Hyman, Phelps & McNamara, P.C., the nation’s largest boutique food and drug regulatory law firm, seeks two attorneys to help with our fast-growing and robust practice. 

The ideal candidate for one position is an attorney with substantive expertise in medical device regulation.   

The other attorney is a junior to mid-level associate with excellent credentials, strong verbal and writing skills, and a demonstrated interest in food and drug law and regulation.

Compensation is competitive and commensurate with experience.  HP&M is an equal opportunity employer.

Please send your curriculum vitae, transcript, and a writing sample to Anne K. Walsh (awalsh@hpm.com).  Candidates must be members of the DC Bar or eligible to waive in.

By Jennifer M. Thomas & John R. Fleder –

On July 6, 2016, the Eighth Circuit upheld a district court ruling in United States v. DeCoster that imposed three-month prison sentences and $100,000 fines on Austin “Jack” and Peter Decoster, the owner and chief operating officer, respectively, of Quality Egg, LLC.  We have previously blogged about the Quality Egg case here, and written about it in FDLI’s Top Food and Drug Cases of 2015.

This case is among the first in decades to analyze the limits of the Park Doctrine (also known as the “Responsible Corporate Officer” doctrine).  The significance of the Decosters’ case is highlighted by the involvement of numerous amici:  The Washington Legal Foundation, Cato Institute, Chamber of Commerce of the United States, Pharmaceutical Research and Manufacturers of America, and the National Association of Manufacturers all submitted briefs to the Eighth Circuit on behalf of the Decosters.  And the Decosters’ legal war is unlikely to end with their defeat in this battle.  Three Eighth Circuit judges wrote three different opinions in this case, making it highly likely that the Decosters will seek en banc review of the decision and/or petition the Supreme Court for a writ of certiorari.

Despite the fractured nature of the Eighth Circuit’s ruling and the likelihood of further appeal, the multiple opinions issued today are of interest and worth reading in their entirety.  Importantly, while they wrote separately and reached different conclusions, the three Eighth Circuit judges appeared unanimous in finding that a penalty of imprisonment for a misdemeanor violation of the FDC Act would violate principles of due process if the offense is merely one of “vicarious liability,” defined as liability “for the actionable conduct of a subordinate . . . based on the relationship between the two parties.”  United States v. Austin Decoster, No. 15-1890, slip op. at 8 (8th Cir. Jul. 6, 2016).

Judge Murphy, writing on behalf of the court, addressed the problem of “vicarious liability” by clarifying that Park liability under the FDC Act does not impose vicarious liability, but rather recognizes the “blameworthiness” of a corporate officer that “fail[s] to prevent or remedy the conditions which gave rise to the charges against him.”  Id.  (internal quotations omitted) (citing United States v. Park, 421 U.S. 658, 673, 675 (1975)).  Judge Gruender, in concurrence, further distinguished the present case from one involving “vicarious liability,” pointing to the fact that the district court had found the Decosters negligent.  See United States v. Austin Decoster, No. 15-1890, slip op. at 14 (8th Cir. Jul. 6, 2016).  He wrote separately from Judge Murphy to emphasize that, pursuant to the Supreme Court’s reasoning in Park, negligence is an absolute prerequisite to imposing a sentence of imprisonment on a responsible corporate officer under the FDC Act.  Id. at 14-18.  Finally, Judge Beam in dissent did not disagree with the other two judges that “vicarious liability” could not justify the imposition of imprisonment for a violation of the FDC Act, but he went further to conclude that a finding of negligence was also insufficient.  To impose a sentence of incarceration under the FDC Act, he opined, the government would have needed to demonstrate that the Decosters had the necessary mens rea or “guilty minds” – in other words, that they knew they were violating the law.  Judge Beam reasoned that the mens rea requirement applies to FDC Act violations because that statute contains no “express congressional statement to the contrary.”  Id. at 22-23.  Thus, he dissented from the majority opinion in favor of upholding the Decosters’ sentence.

We will continue to follow this case and keep blog readers informed, and may follow with further analysis of this Eighth Circuit holding at a later date.

By Kurt R. Karst –      

We like hunting down orphan drug clinical superiority precedents. And although it’s been said that “the thrill is in the chase, never in the capture” (by a Doctor Who character at least), we enjoy the capture just as much as the chase. Earlier this year we put our a scorecard of precedents where FDA determined that an orphan drug is clinically superiority to another drug that is otherwise the same drug for the same orphan condition.  We have two more precedents to add to the scorecard.  Both concern “greater safety” clinical superiority, and put that clinical superiority basis on par with the number of precedents we know of for the so-called Major Contribution to Patient Care (“MC-to-PC”) basis (now seven each). Today, we’re posting on one of those decisions.  We’ll post on the second – and perhaps more interesting precedent – in the coming days. 

We refer to our previous post for a more detailed discussion of orphan drug clinical superiority, but remind folks here that FDA’s orphan drug regulations (21 C.F.R. Part 316) define a “clinically superior” drug as “a drug . . . shown to provide a significant therapeutic advantage over and above that provided by an approved orphan drug (that is otherwise the same drug)” in one of three ways: (1) greater effectiveness as assessed by effect on a clinically meaningful endpoint in adequate and well controlled trials; (2) greater safety in a substantial portion of the target population; or (3) demonstration that the drug makes a major contribution to patient care. By virtue of showing clinically superior, a drug is not considered the same as a previously approved drug (even if it contains the same active moiety and is approved for the same orphan indication as the previously approved drug), and can be approved notwithstanding a period of orphan drug exclusivity applicable to the previous drug and may obtain its own period of 7-year orphan drug exclusivity.

On August 20, 2012, FDA designated Nova Laboratories Limited’s (“Nova’s”) Mercaptopurine Oral Solution as an orphan drug for the treatment of Acute Lymphoblastic Leukemia (“ALL”) in pediatric patients. Pediatric ALL, which peaks between the ages of 1 and 4 years, is reportedly the most common malignancy diagnosed in children, representing about 23% of childhood cancers.  Nevertheless, in 2012, when Nova requested orphan drug designation, the United States prevalence of pediatric ALL, and, indeed adult and pediatric ALL together, was well below the statutory 200,000 prevalence threshold: about 66,000, according the National Cancer Institute’s Surveillance, Epidemiology, and End Results Program database.

With a drug for a disease that is clearly a rare (orphan) disease, the only obstacle for Nova to overcome seemed to be providing a plausible hypothesis of clinical superiority. You see, FDA previously approved mercaptopurine for the treatment of ALL, including pediatric ALL.  Specifically, FDA approved PURINETHOL (mercaptopurine) Tablets on September 11, 1953 under NDA 009053, which is currently held by Stason Pharmaceuticals.  But the tablet dosage form raised issues for pediatric patients.  According to Nova: 

Presently, a single 50mg strength tablet formulation of [mercaptopurine] is marketed in the United States. Tablet formulations are not acceptable to nearly all pre-school (less than 5 years of age) children and the majority of school-aged children 6-12 years.  As a consequence, children are often given unlicensed liquid formulations of [mercaptopurine] prepared extemporaneously in pharmacies. Alternatively, parents and carers of children are dispensed the tablet form of [mercaptopurine] and therefore have to resort to splitting or crushing the tablet(s) before mixing it into water or food prior to administration.

FDA’s Office of Orphan Products Development agreed with Nova in a July 18, 2012 Memorandum:

The approval by the FDA of mercaptopurine (MF) tablets for the treatment of ALL provides a more than adequate scientific rationale. The issue with this application then becomes whether an oral liquid formulation is clinically superior (i.e., safer or more efficacious) than the approved tablet formulation or a major contribution to patient care. As noted in the November 30, 2009 review of application 09-2863 [from Orbona Pharma Ltd.] for another oral liquid formulation of MP for ALL, there are significant safety issues associated with the use of MP for the treatment ofALL and these safety issues can be compounded when the tablets are manipulated in order to dose pediatric patients.  It is certainly feasible that parents attempting to prepare a dose of MF could accidentally over or underdose their child with serious consequences.  Consequently, an oral iquid formulation of MF would be a “safer” product than the approved tablet formulation by eliminating the need for compounding procedures and thus reducing or avoiding potential serious medication errors. Therefore, for purposes of orphan designation, the sponsor has provided a plausible hypothesis for expecting an oral liquid formulation of MP to be a safer product than the approved tablet formulation of the drug.

FDA ultimately approved Nova’s mercaptopurine drug product for pediatric ALL. In fact, FDA approved the drug for all ALL patients.  Specifically, on April 28, 2014 FDA approved Nova’s NDA 205919 for PURIXAN (mercaptopurine) Oral Suspension, 20 mg/mL, “ for use in pediatric, children, and adult patients for maintenance therapy of [ALL] as part of a combination regimen.” Although PURIXAN was approved for a use broader than the orphan drug designated use (but still an orphan use), FDA granted Nova a period of orphan drug exclusivity that expires on April 28, 2021.

