By Kurt R. Karst –      

As the years go by and nostalgia creeps in, we reminisce about the past and how things were “back then” (which to this blogger means the 1980s and 1990s).  It’s not that things were necessarily better “back then,” they were just different.  Take a gander at the National Geographic Channel’s “The ‘80s: The Decade That Made Us” or “The ‘90s: The Last Great Decade?” as this blogger did this past weekend and you quickly get a sense of what we mean. Nostalgia and reminiscence will envelope you.  We’re not advocating a return to an era of big hair, shoulder pads, leg warmers and when David Hasselhoff ruled the airwaves, but there’s something heartwarming – something quaint – about those simpler times. 

As a food and drug attorney, I have plenty of opportunities to indulge in the past.  Take, for example, FDA Summary Basis of Approvals (“SBAs”).  (An SBA is defined in an FDA regulation as a “document that contains a summary of the safety and effectiveness data and information evaluated by FDA during the drug approval process;” however, the term is often used to refer more generally to what is known today as a “Drug Approval Package” or an “Action Package” (see FDA MAPP 4520.1).)  We recently had a reason to look over some old SBAs.  Maybe it’s the old typeface (from an old word processor), the magic marker redactions, the cut-and-paste data tables, the unreadable (and unsearchable) pages of text (stamped with “BEST POSSIBLE COPY”), the hand written notes (and signatures), or the hand-drawn and oddly artistic lettering of the cover pages separating each SBA section in many SBAs (see below), but there’s some level of comfort in seeing these things – particularly when compared to the regimented SBA structure and rules in place today. 

One SBA component to which this blogger has always paid close attention is the “Exclusivity Summary” (also sometimes referred to as the “Exclusivity Checklist”).  The earliest version of that document we have seen dates back to a July 1990 revision, but was apparently developed in the 1980s according to a recent FDA response to a series of Citizen Petitions (see here at page 7).  Since then, the document, known generically as “Form OGD-011347,” and which we understand was a sort of homemade piece, has evolved with technology, but only rarely with changes in the law.  (At one time, there was an html version of the document titled “Exclusivity Checklist” that was completed by FDA.)       

The one clear constant with the “Exclusivity Summary” are the three component parts, which are intended to track and simplify changes made to the law by the 1984 Hatch-Waxman Amendments:

PART I – IS AN EXCLUSIVITY DETERMINATION NEEDED?

PART II – FIVE-YEAR EXCLUSIVITY FOR NEW CHEMICAL ENTITIES

PART III – THREE-YEAR EXCLUSIVITY FOR NDAs AND SUPPLEMENTS

Changes in the law and the need for greater granularity have resulted in small changes and updates to the “Exclusivity Summary.”  For example, the following question appeared in Part I as late as August 2000: “e) Has pediatric exclusivity been granted for this Active Moiety?”  Later, FDA added the following clarification after that question: “If the answer to the above question in YES, is this approval a result of the studies submitted in response to the Pediatric Written Request?”  (Emphasis in original.)

The text of Parts II and III of the “Exclusivity Summary” in place today is virtually identical to the text in place in 1990.  This is so notwithstanding significant changes in the law adding new types of exclusivity (e.g., GAIN Act exclusivity) or clarifying how exclusivity can be applied under certain circumstances (e.g., enantiomers of previously approved racemates), and an evolution in FDA’s interpretation of the law.  The current “Exclusivity Summary” (see here at pdf pages 23-30) takes none of this into account, leaving questions unanswered, or the need to add comments.  Take, for example, combination drug products.  FDA’s recent reinterpretation of the law (see our previous post here) provides that NCE exclusivity is now available for newly-approved combination drugs containing an NCE and a previously approved drug.  Despite this, the current “Exclusivity Summary” includes the same questions in place when FDA interpreted the law to preclude an award of NCE exclusivity for certain combination drugs containing an NCE:

2. Combination product.

If the product contains more than one active moiety (as defined in Part II, #1), has FDA previously approved an application under section 505 containing any one of the active moieties in the drug product? If, for example, the combination contains one never-before-approved active moiety and one previously approved active moiety, answer “yes.”  (An active moiety that is marketed under an OTC monograph, but that was never approved under an NDA, is considered not previously approved.)

                                                                                      YES /_/  NO /_/

If “yes,” identify the approved drug product(s) containing the active moiety, and, if known, the NDA #(s).

IF THE ANSWER TO QUESTION 1 OR 2 UNDER PART II IS “NO,” GO DIRECTLY TO THE SIGNATURE BLOCKS ON PAGE 8. (Caution: The questions in part II of the summary should only be answered “NO” for original approvals of new molecular entities.) IF “YES” GO TO PART III.

In at least one instance, this required a FDA reviewer to clarify the award of NCE exclusivity:

NDA 205718 contains netupitant, a new chemical entity, in combination with palonosetron, a previously approved active moiety. Under the Agency’s new interpretation described in the Agency’s Guidance for Industry, New Chemical Entity Exclusivity for Certain Fixed-Combination Drug Products, a drug substance is eligible for 5-year exclusivity, provided it meets the regulatory definition of new chemical entity, regardless of whether that drug substance is approved in a single-ingredient drug product or in a fixed-combination with another drug substance that contains no previously approved active moiety, or in a fixed-combination with another drug substance that contains a previously approved active moiety. This NDA is thus eligible for 5-year new chemical entity exclusivity pursuant to the new interpretation.

Though quaint, the current version of the “Exclusivity Summary” is, like shoulder pads and big hair, outdated.  It needs a serious makeover to make the document useful.  At the very least, a revised “Exclusivity Summary” should include questions or information on all non-patent exclusivities available under the FDC Act.  For example, it should identify whether orphan drug designation and exclusivity was granted (and, in cases of clinical superiority, the basis for such a decision).  And in the case of generic drugs, it should identify whether 180-day exclusivity was granted or eligibility for such exclusivity forfeited. 

Why the “Exclusivity Summary” has gone without a makeover for so long while other important FDA forms, such as the Agency’s “RPM Filing Review” and associated “505(b)(2) Assessment,” have been revised significantly is unclear.  Until a significant change is made, the “Exclusivity Summary” is really just a relic of a bygone era – a reminder of the days when Hatch-Waxman was more simple. 

Hyman, Phelps & McNamara, P.C. (“HP&M”) is happy to announce that five of the firm’s attorneys have been named “Super Lawyers” in the Washington, D.C. area in the 2015 Washington DC Super Lawyers Magazine.  Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement.  Super Lawyers are selected based on a multi-phased process that includes independent research, peer nominations, and peer evaluations.  Congratulations go to HP&M’s Robert A. Dormer, John R. Fleder, Jeffrey N. Gibbs, Frank J. Sasinowski and Jeffrey K. Shapiro, who are recognized in the Food & Drugs practice area (pages 39-40).

