By Wes Siegner –

FDA held a public hearing titled “Homeopathic Product Regulation” on April 20 and 21 of this year.  Now the FTC has announced that it will hold a “Workshop” to examine advertising for over-the-counter (OTC) homeopathic products on September 21. 

FDA’s Federal Register Notice for the hearing identified issues to be discussed that were careful to avoid indicating that may FDA intend to make significant regulatory changes for homeopathic products.  FTC’s Press Release was more direct, stating that “The workshop will cover topics including:

• A look at changes in the homeopathic market, its advertising, and what consumers know;
• The science behind homeopathy and its effectiveness;
• The effects of recent class actions against homeopathic product companies;
• The application of Section 5 of the FTC Act to advertising claims for homeopathic products; and
• Public policy concerns about the current regulation of homeopathic products.”

Bottom line, if the FTC holds homeopathic products to the same scientific standards that are applied to claims for other OTC products like dietary supplements, as the FTC appears inclined to do (see, for example here), few if any homeopathic products will pass the test.

The practice of homeopathy and the products this practice has inspired are a fascinating enigma to the uninitiated.  The pre- and post-regulatory history of homeopathy is too long and too complex to cover here, but for an excellent review of this history, read Dr. Susan White Junod’s “An Alternative Perspective: Homeopathic Drugs, Royal Copeland, and Federal Drug Regulation.” 

When attempting to regulate homeopathic preparations, the agencies are forced to address questions they never face with other regulated products, such as:  How does “like cure like”?  How does a substance diluted beyond detectable limits have curative powers?  How do you label a product when it contains ingredients that, after dilution, you cannot prove are in the product?  Nevertheless, over the past 30 years, we have seen a substantial growth in the number and variety of homeopathic products, and the size of the homeopathic market.  This growth is undoubtedly what has spurred the recent FDA and FTC interest in reexamining the regulation of homeopathic preparations.

Historically, regulators have accepted that homeopathic drugs, while presenting difficult questions and considerable skepticism with respect to efficacy, deserved regulatory leeway because of their safety.  This explains why FDA did not require proof of safety after the enactment of the Federal Food, Drug, and Cosmetic Act (FDC Act) in 1938, or proof of efficacy after the 1962 Kefauver-Harris Amendments to the FDC Act, and why the FTC has historically pursued only those homeopathic products, such as HCG, that are blatant frauds.  This permissive regulatory posture has allowed the market for safe, properly manufactured homeopathic products to expand as the public interest in nutrition and alternative therapies has grown.

The question now is whether this 70-plus year old climate of regulatory tolerance has ended, and whether one or both agencies will severely limit or perhaps close down the market for homeopathic products by applying regulatory standards that the practice cannot survive.

By Kurt R. Karst –      

It was just a few weeks ago that we noted in a post concerning FDA’s recently finalized guidance document on “Scientific Considerations in Demonstrating Biosimilarity to a Reference Product” that the Agency removed from the 2012 draft version of the document any requirement that the labeling of a biosimilar biological product licensed under PHS Act § 351(k) indicate that it is biosimilar to a reference product, and also to call out whether or not it is interchangeable with a reference product.  As we commented then, “[w]hile such designations may not have made a biosimilar feel like Hester Prynne, it does seem that mandating such terms be present may have led to some shunning in the marketplace that is today’s town green.”

It seems that AbbVie Inc. (“AbbVie”) – which, interestingly, starts with the letter “A” – took note of the Scarlet Letter change as well.  In a June 2, 2015 Citizen Petition (Docket No. FDA-2015-P-2000) that popped up on regulations.gov earlier this afternoon (June 3rd, the same day the Federal Circuit heard Oral Argument in the Sandoz-Amgen “patent dance” case – which you can listen to and read about here, here, and here), AbbVie requests FDA to require the approved labeling for biological products licensed under PHS Act § 351(k) to contain (if applicable) certain statements and descriptions that would differentiate biosimilars from their reference product counterparts.  Specifically, AbbVie wants biosimilar labeling to include:

A clear statement that the product is a biosimilar, that the biosimilar is licensed for fewer than all the reference product’s conditions of use (if applicable), and that the biosimilar’s licensed conditions of use were based on extrapolation (if applicable);

A clear statement that FDA has not determined that the biosimilar product is interchangeable with the reference product (if applicable); and

A concise description of the pertinent data developed to support licensure of the biosimilar, along with information adequate to enable prescribers to distinguish data derived from studies of the biosimilar from data derived from studies of the reference product.

Biosimilars, which came about with the March 23, 2010 enactment of the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), “are not generic drugs and should not be labeled like generic drugs,” says AbbVie in its petition.  Including in biosimilar labeling the items above “is necessary to enable rational and informed prescribing decisions regarding these complex products, to avoid potentially unsafe substitution of biosimilars and reference products, and to combat widespread misconceptions among prescribers about biosimilars and their relationship to reference products,” writes the company.  Furthermore, without such differentiating statements and description, “biosimilar labeling will not reflect the unique licensure provisions established by the BPCIA and will be materially misleading in violation of the FDCA and FDA regulations.”  And, in what might be a signal of future litigation, AbbVie alleges that FDA’s “about-face” reversing, without explanation, what the Agency proposed in the 2012 draft guidance is a violation of the Administrative Procedure Act (“APA”).  (Though, keep in mind that the last time Abbvie – then Abbott Laboratories – petitioned FDA on the BPCIA back in 2012 – concerning Reference Product Exclusivity – we though a lawsuit might be looming – see our previous post here.  That didn’t happen – at least it hasn’t yet.)

Pointing to FDA’s March 6, 2015 approval of BLA 103353 for Sandoz Inc.’s (“Sandoz’s”) ZARXIO (filgrastim-sndz), a biosimilar version of Amgen Inc.’s NEUPOGEN (filgrastim), AbbVie says that FDA long ago made the decision to apply the “same labeling” requirement under FDCA § 505(j) (applicable to ANDAs) for small-molecule generic drugs to biosimilars licensed under PHS Act § 351(k):

Publicly available materials from FDA’s review of Zarxio confirm that FDA followed a “same labeling” approach.  According to the action package for Zarxio, in November 2013, Sandoz proposed and FDA agreed that the biosimilar and reference product labeling “should be essentially the same.”  In February 2015, FDA provided the labeling for Neupogen to Sandoz for use “as a template” in developing the labeling for Zarxio, and instructed Sandoz to track any changes made to the Neupogen labeling and provide annotations to explain and justify any such changes.  That is essentially what FDA regulations require of applicants seeking to market generic drugs under section 505(j).  Indeed, in the media briefing announcing the approval of Zarxio, the Director of the Office of New Drugs in the Center for Drug Evaluation and Research (CDER) acknowledged that the “approach” taken with respect to the labeling for Zarxio was “not that different from the approach . . . taken in the past . . . for generic applications.”  Consistent with that approach, the approved labeling for Zarxio is nearly identical to that of Neupogen . . . .

According to AbbVie, however, applying the FDC Act’s ANDA “same labeling” approach to to biosimilars is legally unsound.  AbbVie then ticks off the reasons why such an approach doesn’t comport with the law. 

“First, a ‘same labeling’ approach is flatly inconsistent with the BPCIA, which—unlike the [ANDA] provisions in section 505(j)—includes no ‘same labeling’ requirement and recognizes that biosimilars are different from their reference products. . . .” (Emphasis in original).  Here, AbbVie compares and contrasts the BPCIA and the FDC Act, noting, among other things, that the BPCIA specifically amended the FDC Act (at FDC Act § 505B, concerning required pediatric studies) to provide that a non-interchangeable biosimilar biological product “shall be considered to have a new active ingredient” (at least for purposes of FDC Act § 505B). 

“Second, a ‘same labeling’ approach to biosimilars would result in labeling that omits material information necessary for safe and informed prescribing, and would exacerbate, rather than dispel, misconceptions among prescribers regarding biosimilars.”  Here, AbbVie argues that applying a “same labeling” approach to biosimilars violates the FDC Act’s misbranding and misleading labeling provisions at FDC Act §§ 502(a) and 201(m), respectively.

Third, AbbVie argues that “FDA has not provided the reasoned explanation required by the APA for its decision to abandon the approach taken in the Draft Scientific Guidance, which stated that the labeling of a biosimilar product should disclose that the product is a biosimilar, the scope of its approval, and whether it has been found to be interchangeable, on the ground that this information is ‘necessary’ for informed prescribing.”  Going through the record of FDA meetings and comments leading up to and on the draft guidance, AbbVie asserts that “FDA’s decision to reverse course and adopt a same labeling approach for biosimilars is arbitrary and capricious.”

AbbVie’s petition includes a certification under FDC Act § 505(q), which was made applicable to petitions affecting pending Section 351(k) biosimilar applications under the 2012 FDA Safety and Innovation Act.  This is, by our count, the second citizen petition involving the BPCIA containing such a certification.  FDA denied the first 505(q) biosimilar petition earlier this year (see our previous posts here and here).  If FDA tags AbbVie’s petition as a 505(q) petition – which seems probably given the likley pending status of Section 351(k) applications at FDA that could be affected by the petition – then we can expect some sort of response within 150 days.

