By Etan J. Yeshua –

A regulation requiring restaurants in New York City to warn customers about menu items with high levels of sodium was set to take effect last week, but it is now the latest in a string of food labeling laws and regulations (on the state and federal levels) caught in legal limbo.

The New York City Sodium Warning

The regulation requires any restaurant in New York City that is part of a chain with 15 or more locations nationwide to include a symbol of a salt shaker on its menu next to items that contain more than 2,300 mg of sodium. In addition, the restaurant must display the following warning at the point of purchase:

Warning:  indicates that the sodium (salt) content of this item is higher than the total daily recommended limit (2300 mg). High sodium intake can increase blood pressure and risk of heart disease and stroke.

The measure took effect on December 1, 2015, and the City intended to begin assessing $200 fines for violations on March 1, 2016. But a lawsuit brought against the City by the National Restaurant Association (NRA) has provided restaurants a last minute reprieve, with a New York appeals court on February 29 granting an interim stay that prevents the City from enforcing the regulation.

Just days before the stay was granted, though, a lower court had ruled in favor of the City in a decision that addressed, among other things, whether the rule is preempted by federal law. Although that ruling (by Judge Eileen Rakower) has since been stayed, its assessment of the preemption issue highlights the complicated web of federal, state, and local menu labeling regulations that many restaurants are facing and that lawmakers and policymakers have had to consider when pursuing various public health initiatives.

Preemption Issues

Although the City’s rule related to nutrition information on restaurant menus, neither NRA’s complaint nor Judge Rakower’s decision focused on federal menu labeling requirements. You may recall that the Patient Protection and Affordable Care Act amended the Federal Food, Drug, and Cosmetic Act (FDC Act) to require that restaurants (with 20 or more locations) include certain nutrition information on menus and menu boards, as well as information about sodium and other nutrient content elsewhere in the restaurant. In doing so, the law explicitly preempted any state and local “requirement for nutrition labeling” that is not identical to the federal requirements, unless the state or local government successfully petitions FDA for an exemption. FDC Act 403A(a)(4). (The City of Philadelphia recently petitioned FDA for such an exemption. See below).

This preemption of menu labeling requirements has not taken center stage in the legal battle between NRA and the City of New York. Rather, it was raised in a footnote to the “Background” section of NRA’s complaint. As a result, Judge Rakower’s decision does not consider whether the City’s sodium rule, or at least part of it, is a “requirement for nutrition labeling” under section 403A(a)(4) of the FDC Act, and whether it therefore may be preempted. Note also that, because the FDC Act preempts only state and local menu labeling requirements that apply to chains with 20 or more locations, the City’s rule (if preempted at all) arguably would be enforceable against restaurants with more than 15 but fewer than 20 locations.

Instead, NRA’s main preemption argument characterized the City’s sodium warning (including the shalt-shaker symbol) as both a “nutrient content claim” and a “health claim.” In short, a “nutrient content claim” is a claim that “characterizes the level” of a nutrient, like sodium, in a food; and a “health claim” is a claim that “characterizes the relationship” of a nutrient, like sodium, “to a disease or a health-related condition.” FDC Act 403(r)(1)(A)-(B). Generally, such claims may only be made for a food if authorized by, or notified to, FDA. Moreover, the FDC Act expressly preempts state or local requirements regarding nutrient content and health claims that are not identical to the federal requirements. NRA argued that the sodium icon and the first sentence of the warning are unauthorized nutrient content claims, that the remainder of the warning is an unauthorized health claim, and that both are preempted by federal law as non-identical local requirements.

Judge Rakower rejected this argument based on a congressional note of construction that accompanied the codified text of the Nutrition Labeling and Education Act of 1990 (NLEA)—i.e., the statute that provided the relevant preemption provisions of the FDC Act. Specifically, the note states that the preemption provisions “shall not be construed to apply to any requirement respecting a statement in the labeling of food that provides for a warning concerning the safety of the food or component of the food.” Construction Note to Pub. L. 101-535 § 6(c). Judge Rakower concluded that the City’s sodium regulation “falls within the plain language of the NLEA’s warning exception to express preemption.”

Nevertheless, three days after Judge Rakower published her decision in favor of the City of New York, a judge in the Appellate Division granted NRA an interim stay of enforcement, leaving the future of the regulation uncertain.

Many Food Labeling Laws and Regulations Caught in Limbo

Meanwhile, related laws and regulations in other states and on the federal level are similarly in limbo.

For example, the City of Philadelphia petitioned FDA in September 2015 asking for an exemption from the FDC Act’s preemption provisions and for permission to implement its own sodium menu labeling requirements. In December 2015, FDA notified the City that FDA needed additional time to review the petition.

On the federal level, FDA was originally set to begin enforcing the FDC Act’s menu labeling requirements in December 2015; amid requests from industry, FDA extended the compliance date to December 2016. Then, Congress delayed the implementation date even further: the omnibus appropriations bill for 2016 postponed implementation until one year after FDA issues a final guidance on the menu labeling requirements. The Agency has yet to issue the final guidance.

In Vermont, a law that sets labeling requirements for certain genetically modified foods is set to take effect in July of this year, although its fate is uncertain. There is ongoing litigation in federal court challenging the constitutionality of the law and seeking to stop it from going into effect.

Moreover, just last week, competing bills (here and here) that would set up labeling frameworks for genetically modified foods and block states from imposing different labeling requirements began winding their way through Congress. For now, their prospects remain uncertain.

Reminder: Register now for the May 3, 2016 Virginia Tech and HP&M Conference on Effective Documentation.  Information on the conference is available here.

By David C. Gibbons & John R. Fleder –

On March 8, 2016, Amarin Pharma, Inc. (“Amarin” or “the Company”) and FDA filed a proposed Stipulation And Order Of Settlement (“Proposed Settlement Order”) with Judge Paul Engelmayer in the U.S. District Court for the Southern District of New York, that would bring to a close Amarin’s proactive challenge to FDA’s restrictions concerning the Company’s off-label promotion of Vascepa. We do not know when the Court will complete its review of the Proposed Settlement Order and finalize the settlement.

In sum, the parties agree that FDA will be bound by Judge Engelmayer’s prior conclusions that: (1) “Amarin may engage in truthful and non-misleading speech promoting the off-label use of Vascepa”; and (2) certain statements and disclosures that Amarin proposes to make to doctors are truthful and non-misleading.

Readers can review our previous posts about the Amarin litigation here and here. However, we summarize the relevant background of the litigation below. A more exhaustive review and analysis of the issues presented by the original suit can also be found in our article published in FDLI Update last Fall.

Background: Amarin Files Civil Suit Against FDA on May 7, 2015

The lawsuit brought by Amarin concerns its drug, Vascepa (icosapent ethyl), an ethyl ester of the omega-3 fatty acid eicosapentaenoic acid (“EPA”).  Vascepa is an approved drug indicated as an adjunct to diet to reduce triglyceride levels in adult patients with severe hypertriglyceridemia (triglycerides ≥ 500 mg/dL).  See Vascepa (icosapent ethyl) Label, NDA 202057 (June 23, 2015).

As part of the Company’s planned development and marketing of Vascepa, Amarin designed and conducted a Phase 3 clinical study, the ANCHOR trial, to examine the effect of Vascepa on triglyceride levels among statin-treated patients with “persistently high” triglycerides (≥ 200 and ≤ 500 mg/dL), and entered into a Special Protocol Assessment (“SPA”) with FDA (the “ANCHOR SPA”). Amarin believed it had satisfied all of FDA’s requirements to obtain approval of Vascepa for this indication per the ANCHOR SPA agreement.  The ANCHOR study achieved its primary endpoint demonstrating statistically significant reductions in triglyceride levels with Vascepa, compared to placebo. Vascepa achieved statistically significant results for its secondary endpoints in the ANCHOR study as well.  In addition, Amarin met its obligation under the ANCHOR SPA to enroll at least 50% of a cardiovascular outcomes trial (the REDUCE-IT trial) to examine whether Vascepa would be effective in reducing cardiovascular events. Thus, Amarin submitted its sNDA for the persistently high triglyceride indication in February 2013, and anticipated a timely approval for this additional indication.

The company’s plan to obtain approval of the persistently-high triglyceride level indication was derailed when FDA called into question the clinical validity of the triglyceride lowering endpoint while the sNDA for this indication was under review, despite FDA having agreed to that endpoint in the ANCHOR SPA. Following an FDA-convened Advisory Committee meeting, where Committee members voted 9 to 2 against approval of Vascepa for that indication, FDA rescinded the ANCHOR SPA and issued a Complete Response Letter to Amarin requiring data showing a reduction in cardiovascular events prior to approval of the indication for persistently high triglycerides.  FDA concluded the Complete Response Letter “with a warning that any effort by Amarin to market Vascepa for the proposed supplemental use could constitute ‘misbrand[ing] under the Federal Food, Drug, and Cosmetic Act [(“FD&C Act”)].’”  Complaint at 27, Amarin Pharma, Inc. v. FDA, No. 15-3588 (S.D.N.Y. May 7, 2015).

The civil Complaint that Amarin filed claimed that FDA’s threat of prosecution for misbranding Vascepa had a chilling effect on Amarin’s commercial speech that was otherwise protected by the First Amendment.  For that reason, Amarin sought declaratory and injunctive relief to prevent the government from prosecuting the Company for truthful and non-misleading speech concerning Vascepa, detailing, in its complaint, certain off-label promotional content regarding Vascepa that the Company proposed to disseminate.