By Alexander J. Varond –

On July 10, 2015, the U.S. House of Representatives passed the 21st Century Cures Act.  In all, there were 344 “yes” votes and only 77 “no” votes, with half of the “yes” votes coming from Republicans and the other half coming from Democrats.  We have blogged on the 21st Century Cures Act here and here.  In addition, the House has provided a two-page summary and a section-by-section summary of the current legislation.

Although the overall 21st Century Cures Act is not the topic of this blog post, we give its passage in the House prominence here because it includes the most developed proposal for the renewal of FDA’s rare pediatric disease priority review voucher program (Pediatric PRV program).  We have blogged extensively on the Pediatric PRV program, including here and here.  Without congressional action, FDA will be unable to grant Pediatric PRVs after mid-March 2016 (see our post on the program’s sunset here).

Recall that the Pediatric PRV program was developed as a means to encourage the development of therapies to treat rare diseases that primarily affect children.  Since the program’s inception in 2012, three sponsors have received Pediatric PRVs.  Pediatric PRVs have been issued for: 

1. Vimizim (elosulfase alfa) for mucopolysaccharidosis type IVA (a rare, severely debilitating and progressive disease);
2. Unituxin (dinutuximab) for high-risk neuroblastoma (a rare pediatric cancer); and
3. Cholbam (cholic acid) for bile acid synthesis disorders due to single enzyme defects and for peroxisomal disorders (including Zellweger spectrum disorders) (both inborn errors of metabolism).

(See our posts on each of these grants here, here, and here.)

Industry has taken considerable interest in the Pediatric PRV program.  After all, the most recent priority review voucher sold for an incredible $245 million dollars.  Here is a rundown of the publicly announced sales of priority review vouchers to date: 

Table 1: PRV Sales Data

Despite significant interest in the Pediatric PRV program, thereis concern related to the program’s unpredictable availability.  Stated another way, companies do not know whether the Pediatric PRV program will be reauthorized or how long it will be authorized for.  This uncertainty has had a considerable chilling effect.

A Change in the Proposed Legislation.  The most recent version of the 21st Century Cures Act pegs the sunset of the program to the date on which a sponsor files its marketing application (so long as the drug is also designated as a drug for a rare pediatric disease prior to the sunset date).  In the past, a sponsor’s marketing application had to be approved by the sunset date.  This small change is significant—it creates more certainty because it does not subject sponsors’ eligibility to unpredictable delays in the review process.

Below, we catalogue the current law and recent proposals for reauthorizing the program.

Table 2:  Pediatric PRV Sunset Provisions (Current Law and Recent Proposals)

A Proposal for a Different Sunset Date.  Short of significantly increasing the duration of the program or making it permanent, it would be helpful if future legislation used a different sunset date.  As the status quo demonstrates, timing on the reauthorization of the program is unpredictable and unpredictability can be costly.  Therefore, instead of designating an arbitrary sunset date (e.g., December 31, 2018), the sunset date of the Pediatric PRV program could be tied to the sunset date of the Prescription Drug User Fee Act (PDUFA) authorization (e.g., September 30, 2022).  

By tying the sunset of the Pediatric PRV program to the sunset date of PDUFA authorization, the Pediatric PRV program would have a predictable platform on which it could be reauthorized.  With the predictable timing of PDUFA reauthorization, the timing of the Pediatric PRV program’s reauthorization would also be more predictable.  As a result, sponsors could plan better and invest more in developing the therapies that the program intends to encourage—therapies for rare pediatric diseases.

By James C. Shehan –

On July 9, 2015, Representatives Matt Salmon (R- AZ), Paul Gosar (R-AZ) and Marlin Stutzman (R-IN) introduced H.R. 3012, the Right to Try Act of 2015. The bill seeks to expand the access of terminally ill patients to experimental drugs in a novel way, by prohibiting the federal government, including FDA and DEA, from taking action to stop such access.

The bill is short and straightforward.  It simply states that, notwithstanding any law, including the Federal food, Drug, and Cosmetic Act, the federal government shall not take “any action to prohibit or restrict the production, manufacture, distribution, prescribing, dispensing, possession, or use of an experimental drug, biological product, or device that – (1) is intended to treat a patient who has been diagnosed with a terminal illness; and (2) is authorized by, and in accordance with, State law.  An “experimental product” is defined as one that “has successfully completed a phase 1 clinical investigation,” remains under investigation in an FDA-approved clinical trial, and is not FDA “approved, licensed, or cleared.”   The term “terminal illness’’ is defined as the meaning given to such term under relevant State law.

The legislation is viewed by at least one of its sponsors, Rep. Stutzman, as complementary to state right to try laws.  These laws (see our previous post here) also allow doctors, patients and companies to bypass FDA’s regulations.  But given the reluctance of companies to violate regulations that require prior FDA approval of expanded access, these laws are not being regularly used. 

Whether this bill if passed would change this situation is unclear.  On the one hand, it bars FDA from doing something that it almost never does – denying access to an experimental drug to a terminally ill patient.  On the other hand, by preventing FDA from taking any action to stop access, it potentially undermines FDA’s entire expanded access regulatory regime.  Although the bill does not mention the companies that make experimental products, the bill could be interpreted as prohibiting FDA from taking enforcement action against anyone who ignored the expanded access regulations, including the companies.  Whether FDA would agree with that interpretation and whether companies would decide to not seek FDA approval in the face of such ambiguity remains to be seen. 

By Etan J. Yeshua –

Last week, FDA announced that it will be extending by one year the compliance date for its menu labeling rule.  This means that restaurants and other establishments covered by the rule, and by the menu labeling provisions of the Affordable Care Act (ACA), now have until December 1, 2016 to post calories and other information on their menus and menu boards, provide full written nutrition information in-store, and come into compliance with the rule’s other requirements.  The Agency also announced that it plans to issue a draft guidance document to provide “answers to some of the more frequently asked and crosscutting questions that the agency has received” about the rule.  The announcement followed requests by some in industry and on Capitol Hill for such a delay and for additional guidance.

Earlier, FDA had rejected requests for delaying enforcement past December 1, 2015.  In its proposed rule, FDA specified that the final rule would become effective six months from the date of its publication.  When the final rule was published on December 1, 2014, the Agency said it agreed with comments it received that called for a later enforcement date, and it announced a one-year compliance window, ending on December 1, 2015.  In that preamble, the Agency said it believed a compliance date longer than one year was unnecessary: “We disagree that an effective date over 1 year (such as 18 months or 2 years, as suggested by [some] comments) is necessary.  Many comments seeking a longer effective date focused on the need to train employees.  Such training does not need to wait until all implementation activities are complete.”  The Agency added that “we have no information that could assist us in considering whether or how much additional time might be appropriate.”