By Kurt R. Karst –      

Here we are . . . on the eve of Oral Argument before the U.S. Court of Appeals for the Federal Circuit in a dispute over the applicability and correct interpretation of various provisions of the the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).  The dispute comes in the context of Sandoz Inc.’s (“Sandoz’s”) ZARXIO (filgrastim-sndz), a biosimilar version of Amgen Inc.’s (“Amgen’s”) NEUPOGEN (filgrastim) (BLA 103353) that FDA licensed on March 6, 2015 (BLA 125553).  Things have been pretty quiet now for a couple of weeks.  Perhaps folks are lacing up their shoes and doing some stretching before the Big Dance.  Regardless, anticipation is quietly growing; and no matter what dance style you prefer – the Amgen Waltz, or the Sandoz Shuffle – you’ll be waiting with bated breath for the Federal Circuit’s ruling.  Of course, no matter how the Federal Circuit rules, it’s highly unlikely to be the end of the party.  The dispute will almost certainly end up on the steps of the U.S. Supreme Court.  But that Court may not take up an appeal, leaving the Federal Circuit’s ruling intact.  Thus, June 3, 2015 will mark an important milestone in the young life of the BPCIA. 

We won’t repeat all of the details of the case here, as we’ve posted on the case several times before (here, here, here, and here).  But briefly, the case is before the Federal Circuit after Amgen appealed a March 19, 2015 decision from the U.S. District Court for the Northern District of California holding that, among other things, the BPCIA’s reticulated information exchange and patent resolution procedures are not mandatory for Section 351(k) biosimilar applicants, and that the plain language of the BPCIA allows for the statutory 180-day notice of commercial marketing to come well before the licensure of a Section 351(k) application.

In early May 2015, the Federal Circuit may have tipped its hand on the the merits of the case when the Court issued an Order granting Amgen’s Emergency Motion for an Injunction Pending Appeal.  That Order threw a wrench in Sandoz’s planned launch of ZARXIO.  The Federal Circuit also directed Amgen and Sandoz to respond concerning what amount of a bond, if any, should be posted for each day that the injunction is in place.  Sandoz promptly filed its Response, saying that a “substantial bond should be required to ensure that Sandoz can be fully compensated if it later is determined that the injunction was improvidently granted.”  How much is “substantial”?  About $180 million!  According to Sandoz:

[T]he Court should require Amgen to post a bond in a total amount that represents $460,000 per day multiplied by the maximum number of days this Court anticipates the injunction may be in place.  Although Sandoz hopes a decision will issue quickly, it respectfully requests a bond amount calculated from May 11, 2015, until one year from the date of oral argument (June 3, 2016) to ensure that it is adequately protected.  Such a bond would total $179.4 million.  In addition, for whatever time period the Court uses to calculate the lump sum total of the bond, Sandoz requests that the Court also order that Amgen augment the bond amount by $3.22 million per week (7 times $460,000) thereafter, if the injunction remains in place beyond what the Court anticipates.

Amgen doesn’t agree.  In Amgen’s Response, the company says that Sandoz’s number is “inflated” and that Sandoz “wildly overstates” the bond needed to protect the company from the effects of a later-vacated injunction.  Among other things, Amgen says that 390 days (i.e., from and including Monday, May 11, 2015, to and including Friday, June 3, 2016) is far too long a period.  “In recent cases with expedited briefing, as is the case here,” notes Amgen, “the Court’s average time from oral argument to an opinion on the merits was 58 days and the median time was 61 days.   Thus, the Court should not order a bond based on a 390-day calculation.” 

So how much of a bond would Amgen propose?  Preferably, nothing.  According to Amgen:

Given that ZARXIO® is a new product, that the injunction is expected to be short, and that Amgen has sufficient resources to pay any damages award, the Court could fairly conclude that no bond is needed.  If the Court is inclined to order Amgen to post a bond, however, Amgen submits the bond should reflect the revenue Sandoz forecasts that it would have received during the injunction period.

Amgen's proposed bond amount is redacted from the company's brief.  The Federal Circuit has thus far remaind mum on the bond issue. 

Moving up the Eastern Seaboard, to the U.S. District Court for the District of Massachusetts, there’s the ongoing case over Celltrion, Inc.’s (“Celltrion’s”) and Hospira, Inc.’s (“Hospira’s”) biosimilar version of Janssen Biotech, Inc.’s (“Janssen’s”) REMICADE (infliximab).  As we previously reported, that case raises some of the same issues currently before the Federal Circuit in the Sandoz-Amgen dispute.  That court docket hasn’t seen a lot of action as of late, except for a May 20, 2015 Memorandum of Law from Janssen (and New York University) in further support of their Motion for Partial Summary Judgment and a Preliminary and Permanent Injunction (and in opposition to Celltrion’s/Hospira’s Cross-motion for Partial Summary Judgment).  In that brief, Janssen argues that the statutory notice of commercial marketing from Celltrion is ineffective because it occurred before any biosimilar licensure, and that Janssen is entitled to a permanent injunction requiring Celltrion/Hospira to comply with the BPCIA’s 180-day notice requirement.

By David C. Gibbons –

In a letter sent to Acting FDA Commissioner Ostroff on May 27, 2015, the House Committee on Energy and Commerce (“EC Committee”) informed FDA that it is examining FDA’s “policies and practices regarding the use and publication of untitled letters, including whether such policies and practices are consistently fair, effective, and efficient in gaining compliance.”

Two types of advisory actions taken by FDA include Warning and Untitled Letters.  FDA Warning Letters (“WLs”) are issued by the Agency for violations of the Federal Food, Drug, and Cosmetic Act that, if not promptly and adequately corrected, may lead to enforcement action.  FDA’s Regulatory Procedures Manual (“RPM”) makes it clear that WLs are “informal and advisory.  [They] communicate[] the agency’s position on a matter but [do] not commit FDA to taking enforcement action.”  FDA, Regulatory Procedures Manual, Chapter 4, 2-3 (July 2012).  Untitled Letters (“ULs”) issued by FDA are for violative conduct that does not reach the same level of regulatory significance as Warning Letters.  Id. at 33. 

FDA policy on public dissemination of WLs issued to individuals or firms states that all FDA-issued WLs should be posted on its internet page once a redacted version has been made available by FDA’s Division of Freedom of Information.  Id. at 22.  Conversely, FDA’s RPM does not stipulate a policy or contain any direction on if, when, or how ULs should be disseminated publicly.

In its letter to FDA, the EC Committee related its findings that FDA Centers have been inconsistent in which ULs are posted and when.  The letter describes examples of the various Centers’ policies regarding posting ULs:

• CDER: posts ULs related to advertising and promotional labeling;
• CFSAN: posts ULs related to violations from manufacturing controls or labeling that do not meet the threshold of regulatory significance for a WL, or that are issued to internet websites;
• CVM: posts all ULs issued by the Center but not by field offices.

The broad concerns expressed by the EC Committee include the apparent decentralized and inconsistent practices with ULs, especially as it concerns public dissemination.  The EC Committee noted that FDA will post some ULs quickly on its website; however, other ULs become publicly available only after FDA has received multiple requests under the Freedom of Information Act (“FOIA”).  The EC Committee also noted concerns regarding the need for FDA to be “more thoughtful about the consequences from the impact of both disclosure and timing of [ULs] on FDA-regulated companies . . . .” 

To this point, the EC Committee relates a case where FDA issued a UL to a publicly-traded company, a year after an inspection of the company, noting a violation based on information collected during the inspection.  The FDA inspection a year earlier had resulted in a No Action Indicated classification, and no FDA 483 had been issued.  FDA posted the UL on its website just three business days after sending it to the company.  The UL was posted during a business day, leading to a tumultuous day of trading that ultimately saw the company’s stock drop 36% in value.  Additionally, a shareholder lawsuit related to the UL was filed against the company.

The EC Committee noted that FDA had posted the UL during the business day when it would affect the market, and before the company had an opportunity to work with FDA to address its concerns.  The EC Committee further noted that a year after the UL was issued, FDA issued a draft guidance document governing the firm’s product and the basis for its conclusion in the UL, using similar language in FDA’s post-UL correspondence with the company.

To further the EC Committee’s “examination,” it requested that FDA provide written responses to numerous questions regarding FDA’s policies and practices concerning ULs.  Some questions concern the criteria used by FDA centers to issue and post ULs as well as the apparent inconsistency among FDA centers; to this end, the EC Committee’s letter requested an explanation as to “why FDA does not have consistent policies and practices among its centers for publishing untitled letters.”  The EC Committee goes on to ask whether FDA uses a numerical threshold of FOIA requests as a basis for posting a UL on its website and, if so, to identify the threshold.  The EC Committee asks whether FDA’s practice of posting ULs issued to publicly-traded firms could be modified to posting after the trading session has ended and, if such practice cannot be modified, to explain why.  FDA was also asked whether its approach relating to the issuance of ULs is the most efficient in obtaining compliance by the firms it regulates.

One of the more interesting questions to which FDA’s response is being sought likely relates to the stated example mentioned above and concerns whether FDA uses ULs as “a way to announce new regulatory approaches or policies.”  We know that many readers of this blog have just responded with an emphatic “YES!” to this question without any need to see FDA’s response.  We previously blogged about how this was true years ago regarding FDA’s policy on risk communication in promotional activities carried out using social media.  In addition, FDA’s Draft Guidance: Presenting Risk Information in Prescription Drug and Medical Device Promotion, issued in 2009, is an accumulation of issues previously cited in Untitled Letters (see our previous post here).

FDA’s written response to the EC Committee’s request is due no later than June 10. 

It’s rare that Congress reproaches FDA in the manner done so in the EC Committee letter.  But in the case of FDA’s practices with respect to the issuance and public dissemination of ULs, there are many out there who believe it is well deserved.