In its Complaint, Amarin stated that it sought only to “engage in truthful, non-misleading speech about Vascepa directly with healthcare professionals” (Compl. at 41), albeit on information that FDA had not approved to appear in Vascepa’s label.  First, Amarin wanted to disseminate the results of the ANCHOR study.  Amarin proposed to distribute summaries of Vascepa’s effect on triglycerides as well as secondary endpoints on other lipid parameters that were examined in the ANCHOR study.  Second, Amarin wanted to make the statement that “[s]upportive but not conclusive research shows that consumption of EPA and DHA [(docasohexanoic acid)] omega-3 fatty acids may reduce the risk of coronary heart disease,” a claim that EPA- and DHA-containing dietary supplements are allowed to make, under FDA’s rules.  Id. at 41, 31-37.  Third, Amarin sought to distribute reprints of “peer-reviewed scientific publications relevant to the potential effect of EPA on the reduction of the risk of coronary heart disease.”  Id. at 42.  Along with this information, Amarin proposed to make relevant “contemporaneous disclosures” to ensure that the messages the Company communicated to healthcare professionals concerning the use of Vascepa in patients with persistently high triglycerides was not misleading.

Preliminary Relief Granted to Amarin on August 7, 2015

Amarin filed a motion for preliminary injunction and, on August 7, the court handed down a 71-page opinion that gave Amarin an early victory in the case and presumably provided the impetus for the parties to settle.

Following United States v. Caronia, 703 F.3d 149 (2d Cir. 2012) (here), a Second Circuit criminal misbranding case, Judge Engelmayer granted Amarin’s motion for preliminary injunction against FDA.  The court held that Amarin’s dissemination of a summary of the ANCHOR study results as well as the reprints regarding the potential cardioprotective effect of EPA, “would be neither false nor misleading.”  Op. and Order at 55, Amarin Pharma, Inc. v. FDA, No. 15-3588 (S.D.N.Y. Aug. 7, 2015) (“August 7 Order”). The court held that certain statements and disclosures, proposed by Amarin and agreed upon by FDA, concerning the results of the ANCHOR study were “based on current information, truthful and non-misleading.”  Id. at 57.

The court also ruled on additional disclosures proposed by Amarin, but initially contested by FDA, that would be made contemporaneously with certain off-label statements concerning Vascepa.  In the end, the court approved a disclosure explaining FDA’s decision not to approve Vascepa for use in patients with persistently high triglycerides. The court indicated that such a disclosure was necessary, and the court itself proceeded to revise a disclosure “drawing upon both parties’ final positions, [that] achieve[d] a truthful and non-misleading result.”  Id. at 58.  The court noted that Amarin and FDA were “at liberty to pursue further refinements . . . .”  Id. at 60.

Finally, the court considered Amarin’s proposed cardiovascular disease claim.  During the litigation, Amarin proposed to revise the claim to read: “Supportive but not conclusive research shows that consumption of EPA and DHA omega-3 fatty acids may reduce the risk of coronary heart disease. Vascepa should not be taken in place of a healthy diet and lifestyle or statin therapy.”  Id. at 63.  The court held that its “assessment, with Amarin, is that the coronary heart disease claim—given its qualified phrasing and its acceptance elsewhere by the FDA, and with the sentence added by Amarin—is presently truthful and non-misleading. Therefore, Amarin may today make that claim, too, without exposing itself to liability for misbranding.”  Id. at 64.

The court noted that circumstances could change the court’s “approval” of the aforementioned statements as truthful and non-misleading.  The court stated:

The Court has held that Amarin’s proposed communications, as modified herein, are presently truthful and non-misleading. But the dynamic nature of science and medicine is that knowledge is ever-advancing. A statement that is fair and balanced today may become incomplete or otherwise misleading in the future as new studies are done and new data is acquired. The Court’s approval today of these communications is based on the present record. Amarin bears the responsibility, going forward, of assuring that its communications to doctors regarding off-label use of Vascepa remain truthful and non-misleading.  [(Id. at 66.)]

The Court’s Ruling on First Amendment Protection for Amarin’s Off-Label Promotion

In addition to its rulings on the specific statements proposed by Amarin, the court also addressed Amarin’s general request for First Amendment protection for truthful and non-misleading off-label promotion.  The court heavily relied on the precedent-setting analysis in Caronia, although the Amarin court amplified Caronia’s central holding with regard to Amarin’s as-applied challenge to FDA’s threat of prosecution for off-label promotion.

FDA’s counter to Amarin’s challenge was a refinement of its long-standing position that it may use speech as evidence of misbranding, taking the position that it would not seek to prosecute Amarin for the speech in and of itself.  Rather, FDA, in its briefs as well as in its oral arguments, stated that it could lawfully use speech to establish the intent and the act of misbranding.  In addition to using Amarin’s speech as evidence of intent to misbrand Vascepa, FDA stated that it “may bring a misbranding action where Amarin’s only acts constituting promotion of Vascepa for an off-label use are its truthful and non-misleading statements about that use, provided that these acts support an inference that Amarin intended to promote that off-label use.”  Id. at 44.  FDA went on to argue that “it does not read Caronia to preclude a misbranding action where the acts to promote off-label use consist solely of truthful and non-misleading speech, provided that the evidence also shows that the drug had been introduced into interstate commerce and that the FDA had not approved it as safe and effective for the off-label use.”  Id. at 44-45.

The court flatly rejected FDA’s interpretation of Caronia and stated that “[t]he [c]ourt’s considered and firm view is that, under Caronia, the FDA may not bring such an action based on truthful promotional speech alone, consistent with the First Amendment.”  Id. at 45.  The court stated that, “[w]here the speech at issue consists of truthful and non-misleading speech promoting the off-label use of an FDA-approved drug, such speech, under Caronia, cannot be the act upon which an action for misbranding is based.”  Id. at 49.

The court rejected FDA’s legal arguments as to why Amarin’s off-label speech should be restricted. First, the court rejected FDA’s argument that Amarin’s proactive challenge constituted a “frontal assault” on FDA’s new drug approval process.  Id.  To this, the court pointed to the fact that the 1962 amendments predated First Amendment jurisprudence protecting commercial speech (see Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n, 447 U.S. 557 (1980)) and found that pharmaceutical speech qualifies for such protection (see Sorrell v. IMS Health, Inc., 131 S. Ct. 2653, 2672 (2011)).  August 7 Order at 49. Second, the court rejected FDA’s attempt to narrow the applicability of Caronia to only certain types of truthful and non-misleading off-label promotion. The court stated that Caronia applies “across the board to all truthful and non-misleading promotional speech.”  Id. at 51.  Finally, FDA reprised its argument that Caronia does not prohibit the use of speech as evidence of intent to promote a drug for off-label uses.  The court stated that the “construction [of the misbranding provision in the FD&C Act in accord with Caronia] applies no matter how obvious it was that the speaker’s motivation was to promote such off-label use.”  Id.  The court concluded by stating: “[i]n the end, however, if the speech at issue is found truthful and non-misleading, under Caronia, it may not serve as the basis for a misbranding action.”  Id. at 53.

The Settlement Agreement Filed on March 8, 2016, Resolving the Lawsuit

The comprehensive analysis of Amarin’s First Amendment claims by the court and its sweeping decision with regard to Amarin’s motion for preliminary injunctive relief propelled the litigants into settlement discussions that culminated over six months later. The Proposed Settlement Order filed in the court follows and indeed adopts the court’s key determinations in the August 7 Order. The first four paragraphs of the settlement terms provide, broadly, that Amarin will not be prosecuted for truthful and non-misleading promotion of Vascepa outside of its approved label. These terms include:

1. Amarin may engage in truthful and non-misleading speech promoting the off-label use of Vascepa to treat patients with persistently high triglycerides, and “under Caronia, such speech may not form the basis of a prosecution for misbranding.”
2. The communications regarding off-label use of Vascepa, as modified and approved in the court’s August 7 Order, are, based on information known at that time, truthful and non-misleading.
3. “Amarin bears the responsibility, going forward, of assuring that its communications to doctors regarding off-label use of Vascepa remain truthful and non-misleading.”
4. All settlement terms are to be interpreted consistent with the August 7 Order, and nothing in the Proposed Settlement Order shall be construed to limit Amarin’s constitutional rights to free speech concerning Vascepa.

Proposed Settlement Order at 2.

Two other provisions of the Proposed Settlement Order warrant attention. First, in addition to generally-available regulatory procedures available to companies regarding FDA review of promotional materials, Amarin may submit to FDA up to two proposed communication pieces per year regarding off-label use of Vascepa under a “preclearance procedure” detailed in the Proposed Settlement Order. Id. The proposed communication pieces that Amarin submits will be reviewed by FDA prior to Amarin disseminating such information. FDA has 60 calendar days to object, unless the parties agree on an extended timeframe. Should FDA object, Amarin must respond to FDA’s concerns or objections within 45 calendar days, again, unless extended by mutual agreement of the parties. FDA will notify Amarin within 30 calendar days of the specifics of any remaining dispute over the proposed communication pieces. Id. at 2-3. This preclearance process will be available to Amarin until December 31, 2020, and is the only provision of the Proposed Settlement Order that will terminate. Id. at 3.

