms. Corrigan provided this estimate prior to the United Kingdom’s Brexit vote, which will carve out a number of UK drug facilities from EU oversight over the coming years.

In a recent interview, Ms. Corrigan said that $18.5 million in inspection costs could be used elsewhere if FDA did not inspect facilities in the EU.  And these costs are only going to increase as the number of domestic inspections over the past several years has gone down while the number of foreign inspections has increased commensurately.  That trend is expected to continue.

Historically, one of the main stumbling blocks has been the disparate regulatory structures between the U.S. and the EU, as the EU has 28 member states and most, if not all, of these states have their own medicines authorities, in addition to the European Medicines Agency (EMA), which is the EU agency responsible for the protection of public health through the scientific evaluation and supervision of medicines.  This web of overlapping state and super-state drug authorities has made it difficult for FDA to reach agreement with the EU.

Another stumbling block has been the sharing of trade secret information between FDA and the EMA. The EMA has been sending unredacted summaries of EU inspections to FDA for some time, however, the FDA’s reports to the EMA have been redacted, as by law it is only allowed to share trade secret information with a foreign government if the FDA Commissioner certifies that the foreign government has the ability to protect the information from disclosure (Section 708 FDASIA).

The EMA already has bilateral mutual reliance agreements with other regulatory authorities but, for years, has been most interested in securing one with the U.S., its most important trading partner.

Ms. Corrigan has stated that the agency expects to make a decision this year as to whether an EU member state is capable of performing drug facility inspections to FDA’s satisfaction, and whether the agency can confidently rely on those findings.

However, the notion of having a foreign inspectorate perform drug inspections on FDA’s behalf, when the inspections performed by FDA’s own investigators are already so inconsistent, is problematic at best.  Indeed, FDA representatives have long acknowledged that the agency doesn’t have an objective method for measuring quality in the drug industry (for instance, at which facilities are cGMPs improving?  By how much and in what way?)  Nor do they have a reliable method for making cGMP comparisons between facilities manufacturing similar products, or for comparing the results from within a facility over multiple inspections.[1]

It would seem that rectifying these significant lacunae in FDA’s inspectional responsibilities should be the first order of business for the agency, prior to even considering delegating the responsibility for EU inspections to a foreign inspectorate which is not schooled in FDA’s precise cGMP requirements.

We will continue to keep you posted on all developments in this regard.

[1]  This author will acknowledge that, last year, the agency published a draft guidance on Quality Metrics, which has yet to be finalized, and it is also developing a New Inspection Protocol Project, both of which seek to remedy these weaknesses in the agency’s inspection process.  However, these projects are in their earliest stages, they remain largely untested, and it is unclear at this point whether they will lead to more consistency in inspectional results.

by Alan Kirschenbaum and Michelle Butler

On July 14, 2016, CMS issued a release to manufacturers regarding value-based purchasing (VBP) arrangements.  The purpose of the release is to (1) inform manufacturers how to seek guidance from CMS regarding the impact such arrangements might have on the determination of best price and (2) encourage states to consider entering into VBP arrangements.

Regarding the effect on best price, CMS states that it has received a number of specific requests from manufacturers regarding the effect VBP arrangements might have on the determination of best price.  CMS has concluded that the impact on best price “will differ depending on the structure of the VBP arrangement.”  If manufacturers have questions about specific VBP arrangements, CMS encourages manufacturers to submit questions to CMCS Division of Pharmacy at RxDRUGPolicy@cms.hhs.gov.  CMS also states that it “will seek to generalize lessons learned regarding common questions and arrangements in subsequent guidance.”  As always, manufacturers should continue to consult the statute and regulations and document any reasonable assumptions for the determination of best price.