By Ricardo Carvajal - 

FTC updated a Q&A on its Endorsement Guides, which set forth administrative interpretations of relevant provisions of the FTC Act as they apply to the use of endorsements and testimonials in advertising (the Endorsement Guides were last updated in 2009 – see out posting on that development here).  The Q&A, titled The FTC’s Endorsement Guides: What People Are Asking, has been expanded to address certain topics in more detail.

For example, in a section that guides endorsers on how to disclose the fact that they have been given something for their endorsement, the Q&A addresses uploads to YouTube and the use of Twitter:

If I upload a video to YouTube and that video requires a disclosure, can I just put the disclosure in the description that I upload together with the video?

No, because it’s easy for consumers to miss disclosures in the video description. Many people might watch the video without even seeing the description page, and those who do might not read the disclosure. The disclosure has the most chance of being effective if it is made clearly and prominently in the video itself. That’s not to say that you couldn’t have disclosures in both the video and the description.

What about a platform like Twitter? How can I make a disclosure when my message is limited to 140 characters?

The FTC isn’t mandating the specific wording of disclosures. However, the same general principle – that people get the information they need to evaluate sponsored statements – applies across the board, regardless of the advertising medium. The words “Sponsored” and “Promotion” use only 9 characters. “Paid ad” only uses 7 characters. Starting a tweet with “Ad:” or “#ad” – which takes only 3 characters – would likely be effective.

Questions to FTC about the Endorsement Guides can be submitted to endorsements@ftc.gov, for possible inclusion in future updates to the Q&A.

By Kurt R. Karst –

[FDA’s] ultimate conclusion that Vascepa, a drug “no active ingredient of which . . . has been approved” in a previous NDA, was not entitled to exclusivity, is contrary to the statute’s plain meaning.  Rather than explaining this discrepancy, the administrative decision only adds to the problem by emphasizing the divergence between the Agency’s regulatory inquiry and the statutory requirement.  Whether the problems with the FDA’s decision are characterized as failures under Chevron step one, step two, or the APA’s requirement of reasoned decision-making, the Agency’s decision must be set aside.

That’s the bottom line in a 40-page decision handed down by Judge Randolph D. Moss of the U.S. District Court for the District of Columbia on May 28, 2015 in a lawsuit lodged by Amarin Pharmaceuticals Ireland Limited (“Amarin”) against FDA on February 27, 2014 challenging the Agency’s February 21, 2014 Exclusivity Determination that Amarin’s VASCEPA (icosapent ethyl) Capsules, 1 gram, which FDA approved under NDA No. 202057 on July 26, 2012, is not eligible for 5-year New Chemical Entity (“NCE”) exclusivity.

In ruling for Amarin, Judge Moss granted Amarin’s Motion for Summary Judgment and denied FDA’s Cross-Motion for Summary Judgment.  (Amarin’s Reply/Opposition Brief and a Supplemental Submission from FDA are available here and here.)  (As an aside, Amarin is also challenging FDA in court over the company’s First Amendment right to distribute information about unapproved uses of VASCEPA – see here.)

As we previously reported, FDA’s rationale for denying NCE exclusivity for VASCEPA – and instead granting a period of 3-year new clinical investigation exclusivity – was that eicosapentaenoic acid (“EPA”), “the single active moiety in Vascepa, was also an active moiety contained in another, previously approved drug, Lovaza (omega-3-acid ethyl esters) Capsules (Lovaza).”  More specifically, FDA ruled that:

In cases where at least part of the mixture is well characterized and some components of the mixture that are consistently present and active are identifiable or have been identified, an approach in which the mixture is identified as both the active ingredient and the active moiety appears inconsistent with the definition of active moiety as a “molecule or ion. . . responsible for the physiological or pharmacological action of the drug substance.”  The approach that is the most consistent with the relevant definitions, facts, and policies present in this case is one in which the entire mixture is the single active ingredient, but that active ingredient may contain more than one component active moiety.  This approach recognizes that there can be a “one-to-many” relationship between the active ingredient and its component active moieties.

FDA’s Exclusivity Determination then laid out three criteria for when the Agency will consider certain component molecules of a naturally derived complex mixture to be previously approved active moieties for the purpose of determining a subsequent drug’s eligibility for NCE exclusivity:

(1) Characterization: The previously approved mixture has been characterized such that one or more specific molecules in the mixture have been identified;

(2) Consistent Presence: The evidence demonstrates that one or more specific molecules identified in criterion 1 are consistently present in the mixture; and

(3) Activity: The evidence demonstrates that the molecule or molecules identified in criteria 1 and 2 are responsible at least in part for the physiological or pharmacological action of the mixture, based on a finding that they make a meaningful contribution to the activity of the mixture.

This 3-part test did not sit well with Judge Moss, however, who says in his Opinion under a Chevron Step One analysis that FDA’s test “suffers from at least three difficulties”:

First, the contention that “active ingredient” means “active moiety” is at odds with the canon against surplusage. . . .  If “active ingredient” means “active moiety,” and “active moiety” is defined as a molecule excluding (among other things) those portions that render the molecule a salt or an ester, 21 C.F.R. § 314.108(a), there are no circumstances in which the parenthetical clause would have any coherent meaning. . . .  The statutory provision includes two references to the term “active ingredient.”  Defining either to mean “active moiety” would render the statute incoherent; reading both to mean “active moiety”—as required to maintain any semblance of consistency in statutory interpretation—results in a mind-numbing muddle.

The second problem with the Agency’s interpretation is that it requires the Agency to interpret the phrase “active ingredient” differently for purposes of the ANDA and exclusivity provisions of the Act. . . .  Absent good reason, it is safe to assume that Congress intended “active ingredient” to have the same meaning when it used that term in different, but closely related, places in the same statute. . . .  [FDA] argues before this Court that the exclusivity and ANDA provisions serve different purposes, because the exclusivity provision is designed to promote novelty while the ANDA provisions require the FDA to ascertain whether generic drugs are safe and effective.  But . . . while the two provisions do, of course, play different roles, they are part of a unified statutory scheme intended to strike a balance between fostering innovation and promoting access to affordable medications.

The third (and related) difficulty with the Agency’s approach is that its focus on a drug component that was never the subject of the FDA’s approval is also inconsistent with the statutory text, which considers whether the new drug contains an “active ingredient” “which has been approved in [a prior] application.”  21 U.S.C. §§ 355(c)(3)(E)(ii), 355(j)(5)(F)(ii) (emphasis added).  Under the FDA’s approach, the relevant “active moieties” are not even identified until the Agency acts on an application for exclusivity. . . .  The FDA’s approach fails to make temporal or substantive sense of the statutory reference to an “active ingredient” “which has been approved,” and thus, once again, is at odds with the statute.  [(Emphasis in original)]

Although Judge Moss could have ended his analysis at Chevron Step One, he continued on to Step Two, writing that FDA’s interpretation also fails there:

Focusing on the analysis actually contained in the FDA’s administrative decision, as opposed to the arguments made by counsel, it is apparent that the decision is both procedurally and substantively flawed.  Most notably, the administrative decision does not offer—or even attempt—any reasoned explanation for how its application of the regulatory focus on “active moiety” can be reconciled with the statutory focus on “active ingredient.” To the contrary, the decision affirmatively embraces the notion that “active ingredient” and “active moiety” have different meanings. . . .  The decision thus concedes that Vascepa’s “active ingredient”—EPA—is not an “active ingredient” in Lovaza . . . but because it concluded that EPA is an “active moiety” in both Vascepa and in Lovaza’s single-active-ingredient mixture, it denies exclusivity. 

The decision’s sole acknowledgment of the apparent divergence between the statutory and regulatory inquiries is both minimal and confounding.  In the course of its 24-page, single spaced administrative decision, the FDA refers to the statutory text only twice—in a background recitation of the governing legal framework, and in a parenthetical in a footnote.  [(Emphasis in original)]

With respect to that footnote – footnote 31, which quotes from FDA’s 1994 Final Rule promulgating, among other things, regulations governing 5-year NCE exclusivity – Judge Moss says that it conflicts with other portions of FDA’s February 21, 2014 Exclusivity Determination: “[A]lthough the footnote appears to treat the phrases ‘active ingredient’ and ‘active moiety’ as synonymous for purposes of the five-year exclusivity determination, the remainder of the [Exclusivity Determination] is emphatic in concluding that the terms have distinct meanings, at least in the context of naturally derived mixtures.”

Moreover, writes Judge Moss:

[A]lthough an administrative decision can rely on an agency’s prior consideration of an issue, the FDA has never addressed why the phrase “active ingredient” should be given different meanings in different provisions of the Act, let alone explained how the regulatory focus on “active moiety” can apply where the “active ingredient” and “active moiety” refer to different substances.  The Agency makes no attempt to explain how its approach furthers Congress’s purposes or is otherwise a reasonable policy choice, especially in light of the clear interest in providing notice to potential innovators of the exclusivity to which they might eventually be entitled.  And the FDA’s regulations do not provide any further gloss on this point.  The decision to identify a mixture’s “active moiety” based on information available at the time the FDA evaluates a subsequent drug’s request for exclusivity, rather than at the time drug was “approved,” is similarly unexplained, and . . . runs counter to the exclusivity provision’s purpose of incentivizing innovation.

The decision from Judge Moss ends a winning streak for FDA on legal challenges involving Hatch-Waxman matters, which we posted on earlier today.