Second, should any other dispute arise between the parties, the Proposed Settlement Order provides for a dispute resolution process. In an effort to promote dialog between the Company and FDA, the parties have agreed that, upon written notice of a dispute by one of the parties, the other party will have 60 days to cure or resolve the dispute. If the party is not satisfied by the other party’s proposed cure or resolution, that party will have 30 calendar days to respond. After this process has been followed, unresolved disputes may be brought before Judge Engelmayer, whose court retains jurisdiction over the Proposed Settlement Order. Id. at 3-4.

Finally, the Proposed Settlement Order applies to both Amarin as well as it representatives. Id. at 4.

Some Things We Have Gleaned from Recent Off-Label Promotion Cases

In a suit that followed on Amarin’s coat-tails in the Southern District of New York, Pacira Pharmaceuticals, Inc. (“Pacira”) challenged FDA’s limitations on Pacira’s promotion of its post-surgical analgesic drug, Exparel, to only those specific uses in which the drug has been studied and approved, despite the drug having a general use indication. See Pacira Pharms., Inc. v. FDA, No. 15-7055 (S.D.N.Y.). Pacira settled its First Amendment challenge against FDA regarding the promotion of its drug, Exparel (see our discussion on the litigation here and the settlement here). Both the terms of settlement and the revised label confirmed that Exparel’s use encompassed a broad range of surgeries, not limited to the clinical studies included in the label. Also, FDA stipulated that this broad use of Exparel does not represent the approval of a new indication, but rather clarifies Exparel’s use, “as initially approved” at the time Exparel’s NDA was approved, back in 2011, thus exculpating Pacira from prosecution related to its past, current, and future promotion of Exparel for specific surgery types that are encompassed by its general indication. We believe there are broader implications to this settlement for products bearing general indications in their label. As we noted previously, medical device companies frequently face this “general versus specific use” issue. We must remember that Pacira was a settlement of a specific legal dispute and does not provide legal conclusions from a court in litigation.

Second, on February 25, 2016, in a criminal case, United States v. Vascular Solutions, Inc., on which we previously posted here and here, a jury acquitted Vascular Solutions, Inc. (“VSI”) and its CEO, Howard Root, on allegations that the defendants engaged in a criminal conspiracy to violate the FD&C Act and sold misbranded medical devices. Judge Royce Lamberth, a Senior Judge in the U.S. District Court for the District of Columbia and sitting by designation in the U.S. District Court for the Western District of Texas, instructed the jury, consistent with Caronia and Amarin, that speech that is truthful and not misleading is not criminal. His instructions read, in part:

It is also not a crime for a device company or its representative to give doctors wholly truthful and non-misleading information about the unapproved use of a device. If you find that VSI’s promotional speech to doctors was solely truthful and not misleading, then you must find the Defendants not guilty of the misbranding offense.

Final Jury Instructions at 12, United States v. Vascular Solutions, Inc., 5:14-CR-00926 (W.D. Tex. Feb. 25, 2016) (emphasis added).

This was an important case because it showed us that a court outside of the Second Circuit may be following its lead in finding that truthful and non-misleading speech concerning off-label uses of a product does not violate the criminal misbranding provisions of the FD&C Act.

Which brings us back to Amarin . . . The Amarin Proposed Settlement Order may be a sign of how FDA will be regulating off-label promotion in the future. This is the first case where FDA has agreed to allow a company to engage in truthful and non-misleading off-label promotion outside the narrow scope of its two Guidance documents concerning the dissemination of information on unapproved uses of a product. See FDA, Draft Guidance for Industry: Responding to Unsolicited Requests for Off-Label Information About Prescription Drugs and Medical Devices (Dec. 2011); FDA, Revised Draft Guidance for Industry: Distributing Scientific and Medical Publications on Unapproved New Uses — Recommended Practices (Feb. 2014). The terms of the Proposed Settlement Order do not limit Amarin’s ability to make claims that were presented during the litigation. Rather, the Proposed Settlement Order broadly allows Amarin to disseminate any truthful and non-misleading off-label information and materials related to Vascepa’s use in patients with persistently high triglyceride levels. See Proposed Settlement Order at 1. As we discussed previously, however, FDA may believe that Amarin presents a somewhat unique sets of facts, given the regulatory history and NDA-quality data underlying the court’s preliminary decision that the speech was truthful and not misleading.

Where Do We Go From Here?

While pharmaceutical and medical device companies have come out on top in recent First Amendment litigation, companies should still tread cautiously in moving beyond their approved labeling.

A company’s review and approval of promotional pieces begins, but does not end, with a review of the product’s prescribing information and labeling. Companies should carefully consider communications it has had with FDA during the development and approval of the product as well as any post-marketing discussions. Often these communications, memorialized in official meetings minutes, regulatory correspondence, or contact reports, provide a rich understanding of FDA’s view on the claims that can be made within the scope of the approved prescribing information.

It is also important to understand that First Amendment protection only applies to speech that is both truthful and non-misleading.  While it may be relatively straightforward to determine what is or is not “truthful,” the nature of what may “mislead” is much more complicated and will heavily depend on the facts and circumstances. Indeed, the court, in Amarin, gave very practical advice when it said:

Although the FDA cannot require a manufacturer to choreograph its truthful promotional speech to conform to the agency’s specifications, there is practical wisdom to much of the FDA’s guidance, including that a manufacturer vet and script in advance its statements about a drug’s off-label use. A manufacturer that leaves its sales force at liberty to converse unscripted with doctors about off-label use of an approved drug invites a misbranding action if false or misleading (e.g., one-sided or incomplete) representations result. Caronia leaves the FDA free to act against such lapses.  [(August 7 Order at 53.)]

Finally, we note that the Amarin Proposed Settlement Order does not specifically address the issue of whether, to make a promotional claim, a company must have adequate substantiation for that claim. The government may assert that an unsubstantiated claim is unlawful without regard to the First Amendment, even if that claim is otherwise truthful and not misleading.

In sum, we expect that the next battleground for companies who seek to disseminate off-label information concerning their products will be whether an off-label claim is misleading and/or unsubstantiated.

We may take a deeper dive into these issues in future posts.

UPDATE:  Late on March 8, 2016, Judge Engelmayer signed the Stipulation And Order Of Settlement.

By Wes Siegner –

In April 2005, FDA published guidance for industry on dietary supplement labeling, “A Dietary Supplement Labeling Guide.”  As we wrote in 2009, an error in this guidance, stating that the term “dietary supplement” was not an acceptable statement of identity on its own for a dietary supplement product, had caused significant regulatory problems for at least one company.  When we contacted FDA on this issue in 2009, a senior FDA official acknowledged the error but also expressed his opinion that FDA was not likely to fix the guidance in the near future.  This official proved to be prophetic.

The erroneous guidance stayed on FDA’s website through last year, creating additional headaches for industry as class action lawyers used the guidance to support their lawsuits, leading us to write another blogpost urging FDA to fix the guidance.  This time, the American Herbal Products Association waded in, sending FDA a letter requesting that the guidance be fixed.

At long last FDA has addressed this problem. The following appeared in a notice in the March 7, 2016 Federal Register:

In April 2005, we issued a guidance for industry entitled "A Dietary Supplement Labeling Guide." The guidance covers the most frequently raised questions about the labeling of dietary supplements using a question and answer format and is intended to help ensure that the dietary supplements sold in the United States are properly labeled. We recently were made aware that the guidance was inaccurate in one detail. Specifically, in Chapter II, entitled "Identity Statement," question 3 asked "Can the term 'dietary supplement' by itself be considered the statement of identity?" The response to the question said that it could not, but this response was not consistent with section 403(s)(2)(B) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act) (21 U.S.C. 343(s)(2)(B)) and our regulations at 21 CFR 101.3(g). Thus, we are revising the guidance to state that the term "dietary supplement" may be used as the entire statement of identity for a dietary supplement and to explain the basis for that conclusion.

The difficulty fixing this small but very significant, from a regulatory perspective, problem in FDA’s guidance bolsters complaints about the broader problems with FDA guidance generally. The lower standards applied to the development and issuance of guidance compared with regulations makes errors both large and small more likely.  The overreliance of FDA on guidance, which is theoretically “nonbinding” but is often treated as establishing legal requirements by FDA, the states, and the courts, combined with the low priority that FDA appears to place on fixing errors, argues for continued resistance and inquiry into FDA’s use of guidance to regulate industry.

Reminder: Register now for the May 3, 2016 Virginia Tech and HP&M Conference on Effective Documentation.  Information on the conference is available here.

By Mark I. Schwartz –

There have been at least four FDA initiatives, in the works for some time that, in the coming years, will change the way pharmaceutical (and indeed all FDA) inspections are conducted. We think you should know about these initiatives, and how they are likely to affect the way companies prepare for, and deal with, FDA inspections. Today, we are going to discuss the Program Alignment Group (PAG) plan, arguably the least controversial of the four. Over the next few weeks we will discuss the other three programs that are likely to dramatically affect the inspection landscape.

Way back in September of 2013, then Commissioner Hamburg tasked some senior FDA officials with “…developing plans to modify agency functions and processes to best achieve mission-critical agency objectives.” The advice that the officials subsequently provided to Dr. Hamburg recommended that FDA’s regulatory and compliance activities be organized around “commodity” based and vertically integrated regulatory programs.  See Program Alignment Group Recommendations – Decision Memorandum (Feb. 3, 2014). The six commodity based programs are: pharmaceuticals, biological products, medical devices and radiological health, food and feed products, tobacco and bioresearch monitoring.