McKenzie E. Cato* and Allyson B. Mullen

Many device companies struggle to ensure that the patients enrolled in their clinical studies are representative of the sex, age, race, and ethnic make-up of the U.S. population.  In part, this task is difficult because device clinical studies are often small and occur at only a few study sites.  FDA has previously attempted to provide clarification regarding sex, age, race, and ethnicity in earlier guidances, Evaluation of Sex-Specific Data in Medical Device Clinical Studies (Dec. 2011) and Collection of Race and Ethnicity Data in Clinical Trials (Sept. 2005). 

In 2012, Congress directed FDA publish a report “addressing the extent to which clinical trial participation and the inclusion of safety and effectiveness data by demographic subgroups including sex, age, race, and ethnicity, is included in applications submitted to the Food and Drug Administration.”  The report was required to include information about clinical trials for all products, not only medical devices.  See Food and Drug Administration Safety and Innovation Act, Pub. L. No. 112-144, § 907, 126 Stat. 993, 1092-93 (2012).

FDA submitted the required report to Congress in August 2013.  The report reviewed original premarket approval (PMA) applications for medical devices approved in 2011.  Of the approved PMAs evaluated for the report, only 40% publicly reported an age-based analysis, only 27% contained a race or ethnicity subgroup analysis, and only 16% had public statements regarding race or ethnicity analyses.  In August 2014, FDA published an Action Plan on enhancing the collection and availability of demographic subgroup data across all premarket submission types, not just PMAs.  On April 9, 2015, the Institute of Medicine held a public workshop to discuss “strategies for ensuring diversity, inclusion, and meaningful participation in clinical trials.”  FDA released a draft guidance on June 20, 2016, titled Evaluation and Reporting of Age, Race, and Ethnicity Data in Medical Device Clinical Studies, incorporating the recommendations from the IOM workshop.  Once finalized, the draft guidance will be an extension of the earlier guidances. 

FDA’s stated goal of the draft guidance is to “improve the quality, consistency and transparency of data regarding the performance of medical devices within specific age, race and ethnic groups.”  The three specific objectives of the draft guidance are to:

1. Encourage the collection and consideration of relevant age, race, ethnicity, and associated covariates during study design for devices for which safety, effectiveness, or benefit-risk profile is expected to vary across these groups;
2. Outline recommended analyses of study subgroup data; and
3. Specify FDA’s expectations for reporting age, race, and ethnicity-specific information in summaries and labeling for approved or cleared medical devices.

FDA’s recommendations for each of these three objectives are discussed in turn below.  FDA emphasizes throughout the draft guidance that when there are clinically relevant differences in treatment effects across age, race, or ethnic groups, the effects should be considered in the study design and reported in the device labeling.

Achieving Appropriate Enrollment

The draft guidance explains that it is important for medical device clinical trials to include representative proportions of age, race, and ethnicity subgroups to reflect the intended use population, particularly when there are clinically meaningful differences in safety, effectiveness, or benefit-risk profile across demographic subgroups.  The draft guidance discusses potential barriers to enrollment and cites a 2009 FDA report to Congress on how to address low enrollment of certain populations of clinical trials.  The draft guidance also includes a list of suggestions for enhancing enrollment of relevant age, race, and ethnicity subgroups.  Sponsors are advised to justify in the investigational plan how the enrollment criteria will provide reasonable representation of the intended population.

While the enrollment suggestions may be helpful to some sponsors, they may be of limited utility in certain situations.  Perhaps most importantly, the draft guidance does not directly address the unique challenges faced by many device companies in planning a clinical trial, such as having only a few study sites and small total numbers of patients enrolled in many studies, particularly for 510(k)s.

If there are age, race, or ethnicity differences in terms of (1) prevalence, (2) diagnosis and treatment patterns, (3) proportions of age, race, and ethnicity subgroups included in past studies for the target indication, or (4) outcomes related to safety or effectiveness, FDA advises sponsors to provide this information in the protocol and submission documents.  Specifically, FDA recommends that sponsors describe this information as part of the risk analysis section of the investigational plan, the study protocol, investigator training materials, sections of the marketing application containing results of clinical investigations, and in any interim or final reports for any mandated postmarket studies.

It appears that FDA intends to continually assess whether there are any clinically meaningful age, race, or ethnicity differences in both the premarket and postmarket setting.  If the Agency determines that additional data are needed from a particular demographic subgroup before the device is approved or cleared, it may recommend that sponsors include provisions to encourage enrollment of certain subgroups.  It is unclear how a sponsor would incorporate a “recommendation” from FDA for “further enrollment” during the premarket review stage, since presumably, by that time, the study will be completed and data collected and analyzed.  FDA may also determine that postmarket evaluation of age, race, or ethnicity may be warranted if there are premarket “signals” indicating that there may be clinically meaningful outcome differences in age, race, or ethnic subgroups.

The draft guidance provides recommendations for sponsors and investigators for avoiding loss to follow-up of subjects.  FDA explains that disproportionate loss to follow-up among minorities and older patients may be a barrier to diverse study representation.

Study Design, Analysis, and Interpretation of Study Results

FDA explains that biological differences across age, race, and ethnic groups, such as gonad development, skin texture and color, hormone levels, metabolism, and bone density, can influence the safety and effectiveness of a device.  Thus, FDA believes it is important for any differences in data across age, race, and ethnic groups to be accounted for in study design and analysis.

At the IDE study design and early enrollment stage, sponsors are advised to discuss in the Statistical Analysis Plan their strategy for achieving diverse enrollment, any key covariates that could explain differences across subgroups, and whether clinical outcome measurements may differ across subgroups. 

For both premarket and postmarket studies, the draft guidance recommends that sponsors submit descriptive statistics to the Agency for outcomes of interest by subgroup, and address the issue of confounding variables by using multivariable analyses adjusted for patient characteristics that could confound the relationship between the subgroup and study outcomes.  The recommended statistical analyses are discussed in detail in the draft guidance. 

In interpreting study results, if sponsors find that there are any clinically meaningful differences, they are advised to discuss with FDA whether any additional data are needed.  If the results of study analyses demonstrate that there are insufficient data to assess whether there are clinically meaningful differences, FDA may determine that clinical data from additional subjects in one or more subgroup is necessary.  Additionally, FDA may request additional confirmatory studies, though the draft guidance notes that this would be rare.  In cases where sample sizes may not be large enough to detect clinically meaningful differences, the draft guidance recommends that sponsors consult with FDA.

Submitting Age, Race, and Ethnicity Data in Submissions to FDA and Reporting in Public Documents

FDA recommends that sponsors submit and publicly report, in 510(k), PMA, and de novo documents, the study demographics (i.e., proportion enrolled and completed by subgroup).  If known, sponsors are advised to discuss the generalizability of study findings to the subgroups.  FDA recommends that sponsors analyze and submit any co-morbidities and/or other baseline characteristics by subgroup.  FDA also recommends that sponsors report whether loss to follow-up disproportionately affected a particular subgroup.  Sponsors are advised to submit or publicly report this information as follows:

• IDE Study Design and Early Enrollment Stage: As part of IDE annual progress reports
• Premarket Submission Stage: As part of the marketing application (including in the labeling) in sections discussing results of clinical investigations and in the 510(k) Summary
• Postmarket Submission Stage: In interim and final reports for any required postmarket studies

FDA staff will also include this information in the PMA Summary of Safety and Effectiveness, HDE Summary of Safety and Probable Benefit, de novo decision summaries, and mandated postmarket study summaries, all of which are publicly available on FDA’s website.  Interestingly, FDA does not say that it will include this information in its 510(k) decision summaries published by the Office of In Vitro Diagnostics and Radiological Health (OIR).

FDA recommends that outcome analyses, including any covariates that may explain outcome differences, also be included in labeling and review summaries.  In particular, FDA recommends that sponsors discuss how differences across subgroups affect the benefit-risk profile of the device.

The draft guidance includes several flowcharts for various study designs: (1) recommendations for demographic subgroup-specific statistical study design; (2) recommendations for demographic subgroup-specific statistical analysis for one-arm studies; (3) recommendations for demographic subgroup-specific statistical analysis for comparative studies; and (4) recommendations for submitting and reporting subgroup-specific participation and outcome information.

The recommendations in this draft guidance have the potential to impose a substantial burden on sponsors not already performing these analyses.  Information provided in an FDA guidance document is, of course, not binding on sponsors, but it does represent FDA’s current expectation for manufacturers and applicants.  While FDA can require additional premarket or postmarket studies to address questions regarding device safety and effectiveness across demographic subgroups, it remains to be seen the extent to which sponsors will proactively approach FDA with these questions or report demographic subgroup differences in their submissions.  We agree that it is important to understand the safety and effectiveness of devices in age, racial, and ethnic subgroups.  This draft guidance, however, does not appear to consider the practical limitations to understanding these key points based on the current study design of most device clinical studies.  This draft guidance would benefit from taking a more practical approach to performing these analyses.