Amarin commented in a press release that the company “believes based on the court's ruling that Vascepa is entitled to five-year marketing exclusivity starting from FDA's approval of Vascepa in July 2012, thus extending NCE exclusivity through July 25, 2017.”  The ruling also confirms, said Amarin, “that acceptance by FDA of [ANDAs] for generic versions of Vascepa is not permitted until July 2016.  The related statutory 30-month stay triggered by patent litigation following generic application resubmissions in July 2016 would then expire in January 2020.”  According to FDA's Paragraph IV Certifications List, the first ANDA submitted to FDA containing a Paragraph IV certification was received as of January 15, 2013.  FDA has 60 days to file an appeal to the U.S. Court of Appeals for the District of Columbia Circuit.

By Kurt R. Karst –  

Like rapid gunfire (judicial style), two courts – the U.S. District Court for the District of Maryland and the U.S. District Court for the District of Columbia – issued decisions on May 27, 2015 within hours of one another denying challenges to FDA’s decisions to approve generic versions of Otsuka Pharmaceutical Co.’s (“Otsuka’s”) ABILIFY (aripiprazole) and Spectrum Pharmaceuticals, Inc.’s (“Spectrum’s”) FUSILEV (levoleucovorin) for Injection with labeling omitting uses protected by separate periods of 7-year orphan drug exclusivity.  Labeling carve-outs, which we track on our Generic Drug Labeling Carve-Out Scorecard, seem to be all the rage these days (as well as controversies involving orphan drug exclusivity).  And, as Bob Pollock recently intimated on the Lachman Consultants Blog, labeling carve-out issues and controversies will likely continue to arise in the forseeable future as brand-name companies take aim at would-be generic competitors.

As we previously reported,  on December 12, 2014, FDA approved Supplemental NDAs for ABILIFY for the treatment of pediatric Tourette’s Disorder and later granted Otsuka a period of orphan drug exclusivity expiring on December 12, 2021.  Otsuka ultimately contended that as a result of this period of exclusivity, the company is entitled to a 7-year period of total market exclusivity such that FDA is precluded from approving any generic version of ABILIFY for any of its FDA-approved uses (absent a license from Otsuka) until December 12, 2021.  

Otsuka’s contention primarily relies on FDC Act § 505A(o), titled “Prompt approval of drugs under section 355(j) when pediatric information is added to labeling,” and also known as the “Anti-Glucophage  Provision” (or Section 11 of the Best Pharmaceuticals for Children Act).  That provision states:

(1) General rule – A drug for which an application has been submitted or approved under section 355(j) of this title shall not be considered ineligible for approval under that section or misbranded under section 352 of this title on the basis that the labeling of the drug omits a pediatric indication or any other aspect of labeling pertaining to pediatric use when the omitted indication or other aspect is protected by patent or by exclusivity under clause (iii) or (iv) of section 355(j)(5)(F) of this title.

(2) Labeling – Notwithstanding clauses (iii) and (iv) of section 355(j)(5)(F) of this title [(concerning 3-year new clinical investigation exclusivity)], the Secretary may require that the labeling of a drug approved under section 355(j) of this title that omits a pediatric indication or other aspect of labeling as described in paragraph (1) include—

(A) a statement that, because of marketing exclusivity for a manufacturer—

(i) the drug is not labeled for pediatric use; or

(ii) in the case of a drug for which there is an additional pediatric use not referred to in paragraph (1), the drug is not labeled for the pediatric use under paragraph (1); and

(B) a statement of any appropriate pediatric contraindications, warnings, or precautions that the Secretary considers necessary.

It is against this backdrop that Otsuka, on March 24, 2015, initially filed a Complaint and Motion for Summary Judgment against FDA in the U.S. District Court for the District of Maryland challenging certain FDA determinations with respect to the Supplemental NDA approval for pediatric Tourette’s Disorder.  That litigation later transformed into a Motion for a Temporary Restraining Order and/or Preliminary Injunction against FDA to stay the approval of ANDAs for generic versions of ABILIFY (and to prevent any further approvals), which occurred on April 28, 2015 at around the time FDA issued a Letter Decision  addressing the exclusivity issues raised in the case.  On April 29, 2015, Judge George J. Hazel denied Otsuka’s Motion for Temporary Restraining Order and/or Preliminary Injunction.  The case then moved into the summary judgment phase, with Cross-Motions for Summary Judgment from FDA (here), Otsuka (here), and several Intervenor-Defendants (here). 

On May 27, 2015, Judge Hazel denied Otsuka’s Motion for Summary Judgment and granted FDA’s and Intervenor-Defendants’ Motion for Summary Judgment.  After concluding that the appropriate level of deference afforded to FDA in the case is that provided by framework laid out by the U.S. Supreme Court in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842 (1984), Judge Hazel delved into the two-step analysis required under Chevron.  Under Chevron Step One, the District Court concluded that FDC Act § 505A(o) does not speak directly to the issue in the case:

[W]hen the Court considers the text of section 355a(o), as well as its legislative history, the Court cannot conclude that section 355a(o) clearly proscribes FDA’s ability to omit from a generic’s label information pertaining to pediatric orphan drug exclusivity.  Thus, if the Court’s role here was simply to “interpret and apply the statute to resolve a claim,” the Court would, without further analysis, side with the interpretation of FDA and Defendant-Intervenors. . . .  However, given 355a(o)’s silence on orphan drug exclusivity, the Court cannot find that Congress’s intent in enacting 355a(o), as it relates to its impact on orphan drugs, if any, is so clear as to completely foreclose Otsuka’s interpretation.  The Court must therefore proceed to Chevron step two.

Moving on to Chevron Step One, the District Court ruled that FDA’s interpretation of FDC Act § 505A(o) is reasonable:

The Court therefore finds that the FDCA, its legislative history, the case law, and FDA’s regulations all support the FDA’s construction of the statute that allows it to carve out an indication or other information from ANDA labeling when that indication or information is protected by orphan drug exclusivity as long as the ANDA with that carved out label remains safe and effective for the remaining non-protected conditions of use.  To be sure, Otsuka’s reading of section 355a(o) would nullify the limitation expressly written into section 360cc – that the exclusivity is given to a drug “for [the orphan] disease or condition” – and instead treat the orphan drug exclusivity as extending to the drug for any and all diseases and conditions, directly contradicting that provision’s text and the Fourth Circuit’s holding in Sigma-Tau.  If that was Congress’s intent, it is certainly left unclear by the statute and FDA’s interpretation is reasonable.

It’s unclear at this juncture whether or not Otsuka will appeal Judge Hazel’s decision to the U.S. Court of Appeals for the Fourth Circuit.

The second decision handed down on May 27, 2015 was from the U.S. District Court for the District of Columbia in a challenge from Spectrum to FDA’s February 24, 2015 denial of a Citizen Petition (Docket No. FDA-2014-P-1649) and March 9, 2015 approval of Sandoz Inc.’s (“Sandoz’s”) ANDA 203563 for a generic version of FUSILEV with labeling that omits certain information protected by orphan drug exclusivity. 

FUSILEV is approved to treat three conditions, two of which relate to counteracting the effects of the drug methotrexate, and one of which involves palliative treatment of patients with advanced metastatic colorectal cancer that is protected by orphan drug exclusivity until April 29, 2018.  Spectrum initially filed a Complaint and a Motion for Temporary Restraining Order and/or Preliminary Injunction alleging that FDA’s approval of ANDA 203563 in certain vial sizes for the unprotected methotrexate uses and with labeling omitting the orphan drug exclusivity-protected colorectal cancer use violated the law and the company’s orphan drug exclusivity.  (Sandoz, represented by Hyman, Phelps & McNamara, P.C., entered the case as an Intervenor-Defendant.) 

Spectrum’s Motion for Temporary Restraining Order was denied in an April 29, 2015 Minute Order from Judge Royce C. Lamberth, and a Hearing on Spectrum’s Motion for Preliminary Injunction was set for May 18, 2015.  The parties subsequently filed Cross-Motions for Summary Judgment.  According to Spectrum:

This case presents the question of whether FDA can lawfully approve a generic drug in a strength that is appropriate only for an indication that has been “carved out” based on the reference listed drug’s Orphan Drug Act exclusivity.  FDA has argued that it can do so.  But in order to justify its conduct here, FDA turned a blind eye to the requirements of the Orphan Drug Act, violated clear procedural mandates in the [FDCA] relating to drug shortages, and engaged in an abrupt departure from two of its own longstanding positions.  In violation of the FDCA and its own regulations, FDA has also taken affirmative steps to expedite the approval of a generic drug for the express purpose of facilitating the use of that drug in an unapproved “off-label” indication.  FDA’s conduct effectuates an unlawful labeling carve-out and therefore is arbitrary, capricious, and unlawful under the Administrative Procedure Act (“APA”). 

In a May 27, 2015 Memorandum Opinion (currently under seal) and Order, Judge Lamberth granted FDA’s and Sandoz’s Motions for Summary Judgment and denied Spectrum’s Motions for Preliminary Injunction and Summary Judgment.

By Douglas B. Farquhar –

When plaintiffs’ attorneys seek to recover damages because of alleged frauds committed on the federal government – obtaining massive attorneys’ fees and whistleblower bounties for doing so – they frequently argue that no claim is untimely, because of the wars in Iraq and Afghanistan.  It’s like the character in the old Dick Tracy comic strip who shouts, “Hold everything,” and time stands still, so the requirement to file a lawsuit within three years or ten years never applies.  Earlier this week, the Supreme Court held that the “Hold everything” moment is as fictitious as the comics, if not as funny.