In other words, the marching orders from the Commissioner were to develop a dedicated corps of specialized ORA investigators to conduct inspections exclusively within a particular area of expertise. The thinking was that product areas are becoming much more complicated and highly specialized, both because of ever increasing regulatory requirements and because improved technology is playing an increasing role in product development and in manufacturing. Hence, shouldn’t the inspection force be equally as specialized?

In other words, if you are spending two-thirds of your time as an investigator inspecting run-of-the-mill food, feed or tobacco facilities, does it really make sense for that same person to also be conducting inspections of recombinant biotech drug firms? The answer seems self-evident, until you realize that little in a huge bureaucracy is self-evident, and even less is readily achievable even when it is self-evident.

Dr. Hamburg’s objectives went beyond specializing, or commoditizing, the inspectorate, and also included commoditization of the laboratories and the compliance officers who manage the results of the investigations. According to the then Commissioner: “[t]he goal should be to have a cadre of compliance officers across the Agency who have a similar level of technical expertise as the specialized investigators and who can work more closely with Center experts on complex scientific, manufacturing, and other regulatory challenges.”  Id.

The PAG plan includes developing the commodity programs out of the Office of Regulatory Affairs’ (ORA’s) 20 district offices. Each district office will focus on only one category of product, based on geographic location.

So, what to make of these objectives? From an industry perspective, having specialists, rather than generalists, analyzing a firm’s key systems seems like a no-brainer in terms of the specialist being better able to understand the complexities of the businesses being inspected and developing a better understanding of the inspected firm’s concerns. However, that alone does not mean that the quality of future inspections will be satisfactory.

Team Biologics, a specialized group of ORA investigators who inspect most CBER-regulated facilities, is perhaps the model for the PAG plan. While employed at FDA, this author observed that Team Biologics’ inspections have clearly raised the bar on the FDA inspectorate as a whole. However, the quality of such inspections, and inspectional observations, still varies widely, both between lead investigators and between facilities inspected, almost twenty years after the inception of Team Biologics. In other words, this development is a necessary, but not a sufficient, condition to thorough and fair inspections.

One thing is certain. Firms that have thus far counted on investigators not discovering fundamental problems with their key systems are less likely to succeed after the PAG plan’s implementation, owing to the greater level of knowledge and specialization of investigators.

The PAG plan also seeks to reduce layers of review, and encourage closer collaboration between Center staff and field inspectors, with the goal of eliminating duplicate work and speeding up inspectional findings to manufacturers. Indeed, FDA officials have stated that the changes are expected to accelerate re-reviews of facilities looking to regain compliance status and “not leave firms in OAI status for a long time…” (Apparently, another objective is to halt violative imports more quickly by de-linking import alerts from warning letters).  See, e.g., Statements by Tom Cosgrove, Director of the Office of Manufacturing Quality, CDER, at last year’s PDA/FDA conference While most of these are laudable, and indeed desirable, goals, it is wholly unclear whether the PAG plan can achieve these objectives.

Without a doubt, this portion of the PAG plan seems the least realistic, as it anticipates the removal of layers of bureaucracy without the hammer of a statutory mandate or new funding specifically earmarked by Congress (broadly, like what exists with the user fee programs). Finally, it does not appear to consider the possibility that accelerating the delivery of inspectional findings in a huge bureaucracy will diminish the quality of the work product.

The agency’s goal is have the new model in place for fiscal year 2017. FDA, and its sundry components, has undergone various reorganizations over the years, often without achieving many of their key objectives. This is one that many people unambiguously hope is properly implemented and successful. However, it has the added complexity of needing to be implemented by a new Commissioner, who is in the final year of the second term of a presidential administration.

As always, we will keep you posted on developments.

By Kurt R. Karst –

The ongoing controversy over drug pricing has raised debate on many aspects of drug approval, and, in particular, on the approval of generic drugs.  Over the past several months, there have been numerous letters from Members of Congress to FDA – see, e.g., here, here, and here – seeking an accounting of ANDA reviews and the ANDA backlog, and criticizing FDA for being slow to act.  Even The New Yorker chimed in, saying that the “F.D.A. certification process for generic drugs is gruelling.” 

While the ANDA review process has historically been long – and in some cases quite exasperating – FDA’s Office of Generic Drugs (“OGD”) has made significant strides to improve the process as the Office implements the Generic Drug User Fee Amendments (“GDUFA”).  Last month, OGD Director Dr. Kathleen (“Cook”) Uhl provided a nice accounting of OGD’s progress under GDUFA I (see our previous post here).  Earlier this week, Lachman Consultants’ Bob Pollock noted in a blog post that OGD’s approval actions are increasing.

In February 2016, the House Committee on Oversight and Government Reform held a hearing at which some Representatives expressed disbelief that it could take 15 months or more for FDA to review and act on an ANDA. One exchange during the hearing, between Representative Blake Farenthold (R-TX) and OGD’s Keith Flanagan, was particularly entertaining (and yet also frustrating).  Representative Farenthold seemed to suggest that FDA’s OGD could just wave a magic wand – like a wand or swab used by the Transportation Security Administration at airports – to review and act on an ANDA.  Here’s a transcription of the exchange (which you can view here, minutes 1:40-3:50):

Farenthold:  The amount of time it takes the FDA to approve a generic drug manufacturer, that—if there’s only one manufacturer in the generic market—they’ve basically got the 15 months it takes—and I’m going to argue that number with you—they’ve got an exclusive ability to sell that drug for 15 months at a million dollars a pill if they choose to do that.

Flanagan:  Right.

Farenthold:  So, what takes so long to do this?  I’m not an expert in what’s involved in approving a place to manufacture drugs.  I assume if you can manufacture XYZ drug in a place, you’ve got a clean facility, there are no roaches on the assembly line.  If you want to add another product, why should it take 15 months to get that approved?  I assume you can test whatever drug they make and see if it is what they say.  What else is involved there?  And why—and if they do screw up making it, 1-800-BAD-DRUG is going to bankrupt the company.

Flanagan:  So, basically, to review a generic drug, there’s the scientific and technical review; bioequivalence; chemistry, manufacturing, controls; stuff like that. 

Farenthold:  How much of this is really necessary, and how much of it is regulations that are “what color is the toilet paper?”

Flanagan:  So, the reason we have 88% prescription penetration in the United States is because when you or your family go to the pharmacy to get a generic drug that you can be confident that it’s the same as the brand.  Our review—

Farenthold:  But, does it—why does it have to take 15 months?  How difficult is it to get their output, analyze it, and see what it is?  I can’t believe that takes 15 months.  The TSA can, in a matter of seconds, tell whether or not I’ve got an explosive in my bag by just swiping something on it.  I mean, isn’t there technology there that’ll make it faster and better?  Why aren’t we using it? Every day you delay getting a competitor on the market, is a day companies can screw the consumer.

Given the intense discussion around ANDA reviews and the need to get generic drugs to the market faster, it was inevitable that legislation would be introduced in an effort to tinker with the ANDA review process. 

Earlier this week, Senator Susan Collins (R-ME) introduced S. 2615, the “Increasing Competition in Pharmaceuticals Act” (“ICPA”).  In addition to requiring FDA to send to Congress quarterly reports on generic drugs (including the  number of ANDAs submitted to FDA, average and median approval times, and other figures), amending the tropical disease priority review voucher statute to require the submission of clinical studies to be eligible for a voucher, and requiring the Comptroller General to conduct a review of the implementation and effectiveness of Risk Evaluation and Mitigation Strategies (“REMS”) (including the burden of REMS on generic competition), the ICPA would amend the FDC Act to add Section 505(j)(11), requiring FDA to prioritize the review of certain ANDAs.  Here’s what the statute would be amended to state:

(11)(A) The Secretary shall prioritize the review, and act not later than 150 calendar days after the date of the submission of an application, on an application that has been submitted and accepted for review under this subsection, or on a supplement to such an application, that is for a drug that—

(i) has been introduced into interstate commerce by not more than one manufacturer or sponsor, as applicable, in the last 3 months and with respect to which tentative approval under paragraph (5) has been granted for not more than 2 applications; or

(ii) has been included on the list under section 506E [concerning drug shortages].

(B) The fees pursuant to section 744B(a)(3) shall be waived with respect to an application described in subparagraph (A), unless such application contains a certification under paragraph (2)(A)(vii)(IV).

(C) The Secretary may expedite an inspection or reinspection under section 704 of an establishment that proposes to manufacture a drug described in subparagraph (A).

How FDA will police the market to determine what drug “has been introduced into interstate commerce” is unclear.  And how will FDA handle the ever-changing content of the drug shortage list (FDC Act § 505E)?

The ICPA would also take the concept of Priority Review Vouchers (“PRVs”) into a new area.  As we previously reported (here and here), Congress has been exploring new ways to incentivize drug product development by, among other things, creating new statutory PRV provisions.  (As we reported earlier this week, not everyone at FDA has warmed up to the idea of PRVs.)  

Specifically, the ICPA would add Section 505G to the statute to create a new (and transferable) “Generic Priority Review Voucher” that would require FDA to review and act on an ANDA within 150 calendar days of submission and acceptance for review.  A Generic PRV would be awarded upon the approval of an ANDA described in FDC Act § 505(j)(11)(A) above, unless such ANDA contains a Paragraph IV certification.  A Generic PRV could be revoked if the product giving rise to the voucher is not marketed within 356 days from the date of ANDA approval.  The bill clarifies that nothing in proposed FDC Act § 505G  affects any period of patent or non-patent exclusivity applicable to a brand-name listed drug. 