CMS also uses this release to encourage states to consider entering into VBP arrangements, including through the collection of supplemental rebates.  CMS notes that, to the extent a VBP arrangement provides supplemental rebates pursuant to a CMS-approved supplemental rebate agreement with a state Medicaid agency, such rebates would be excluded from best price.  While that does not solve the problem of the impact of a commercial VBP arrangement on best price, it does show that CMS is continuing to think about ways to implement VBP arrangements for government payors.  Earlier this year, we posted on a CMS proposed rule to test new models for payment of drugs and biologicals under Medicare Part B, which included in Phase II testing of the effect of four VBP arrangements.

These initiatives by CMS are occurring as commercial payors such as Cigna Corp., Harvard Pilgrim Health Care, and others are announcing VBP arrangements that they are entering into with manufacturers.  For example, Cigna recently announced that it has entered into VBP arrangements for both of the PCSK9 inhibitors (a new class of cholesterol-lowering drugs) currently on the market.  Similarly, Harvard Pilgrim recently announced VBP arrangements with Novartis for its new heart failure drug, Entresto, and Eli Lilly for its type 2 diabetes drug, Trulicity.

As both commercial and government payors continue to look for ways to bring down the cost of drugs, we can expect to see more innovative contracting mechanisms, such as VBP arrangements.

By Karla L. Palmer

FDA published for comment two non-binding draft guidance documents addressing compounding of commercially available drug products by traditional pharmacies under FDCA Section 503A and outsourcing facilities under Section 503B.  [Section 503A Draft Guidance is HERE, blogged separately] and Section 503B Guidance is [HERE].  These non-binding draft guidance documents reflect FDA’s latest attempt to restrict what may be compounded by narrowly construing what is and is not essentially a copy of a commercially available drug product.  If finalized, the Section 530B guidance would affect, by FDA’s estimates, approximately 40 outsourcing facilities.  The deadline for submitting comments on the draft guidance documents is October 11, 2016.

Section 503B Draft Guidance      

            Under Section 503B, outsourcing facilities may compound “essentially a copy of an approved drug” in limited circumstances.  Section 503B(d)(2).  Section 503B defines “essentially” copies somewhat differently than Section 503A, including referencing non-prescription marketed drugs, whether the compounded and commercially available substances are “identical,” and, if compounded from bulk substances, whether the compounded version produces a “clinical” difference for the patient (which FDA generally describes the same as the “significant” difference requirement under Section 503A).  FDA attaches to its draft Section503B guidance at Appendices A and B a very handy flow chart HERE to assist outsourcing facilities in determining whether a drug is essentially a copy of an approved drug.  Under the statute, and as depicted on FDA’s chart, essentially copies have two components: (1) A drug that is identical or nearly identical to an approved drug or an unapproved non-prescription drug is evaluated under Section 503B(d)(2)(A); and, (2) all other compounded drugs are evaluated under Section 503B(d)(2)(B).  FDA also defines “covered OTC drug products” in the draft guidance as a marketed drug not subject to Section 503(b) (prescription requirements) and not subject to approval under Section 505 to mean any non-prescription drug product marketed without an approved application; it includes monograph and non-monograph products as well. 

The draft guidance describes how FDA intends to apply its definition of “essentially a copy” of a compounded drug when applied to an approved drug (unless it appears on FDA’s shortage list) and how it intends to apply that definition when the compound is compared to a covered OTC product.  Some of the draft’s salient points are as follows:

Compounded drugs “nearly identical” to approved drugs: Referring to Box 1 of Appendix A, FDA will consider whether the compounded and approved drug have the same:  

(1) Active ingredients;

(2) Route of administration;

(3) Dosage form;

(4) Dosage strength; and

(5) Excipients (if excipients of the approved drug are known).   .    