Since then, there have been repeated calls for FDA to delay enforcement and/or to revise or clarify certain of the rule’s requirements.  For example, in May 2015, 32 U.S. Senators sent a letter to FDA requesting a one-year delay citing “outstanding questions regarding the details of how the final rule will be applied to certain covered entities” and the need for “clear and consistent guidance” as well as “adequate time to understand and come into compliance with the regulations.”  In addition, legislation that would both delay enforcement of the rules and revise the statutory requirements of the ACA’s menu labeling provisions has been introduced in Congress.  More recently, language was added to a draft House Appropriations bill (pages 84-85) and report (page 67) that “directs the FDA to implement the final rule no earlier than December 1, 2016, and at least one-year following agency publication of related guidance to newly regulated stakeholders.”  Some in industry have been calling for a delay as well, and in its announcement last week, FDA cited its “extensive dialogue with chain restaurants, covered grocery stores and other covered businesses.”

FDA noted that specific information in four requests it received from “large retailer and trade and other associates” justified the compliance date extension:

[T]he requests describe steps involved in developing software, information systems, and other technologies for providing nutrition information in ways that better correspond to how foods are offered for sale in covered establishments and allow for more efficient and product specific nutrition labeling. In addition, the requests describe steps involved in training staff, implementing standard operating procedures, and developing and installing updated and consistent menu boards across all locations within a chain. Most requests sought to extend the compliance date by 1 year. In light of these requests, we have decided to extend the compliance date for the final rule to December 1, 2016.

By Alexander J. Varond –

FDA recently issued its final rule on permanent discontinuance or interruption in manufacturing of certain drug or biological products.  To those familiar with the proposed rule issued in 2013, a review of the final rule will not bring many surprises.  We discussed the proposed rule and FDA’s “Strategic Plan for Preventing and Mitigating Drug Shortages” here.

The final rule requires “all applicants of covered approved drugs or biological products—including certain applicants of blood or blood components for transfusion and all manufacturers of covered drugs marketed without an approved application—to notify FDA electronically of permanent discontinuance or an interruption in manufacturing of the product that is likely to lead to a meaningful disruption in supply (or a significant disruption in supply for blood or blood components) of the products in the United States.”

Ongoing Effort to Address Drug Shortages

The rule represents the latest step in an ongoing effort to address drug shortages in the United States.  Recall that President Obama, in 2011, issued an Executive Order to address the issue.  We blogged on that here.  That same year, the Government Accountability Office released a report finding that FDA needed increased authority to address the growing problem of drug shortages.  We blogged on that here.  Congress then amended the Federal Food, Drug, and Cosmetic Act (FDCA) (via FDASIA), in 2012, and further addressed the drug shortage issue.  Our summary of FDASIA can be found here.

FDASIA amended the FDCA to give FDA the authority to require all manufacturers of certain drugs to notify FDA six months in advance of a permanent discontinuance or interruption in manufacturing.  It also required FDA to maintain a list of drugs in shortage.  This is FDA’s shortage list in its current incarnation.  Finally, FDASIA gave FDA the authority to apply its drug shortage provisions to biological products.  FDA’s final rule implements FDASIA’s changes and substantively modifies 21 C.F.R. §§ 310.306, 314.81(b)(3)(iii), and 600.82.

Recent Statistics on Drug Shortages

FDA notes in its preamble to the final rule that although the number of drug and biological product shortages quadrupled from approximately 61 in 2005 to more than 250 shortages in 2011, the number of shortages has decreased in the last several years.  The preamble reports the following figures:

Table 1:  Drug Shortages

Thus, it appears that the increase in early notifications to FDA that began as a result of the 2011 Executive Order (Executive Order 13588) has enabled FDA to work with stakeholders to prevent shortages.  FDA reports the following statistics:

Table 2:  Drug Shortages Prevented

According to FDA, these shortages were prevented by using such tools as, working with manufacturers to resolve manufacturing and quality issues, expediting FDA inspections and review of submissions to prevent shortages, identifying and working with manufacturers willing to initiate or increase production to cover expected gaps in supply, and exercising regulatory flexibility and discretion under certain circumstances.

Final Rule

The final rule requires that a covered entity notify FDA in writing of a permanent discontinuance of manufacture or interruption in manufacturing that is likely to lead to a meaningful disruption in the supply of a product that is life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition.  Radiopharmaceuticals are excluded from these requirements.  Notably, a meaningful disruption does not include interruptions such as routine maintenance “so long as the manufacturer expects to resume operations in a short period of time.”

The final rule defines “life support or life sustaining” as “essential to, or that yields information that is essential to, the restoration or continuation of a bodily function important to the continuation of human life.”  “Intended for use in the prevention or treatment of a debilitating disease or condition” is defined as “intended for use in the prevention or treatment of a disease or condition associated with mortality or morbidity that has a substantial impact on day-to-day functioning.”  In the preamble to the final rule, FDA notes that this definition is different than the Agency’s definition of “medically necessary,” which it uses in its Manual of Policies and Procedures on shortages.

The rule defines “product” in a way that significantly increases the frequency with which covered entities must notify FDA.  That is, a covered entity must notify FDA of a discontinuance or interruption for specific strengths, dosage forms, and routes of administration.  FDA provides an example:

[I]f Applicant X experiences an interruption in manufacturing of the 50-milligram (mg) strength of a drug product that would be subject to § 314.81(b)(3)(iii), but the 100-mg strength continues to be manufactured without delay, under the rule, Applicant X must notify FDA of the interruption in manufacturing of the 50-mg strength if the interruption is likely to lead to a meaningful disruption in the applicant’s supply of the 50-mg strength.

Thus, when determining whether an interruption in manufacturing is likely to lead to a meaningful disruption in supply, triggering the notification requirement, a manufacturer or applicant may only consider whether the manufacturing disruption will affect the manufacturer’s own ability to meet demand for its product – even if the manufacturer has such a small market share that its disruption is unlikely to affect the market as a whole.

The final rule applies to the following covered entities:

• All applicants with an approved NDA or ANDA for a covered drug product;
• All applicants with an approved BLA for a covered biological product, other than blood or blood components;
• Applicants with an approved BLA for blood or blood components, if the applicant is a manufacturer of a significant percentage of the U.S. blood supply; and
• All manufacturers of a covered drug product marketed without an approved NDA or ANDA in its entirety to covered drug products marketed without an approved NDA or ANDA).

With regard to timing, notifications must be submitted electronically to FDA:

• At least 6 months prior to the date of the permanent discontinuance or interruption in manufacturing; or
• If 6 months’ advance notice is not possible because the permanent discontinuance or interruption in manufacturing was not reasonably anticipated 6 months in advance, as soon as practicable thereafter, but in no case later than 5 business days after the permanent discontinuance or interruption.

Such notifications must include the name of the product and applicant, whether the notification relates to a permanent discontinuance or interruption, a description of the reason for the permanent discontinuance or interruption, and an estimated duration of the interruption.

Covered entities that fail to submit adequate notification will be issued a noncompliance letter from FDA informing the entity of its failure to adequately notify FDA.  The covered entity will then have an opportunity to respond.  If FDA does not find that the covered entity had a reasonable basis for failing to adequately notify FDA, the Agency will make the letter and the applicant’s response to the letter public.  As we noted when the proposed rule was issued, while the Agency’s ability to publicize violations is generally one of its most powerful and well-utilized enforcement tools, it may be comparatively weak in this context, where the unfavorable publicity seems unlikely to expose a violative company to private litigation in the absence of extenuating circumstances.