Reminder: Register now for the May 3, 2016 Virginia Tech and HP&M Conference on Effective Documentation.  Information on the conference is available here.

By Alexander J. Varond –

On March 2, 2016, GAO released its report, “RARE DISEASES – Too Early to Gauge Effectiveness of FDA’s Pediatric Voucher Program.” While the report nicely summarizes the history of the program, it contains little new information. Highlights from the report include:

• FDA officials interviewed for the GAO report expressed “concern” about the program and do not support its continuation after the program expires on October 1, 2016;
• 3 PRV requests are currently pending before FDA;
• 52 rare pediatric disease designation requests have been submitted;
• 29 rare pediatric disease designation requests have been granted; and
• To date, no voucher has been awarded for a new drug application to prevent a rare pediatric disease.

The report provides an overview of the drugs that received pediatric vouchers and describes the extent to which they filled unmet need. It also identifies how the pediatric PRVs are being used. Beyond compiling these historical facts, GAO interviewed FDA officials, sponsors, patient advocacy groups, trade groups, and other interested organizations and individuals.

The report’s conclusion is simple: it’s too early to gauge if the pediatric voucher program stimulates drug development (although there are hints that it is).

Background

GAO provides the following table summarizing the issued pediatric vouchers:

GAO also notes that, as of December 31, 2015, there have been 11 requests for pediatric vouchers. Of these, 6 were granted, 2 were denied, and 3 remain under review. The 2 denials were because the diseases “did not satisfy the definition of a rare pediatric disease.”

Too Early to Gauge if Program Stimulates Drug Development

GAO concludes in its report that “[g]iven that the typical drug development process often exceeds a decade, insufficient time has elapsed to gauge whether the 3-year-old pediatric voucher program has been effective at encouraging the development of drugs for rare pediatric diseases. [GAO] found that each of the drugs awarded pediatric vouchers were in development prior to the voucher program’s implementation. Any sponsors motivated by this relatively new program to attempt to develop drugs for such diseases would likely be years away from submitting their new drug applications to FDA.”

The report also mentions that “[a]lthough it is too early to gauge whether the program stimulates drug development, a potential indication of sponsor interest in the program may be reflected by the number of requests that have been submitted for a pediatric voucher or a rare pediatric disease designation.”

Of the 6 drugs that received pediatric vouchers, “[o]fficials from both NIH and FDA agree that these drugs are meaningful for patients with the rare pediatric diseases as the drugs may, for example, increase life expectancy, alleviate certain symptoms, or otherwise improve quality of life.”

FDA Officials Resistant to the Pediatric Voucher Program

What may come as a bit of surprise, the FDA officials interviewed by GAO were resistant to the pediatric voucher program. The report states:

FDA officials expressed concern about the pediatric voucher program, and do not support its continuation after its current authorization expires October 1, 2016. In written responses to our questions, FDA officials reported that they have seen no evidence that the program has encouraged increased development of drugs for rare pediatric diseases. The agency also indicated that while it strongly supports the goal of the program—incentivizing the development of drugs for rare pediatric diseases—it has not seen evidence that the program has yet been effective in achieving this goal. Instead, the agency suggested that companies may consider that other incentives, such as provision of an additional period of “market exclusivity,” may be more effective at incentivizing drug development than the priority review vouchers. FDA specifically cited its authority to provide an additional 6 months of market exclusivity for FDA requested pediatric studies in products that may produce health benefits in the pediatric population—known as pediatric exclusivity—as providing an effective incentive to drug sponsors.

FDA’s concerns include:

• The pediatric voucher program interfering with the agency’s ability to determine its public health priorities (i.e., “the program allows sponsors to ‘purchase’ a priority review at the expense of other important public health work in FDA’s portfolio.”)

• The pediatric voucher program is resource intensive and makes it difficult for FDA to manage its workload.

Other Groups Generally Support the Pediatric Voucher Program

In general, feedback from stakeholders was mostly positive. Sponsors indicated that voucher program incentivized drug development. One way it does this is by channeling money from pharmaceutical companies with more cash to companies focusing on developing drugs for rare pediatric diseases. A significant commentary from stakeholders was that the program should be reauthorized for even longer or permanently. This would provide the certainty needed for companies to invest significant long term resources to developing drugs for rare pediatric diseases.

In Other News, Gilead Successfully Redeems a Priority Review Voucher

On March 1, FDA approved Odefsey® (emtricitabine 200 mg/rilpivirine 25 mg/tenofovir alafenamide 25 mg or R/F/TAF) for the treatment of HIV-1 infection in certain patients. Gilead used the tropical disease voucher it acquired from Knight for $125 million to reduce the review time by 4 months. Thomson Reuters has estimated that peak sales of Odefsey may exceed $1.6 billion per year.

FDA regulatory requirements for products are heavily influenced by the product’s classification. FDA has developed procedures for determining whether a product should be regulated as a drug, device, or biologic.   Understanding FDA’s procedures for determining jurisdiction is essential for companies that are seeking to market a product where it is not clear which category the product falls into or which Center will regulate it.  Unfortunately, FDA’s own procedures for establishing jurisdiction are themselves not clear and can lead to unexpected outcomes.  In a new article in FDLI’s Update Magazine, titled "FDA and Product Jurisdiction: Time for Reforms," Hyman, Phelps & McNamara, P.C., Director Jeffrey N. Gibbs discusses the FDA jurisdictional process and some of its challenges.

Reminder: Register now for the May 3, 2016 Virginia Tech and HP&M Conference on Effective Documentation.  Information on the conference is available here.

ACI is holding its 3rd Annual Legal, Regulatory, and Compliance Forum on Cosmetics & Personal Care Products on March 7-9, 2016 at the Carlton Hotel in New York City. This is the first year ACI is partnering with the Independent Cosmetic Manufacturers and Distributors and the Professional Beauty Association on the Cosmetics and Personal Care Products Forum.  The program provides “a comprehensive guide to the latest developments affecting ‘articles intended for cleansing, beautifying, promoting attractiveness, or altering the appearance’.” 

Among other topics, there will be a panel entitled: “Is it a Cosmetic, a Drug, Or Something Else?  Exploring Regulatory Lines for ‘Cosmetic-Type’ Products Which Affect the Structure or Function of the Body.”  Hyman, Phelps & McNamara, P.C.'s Paul M. Hyman will appear on this panel, speaking on “Fundamentals of the Cosmetic/Drug (and Device) Distinction.” 

You can still register for the program (and receive a discount) at www.AmericanConference.com/Cosmetics, or contact Bolam Kim (B.Kim@americanconference.com) directly to attend.  Please be sure to use discount code S10-866-866L16.S to register and receive 10% off the tuition fee. 

DIA is holding its 27th annual Marketing Pharmaceuticals conference on Thursday and Friday, March 3-4, 2016, at the Bethesda North Marriott Hotel and Conference Center in Bethesda, MD. DIA is a not-for-profit, global organization dedicated to bringing health care product development professionals together in a neutral environment to improve health and well-being throughout the world.  The conference focuses on the complexities of regulatory and compliance challenges within the marketing and promotion of pharmaceuticals, biologics, and medical devices in an evolving environment.

Featured topics include:

• FDA updates on recent enforcement actions and guidances
• Litigation and compliance updates
• Safety labeling changes: real world execution into packaging, advertising, and promotion
• Engaging payors, nontraditional, and emerging customer markets
• Advocacy groups: when & how should they be engaged?
• How to remain compliant in a global environment
• Scientific exchange
• Social media: using new and emerging technologies compliantly
• Global advertising and promotion processes and standards

Hyman, Phelps & McNamara, P.C.’s John R. Fleder will be speaking about recent developments and legal issues in off label marketing and the practical consequences of those developments, Dara Katcher Levy will be moderating a luncheon round table discussion, and James E. Valentine will be moderating a session about when and how to engage advocacy groups.

You can still register for the conference online here. DIA is offering FDA Law Blog readers the option for a single day registration rate.  To take advantage of the single day registration rate, please call DIA’s Customer Service Team directly at 1.888.257.6457, reference the Marketing Pharmaceuticals conference and the FDA Law Blog, and which day you would like to attend.  Please note, this rate is not available online. 

Over the past few years, the Food and Drug Administration has dramatically increased its inspections of foreign manufacturing facilities for Active Pharmaceutical Ingredients (APIs) and finished dosage form drugs, with potentially cataclysmic consequences for U.S. parent companies, distributors, and manufacturers relying on foreign APIs or contract manufacturing. Additionally, the Justice Department and the Securities and Exchange Commission have brought multiple enforcement actions under the anti-bribery and record-keeping provisions of the Foreign Corrupt Practices Act (FCPA) for inappropriate inducements provided to foreign physicians and others deemed to be “foreign officials” because they are in the business of providing health care.  Sharing information with U.S. agencies and among themselves, anti-corruption authorities in other countries (especially China) have also been flexing their enforcement muscles against pharma companies.

Learning how to protect vital overseas supplies of APIs and pharmaceuticals can prevent or alleviate serious hardship. Dechert LLP and Hyman, Phelps & McNamara P.C., are proud to sponsor a free joint conference on these topics April 5, 2016, from 2:30 to 5:15 p.m., in Dechert’s New York City law offices.  The conference (with cocktails to follow) will feature two panels of experts who will address the current enforcement climate for corrupt practices and for FDA inspections that can block imports of pharmaceuticals to the United States.  Speakers will recommend measures that pharmaceutical companies and their investors can take to avert or alleviate harm.