* Summer Associate

In recent years, the level of scrutiny of foreign pharmaceutical manufacturing facilities in countries like China and India has skyrocketed—along with the demand for and dependence of Western countries on the supply of goods coming from those facilities.  A recent webinar, International Pharmaceutical Supply Chain Imperiled Like Never Before, presented by lawyers from Dechert and Hyman, Phelps & McNamara, PC, discussed current pharmaceutical supply chain developments and the steps drug manufacturers should be taking to prevent and remediate compliance issues.

Key questions addressed during the webinar include:

How has the FDA's enforcement focus shifted?

Until recently, most FDA enforcement activity (including warning letters, seizures, injunction actions, consent decrees, criminal prosecution, etc.) relating to pharmaceutical manufacturing was aimed at U.S. facilities. However, the FDA's enforcement focus has shifted to foreign facilities, resulting in a significant increase in investigations in China and India.

• The FDA is staffing up in both China and India, which is a leading indicator that we will see increased enforcement activity in these jurisdictions. While the number of inspections in China and India have held steady, the number of violations they’re finding suggests there is greater scrutiny.
• Within the last 12 months, 25 Warning Letters were issued with 23 of them being to facilities outside of the U.S.
  • Approximately two thirds of the letters alleged violations of data integrity or deficient systems designed to protect data integrity.
  • Many of the cited facilities were subject to Import Alerts, which barr importation of drugs manufactured at those plants, of Active Pharmaceutical Ingredients (APIs) from those plants, and finished dosage forms of drugs manufactured with those APIs.

What should we know about the CFDI?

The Center for Food and Drug Inspection (CFDI) is the department responsible for inspections at the China Food and Drug Administration (CFDA), China’s FDA equivalent.

• The CFDI typically conducts an inspection with a team of at least three people. Inspections are often unannounced and can be completed quickly.
• Retaining an experienced translator is important since the CFDI inspectors usually do not speak English. The inspection results are revealed in a written report only.
• Should your CFDI inspection go poorly, be prepared for: 
  • Import bans publicized on the CFDA website (in Chinese only).
  • Return of drug registration application.
  • Renewal application denied.

Who needs to be prepared?

• Pharmaceutical manufacturers with facilities in China, India, or Europe.
• Pharmaceutical manufacturers that use contract manufacturers in China, India, or Europe. 
  • Nearly 40 percent of drugs sold in the U.S. are manufactured in foreign countries.
• Pharmaceutical manufacturers or related contract manufacturers that use APIs from overseas facilities. 
  • About 80 percent of APIs used in drugs manufactured in the U.S. come from foreign countries.

What important anti-corruption enforcement trends are we seeing in both the United States and Asia?

Recent enforcement of anti-bribery has been vigorous.

• United States
  • In recent years, the DOJ has brought more than a hundred cases against corporations and individuals, resulting in $4 billion in penalties. The SEC has brought actions against 85 companies and approximately 35 individuals, with many billions of dollars in fines, disgorgement and prejudgment interest.
  • An increase in cross-border cooperation among enforcement authorities.
  • An increase in holding corporate executives accountable for corrupt behavior.
• Asia 
  • Emerging markets, such as China and India, rank among the highest in terms of perceived corruption on a jurisdiction basis, leading to a ramp up in anti-corruption efforts.
  • Traditionally China has investigated and taken enforcement action against corrupt officials who receive bribes but, since 2012, when the anti-graft campaign was launched, the focus has also been on companies and individuals who give bribes.
  • The majority of these investigations and enforcement actions have been in areas that affect public safety and the livelihood of Chinese people, most particularly in the life sciences industry.

Continued enforcement against pharmaceutical companies, with a new supply chain focus.

• The head of the SEC’s FCPA unit recently announced a renewed focus on the pharmaceutical industry.
• Prior FCPA enforcement actions have targeted pharmaceutical companies that provided cash, trips, entertainment and other things of value to physicians in state-owned health systems in order to induce them to prescribe the companies’ products. 
• Chinese authorities' investigations and enforcement actions against pharmaceutical companies continue unabated.
• The supply chain represents the next frontier for FCPA and Chinese enforcement in the pharmaceutical industry, focusing on bribes paid within the pharmaceutical in-country supply chain, including by local manufacturers, to secure advantages that ultimately benefit multinational pharmaceutical companies.

How can we avoid risk and create a culture of compliance?

• Conduct internal audits with a focus on electronic data recording systems.
• Encourage unannounced Quality Assurance visits to ensure that workers are making contemporaneous entries.
• Perform mock inspections.
• Do not rely on inspection results from foreign regulators or customers.
• Demonstrate top-down senior management support for compliance.
• Develop clearly written compliance policies and procedures for high-risk areas (i.e., gifts, entertainment, hospitality, sponsored travel, and political contributions) that take into account both overseas (FCPA, UK Bribery Action) and local requirements.
• Know your vendors and supply chain partners well — vet them in advance, and monitor them thereafter — as you will be held accountable for any wrongdoing on their part.

A copy of the webinar presentation is available here. You can access a recording of the webinar here.

By Karla L. Palmer –

The Government Accountability Office (GAO) issued three reports during 2015 making eleven recommendations to the Drug Enforcement Administration (DEA) to more effectively perform their functions under the Controlled Substances Act (CSA) and DEA’s implementing regulations (see previous posts here and here).  GAO now reports that, as of June 2016, DEA has taken actions to address some of the recommendations, but has fully implemented just two of them.  See the entire 26-page report here.

In brief, GAO reported in February 2015 that DEA had not effectively administered the quota process, and that DEA and FDA had failed to establish a sufficiently collaborative relationship to address shortages of drugs containing controlled substances subject to quotas.  DEA has taken some actions to address GAO’s seven recommendations concerning administration of the quota process including finalizing an information sharing agreement with FDA addressing drug shortages, and strengthening internal controls regarding implementation of the quota system.  However, DEA has failed to address fully GAO’s five other recommendations from GAO’s February 2015 Report regarding more effective implementation of the DEA quota process.

In June 2015, GAO reported that DEA registrants were not aware of resources and other information available to them to enhance regulatory compliance and better understand their obligations as DEA registrants.  GAO recommended that DEA take three actions to increase registrants’ awareness and improve information flow.  GAO reports that DEA has made some strides in addressing GAO’s recommendations including developing web-based training and updating the Pharmacist’s Manual to reflect new regulations (which to our knowledge has not yet been published).  However, because DEA did not mention plans to develop and distribute additional guidance for distributors or pharmacies, GAO reported that DEA has not fully implemented its recommendations. 

Specifically with respect to drug distributors, DEA had “raised concerns” about GAO’s recommendation to solicit input from distributors concerning suspicious order reporting and monitoring.  DEA stated that, short of providing arbitrary thresholds to distributors, “it cannot provide more specific suspicious orders guidance because the variables that indicate a suspicious order differ among distributors and their customers.”  

GAO states that in April 2016, DEA provided information about ongoing efforts to educate distributors about their roles and responsibilities for monitoring and reporting suspicious orders (e.g., DEA’s Distributors’ Conferences) and plans for additional yearly distributor training.  DEA “did not mention” plans to develop and distribute additional guidance for distributors.  GAO believes that a guidance document like DEA’s Pharmacist and Practitioner Manuals could assist distributors in understanding and meeting their obligations under the CSA.  Interestingly, GAO stated that although DEA may not be able to provide guidance that will definitively answer the question of what constitutes a suspicious order (notwithstanding significant recent litigation at the DC Circuit on this precise issue) or offer advice about which customers to ship to, DEA could, for example, provide guidance around best practices in developing suspicious orders monitoring systems.  Industry would likely welcome such guidance, so long as DEA does not, in turn, use it as a roadmap in litigation against those same distributors based on non-compliance.  Finally, GAO noted that in the absence of clear guidance from DEA, GAO’s  survey data reveals that many distributors are setting thresholds on the amount of certain controlled substances that can be ordered by their customers (i.e., pharmacies and practitioners), “which can negatively impact pharmacies and ultimately patients’ access.” GAO plans to continue to monitor the agency’s efforts in this area, and thus the recommendation remains open.

Lastly, in September 2015, GAO reported that DEA’s confidential informant policies were not consistent with certain provisions of the Attorney General’s Guidelines.  GAO asserts that DEA failed to address the requirement to provide the informant with written instructions about authorized illegal activity and the requirement of obtaining a signed acknowledgment from the informant.  GAO recommended DEA update these policies and processes.  DEA expects to complete revisions this summer, but until finalized, GAO noted that this recommendation also remains open.  