If these characteristics between the two products are the same, then FDA will consider the products identical or nearly identical, and they may not be compounded.  Importantly, unlike in Section 503A, FDA will NOT exempt products from this restriction based on a determination by a prescriber that the compound produces a “clinical difference” for the patient (addressed below). However, in shortage situations, it expects compounds to be identical or nearly identical to the approved drug on FDA’s published shortage list. FDA does not intend to take action concerning compounding a shortage drug if it was on the list at the time the facility received the order, or within “60 days of … distributing or dispensing the drug.”  FDA notes there will be some regulatory flexibility, but if an outsourcing facility continues to fill orders more than 60 days after the drug is removed from the list, it may take regulatory action.   

If the compound differs in one or more of the above characteristics, then FDA would not consider it generally to be “identical or nearly identical.”  FDA would then turn to Section 503B(d)(2)(B) (see Appendix A) to determine whether the compound is appropriate. 

 Section 503B(d)(2)(B) states that a compounded drug is “essentially a copy” of an approved drug if a component of the compounded product is also a component of an approved drug, unless there is a change that produces a “clinical difference” for the patient as determined by the practitioner.  FDA further defines this section as follows:

Using the same bulk substance as the approved drug (Box 3):  FDA states that if the compounded bulk substance and approved drug products are the same, then the compound is essentially a copy, unless there is a determination of “clinical difference.” These provisions apply to a compound whether compounded from bulk substances or from drugs in finished form.    

Prescriber determination of clinical difference (Box 4):  To rely on a prescriber determination of “clinical difference,” the outsourcing facility should ensure that the determination is stated (in no particular format) on either the non-patient specific order or the patient specific prescription.  For non-patient specific orders, the facility should obtain a practitioner statement that specifies the change, and that the compound will only be provided to a patient “for whom the change produces a clinical difference.”  The facility may make the notation, if confirmed by the health care facility or prescriber (including date of the conversation).  FDA provides examples on pages 9-10 of the draft guidance, and elaborates on written statements that may suffice for non-patient specific orders:  

• “Liquid form, compounded drug will be prescribed to patients who can’t swallow tablet” (if the comparable drug is a tablet)
• “Dilution for infusion solution to be administered to patients who need this formulation during surgery” (if the comparable drug is not available at that concentration, pre-mixed with the particular diluent in an infusion bag)
• “1 mg, pediatric patients need lower dose” (if the comparable drug is only available in 25 mg dose).

And for patient-specific prescriptions:

• “No Dye X, patient allergy” (if the comparable drug contains the dye)
• “Liquid form, patient can’t swallow tablet” (if the comparable drug is a tablet)
• “150 mg drug X in 120 ml cherry-flavored Syrup USP, patient needs alcohol-free preparation (if the comparable drug is only available in formulations that contain alcohol)

An order or a prescription containing only a formulation will not suffice.  FDA adds that “lower price” is not sufficient to establish that the compound is not essentially a copy of the approved drug.  FDA does not intend to “question” the determinations of “clinical difference;” it will consider whether such determination is documented.

            Essentially a copy of one or more approved drug products:  FDA’s draft guidance also focuses on that statute’s statement that the compound must not be essentially a copy of “one or more” approved drug products.  FDA intends “to consider a compounded drug product that has bulk substances that are components of one or more approved drugs to be essentially a copy of an approved drug product” unless the change produces a “clinical difference.” 

            FDA’s application of the “essentially a copy” definition when the compounded drug is compared to a covered OTC product:  The Agency sets forth at Appendix B a flow chart for determining whether compounding copies of covered OTC drug products is appropriate. If the compounded drug is nearly identical to a covered OTC drug, FDA intends to apply the policy described above for “nearly identical” prescription drugs.  If it is not identical or nearly identical to the covered OTC drug, then

FDA will not permit compounding, if a component of the compounded drug is a bulk drug and is also a component of a covered OTC, unless there “is a change that produces for an individual patient a clinical difference,” as determined by the practitioner, between the compound and the comparable approved drug.  FDA leaves unanswered the result if there is no comparable “approved” drug (and what exactly is a “comparable approved drug to an OTC product).   FDA notes that a “clinical difference between the compounded drug and an unapproved drug (such as a covered OTC drug) does not exempt the compounded drug from the definition in section 503B(d)(2)(B).”  FDA should also clarify in final guidance whether this means that a compounder may not compound essentially copies of covered OTC drugs under any circumstance, or what documentation, if any would suffice to permit compounds of essentially copies of covered OTC drugs.  FDA also states that the statute does not provide an “essentially a copy” exemption for covered OTC drugs that may appear on FDA’s shortage list; thus copies of these OTC drugs may not be compounded in shortage situations. 