By Ricardo Carvajal –  

The White House Office of Science and Technology Policy (OSTP) directed the three federal agencies charged with ensuring the safety of biotechnology products (FDA, USDA, and EPA) to undertake a review intended to “improve the transparency, predictability, coordination, and, ultimately, efficiency of the biotechnology regulatory system.”  The review will consist of three elements: an update to the Coordinated Framework for the Regulation of Biotechnology to “help clarify which biotechnology product areas are within the authority and responsibility of each agency;” development of a “long-term strategy to ensure that the system is prepared for the future products of biotechnology;” and the conduct of “an expert analysis of the future landscape of biotechnology products” by the National Academies of Sciences, Engineering, and Medicine.   

As noted by OSTP, the Coordinated Framework was established in 1986 and hasn’t been updated since 1992.  In explaining the need for a review, OSTP pointed to changes in the biotechnology product landscape, a proliferation of regulations and guidance documents by FDA, USDA, and EPA, an apparent lack of public understanding with regard to safety evaluation of biotechnology products, and unnecessary burdens on small companies.  Among other things, OSTP directs the agencies to take measures to ensure that the Coordinated Framework is periodically reviewed and updated going forward.

OSTP’s directive can be expected to have an impact on regulation of bioengineered foods, but not on human drugs and medical devices because those products “are not the focus of the activities described” in the OSTP memorandum.  Given ongoing controversy over certain aspects of regulation of biotechnology, most notably in the area of labeling, there should be significant interest in the OSTP-directed review.  Public meetings are anticipated in the fall, and interested parties are encouraged to sign up to be notified of further developments. 

By Kurt R. Karst –      

One of the more memorable lines from the original Star Wars Trilogy is uttered in Return of the Jedi when Luke Skywalker surrenders himself to Darth Vader on the Forest Moon of Endor.  Luke tries to convince Vader to return to the Light Side of the Force, saying that he feels the “good” within Vader.  Vader, however, rebuffs the attempt at conversion, saying “You don’t know the power of the dark side!  I must obey my master.” 

Putting aside the light versus dark allegory, those lines sum up quite well the power of pediatric exclusivity (and its statutory master), particularly as it relates to Orange Book-listed patents.  And it’s a power that is often overlooked . . . at least initially, until the full force of pediatric exclusivity comes to bear on an ANDA or 505(b)(2) applicant.   Indeed, we’ve seen a few instances over the past year where pediatric exclusivity has crept up on an unsuspecting applicant to block final approval of an ANDA.  Consider, for example, the cascading periods of pediatric exclusivity applicable to various patents that were (and some that still are) listed in the Orange Book for NEXIUM (esomeprazole magnesium) Delayed-Release Capsules, 20 mg and 40 mg.  Although there is no 180-day exclusivity block on ANDA approval, only one ANDA sponsor, Ivax Pharmaceuticals, Inc., currently has approval of an application – ANDA 078003.  FDA approved that application after the sponsor obtained a waiver of pediatric exclusivity from the NDA sponsor, and which pediatric exclusivity became operative upon expiration of a patnet to which it attached (see our previous post here).   Other ANDA sponsor have apparently not been as fortunate. 

In light of this incident and others, we thought it would be a good time to review a couple of the ins and outs outs of pediatric exclusivity.  We also refer to several of our previous posts on some interesting pediatric exclusivity topics – here, here, and here. 

FDC Act § 505A provides an additional six months of patent and non-patent exclusivity to pharmaceutical manufacturers that conduct acceptable pediatric studies of new and currently-marketed drug products identified by FDA in a Written Request for which pediatric information would be beneficial.  Pediatric exclusivity extends all other types of Orange Book-listed patent and non-patent marketing exclusivity (e.g., five-year, three-year, and orphan drug exclusivity) an application holder may have under the FDC Act, provided that the exclusivity is granted with not less than nine months of term remaining.  Pediatric exclusivity does not extend the term of a patent itself, but only the period during which FDA cannot approve an ANDA or a 505(b)(2) application that includes a Paragraph II certification (patent has expired), a Paragraph III certification (date on which a patent will expire), or a Paragraph IV certification that concerns a patent that a court has determined is valid and would be infringed.
 
An important aspect of pediatric exclusivity is that it provides additional marketing exclusivity not just for the pediatric indications or formulations, but for all protected indications and formulations of that sponsor’s drug.  Thus, pediatric exclusivity attaches to the patent and non-patent marketing exclusivity for any of the sponsor’s approved drug products (including certain combination products) that contain the active moiety for which pediatric exclusivity was granted, and not to a specific drug product.  See National Pharmaceutical Alliance v. Henney, 47 F. Supp. 2d 37 (D.D.C. 1999) (here).

Where folks most often get tripped up with pediatric exclusivity is the applicability of the exclusivity after patent expiration (i.e., a Paragraph II certification).  A Paragraph II certification exists either because an applicant specifically certified as such, or because FDA has administratively converted a certification to a Paragraph II certification upon patent expiration.  FDA’s ability to make such conversion has been upheld in court.  See Mylan v. Thompson, 332 F. Supp. 2d 106 (D.D.C. 2004) (here), aff’d, 389 F.3d 1272 (D.C. Cir. 2004) (here); Ranbaxy Lab., Ltd. v. FDA, 307 F. Supp. 2d 15 (D.D.C. 2004) (here), aff’d 96 Fed. Appx. 1 (D.C. Cir. 2004).  Now add in 180-day exclusivity and things can really get complicated, particularly when 180-day exclusivity “overlaps” with patent expiration.  That is, when the period of 180-day exclusivity extends only to patent expiration (cutting that exclusivity short) and butts up against pediatric exclusivity applicable to a patent subject to a Paragraph II certification preventing subsequent ANDA applicants from obtaining final approval.  

FDA first encountered this fact pattern back in 2007 in the context of ANDA approval of generic versions of Pfizer’s NORVASC (amlodipine besylate) Tablets, and in light of pediatric exclusivity applicable to Orange Book-listed U.S. Patent No. 4,879,303 (“the ‘303 patent”).  It led to a flurry of activity, including litigation against FDA, citizen petitions, and more.  It was the first “big case” we covered on this blog (see our previous posts here, here, here, here, and here).  

In an April 18, 2007 Letter Decision (Docket No. FDA-2007-N-0090; Docket Legacy No. 2007N-0123), FDA laid out not only when a court decision becomes final in the context of a patent infringement action (i.e., upon issuance of the mandate), but what such a decision means in the context of the pediatric exclusivity statute.  In doing so, FDA explained how an ANDA applicant subject to pediatric exclusivity applicable to an expired patent can “beat” what is otherwise ironclad exclusivity.  You can read the opinion for greater context, but here’s the important part:

This is the first time that FDA has been called upon to determine whether an ANDA applicant is subject to the innovator’s pediatric exclusivity when the ANDA applicant has received a favorable court decision in its paragraph IV litigation but has not yet obtained final approval when the patent expires [(here, because of another applicant’s 180-day exclusivity)]. . . .