The decision was issued in a case with a complicated procedural history brought under the Federal False Claims Act (FCA), which we have previously blogged about here, here, and here.  Under the statute, a plaintiff with previously undisclosed relevant information can file a lawsuit, on behalf of the United States, against companies or individuals who have presented false or fraudulent claims for payment to the federal government, or who have caused those claims to be presented.  The statute applies gargantuan penalties against wrongdoers, and encourages whistleblowers – and their attorneys – to come forward and file the lawsuits (under seal, pending a government review and investigation) by offering attorneys’ fees and a huge percentage of the damages secured (between 15 and 30 percent, depending on the circumstances).  Claims filed under the FCA have netted the federal government tens of billions of dollars in the last decade, and have spawned a plaintiffs’ Bar that does nothing but represent whistleblowers, called “relators” or “qui tam” plaintiffs who sue on behalf of the federal government.

As with nearly all statutes that provide for a civil recovery of damages, the FCA contains a statute of limitations, which requires the lawsuit to be filed within six years of a violation, or within three years after the government should have known about the violation (but in no event longer than ten years).  So, when the plaintiffs’ Bar and the government attorneys come demanding, the defense Bar has generally tried to limit damages to six years prior to the suit being filed (if the conduct has continued into that period) or to argue that the claims are time-barred because the six- or ten-year period expired.

In response, we frequently hear from the plaintiffs’ Bar that claims are not so limited, or barred, because the United States has been at war with Iraq since 2002, and the hostilities have not been completed there.  They rely on the Wartime Suspension of Limitations Act (“WSLA”), originally enacted after World War I to enable the government to concentrate on battles during wars and worry about investigating and prosecuting fraud later.  In the case that led to this week’s Supreme Court decision, a plaintiff brought a case relating to alleged fraud and misrepresentation in the provision of water purification services for U.S. forces in Iraq.  The complicated procedural history of the case led to an argument from defendants that most of the claims were time-barred.  The district court agreed, but the Fourth Circuit reversed and held that the statute of limitations stopped running from 2002 to the point that the lawsuit was filed (2012) due to the ongoing hostilities. 

The Supreme Court agreed with the district court, in a brief and tantalizing unanimous opinion authored by Justice Alito.  (Among other things, Justice Alito wrote, in criticizing a party’s interpretation of the term “pending” in the FCA, that, its interpretation would mean that Marbury v. Madison, a seminal case decided in 1803, is still “pending,” and, “So is the trial of Socrates.”)  The Court held that the WSLA suspends – or tolls – the statute of limitations only for criminal offenses against the United States involving fraud or attempted fraud against the federal government.  Because the claims of fraud under the FCA were civil, the WSLA did not apply.

One arrow removed from the quiver of the plaintiffs’ Bar.

By Kurt R. Karst –      

We like simplicity.  After all, it is, as Leonardo da Vinci reportedly once said, “the ultimate sophistication.”  We also like simple FDA-related legislation; but that’s not something we see all too often.  (We also don’t often see legislation addressing Prescription-to-Over-the-Counter (“Rc-to-OTC”) switches.)  Last week, however, a bill was introduced in the U.S. Senate by Senators Kelly Ayotte (R-NH) and Cory Gardner (R-CO) – S. 1438, the Allowing Greater Access to Safe and Effective Contraception Act – that provides an elegant remedy to a perceived problem.  (Though not eveyone supports the legislation – see here.)  As explained in a press release announcing the introduction of S. 1438:

The FDA has found a number of contraceptives to be proven safe and effective at preventing pregnancies and managing certain health conditions.  However, in order to access safe and effective contraceptives designed for routine use, currently a woman must visit her health care provider to receive a prescription.  The Allowing Greater Access to Safe and Effective Contraception Act would encourage manufacturers of routine-use contraceptives to file an application with the FDA to switch their products from prescription to OTC.  This legislation would not interfere with the FDA’s current process for determining safety and efficacy, maintaining FDA scientists’ and experts’ authority to make the final decision on whether a contraceptive should be made available OTC.

So what does the bill say, specifically?  Here are the few lines relevant to the FDC Act (Another section of S. 1438 would repeal the Affordable Care Act’s restriction on the use of health, medical and flexible savings accounts to buy OTC drugs without a prescription.):

(a) PRIORITY REVIEW OF APPLICATION.—Thc Secretary of Health and Human Services. . . shall give priority review to any supplemental application submitted under [FDC Act § 505(b)] for a contraceptive drug, provided that—

(1) the supplemental application is with respect to a drug intended for routine use; and

(2) if the supplemental application is approved, with respect to individuals aged 18 and older, such drug would not be subject to [FDC Act § 503(b)(1) concerning prescription status].

(b) FEE WAIVER.—The Secretary shall waive the [application user] fee under [FDC Act § 736(a)(1)] with respect to a supplemental application that receives priority review under subsection (a).

(c) OVER-THE-COUNTER AVAILABILITY.—Notwithstanding any other provision of law, with respect to individuals under age 18, a contraceptive drug that is eligible for priority review under subsection (a) shall be subject to [FDC Act § 503(b)(1)].

Although FDA’s preferred path for a partial Rx-to-OTC switch is the submission of a new NDA (and an NDA supplement for a full Rx-to-OTC switch), S. 1438 recognizes the supplemental pathway used for the partial Rx-to-OTC switch of PLAN B (levonorgestrel) Tablets a few years ago (see our previous posts here and here).

More interesting, however, is the significant benefit S. 1438 would confer to Rx-to-OTC switch applicants with a few strokes of the pen.  Priority review is a highly sought-after commodity.  Indeed, there are separate statutory provisions creating transferable priority review vouchers, such as the rare pediatric disease priority review voucher (FDC Act § 529) (see our previous post here), and the tropical disease priority review voucher (FDC Act § 524) (see our previous post here).  And in each of those programs, a special priority review voucher application user fee must be paid (in addition to other applicable user fees).  While S. 1438 would not create a transferable priority review voucher, the benefit is nothing to sneeze at.  After all, companies pay hundreds of millions of dollars to obtain priority review stats.  In fact, earlier this week, it was announced that Sanofi agreed to pay $245 million in cash for a rare pediatric disease priority review voucher FDA granted to another company a little more than two months ago (see our previous post here).  That’s a lot of dineros!

By Karla L. Palmer –

Last week, Senator David Vitter (R-LA) introduced S. 1406, the Saving Access to Compounded Medications for Special Needs Patients Act, to amend Section 503A of the Federal Food, Drug, and Cosmetic Act.  The amendment addresses confusion over a compounding pharmacy’s “distribution” of compounded preparations and, specifically, compounding for office use (i.e., compounding preparations that are not based on a prescription for an individually identified patient).  As with other provisions of Section 503A, the amendment would exempt compounding pharmacies from the new drug (Section 505), adequate directions for use (Section 502(f)(1)), and current good manufacturing (cGMP) requirements (Section 501(a)(2)(B))  if the drug product is “compounded and distributed to a practitioner where, as permitted under State law, the drug product is used in the treatment of or administered to a patient of the practitioner….”  The proposed provision addresses what many believe is a battle between FDA, various states, and an oversight on the part of Congress concerning office use compounding – as permitted by state law (based on the legislative history concerning re-enactment of Section 503A as part of the passage of Title I of the Drug Quality and Security Act in November  2013). 

The amendment would also require compounders to comply with United States Pharmacopeia standards, including the General Chapters related to the compounding of drug products.   And, it would  provide a needed amendment to the provisions related to the Memorandum of Understanding (“MOU”) (at Section 503A(b)(2)(D)(3)(b)), which, in the current statute, requires states to sign an MOU that  “addresses” the “distribution” of inordinate amounts of compounded drug products shipped interstate.  FDA attempted to garner support for its draft MOU back in 1998, prior to legal challenges to the constitutionality of Section 503A, but States and FDA never came to an agreement on its terms.  FDA recently proposed a new draft MOU (as blogged about here) and is awaiting comments from interested parties (the comment period expires in 23 days) prior publishing a final version.  As the statute currently reads, if a State does not enter into the final MOU with FDA, then compounders within that State are limited to distributing amounts out of state that do not exceed 5 percent of the total prescription orders “dispensed or distributed by such pharmacy or physician.”   The amendment would eliminate the confusing and contentious requirement that the MOU “address distribution” of inordinate amounts of compounded preparations shipped interstate, and instead require the MOU to “provide for appropriate investigation of complaints relating to compounded drug products distributed” out of state.  It also would eliminate requirement of FDA to consult with the National Boards of Pharmacy in the development of the standard MOU; instead, it would require FDA to consult with States.  We will keep you posed concerning movement of the bill.      

By John A. Gilbert, Jr. –

After more than four months without any substantive registrant decisions, the Drug Enforcement Administration (“DEA”) published 11 administrative decisions within two days last week.  Among these are two related cases involving allegations that a pharmacist failed to verify a prescriber DEA registration before filling a prescription for controlled substances.  JM Pharmacy Group, Inc. d/b/a Farmacia Nueva and Best Pharma Corp, 80 Fed. Reg. 28,667 (May 19, 2015) and Farmacia Yani, 80 Fed. Reg. 29,053 (May 20, 2015).  In both cases, the prescriber DEA number had been terminated or expired.

