By  Karla L. Palmer –

The GAO was asked to review DEA registrants’ and others’ interactions with DEA.  The GAO Report, released at the end of July examines the following: (1) To what extent registrants interact with DEA about their Controlled Substances Act (CSA) responsibilities and registrants’ perspectives on those interactions; (2) how state agencies and national associations interact with DEA; and, (3) stakeholders’ perspectives on how DEA enforcement actions have affected prescription drug abuse, diversion, and access to drugs for legitimate medical needs.  To conduct its study, GAO administered web-based surveys to DEA-registered pharmacies, distributors, corporate offices of chain pharmacies, and practitioners.  GAO interviewed DEA employees, individuals from 26 national associations including non-profit associations, and 16 government agencies in four states.  Set forth below are some of the GAO’s conclusions. 

Registrants’ Interactions with DEA.  The Report notes that registrants vary in the extent of their interaction with DEA, and their awareness of DEA resources available to assist registrants in complying with the CSA and DEA’s implementing regulations.  Page 19 of the  Report notes that although DEA has made available various resources to assist registrants, such as guidance manuals and registration validation tools,  registrants are not utilizing these resources because they are unaware they exist.  (Report at 20).  Registrants also want DEA to provide them with additional information.  GAO indicated that distributors may have more communication with DEA given the fact that their renewal cycle is on an annual basis, while pharmacies and practitioners renew their DEA registrations every three-years, and are not subject to scheduled, cyclical regulatory investigations.  Report at 17 (… although we note that DEA has been inspecting pharmacies on a more frequent basis than it did in the past).   

The survey also showed that many registrants are not utilizing these DEA information resources.  For example 70% of practitioners are not aware of the Practitioner’s Manual, and 53 percent of pharmacies are not aware of the Pharmacist’s Manual.  Although the survey interestingly refers to “Know Your Customer” guidance for distributors, that information is not generally available, to our knowledge, on DEA’s website or otherwise; instead DEA provides the “Know Your Customer” guidance to distributors when it visits the registered location or otherwise meets with the registrant.  GAO states that the “lack of awareness among registrants of DEA resources and conferences suggests that DEA may not have an adequate means of communicating with its registrant populations.”  Report at 21.

 The GAO also noted, surprisingly, that while DEA has promoted some industry conferences by email, DEA generally does not have current, valid email addresses for all of its registrants.  GAO stated that DEA should “ensure that there are adequate means of communicating with stakeholders who may have a significant impact on the agency achieving its goals.”  Report at 22.  DEA officials responded that despite the lack of awareness noted by GAO, DEA indicated that they do not believe they need to “take any additional steps to improve communication or raise registrants’ awareness of the agency’s conferences and resources.”  Id. 

GAO concluded that given the state of industry unawareness of available resources, DEA “lacks assurances that registrants have sufficient information to understand and meet their CSA responsibilities.”  Among the registrant groups that communicate with DEA, a common theme contained in the responses to the GAO survey was that they desired more and clearer communications from the Agency, as well as a more collaborative and proactive relationship.  Pharmacies and distributers responded in particular that they wanted increased guidance and communications with the Agency.

Although State Agencies are Satisfied, Associations Want Improved Communications with the Agency.  GAO described different communications that state agencies had with DEA, such as through joint enforcement activities, joint task forces, or otherwise working collaboratively to reduce diversion and abuse.   State agencies reported general satisfaction with interactions with the Agency.   However, twenty four national associations reported various levels of interactions with DEA, typically through meetings where they have hosted DEA at events to discuss regulations or trend data on prescription drug abuse.

Some associations noted that DEA interactions were insufficient in terms of both communication and collaboration.  Five reported that as prescription drug abuse has increased, DEA has been less collaborative; officials from two organizations noted that DEA refused to meet with them to clarify issues related to their members’ CSA responsibilities.  Report at 35.  DEA responded that registrants should communicate directly with DEA to the extent they have questions related to “roles and responsibilities.”  GAO noted that improved communications with and guidance for registrants may address associations’ concerns. 

DEA’s Enforcement Actions may have Decreased Diversion and Abuse but Also May Have Limited Legitimate Access to Controlled Substances.  Many of the survey responders reported that DEA’s actions have resulted in decreased drug abuse and diversion.  However, over half of DEA registrants reported changing certain business practices as a result of DEA enforcement actions, or the business climate the actions have created.  Many reported these changes limit access to prescription drugs for patients with legitimate medical needs.

As for enforcement actions, GAO reports that many stakeholders believe that the Agency’s enforcement actions have helped to decrease drug diversion and prescription drug abuse.  A review of DEA enforcement actions from 2009 through 2013 showed that certain types of administrative enforcement actions — enforcement hearings, letters of admonition, and memoranda of agreement – increased across all registrant types.  However, other administrative enforcement actions including orders to show cause and immediate suspension orders decreased.  This shows that DEA’s enforcement efforts are being resolved by methods that involve increased cooperation between registrants and DEA.    However, there is no available data to show the link between DEA enforcement actions and a decrease in diversion.  Report at 38. 

GAO recognized that some changes in business practices may help drug abuse and diversion, and cited specifically to pharmacy calls to verify prescriber prescriptions.  The Report noted, though, that stricter distributor thresholds, or limits on the quantity of controlled substance ordering, which were influenced by DEA’s enforcement actions against distributors, limit supplies of controlled substances to those with legitimate medical needs.  Of the national associations interviewed, more than half expressed concern that DEA’s enforcement actions have limited access to controlled substances that serve legitimate needs.  DEA responded that enforcement actions do not have any bearing on access issues, and they have rarely heard about concerns with patient access to needed medications.  GAO suggested that if access is an issue, then DEA and registrants should communicate more regularly, including with clearer guidance, which could mitigate registrants’ fears of DEA action. 

GAO Recommendations.  GAO concludes by making three recommendations – each in an effort to strengthen DEA’s communications, guidance, and interaction with registrants: 

• Identify and implement means of cost-effective, regular communication with distributor, pharmacy, and practitioner registrants, such as through listservs or web-based training.
• Solicit input from distributors, or associations representing distributors, and develop additional guidance for distributors regarding their roles and responsibilities for suspicious orders monitoring and reporting.
• Solicit input from pharmacists, or associations representing pharmacies and pharmacists, about updates and additions needed to existing guidance for pharmacists, and revise or issue guidance accordingly.

DEA raised concerns about the second recommendation.  DEA specifically stated that it cannot provide more specific information to distributors about suspicious order monitoring systems because those systems differ depending on the distributor.  DEA noted it can educate through proactive interaction during inspections.  GAO responded that inspections do not provide registrants with a “neutral education setting in which to obtain a better understanding of their CSA roles and responsibilities.”  GAO also stated that DEA could provide better written guidance for distributors.  Note that those that represent distributors likely believe that such guidance is only appropriate to the extent that it is promulgated through notice and comment rulemaking; otherwise it is not necessarily widely disseminated, well known, or generally available; nor does it provide enforceable obligations among registrants.

With respect to the third conclusion concerning soliciting input from pharmacists, DEA responded that it would update its Pharmacist Manual to address rescheduling of hydrocodone and new disposal rules, but it did not comment whether it would provide any additional guidance to pharmacies.  GAO stated that any update should address a pharmacist’s corresponding responsibility under CSA.  Industry would likely agree with GAO’s recommendation, especially given the recent (and significant) enforcement actions) DEA has taken against chain and independent pharmacies based on corresponding responsibility violations.  

By Kurt R. Karst –

Back in September 2013, when FDA’s Office of Generic Drugs (“OGD”) was gearing up for significant implementation of the Generic Drug User Fee Amendments of 2012 (“GDUFA”) (and the associated Performance Goals and Procedures), the Office issued a Manual of Policies and Procedures (“MAPP”) – MAPP 5200.3 – titled “Responding to Industry Inquiries with respect to Abbreviated New Drug Applications in the Office of Generic Drugs.”  The MAPP was intended to clarify “the general principles for handling inquiries with respect to [ANDAs] from the authorized representative for an applicant with an ANDA submission (the authorized inquirer) by Regulatory Project Management (RPM) staff in [OGD].”  At the time, this blogger, channeling concern from some in the generic drug industry, was pretty critical of the MAPP (see our previous post here).  Our friend Bob Pollock (from Lachman Consultants) even turned a nice phrase, calling the document “The MaPP to Nowhere.”  (Bob's post on the revised MAPP, which we discuss below, harkens back to that old post: “MaPP to Nowhere Now has Coordinates to Find the Treasure.”) 

A LOT has happened in the nearly two years since FDA issued MAPP 5200.3.  OGD has undegone a significant transformation, becoming a “Super Office” with a permanent Director and instituting a new organizational structure.  OGD has churned out numerous new and revised policies and guidance documents (see our previous post here).  In early 2014, OGD announced a massive and unprecedented undertaking (presumably to address, in part, an outpouring of concern about MAPP 5200.3) to conduct a complete inventory of all original ANDAs in OGD’s queue, and to provide each applicant with an update regarding the status of their ANDAs (see our previous posts here and here).  Earlier this year, at the Generic Pharmaceutical Association’s (“GPhA’s”) annual meeting, OGD Director Kathleen (“Cook”) Uhl provided an update on the status of GDUFA implementation and included some positive numbers (see our previous post here).  (Recent figures published by FDA show some progress with achieveing the goals of GDUFA, as does the latest GDUFA Performance Report.  Indeed, we understand that OGD recently approved the first GDUFA cohort year 3 ANDA way ahead of the scheduled action date: ANDA 207955 for Tretinoin Gel, 0.05%, approved on August 13, 2015.)  Dr. Uhl also announced at the GPhA meeting that OGD would be assigning Target Action Dates (“TADs”) to pre-year 3 cohort applications (i.e., ANDAs submitted in the year 1 cohort [Fiscal Year 2013] and year 2 cohort [Fiscal Year 2014] – the so-called “GDUFA donut hole”), and indicated that a revision to MAPP 5200.3 was in the works and would address industry concerns.

Earlier today, FDA announced the publication of a revised and renamed MAPP 5200.3.  Titled “Communications with Industry with respect to pre-GDUFA Year Three Abbreviated New Drug Applications,” the revised MAPP, “[d]ue in part to stakeholder feedback,” “substantially expands and sets forth responsibilities and procedures for communications between generic drug program staff and Authorized Representatives concerning the review status of pre-Year 3 submissions.”   Pre-Year 3 submissions include not only the GDUFA donut hole (i.e., applications not approved or withdrawn as of the close of business on September 30, 2014), but pre-GDUFA backlog submissions (i.e., applications not approved or withdrawn as of October 1, 2012).  The Revised MAPP continues OGD’s emphasis on RPM empowerment and responsibility for ANDAs, but also promises a greater depth and improved frequency in communication with ANDA applicants.  

In an email memo “To All Staff Working with ANDAs” (reprinted below),  CDER Director Janet Woodcock, M.D., stated that OGD RPMs “will communicate Target Action Dates, periodically update applicants and/or respond to applicant queries concerning the review status of submissions, communicate when certain major deficiencies may be forthcoming, and provide certain advance notifications of regulatory correspondences.”   These goals are stated in greater detail in the revised MAPP, first in a Background section:

Although GDUFA requires FDA to take action on 90% of the submissions in the pre-GDUFA backlog cohort by September 30, 2017, individual pre-Year 3 submissions lack goal dates. This makes it hard for applicants to plan product launches and conduct other business planning that affects generic drug availability.  To facilitate launch planning – and help ensure public access to affordable, quality generic medicines at the earliest legally available date – we intend to provide information concerning the review status of pre-Year 3 submissions down to the discipline and sub-quality discipline levels. [(Emphasis in original)]

. . .  and then in a Policy section:

Our policy is to provide prompt and accurate responses to any inquiry regarding review status from the Authorized Representative while maintaining appropriate confidentiality related to other stakeholders in the generic review process, including the existence of and information contained in other ANDAs and information contained in a referenced Drug Master File. Generally, inquiries should be responded to within two business days of receipt.