FDA Inspections outside the United States, and their disastrous consequences 

Many of FDA’s foreign inspections are taking place in China and India, and they have led to the discovery of an increasing number of serious current good manufacturing practice (cGMP) violations, along with a commensurate increase in Warning Letters threatening enforcement action (15 Warning Letters to Chinese and Indian firms in 2015 versus four in 2012). Furthermore, a disturbingly large number of those Warning Letters have raised concerns about the pharmaceutical firms’ “data integrity” (13 Warning Letters to Chinese and Indian firms in 2015 versus two in 2012).

In addition to Warning Letters, adverse regulatory consequences resulting from bad foreign inspections include seizures, injunctions, criminal prosecutions, the refusals to approve New Drug Applications (NDAs) and applications to market generic drugs, and, just as significant, import detentions. Indeed, imports of products, including APIs, can be refused admission into the United States “…if it appears…that such article is adulterated [or] misbranded…” as defined in the Federal Food, Drug, and Cosmetic Act (emphasis supplied).  

These foreign facilities may be just an inspection away from disrupting the supply chain of countless U.S. drug manufacturers. Case in point, on March 2, 2015, FDA investigators walked into Zhejiang Hisun Pharmaceutical Co., Ltd. (Hisun), in China and immediately discovered a number of serious cGMP deficiencies, including data integrity problems.  At one point, according to FDA, the investigators walked into a lab and noticed an employee pull a memory stick from a computer and place it in his pocket.  When they asked what he had taken, the man ran away (see here). The agency issued a warning letter to Hisun, and at least 15 of the firm’s products have been barred from entering the U.S., creating a significant disruption in the pharmaceutical supply chain.  

At the April 5 conference, two experts from the internationally recognized pharmaceutical/medical device law firm Hyman, Phelps & McNamara P.C., Douglas B. Farquhar and Mark I. Schwartz, will discuss what can be done to prevent adverse FDA inspectional findings at foreign plants, and how to cope with the bad inspection when it happens.

We will be joined at the seminar by Lewis Ho of Dechert LLP, who will discuss the impact of the enforcement effort on companies in China, and Carmen M. Shepard, Senior Vice President of Global Policy and Regulatory Counsel at Mylan Inc., who will provide industry perspective on these issues. Ms. Shepard will also be interested in hearing from other industry attendees to develop an action plan urging FDA to streamline the process for lifting Official Action Indicated status from plants with poor inspections, and for closing out Warning Letters.

Threats posed by bribery and corruption

For many years, pharmaceutical companies with overseas activities have faced compliance challenges in multiple jurisdictions. The Justice Department and the SEC have brought multiple enforcement actions under the FCPA.  Anti-corruption authorities in other countries also have been active.  Most prominently, Chinese authorities have been actively investigating and taking enforcement actions against pharma companies, and their local business partners and agents, for such conduct.  These enforcement actions and the increasing cooperation and information-sharing among government authorities globally are subjecting global pharma companies to the threat of simultaneous enforcement actions in multiple jurisdictions.  Pharma companies as a consequence are redoubling their efforts to preach and practice ethical compliance worldwide.

But compliance problems need not be limited to one’s own activities. Increasingly, pharma companies with global operations face potential liability for the corrupt behaviors of their third-party partners, including joint ventures, representatives and agents, and contract manufacturers.

And, in the wake of significant negative publicity about the ramp-up of inspections of non-U.S. pharmaceutical facilities by U.S. and local regulatory agencies, pressure may build to “make problems go away” via inappropriate payments. This threat may be acute in countries where both the local regulator and the regulated firm simply expect issues to be resolved in this manner.

Corrupt acts of this sort by local partners could cause global pharma companies significant reputational harm as well as supply chain disruption.    

Two experts on foreign corruption and compliance from Dechert, Jeremy Zucker (Washington, DC) and Kareena Teh (Hong Kong), will discuss these anti-corruption compliance issues from U.S. and Asian perspectives and share “war stories” from recent investigations.

Please click on this link to register to attend the event.

BIOGRAPHIES:

DOUGLAS B. FARQUHAR, Director at Hyman, Phelps & McNamara P.C., has more than 30 years of experience as a prosecutor and defense and regulatory attorney. Since joining the firm in 1997, he has advised pharmaceutical and medical device manufacturers and wholesalers, compounding pharmacies, and individuals on a wide range of enforcement activities, including consent decrees, criminal investigations, debarment issues, arbitration proceedings, civil seizures, FDA inspectional issues, and injunctions.

LEWIS HO, a Dechert partner in its Hong Kong office, leads the life sciences practice in Asia. He helps life sciences and technology companies and their financial sponsors to capture, manage, risk assess, evaluate and monetize their intellectual property assets.  He has extensive experience advising on both inbound and outbound technology transfer transactions, and has negotiated more than 60 collaboration, outsourcing, joint venture and licensing deals with various life sciences companies, academic institutes, hospitals and contract research organizations.  He also assists Chinese companies acquiring IP assets and manufacturing facilities overseas.

MARK I. SCHWARTZ, Of Counsel at Hyman, Phelps & McNamara P.C., advises clients on biologic, drug, and device compliance, as well as on regulatory issues. He joined the firm after spending close to 13 years at the Food and Drug Administration in various capacities. Most recently, Mr. Schwartz was CBER’s Deputy Director in the Office of Compliance and Biologics Quality, an office with approximately 140 staff members.

CARMEN M. SHEPARD, is the Senior Vice President, Global Policy and Regulatory Counsel at Mylan.  She is an expert in the area of generic drug approvals, both for finished dosage form drugs and APIs. Ms. Shepard is responsible for handling legal regulatory issues arising from the company’s generic drug business in over 140 countries. She is also responsible for the company’s policy efforts globally.

KAREENA TEH, a Dechert partner based in its Hong Kong office, advises multinational, PRC, and Hong Kong clients on governance, regulatory and compliance matters, as well as general corporate and commercial litigation matters. Ms. Teh’s experience in these areas includes representing multinational companies and individuals in cross-border fraud, corruption, money laundering and market misconduct investigations.

JEREMY ZUCKER, a Dechert partner based in its Washington, D.C. offices, is co-chair of the firm’s International Trade and Government Regulation practice. He advises clients on international trade regulatory compliance matters, including in relation to the FCPA, the Export Administration Regulations, the International Traffic in Arms Regulations, economic sanctions programs administered by the Office of Foreign Assets Control and the anti-money laundering provisions of the USA Patriot Act.  Mr. Zucker assists clients in all phases of their compliance and risk mitigation programs, including evaluating existing programs, developing and drafting new policies and procedures and providing training, as well as conducting risk assessments, compliance audits and complex internal investigations.

By Allyson B. Mullen –

By In early February, Booz Allen Hamilton (“Booz Allen”) issued its Final Implementation Report assessing the actions taken by CDRH to address the firm’s earlier recommendations to improve the Center’s premarket review activities. We previously blogged on Booz Allen’s recommendations and CDRH’s plan of action here and here.

Booz Allen’s report summarizes a number of key projects completed by the Center in an effort to promote predictable, efficient, and consistent premarket reviews. These projects address all 11 of Booz Allen’s recommendations from its earlier reports. A few of the most notable actions taken by CDRH are:

• Identification of short- and long-term review process to track and monitor for quality. These metrics include Refuse to Accept (RTA) decisions and final decisions.
• Rolling out the SMART template, “a self-guided tool for reviewers based on standardized operating procedures to handle similar issues encountered on different submissions.”
• Revised the 510(k) RTA guidance and checklist. We saw several improvements in the revised guidance, which we blogged on here.
• Implementing internal work instructions for withdrawal decisions and interactive review communications with sponsors.
• Revised the eCopy guidance to emphasize the importance of the use of features that facilitate searching and navigation.

While FDA has completed all of the above projects, there was insufficient time for Booz Allen to assess the implementation and effectiveness for the majority of these projects. Therefore, the report was unable to do more than speculate as to whether these actions will ultimately address the underlying concerns that prompted Booz Allen’s original review and whether additional actions may be necessary.

It is also too soon to know if these efforts will translate into shorter or more predictable review times for industry. In the report’s discussion of CDRH’s actions leading to the steps above, there are a few interesting points/statistics:

• Based on a review of 510(k) submissions from calendar year 2013, it was found that 510(k)s that were refused during the RTA process were associated with overall longer review times.
• An audit of 731 submissions, received over a three month period, showed that:
• on average sponsors missed eight (8) criteria in the checklist, with more than 75% of submissions missing more than 4 criteria,
• 66% of submissions did not include an RTA checklist completed by the sponsor instructing FDA as to where and how each element was addressed in the submission,
• The top four (4) most frequently missed criteria were: (i) shelf life methods (element 28); (ii) prior submissions (element 9); (iii) substantial equivalence rationale (element 16); and (iv) performance data – full test reports provided (element 36),
• Substantive review occurred in only a small number of RTA reviews (11%) and substantive review was not generally the sole cause for a refusal, and
• When substantive review did occur, it most frequently occurred in the reviewer’s assessment of the device description.
• ODE reviewers were trained not to interact with submitters during the RTA review process whereas OIR reviewers worked interactively with submitters during RTA review. The report states that “CDRH subsequently concluded that [interactive review] during RTA may reduce the rate of RTA elements requiring clarification.” It appears this conclusion was reflected in the revised RTA process. We hope that based on the revised guidance, ODE reviews will follow the lead of OIR reviewers with regard to RTA reviews.
• A survey of CDRH review staff regarding eCopy issues identified that:
• Nearly 80% of reviewers were reviewing non-searchable eCopy submissions, which led to an increase in review time, and
• Almost 90% of reviewers reported reviewing submissions that did not include bookmarks or hyperlinks, and this could add to the review time.