            Lastly, like with Section 503A’s draft guidance, FDA emphasizes that outsourcing facilities must keep good records to demonstrate compliance.     

By David C. Gibbons & Jeffrey N. Wasserstein –

The United States Court of Appeals for the Seventh Circuit recently issued an unpublished Opinion in United States v. LeBeau, No. 16-1289, 2016 WL 3619838 (7th Cir. July 5, 2016), a case in which the pro se defendant-appellant raised a First Amendment defense after pleading guilty to a misdemeanor violation of the federal Food, Drug, and Cosmetic Act (“FD&C Act”) for introducing an unapproved new drug into interstate commerce. 

In LeBeau, the defendant was charged with four misdemeanor counts of violating the FD&C Act for selling his product, “Perfect Colon Formula #1,” for use in the cure, treatment, prevention, or mitigation of a variety of conditions, which had not previously been generally recognized as safe and effective nor approved by FDA for such uses.   Ultimately, LeBeau pled guilty to one of those counts, that is, for distributing his product for use in the treatment of food allergies.  LeBeau at 2; Brief of Plaintiff-Appellee, United States v. LeBeau, No. 16-1289, at 3-4 (May 5, 2016).  LeBeau’s plea agreement permitted him to preserve certain legal issues for appeal.  Brief of Plaintiff-Appellee, at 4.

The appellant-defendant raised several issues on appeal, one of which was that the promotion of Perfect Colon Formula #1 for its intended uses was protected commercial speech under the First Amendment.  LeBeau at 1.  The government argued that LeBeau was not being prosecuted for his speech, but rather his speech was used as evidence of his intent to introduce an unapproved new drug into interstate commerce.  The district court agreed with the government on this point and gave no relief to LeBeau.  On appeal, the Seventh Circuit affirmed the lower court’s conclusion that “the government is not prosecuting LeBeau for having made claims about his products.  Rather, it is prosecuting LeBeau for his acts—his attempts to profit from the sale of a product—which he represented to have palliative properties—without having received [FDA] approval to do so.”  Id. at 3.  Specifically regarding LeBeau’s First Amendment defense, the Seventh Circuit went on to say that, “[b]ecause LeBeau’s statements promoted the unlawful sale of an unapproved drug, they were not entitled to [First Amendment] protection.”  Id.

Although this Seventh Circuit opinion arises from an unpublished Opinion, it is important to consider the proposition for which this case stands, which was not at issue in Caronia, and its progeny, nor the more recent settlements in Amarin and Pacira.  That is, First Amendment protection does not extend to commercial speech regarding an unapproved product—that is, a product for which there are no “lawful” uses—even if that speech is truthful and not misleading.  Seventh Circuit precedent in United States v. Caputo, 517 F.3d 935, 940-941 (7th Cir. 2008), cited by the court in LeBeau, elucidates this point.  In Caputo, the Seventh Circuit stated that First Amendment protection for the promotion of off-label uses of a medical product rests on the “assumption” that a manufacturer can lawfully promote the product at all.  Id. at 940.  The Court stated, “[u]nless the [product] itself could be sold lawfully, there were no lawful off-label uses to promote.”  Id.  Thus, it appears that the Seventh Circuit would draw a distinction between commercial speech promoting unapproved uses of FDA-approved products and the promotion of unapproved products.  First Amendment protection for truthful and non-misleading speech may apply to the former, but not the latter, according to the Seventh Circuit.