. . . . and then in a Responsibilities section with very specific responsibilities laid out for OGD Division of Project Management Discipline Project Managers, Division of Filing Review Project Managers, and (most importantly) OGD RPMs.  

OGD RPMs bear the greatest responsibilities, being tasked with ensuring application flow, timely responding to applicant (authorized representative) inquiries, and communicating with applicants (including initial TADs and revised TADs, that a newly filed pre-year 3 submission – yes, there are still about 250 ANDAs for which a filing/receipt communication has not yet been sent – has been assigned to that RPM, and advance notice of Complete Response actions).

Of course, the proof is in the pudding.  There will undoubtedly be some initial bumps in the road.  In the long term, however, we’re hopeful that OGD follow-through on the policies and points articulated in revised MAPP 5200.3 will significantly enhance “the user experience” and provide the greater level of clarity the generic drug industry needs and craves.

To All Staff Working with ANDAs

I am pleased to announce the issuance of the revised, joint Office of Generic Drugs-Office of Pharmaceutical Quality MAPP 5200.3, “Communications with Industry with respect to pre-GDUFA Year 3 Abbreviated New Drug Applications” (available on FDA’s Web site []).  It will substantially expand our communications with applicants concerning pre-GDUFA backlog, GDUFA Year 1 and GDUFA Year 2 submissions (collectively, “pre-Year 3 submissions”). 

Although GDUFA requires us to act on 90% of the submissions in the pre-GDUFA backlog cohort by September 30, 2017, individual pre-Year 3 submissions lack GDUFA goal dates.  This makes it hard for industry to plan product launches and conduct other business planning that affects generic drug availability.  To facilitate launch planning, we will provide information concerning the review status of pre-Year 3 submissions down to the discipline and sub-quality discipline levels.  This will help ensure that quality, affordable generic medicines reach the public at the earliest legally available date.  

For example, OGD Regulatory Project Managers will communicate Target Action Dates, periodically update applicants and/or respond to applicant queries concerning the review status of submissions, communicate when certain major deficiencies may be forthcoming, and provide certain advance notifications of regulatory correspondences.

OGD Discipline Project Managers and OPQ Regulatory Business Process Managers will issue Informational Requests for their respective disciplines.  Informational Requests are letters sent to request further information or clarification that is needed or would be helpful to allow completion of the discipline’s review.  The purpose of these communications is to assure that FDA has all the information necessary to evaluate if the application is approvable or must receive a Complete Response Letter.

To facilitate meaningful communications, we are asking review staff members to refer all questions about the overall status of applications to the appropriate OGD Regulatory Project Manager.

We appreciate all of the ANDA discipline reviewers and project managers working together to expand communications with applicants.  Implementing these changes will help us achieve a robust generic drug program.

Thank you,

Janet Woodcock, M.D.

By Kurt R. Karst –

It seems that hardly a week passes (and sometimes, hardly a day or two) without news of a new merger or acquisition in the pharmaceutical or biotechnology industries.  Indeed, 2015 may be a record-breaking year for such deals (see here, here, and here).  Whether we’re talking about generic-on-generic, brand-on-brand, or brand-on generic acquisitions, however, there are exclusivity considerations companies must keep in mind to avoid inadvertently losing (or triggering) exclusivity.  We highlight a couple of those considerations below. 

We’ll start on the generic drug 180-day exclusivity side of the fence, and, specifically, with the triggering event to start the 180-day period: commercial marketing.  The statute, at FDC Act § 505(j)(5)(B)(iv)(4), provides that subject to the statutory forfeiture provisions, if an ANDA from a non-first applicant (i.e., a subsequent applicant) contains a Paragraph IV certification, approval of such ANDA “shall be made effective on the date that is 180 days after the date of the first commercial marketing of the drug (including the commercial marketing of the listed drug) by any first applicant.”  This provision of the FDC Act was added by the 2003 Medicare Modernization Act (“MMA”) and incorporates FDA’s previous determination (Docket No. 2000P-1446) that commercial marketing of an authorized generic by a first-filer eligible for 180-day exclusivity triggers that exclusivity. 

Back in 2012, FDA applied the Agency’s pre-MMA interpretation of the statute with respect to Teva’s claim to 180-day exclusivity for a generic version of Cephalon’s PROVIGIL (modafinil) Tablets, 100 mg and 200 mg.  Teva had acquired Cephalon on October 14, 2011, and on March 20, 2012, Cephalon announced the launch of an authorized generic version of PROVIGIL by Teva.  FDA determined that Teva’s commercial marketing of the PROVIGIL authorized generic triggered Teva’s 180-day exclusivity such that it would expire 180-days later on September 26, 2012 (see our previous post here). 

But FDA could have determined that 180-day exclusivity had been triggered months before, on October 14, 2011 when Teva acquired Cephalon.  It was at that time that “Teva immediately began marketing PROVIGIL under Cephalon’s NDA.”  FDA laid out this option in a footnote to an April 4, 2012 Letter Decision:

We have considered finding that Teva’s marketing of PROVIGIL upon its acquisition of Cephalon triggered its 180-day exclusivity, and believe that there is a strong argument for finding so.  We have refrained from adopting that interpretation in this case, however, because that exclusivity, if it were triggered by Teva’s acquisition of Cephalon, would expire on April 11, 2012 and, given the multiple uncertainties in this case, Teva had no notice that FDA considered it to be running.  Because of the potential for collusion between NDA holders and captive first generics, and the subversion of the statutory scheme that could result, the agency may in the future provide guidance on the effect of such a relationship between NDA holder and first applicant upon any claim for 180-day exclusivity.

We’re not aware of any further guidance from FDA on this issue, or whether or not the Agency has applied this position in other circumstances, but it’s clearly an issue FDA has considered and believes is consistent with the law.  With complex merger and acquisition deals, companies should not forget about this possibility . . . and ANDA applicants that might otherwise be blocked by 180-day exclusivity should also be aware of this FDA position in case it needs to be argued to FDA. 

Moving on to biological products, we note a provision added to the PHS Act by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).  Specifically, PHS Act § 351(k)(7), which concerns Reference Product Exclusivity (“RPE”), includes certain “anti-evergreening” provisions.  One of those provisions provides that the 12-year and 4-year RPE periods do not apply in the case of:

a subsequent application filed by the same sponsor or manufacturer of the biological product that is the reference product (or a licensor, predecessor in interest, or other related entity) for— (I) a change (not including a modification to the structure of the biological product) that results in a new indication, route of administration, dosing schedule, dosage form, delivery system, delivery device, or strength; or (II) a modification to the structure of the biological product that does not result in a change in safety, purity, or potency. [(Emphasis added)]

In other words, for purposes of determining the start of the 12-year and 4-year RPE periods – i.e., the date of first licensure of a reference product –  FDA must take into consideration corporate relationships between sponsors. 

FDA provided insight on how the Agency intends to apply the “licensor, predecessor in interest, or other related entity” criterion in draft guidance issued in August 2014 (see our previous post here).  FDA explained that:

With respect to 351(k)(7)(C), the Agency intends to interpret the term “predecessor in interest” as it does in the 3-year new drug product exclusivity context.  It will consider any entity that the sponsor has taken over, merged with, or purchased, or that has granted the sponsor exclusive rights to market the biological product under the 351(a) application, or had exclusive rights to the data underlying that application to be a predecessor in interest for purposes of the first licensure provisions at section 351(k)(7)(C) of the PHS Act.

The Agency intends to consider a “licensor” under the BPCI Act to be any entity that has granted the sponsor a license to market the biological product, regardless of whether such license is exclusive.  This term would include, for instance, entities that continue to retain rights to develop, manufacture, or market the biological product, and/or rights to intellectual property that covers the biological product.

Although the BPCI Act does not define the term “other related entity,” the Agency generally will consider an applicant to be a “related entity” in this context if (1) either entity owns, controls, or has the power to own or control the other entity (either directly or through one or more other entities) or (2) the entities are under common ownership or control.  The Agency also may find that two parties are related entities for purposes of the BPCI Act if the entities are or were engaged in certain commercial collaborations relating to the development of the biological product(s) at issue.  In analyzing whether the relationship between the parties would result in a finding that they were “other related entities,” the Agency expects to consider not only ownership and control of the investigational new drug application (IND) and the BLA, but also the level of collaboration between the entities during the development program as a whole.

What this seems to indicate is that RPE determinations may very well be fluid because of after-the-fact happenings between companies.  Thus, FDA might determine, after granting two sponsors each a period of RPE for essentially the same biological product, that after a merger of the two sponsors (or the acquisition of one by the other), there is now, post-hoc, a different date of first licensure for the later approved product.  Such a post-hoc decision could significantly alter the landscape for biosimilar competition and affect how companies strategize about the BPCIA’s “patent dance” procedures.    Similarly, if a sponsor with RPE files a patent infringment lawsuit against a competitor developing essentially the same product, any settlement of the lawsuit that involves a license would presumably shorten the RPE of the competitor’s product.

As the merger and acquisition rage continues, buyers and sellers should take note of the potential effects on exclusivity: caveat emptor (and caveat venditor)! 

By James C. Shehan –   

In the latest Biologics Price Competition and Innovation Act of 2009 ("BPCIA") patent dance development, Amgen filed a lawsuit alleging that Apotex’s biosimilar of Neulasta (pegfilgrastim) infringes two Amgen patents, one about to expire composition of matter patent and one process patent expiring in 2031.  This is the first lawsuit in which the parties at least initially engaged in the “intricate and carefully orchestrated set of information exchanges” known as the patent dance.  But alas, this beautiful pas de deux has been marred, according to Amgen, by Apotex’s providing notification of commercial marketing prior to FDA approval of its Section 351(k) application, or Abbreviated Biologics License Applications ("ABLA").  And Amgen isn’t relying solely on its interpretation of the BPCIA – the judges of its last dance contest, also known as the Federal Circuit, have already ruled in Amgen v. Sandoz that notification of commercial marketing must come after approval (see our earlier post here).   Although it is anticipated that an en banc or Supreme Court appeal will be granted in that case, while it stands, the Federal Circuit opinion should govern this case.  But how that will play out in the current litigation remains to be seen, as it appears that Amgen has filed a complaint that partially follows the patent dance and partially does not. 

Amgen filed suit against Apotex in the Southern District of Florida on August 6th, alleging infringement of U.S. Patent Nos. 8,952,138 and 5,824,784.  Amgen states in the Complaint that Apotex and it began exchanging the information and statements required by the BPCIA in December 2014 and agreed that the two above-referenced patents would be included in patent dance litigation.  

Amgen received a letter from Apotex purporting to be a notification of commercial marketing on April 17, 2015.  Note that this date is roughly a month after the ruling by the U.S. District Court for the Northern District of California in Amgen v. Sandoz that notification of commercial marketing could occur before approval (the ruling that was subsequently reversed by the Federal Circuit).

Although Amgen doesn’t reveal at which stage the rest of the patent dance was at when it received the April 17th letter, from the timing it was likely somewhere in the middle.  The Apotex ABLA was apparently accepted by FDA in December (see Apotex press release here) and patent dance exchanges with Amgen began that month.  These patent dance exchanges take quite a bit of time – 20 days permitted for Apotex to supply the ABLA to Amgen, 60 days for Amgen to provide a patent list, 60 days for Apotex to supply its own patent list, 60 days for Amgen to respond, an unspecified amount of time for good faith negotiations on which patents to litigate over (agreed to here, at least according to Amgen), and then 30 days for Amgen to bring a lawsuit. 