In considering [the Mylan and Ranbaxy decisions] regarding the switch to paragraph II certifications with today’s decision regarding the non-applicability of pediatric exclusivity to applicants who prevail in patent litigation, FDA determines as follows.  When the ‘303 patent expired on March 25, 2007, all of the unapproved ANDAs were required to change (or deemed to have changed) to paragraph II certifications and became subject to Pfizer’s pediatric exclusivity at that time.  That is their status during the period before the mandate issues.  However, FDA believes that the language of the statute manifests a clear Congressional intent that pediatric exclusivity not block the approval of an ANDA where the ANDA applicant has prevailed in the paragraph IV patent litigation and therefore creates an exception to the application of the Hatch-Waxman certification provisions.  Thus, if and when the mandate finalizing the panel’s March 22 decision issues in the Apotex case, Apotex’s ANDA will not be blocked by Pfizer’s pediatric exclusivity.

FDA followed up that initial Letter Decision with a couple of other letters (here and here) applying the Agency’s Letter Decision in light of developing facts.  Ultimately, the ‘303 patent was delisted from the Orange Book, thereby removing the pediatric exclusivity barrier to ANDA approval. 

So, at the end of the day, what are the options for an ANDA applicant to overcome pediatric exclusivity applicable to an expired patent that is blocking final approval?  There aren’t many options, and they can take some time to work through, but there are at least three: (1) obtain a wavier from the NDA sponsor; (2) obtain a final court decision of patent invalidity or non-infringement; or (3) successfully pursue Orange Book delisting of the blocking patent.

By Kurt R. Karst – 

The Orphan Drug Tax Credit (“ODTC”) is not an incentive you hear about all too often, but it’s been around for quite some time – since the enactment of the Orphan Drug Act of 1983 – and is a strong incentive for companies to develop products for rare (i.e., “orphan”) diseases and conditions.  So when Congress considered repeal of the ODTC last year (see here and here) in June 2015 by the Biotechnology Industry Organization (“BIO”) (soon to be renamed the Biotechnology Innovation Organization) and the National Organization for Rare Disorders (“NORD”), and titled “Impact of the Orphan Drug Tax Credit on treatments for rare diseases,” the industry groups quantify the benefits of the ODTC, which has amounted to $750 million in awarded tax credits between 1996 and 2011 (as illustrated below in Figure 7 from the report). 

By way of background, a tax credit for certain clinical testing expenses for an orphan drug incurred in that taxable year is permitted under the Internal Revenue Code and under the Internal Revenue Service’s implementing regulation at 26 C.F.R. § 1.28.  The tax credit permits a firm paying United States taxes to credit against its federal income tax 50% of “qualified clinical testing expenses” relating to orphan drug development.  To qualify for the credit, the clinical testing must, under 26 U.S.C. § 45C: (1) be conducted under an IND; (2) relate to a drug and indication that has received an orphan drug designation from FDA; (3) occur after FDA designation as an orphan drug and before FDA approval; and (4) be conducted by or on behalf of the taxpayer to whom the orphan drug designation applies. 

Expenses eligible for the credit include both in-house testing expenses, such as wages and non-depreciable supplies, and contract research expenses (i.e., amounts paid to persons other than employees to conduct the research).  Under 26 U.S.C. § 39(a), companies can carryback unused tax credits “to each of the 1 taxable years preceding the unused credit year,” and can carryforward unused tax credits “to each of the 20 taxable years following the unused credit year.”  Although the law sets a baseline that “[n]o tax credit shall be allowed . . . with respect to any clinical testing conducted outside the United States,” there’s an exception when “testing is conducted outside the United States because there is an insufficient testing population in the United States . . . .”  (A regulation – at 26 C.F.R. § 1.28-1(d)(3)(ii)(B) – defines “insufficient testing population” to mean “[t]he testing population in the United States is insufficient if there are not within the United States the number of available and appropriate human subjects needed to produce reliable data from the clinical investigation.”)

The key findings from the BIO/NORD report are that:

• Without the ODTC, it is estimated that investment in orphan drugs would have been smaller by a third both historically and in the future;
• In the absence of the ODTC, 67 orphan drugs, or 33%, would likely not have been developed over the past 30 years; and
• Going forward, if the ODTC were repealed, it is estimated that 57, or 33%, fewer new orphan drugs would be approved over the next 10 years.

These findings and others are illustrated throughout the report, and, in particular, in Figures 9, 10, and 11 (reproduced below). 

Things appear to be quiet thus far in 2015 insofar as efforts to repeal the ODTC are concerned.  But if there is a renewed effort, the BIO/NORD report may be an important advocacy piece to sustain the tax credit.

The American Conference Institute (“ACI”) will hold its 26th FDA Boot Camp conference in Boston, Massachusetts from September 30 to October 1, 2015.  A copy of the conference program can be obtained here.  Hyman, Phelps & McNamara, P.C.’s Kurt R. Karst will co-chair the event with Kleinfeld, Kaplan & Becker, LLP’s Scott M. Lassman.  The conference will include presentations from a virtual “who’s who list” of FDA regulatory experts on myriad topics, including the approval process, pre-approval concerns, product labeling, clinical trials, adverse events reporting, and patent and non-patent marketing exclusivity issues.

ACI will also hold its 3rd annual Paragraph IV Disputes Master Symposium in Chicago, Illinois from September 30 to October 1, 2015, with a post-conference workshop on October 2nd.  A copy of the conference program can be obtained here.  The conference features presentations from preeminent patent litigators representing brand-name and generic drug manufacturers, leading in-house counsel, and esteemed jurists and government representatives who will discuss, analyze, and interpret the latest controversies affecting Paragraph IV litigation.  Hyman, Phelps & McNamara, P.C.’s James C. Shehan will be speaking at the conference. 

FDA Law Blog is a media partner for both conferences.  As such, we can offer FDA Law Blog readers a special $200 discount off the current price tier.  The discount code is: FDA200.  We look forward to seeing you at the conferences.

By James E. Valentine* –

The enactment of FDASIA, including the fifth reauthorization of PDUFA, really put patient engagement on the radar beyond some of the traditionally active disease communities (e.g., HIV/AIDS, cancer, neurological diseases).  FDASIA’s section 1137, the provision on Patient Participation in Medical Product Discussions, led FDA to seek input on “strategies to solicit the views of patients during the . . . development process and consider the perspectives of patients during regulatory discussions” (see our prior coverage here).  Meanwhile, CDER and CBER have been busy fulfilling their commitment to host at least 20 Patient-Focused Drug Development (PFDD) meetings on specific disease areas during fiscal years 2013-2017.

On July 2, 2015, CDER/CBER will announce the selection of the final set of disease areas to cover as part of the PFDD initiative under PDUFA V:

• Alopecia areata
• Autism
• Hereditary angioedema
• Non-tuberculous mycobacterial infections
• Patients who have received an organ transplant
• Psoriasis
• Neuropathic pain associated with peripheral neuropathy
• Sarcopenia

With the addition of these eight meetings, FDA is on target to have held 24 in total—four more than the minimum of 20 that the Agency committed to under PDUFA V. 