By Kurt R. Karst –      

First, FDA gets hit with a June 27th preemptive lawsuit over approval of generic versions of CRESTOR (rosuvastatin calcium) Tablets; and then, on June 28th, a second lawsuit is filed by Lannett Company Inc. and Lannett Holdings, Inc. (collectively “Lannett”) challenging FDA’s recent rescission of Lannett’s ANDA 202750 for the oral chemotherapy drug Temozolomide Capsules, 5 mg, 20 mg, 100 mg, 140 mg, 180 mg, and 250 mg. It looks like it may not be much of an Independence Day Holiday for some of FDA’s attorneys.  

Lannett’s five-count Complaint was filed in the U.S. District Court for the District of Columbia and challenges FDA’s May 17, 2016 approval rescission of ANDA 202750 for Temozolomide Capsules, which the Agency had approved on March 23, 2016. According to FDA, the Agency approved the ANDA in error.  You see, ANDA 202750 apparently identifies Chinese company Chongqing Lummy Pharmaceutical Co. Ltd. (“Lummy”) as the manufacturer of the active pharmaceutical ingredient for the drug product.  FDA inspected Lummy in mid-March 2016.  On April 19, 2016, the Agency placed Lummy on Import Alert, pointing to concerns over the company's Current Good Manufacturing Practices (“CGMPs”) as the reason for the Import Alert; and on June 21, 2016, FDA issued a Warning Letter to Lummy summarizing significant CGMP deviations.

Lannett says in the Complaint that on April 1, 2016, FDA sent the company a “General Advice” letter “indicating that Lummy would not be releasing any new Temozolomide active pharmaceutical ingredient into the U.S. market until FDA deemed the Lummy facility acceptable.” FDA’s letter requested a call with Lannett to discuss two issues: first, a commitment by Lannett not to distribute any Temozolomide drug product (or to recall drug product already distributed by Lannett; and second, a “necessary withdrawal” of Lannett ANDA 202750.  After some further correspondence in which FDA gave Lannett three options – (1) request FDA to withdraw approval of the ANDA; (2) agree to immediate rescission of the ANDA approval; and (3) provide FDA with information demonstrating that the compliance status at Lummy was acceptable as of March 23, 2016 – FDA issued an “ANDA Approval Rescission” letter on May 17, 2016.  According to Lannett:

The letter stated that while some FDA officials had information at the time of the ANDA approval indicating that Lummy’s compliance status was unacceptable, the “information was not adequately conveyed to the FDA officials making the final decisions about the ANDA approval.” The letter also stated that the approval was a mistake. It stated that the agency had authority to rescind the ANDA, because the procedures of 21 U.S.C. § 355(e) do not apply, such that there is “no applicable statute displac[ing] FDA’s inherent authority to correct its mistake.” The agency concluded that “FDA is correcting its error and rescinding the approval letter issued for ANDA 202750 on March 23, 2016.”

Lannett alleges in the Complaint that FDA’s rescission of ANDA 202750 violates the Administrative Procedure Act (“APA”) and the Fifth Amendment’s due process right to a hearing in connection with deprivation of a property right. Lannett asks the court to, among other things, set aside and declare as unlawful FDA’s ANDA approval rescission, and to enjoin FDA from revoking the approval of ANDA 202750 without a hearing and the procedures established at FDC Act § 505(e).

Various disputes concerning mistaken ANDA approvals and withdrawal (or suspension) of ANDA approvals have cropped up over the past few years. There’s Armenpharm, Ltd.’s recent opposition to FDA’s efforts to suspend the approval of the company’s ANDA 060851 for Chloramphenicol Capsules, 250 mg (see our previous post here).  Also, a couple of years ago, Mallinckrodt Inc. sued FDA after the Agency downgraded the company’s ANDA 202608 for generic CONCERTA (methylphenidate HCl) Extended-Release Tablets.  Among other things, Mallinckrodt argued that the downgrade was tantamount to withdrawal of ANDA approval (see our previous posts here and here).  There’s also the short-lived lawsuit Novartis Pharmaceuticals Corporation filed back in 2010 after FDA mistakenly approved ANDA 078278 for a generic version of FAMVIR (famciclovir) Tablets (see our previous post here).  And who could forget the litigation surrounding FDA’s decision to strip Ranbaxy Laboratories, Ltd. of tentative ANDA approvals for generic VALCYTE (valganciclovir) Tablets and NEXIUM (esomeprazole magnesium) Delayed-release Capsules (see our previous post here). 

But perhaps the closest parallel to Lannett’s lawsuit is decades old.  Way back in 1989, FDA issued a letter to American Therapeutics, Inc. (“American Therapeutics”) rescinding approval of the company’s ANDA for Chlorzoxazone because of CGMP concerns, and shortly after the ANDA was approved.  American Therapeutics argued before FDA that the rescission is “an illegal action in violation of the FD&C Act, the Administrative Procedures Act, and [the company’s] fundamental due process rights guaranteed by the U.S. Constitution.”  Ultimately, American Therapeutics sued FDA (in D.C. District Court).  In February 1990, in American Therapeutics v. Sullivan, 755 F. Supp. 1 (D.D.C. 1990), the court ruled for FDA in a short decision:

There is no regulation or statutory provision that contemplates rescission of an approval issued by mistake. . . . FDA is entitled to some deference when its actions are examined. This was a good faith mistake promptly discovered and corrected, nothing more.  There is authority that suggests an agency must be given some leeway to remedy mistakes.  No precedent from this circuit has been cited that indicates a contrary approach.  It is not the function of a district court under these circumstances to intervene where an unresolved issue of statutory interpretation and administrative law within the exclusive jurisdiction of the Court of Appeals is presented.  [(Citations omitted)]

Where will the cards fall here given the American Therapeutics decision?  We’ll see soon enough.

By Kurt R. Karst –      

Earlier this week, iPR Pharmaceuticals, Inc. (“iPR”), the owner of NDA 021366 for CRESTOR (rosuvastatin calcium) Tablets, 5 mg, 10 mg, 20 mg, and 40 mg, and AstraZeneca Pharmaceuticals LP (“AstraZeneca”), iPR’s agent, filed a Complaint in the U.S. District Court for the District of Columbia seeking to block FDA’s approval of ANDAs for generic CRESTOR Tablets ahead of the July 8th date when many in industry had been anticipating approval (including AstraZeneca, which says that it’s a “foregone conclusion”), The lawsuit, which challenges FDA’s ability to approve ANDAs with labeling that omits information protected by orphan drug exclusivity, comes on the heels of FDA’s May 27, 2016 approval of CRESTOR for the treatment of pediatric patients 7 to 17 years of age with Homozygous Familial Hypercholesterolemia (“HoFH”), a May 31, 2016 Citizen Petition (Docket No. FDA-2016-P-1485) from AstraZeneca and iPR, and a June 24, 2016 letter from AstraZeneca to FDA rejecting the Agency’s award of a period of 3-year new clinical investigation exclusivity for CRESTOR Tablets, 20 mg, for pediatric HoFH (but not, of course, FDA’s award of 7-year orphan drug exclusivity for the same use for all CRESTOR strengths). 

As we previously reported, AstraZeneca’s Citizen Petition raises two challenges:

First, carving out AstraZeneca’s protected pediatric HoFH labeling from the labeling of a product marketed under an ANDA or section 505(b)(2) NDA would present substantial safety and efficacy risks. . . .

Second, irrespective of whether a carve out would present a safety risk, FDA lacks legal authority to carve out pediatric labeling protected by orphan drug exclusivity.

AstraZeneca’s Complaint currently concerns the second issue above; however, AstraZeneca notes in the Complaint that the company “intends to bring this separate safety claim before the Court as soon as it is ripe for review.” (That is, if FDA approves ANDAs for generic CRESTOR with labeling that omits information on exclusivity-protected pediatric HoFH.)  AstraZeneca also hopes that the legal issue will be resolved before July 8th, stating in the Complaint that the company “will promptly confer to see if Defendants will agree to an expedited briefing schedule that would enable this Court to resolve this case before FDA approves the generic Crestor ANDAs on or about July 8, 2016.”  But if FDA is not willing to agree to expedite things, and if FDA is unwilling to provide AstraZeneca with a heads-up on ANDA approval, then “AstraZeneca will have no choice but to file an application for a temporary restraining order to preserve the status quo pending resolution of the merits of AstraZeneca’s claims.”  So, things could get ugly in the coming weeks.