Amgen thus appears have allowed the patent dance to proceed otherwise unimpeded after it received the April 17th notification of commercial marketing.  Nothing in the complaint indicates that Amgen told Apotex upon receipt of the letter that it was ineffective or otherwise took steps to stop the patent dance.  But with the Federal Circuit opinion now in hand, Amgen appears to be hedging its bets, filing a Complaint that acts as if the patent dance is and is not still on.  In other words, the complaint asks for both findings of infringement under the BPCIA patent dance (artificial acts of infringement of both patents by virtue of the filing of the ABLA) and for declaratory judgements outside of the patent dance.  Amgen makes two distinct declaratory judgment requests: (1) that the court declare that Apotex will infringe the later to expire process patent (No. 8,952,138) if it manufactures, uses, offers to sell, sells or imports its pegfilgrastim product; and (2)  that the court declare that Apotex’s April 17th letter is not effective notice of commercial marketing and that the Court declare that Apotex will violate 42 U.S.C. § 262(l)(8)(A) by not providing Amgen with a notice after its ABLA is approved and at least 180 days before marketing commences.  Amgen also asks that the court to enjoin Apotex from taking these actions. 

It will be fascinating to see how Apotex responds to the nimble steps taken by Amgen, and how this case will change in reaction to possible further developments in Amgen v. Sandoz.  And with Neulasta ringing up about $4.6B of annual sales in 2014, we can be pretty certain that we will see some more interesting positions taken in this litigation, and that the FDA Law Blog will find more dance puns to use to comment upon them.  According to Big Molecule Watch Blog, the case has been scheduled for a two-week trial beginning on July 11, 2016.  Meanwhile, the user fee date for the Apotex product should be sometime this month, although the absence of notice of an advisory committee meeting to review the application suggests that approval may not be imminent. 

By Jamie K. Wolszon –

As we have previously blogged on numerous occasions, FDA has released a framework for regulation of laboratory-developed tests (LDTs) that has sparked considerable controversy.  The Association of Molecular Pathology (AMP), which represents molecular pathologists and has been an active participant in the LDT debate, announced in a press release that it has met with the Senate Health, Education, Labor and Pensions Committee to propose a legislative solution to modernize the Clinical Laboratory Improvement Amendments (CLIA), including premarket review by the Centers for Medicare & Medicaid (CMS) or its designated third parties, as a substitute.  Under the AMP proposal, FDA would only review laboratory-developed testing protocols (LDPs) – a new term coined by AMP to stress that these are healthcare professional services –  under limited circumstances.  At the same time, it will increase CMS regulation of LDPs compared to today.

The House Energy & Commerce Committee has released a discussion draft which proposes a separate alternative to the Framework.  The 21st Century Cures legislation adopted by the House did not address LDTs.  In the meantime, as we have previously reported, a group of labs and in vitro diagnostic kit companies called the Diagnostic Test Working Group have tried to craft their own legislative solution.  We expect that additional legislative solutions may be proposed in the near future.  Whether any legislation will actually be enacted is anyone’s guess.

As for FDA, we understand that FDA is working on revising the two draft guidances that outlined the framework (the “Framework” guidance and the “Notification” guidance).  As of today, according to regulations.gov, FDA has received 236 comments on the draft “Framework” guidance; however, it has only posted 170 of those comments.  We do not understand why more than six months after the comment period closed (in early February 2015) so many of the comments have yet to be posted.  The website offers no explanation for the missing 66 comments other than the following boilerplate language: “[S]ome agencies may choose to redact, or withhold, certain submissions (or portions thereof) such as those containing private or proprietary information, inappropriate language, or duplicate/near duplicate examples of a mass-mail campaign.”

Discussing the rationale for its own legislative proposal, AMP explains that it is duplicative to have two separate agencies regulate LDPs, and CMS, as the agency that implements CLIA, is the appropriate agency for the task. 

At the heart of the proposal is a risk-based scheme that will determine whether a LDP must undergo premarket review.  To be high-risk the LDP must involve a proprietary computational method or algorithm AND be used “to diagnose a disease, predict risk of disease, or risk of progression of a disease, that is associated with significant morbidity or mortality, or threatens the public health.”  Therefore, an LDP that FDA would now consider a companion diagnostic is high risk under the AMP proposal only if it uses an algorithm or computational method.  The approach of focusing on transparency is reminiscent of FDA’s IVDMIA proposal, in which it proposed to require premarket review for a subset of LDTs, involving an algorithm.  The theory behind the IVDMIA proposal was that these tests were non-transparent black boxes. 

Under the AMP proposal, like high-risk tests, moderate-risk tests would also be those used “to diagnose a disease, predict risk of disease, or risk of progression of a disease, that is associated with significant morbidity or mortality, or threatens the public health.”  However, moderate-risk LDPs would use a methodology that “lends itself to inter-laboratory comparisons or proficiency testing.” 

Low-risk tests, by contrast, would either be adjunctive in nature or protocols for which “the consequence of an incorrect result or interpretation is unlikely to lead to serious morbidity or mortality, either for the patient or the public health.”  The AMP proposal would classify LDPs used for rare diseases, for public health emergencies, and for infectious agents that are not serious threats to the public health as low risk.  The proposal would modify the definition rare disease to match the drug definition of a disease or disorder with an incidence of fewer than 200,000 newly diagnosed individuals per year in the United States.  FDA’s “Framework” draft guidance proposed an exemption from premarket review for rare disorders, but it included a limitation of 4,000 tests per year.  During FDA’s public meeting in January 2015, multiple stakeholders criticized that limited number.

Under the AMP program, FDA would only review the LDP submission if the laboratory voluntarily chooses to go through FDA PMA/510(k) process or if a protocol is high-risk and the laboratory does not want to give the proprietary information to the CMS or third-party reviewer.  In all other instances where premarket review would be required, CMS or a qualified third party acting as a surrogate of CMS would perform the review.  CMS would establish a transparent process to designate non-federal government organizations as third parties.  Current accrediting bodies under the CLIA process, such as the College of American Pathologists (CAP), could be a third party, as could a state for LDPs offered to residents of that state. 

The proposal would direct CMS to stipulate a minimum level of standards for LDP analytical and clinical validity.  The proposal defines clinical validity as “the association of a biomarker or analyte with the presence, absence, predisposition to, or risk of a specific clinical condition.”  The proposal notes that clinical validity is distinct from clinical utility.  Clinical validity can be established by many things including peer reviewed literature; clinical practice guidelines; subject matter expert opinion; bench studies, including use of archived specimens; past experience with similar products; case studies; clinical data; consensus standards; reference standards; data registries, e.g., ClinGen, ClinVar, CancerLinQ, or other curated relevant database; post-market data; or clinical trials, including those conducted outside of the United States.

The need for clinical studies would be substantially curbed.  A third-party reviewer could require a laboratory to conduct a clinical trial only for a high-risk protocol and only if the CMS or the third-party reviewer determines that no other approach can provide the necessary information to support the laboratory’s claims, and provides written justification for that decision.

The LDP review information must be sent to CMS within three days after completion of review of the LDP.  CMS can reclassify the risk of an LDP, which implies that CMS reviews the information sent to them by either the CMS or third-party reviewer.  How often CMS will exercise this right to verify the work of the third-party reviewer within the deadlines outlined in this proposal is an open question.  This has been an issue under FDA’s third-party 510(k) review program as there have been claims that FDA’s secondary review of the reviewer’s work means that any potential efficiency from a third-party review is lost.

If a LDP is high-risk, the CMS or third-party reviewer has 90 days to review the submission.  If the CMS or third-party reviewer does not complete the review within the deadline the approval is automatically granted.  There is no grandfathering for high-risk LDPs.  This timeframe of 90 days is the same as the 510(k) process, and shorter than the PMA review timeframe of 180 days; there is no mention of stopping the clock as there is under the PMA and 510(k) processes.    

If a LDP is moderate risk, the CMS or third-party reviewer has 30 days to review the submission.  If the CMS or third-party reviewer does not complete the review within the deadline, the submission is automatically granted.  There would be grandfathering for moderate-risk tests on the market prior to enactment of the law. 

Low-risk LDPs would not undergo premarket review under the proposal.  Rather, low-risk LDPs would be subject to inspection in the normal course of the laboratory inspection process. 

Laboratories with demonstrated success with approved LDPs in the same or higher-risk classification, will be conditionally approved to begin testing with LDPs that use similar technologies or methodologies while review of the LDP submission is pending. 

In addition to pre-market review, the AMP proposal would require laboratories to prepare summaries about the test that could be posted by CMS.  This summary would be similar to the ones that a 510(k) submitter must provide, and that FDA publishes on its publicly available searchable electronic database.  Low-risk LDPs would not have to provide these summaries.  Moderate-risk tests on the market as of April 24, 2003, would not have to provide these summaries.  (It is not clear why this date was selected).  Once there have been three tests of the same kind the laboratory seeking to market a new LDP does not need to provide clinical validity either in the submission or prepare a summary of the clinical validity for the test but can instead reference the database.

If a laboratory modifies an LDP after the protocol goes through the review process, that modified LDP would have to undergo new review if the change elevates the test to a higher risk classification or if the modification significantly changes the performance characteristics.  Moreover, if a laboratory modifies an FDA-approved or cleared test in a way that significantly changes the performance characteristics, and the modified test is high risk or moderate risk, the modified test would need to undergo premarket review as described above.  If the modification to the approved or cleared device does not change the performance characteristics, the laboratory would need to provide summary information that could be published as described above. 

The proposal also would modify CLIA requirements related to proficiency testing, inspections, recordkeeping, and reporting of laboratory errors.  It also would authorize CMS to collect an annual user fee, limited to cost recovery, from laboratories determined by the number of LDPs the laboratory offers.  

The proposal would call on CMS to issue final updated CLIA regulations within two years after the legislation is enacted. That is a very short time period for issuance of any final rule.  The requirements will be effective two years after the regulations are finalized.

The fate of the proposal is uncertain.  However, it does show that there are alternative approaches to regulating LDPs – or LDTs – than what FDA proposed.

By David C. Gibbons & Alan M. Kirschenbaum –

The U.S. Department of Health and Human Services Office of Inspector General (“OIG”) has recently issued two Advisory Opinions involving patient benefits provided by drug and device manufacturers.  Advisory Opinion 15-11, posted today, involves a manufacturer’s short-term free-drug program.  The other, Advisory Opinion 15‑07, which was posted in June, concerned a device manufacturer’s subsidies for products and services provided to clinical trial subjects.  We bring these to our readers’ attention because they both involve manufacturer programs addressing problems that are not uncommon in the industry.

Free Drug Supply Program for Coverage Delays (Advisory Opinion 15-11)

The requestors in this Advisory Opinion are pharmaceutical manufacturers who co-promote an oral oncology drug that was FDA-approved for various antineoplastic indications under FDA’s Breakthrough Therapy Designation for which limited alternative therapies are available.  The drug can be obtained only through specialty pharmacies.

To deal with delays in coverage determinations for individual prescriptions for the drug, the manufacturers have implemented a free drug supply program for this product (the “Program”).  A third-party vendor operates the Program through a single specialty pharmacy (the “Program Pharmacy”) that does not fill prescription orders for the general public or bill third-party payors, but only dispenses drugs under various contract supply programs, including the Program.

To receive the drug through the Program, patients are required to satisfy certain eligibility requirements.  The patient must:

1. be a “new” patient;
2. have received a prescription for the drug;
3. have a diagnosis consistent with a labeled indication;
4. have health insurance that covers prescription drugs (including private, commercial, or government health insurance programs); and
5. have experienced a delay in a coverage determination of at least five business days.