In overruling the Administrative Law Judges’ (“ALJ”) opinion in both cases, the Administrator held that pharmacists would not violate their corresponding responsibility by failing to verify a DEA registration unless the pharmacist had knowledge that the prescriber’s DEA registration had expired or was invalid.  Also, while finding that a pharmacist has some “duty” to verify a DEA registration, the Administrator determined that DEA has failed to provide guidance to the industry on the appropriate standard, and thus specifically declined to articulate a standard in either case.  These cases appear to narrow DEA’s enforcement authority against pharmacies that do not routinely verify DEA registrations; however, it remains unclear as to when a pharmacist must verify a DEA registration and the circumstances where DEA may find that a pharmacist “has reason to know” that a prescriber’s DEA registration is invalid.  This is all the more significant given that DEA has pursued administrative and civil penalties against registrants for failing to verify DEA registrations of terminated or expired practitioners.  

Both cases involved pharmacies located in Puerto Rico that had applied to become registered with DEA as retail pharmacies.  In the JM Pharmacy matter, DEA alleged that two pharmacies filled more than 170 prescriptions between January 2009 and November 2011 that were written by a doctor whose DEA certificate of registration (“COR”) had been revoked.  80 Fed. Reg. at 28,669.  The pharmacist admitted he never verified the practitioner registration because the pharmacy “understood” the registration was valid and relied on the fact that the patients’ insurance carriers had processed claims for the dispensed prescriptions.  Id. at 28,670.  In the Farmacia Yani matter, the government alleged that the pharmacy filled more than 200 controlled substance prescriptions over a time period of about 29 months for a prescriber whose COR had been expired during this entire period.  80 Fed. Reg. at 29,062.  In that case, the pharmacist also admitted she never tried to verify the prescriber registration.  

The DEA attorneys argued that the pharmacists violated their corresponding responsibility by failing to verify the prescriber’s DEA registration before filling a prescription for a controlled substance.  See 21 C.F.R. § 1306.04(a).  (In the Farmacia Yani matter, the government also argued that the pharmacist violated 21 U.S.C. §  843(a)(2), which imposes liability on a person who uses an expired DEA registration to dispense a prescription.  The Administrator acknowledged that this criminal law could apply in these types of cases, but stated that liability under this section only applied if the pharmacist acted knowingly or intentionally.  80 Fed. Reg. at 29,062.)  In both cases the ALJ agreed and found that the pharmacies had violated their corresponding responsibility.  However, the Administrator disagreed.  The Administrator noted that neither the Controlled Substances Act (“CSA”) nor DEA regulations require a pharmacist to verify a DEA registration before filling a prescription.  In fact, the Administrator found that the Agency had previously acknowledged there was no requirement that a pharmacist verify a DEA registration before filling a prescription when it promulgated its rule on electronic prescriptions.  Interim Final Rule on Electronic Prescriptions for Controlled Substances, 75 Fed. Reg. 16,236, 16,266 (Mar. 31, 2010).  In that rulemaking DEA stated that it is not necessary for a pharmacist who receives electronic prescriptions to check the CSA database every time to confirm that the prescribing practitioner is properly registered with the DEA.  Id.

Therefore, the Administrator ruled that the pharmacists did not violate their corresponding responsibility because there was no evidence the pharmacists in these cases had knowledge that the prescriber did not maintain a valid DEA registration.  The Administrator found that the requisite scienter for finding a violation of a pharmacist’s corresponding responsibility is knowledge or reason to know that a prescription is not valid.  Regarding the “reason to know” standard, the Administrator held that this means “deliberate ignorance or willful blindness.”  80 Fed. Reg. at 28,673.  Relying on the definition from the Supreme Court’s decision in Global-Tech Appliances, Inc. v. SEB, 131 S. Ct. 2060, 2070-71 (2011), the Administrator noted the Supreme Court “made clear that a ‘willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts.’”  80 Fed. Reg. 28,672 (quoting Global-Tech Appliance, Inc., 131 S. Ct. at 2070-71).  The Administrator further quoted the Supreme Court’s finding that willful blindness occurs when: “1) the defendant subjectively believes that there is a high probability that a fact exists, and 2) the defendant must take deliberate actions to avoid learning of that fact.”  Id.  Consequently, the Administrator held that because there is no explicit statutory or regulatory duty for a pharmacy to determine whether a prescribing doctor’s COR is valid, the pharmacies in question did not violate their corresponding responsibility absent proof that they had any reason to know that the doctors’ CORs had been revoked.  The Administrator noted that the “corresponding responsibility to ensure the dispensing of valid prescriptions extends to the pharmacy itself.”  80 Fed. Reg. at 28,685.

The Administrator noted that DEA counsel failed to provide any expert testimony that a reasonable pharmacist would have inferred that the prescribers in question were not registered, or that this fact would have been so highly probable that the pharmacist should have refused to dispense the prescription.  Id. at 28,673, n.24.   The Administrator also found that these cases should be distinguished from the DEA’s decision in Holiday CVS, L.L.C., 77 Fed. Reg. 62,316 (Oct. 12, 2012), where the Administrator held CVS’s pharmacists liable under the corresponding responsibility standard for failing to verify a prescriber’s DEA registration.  Id. at 28,671.  The Administrator reasoned that, in Holiday CVS, the pharmacists were found to have had “knowledge” that the prescriber was not registered because the prescriber’s revocation of registration had been published in the Federal Register and the pharmacies maintained a database of DEA registrations for prescribers, which was available to the pharmacists when they filled a prescription.  Id. 

Despite determining that neither pharmacy in the present cases had violated its corresponding responsibility, the Administrator, relying on dictum from a prior decision, (Medicine Shoppe-Jonesborough, 73 Fed. Reg. 364, 381 (Jan. 2, 2008)), found that the pharmacists had violated a “duty” to periodically check to see that a prescriber retained authority to practice medicine and dispense controlled substances.  80 Fed. Reg. at 28,673; 80 Fed. Reg. at 29,063 (citations omitted).  Nevertheless, the Administrator made it clear that until the DEA publishes guidance to the regulated industry on the scope of this duty, the Administrator will give “nominal weight” to any such duty to verify DEA registrations because DEA did not prove that such “misconduct” was “intentional or knowing”  Id. at 28,673.  Specially, the Administrator found:

[I]f the Agency intends to enforce this duty in other cases, it must provide the regulated community with guidance as to its scope.  However, while such guidance can be announced in an adjudicatory proceeding, the process of adjudication is not well suited for doing so. . . .  Accordingly, I decline to set forth how frequently a pharmacy must verify that prescriber is registered.  

Id.  Thus, while the Administrator found that there is some “duty” to verify a DEA registration, and a failure to verify that registration is a breach of that duty, DEA cannot enforce that duty without providing guidance to the regulated community concerning its scope.   See id. 

In the JM Pharmacy case, the Administrator denied the applications the COR because she found the pharmacy had falsified the application for registration, but noted that only nominal weight would be given to evidence that the pharmacy failed in its duty to verify DEA registrations.  In the Farmacia Yani, case the Administrator gave little weight to respondent’s failure to verify DEA registrations and ruled that the application would be held in abeyance for six months; but the application would be granted if the respondent  completed a course on controlled substance dispensing and corresponding responsibility. 

These decisions raise questions as to when DEA may find that a pharmacist has sufficient “knowledge” to show that it has violated its corresponding responsibility in filling a prescription for an expired or terminated DEA COR.  For example, while the Administrator in the current cases would not impute “knowledge” under the corresponding responsibility standard to two pharmacies that — for more than two years — did not even try to verify a DEA registration, the Administrator reaffirmed her 2012 holding that two CVS pharmacies violated their corresponding responsibility because the prescriber’s revocation was published in the Federal Register and the company maintained a database of prescriber DEA registrations.  As noted by the ALJs in the current decisions, the pharmacies could have checked the registration on the DEA diversion website (which was accessible to any pharmacist with an internet connection), contacted the local DEA office or contracted with a private service to verify the DEA registration.  See, e.g., 80 Fed. Reg. at 28,686.  Moreover, the Administrator acknowledged that the availability of the DEA website had been published in the Federal Register as part of the electronic prescription Interim Final Rule.  75 Fed. Reg. at 16,266.  But the Administrator did not believe this was sufficient evidence that the pharmacists knew or had reason to know the prescribers’ DEA registration had been terminated or expired.  While the Administrator would not impute “knowledge” of these DEA registration verification sources to the pharmacies, it found that the CVS pharmacies should have had knowledge about the Federal Register notice regarding the prescriber revocation or what information was available in the CVS database (assuming the database was accurate concerning the validity of the DEA registrations).  This appears like a double standard.  Moreover, it is questionable whether the facts presented in Holiday CVS would satisfy the new “knowledge” standard articulated by the Administrator.   

While DEA has imposed a “knowledge” requirement on any determination whether a pharmacist has violated its corresponding responsibility for failing to verify a DEA registration, these decisions also establish a nebulous and undefined “duty” to verify a DEA registration.  But the Administrator’s ruling is clear: Until DEA promulgates guidance or regulations defining the duty to verify a DEA registration, the Administrator had held that DEA should give little weight to any evidence of a breach of that duty. 

By Riëtte van Laack –

Where’s the beef?  It’s in a recent announcement from the USDA Food Safety and Inspection Service (“FSIS”) concerning finalized labeling requirements for mechanically, blade- or needle-tenderized beef.   Under the new rule, published on May 18, 2015, raw or partially cooked mechanically tenderized beef products must bear labels that state that they have been mechanically tenderized.  The labels must also include cooking instructions — including the minimum internal temperatures and any hold times — so that consumers know how to safely prepare the products.