The legal issue in the case, says AstraZeneca, is a rub between various laws that establish a “categorical rule” that “[g]eneric drugs must contain all the pediatric information included on the corresponding brand-name drug’s label” (emphasis in original), and certain statutes and regulations – and in particular FDC Act § 505A(o) (a.k.a. the “Anti-Glucophage  Provision”; see here and here) – that allow generic drug manufacturers to omit (i.e., “carve out” or “skinny label”) from their labeling certain information protected by patent or non-patent exclusivity.  In an April 2015 FDA Letter Decision, which AstraZeneca refers to as the “2015 Interpretation,” FDA laid out a rationale for the approval of ANDAs for generic versions of ABILIFY (aripiprazole) with labeling that omits information concerning pediatric patients and that is protected by orphan drug exclusivity.  A court agreed with FDA’s rational in a May 2015 Memorandum Opinion, but AstraZeneca contends that the decision was wrongly decided, and that the 2015 Interpretation is off-base:   

FDA’s general carve-out authorities [] do not allow a generic sponsor to carve out pediatric labeling protected by orphan drug exclusivity. This conclusion follows from FDA’s interpretation of those authorities in adjudicating the Glucophage ANDAs. It is also supported by the categorical language of FDA’s pediatric-labeling regulations; FDA’s promulgation of those regulations in 1994, after its adoption of the general carve-out regulations; the text, structure, purposes, and history of the FDCA; and Congress’s decision not to include orphan drug exclusivity in section 505A(o).

AstraZeneca alleges that FDA’s 2015 Interpretation violates the Administrative Procedure Act (“APA”) in that it “conflicts with the interpretation of the pediatric-labeling regulations FDA adopted in adjudicating the Glucophage ANDAs; the categorical language of FDA’s pediatric-labeling regulations; and the text, structure, purposes, and history of the FDCA, as amended by the ODA and section 505A(o).” AstraZeneca also alleges that the 2015 Interpretation “departed without explanation from the categorical rule applied by FDA to the Glucophage ANDAs and set forth in FDA’s pediatric-labeling regulations,” which require that certain pediatric information be included in drug product labeling.

AstraZeneca asks that the court, among other things, vacate and set aside FDA’s 2015 Interpretation, and “permanently enjoin FDA from granting approval of any ANDA or other application for a rosuvastatin calcium product prior to expiration of AstraZeneca’s seven-year orphan drug exclusivity period on May 27, 2023 (absent a license from AstraZeneca).”

By Kurt R. Karst –      

Earlier this month, the U.S. District Court for the Eastern District of Virginia issued a Memorandum Opinion granting a Motion for Summary Judgment filed by the U.S. Patent and Trademark Office (“PTO”) and denying a Motion for Summary Judgment filed by Angiotech Pharmaceuticals Inc. (“Angiotech”) in a case started on December 21, 2015 when Angiotech filed a Complaint challenging the PTO’s December 11, 2015 Final Decision denying a Patent Term Extension (“PTE”) for U.S. Patent No. 5,811,447 (“the ‘447 patent”) allegedly covering the ZILVER PTX Drug Eluting Peripheral Stent (“ZILVER PTX”).  (Reply and Opposition briefs filed in the case are available here, here, here, and here.)  Last October in a post concerning another PTE dispute (here), we noted in passing the PTO’s Initial Denial of a PTE for the ‘447 patent, but we hadn’t realized until recently that the PTE dispute moved quickly on to litigation after the PTO denied Angiotech’s Request for Reconsideration. 

As we alluded to in our October 2015 post, the PTO’s denial of a PTE for the ‘447 patent is not what we’ve come to see as a “typical” PTE challenge. That is, it doesn’t involve the first permitted commercial marketing prong of the PTE statute (35 U.S.C. § 156), the length of a PTE, or even the timeliness of submission of a PTE application.  Rather, Angiotech’s case involves whether or not the ‘447 patent actually claims ZILVER PTX.

By way of background, FDA approved (here and here) ZILVER PTX on November 14, 2012 under Premarket Approval Application (“PMA”) P100022 for improving luminal diameter for the treatment of de novo or restenotic symptomatic lesions in native vascular disease of the above-the-knee femoropopliteal (thigh) arteries having certain vessel diameters.  ZILVER PTX is a drug-device combination product with a self-expanding, small metal, mesh stent with the outer surface coated with the drug paclitaxel (to help prevent artery restenosis) that can be implanted in a femoropopliteal artery.  As a combination product, FDA determined that ZILVER PTX has a primary mode of action of that of a medical device, instead of as a drug, and FDA’s Center for Devices and Radiological Health took the lead on reviewing the PMA submitted by Angiotech’s partner, Cook Medical Technologies, LLC (“Cook).

Angiotech, on behalf of the patent owner, Boston Scientific Scimed, Inc. (“BSC”), submitted a PTE application to the PTO for the ‘447 patent on December 7, 2012 (Docket No. FDA-2013-E-0781) requesting the statutory 5-year maximum extension. (As an aside, Cook and BSC separately submitted PTE applications for other patents related to ZILVER PTX: U.S. Patent No. 6,299,604 (Docket No. FDA-2013-E-0677); U.S. Patent Nos. 6,515,009 (Docket No. FDA-2013-E-0681); and U.S. Patent No. 7,820,193 (Docket No. FDA-2013-E-0676).)  Element number 9 of a PTE application (37 C.F.R. § 1.740(a)(9)) requires the following:

A statement that the patent claims the approved product, or a method of using or manufacturing the approved product, and a showing which lists each applicable patent claim and demonstrates the manner in which at least one such patent claim reads on: (i) The approved product, if the listed claims include any claim to the approved product; (ii) The method of using the approved product, if the listed claims include any claim to the method of using the approved product; and (iii) The method of manufacturing the approved product, if the listed claims include any claim to the method of manufacturing the approved product.

Angiotech asserted that Claim 12 of the ‘447 patent reads on methods of using ZILVER PTX. That claim states:

A method for biologically stenting a mammalian blood vessel, which method comprises administering to the blood vessel of a mammal a cytoskeletal inhibitor in an amount and for a period of time effective to inhibit the contraction or migration of the vascular smooth muscle cells.

Specifically, Angiotech asserted that the following Claim 12 elements correspond to ZILVER PTX:

Ultimately, the PTO denied Angiotech’s PTE request on the basis that Claim 12 of the ‘447 patent does not claim a method of using ZILVER PTX:

A predicate to finding a patent eligible for patent term extension based on FDA review of a product subject to premarket regulatory review (“a regulated product”) requires that the patent claim the product, a method of using the product or a method of manufacturing the product. Here, the regulatory review period was conducted under section 515 of the FFDCA.  Where FDA reviews a regulated product under section 515 of the FFDCA, the regulated product is a medical device.  Therefore, substituting that term into 35 U.S.C. § 156(a) yields, “(a) [t]he term of a patent which claims a [medical device], a method of using a [medical device], or a method of manufacturing a [medical device] shall be extended ….” Because claim 12 is directed to a method of biologically stenting a mammalian blood vessel, Applicant and USPTO agree that eligibility rests on whether claim 12 of the ‘447 patent claims a method of using the approved medical device. In other words, it is undisputed that claim 12 does not claim the approved medical device itself or a method of manufacturing the approved medical device.

Angiotech promptly filed suit against the PTO.

An important issue in the case (though not one we will detail here) was whether or not the PTO’s interpretation of the Hatch-Waxman Amendments, which, among other things, amended the patent law, is entitled to any deference at all. In his June 8, 2016 decision, Senior Judge T.S. Ellis, III concluded that no deference is due to the PTO’s final decision interpreting the law.  “[G]iven the PTO’s function in this context,” which Judge Ellis described elsewhere in his Opinion as “more analogous to [that] of an agent engaged in the ordinary private law task of complying with contract-like agreements affecting the disposition of property rather than [that] of a public law entity engaged in regulation,” “there is no compelling reason to believe that the PTO’s positions on the meaning of the Patent Act are ‘wise and correct’ in a manner that justifies deference under an administrative law doctrine . . . .  Like any party attempting to enforce the terms of a contract, the PTO is entitled to no special deference in assessing the meaning of the terms.”

Despite this ruling on the lack of deference to the PTO’s decision, Judge Ellis ultimately sided with the PTO, granting the Office’s Motion for Summary Judgment. “[T]he dispute boils down to a single question: Does the ‘447 patent ‘claim[] . . . a method of using” a ‘medical device’ as those terms are used in the Hatch-Waxman Act?”  The answer is “No,” according to Judge Ellis.  But it was a long and tortured road for the PTO to get that “No” decision.

“A ‘medical device’ for purposes of § 156(f)(1)(B) should not be construed to have the same meaning as ‘device’ under [FDC Act § 201(h) (21 U.S.C. § 321(h))], but should instead take its ordinary meaning,” wrote Judge Ellis, referencing various dictionary definitions of “device” and “medical.”

The fact that the FDA reviewed the Zilver PTX as a medical device does nothing to change this analysis. When the FDA determines a combination product’s primary mode of action for purposes of FDCA review, the FDA is not identifying the nature of the product itself.  Rather, the FDA’s determination of a primary mode of action is merely an identification of the predominate means by which the product achieves its therapeutic effect. . . .  For purposes of classifying a product under the Hatch-Waxman Act, it makes no difference whether the FDA reviews a product as a device, as a drug, as a biological product, or as a unicorn – if the product is a contraption, contrivance, or related article with a purpose related to the diagnosis, treatment, or prevention of disease, then it is a medical device under § 156(f)(1)(B).