There are some important limitations of the LeBeau opinion to consider.  First, as noted above, LeBeau is an unpublished opinion, thus, with limited precedential value.  However, the principles articulated by the court in Caputo carry weight, at least in the Seventh Circuit, and were relied on, in part, by the court in LeBeau.  Second, the pro se defendant-appellant’s arguments in his appellate brief were, at best, unartfully rendered and made without a sufficient understanding of the FD&C Act, the substantial jurisprudence concerning First Amendment protection for truthful and non-misleading commercial speech, and appellate practice.  Finally, the promotional statements at issue in LeBeau were related to labeling statements associated with an unlawfully marketed drug.  It is important to recall FDA regulations regarding preapproval promotion of unapproved, investigational drugs, which permit commercial speech in the context of scientific exchange and are intended only to restrict “promotional claims of safety or effectiveness of the drug for a use for which it is under investigation and to preclude commercialization of the drug before it is approved for commercial distribution.”  21 C.F.R. § 312.7(a).

By Karla L. Palmer –   

On July 11, 2016, FDA published for comment two draft guidance documents addressing compounding of commercially available drug products by traditional pharmacies under FDCA Section 503A and outsourcing facilities under Section 503B (the Section 503A Draft Guidance is available here and the Section 503B Guidance is available here, blogged separately).  This non-binding, draft guidance documents reflect FDA’s latest attempt to significantly restrict what may be compounded by narrowly construing what is and is not essentially a copy of a commercially available drug product.  If finalized, the Section 530A guidance would affect, by FDA’s estimates, approximately 6,900 pharmacies.  The deadline for submitting comments on the draft guidance documents is October 11, 2016.

Section 503A Draft Guidance      

Under the plain language of Section of Section 503A, traditional compounders may compound essentially copies of commercially available drug products so long as not “regularly or in inordinate amounts.”  FDA’s draft guidance attempts to define the scope of “regularly or in inordinate amounts.”  FDA’s draft also defines “commercially available” and “essentially a copy of a commercially available” drug.  These terms have become increasingly important in the wake of FDA’s attempts to curtain how and what drugs may be compounded compounders may 

“Commercially Available” – FDA defines “commercially available” as a marketed drug product.  It will not consider a drug “commercially available” if it is discontinued and no longer marketed or it appears of FDA’s published shortage list.      

“Essentially a copy” – A compound is “essentially a copy” of a commercially available drug if: (1) it has the same active pharmaceutical ingredient (“API”); (2) the APIs have the same, similar or easily substitutable dosage strength; and (3) the commercially available drug can be used by the same route of administration as the compounded drug – UNLESS a prescriber determines there is a “change, made for an identified individual patient, which produces for that patient a significant difference.” 

FDA describes what may cause a compounded drug to be “essentially a copy” and thus violative of Section 503A:

“Same API” – FDA intends to consider drugs with the same API to be “essentially a copy” unless a prescriber determines there is a change between the compounded and manufactured drug product that will produce a significant difference for the patient for whom it is prescribed. 

“Same, similar or easily substitutable strength” – Two drugs will have similar dosage strength if the strength of the compound is within 10% of the commercial product.  FDA would consider dosages easily substitutable if a patient could take, for example two 25mg manufactured doses, instead of one 50 milligram compounded dose. 

“Same route of administration” (i.e., topical, intravenous, oral) – FDA states it does not intend to consider a product with the same API and similar/substitutable strengths to be essentially copies if they have different routes of administration.  FDA includes an important “however:” if the compound and manufactured drug have the same API and same/substitutable strengths, and the commercially available drug can be used “(regardless of how it is labeled)” by the route of administration prescribed for the compound, FDA considers the compound to be a copy of a commercially available drug.  FDA, Draft Guidance at 7, lines 250-59.  FDA uses as an example an injectable drug labeled for intra-muscular use, but can be drawn from the vial by a smaller needle for other administration.  If the doctor preferred a compound to be used in this situation, he or she must document the significant difference between the compound and the commercially available drug.  As another example, FDA states that if X and Y are two commercially available oral drugs, FDA intends to consider a compounded formulation of X and Y in strengths within 10% of the commercially available drugs to be essentially a copy, unless the prescriber determination of significant difference has been documented.  