Tenderness is a key selling point for beef products.  To increase tenderness, some cuts of beef are tenderized mechanically by piercing them with needles or small blades in order to break up tissue.  These mechanically tenderized beef cuts look similar to non-tenderized cuts.  However, there is evidence that the mechanical tenderization of beef can pose food safety risks because it can transfer pathogens from the surface of the meat into the center.  Whereas intact cuts of muscle such as steaks are rendered free of pathogenic bacteria even if cooked “rare” or “medium rare” as long as the steaks are seared, mechanically tenderized cuts (just like ground beef products) must be cooked thoroughly to prevent that pathogens inside the cuts from surviving.  Since 2000, the Centers for Disease Control and Prevention received reports of six outbreaks attributable to needle or blade tenderized beef products in restaurants and consumers’ homes.  Because it is impossible to see whether meat has been mechanically tenderized, the new rule requires that the tenderized products be labeled with a disclosure statement.

The new rule also requires that, unless the product is fully cooked, the labels of mechanically tenderized beef products include validated cooking instructions so that consumers will know how to safely prepare them. The instructions must specify the minimum internal temperatures and any hold or “dwell” times for the products to ensure that they are fully cooked.  FSIS released an updated guidance for the use of federally inspected establishments in developing validated cooking instructions for mechanically tenderized products. 

The new labels need not be submitted to FSIS for approval.  FSIS will consider the labels of raw and partially cooked mechanically tenderized beef products as required in this final rule to be generically approved, provided that they meet applicable regulatory requirements and are not otherwise false or misleading in any particular. 

The main difference between the proposed and final rule is the compliance date.  In 2013, FSIS proposed to use the Uniform Compliance Date for Food Labeling Regulations, which in 2013 was January 1, 2016.  However, for rules issued in 2015, the Uniform Compliance Data is January 1, 2018.  In light of the public health benefits of the new requirements, FSIS set the compliance date 365 days from the date of the rule’s publication in the Federal Register, i.e., May 17, 2016.  FSIS predicts that the changes resulting from the new rule could prevent hundreds of illnesses per year.

The new rule applies only to mechanically tenderized beef, and not to tenderized poultry or other non-beef products.  Although FSIS considered this option, it concluded that there are insufficient data on the production practices and risks of consuming those products.

By Karla L. Palmer – 

In addition to FDA’s request for nominations for bulk substances that may be used by outsourcing facilities for compounding animal medications (here) and draft guidance on compounding animal drugs from bulk substances (here), FDA also announced earlier this week that it is seeking comments on specific issues raised by compounding animal drugs.  The topics FDA raises run the spectrum of potential issues that could arise (and many of which have arisen) concerning drug compounding generally.  FDA asked for comments on these specific topics; as the saying goes, interested parties should “speak now . . . :”   

• Should the final guidance address the issue of FDA-approved animal and human drugs that are in shortage or are otherwise unavailable (e.g., disruptions in the manufacture or supply chain; business decisions to stop marketing the drug; drug is subject to Agency action based on safety, effectiveness, or manufacturing concerns)? If so:
• How should these situations be addressed in the final guidance?
• How should the final guidance define the terms “shortage” and “unavailable”?
• What criteria should FDA use to determine if an approved animal or human drug is in shortage or otherwise unavailable?
• Do USP/NF chapters <795> and <797> provide suitable standards for animal drugs compounded by veterinarians, and if not, what standards of safety, purity, and quality should apply to animal drugs compounded by veterinarians?
• Should licensed veterinarians be able to sell or transfer an animal drug compounded from bulk drug substances by a state-licensed pharmacy or an outsourcing facility to owners or caretakers of animals under the veterinarian's care?
• How should FDA apply the condition to identify an individual patient when it is not possible to identify an individual animal (e.g., koi in a koi pond)?
• Should the final guidance include a condition on the amount/percentage of compounded animal drugs that a pharmacy/outsourcing facility can ship interstate?  If so, what would a reasonable amount be?
• Should facilities registered as outsourcing facilities under section 503B of the Federal Food, Drug, and Cosmetic Act (FDCA) be able to compound animal drugs from bulk drug substances that do not appear in Appendix A for an individually identified animal patient under conditions similar to those applicable to state-licensed pharmacies (i.e., the conditions contained in section III.A. of the draft guidance)?
• Is additional guidance needed to address the repackaging of drugs for animal use?
• How widespread is the practice of repackaging drugs for animal use?
• What types of drugs are repackaged for animal use, and why are they repackaged?
• Have problems been identified with repackaged drugs for animal use?
• Is additional guidance needed to address the compounding of animal drugs from approved animal or human drugs under FDCA § 512(a)(4) or (a)(5) and 21 C.F.R. pt. 530?
• Is additional guidance needed to address the compounding of animal drugs from bulk drug substances for food-producing animals?
• As one condition under which FDA does not generally intend to take action for certain violations of the FDCA if this and the other conditions are followed, FDA is proposing that state-licensed pharmacies and veterinarians report any product defects or serious adverse events associated with animal drugs they compound from bulk drug substances to FDA within 15 days of becoming aware of the product defect or serious adverse event.  Outsourcing facilities are required to report adverse events associated with the drugs they compound.  FDA believes it is important to receive this information from state-licensed pharmacies and veterinarians because there are no other State Departments of Health or Federal Agencies (e.g., the Centers for Disease Control and Prevention) charged with identifying and tracing animal injuries or disease associated with an animal drug compounded by these entities.  FDA has the following specific questions with respect to this proposed condition:
• How many state-licensed pharmacies and veterinarians compound animal drugs from bulk drug substances and would potentially be reporting product defects and serious adverse events to FDA?
• Are state-licensed pharmacies and veterinarians reporting the same or similar information to any state regulatory agency (e.g., state boards of pharmacy, state boards of veterinary medicine)?  If so, how many reports on average does each state-licensed pharmacy and veterinarian submit to these state agencies each year?
• For purposes of the guidance, how should FDA define the terms “product defect” and “serious adverse event”?
• Can FDA achieve the same objective of identifying and tracing the source of injuries or disease associated with an animal drug compounded from a bulk drug substance through means other than product defect and serious adverse event reporting, and if so, what other means?  For example, would reports of product defects alone achieve the same objective?

Comments may be submitted at any time, but to ensure FDA considers comments prior to finalizing guidance, they should be submitted within 90 days of publication of the request for comments in the Federal Register, or by August 17, 2015. 

By Kurt R. Karst –      

On May 19th, the House Committee on Energy and Commerce took up consideration of the 21st Century Cures Act.  The bill, H.R. 6, is a 309-page behemoth that was officially introduced on May 19th, and is the fourth iteration of the bill (see our previous post here on the prior versions).  If enacted, the 21st Century Cures Act would dramatically change the the development and approval of medical products in the United States. 

Representatives Fred Upton (R-MI) and Diana DeGette (D-CO) have spearheaded the Cures Act effort.  And the bill is being put on fast-track.  Representative Upton has indicated that “[h]is goal is to have the bill on the floor in June, go to conference with the Senate in the fall and then send it to the president before the end of the year.”  That’s a pretty aggressive schedule considering that the U.S. Senate – and in particular Senators Richard Burr (R-NC) and Lamar Alexander (R-TN), Chairman of the Senate Health, Education, Labor and Pensions Committee – have yet to weigh in on the Cures Act initiative and seem to have their own ideas for change, as outlined in a white paper released earlier this year.

Meanwhile, other members of the U.S. House of Representatives have decided to introduce stand-alone bills, either breaking out provisions from the 21st Century Cures Act, or seeking consideration of legislation addressing new FDA-related topics.  Indeed, May19th saw the introduction of at least 17 separate bills to amend the FDC Act.  (Other stand-alone bills, like H.R. 2456 and H.R. 2414, would amend related laws, such as the PHS Act, to ensure the sharing of data generated from research with the public, and to facilitate the responsible communication of scientific and medical developments.)  Here’s a list of the FDA bills introduced on May 19th (not including the 21st Century Cures Act): 

• H.R. 2459 – To amend the Federal Food, Drug, and Cosmetic Act to enhance the reporting requirements pertaining to use of antimicrobial drugs in food animals
• H.R. 2455 – To amend the Federal Food, Drug, and Cosmetic Act with respect to precision medicine
• H.R. 2452 – To amend the Federal Food, Drug, and Cosmetic Act with respect to facilitating dissemination of health care economic information
• H.R. 2444 – To authorize the Commissioner of Food and Drugs to award grants for studying the process of continuous drug manufacturing
• H.R. 2443 – To amend the Federal Food, Drug, and Cosmetic Act with respect to CLIA waiver study design guidance for in vitro diagnostics
• H.R. 2438 – To amend the Federal Food, Drug, and Cosmetic Act with respect to broader application of Bayesian statistics and adaptive trial designs
• H.R. 2435 – To amend the Federal Food, Drug, and Cosmetic Act with regard to the Reagan-Udall Foundation
• H.R. 2433 – To amend the Federal Food, Drug, and Cosmetic Act with respect to enhancing combination products review
• H.R. 2428 – To amend the Federal Food, Drug, and Cosmetic Act with respect to humanitarian device exemption applications
• H.R. 2427 – To amend the Federal Food, Drug, and Cosmetic Act with respect to advisory committee process
• H.R. 2426 – To amend the Federal Food, Drug, and Cosmetic Act with respect to easing regulatory burden with respect to certain class I and class II devices
• H.R. 2425 – To amend the Federal Food, Drug, and Cosmetic Act with respect to the recognition of standards
• H.R. 2424 – To amend the Federal Food, Drug, and Cosmetic Act with respect to training and oversight in least burdensome appropriate means concept
• H.R. 2423 – To amend the Federal Food, Drug, and Cosmetic Act with respect to valid scientific evidence
• H.R. 2422 – To amend the Federal Food, Drug, and Cosmetic Act with respect to third-party quality system assessment
• H.R. 2416 – To amend the Federal Food, Drug, and Cosmetic Act to evaluate the potential use of evidence from clinical experience to help support the approval of new indications for approved drugs, and for other purposes
• H.R. 2415 – To amend the Federal Food, Drug, and Cosmetic Act to provide for establishment of a streamlined data review program