If the patient’s pharmacy does not receive a coverage determination from the patient’s insurer within five business days, then either the patient’s pharmacy or the prescriber can submit a request for the drug to the Program Pharmacy.  Once the Program Pharmacy confirms eligibility, a separate prescription for the drug is obtained from the prescriber to cover the drug’s dispensing under the Program.

The manufacturers provide up to two free 30-day supplies of the drug under the Program.  Eligible patients receive their first fill and potentially one refill if the coverage determination delay persists beyond 30 days or if the patient has been denied coverage but files a timely appeal with their insurer.

The OIG concluded that, although the arrangement has the potential to generate improper remuneration under the federal health care program anti-kickback statute (“AKS”), 42 U.S.C. § 1320a–7b(b), the OIG would not seek administrative sanctions against the manufacturers because the Program presents a low risk of fraud and abuse.  The HHS OIG cited several reasons for this conclusion:

• The risk of overutilization of the drug product is limited.  Only on-label patients whose insurers do not make a coverage determination within five business days are eligible for the program.  In addition, no more than two 30-day supplies of the drug are provided. 

• The arrangement is distinguishable from “seeding” arrangements in which a pharmaceutical manufacturer offers a product for free or at a substantially reduced cost to induce a patient to use the drug, which will subsequently be reimbursed under a federal health care program.  The Program is not “actively marketed” (i.e., no direct-to-consumer advertising) to patients and information about the Program is available primarily on the manufacturers’ websites.  The manufacturers certified that only 0.0008% of drug “shipments” have been made under the Program, approximately one-third of which were made to beneficiaries of federal healthcare programs.

• Prescribers receive no remuneration under the Program and no fee for administration of the drug.  Thus, there is no inducement to prescribers to purchase or prescribe the drug.

• There are no costs to a federal healthcare program since no third-party payor is billed for free drug provided under the Program, and no part of the costs associated with the drug provided under the Program count towards a patient’s true out-of-pocket (“TrOOP”) expenses under Medicare Part D.

• There is little risk of beneficiary inducement to obtain other federally reimbursed prescription drugs from the Program Pharmacy, since patients cannot obtain future refills of the drug product from the Program Pharmacy and the Program Pharmacy does not dispense to the general public outside of contract supply programs.

The OIG also concluded that the arrangement would not violate the beneficiary inducement civil monetary penalty, 42 U.S.C. § 1320a–7a(a)(5), which prohibits the offer of remuneration to a Medicaid or Medicare beneficiary that the offeror knows or should know is likely to influence the beneficiary to use a particular “provider, practitioner, or supplier” for federally reimbursed items or services.  After reiterating its long-standing interpretation that an inducement to use a particular manufacturer’s drug does not violate the statute because pharmaceutical manufacturers are not “providers, practitioners, or suppliers,” the OIG reasoned that beneficiaries could not be influenced to use the Program Pharmacy to dispense federally reimbursed drugs, since the Program Pharmacy does not dispense drugs to the general public or bill third party payors.

This Advisory Opinion, like others, is limited in its applicability to the specific requestors under the particular set of facts provided.  For example, the opinion might have been less favorable if the Program Pharmacy had the capacity to continue dispensing the product to the patient after the free drug was used up, if the prescriber received a drug administration fee, if off-label patients were eligible to receive the free drug, or if the manufacturers actively promoted the Program.  However, this Advisory Opinion provides a blueprint for pharmaceutical manufacturers to provide assistance where it is important for patients to obtain urgently needed therapy pending reimbursement delays.

Copay Subsidies in Clinical Trial (Advisory Opinion 15-07)

In this Advisory Opinion, the OIG approved of a device manufacturer’s subsidies covering copayments owed by clinical trial subjects.  The trial was a prospective, randomized, double-blind, placebo-controlled study of percutaneous image-guided lumbar decompression (“PILD”) procedures for patients with lumbar stenosis, which was to be sponsored by the manufacturer of devices (the “System”) used in the procedure.  Patients in the control arm of the study would receive a “sham” procedure (i.e., no therapeutic treatment would be performed), but would be able to elect have the PILD procedure after the primary endpoint was reached at six months post-procedure.  CMS had determined to cover the study under its Coverage with Evidence Development (CED) Program.  For subjects in the control arm, Medicare would not cover expenses of the sham procedure, since no therapy would be provided.  For those in the treatment arm, Medicare would cover the facility and professional costs of the PILD procedure, but those subjects would still owe copayments.  The manufacturer faced the problem that, if subjects in the control arm were not charged any payments but subjects in the treatment arm were charged copayments, both would know which arm of the study they were in, thus breaking the blind.  Therefore, the manufacturer proposed to subsidize the copayments owed by the treatment arm subjects by paying the copayments directly to the providers.  The manufacturer would also subsidize all of the costs of the control subjects who, after the endpoint had been reached, elected to have the PILD procedure.

The OIG found that this arrangement presented  minimal risk of fraud and abuse, for several reasons.  First, the study had been designed in consultation with CMS, which would use the results to determine whether PILD should be covered under Medicare.  Second, the Program was necessary to enable a properly designed study to be conducted, and was “a reasonable means of achieving the Study’s goals because it both encourages necessary patient enrollment in the Study and allows for the true impact of the PILD using the System on patient health outcomes to be isolated and assessed.”  In other words, the subsidies were necessary both to keep financial considerations from inhibiting enrollment or causing drop-outs, and to maintain the blind.

The OIG also noted that compensation paid to investigators was fair market value, thus not designed to induce physicians to use the System, and that overutilization would not be a problem because of the small number of subjects, the requirement that investigators follow the study protocol, and the oversight of an IRB.

This Advisory Opinion addresses the infrequent situation where a study has been approved by CMS for coverage under CED.  However, it contains certain considerations that may have wider applicability.  Device and drug manufacturers conducting blinded non-inferiority studies comparing an investigational product to an approved, marketed product sometimes face the predicament described in this Advisory Opinion.  The marketed comparator product may be covered by third party payors, but the associated copayments may be sufficient to cause lower-income patients to drop-out or fail to enroll in the first place, and may also undermine the blind by making patients aware that they are in the comparator arm.  One solution is for the sponsor to provide the comparator product to subjects at no charge, but it is sometimes not possible for the sponsor to obtain the product, or, even it is possible, purchasing it and providing it to subjects might be cost-prohibitive, depending on the product and the size of the study. 

Although CMS’s approval of the study in the Advisory Opinion was clearly an important factor to the OIG, it was not the only one.  The OIG also recognized that the subsidies were necessary both to encourage patients to enroll and remain in the study regardless of their income, and to maintain the blind.  This is not the first Advisory Opinion to recognize this problem.  See, e.g., Advisory Opinions 00-05 (“waiving copayments is a reasonable means of enhancing patient compliance with study requirements and retaining patients for the entire study period.  Waiving copayments will also ensure that economically disadvantaged patients are not precluded from the study”) and Advisory Opinion 98-06.  Although it is somewhat perilous to extrapolate OIG conclusions in one Advisory Opinions to different situations, we would hope that the OIG would take a similar view of copay subsidies in other types of well designed non-inferiority studies where they are intended to ensure the integrity of the clinical trial, and not intended as inducements to purchase or prescribe products.

By Kurt R. Karst –

Earlier this week, the U.S. District Court for the District of Maryland unsealed a 73-page Opinion handed down on July 29, 2015, along with an Order, in a challenge brought by Mallinckrodt Inc. (“Mallinckrodt”) last November after FDA downgraded from “AB” to “BX” the Therapeutic Equivalence (“TE”) rating for Mallinckrodt’s generic version of CONCERTA (methylphenidate HCl) Extended-Release Tablets, 27 mg, 36 mg, and 54 mg, approved under ANDA 202608.  According to FDA, “an analysis of adverse event reports, an internal FDA re-examination of previously submitted data, and FDA laboratory tests . . .  have raised concerns that the products may not produce the same therapeutic benefits for some patients as the brand-name product, Concerta. . . .”  FDA also revised the Agency’s Draft Guidance on Methylphenidate Hydrochloride (“2014 Draft Guidance”), changing the bioequivalence metrics for approval of generic CONCERTA.  The district court granted FDA’s Motion to Dismiss with respect to three of the five counts in the Complaint and granted summary judgment in favor of FDA with respect to the two remaining counts. 

As we previously reported, Mallinckrodt alleged in the company’s five-count Complaint violations of the Administrative Procedure Act (“APA”) and a direct cause of action under the Fifth Amendment’s Due Process Clause:

• Count I: Alleges a violation of the APA because FDA’s TE rating downgrade was done without a hearing, thereby violating Mallinckrodt’s Fifth Amendment due process rights in violation of 5 U.S.C. 706(2)(B).
• Count II: Asserts a direct right of action under the Fifth Amendment based on FDA’s failure to provide Mallinckrodt a hearing in conjunction with the TE rating downgrade.
• Count III: Alleges a violation of the APA insofar as FDA’s TE rating downgrade was in excess of its statutory authority in violation of 5 U.S.C. § 706(2)(C), because “FDA has no authority to take a drug off the market without following the procedures set forth in 21 U.S.C. § 355(e).”
• Count IV: Alleges a violation of the APA insofar as FDA issued the 2014 Draft Guidance without first going through the required notice-and-comment procedure.   
• Count V: Alleges a violation of the APA insofar as FDA’s TE rating downgrade was arbitrary and capricious because it did “not satisfy the evidentiary standard set forth in the Orange Book’s description of code BX[,]” was “not the product of reasoned decisionmaking, is not rationally related to the facts, and/or does not account for evidence contrary to its conclusions.”

Judge Deborah K. Chasnow divided her analysis of the allegations into three parts, first tacking Counts I, III, and V (APA claims challenging FDA’s TE rating downgrade), then moving on to Count IV (APA claims challenging FDA’s issuance of the 2014 Draft Guidance), and finally, addressing Count II (Fifth Amendment due process right of action). 

With respect to Counts I, III, and V, Judge Chasnow did not view FDA’s TE rating downgrade as final agency action subject to challenge; however, she left open the litigation door if FDA ultimately pursues withdrawal of the ANDA.  We finally get to that conclusion on page 35 of the decision, where Judge Chasnow writes:

FDA’s reclassification of the drug’s TE rating is not a final agency action, but rather appears to be an intermediate step taken by FDA to inform the public that Mallinckrodt’s drug may not be therapeutically equivalent and therefore have “the same” clinical effect as Concerta. . . .  The record also indicates that the agency’s position concerning the therapeutic equivalence of Mallinckrodt’s product is a tentative one: FDA indicates that it may take steps in the future to remove Mallinckrodt’s product from the market if the drug’s TE is not established, but at this time it has not made a final decision as to the product’s TE or that Mallinckrodt’s ANDA must be removed from the market. . . .  FDA has not instigated formal proceedings to withdraw Mallinckrodt’s product from the market, it has simply indicated that pending further review it may choose to instigate a withdrawal proceeding if it determines that Mallinckrodt’s product is not TE. . . .  Although FDA has asked Mallinckrodt voluntarily to withdraw its ANDA, it has not compelled or ordered Mallinckrodt to take any action. . . .  Should FDA choose to instigate a withdrawal proceeding, then all procedures required under 21 U.S.C. § 355(e), including notice and hearing, would apply, and if FDA makes a determination following these proceedings that Mallinckrodt’s drug is not therapeutically equivalent to Concerta and revokes its ANDA approval, this final agency decision would be subject to judicial review.