“Statement of Significant Difference” – FDA proposes that any determination of a significant difference in the compounded preparation from the commercially available product should be documented on the prescription.  FDA states there would be no required format, but gives examples of acceptable statements. Just a patient name and formulation would not be sufficient, states FDA.  Importantly, FDA adds that the “significant benefit that the prescriber identifies must be produced by the change” the compounder makes to the commercially available product.  FDA specifically states that “lower prices” are not sufficient to establish something is not essentially a copy.  If the prescriber does not make clear the significant difference, then the compounder should contact the prescriber and make a specific notation of the difference, including date, on the prescription.

FDA’s Shortage List: Documentation Required – For compounding drugs on FDA’s shortage list, FDA states the compounder or prescriber should include a notation on the prescription that the drug is on the shortage list (including an indication of the date the list was checked). 

“Regularly or in Inordinate Amounts” – As required by the statute, FDA’s draft  defines the vague statutory phrase “regularly or in inordinate amounts.”  The statute permits compounders to compounding essentially copies of commercially available drugs so long as not “regularly or in inordinate amounts.”  FDA suggests “regularly” or “inordinate amounts” means if a drug “is compounded more frequently than needed to address unanticipated, emergency circumstances or in more than the small quantities needed to address unanticipated, emergency circumstances.”  As examples of other non-exhaustive factors FDA will consider:

1. Compounding copies of more than a small number of prescriptions;
2. The compounder routinely substitutes compounds that are essentially copies;
3. The compounder offers pre-printed prescription pads that a prescriber may complete without making a “significant difference” determination;
4. The drug is not compounded on an “as needed basis”, but on a routine or preset schedule. 

FDA states that, at this time, it does not plan to take action against a compounder that fills 4 or less prescriptions of essentially copies of the relevant drug product in a month.  If the prescription appropriately documents the significant difference, FDA would not count it in the four “permitted” prescriptions.

Recordkeeping

FDA’s draft states that a physician or pharmacist seeking to compound a drug under 503A should maintain records to demonstrate compliance with the statute.  This would include notation on prescriptions of “significant difference,” and records of the frequency of compounding “essentially copies” to that they can demonstrate such compounding is not “regularly or in inordinate amounts.” 

Given repeated emphasis of the importance of documentation, and maintaining the documentation, FDA plainly believes documentation is critical to establishing whether the compounded product is appropriate.  It will be interesting to see how compounders and drug manufacturers react to FDA’s draft guidance.

By Kurt R. Karst –      

It’s been a while since we posted on a 180-day exclusivity forfeiture issue, though we suspect that we’ll be doing it more in the coming months with some interesting issues on the horizon. But for now, FDA Blog Readers will have to be content with an oldie but a goodie (at least insofar as 2015 is consider old in Hatch-Waxman time).

We recently got our hands on a Memorandum prepared by FDA’s Office of Generic Drugs concerning the Agency’s December 3, 2015 approval of Sun Pharma Global FZE’s (“Sun’s”) ANDA 078340 for generic versions of Novartis Pharmaceuticals Corporation’s GLEEVEC (imatinib mesylate) Tablets, 100 mg and 400 mg, that we though was worth sharing with folks. The ANDA, which contained a Paragraph IV certification qualifying Sun as a first applicant eligible for 180-day exclusivity, was considered received (i.e., filed) by FDA as of March 12, 2007, and was tentatively approved about 32 months later, on November 13, 2009. 