In short, the PTO’s statutory analysis of § 156 is flawed. Section 156’s language is adequate (i) to classify the Zilver PTX as a drug or as a medical device for purposes of the Hatch-Waxman Act and (ii) to analyze the ‘447 patent’s eligibility for a [PTE].  There is no need or warrant to refer to the FDCA or the actions of the FDA to reach these conclusions.

Despite these findings, however, Judge Ellis states that “it does not necessarily follow that the PTO’s ultimate conclusion must be set aside.” And, in fact, here Judge Ellis did not do so.  Finding support in the ordinary meaning of “a product” in 35 U.S.C. § 156(a), in the ordinary meaning of “medical device” in 35 U.S.C. § 156(f)(1)(B), and in the meaning of claims in 35 U.S.C. § 156(a) as interpreted by the Federal Circuit in Hoechst-Roussel Pharms. Inc. v. Lehman, 109 F.3d 756 (Fed. Cir. 1997) (here), Judge Ellis concluded that:

[I]n order for a method claim to qualify for a [PTE] under § 156(a), the method must claim the use of the particular product that underwent FDA review. Where the product in issue is a “medical device,” it follows from the ordinary meaning of that term that the claimed product will be physical in nature and have some structure.  Claim 12 of the ‘447 patent recites no structure and does not expressly contemplate the use of any structure, and it therefore cannot be said that the patent claims a method of using any particular product, much less the Zilver PTX.  Thus, although the PTO erred in concluding that [FDC Act § 201(h)] requires that a patent claiming a method of using a medical device recite some structure in order to qualify for a [PTE], the PTO’s ultimate conclusion was not in error. [(Emphasis in original)]

It’s unclear whether or not Angiotech will appeal Judge Ellis’ decision to the Federal Circuit for another look.

By Allyson B. Mullen – 

On June 16, FDA issued the final guidance “Use of International Standard ISO 10993-1, ‘Biological evaluation of medical devices – Part 1: Evaluation and testing within a risk management process.’”  This final guidance replaces the draft guidance issued on April 23, 2013.

Biocompatibility testing is an area where many device struggle to meet FDA’s requirements.  For example, some companies think simply because its patient contacting material is widely used in the industry it should not need to be tested.  FDA, on the other hand, generally expects that nearly all patient contacting devices will be subjected to biocompatibility testing, unless the manufacturer provides a suitable scientific rationale justifying why testing is not required (e.g., materials and manufacturing/processing are identical to the predicate).  This final guidance should provide manufacturers with guidance as they work to identify what biocompatibility testing is needed for their devices.

The final guidance is mainly unchanged from the draft, with a few notable exceptions:

• Based on comments from industry requesting additional clarification, FDA removed devices in contact with gas pathways and color additives from this guidance. Biocompatibility of these materials/devices will be covered in separately in other guidances.

• New Attachment B outlines the information that FDA would expect (although presumably not require, because this is a guidance document) to have in a device master file for biocompatibility assessments.

• The final guidance includes a helpful glossary of key biocompatibility terms.

In our view, the most important change in the final guidance is that it takes a risk-based view of biocompatibility assessments.  The guidance now begins with a section entitled “Risk Management for Biocompatibility Evaluations.”  Rather than simply assessing the contact type and duration to determine, based on FDA’s modified matrix, which biocompatibility tests are required, the guidance suggests beginning by performing a risk analysis of the device materials.  Once the risks are identified, a gap analysis can be performed to see what information, if any, is available to mitigate the identified risks.  Any regulating gaps would be expected to be filled in with biocompatibility testing.

The guidance provides advice on how to perform such a risk analysis.  It also outlines several types of information that may mitigate biocompatibility risks, including manufacturer’s prior experience, published literature, clinical information, animal studies, and other previously cleared devices.  Now, in the biocompatibility section of premarket submissions for devices, FDA suggests that applicants begin with their risk assessment rather than the contact type and duration as specified in ISO 10993-1, although we expect FDA will still want to manufacturers to identify the later.

The guidance appears to suggest that biocompatibility testing may not always be needed so long as other information as to the biocompatibility of the material exists.  However, FDA is quick to note that it does not clear individual materials.  The biocompatibility of the material is affected by device-specific features, including the manufacturing processes, tissue contact type and duration of contact.  Although not stated in a guidance, FDA has historically said that biocompatibility can be shown through alternative information (not just ISO 10993 testing).  In our experience, however, FDA is rarely accepting of such alternative information because, for example,  the manufacturing processes are different between the material that is the subject of the alternative information and the proposed device, or the alternative information did not specifically consider biocompatibility (e.g., in a clinical or animal study).  We find it encouraging that FDA has put this policy in the final guidance.  We will be interested to see if FDA becomes more accepting in practice of alternative information to support biocompatibility. 

Consistent with its practice for other recent final guidances, FDA plans to hold a webinar to discuss the final guidance on July 21, 2016.  Registration information for the webinar can be found on FDA’s website. 

By Kurt R. Karst –       

For several years now, the Obama Administration’s annual budget requests (here, here, and here, for example) have included proposals to reduce to 7 years the current 12-year period of Reference Product Exclusivity (“RPE”) for biological products licensed under Section 351(a) of the Public Health Service Act (“PHS Act”), and which RPE was created by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).  But the proposals never gained traction in Congress (at least not in the form of a legislative proposal) . . . . Until now. 

Earlier this week, Representative Janice Schakowsky (D-IL) introduced H.R. 5573, the Price Relief, Innovation and Competition for Essential Drugs Act (“PRICED Act”).  The PRICED Act “would foster competition and provide opportunity for more biologics to enter the marketplace and drive down costs,” says Rep. Schakowsky in a press release.  “In the same way the entrance of generics helped increase competition and boost access to more affordable prescription drugs, an increased number of biologics and equally effective 'biosimilars' will provide additional competition in the marketplace and make life-saving drugs more affordable for consumers.”

The two-page bill is short and sweet.  It would amend the RPE provisions at PHS Act § 351(k)(7)(A) to strike “12 years” and insert “7 years” in its place.  Conforming amendments would also be made to PHS Act § 351(m) (paragraphs (2)(A) and (3)(A)), which concerns the addition of 6 months of pediatric exclusivity, to show the 12-year-to-7-year change.  The 7-year period (or 7.5 years with pediatric exclusivity) would match the amount of exclusivity for a biological product granted under the Orphan Drug Act.

In terms of applicability, the PRICED Act would “apply only with respect to a biological product for which the reference product . . . is licensed under [PHS Act § 351(a)] on or after the date of enactment of this Act.” In other words, if the PRICED Act is signed into law, there would be a cohort of biological products with 12-year RPE and another cohort with 7-year RPE.  That means that Section 7002(h) of the BPCIA would eventually become moot.  That provision states:

(h) ORPHAN PRODUCTS.—If a reference product, as defined in Section 351 of the Public Health Service Act (42 U.S.C. 262) (as amended by this Act) has been designated under section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb) for a rare disease or condition, a biological product seeking approval for such disease or condition under subsection (k) of such section 351 as biosimilar to, or interchangeable with, such reference product may be licensed by the Secretary only after the expiration for such reference product of the later of—

(1) the 7-year period described in section 527(a) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc(a)); and

(2) the 12-year period described in subsection (k)(7) of such section 351.

The National Committee to Preserve Social Security and Medicare (“NCPSSM”) issued a press release supporting the PRICED Act. “Long exclusivity periods delay competition and drive up drug costs.  Long exclusivity periods are particularly problematic for biologics because of their significant expense,” says NCPSSM.  Several other organizations also support the legislation, including the AARP, Center for Medicare Advocacy, and Families USA. 

Coincidentally, the introduction of the PRICED Act comes on the heels of a set of conclusions adopted by the Council of the European Union earlier this month. Among other things, the Council expresses concern about the effects of patent and non-patent exclusivities on generic competition, and invites the European Commission to prepare:

an evidence based analysis of the impact of the incentives in these EU legislative instruments, as implemented, on innovation, as well as on the availability, inter alia supply shortages and deferred or missed market launches, and accessibility of medicinal products, including high priced essential medicinal products for conditions that pose a high burden for patients and health systems as well as availability of generic medicinal products.  Among those incentives, particular attention should be given to the purpose of supplementary protection certificates as defined in the relevant EU legislative instrument and the use of the “Bolar” patent exemption, the data exclusivity for medicinal products and the market exclusivity for orphan medicinal products.