Moving on to Count IV, Judge Chasnow concluded that the 2014 Draft Guidance “was an interpretive rule rather than a legislative rule, and therefore the agency did not violate the APA by failing to go through formal notice and comment procedures before issuing the document.”  Although Mallinckrodt argued that even if the 2014 Draft Guidance is an interpretive rule, FDA nevertheless violated the APA’s notice-and-comment requirements insofar as they apply to significant amendments to agency interpretive rules, Judge Chasnow pointed to the U.S. Supreme Court’s recent decision in Perez v. Mortgage Bankers Association that does away with the so-called “Paralyzed Veterans doctrine.”  As we previously posted, that doctrine had held that an agency must use notice-and-comment procedures as required under the APA when the agency wishes to significantly change its previous interpretation of a regulation, even if the original regulation was not one for which notice-and-comment rulemaking was required. 

With respect to Mallinckrodt’s assertion of a direct right of action under the Fifth Amendment based on FDA’s failure to provide Mallinckrodt a hearing in conjunction with the TE rating downgrade, Judge Chasnow concluded that Mallinckrodt failed to show that FDA has deprived the company of a property interest in its ANDA.  Moreover, Judge Chasnow was unconvined by Mallinckrodt’s “partial deprivation theory,” which is “premised on the fact that pharmacists will no longer automatically substitute [Mallinckrodt’s] for Concerta and fewer of its major distributors will purchase its drug due to its new TE rating, which will purportedly result in decreased market share and profits for Mallinckrodt.”  According to Judge Chasnow:

FDA’s reclassification of Mallinckrodt’s TE rating in the Orange Book did not deprive Mallinckrodt of its ANDA approval.  Mallinckrodt has argued that because of its new TE rating in the Orange Book pharmacists will no longer automatically substitute its drug for Concerta and fewer customers will purchase its drug, resulting in a loss of market share and profits.  Mallinckrodt has provided some evidence . . . of the anticipated impact on its market share, shortly following the TE rating change. . . .  Evidence of the impact on its market share and sales, however, does not show that its property right — the ability to sell its product lawfully — has been deprived by FDA and instead, shows third party and market reactions to FDA’s reclassification. . . .  FDA did not compel the pharmacists or Mallinckrodt’s customers to change their dispensing and buying habits.  It merely changed the drug’s TE classification in the Orange Book in accordance with its duty to provide updated drug information to the public on a regular basis.  Taking Mallinckrodt’s facts as true, it has failed to show a deprivation of its property interest by FDA. [(Emphasis in original; internal citations omitted.)]

Will Mallinckrodt appeal the decision?  Mallinckrodt initially commented that the company was “evaluating its options with respect to the court’s decision, including a possible appeal to the U.S. Court of Appeals for the Fourth Circuit.”  Well, that evaluation has concluded, and on August 12, 2015, Mallinckrodt appealed Judge Chasnow's decision to the Fourth Circuit (Notice of Appeal).

We found it quite interesting that shortly after Judge Chasnow issued her decision under seal, Intellipharmaceutics International Inc. (“Intellipharmaceutics”) issued a press release explaining the company’s travails with FDA over the bioequivalence requirements for FOCALIN XR (dexmethylphenidate HCl) Extended-release Capsules, a drug closely related to CONCERTA. 

We previously posted on the approval landscape for generic FOCALIN XR, explaining that FDA approved Intellipharmaceutics’ ANDA 078992 for the 15 mg and 30 mg strengths, but only tentatively approved the 5 mg, 10 mg, 20 mg, and 40 mg strengths.  It seems that FDA wants Intellipharmaceutics to supply new bioequivalence data – using updated bioequivalence metrics – but only with respect to the tentatively approved strengths.  That seems odd, no?  Just as odd, however, is the on-again, off-again (and now on-again) requirement that Intellipharmaceutics evaluate bioequivalence using FDA’s revised criteria.  Here’s how Intellipharmaceutics summarizes the volley with FDA:

• In November 2013, the FDA granted the Company tentative approvals for the 5 mg, 10 mg, 20 mg, and 40 mg strengths of its generic Focalin XR®.
• In June 2015, the FDA required that the Company demonstrate bioequivalence with Focalin XR® for the 40 mg strength, under new bioequivalence criteria, as a basis for the approval of each of the affected strengths.
• In July 2015, the FDA rescinded its June 2015 requirement that the Company demonstrate bioequivalence with Focalin XR® for the 40 mg strength, under new bioequivalence criteria, as a basis for the approval of each of the affected strengths.
• The FDA has now reinstated the requirement that the Company demonstrate bioequivalence with Focalin XR® for the 40 mg strength, under new bioequivalence criteria, as a basis for the approval of each of the affected strengths.  More specifically, in reverting to the requirement for a demonstration of bio-equivalence under new criteria, the FDA stated “Upon review, we have concluded that our rescission was issued in error.”

By Jenifer R. Stach* –

After Stewart Parnell’s conviction for selling salmonella-tainted peanut products, causing many deaths and illnesses, he could be facing life in prison.  Attorneys on both sides called the recommendation for a life sentence “unprecedented” for a food-poisoning case.   

We wrote about the convictions in a prior posting after the Peanut Corporation of America (PCA) defendants were found guilty on September 19, 2014.  On July 22, 2015, the Government filed their brief seeking a life sentence for Stewart Parnell, 17.5 – 21 years for his brother, Michael Parnell, and 8 – 10 years for Mary Wilkerson, a PCA Quality Assurance Manager.  

Are these sentencing recommendations warranted? 

In their brief, the Government argues that the Sentencing Guidelines adjusted offense levels in the Pre-Sentence Reports (PSRs) issued by the U.S. Probation Office were properly calculated.  The adjustments were made based on the following factors:  number of victims, loss calculations, conscious or reckless risk of death or serious bodily injury by the Parnell brothers, and a general lack of acceptance of responsibility by Mary Wilkerson.  While the recommendation for a life sentence may be unprecedented, so are the facts of the case.     

Number of Victims.  The number of victims included 9 deaths; 714 people who fell ill, with 166 of those hospitalized; and that for every case reported to the Center for Disease Control, 30 cases go unreported, therefore, the 714 illnesses confirmed by the CDC could represent as many as 20,000 ill people across the United States. 

Conscious or Reckless Risk of Death or Serious Bodily Injury by the Parnells.  The Parnell brothers both claimed that they were unaware of the risk of serious bodily injury or death.  The Government argues that witness testimony by PCA employees of the conditions of filth in the Texas, Virginia, and Georgia plants,  knowledge by defendants of the salmonella-positive test results, the falsification of Certificates of Analysis (COAs) for testing, and emails written by Stewart Parnell telling his employees to ship tainted products were aggravating factors that warranted the adjusted sentencing levels.    

An executive who was perhaps new to the industry may have been able to make the claim that they were unaware of the risk, but the Parnell brothers had been in the peanut business with their father as peanut roasters since 1977.  In 2005, Stewart Parnell was appointed to the USDA’s Peanut Agriculture Board, which (ironically enough) sets quality control procedures for peanuts.  In 2009 after the DOJ investigation was initiated, Parnell was removed from the board.  Clearly, Parnell’s egregious and continuous behavior directing his employees to ship tainted products was not a result of being unaware.  

Loss Calculation.  Despite arguments by the Parnell brothers that insurance payouts should be considered in the loss calculation, the Government argues that insurance payouts are not relevant and asserts that the loss estimates to PCA customers is $144 million due to recalls and product that had to be destroyed.

A General Lack of Acceptance of Responsibility by Mary Wilkerson.  Wilkerson claims she had no knowledge of the schemes to ship tainted products.  The Government points to testimony by PCA employees that Wilkerson was the Quality Assurance Manager responsible for COAs during the time of the outbreaks, and that she was aware that products were produced and shipped on the same day, despite her knowledge that salmonella testing takes two to four days.    

All in all, the Government argues that “this criminal activity was extensive.”  But the impact is wider than the Sentencing Guidelines factors.  We should not forget the number of people affected by the deaths of those nine people — their family and friends, the interruption in the lives of those who fell ill, and the impact of the PCA employees and family members who lost their jobs after the company filed bankruptcy. 

Even if Stewart Parnell does not receive a life sentence, the impact on government enforcement priorities has persisted.  The Department of Justice (DOJ) and FDA continue to focus on safety in peanut manufacturing as a priority.  Recent cases indicate that companies are learning the potential consequences of violating the FDC Act.  In 2012 Sunland, a New Mexico based peanut producer entered into a consent decree with DOJ to implement sanitation control programs, conduct testing, and develop monitoring and remediation protocols.  Most recently in May, ConAgra pled guilty to a misdemeanor charge of the FDC Act for introducing peanut butter with salmonella into interstate commerce (coincidentally manufactured in Georgia). 

Will Stewart Parnell’s willful sales of tainted peanut butter be enough for a court to sentence him to life in prison?  We’ll find out soon, because sentencing is scheduled for September 21, 2015.   We will keep you posted. 

*Admitted only in Maryland.  Practicing under the supervision of the Firm.

By Kurt R. Karst –   

There are few things this blogger relishes more in his practice than getting his hands on FDA exclusivity decisions.  (It’s like being given and then unwrapping a holiday gift.)  We don’t mean the “decisions” that most people see in ANDA approval letters or that are published in the Orange Book.  Those “decisions” are interesting, but they aren’t usually terribly helpful because of their opacity.  We mean the decisions underlying those “decisions”; the decisions that explain why FDA granted (or denied) exclusivity to an application sponsor.  Those decisions aren’t published by FDA.  You have to know what you’re looking for, and then ask for them. 

We try to publicize FDA exclusivity decisions when we can.  After all, those FDA decisons should be freely available and in the public domain so that folks understand FDA’s current thinking.  Nobody likes stumbling around in a dark room.  The lights need to be turned on – or, at the very least, you need a night light.  Sometimes we cannot provide the actual FDA decision, so, when possible, we put up a post explaining what we know, as we did here and here.  Sometimes we can provide the actual FDA decisional memorandum.  We did that last year when we obtained a copy of FDA’s decision on 180-day exclusivity forfeiture for Risedronate Sodium Tablets (ACTONEL) (see our previous post here).  More recently, we publicized FDA’s various decisions on the scope of 3-year new clinical investigation exclusivity made available after the unsealing of litigation documents in a lawsuit involving extended-release Tacrolimus (see our previous post here).  In some instances, we’re in the dark as much as everyone else, because FDA has decided not to decide on exclusivity – sometimes for many months (as in the case of AURYXIA (ferric citrate) Tablets approved under NDA 205874), and sometimes for years (as in the case of SURFAXIN (lucinactant) Intratracheal Suspension approved under NDA 021746).

Over the past few weeks we’ve come across three exclusivity decisions: two concerning 180-day exclusivity forfeiture, and another concerning 3-year exclusivity.  The two 180-day exclusivity forfeiture decisions are interesting reads, but not overly noteworthy.  One FDA Memorandum provides FDA’s rationale for determining that 180-day exclusivity for Linezolid Injection 2 mg/mL (packaged in 600 mg/300 mL single-use flexible plastic containers), a generic version of ZYVOX, was not forfeited because of a change in or review of the requirements that prevented tentative approval within 30 months of ANDA submission (FDC Act § 505(j)(5)(D)(i)(IV)).  Another FDA Memorandum goes into the “better late than never” category and explains FDA’s rationale for determining that 180-day exclusivity for Valsartan Tablets, 40 mg, 80 mg, 160 mg, and 320 mg (DIOVAN) was not forfeited under FDC Act § 505(j)(5)(D)(i)(IV).  That decision led to litigation that was resolved in late 2012 (see our previous post here). 