Sponsors taking note of some of these points could improve their odds of a successful premarket review. Providing a completed RTA checklist and a searchable eCopy are two small steps that industry could take on its end to facilitate smoother 510(k) reviews.

By Jennifer D. Newberger –

Judge Royce Lamberth, a Senior Judge in the United States District Court for the District of Columbia and sitting by designation in the United States District Court for the Western District of Texas, is no stranger to First Amendment cases involving FDA. See Washington Legal Foundation v. Henney, 56 F. Supp. 2d 81 (1999). More than 15 years have passed since he ruled that the restrictions in the FDA Modernization Act of 1997 (FDAMA) and FDA’s implementing regulations regarding distribution of off-label materials were unconstitutional.

On February 25, 2016, upon conclusion of the evidence in a criminal case styled United States v. Vascular Solutions, Inc., on which we previously posted here, Judge Lamberth charged the jury by instructing them on the relevant law. The case involves allegations that the defendants, a medical device company and its president, engaged in an unlawful off-label marketing campaign. The government’s superseding indictment alleged that the defendants engaged in a criminal conspiracy to violate the Federal Food, Drug, and Cosmetic Act (FDC Act), and committed four counts of selling misbranded medical devices.

After deliberating for one day, the jury came back with a verdict of “not guilty” on all counts for both the company and its CEO, Howard Root. Though we cannot know why the jury reached this verdict, Judge Lamberth instructed the jury by, in effect, reminding the jury that FDA’s ability to restrict speech that is truthful and not misleading is limited:

It is also not a crime for a device company or its representative to give doctors wholly truthful and non-misleading information about the unapproved use of a device. If you find that VSI’s promotional speech to doctors was solely truthful and not misleading, then you must find the Defendants not guilty of the misbranding offense.

The first of the two sentences above was included in the government’s proposed jury instructions, provided to the court on January 7, 2016. Whether such a statement represents a change in position for the government depends largely on the context in which the government is speaking and the circumstances in which such information is distributed.

FDA has long stated that the dissemination of information about unapproved uses can be important for medical professionals, and so long as the information is distributed according to certain guidelines provided by FDA, FDA would not consider the information to be evidence of a new intended use. See FDA, Guidance for Industry, Distributing Scientific and Medical Publications on Unapproved New Uses — Recommended Practices (Feb. 2014).

Importantly, however, FDA has stated that publications about unapproved uses must “[b]e distributed separately from the delivery of information that is promotional in nature” in order to fit within the “safe harbor” of the above-mentioned guidance document. Consistent with this position, FDA has traditionally taken the position that off-label promotion of a drug or device for a use that has not been cleared or approved by FDA is a violation of the FDC Act. In contrast, the Department of Justice (DOJ) has made a number of statements in other cases indicating that the law is not so clearly a black and white situation. See, e.g., United States v. Stryker Biotech, LLC, No. 09-cr-10330 (D. Mass. 2012), in which DOJ stated in a brief that “not all off-label promotion is a crime” and that “there is some off-label promotion that is not illegal.”

Judge Lamberth’s instructions to the jury seem more consistent with DOJ’s position in Stryker than FDA’s traditional view of off-label promotion. In the jury instructions, Judge Lamberth indicated that promotional speech itself would not be evidence of misbranding so long as the speech was solely truthful and not misleading. This position is consistent with a growing trend among courts to find that truthful and not misleading promotional materials may be distributed by a company without violating the misbranding provisions of the FDC Act. See, e.g., United States v. Caronia, 703 F.3d 149 (2d Cir. 2012); Op. and Order, Amarin Pharma, Inc. v. FDA, No. 1:15-cv-03588-PAE (S.D.N.Y. Aug. 7, 2015) (see our previous posts here and here). It is notable that the jury instruction states that in order to avoid violating the misbranding provisions, the speech must be solely truthful and not misleading. This suggests that if any portion of the company’s “speech” is not truthful or is misleading, it may result in a product being deemed to be misbranded.

In reading Judge Lamberth’s jury instruction, it is important to keep in mind that the court is not necessarily making a statement about charges the government could have brought but chose not to. For example, the court charged the jury based on the superseding indictment of December 2, 2015. That indictment did not contain an adulteration charge involving selling devices without an approved PMA (unlike the original indictment of November 13, 2014). Nevertheless, given the growing willingness of companies to challenge FDA’s regulation of off-label promotion, their success in doing so, and court decisions indicating that the distribution of truthful, non-misleading information about an unapproved use does not violate the misbranding provisions of the FDCA, DOJ and FDA must carefully consider how to proceed in bringing charges of off-label promotion.

Reminder: Register now for the May 3, 2016 Virginia Tech and HP&M Conference on Effective Documentation.  Information on the conference is available here.

By Kurt R. Karst –  

Earlier this week at the Generic Pharmaceutical Association’s (“GPhA”) annual meeting in Orlando, Florida, Dr. Kathleen (“Cook”) Uhl, Director of the Office of Generic Drugs (“OGD”), gave the keynote address, providing the generic drug industry with a much-anticipated lowdown on FDA’s progress in implementing the Generic Drug User Fee Amendments of 2012 (“GDUFA”). According to Dr. Uhl’s facts and figures (there’s no fiction in them, she noted to the packed audience), OGD has made significant headway on improving communication and increasing productivity.  (According to Dr. Uhl, this is  due primarily to OGD’s improved IT system for the generic drug program that was put in place in October 2014.) 

Dr. Uhl’s presentation covered five topics: (1) GDUFA Update; (2) Output & Productivity; (3) Quality of ANDA Submissions; (4) Update on Pre-Year 3 Cohort; and (5) Opportunities for Improvement & Challenges.  We’ll focus on topics (2)-(4) as they tend to be of the greatest interest to ANDA applicants.  For a point of reference, and as background, we refer folks to the GDUFA I Program Performance Goals and Procedures. (GDUFA II is currently being negotiated.  FDA has already held several negotiation sessions and stakeholder meetings.)

Output & Productivity

Output is really where the rubber meets the road under GDUFA. After all, that’s what the generic drug industry is paying user fees for in the first place: to increase generic drug availability with a greater number of ANDA approvals must faster than in the pre-GDUFA era.  Of course, high output depends on high quality input (we’ll get to that topic a little later).  By the end of GDUFA Year 5 (Fiscal Year 2017), when OGD is expected to review and act on 90% of original ANDAs within 10 months from the date of submission, OGD anticipates that a typical 10-month review cycle will follow the timeline below. 

But we’re not quite at this timeline yet! So where are we?

After an initial two years of high volume submission numbers (GDUFA Years 1 and 2; FYs 2013 and 2014), ANDA submissions tapered off in FY 2015, as shown in the tables below. (Although the second table below reflects submissions through September 2015, there was an increase in submissions in the first quarter of FY 2016 (GDUFA Year 3), with 180 ANDA submissions in December 2015 alone.)

FDA’s various actions on ANDAs – final approvals, tentative approvals, and complete responses – have been pretty consistent over the first three FYs of GDUFA, though the number of Complete Response Letters has increased dramatically compared to FY 2012. The increase is due to a large number of Complete Response Letters for pre-GDUFA backlog ANDAs, as shown in the second table below.  As shown in the third table below, FY 2016 has gotten off to a tremendous start, with 99 final and tentative approval actions in December 2015.  That’s the highest number of final and tentative approvals ever issued in a single month. 

In other good news, Dr. Uhl reported that OGD has eliminated the Office’s backlog of ANDAs requiring a filing decision, which stood at two ANDAs in December 2015. Today, ANDA filing (receipt) decisions are being made in about 31 days. 

Quality of ANDA Submissions

Dr. Uhl laid out various metrics for ANDA quality, including the first peek at GDUFA Year 3 (FY 2015) ANDA actions. ANDA Refuse-to-Receive (“RTR”) continue to be a problem, with hundreds of ANDAs being issued RTR letters each fiscal year, as shown in the table below. In fact, of the 180 ANDA submissions made in December 2015, approximately 30% of them were issued RTR letters, primarily for insufficient stability information and/or insufficient dissolution information).  Although the RTR numbers provided by Dr. Uhl are generally in line with the Refuse-to-File numbers for applications submitted to FDA during the first few years of PDUFA implementation, the ANDA RTR numbers should be lower.  Many of the RTR letters could have been avoided with closer scrutiny of the submission.

In addition, the number of ANDA review cycles – and, in particular, CMC review cycles – remains high. Very few applications are approved after the initial review cycle. 

Moving on to the first numbers provided by FDA for ANDAs submitted in FY 2014 (GDUFA Year 3), only 12% of the 51 ANDAs with a 15-month action date that fell in January 2016 received a first cycle approval (or tentative approval).  Most of the submissions were the subject of a Complete Response Letter.  Of course, that’s only 1 month of data, so folks should not be overly concerned . . . . yet.  By way of comparison, 36% of applications were approved under the first cycle in the first year of PDUFA (FY 1993). 