The likelihood that the PRICED Act will progress with any speed through the current Congress and end up getting signed into law by the end of President Obama’s term is pretty low. But the bill is yet another sign of the concern on Capitol Hill over drug prices.

By Ricardo Carvajal –

In an unusual “Early Alert,” the Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) publicly took FDA to task for allegedly lacking “an efficient and effective food recall initiation process that helps ensure the safety of the Nation’s food supply.”  The alert describes that finding as preliminary, and as the result of an ongoing audit that is expected to yield a more comprehensive report.  Nonetheless, the alert was somewhat startling, and prompted FDA to issue public statements in response (see here and here).   

In brief, OIG’s preliminary finding was based on a “judgmental sample” of 30 recalls conducted in a two-and-a-half year period.  A footnote in the alert explains OIG’s approach to sampling:  “We selected recalls by considering certain risk factors, including but not limited to the recall classification, length of time for the firm to initiate a recall, and length of time for the FDA to classify a recall.”  In other words, OIG’s sampling was intentionally biased toward selection of the most complex recall situations – precisely those situations that would be most likely to show apparently inordinate delays.  Nowhere does the OIG’s alert acknowledge that underlying complexity, nor does it acknowledge that FDA effectively supervised thousands of recalls during the time frame in question.  Instead, the alert implies that FDA may have unnecessarily placed consumers “at risk of illness or death” as the result of the agency’s lack of “policies and procedures that instruct its recall staff to establish set timeframes for (1) FDA to request that firms voluntarily recall their products and (2) firms to initiate voluntary food recalls.”

For its part, FDA states that the delays identified by OIG are “unacceptable,” and expresses appreciation for OIG’s input.  However, FDA also provides some of the contextual information lacking in OIG’s alert, and concludes that a one-size-fits-all approach to establishing timeframes and deadlines is the wrong remedy.  FDA’s conclusion should be obvious to anyone who has witnessed how a recall decision can hinge on the evaluation of disparate and sometimes conflicting information, which now can include the results product and environmental testing, whole genome sequencing, and epidemiologic investigation.  FDA’s conclusion should also be obvious to anyone with a passing familiarity with instances where an outbreak was attributed to the wrong product.  As FDA notes, “to request a recall without evidence risks recalling the wrong product and leaving consumers vulnerable to contaminated food that is still on the market.”  It also risks wrongly inflicting hefty economic damage that a business might not survive, and for which there may be little chance of recovery from the government.

One can hope that OIG will adopt a more complete and nuanced view of how recalls unfold in the real world before issuing its more comprehensive report, and will understand the need for accuracy as well as speed in evaluating potential recall situations.  Even so, FDA’s statements make clear that the agency is pushing to speed up its response to such situations, and industry should take heed. 

Hyman, Phelps & McNamara, P.C., the nation’s largest boutique food and drug regulatory law firm, seeks a junior to mid-level associate with substantive experience in medical devices and other areas of food and drug law and regulation to assist with a growing practice.  Strong verbal and writing skills are required.  Compensation is competitive and commensurate with experience.  HP&M is an equal opportunity employer.

Please send your curriculum vitae, transcript, and a writing sample to Anne K. Walsh (awalsh@hpm.com).  Candidates must be members of the DC Bar or eligible to waive in.

By Allyson B. Mullen – 

It is an open secret that at some point in every device company’s life one or more of its devices will likely be out of compliance with the Federal Food, Drug, and Cosmetic Act. That is because the regulatory scheme is complex and subjective, and any problem in the manufacture or use of the device could result in a violation.

Although there are many “technical” violations, FDA does not take enforcement action to remove violative product from the market in most cases. This seeming lack of action is partly because the agency is not aware of every violation.  But even among those that come to the agency’s attention, it simply does not have the resources to take action every time.  More important, doing so would frequently be more detrimental to patients and doctors than leaving violative product on the market. 

Device companies are not always aware of FDA’s enforcement discretion to not take action or how best to advocate for such discretion. FDA’s recent draft guidance, “Factors to Consider Regarding Benefit-Risk in Medical Device Product Availability, Compliance, and Enforcement Decisions” is intended to clarify “the benefit and risk factors FDA may consider in prioritizing resources for compliance and enforcement efforts to maximize medical device quality and patient safety.”  

FDA often formally considers product availability and benefit-risk evaluation when deciding whether to take enforcement action. For example, in consent decrees, it is not uncommon for FDA to permit continued sale of violative devices that FDA determines are “medically necessary.”  To our knowledge, the draft guidance is the first time FDA has comprehensively listed the factors that underlie these enforcement decisions. However, these factors likely have always been used and will continue to be used even prior to finalization of the guidance.

The factors FDA has called out are quite similar to the factors identified in earlier premarket benefit-risk guidances FDA has issued. The factors are:

Benefits

• Type of benefit;
• Magnitude of benefit;
• Likelihood of patients experiencing one or more benefits;
• Duration of effects;
• Patient preference on benefit;
• Benefit factors for healthcare professionals or caregivers; and
• Medical necessity.

Risks

• Risk severity;
• Likelihood or risk;
• Nonconforming product risks;
• Duration of exposure to population;
• False-positive or false-negative results;
• Patient tolerance of risk; and
• Risk factors for healthcare professionals or caregivers.

The draft guidance acknowledges that the benefits and risks associated with a device and its noncompliance may change over time. FDA notes that, “as the medical device is used, patients may experience significantly longer treatment effects than those described in the device labeling.”  While FDA will not typically permit a device company to make device performance claims beyond the cleared/approved labeling, FDA is expressly using such expanded performance data in a benefit-risk assessment. 

The draft guidance does not explain how FDA will weigh or evaluate these factors to make a final decision as to whether or not to take a contemplated enforcement action. It states that FDA will use the outcome of the benefit-risk analysis to “make informed appropriate decisions” and

Specific benefit-risk analyses will again need to be viewed in context, but generally, if FDA’s benefit-risk assessment indicates high benefit to patients with little risk, FDA may decide to work with the manufacturer to address the underlying issue without initiating a formal compliance or enforcement action. If FDA’s benefit-risk assessment indicates low benefit to patients with high risk, FDA would likely take formal compliance or enforcement action to address the problem.

It is highly unlikely that FDA will decline to take enforcement action in every situation where the benefits of a violative device outweigh the potential risks. How far the benefits must outweigh the risks and how certain FDA must be of the benefits and risks in order to avoid enforcement action is not specified in the draft.

The draft guidance indicates that FDA may use the results of the benefit‑risk analysis to inform decisions such as:

• “When should a firm’s recall strategy appropriately include a correction instead of a removal?
• What actions, if any, may FDA take when continued access to a nonconforming device or a device manufactured by a firm with regulatory compliance issues might be needed during a shortage situation?
• When is it in the best interest of the public health to grant a variance from certain [quality system (QS)] regulation requirements for QS issues identified during a PMA pre-approval inspection?
• When might FDA exercise enforcement discretion and not take immediate action against a company for marketing a device with a significant change or modification prior to obtaining clearance, as required by 21 CFR 807.81(a)(3)?
• Is a manufacturer’s proposed correction strategy adequate given the benefit-risk assessments and mitigation activities?
• Upon observing a violation, when might FDA send a Warning Letter or Untitled Letter and when would it be appropriate to take an alternative, more informal approach?”

These questions are not only relevant to situations in which a product shortage could occur if FDA were to take action (e.g., medical necessity). The draft guidance states that the factors in the guidance apply not only “to compliance and enforcement decisions that potentially have a direct effect on product availability, when appropriate, [but] FDA may use the outcome of a benefit-risk assessment to inform other decisions related to compliance and enforcement.”  It states that when making decisions that will not potentially impact product availability, FDA may also consider “whether regulatory non-compliance increases risk of harm to patients, whether taking (or not taking) a contemplated compliance or enforcement action would impact patients, the manufacturer’s regulatory history, and steps taken by the manufacturer to address the situation.”

Because this guidance applies to all potential compliance and enforcement actions, device companies should be aware of the factors FDA will use to analyze these situations and when applicable, use these factors to urge FDA to exercise enforcement discretion and permit important devices to remain on the market while the company comes into compliance.

The draft guidance states that its purpose is to “improve the consistency and transparency of” FDA’s decision making regarding compliance and enforcement actions. Outlining specific factors could certainly help consistency.  To truly increase transparency as to FDA’s decisions, industry needs to know both when FDA has taken action (typically is available through warning letters and other enforcement actions) and also when it has not. The draft guidance helps somewhat with the latter by providing two examples of cases in which enforcement discretion would be exercised.

We commend FDA for attempting to give some insight into its decision making. However, it would be helpful to have many more examples, with as much insight as possible into FDA’s reasoning and weighing of benefit‑risk.  We would hope the final guidance expands the number of examples, especially as to situations in which enforcement discretion applies.