Our best “find” is a March 3, 2015 Memorandum from the CDER Exclusivity Board explaining FDA’s decision to grant a period of 3-year exclusivity with respect to the April 16, 2013 approval of NDA 022272/S014 for OXYCONTIN (oxycodone HCl) Controlled-Release Tablets.  That NDA Supplement included a “drug liking” study and proposed the addition of “labeling language describing the results of pre- and post-marketing data from in vitro and in vivo abuse potential studies to the DRUG ABUSE AND DEPENDENDCE section of the Package Insert.”  The NDA Supplement approval was the first approval for a drug with abuse-deterrent labeling claims.  (Then in draft form – see our previous post here – today final guidance – “Abuse-Deterrent Opioids — Evaluation and Labeling” provides FDA’s current thinking about the studies that should be conducted to demonstrate that a particular drug product formulation has abuse-deterrent properties.)

The approval of NDA 022272/S014 had been on our radar for a while.  It was on our list of drug products for which an exclusivity decision was pending (and delayed).  We’re not entirely certain why it took FDA so long to make a decision, or what finally prompted the Agency to act, but when we saw the addition of a period of 3-year exclusivity for NDA 022272 in the February 2015 Orange Book Cumulative Supplement (published in mid-March) coded as “M-153” and defined as “ADDITION OF INFORMATION REGARDING THE INTRANASAL ABUSE POTENTIAL OF OXYCONTIN” we were immediately interested to know what FDA had to say.  (Orange Book exclusivity codes are defined in an appendix to the publication.  FDA has explained that “[e]xclusivity codes with an ‘I’ prefix (‘I-###’) are suggestive of new indication exclusivity, exclusivities for ‘new dosing schedules’ are assigned a ‘D-###’ code, whereas exclusivities that do not neatly fall into either of these two categories are assigned a ‘miscellaneous’ use code ‘M-###.’”)

After providing the necessary background and going through the criteria for granting 3-year exclusivity (i.e., an application for a previously approved active moiety containing “reports of new clinical investigations (other than bioavailability studies),” that were “essential to approval” of the application, and that were “conducted or sponsored by” the applicant), the CDER Exclusivity Board addresses the issues at hand: “The issues before the Board in this instance are the scope of exclusivity and the assignment of an appropriate exclusivity code in the Orange Book that best characterizes this exclusivity.”  Here’s what the Board has to say about those two issues:

Exclusivity extends only to the change approved in the supplement for which new clinical investigations were essential, and the Agency interprets the scope of 3-year exclusivity to be related to the scope of the underlying new clinical investigations that were essential to the approval of the supplement.  As discussed above, OTR 1018 did not support approval of the original NDA 022272 on April 5, 2010, and was thus not essential to the approval of the specific abuse-deterrent formulation of [reformulated OxyContin (OCR)].  This study only supported the addition of information obtained from the drug liking study to the OCR labeling that indicates that OCR has physicochemical properties that are expected to reduce abuse via the intranasal route.  Therefore, the scope of exclusivity in this instance is limited to the addition of this information to Section 9.2 in the labeling.

The Board notes generally that the scope of exclusivity should be determined by the nature of the clinical studies done to gain approval of the NDA, not by the exclusivity code that is used as shorthand to describe that approval in the Orange Book.  Nevertheless, the Board recommends that when the Orange Book listing is updated to display this exclusivity period, OCR be assigned a unique exclusivity code that reflects the scope of this exclusivity.  Given that the scope of 3-year exclusivity in this instance is limited to the addition of information to the OCR labeling regarding the reduction of abuse via the intranasal route, the Board recommends that the following exclusivity code be assigned:

M-###: “Addition of Information Regarding the Intranasal Abuse Potential of OxyContin.”

What one might gather from the Board’s memorandum is that the scope of the period of 3-year exclusivity for OXYCONTIN expiring on April 16, 2016 applies to the particular drug product formulation studied in clinical trials, and not broadly to prevent approval of all oxycodone extended-release drug products with abuse-deterrence labeling.  That would seem to be consistent with other FDA decisions.  For example, on January 4, 1999, FDA approved ANDA 075102 for Propofol Injectable Emulsion, 1% (10 mg/mL), notwithstanding a period of 3-year exclusivity on the reference listed drug, DIPRIVAN, that was not scheduled to expire until June 11, 1999.  The period of 3-year exclusivity applicable to DIPRIVAN was based on FDA’s approval of a NDA Supplement for a version of the drug product formulated with EDTA as a preservative.  FDA determined that the ANDA sponsor, whose drug product was formulated with sodium metabisulfite as the preservative in place of EDTA, was not subject to the exclusivity applicable to the EDTA-formulated version of DIPRIVAN because the scope of 3-year exclusivity was limited to the drug product formulation.

FDA’s decision was challenged in court.  In upholding FDA’s grant of 3-year exclusivity as relating only to the clinical investigations for EDTA, and not to preservatives in general, the U.S. District Court for the District of Maryland ruled in Zeneca Inc. v. Shalala, No. CIV.A. WMN–99–307, 1999 WL 728104 (D. Md. Aug. 11, 1999), aff’d, 213 F.3d 161 (4th Cir. 2000), that the 3-year exclusivity FDA granted:

extends only to the change approved in the supplement.  Zeneca’s NDA supplement sought authority to add EDTA to Diprivan.  The clinical investigations it submitted to the FDA with that supplement were necessitated by specific concerns related to EDTA, not to preservatives in general.  Thus, the exclusivity applies to propofol products including EDTA, not to propofol products with other preservatives.

More recently, FDA approved multiple 505(b)(2) applications for pharmaceutically equivalent testosterone gel drug products containing different penetration enhancers, and granted each sponsor a period of 3-year exclusivity.  FDA’s decision that the first 505(b)(2) application approved with a period of 3-year exclusivity – i.e., NDA 202763, approved on February 14, 2012 with a period of “new product” exclusivity expiring on February 14, 2015 – did not block the approval of a subsequent 505(b)(2) application – i.e., NDA 203098, approved on January 31, 2013 with a period of “new product” exclusivity expiring on January 31, 2016 – would seem to be the result of FDA’s determination that the scope of each applicant’s 3-year exclusivity is limited to the clinical trial data supporting approval of the particular penetration enhancer formulation tested. 

With all of the “abuse-deterrent” drug products in development these days (including products that are or will be the subject of 505(b)(2) applications), and given FDA’s recent explanation of the scope of 3-year exclusivity (above and in recent memoranda unsealed in litigation against FDA), interest (and concern) over the scope of a particular period of 3-year exclusivity seems to be growing.  Indeed, the concern was so great that late last year two companies exchanged waivers of 3-year exclusivity for their competing single-entity, extended-release hydrocodone drug products (see here).  Those mutual waivers occurred shortly after at least one of the companies met with FDA's Office of Chief Counsel on October 21, 2014 (see here) 

By David C. Gibbons –

On Friday, August 7, Judge Paul Engelmayer, U.S. District Court for the Southern District of New York, handed down one of the most significant rulings concerning First Amendment protection for a pharmaceutical manufacturer’s off-label promotion of an otherwise approved drug.  Judge Engelmayer granted a motion for preliminary injunction in favor of Amarin Pharma, Inc. (“Amarin” or “the Company”) and did what some believed the court would not do: reach the merits of Amarin’s First Amendment claims.  

Background

The case before Judge Engelmayer concerned Vascepa (icosapent ethyl), an ethyl ester of the omega-3 fatty acid eicosapentaenoic acid (“EPA”) obtained from fish oil.  Vascepa is an approved drug indicated as an adjunct to diet to reduce triglyceride levels in adult patients with severe (≥ 500 mg/dL) hypertriglyceridemia.  Vascepa (icosapent ethyl), Label, NDA 202057 (June 23, 2015). 

Vascepa’s approval was based on a single phase 3 clinical trial (the MARINE trial), conducted in patients with “very high” triglycerides (≥ 500 mg/dL), pursuant to a Special Protocol Assessment (“SPA”) agreement with FDA. Generally, a SPA indicates FDA agreement that a study will support the approval of a drug or biologic product’s marketing application (or supplement to an approved application) if it is conducted according to the protocol and it achieves its agreed-upon objectives.  See FDCA § 505(b)(5)(B); see also FDA, Guidance for Industry: Special Protocol Assessment, 2 (May 2002).  Once FDA and a sponsor enter into a SPA agreement, there are only two narrow statutory bases for changes to the SPA – written agreement between FDA and the sponsor or where FDA finds a “substantial scientific issue essential to determining the safety or effectiveness of the drug” that is identified after the trial has begun.  FDCA § 505(b)(5)(C). 

Similar to the Company’s approach with the initial indication, Amarin designed a single phase 3 clinical trial to examine the effect of Vascepa on triglyceride levels among statin-treated patients with “persistently high” triglycerides (≥ 200 and ≤ 500 mg/dL), the ANCHOR trial, and entered into a separate SPA with FDA (the “ANCHOR SPA”). In connection with the ANCHOR SPA, Amarin also agreed to conduct a cardiovascular outcomes trial (the REDUCE-IT trial) to examine whether Vascepa would be effective in reducing cardiovascular events.  As a condition of the ANCHOR SPA, FDA required that the REDUCE-IT trial would need to be at least 50% enrolled before FDA would accept Amarin’s supplemental new drug application (“sNDA”) for use of Vascepa in patients with persistently high triglycerides.  When Amarin submitted its application for approval of the initial indication, FDA reviewed the ANCHOR data as a second, confirmatory trial and included the combined safety results from both trials in the first indication labeling.

Amarin believed it had satisfied all of FDA’s requirements to obtain approval of Vascepa for persistently high triglycerides, 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 enrollment obligations with respect to the REDUCE-IT trial.  Thus, Amarin submitted its sNDA for the persistently high triglyceride indication in February 2013and anticipated a timely approval for this additional indication.

However, FDA convened an Advisory Committee during which the agency called into question the clinical validity of the ANCHOR study endpoint of triglyceride lowering, despite having agreed to that endpoint in the SPA. Data from several high-profile cardiovascular outcomes trials reported out after the ANCHOR SPA was entered into by FDA and Amarin and cast doubt on the clinical benefit of triglyceride lowering and whether a reduction in triglyceride levels would translate into a reduction in cardiovascular events, in general.  Upon reviewing these data, FDA asked the Advisory Committee to weigh in on whether Vascepa’s triglyceride lowering effect was sufficient to approve the drug for use in patients with persistently high triglycerides. The Advisory Committee voted 9 to 2 against approval of Vascepa for that indication. Subsequently, FDA rescinded the ANCHOR SPA, something FDA has done only 10 times among approximately 1,000 SPAs, and issued a Complete Response Letter to Amarin indicating the need for data showing a reduction in cardiovascular events (i.e., data from the REDUCE-IT trial) prior to approval for persistently high triglycerides.  Amarin stated that 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 [(“FDCA”)].’”  Complaint at 27, Amarin Pharma, Inc. v. FDA, No. 15-3588 (S.D.N.Y. May 7, 2015).

The court had acknowledged the lawful use of FDA-approved drugs for off-label uses by doctors and the inability of FDA to regulate doctors so using those drugs.  The court cited to numerous studies of off-label use that shows such use is ubiquitous in clinical medicine, noting in some areas that off-label use is “the norm rather than the exception.”  Amarin at 5.  The court went on to say that the “therapeutic—indeed, sometimes life-saving—value of off-label uses of FDA-approved drugs has been widely recognized.”  Id. at 6. 