The PFDD meetings have helped advance a systematic approach to gather patients’ input on their condition and treatment options, and provide what FDA has deemed “the therapeutic context” for weighing benefits and risks of investigational products for the given disease.  This is accomplished through the inclusion of information synthesized from the PFDD meetings in the first two rows of the structured benefit-risk framework (sB/R) (see below).  The framework was rolled out in March 2015 in CDER’s review of NME NDAs and Original BLAs.   

However, it appears one industry trade group sees this sB/R framework as a platform with greater utility.  In a white paper released in June 2015 by the Biotechnology Industry Organization (BIO) (soon to be renamed the Biotechnology Innovation Organization), the industry group recommends that the perspectives of patients be a standard component of decisions that are made during discussions behind closed doors between sponsors and FDA.  As BIO sees it, the sB/R framework holds the potential to serve as the bridge between patient input and regulatory decisions.  But in order for this to work, patient input should begin when initiating a development program, and the sB/R framework needs to be used early and often in considerations by both sponsors and FDA.

The BIO white paper provides a comprehensive set of recommendations for incorporating patient feedback into the sB/R framework and using the framework during key points of a product’s lifecycle to ensure transparency on the key areas of judgement for regulatory decision-making.  Here are a few recommendations this blogger found noteworthy that bring the patient perspective earlier in the development lifecycle:

Early Stage Development (Pre-IND to Phase 1)

In the early stages of development, a sponsor has the ability to describe the development rationale for a new medicine in the context of the benefit-risk framework and use this information to screen compounds.  To obtain input from patients, BIO recommends that sponsors consider organizing meetings with a representative group of patients and caregivers, including patient advocacy groups (PAGs), to engage in a dialogue around the burden of the condition and the current armamentarium of treatment options.  This information would be summarized in the first to lines of the sB/R framework.  This early stage, qualitative activity appears similar in scope to the discussions at FDA-hosted PFDD meetings.

In addition, BIO recommends that sponsors employ methods to gather robust and representative data that could be used in regulatory decision-making, such as patient surveys and stated choice studies, to assess patient preferences and perspectives on benefit-risk considerations and integrate this information into the framework summary.

To date, this quantitative approach to incorporating the patient perspective has been endorsed by FDA only for the review of medical devices (see our coverage on Patient Preference Information draft guidance here).  However, patient advocacy groups have taken their own initiative to collect patient preference information for use in drug review (e.g., Parent Project Muscular Dystrophy’s risk tolerance survey) and CDER officials have suggested that “more systematic collection of patients’ experience” would be considered in future iterations of PFDD. 

BIO postulates that, in sum, incorporating these patient perspectives in submissions to FDA (e.g., briefing materials for milestone meetings) will assist the sponsor and FDA in developing an aligned sense of the status quo.  It may also provide an opportunity to identify and discuss potential differences in opinion between the two parties early in development.

Mid-to-Late Stage Clinical Development (Phase 2 to Pre-NDA/BLA)

Here, the targeted benefit-risk profile of an investigational drug continues to be investigated and refined so the focus shifts to designing registration trials that ideally reflect an alignment between the sponsor’s and FDA’s perspectives on the clinical context.  BIO sees a role for the sB/R framework to facilitate this evolving dialogue.

In preparation for the end-of-phase 2 meeting, BIO recommends that sponsors obtain further patient preference input from patient organizations in the context of data emerging over the course of development.  This would allow sponsors to gain insight into evolving views of the drug candidate.  BIO suggests measures such as non-disclosure agreements to protect any confidential commercial information.  This qualitative and quantitative patient feedback would be summarized in the bottom three rows of the sB/R framework, as well as the summary assessment.  This recommendation is novel in that it expands the inclusion of patient input beyond the contextual information contained in the first two rows of the framework, now including product-specific input. 

BIO suggests including the updated sB/R framework in the end-of-phase 2 meeting document to serve as an early opportunity for FDA to hear the voice of the patient as it relates to the specific drug candidate benefit and risk attributes, as well as Phase 3 clinical trial development considerations (e.g., size and complexity, recruitment and enrollment strategies, use of endpoints, the clinical outcome measure).

Other opportunities to share the patient perspective, as well as to concisely summarize available data and other factors considered by the sponsor, through the sB/R framework include at pre-NDA/BLA and other late stage meetings and at advisory committee meetings.  BIO also requests that FDA integrate the sB/R framework in the decision memo at the time of approval to communicate the reasoning behind the Agency’s decisions, such as which benefits, risks, or other factors were considered and how they were weighed.  In the event of a Complete Response Letter, BIO requests that FDA provide the sponsor with the framework as documentation of those same factors, but not to release that information to the public.

Shifting to PDUFA VI

While BIO’s recommendations could be implemented at any time, to establish buy-in by FDA, there is an opportunity to present and discuss such proposals during the negotiations for the next reauthorization of PDUFA.  FDA is hosting a public meeting on July 15 to initiate the reauthorization process.  Once under way, there will be opportunities for industry and other stakeholders, including patient advocacy groups, to participate in the process.  A second iteration of PFDD is bound to be a hot topic.

*Admitted only in Maryland. Work supervised by the Firm while D.C. application pending.

By John R. Fleder –

Although there are many areas where practitioners and others disagree regarding the FDC Act, there is at least one subject that seems to generate universal agreement: FDA has the authority to issue a Form 482 to a companies subject to inspection under 21 U.S.C. § 374, and those companies have no right to refuse FDA’s entry to a facility.  FDA has publicly articulated this principle many times and acted accordingly when questioned at the front door by a company that questions FDA’s right to inspection without a warrant and without the firm’s consent.  Indeed, this author clearly publicly advocated that position in 1989 when employed by the Department of Justice.  Administrative Inspections by the Food and Drug Administration:  The Role of the Department of Justice, 44 Food Cosmetic Law Journal 297 (July 1989).

That article cited many district court and courts of appeals rulings involving FDA supporting that principle.  Those courts generally concluded that FDA-regulated industries are “closely regulated,” thereby exempting FDA from needing a warrant to conduct an inspection.  Id. at 298-99.   However, the article also cited to two FDA cases that concluded that FDA could not ordinarily compel an inspection of a regulated company without a warrant unless FDA obtained the consent of the establishment to be inspected.  Id. at 299 (U.S. v. Kramer Grocery Co., 418 F.2d 987 (8th Cir. 1969) (here) and U.S. v. Stanack Sales Co., 387 F.2d 849 (3d Cir. 1968) (here)).  The article noted that these two rulings preceded two Supreme Court cases that had ruled that other federal agencies had the right to conduct administrative inspections without the consent of the regulated entity and without a warrant:  U.S. v. Biswell, 406 U.S. 311 (1972) (the firearms industry) (here) and Colonnade Catering Corp. v. U.S., 397 U.S. 72 (1970) (the liquor industry) (here).  The article also cited to the legislative history of FDC Act for the proposition that warrantless and compelled inspections by FDA were appropriate and would not violate the Fourth Amendment.   Administrative Inspections by the Food and Drug Administration:  The Role of the Department of Justice at 299.