Procedurally, the draft guidance does not say whether FDA will formally document its benefit-risk analyses and decisions. We wonder if it will because if these analyses are formally documented they may be able to be obtained through a Freedom of Information Act request.  If industry could obtain such analyses, they would likely be heavily redacted, but could provide some additional insight into instances in which FDA chose not to take action. 

One area where this guidance may have a significant affect on current industry practice is off-label promotion. As noted above, FDA indicates it has discretion to perform a benefit‑risk analysis to assess whether or not to issue a warning or untitled letter to a device manufacturer that has made a major change in its device’s intended use without obtaining a new 510(k) clearance (i.e., promoting a device for a new intended use).  Many off-label uses may provide significant benefits to patients and/or doctors while posing low risks. 

It is not clear whether the draft guidance will have an effect on current FDA or industry practice. FDA publishes annual statistics regarding, among other things, the number of warning letters issued and recalls undertaken by industry.  We will certainly be watching to see if there is any significant change in these numbers to assess the potential impact of the guidance.

By Kurt R. Karst –     

It’s been a little more than 4.5 years since we first revealed in a December 11, 2011 FDA Law Blog post the fruits of our hunt for the mythical list of pending proceedings under the Drug Efficacy Study Implementation (“DESI”) program, which started decades ago after enactment of the 1962 Kefauver-Harris Drug Amendments.  The list, dated August 2006, identifies 17 items.  As we explained in our previous post, the list is of interest to some drug manufacturers given the enforcement policy FDA laid out in the Agency’s September 19, 2011 “Compliance Policy Guide: Sec. 440.100 Marketed New Drugs Without Approved NDAs or ANDAs.”

We recently came across an updated version of FDA’s List of Pending DESI Proceedings.  The new list, which updates the August 2006 version (updating the previous 17 items and adding 2 more proceedings), is included in correspondence that FDA sent to the Staff of the House Energy and Commerce Committee in March 2016 in response to some questions the Committee had about the DESI program.  FDA’s response also addresses two questions from the Committee – “For how many DESI drugs have there been successful NDA filings?” and “How many DESI drugs are still on the market?” – which we provide further below. 

In the 10 years since the August 2006 list was put together, FDA seems to have made some headway in completing pending DESI proceedings.  Of the 17 proceedings identified in the August 2006 list, 7 are now identified as closed.  A total of 12 DESI proceedings (including 2 additions) are now identified as pending, including one proceeding that has been the subject of some recent activity.

1. Anticholinergic/Barbituate Combinations (e.g., Donnatal); Docket No. FDA-1975-N-0336 (formerly75N-0184); DESI 597.  This proceeding remains pending with an open hearing request.

2. Donnatal Extentabs; Docket No. FDA-1975-N-0337 (formerly 75N-0223); DESI 597. This proceeding remains pending with an open hearing request.

3. Chloridiazapoxide hydrochloride and clidinium bromide (Librax); Docket No. FDA-1975-N-0336 (formerly 75N-0184); DESI 10837.  This proceeding remains pending with an open hearing request.

4. Xanthine derivatives, ephedrine hydrochloride, phenobarbital, and guaifenesin; Docket Nos. FDA-1976-N-0272 (formerly 76N-0056), FDA-1976-N-0344 (formerly 76N-0057), and FDA-1978-N-0701 (formerly 78N-0070); DESI 1626. This proceeding was closed on January 10, 2014 (79 FR 1877).

5. Theophylline, Ephedrine, and Barbiturate Combinations Docket No. FDA-1976-N-0272 (formerly 76N-0056); DESI 1626. This proceeding was closed on January 10, 2014 (79 FR 1877).

6. Pentaerythritol tetranitrate (PETN) and Secobarbital (Docket No. 75N-0230; DESI 1786. This proceeding remains pending with open hearing requests.  Also, there is an open hearing request under DESI 1786 for Oral Extended-Release Nitroglycerin products; Docket FDA-1977-N-0356 (formerly 77N-0240); DESI 1786.  The portion of DESI 1786 relating to transdermal system nitroglycerin products was closed on November 16, 2015 (80 FR 70822).

7. Isometheptene mucate, dichloralphenazone and acetaminophen (e.g. Midrin); Docket FDA-1975-N-0355 (formerly 75N-0203); DESI 3265. This proceeding was closed on January 10, 2014 (79 FR 1877).

8. Cough/Cold products. All proceedings relating to DESIs 6290, 6514, 11935, and 12152 were closed on January 1, 2011, and March 3, 2011 (76 FR 1175; 76 FR 11790).

9. Benzocaine, Butylamine benzoate, and tetracaine hydrochloride (e.g. Cetacaine); Docket 75N-0203; DESI 8076. This proceeding remains pending with an open hearing request.  (Please note that the DESI and docket numbers for the Cetacaine proceeding are incorrect in the 2006 Attachment to your March 9, 2016 email.)

10. Hydroxyzine hydrochloride intramuscular solution (e.g. Vistaril); Docket No. FDA-1978-N-0441 (formerly 78N-0324); DESI 10392. This proceeding was closed on February 29, 2012 (77 FR 12310).

11. Trimethobenzamide hydrochloride suppository dosage form (e.g. Tigan suppositories); Docket No. FDA-1978-N-0224 (formerly 78N-0224); DESI 11853.  This proceeding was closed on April 9, 2007 (72 FR 17556).  The 2006 Attachment to your March 9, 2016, email contains a reference to “78N-022,” which is not a complete docket number.  Docket 78N-0227, DESI 11853, covered Tigan injection and capsule products and was closed on December 24, 2002 (67 FR 78476).

12. Oxytetracycline, sulfamethizole, and phenazopyridine (e.g. Urobiotic Capsules); Docket FDA-1983-N-0297 (formerly 83N-0030); DESI 50213. This proceeding was closed on January 10, 2014 (79 FR 1877).

13. Potaba (potassium p-aminobenzoate); Docket 77N-0183; DESI 7663. This proceeding remains pending with an open hearing request.

14. Vioform-HC; DESI 10367. Appeal remains pending at the Office of the Commissioner.

15. Vasodilan (Isoxsuprine); DESI 6403. Appeal remains pending at the Office of the Commissioner.

16. Mepergan Fortis (Promethazine and Meperidine); DESI 7337. Appeal remains pending at the Office of the Commissioner.

17. Pentaerythritol tetranitrate (PETN) DESI 1786. Appeal remains pending at the Office of the Commissioner.

18. Fixed-combination estrogen/androgen products; Docket No. FDA-1998-P-0083 (formerly 76N-0377); DESI 7661. This proceeding remains pending with an open hearing request.

19. Amphetamines indicated for the management of exogenous obesity; Docket No. 79N-0190; DESI 5378. This proceeding remains pending with an open hearing request.

As noted above, in addition to updating the August 2006 List of Pending DESI Proceedings, FDA responded to two other DESI-related questions from the Committee:

For how many DESI drugs have there been successful NDA filings?

Approximately 3,400 drug products intended for use in humans were reviewed under the Drug Efficacy Study Implementation (DESI) program.  These prescription drugs had been approved for safety only and collectively had more than 16,000 indications.  The Food and Drug Administration (FDA) requested that firms submit data in support of the efficacy claims for their products. By 1984, of the approximately 3,400 products reviewed, approximately 2,225 had been found to be effective for one or more indications.  FDA estimates that for every product with an approved safety-only new drug application (NDA), there were five identical, related, or similar (IRS) products on the market also subject to the DESI findings (21 CFR 310.6).  In each instance where a product has been found effective under DESI, that product and those IRS to it could submit an application for approval based on the DESI efficacy finding, if they could meet the conditions for marketing for that particular category of product.  Note that the IRS category of applications would also include abbreviated new drug applications (ANDAs) if drugs were identical to the subject of the DESI product.  Drugs related or similar to DESI drugs would likely have been reviewed through the NDA process.  As a result, for every one of the approximately 2,225 DESI closures where a drug has been found effective for one or more indications, it is possible that numerous NDAs and ANDAs have been reviewed and approved.  The FDA does not currently track the number of NDAs or ANDAs approved for DESI drugs.

How many DESI drugs are still on the market?

Fewer than a dozen DESI proceedings remain open or “pending,” covering approximately 20 active ingredients.  FDA is actively working to close these proceedings. It has been FDA’s policy to allow continued marketing of drugs that are subject to a pending DESI proceeding.

A review of the National Drug Code (NDC) Directory on February 24, 2016, for the active ingredients in each of the open DESI proceedings indicated that there are slightly less than 250 different NDCs listed in the NDC Directory.  These drugs include the products approved as safety-only and those IRS to those safety-only applications, as well as newer applications approved by FDA for both safety and efficacy.  Approximately 50 of these NDCs are associated with FDA-approved products, and the remainder are unapproved while the DESIs remain open.  These currently marketed products include a variety of strengths and dosage forms, different manufacturers, and different combinations of ingredients.