The court discussed how FDA has “long taken the position” that pharmaceutical manufacturers who market or promote off-label uses of approved drugs violate the FDCA.  Id. at 9.  The court described FDA’s long-standing position that off-label promotion of drug products risks criminal misbranding under the FDCA.  FDCA § 301(b).  A drug is misbranded if its labeling is “false or misleading in any particular.”  Id. § 502(a).  A drug is misbranded, according to the FDCA, if its labeling does not bear “adequate directions for use.”  Id. § 502(f).  FDA regulations define adequate directions for use as those under which a lay person can “use a drug safely and for the purposes for which it was intended.”  21 C.F.R. § 201.5.  The court, in its opinion, skipped a step, but it is important to note that labeling for prescription drugs, which are not safe for use except under supervision by a licensed health care provider, cannot bear adequate directions for use by a lay person, but can be subject to an exemption from this statutory requirement.  FDCA §§ 503(b), 502(f).  FDA regulations require that, to satisfy the conditions for this exemption, prescription drugs must have labeling that contains “adequate information for [] use . . . under which practitioners licensed by law to administer the drug can use the drug safely and for the purposes for which it is intended, including all conditions for which it is advertised or represented.”  21 C.F.R. § 201.100(d)(1) (emphasis added).  “Intended use” means the objective intent of the persons legally responsible for the labeling of drugs, which is determined by such persons’ expressions or may be shown by the circumstances surrounding the distribution of the article.  This objective intent may, for example, be shown by labeling claims, advertising matter, or oral or written statements by such persons or their representatives.  21 C.F.R. § 201.128.  Where the intended use of a prescription drug differs from the use approved by FDA (as indicated in the drug’s approved labeling), FDA has asserted that the product is a “new drug” for which FDA approval is required.  Placing a new drug in interstate commerce without FDA approval is a violation of the FDCA.  FDCA § 505(a). 

FDA has argued that misbranding actions against manufacturers who engage in off-label promotion furthers public safety.  Amarin at 12.  The court noted, “FDA has stated, its goal in pursuing misbranding charges against manufacturers based on the off-label promotion of drugs is to encourage use of the FDA’s drug review and approval process.”  Id.  Prosecutions therefore, act as a deterrent for manufacturers to evade FDA’s drug approval process for new uses of approve drugs.  Id. at 13. 

Amarin’s Proactive Challenge to FDA

In a bold move, Amarin filed a civil complaint against FDA claiming 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 that would prevent FDA from prosecuting the Company for truthful, non-misleading speech concerning Vascepa, going so far as to detail, in its complaint, certain off-label promotional content regarding Vascepa that the Company proposed to disseminate.  Early in the litigation proceedings, Amarin filed a motion for preliminary injunction and the court heard oral arguments on the motion on July 7, 2015, and, on August 7, the court handed down a 71-page opinion in which it granted Amarin’s requests, as described below.

Amarin sought to disseminate three types of information relating to the use of Vascepa in patients with persistently high triglycerides.  Importantly, Amarin stated in its complaint that it did not intend to promote this use of Vascepa in direct-to-consumer advertising, but only sought to “engage in truthful, nonmisleading speech about Vascepa directly with healthcare professionals.”  Compl. at 41.  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.  Compl. 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.”  Compl. 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.  These disclosures included the statements: 

• FDA has not approved Vascepa to reduce the risk of coronary heart disease;
• FDA has not approved Vascepa for the treatment of statin-treated patients with mixed dyslipidemia and high (> 200 mg/dL and < 500 mg/dL) triglyceride levels;
• The effect of Vascepa on the risk of cardiovascular mortality and morbidity has
• not been determined;
• A cardiovascular outcomes study of Vascepa designed to evaluate the efficacy of Vascepa in reducing cardiovascular mortality and morbidity in a high risk patient population on statin therapy is currently underway; and
• Vascepa may not be eligible for reimbursement under government healthcare programs, such as Medicare or Medicaid, to reduce the risk of coronary heart disease or for treatment of statin-treated patients with mixed dyslipidemia and high (> 200 mg/dL and < 500 mg/dL) triglyceride levels. We encourage you to check that for yourself. [(Compl. at 42-43.)]

In response, and perhaps in light of FDA’s recent losing record on First Amendment cases, FDA attempted to moot Amarin’s case in a letter provided to Amarin and filed with the court.  In its letter, FDA stated that it “does not intend to object to Amarin’s proposed communications” if made in a truthful, non-misleading, and balanced manner.  Exhibit A to Letter from Ellen London to Judge Paul A. Engelmayer at 6, Amarin, No. 15-3588 (S.D.N.Y. June 8, 2015).  Essentially, FDA agreed that many of Amarin’s proposed communications were consistent with FDA policy on dissemination of reprints and other medical communications.  FDA also agreed that Amarin’s proposed contemporaneous disclosures regarding Vascepa’s regulatory status, approval limitations, and the status of the REDUCE-IT trial would help to balance Amarin’s presentation of Vascepa efficacy data in patients with persistently high triglycerides.  However, FDA insisted that certain additional disclosures be made with Amarin’s proposed off-label promotion and rejected Amarin’s ability to make claims similar to the qualified health claims of EPA-containing dietary supplements.  FDA justified its exercise of enforcement discretion regarding these claims in the dietary supplement context due to the different statutory and regulatory schemes governing dietary supplement as well as the lower level of scientific evidence required for such products.

The Court Granted Preliminary Relief to Amarin

Finding a ripe controversy as to the threat of prosecution under the FDCA, the court indicated that the central dispute, as to whether a preliminary injunction should be granted, was whether Amarin was likely to succeed on the merits.  In accord with binding precedent set by the Second Circuit in the criminal misbranding case, United States v. Caronia, 703 F.3d 149 (2d Cir. 2012) (here), Judge Engelmayer granted Amarin’s motion for preliminary injunction against FDA.  The court noted that Amarin sought protection for its speech “both at a general and a statement-specific level.”  Amarin at 28.

When addressing Amarin’s statement-specific request for relief, surprisingly, the court evaluated and ruled on each of Amarin’s proposed off-label statements concerning Vascepa along with FDA’s responses to the same.  The court held, noting that FDA did not dispute, 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.”  Amarin Pharma, Inc. v. FDA, No. 15-3588, 55 (S.D.N.Y. Aug. 7, 2015) (opinion and order granting preliminary injunction).  The court then considered the “agreed-upon statements and disclosures” proposed by Amarin.  These included statements concerning the results of the ANCHOR study on both primary and secondary endpoints.  The court held the statements, along with the proposed contemporaneous disclosures that would be made with such statements were “based on current information, truthful and non-misleading.”  Id. at 57. 

Next, the court discussed additional “contested disclosures” that would be made contemporaneously with certain off-label statements concerning Vascepa.  Amarin proposed to state: “FDA has not approved Vascepa for the treatment of statin-treated patients with mixed dyslipidemia and high (≥200 mg/dL and <500 mg/dL) triglyceride levels.”  However, FDA wanted the following added to this disclosure: “FDA declined to approve this indication because the available evidence does not establish that reducing triglycerides with a drug reduces the risk of cardiovascular events among patients already treated with statins,” to which Amarin disagreed.  Court filings evidenced the back-and-forth between Amarin and FDA concerning the appropriate disclosure indicating FDA’s lack of approval for the persistently high triglyceride indication.  In the end, the court agreed with FDA that a disclosure explaining FDA’s decision not to approve Vascepa for this off-label use was necessary, stating that a revised disclosure “drawing upon both parties’ final positions, achieves a truthful and non-misleading result.”  Id. at 58.  Judge Engelmayer then proceeded to provide such a revised disclosure that read:

Vascepa is not FDA-approved for the treatment of statin-treated patients with mixed dyslipidemia and high (≥ 200 mg/dL and < 500 mg/dL) triglyceride levels due to current uncertainty regarding the benefit, if any, of drug-induced changes in lipid/lipoprotein parameters beyond statin lowered low-density lipoprotein cholesterol on cardiovascular risk among statin-treated patients with residually high triglycerides. No prospective study has been conducted to test and support what, if any, benefit exists.  [(Id.  at 60.)] 

The court held that its own revision was “at present, truthful and non-misleading,” but 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 High-level Analysis and Holding Related to First Amendment Protection for 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 this court amplified Caronia’s central holding in Amarin’s as-applied challenge to FDA’s threat of prosecution for off-label promotion. 

At a high level, the court said that FDA “reserve[ed] the right” to prosecute Amarin for its truthful and non-misleading off-label promotion.  Id. at 44.  FDA’s argument was a refinement of its long-standing position that it would use Amarin’s speech as evidence of misbranding, and not prosecute the speech itself.  FDA, in its briefs as well as in its oral arguments stated that it could lawfully use speech to establish both 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.  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.  To bolster its point, FDA likened misbranding to other crimes where speech constitutes the act, such as jury tampering, blackmail, and insider trading.  Id. at 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. (emphasis in original). The court stated that, based on its reading of Caronia, misbranding is not like the analogous crimes of jury tampering, blackmail, or insider trading.  The court closed the door on FDA’s line of reason by stating, “[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 (emphasis in original).

FDA made three counter-arguments, none of which persuaded the court. First, FDA argues that Amarin’s proactive challenge constituted a “frontal assault” on FDA’s new drug approval process to which Congress gave effect in the 1962 amendments to the FDCA.  Id.  To this, the court simply stated that the 1962 amendments predate First Amendment jurisprudence protecting commercial speech (see Cent. Hudson Gas & Elec. Corp. v. Pub. Serv. Comm’n, 447 U.S. 557 (1980)) and finding that pharmaceutical speech qualifies for such protection (see Sorrell v. IMS Health, Inc., 131 S. Ct. 2653, 2672 (2011)).  Id.  The court went so far as to “ding” FDA for not seeking a rehearing or appeal of Caronia. 

Second, FDA argues that Caronia’s holding should only apply to certain types of truthful and non-misleading off-label promotion, consistent with FDA policy as expressed in its guidance documents.  For example, off-label promotion in the context of a solicited request for such information is permissible while the unsolicited provision of such information is not.  The court responded by stating that Caronia applies “across the board to all truthful and non-misleading promotional speech.”  Id. at 51 (emphasis in original). 

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 found this argument “beside the point” since Amarin’s lawsuit concerned only the situation in which FDA prosecuted Amarin for misbranding based on its truthful and non-misleading speech.  The court stated that the “construction [of the misbranding provision in the FDCA 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.

Conclusion

There are several points we would emphasize, as we read the court’s lengthy opinion in Amarin:

• Although the court reached the merits in this case, the opinion reflects a ruling only on Amarin’s motion for preliminary injunction.  However, it does provide a great deal of insight into the court’s thinking on the matter. 
• The government has a number of options at this point, one of which is to file an appeal, for which it has 60 days to do so.  We cannot predict whether the government will appeal, cut its losses and settle with Amarin, or continue to defend itself as the litigation progresses.  The government’s next move may have a significant impact on this ruling.
• While this ruling in Amarin, coupled with the Second Circuit’s decision in Caronia, appears to foreclose FDA from prosecuting a pharmaceutical manufacturer for truthful and non-misleading off-label promotion, it is important to note that this precedent has only been established in the Second Circuit to date and there is considerable uncertainty as to how sister Circuits would rule if faced with the same set of facts. 
• Finally, the limitation of First Amendment protection to truthful and non-misleading speech is not to be missed.  Indeed, the court gave very practical advice to manufacturers 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.  [(Amarin at 53.)]

By Riëtte van Laack –

On August 5, 2015, FDA announced the availability of a guidance document regarding nanomaterials in food for animals.  The guidance contains no surprises as it is virtually identical to the draft guidance (based on the docket, it appears that FDA did not receive any comments to the draft guidance) and is in agreement with FDA’s guidance regarding use of nanomaterials in human food (see our previous post here).

At the outset, FDA clarifies that the guidance is applicable only to feed ingredients for which the size has been deliberately manipulated with the goal to produce specific effects.  Materials that naturally occur or naturally contain substances in nanoscale range or contain particles in nanoscale range as a result of conventional manufacturing processes are not within the scope of the guidance. 