By way of background, under FDC Act § 505(j)(5)(D)(i)(IV), one of the six 180-day exclusivity provisions added to the FDC Act by Title XI of the 2003 Medicare Modernization Act (“MMA”), 180-day exclusivity eligibility is forfeited if:

The first applicant fails to obtain tentative approval of the application within 30 months after the date on which the application is filed, unless the failure is caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed.

The 2007 FDA Amendments Act (“FDAAA”) clarified FDC Act § 505(j)(5)(D)(i)(IV), such that if “approval of the [ANDA] was delayed because of a [citizen] petition, the 30-month period under such subsection is deemed to be extended by a period of time equal to the period beginning on the date on which the Secretary received the petition and ending on the date of final agency action on the petition (inclusive of such beginning and ending dates) . . . .” (FDC Act § 505(q)(1)(G)). The 2012 FDA Safety and Innovation Act (“FDASIA”) made further changes with respect to the application of FDC Act § 505(j)(5)(D)(i)(IV) to certain ANDAs (see our previous post here).  Neither the FDAAA, nor the FDASIA provisions came into play with Sun ANDA 078340, but we note them nevertheless.

FDA’s letter approving ANDA 078340 says, with respect to 180-day exclusivity, that:

Sun was the first ANDA applicant to submit a substantially complete ANDA for Imatinib Mesylate Tablets, 100 mg (base) and 400 mg (base) with a paragraph IV certification to the ‘051 patent. Therefore, with this approval, Sun is eligible for 180-days of generic drug exclusivity for Imatinib Mesylate Tablets, 100 mg (base) and 400 mg (base).  This exclusivity, which is provided for under section 505(j)(5)(B)(iv) of the FD&C Act, will begin to run from the date of the commercial marketing identified in section 505(j)(5)(B)(iv).  Please submit correspondence to this ANDA informing the agency of the date the exclusivity begins to run.

Although FDA sometimes drops a footnote in an approval letter to explain that an applicant who failed to obtain timely tentative approval neverless remains eligible for exclusivity because of some excuse excepting the applicant from the statutory 30-month period (e.g., ANDA 200156 for Armodafinil Tablets, 100 mg and 200 mg), FDA did not do so in the case of ANDA 078340.  But there’s a story there nevertheless. 

According to FDA’s July 1, 2015 Memorandum, despite Sun’s failure to obtain timely tentative approval by September 12, 2009, the company avoided forfeiting eligiblity for 180-day exclusivity because of a chemistry discipline review issue that remained pending on September 12, 2009.  The specifics of the chemistry review issue are redacted from FDA’s July 1, 2015 Memorandum; however, FDA explains that:

On September 8, 2009, FDA and Sun held [a] chemistry teleconference, during which FDA asked the firm, among other things, to provide a commitment to provide [the requested chemistry information] after tentative approval. Sun responded to this request on September 9, 2009, and provided a commitment to provide [the requested chemistry information] within 15 days of receiving tentative approval.  FDA’s review of Sun’s September 9, 2009 amendment, including the commitment to submit [the requested chemistry information], extended past the 30-month date. . . .  FDA reviewed Sun’s amendment and found chemistry to be acceptable on October 9, 2009, approximately one month after the 30-month forfeiture date.  Based on the above facts, we have determined that there was a change in requirements for approval related to [chemistry information] which FDA was actively addressing at the 30-month forfeiture date, and that this change was a cause of Sun’s failure to obtain tentative approval by the 30-month forfeiture date.

Although FDA could have ended the Agency’s analysis there, the Agency went on to address an argument from Sun that there was a change in ANDA bioequivalence requirements that caused the company to miss the 30-month tentative approval deadline. Specifically, Sun argued that after the submission of ANDA 078340, “FDA required for the first time that the [bioequivalence] studies for [imatinib mesylate tablets] be performed on a patient population” instead of a health volunteer population. FDA identified this as a bioequivalence deficiency in November 19, 2007 correspondence to Sun.  Sun performed new studies and amended ANDA 078340 on April 2, 2009, and again on July 29, 2009. FDA reviewed Sun’s submissions and found bioequivalence to be acceptable on August 27, 2009, about two weeks prior to the September 12, 2009 30-month forfeiture event date.  “Sun’s bioequivalence data was determined to be acceptable prior to the 30-month forfeiture date; therefore, any changes in bioequivalence requirements could not have caused Sun’s failure to obtain tentative approval within 30 months,” says FDA in the July 1, 2015 Memorandum.