The introduction of these bills in the House on May 19th follows an already-busy May for new FDA-related legislation.  As noted on our popular FDA Legislation Tracker we also recently saw the introduction of the Sensible Oversight for Technology which Advances Regulatory Efficiency (SOFTWARE) Act (H.R. 2396), the Stop Tampering of Prescription Pills Act of 2013 (H.R. 2335) (unchanged from previous versions – see our previous post here), legislation to to authorize priority review for breakthrough devices (H.R. 2337),  and legislation to provide for the development and use of patient experience data to enhance the structured risk-benefit assessment framework  (H.R. 2338). 

By Karla L. Palmer – 

Notwithstanding recognizing that sections 503A and 503B of the Federal Food, Drug, and Cosmetic Act (FDCA) apply to compounding of human drug products, earlier this week the Food and Drug Administration (FDA) issued draft guidance on animal drug compounding, including compounding by section 503B outsourcing facilities.  FDA also withdrew its vastly different prior Compliance Policy Guide (608.400) for animal drugs promulgated over 12 years ago (and later revised).  It also issued a request for nominations for bulk substances that may be used in animal drug compounding by an outsourcing facility (blogged separately), which will serve as Appendix A to the guidance.  Lastly, FDA also separately requested comments from the public on a number of separate topics concerning animal drug compounding.  FDA is seeking comments on certain specific issues so it can determine whether additional guidance is needed on, for example, drug repackaging or compounding from approved drug products for animal use.  We will set these forth comment topics in a separate blog post as well.  Comments are due 90 days from publication in the Federal Register, or on August 17, 2015.

The “non-binding” draft guidance describes conditions under which FDA does not intend to initiate enforcement action against state-licensed pharmacies, licensed veterinarians, and outsourcing facilities (“animal drug compounders”).  However, these animal drug compounders must meet all the conditions set forth in the draft guidance; in addition outsourcing facilities must compound from a bulk substance that appears in Appendix A of the guidance.  The draft guidance explicitly does not address compounding from approved animal or human drugs pursuant to the extra label use provisions of the law and does not address repackaging.  Note the Appendix is not final (and thus lists no bulk substances). 

Like the former withdrawn guidance, FDA states that, to be legally marketed, new animal drugs must be approved under FDCA § 512, or on the list of Legally Marketed Unapproved New Animal Drugs for Minor Species at FDCA § 572.  Otherwise, FDA considers compounded animal drugs to be unapproved, unsafe, and adulterated.  FDA recognizes limited exemptions from certain statutory requirements for approved animal drugs for extra label use under the conditions set forth in FDCA § 512 and 21 C.F.R. pt. 530.  FDA is concerned about the use of drugs compounded from bulk for use in animals when approved alternatives exist that can be used in a labeled or extra-labeled manner. 

FDA does not plan to take enforcement action under §§ 512(a) (new animal drug approval requirements); 501(a)(5) (unsafe new animal drug under § 512); 502(f)(1) (adequate directions for use); and 501(a)(2)(B) (current good manufacturing practices (cGMP) requirements) so long as animal drug compounders comply with the following conditions, briefly summarized below.  However, FDA warns that, until the draft guidance is finalized, stakeholders should be aware that FDA intends to look at the totality of the circumstances when determining whether to take enforcement action for unlawful animal drug compounding activities.

Licensed Pharmacies

1.  The drug must be compounded by a state licensed pharmacy.

2.  The drug must be dispensed for an individually identified animal patient.  Specific limits on compounding in advance (based on amounts compounded over a 14-day period within previous six months).

3.  The drug is not intended for use in food producing animals (as specifically defined); prescription must contain the statement, “this patient is not a food-producing animal.”

4.  If the drug contains a bulk substance that is a component of any marketed animal/human drug:

a.      There is a change between the compound and the FDA-approved drug that produces a “clinical difference” for the individually identified animal patient as determined by the veterinarian, and

b.      The prescription or accompanying documentation contains a statement that the change would produce a clinical difference for the individually identified animal patient.

5.   If there is an approved human or animal drug with the same active ingredients, the pharmacy must determine and document that the compounded drug cannot be made from the approved drug.

6.  The pharmacy must receive from the veterinarian, in addition to any information required by state law:

a.  Identification of the species that will receive the drug, and

b.  The statement: “There are no FDA-approved animal or human drugs that can be used as labeled or in an extralabel manner under section 512(a)(4) or (5) and 21 CFR part 530 to appropriately treat the disease, symptom, or condition for which this drug is being prescribed.”

7.  The bulk substance must be manufactured by an FDA-registered establishment under FDCA § 510, and accompanied by a certificate of analysis. 

8.  The drug must be compounded in accordance with USP/NF chapters <795> and <797> (and note that the sterile drug must be compounded in an area with air quality that meets or exceeds ISO 5 standards). 

9.  The drug must not be sold/transferred by an entity other than the compounder.  Sale or transfer does not include administration by a veterinarian.

10.  The pharmacy must report on a Form FDA-1932a any product defect or serious adverse event associated with animal drugs it compounded from bulk substances within 15 days of becoming aware of it. 

11.  The label of any compounded drug must indicate the species of the intended animal patient, and name of animal and owner.

Licensed Veterinarians

1.  The drug must be compounded and dispensed for an individually identified patient under his or her care.

2.  The drug must not be intended for use in food producing animals

3.  If the bulk substance is a component of an approved human or animal drug, there must be a change made for the individually identified patient that produces a clinical difference as determined by the veterinarian.

4.  There are no approved animal or human drugs that can be used as labeled or in an extralabel manner under §§ 512(a)(4) and (5) and 21 C.F.R. part 530 to appropriately treat the disease/symptom/condition for which the drug is being prescribed.

5.  Must be compounded in accordance with USP/NF chapters <795> and <797> (note that the  sterile drug must be compounded in an area that meets or exceeds ISO 5 air quality standards). 

6.  The bulk substance must be manufactured by an FDA-registered establishment under FDCA § 510, and accompanied by a certificate of analysis. 

7.  The drug may not be sold/transferred by the veterinarian compounding the drug.  This does not include administration by the veterinarian or dispensing of a drug compounded by the veterinarian to the owner of an animal under his or her care.

8.  The pharmacy must report on a Form FDA-1932a any product defect or serious adverse event associated with animal drugs it compounded from bulk substances within 15 days of becoming aware of it. 

9.  The label must indicate the species, name of the animal and owner.

Outsourcing Facilities

1.  The drug must be compounded only from bulk substances appearing on Appendix A (note: list to be determined after nomination process).

2.  The drug must be compounded by or under the direct supervision of a licensed pharmacist. 

3.  The drug must not be intended for use in food-producing animals; accompanying documentation must state: “This drug will not be dispensed for or administered to food-producing animals.”

4.  The drug must be compounded in accordance with cGMP.

5.  The bulk substance used in compounding must be manufactured by a FDA-registered establishment under FDCA § 510, and accompanied by a certificate of analysis. 

6.  The drug cannot be sold/transferred by an entity other than the facility that compounded the drug.  Sale or transfer does not include administration by a veterinarian to a patient under his or her care.

7.  The facility must report on a Form FDA 1932a any product defect or serious adverse event associated with animal drugs it compounded from bulk substances within 15 days of becoming aware of it.

8.  All animal drugs compounded must be included on the report to FDA required under Section 503B. (See FDCA § 503B(b)(2).)

9.  The veterinarian’s prescription must state that the drug is intended to treat the species and conditions for which the substance is listed in Appendix A.

10.  The (what will have to be a very large….) label must include the following: (a) active ingredients; (b) dosage form, strength, and flavoring, if any; (c) directions for use; (d) quantity/volume; (e) the statement “Not for resale.”; (f) the statement “For use only in [fill in species and any associated condition or limitation listed in Appendix A].”; (g) the statement “Compounded by [name of outsourcing facility].”; (h) lot/batch number of drug; (i) special storage and handling instructions; (j) date of compounding; (k) beyond use date (BUD); (l) veterinarian prescribing/ordering the drug; (m) address and phone number of the outsourcing facility that compounded the drug; (n) inactive ingredients; (o) the statement “Adverse events associated with this compounded drug should be reported to FDA on a Form FDA 1932a.”; (p) if the drug is compounded pursuant to a patient specific prescription, the species and name of the animal patient, name, and name of the owner or caretaker.

Comments should be submitted to Docket No.  FDA-2003-D-0202: Draft Guidance for Industry #230: Compounding Animal Drugs from Bulk Drug Substances.