In the intervening period of more than 25 years, the law in this area has not materially changed.  FDA has continued to proceed on the assumption that it has the statutory right to enter regulated companies’ premises by the mere act of issuing a Form 482, and that FDA does not need the actual consent of the establishment or a judicial warrant to enforce that right.  Few companies have challenged FDA’s position.  However, FDA has from time to time obtained “administrative warrants” from U.S. Magistrate Judges when companies have refused or limited an FDA inspection.

A very recent Supreme Court case indicates that the law in this area may be evolving in a direction that could provide FDA-regulated industries with an argument that most thought was unavailable, namely that perhaps FDA cannot insist that a company “allow” an FDA inspection based on issuance of a Form 482.   We do believe that the recent decision from the U.S. Supreme Court is at least worthy of discussion.

On June 22, 2015, the Court by a 5-4 vote decided City of Los Angeles v. Patel.  A group of motel operators and a lodging association had commenced a suit seeking declaratory and injunctive relief by making a facial challenge to a Los Angeles ordinance that requires hotel operators to make their registries concerning their guests available on demand to the police.  The ordinance provides for a criminal fine for a hotel operator’s failure to make guest records available to a police officer demanding the records.  Justice Alito’s dissent noted that the requirement to make those records available on demand had been in effect for 116 years.  Similarly, as noted above, FDA has enforced 21 U.S.C. § 374 by “compelling” inspections merely by issuance of a Form 482.  Similar to the Los Angeles ordinance, failure to “permit” an FDA inspection is a crime.  21 U.S.C. §§ 331(f) and 333.

First, the Supreme Court ruled that the plaintiffs could mount a facial challenge to the Los Angeles ordinance even though the plaintiffs had not been fined or had refused to comply with a police demand for hotel registry documents.  Next, the Court examined whether there was merit to plaintiffs’ argument that hotel operators could mount a challenge if and when the police demanded records pursuant to the ordinance.  The Supreme Court ruled that the ordinance’s requirement that hotel operators make their registries available to the police on demand was unconstitutional “because it penalizes them for declining to turn over their records without affording them any opportunity for precompliance review.”  Slip Op. at 1.

In examining whether the police needed a warrant to force operators to provide records, the Court rejected the argument that no warrant was required even though the police had “special needs” independent of conducting a criminal investigation, namely to ensure compliance and deter criminals from operating on a hotel’s premises.  However, the Court then noted that absent consent, exigent circumstances or the like, the subject of an administrative search “must be afforded an opportunity to obtain precompliance review before a neutral decision maker.”  Slip Op. at 10.  The Court concluded that absent an opportunity for a hotel operator to get precompliance review, the ordinance posed a risk that an administrative search would exceed statutory limits or be used as a pretext to harass hotel operators and their guests.

The Court noted that the police could issue an administrative subpoena seeking records “without probable cause that a regulation is being infringed.”  Slip Op. at 11.  FDA would certainly argue that a Form 482 is at least analogous to an administrative subpoena and that even if this case applies to FDA, FDA investigators need do nothing more than what they are doing today, namely issuing Form 482s.  However, the plaintiffs in Patel suggested to the Court that even when a subpoena is issued, the hotel operators need to be able to move to quash the subpoena before any search of records takes place.  The Court adopted this argument.

Los Angeles argued that these procedures should not be applied to the ordinance because it “is facially valid under the more relaxed standard that applies to searches of this category of businesses,” namely “closely regulated” industries.  Slip Op. at 14.   The Court addressed this argument by noting that in the past 45 years, it had only identified four industries, liquor sales, auto junkyards, firearms dealings, and mining as having had “such a history of government oversight that no reasonable expectation of privacy … could exist for the proprietor over the stock of such an enterprise.”  Slip Op. at 14.  Notably absent from the cited list are industries regulated by FDA.  Perhaps the reason is that in those 45 years no case involving FDA on that issue has come up to the Supreme Court.

The Court discussion of those four industries cites to Colonnade Catering and Biswell, the two Supreme Court decision that lower courts have relied on for the proposition that FDA can conduct warrantless inspections.  The Court noted, however, that defining an industry as being “closely regulated” is the exception and that classifying hotels as being pervasively regulated “would permit what has always been a narrow exception to swallow the rule.”  Slip Op. at 14.  Los Angeles unsuccessfully argued that hotels have been subject to warrantless searches for decades.

The Court then concluded that even if hotels are pervasively regulated, the ordinance at issue would be reasonable under the Fourth Amendment only if it passed three other tests: (1) there is a substantial government interest in the regulatory inspection scheme; (2) warrantless inspections are necessary; and (3) the statute’s inspection program in terms of certainty and regularity of its application provides a constitutional substitute for a warrant.  Slip Op. at 16.  The Court concluded that the ordinance failed the second and third requirements.  The Court suggested that even assuming the need for the element of surprise, it was not apparent that the police could not obtain an ex parte warrant after being refused entry.

Finally, the Court stated that while it has upheld inspections of closely regulated industries that call for searches at least four times a year or on a regular basis, the ordinance at issue imposed no comparable standard.  Slip Op. at 17.  In contrast, FDA inspects very few companies on what anyone could argue is a “regular basis.”

It is here that the Patel case raises the most interesting issues.  Until now, most commentators looked at whether an industry is closely regulated according to the length and scope of the agency’s regulation of that industry.  On that basis, three justices dissenting in the case concluded that the hotel industry is indeed “closely regulated.”  However, Patel arguably changes that analysis by focusing on whether a police officer is given too much discretion as to which hotels to “search” and whether the industry in question is subject to frequent inspections as opposed to occasional and sporadic inspections.   If these are the criteria for determining whether an industry is closely regulated, an interesting challenge could be mounted to FDA’s status as “closely regulating” the industries it regulates.

So where does that leave us?  We suspect that few companies regulated by FDA should want to risk the ire of FDA and the possibility of facing severe sanctions by refusing to “permit” an FDA inspection.  FDA will surely continue to argue that FDA industries are closely regulated and fit within the line of Supreme Court cases that allow for warrantless inspections and no opportunity for a company to obtain judicial review before FDA enters premises pursuant to a Form 482.  It is certainly not the point of this posting to provide anyone with legal advice and to advocate that companies should incur the risk and expense of challenging FDA on this topic.

However, the law in this area seems murkier than most commentators would have thought before Patel was decided.  Can companies legally tell FDA that they can refuse entry by an FDA inspector until the company gets “preenforcement review”?  Will someone file the same type of preenforcement judicial challenge to FDA’s warrantless scheme, the way the hotel operators did in Patel?  Must FDA get a warrant before it can legally “force” a company to “permit” an inspection?  Will courts rule that FDA inspections do not require warrants and that preenforcement judicial review is not available?  We may or may not see answers in the foreseeable future.  Who knows when and even whether someone will make these arguments to challenge FDA’s authority.