FDA does not question the regulatory status of products that naturally contain nanosize substances and have already been determined to be generally recognized as safe (GRAS) or approved as a food additive.  However, FDA concludes that animal food ingredients that have been engineered to be nanosize are not GRAS and, therefore, will be food additives subject to premarket review and approval by FDA.  The guidance details FDA’s recommendations for a food additive petition for nanomaterial food ingredients.  Throughout the guidance, FDA encourages companies contemplating the use of nanomaterials in animal food to consult FDA.

By Jeffrey K. Shapiro & Jeffrey N. Gibbs –

The Office of Combination Products (OCP) was established in 2002 to improve the agency’s handling of combination products and also drug versus device classification decisions.  Unfortunately, it has become clear that more needs to be done.  FDA’s approach to these issues continues to slow technological innovation.

Senators Isakson, Casey and Roberts have introduced a reform bill called, “The Combination Product Regulatory Fairness Act of 2015” (S. 1767).  This bill is a good start, but more is needed.  This post will focus on reform of drug versus device classification decisions. 

For certain types of products, it can be a close question whether it is a drug or device under the statute.  This area of decision making by the OCP badly needs reform.

As the OCP reads the Food, Drug, and Cosmetic Act (FDCA), any product intended to diagnose, prevent or treat disease, or alter the structure or function of the body is presumptively a drug unless an applicant proves that it satisfies the “device exclusionary clause.”  This clause states that an article is a device if it “does not achieve its primary intended purposes through chemical action within or on the body of man … and … is not dependent upon being metabolized for the achievement of its primary intended purposes.”  Id., sec. 201(h).

Whether or not the OCP’s reading of the FDCA in this regard is plausible, there are important classes of products historically regulated as devices that have some degree of chemical action.  For example, many wound healing products fall in this category.  Various washes or skin care products with neutralizing or surfactant properties are another example.  Now, when a new product is presented, the OCP requires detailed information – within its 15-page limit – about the chemical action of each and every component and classifies the product as a drug if it cannot be proven that the exclusionary clause is satisfied. 

This approach leads to inconsistency with historical agency classification decisions, so that a product intended to compete with other devices is forced to undergo much more burdensome drug regulation.  OCP’s lack of transparency also means surprises for applicants, since they had expected – and reasonably so – that like products would be regulated in a like manner.  Furthermore, for many of these products, the drug regulatory framework is a bad fit and unnecessarily burdensome for the protection of public health.  In many instances, the more burdensome drug provisions mean that the company abandons the attempt to sell the product in the U.S.

The Isakson bill would create a procedure requiring the OCP to provide a scientific rationale for its conclusion that chemical action is responsible for achieving a product’s primary intended purpose, and would permit a sponsor the option to propose a study to resolve the issue.

This solution is not likely to yield good fruit.  It will not be difficult for the OCP to provide a rationale, even if supported by little science.  It often does so now.  Once the decision is made, with or without a required scientific rationale, it is difficult or impossible as a practical matter for the sponsor to challenge.  An appeal goes to the Office of Special Medical Programs (OSMP), where matters often languish without a decision for well past a year.  While OCP must decide in 60 days, OSMP has no deadline.  A lawsuit is likely to be prohibitively expensive for most sponsors, and represents even more years of delay.

Sponsors have always had the opportunity to provide study data to show that chemical activity is not responsible for the product’s primary purpose.  In our experience, and as shown by the Prevor litigation (see our previous posts here, here, and here), the OCP tends to apply narrow and stringent constructions on the data, with a bias toward concluding that the study does not exclude chemical action as playing a role in product performance.  Since the study must prove a negative, i.e., that chemical action does not play a role – or at least more than a minor role – it is easy for the OCP to dismiss almost any such study as insufficient.

The more formal opportunity to develop a study in the Isakson bill may make it possible to provide supporting data more efficiently, but is unlikely to resolve the problems identified above.  It also places quite a burden on a sponsor, requiring a study solely to address classification, even before undertaking additional studies to show that the product is safe and effective.

At a minimum, the burden of scientific proof should be reversed and placed upon the OCP.  That is, instead of the sponsor proving that there is no chemical action involved in achieving the product’s primary purpose, the OCP should not be permitted to classify a product as a drug unless it proves that a product claimed to be a device actually uses chemical (or metabolic) action as the primary mechanism for achieving the product’s primary purpose. 

More fundamentally, the problem with the Isakson bill on this point is that it applies a procedural solution to a substantive problem: the OCP’s construction of the governing statute.  A root cause solution to the problem does not require a new procedure; it requires a revision to the statute to shift the burden of proof and to require that the chemical or metabolic action be the primary mechanism for achieving the product’s primary purpose.

To be clear, we are not questioning the OCP’s good faith in its classification decisions.  The problem is that, as a practical matter, the OCP’s decisions are not yielding good outcomes from a public health perspective, and create confusion by being inconsistent with prior classifications.  The solution is to revise the statute to help direct the OCP’s energies in the right direction.

One final, somewhat technical, note:  The exclusionary clause in the device definition requires that chemical action not be required to achieve the products “primary purposes.”  The Isakson bill refers to the “primary purpose.”  This distinction, believe it or not, has been a subject of litigation.  The OCP, at least for a time, declared every possible purpose to be “primary” and thereby precluding device classification if any of them were achieved by chemical action.  It would be helpful to clarify it by striking the “s” and changing “primary purposes” to “primary purpose.” 

Or, even more helpfully, Congress could change “primary purposes” in the exclusionary clause to “intended use” which is the key phrase in the device definition.  No one, to our knowledge, has explained the why “intended use” is used in the body of the definition but “primary purposes” is used in the exclusionary clause.  This discrepancy seems to serve no purpose other than to stir up confusion.

By Alan M. Kirschenbaum –

Yesterday, CMS’s final Medicaid Drug Rebate Program rule arrived on the doorstep of OMB’s Office of Information and Regulatory Affairs (OIRA) for review under Executive Order 12866.  Under the Executive Order, OIRA ordinarily has 90 days to complete its review, with the possibility of one 30-day extension with the written approval of the Director of OMB.  Of course, OIRA may complete its review sooner.  The current Unified Agenda of Regulatory and Deregulatory Actions still identifies August 2015 as the expected time of publication, as it has since May.  Note that the expected “final action” date published in the regulatory agenda has been missed multiple times since CMS published the proposed rule in February 2012.  However, we can now be relatively confident that the final rule will be published within the next several months.  We will be watching for it and will keep our readers posted.

By Larry K. Houck –

Representatives Bill Johnson (R-Ohio) and Doris Matsui (D-California), members of the House Energy and Commerce Committee, introduced legislation in Congress on July 28th that seeks to curb teenage dextromethorphan (“DXM”) abuse by restricting its sale to individuals under 18 years old.  The DXM Abuse Prevention Act of 2015 (H.R. 3250) is similar to the Preventing Abuse of Cough Treatments Act of 2014 (H.R. 3969) that Rep. Johnson introduced in January 2014, which was last referred to the Subcommittee on Health in February 2014.  A post on the 2014 bill appeared here on February 5, 2014.

Representative Johnson observed that “[t]eens are taking large doses of cough and/or cold medicine to get high, largely because of its easy availability.”  Dextromethorphan is an antitussive (i.e., cough suppressant) found alone or in combination with other drugs in over 120 over-the-counter cough and cold products.  Dextromethorphan is not a federally-controlled substance, but the Drug Enforcement Administration (“DEA”) has noted that even though abuse is not exclusive to individuals in a specific age group, “its abuse by teenagers and young adults is of particular concern.”  Dextromethorphan, DEA Office of Diversion Control, March 2014.  A handful of states prohibit the sale of dextromethorphan to minors.

The DXM Abuse Prevention Bill would amend the Federal Food, Drug, and Cosmetic Act by:

• Prohibiting the sale of any drug containing dextromethorphan to individuals under 18 years old except with a valid prescription or for military personnel;
• Requiring retailers to verify that they are not selling dextromethorphan to individuals under 18 years old and to implement a verification system through an electronic point-of-sale prompt to verify age, employee training manuals and materials, sales approval by authorized employees, signs or other authorized measures;
• Providing an affirmative defense to retailers who check identification and reasonably conclude that the identification is valid and indicates that the customer is at least 18 years old;
• Creating the following penalties for age violations:  a warning for a first violation; civil penalties of up to $1,000 for a second violation, civil penalties of up to $2,000 for a third violation and civil penalties up to $5,000 for a fourth or subsequent violation;
• Prohibiting possession or receipt of unfinished dextromethorphan by any person not registered, licensed or approved under federal or state law to practice pharmacy, engage in “pharmaceutical production,” or manufacture or distribute drug ingredients;
• Prohibiting the distribution of unfinished dextromethorphan to unregistered or unauthorized persons; and
• Establishing a civil penalty of up to $100,000 for the unfinished dextromethorphan possession, receipt and distribution violations.

In determining civil penalty amounts for violations, the bill would require consideration of whether the retailer “has taken appropriate steps to prevent subsequent violations,” including establishing a documented training program for all employees who sell dextromethorphan.  The bill has received strong support by a number of anti-drug abuse, healthcare and industry organizations including the Consumer Healthcare Products Association, Drug Abuse Resistance Education (“D.A.R.E.”) and Partnership for Drug-Free Kids.  The bill was referred to the Committee on Energy and Commerce the day it was introduced.

By Riëtte van Laack –

On July 30, FDA announced the publication of a draft guidance titled “FDA’s Policy on Declaring Small Amounts of Nutrients and Dietary Ingredients on Nutrition Labels”.  The draft guidance addresses an apparent conflict between FDA’s compliance guidelines and FDA’s rounding rules for nutrition labeling.  The relevant regulations have been in effect for approximately two decades and the conflict is not new, so it is unclear what induced FDA to issue this guidance now.

So what is it all about?  The nutrition labeling regulations, 21 C.F.R. §§ 101.9(c)(1)-(8); 101.36(b)(2)(ii), specify how to declare nutrients and dietary ingredients.  Notably, the regulations specify the rounding of nutrients, e.g., the quantitative amount of total fat present at 5 g or less must be rounded to the nearest 0.5 increment.  The regulations also specify how FDA tests for compliance.  Paragraphs (g)(4)(ii) and (g)(5) of section 101.9 detail what is often referred to as the 20-20 rule.  Specifically, under the compliance provisions a product declaring the amount of a nutrient or dietary ingredient is misbranded if:

• The amount of a naturally present vitamin, mineral, protein, total carbohydrate, dietary fiber, other carbohydrate, polyunsaturated fat, monounsaturated fat or potassium is less than 80% of the declared value for that nutrient
• The amount of calories, sugars, total fat, saturated fat, trans fat, cholesterol, or sodium is more than 120% of the declared value for that nutrient.

For small amounts, however, it may not be possible to comply with the rounding requirements under 101.9(c)(1)-(8) and meet the compliance standard of 101.9(g), because the rounding may result in more than the permissible 20% deviation.  For example, if a food contains 0.70 g of saturated fat per serving, this amount would be declared as 0.5 g, but this declaration would not comply with § 101.9(g)(5) because 0.70 g is more than 20 percent in excess of 0.5 g. 

FDA advises that the label should declare nutrients and dietary ingredients in accordance with the rounding rules set forth in § 101.9(c)(1) through (8).  In cases that a conflict may arise between the rounding rules regarding the declaration of nutrients and the compliance requirements, FDA intends to use its enforcement discretion. 

FDA will evaluate whether it should change the nutrition labeling regulation (either the rounding rules or the compliance criteria) to address this potential conflict.

Although comments may be submitted at any time, to be considered in finalizing the guidance, they should be submitted by September 28, 2015.