Update on Pre-Year 3 Cohort

With respect to pre-year 3 GDUFA ANDAs, the details are a little sketchy. Although we know generally where things stand with pre-Year 3 applications, thanks in large part to  FDA’s recent launch of the Generic Drug Review Dashboard, we don’t have much insight into FDA’s ability to meet internal goals set for those applications.  Those internal (and aspirational) goals, known as Target Action Dates (“TADs”), were created by FDA to give industry comfort that review of their applications would not suffer as a result of OGD’s need to meet goals for applications submitted post-year 2. TADs also serve as a sort of dry run for OGD to meet the true goals under GDUFA.  The TADs established by FDA are shown in the slide below.  Although knowing the various TADs OGD has established are nice, it would be helpful to know OGD’s success rate. 

Reminder: Register now for the May 3, 2016 Virginia Tech and HP&M Conference on Effective Documentation.  Information on the conference is available here.

By Melisa M. Moonan –

After more than 600 comments and four and a half years since the draft guidance (“Applying Human Factors and Usability Engineering to Optimize Medical Device Design” (June 21, 2011)) was published, FDA has released the final device human factors guidance, “Applying Human Factors and Usability Engineering to Medical Devices, Guidance for Industry and Food and Drug Administration Staff” (Feb. 3, 2016) (final HFE guidance). FDA considers the terms human factors engineering and usability engineering to be synonyms; we utilize the acronym HFE here for convenience.

The final HFE guidance provides a detailed framework for consideration and testing of user interface design and potential use error. FDA delayed effectiveness of the final HFE guidance until April 3, 2016, perhaps to provide industry some time to understand whether the numerous language and organization changes made since the 2011 draft guidance was published are just fine-tuning or represent significant changes in agency expectations. With some exceptions, we do not believe the final version represents significant overall change from the draft. Many changes appear to be clarification of terminology and addition of detail. Some changes (including the revision to the title to drop the words “optimize” and “design”) appear to emphasize an agency message that the goal of the guidance is the establishment of safety and effectiveness of devices for their intended users, uses, and use environments, not merely design optimization that may enhance safety and effectiveness. In short, human factors design and validation are critical components of a device’s safety and effectiveness, not merely an added bonus.

As we previously blogged, here, the agency simultaneously issued a complementary draft guidance, “List of Highest Priority Devices for Human Factors Review, Draft Guidance for Industry and Food and Drug Administration Staff” (Feb. 3, 2016) (draft List guidance). The draft List guidance addresses one issue raised by the draft HFE guidance, i.e., when will the agency expect or request HFE data in premarket submissions. In the draft List guidance, FDA provides a list of 16 classified device types and the corresponding product codes for which FDA will expect human factors data to be included in premarket submissions in an “HFE/UE Report”, as outlined in Appendix A of the final HFE guidance. As we discussed in our blog, FDA also sets out certain circumstances under which ODE reviewers will be empowered to ask for such data on a case by case basis for devices not on the list.

Comments and Changes

In the Federal Register announcement for the final HFE guidance, FDA stated that comments on the draft HFE guidance most frequently requested changes to the guidance’s language and structure, and clarification of the following topics: risk mitigation and human factors testing methods; user populations for testing; training of test participants; sample size determination; reporting for premarket submissions; and collecting human factors data as part of a clinical study. Considering the complexity of this topic, the significant impact on industry and the extraordinarily high level of interest, we believe this guidance topic may have been better served by notice and comment rulemaking. FDA conducted a webinar on the guidance on February 19, 2016, which can be found here: http://www.fda.gov/Training/CDRHLearn/. In addition, we believe an agency FAQ document may be beneficial for enhanced understanding of FDA’s thinking and its responses to industry concerns.

One of the changes made was to add definitions of some important terms. One of the new definitions is for the term “critical task,” and that term receives additional focus in the final HFE guidance. A critical task is “[a]user task, which if performed incorrectly, or not performed at all, would or could cause serious harm to the patient or user, where harm is defined to include compromised medical care.” Devices with identified critical tasks would therefore seem to qualify for submission of their HFE data to FDA in premarket submissions. Related changes to the guidance’s section on Preliminary Analyses and Evaluations provide additional detail on methods of identifying critical tasks, and an expanded section specific to critical task assessment methods and findings was added to the final “HFE/UE Report” outline provided in Appendix A.

Another difference from the draft guidance is found in the Conclusion section of the final guidance’s HFE/UE Report outline. The draft Report outline’s Conclusion section requested a statement from the applicant that the product had been found “reasonably” or adequately” safe and effective for the intended users, uses, and use environments, i.e., language akin to the PMA approval standard of “of a reasonable assurance of safety and effectiveness.” However, the final Report outline’s Conclusion section requests a statement that dispenses with the modifiers; a submitter’s HFE/UE Report conclusion now should be that the device “has been found to be safe and effective for the intended users, uses, and use environments.” The recommended conclusion language thus exceeds that of the PMA approval standard. We are curious how FDA will implement review of the HFE/UE Report in the context of a PMA approval, and are particularly interested in how the Report fits into 510(k) review and clearance, where the overall standard is substantial equivalence, and predicates may not have HFE data on file with FDA for comparison. We believe it would be helpful if FDA utilizes an FAQ document or the draft List guidance to clarify how review of HFE/UE Reports will affect premarket programs and processes.

We noted a similar shift in language by FDA in the final guidance’s Scope section. The draft guidance recommended implementing HFE testing where there was a “moderate to high risk” of use error. In the final guidance, FDA states that use errors are not easily anticipated and suggests that potential severity alone, i.e., without giving much, if any, weight to likelihood of occurrence of the harm, should drive HFE design activities and decisions whether a hazard (a “potential source of harm”) must be designed out to eliminate the risk. This is paralleled in the risk mitigation section (now section 7) where the title has changed from “Mitigation and Control of Use –Related Hazards” to “Elimination or Reduction of Use –Related Hazards.”

HFE Validation Testing and Residual Risk Analysis

In addition to critical tasks, another major emphasis in the final guidance is on HFE validation testing (now section 8). FDA encourages seeking review of draft validation testing protocols under the CDRH pre-submission program to ensure the methods used will be acceptable. There is also guidance provided on HFE validation testing for product modifications and/or corrections, and a new Appendix (Appendix C) that provides information on and examples of test results analysis.

The four key factors identified for HFE validation testing design are:

• the test participants represent the intended (actual) users of the device;
• all critical tasks are performed during the test;
• the device user interface represents the final design; and
• the test conditions are sufficiently realistic to represent actual conditions of use.

The recommended sample size remains a minimum of 15 from each distinct user population, and could be higher for certain device types. The final guidance also reiterates that subjects should be U.S. residents and should not be employees of the manufacturer, and training should approximate what would be given to actual users, including that it should be allowed to elapse somewhat before testing.

An area that the final guidance fails to clarify fully are the differences between HFE simulated use testing, HFE actual use testing, and HFE actual use testing that is considered clinical testing requiring an IDE or exemption. With regard to the latter, the final guidance states that when “actual use testing is needed to determine safety and effectiveness of the proposed device and the requirements of § 812 apply,” an IDE or IDE exemption would be needed. This is an unhelpful tautology. We believe examples of actual use HFE studies that do and do not require IDE or IDE Exemption would be helpful. This is particularly important for planning modifications to 510(k) devices, where the need to do a clinical trial to support equivalent safety and effectiveness may trigger a 510(k) submission requirement.

Like the draft, the final guidance states that testing results indicating that use errors that could cause harm persist in the design are not acceptable in submissions, unless there is a strong rationale demonstrating that “further reduction of the errors’ likelihood is not possible or practical” and the benefits of device use outweigh the residual risk of harm. A promise to address the use errors in subsequent versions will not suffice, and may invite further scrutiny of the HFE processes used.

Looking Forward

We recommend that device manufacturers prioritize review of the final HFE guidance and the draft List guidance. With the publication of the final HFE guidance, manufacturers can expect increased FDA scrutiny of HFE design processes during inspections focusing on design controls. FDA will expect to see medical device user interfaces thoroughly considered in product risk assessments, and will look for HFE processes for user interface evaluation, risk mitigation, and validation testing to have been implemented wherever a use error could result in serious harm. With regard to premarket submissions, agency expectations should remain status quo ante until the draft List and accompanying criteria for requests for such data are finalized. Nonetheless, manufacturers should conduct human factors risk assessment and consider the final HFE guidance’s recommendations for devices in development.

This 1-day conference, scheduled for Tuesday, May 3, 2016 in Arlington, Virginia, is for individuals who draft or review documentation relating to the quality of products regulated by FDA. Effective documentation (written communications/company records) is critical to the success of any company, most especially any doing business in a regulated industry. Documents speak for the company and the writer. Documents are subject to misinterpretation by third parties and can subject a firm to unnecessary regulatory action or litigation. Conversely, effective documentation can demonstrate that a company’s quality system and actions are properly functioning to prevent a health risk to consumers from the company’s products. This conference will provide advice on how to create accurate and complete documentation to meet FDA requirements and avoid common pitfalls that can harm the company. Speakers include Stewart Crumpler from Quintiles, and Brian Donato, Jeffrey Shapiro and Roger Thies from Hyman, Phelps & McNamara, P.C. Attendance will be limited to 60 attendees to facilitate interaction with the program faculty.

For more information and to register please visit the conference website and click on the Educational Programs tab. A link to the registration form is available in the course announcement. Payment can be made by check or credit card.

UPDATE:  THIS 1-DAY CONFERENCE HAS BEEN CANCELLED.