Although FDA’s memorandum doesn’t relay the most scintillating 180-day exclusivity forfeiture story we’ve seen, the case provides greater visibility into FDA’s thinking on 180-day exclusivity forfeiture. In addition, it serves as a reminder that just because an ANDA approval letter is silent with respect to 180-day exclusivity forfeiture for failure to obtain timely tentative approval (or with respect to any of the other forfeiture provisions for that matter) doesn’t mean there’s not something else lurking out there providing an explanation. 

By Riette Van Laack –

On June 30, as required under the consent decree in the action by the National Resource Defense Council against FDA (see our previous post here), FDA published the amended tentative final monograph for consumer antiseptic rubs, also referred to as consumer rubs, leave on products or hand sanitizers. This category of products includes antiseptic wipes.

As we previously reported here and here, FDA has published two other proposed rules pursuant to the consent decree: a proposal to classify all consumer antiseptic hand wash products non-GRASE and a proposal to reclassify the health care antiseptics as category III (i.e., additional data are needed for safety or effectiveness). 

In the most recent action, FDA proposes to (re)classify alcohol (60-95 percent), isopropyl alcohol (70 to 91.3 percent) and benzalkonium chloride as category III because the Agency has determined that it currently has insufficient data to conclude that these active ingredients are Generally Recognized as Safe and Effective (GRASE) under FDA’s updated standards.  Unless additional data are submitted to support GRASE under the updated standards, FDA will declare them non-monograph ingredients in the final monograph.  FDA hastens to note that this proposal should not be interpreted as FDA’s determination that the consumer antiseptic rubs on the market are not safe or effective.  

It likely will come as welcome news for industry that the Agency does not propose to require clinical outcome data to support Generally Recognized as Effective (GRAE) status for the consumer antiseptic rubs.  FDA previously required such data for the consumer hand wash products in light of the easily available alternative of washing with soap and water.  However, antiseptic rubs are intended to be used by consumers when soap and water are not available, and there is no readily available alternative for antiseptic rubs.

Studies needed to support GRAE status for consumer antiseptic rubs include in vitro testing and in vivo studies.  The in vitro test consists of a determination of the antimicrobial activity against potential pathogens; including 25 representative clinical isolates and 25 reference strains of specified organisms.

The in vivo study consists of a clinical simulation test.  FDA continues to propose a bacterial log reduction as evidence that a consumer antiseptic rub is GRAE.  As with the health care antiseptics, FDA proposes a log reduction standard for one-time use application only; for an active ingredient to be GRAE, a single application must result in a 2.5 log reduction on each hand within 5 minutes after application.

FDA also is asking for data and information about the impact of product use factors, e.g., the impact of volume of product per application on the efficacy of the product.  FDA plans to use this information when developing the requirements for final formulation testing and labeling for the final formulations.

All three ingredients included in this proposed regulation are also included in the proposed regulation for health care antiseptics, so the requirements for additional safety data should not come as a surprise, as FDA’s considerations are largely identical for both categories of products.

FDA’s proposal does not address labeling and testing of final formulations because, at this time, no active ingredients are considered GRASE.  The Agency indicates that, if any of the three ingredients are determined to be GRASE, the final rule will address requirements for final formulations, including efficacy testing.

The proposed rule is open for comments for 180 days.  In addition, companies will have one year to submit new data and information, and comments on any new data or information may then be submitted to the docket for an additional 60 days.