By Andrew J. Hull* –

Only one day before the product-tracing provisions of the Drug Supply Chain Security Act (“DSCSA”) were set to take effect for dispensers, FDA issued a Guidance Document for immediate implementation that signals FDA’s intention to delay any use of enforcement for failure to comply with the DSCSA’s two major product-tracing requirements for dispensers until November 1, 2015.  These provisions, which take effect on July 1, 2015, require that a dispenser (1) not accept ownership of a product without receiving the necessary product-tracing information (i.e., transaction history, transaction information, and transaction statement), and (2) capture and maintain such information for at least 6 years.  See FDCA § 582(d)(1)(A)(i), (iii).  The Guidance Document comes just over a week after pharmacist associations wrote a letter to FDA asking for an extension of time for compliance with these requirements (see our previous post here).

Noting that many dispensers intend to use an electronic system to capture and maintain product-tracing information, FDA recognized “that some dispensers may need additional time beyond July 1, 2015, to work with trading partners to ensure that the product tracing information required by section 582 [of the FDCA] is captured and maintained by dispensers.”  Guidance Document at 3.  While FDA does not intend to take action against dispensers who fail to receive product-tracing information upon acceptance of ownership or who fail to capture and maintain such information, it does recommend that dispensers “work with the previous owner[s] to receive this information” in order to fulfill their additional obligations under the DSCSA to identify and investigate suspect and illegitimate product.  Id. 

The Guidance Document reminds prescribers, however, that they are not completely off the hook until November 1, including when it comes to their product-tracing responsibilities.  Prescribers must still only engage in transactions with authorized trading partners, and they must ensure proper handling of suspect and illegitimate product.  Additionally, under the product-tracing requirements in section 582(d) of the FDCA, dispensers engaged in transactions with subsequent owners must still pass along the appropriate product-tracing information, effective July 1.  Guidance Document at 3; see FDCA § 582(d)(1)(A)(ii).

* Admitted only in Virginia.  Work supervised by the Firm while D.C. application pending.

By Ricardo Carvajal –

As directed under FSMA, FDA issued draft guidance on its approach to implementation of the Voluntary Qualified Importer Program (VQIP).  In exchange for voluntarily subjecting themselves to an initial round of heightened scrutiny, importers who are approved for participation in the program can expect a range of benefits that could have a significant commercial impact.  The Q&A section of the draft guidance begins with a focus on those benefits, to include:

• Expedited entry for all foods included in an approved VQIP application – in essence, immediate release of shipments “unless examination and sampling are necessary for public health reasons”;
• Examination and sampling limited to “’for cause’ situations (i.e., when the food is or may be associated with a risk to the public health), to obtain statistically necessary risk-based microbiological samples, and to audit VQIP”;
• Examination and sampling at the location preferred by the importer;
• Expedited laboratory analysis of “for cause” or audit samples “to the extent possible in accordance with public health priorities”; and
• Access to a VQIP Importers Help Desk.

The benefits described above have obvious appeal to any importer that has experienced a disruption of its operations as a result of an FDA hold on an imported food shipment.  However, as the remainder of the draft guidance makes clear, those benefits won’t come cheap.  There are numerous eligibility criteria that must be satisfied, but the ones that we believe merit greatest attention are these: 

• Neither the importer nor any non-applicant entities associated with the food can be “subject to an ongoing FDA administrative or judicial action…, or have a history of significant noncompliances relating to food safety” (“non-applicant entities” are defined as “those entities associated with a VQIP food that conduct activities throughout the supply chain necessary for ensuring that the eligibility requirements of VQIP are met,” and include the FSVP or HACCP importer, the foreign supplier, and the filer/broker);
• Demonstration of compliance with supplier verification “and other importer responsibilities under the applicable FSVP, juice HACCP, or seafood HACCP regulations”; and
• Development and implementation of a VQIP Quality Assurance Program (QAP).

The first criterion described above suggests that a fair amount of due diligence will be expected on the part of any importer that hopes to gain approval.  The second criterion essentially summarizes what will be required under the Foreign Supplier Verification Program.  But the third criterion is where the rubber really meets the road.  The QAP is described as “a compilation of the written policies and procedures you will use to ensure adequate control over the safety and security of the foods you import,” and must include the following “as applicable”:

• Corporate quality policy statement that relates to “food safety and security throughout the supply chain,” and an explanation of how it is communicated to and understood by all non-applicant entities involved in implementation;
• Organizational structure and functional responsibilities for the importer, and functional responsibilities for non-applicant entities;
• Food safety policies and procedures implemented to ensure food safety “from source to entry”;
• Food defense policies and procedures, including “procedures for controlling the safety and security of each VQIP food throughout the transportation supply chain”;
• Experience and training for responsible employees;
• Procedures for ensuring QAP implementation, and auditing and updating as needed;
• Records “relating to the structure, processes, procedures, and implementation of the QAP,” which must be made available to FDA upon request; and
• References relied on in development and implementation of the QAP.

It seems clear that development and implementation of a QAP that will pass muster with FDA will be a resource-intensive endeavor.  It may be impossible to anticipate how many importers will be willing to take on that burden (and also bear the other costs, including the estimated annual fee of @ $16k) in exchange for the benefits promised by FDA.  In any case, FDA plans to limit the number of applications in the first year of operation to approximately 200, depending on the agency’s resources.  Whether that limit is reached could prove to be a good indicator of whether FDA has struck the right balance between benefits and costs of participation.

Comments on the draft guidance are due by August 19.

By Jennifer D. Newberger – 

Devices intended to be reprocessed and used on more than one patient are required to be directly marked with a unique device identifier (UDI).  21 C.F.R. § 801.45.  If, however, the direct marking “would interfere with the safety or effectiveness of the device,” the regulation provides an exception from the requirement.  21 C.F.R. § 801.45(d)(1).

The exception in the regulation does not depend on which type of premarket review the device underwent, i.e., de novo classification, 510(k) notification, premarket approval (PMA) or biologics license application (BLA) approval.  FDA recently issued a draft guidance, however, that—intentionally or unintentionally— appears to make just this distinction.

In Unique Device Identification: Direct Marking of Devices (June 26, 2015), FDA states that when a device has been cleared through the 510(k) or de novo process, the sponsor should “conduct analysis and/or testing to determine whether direct marking could significantly affect the safety or effectiveness of the device” and document the decision in the design history file (DHF).  Draft Guidance, at 7.  The draft guidance then states that, if the direct marking would interfere with the safety or effectiveness of the device, the exception would apply.  If the company nevertheless chooses to directly mark the device, then a new 510(k) would be required.

The process described above is how the decision-making process ideally should proceed for all devices, regardless of classification or regulatory pathway.  First, the manufacturer decides whether directly marking the device will affect safety or effectiveness.  If so, that decision is documented in the DHF, and the company can take advantage of the exception and not directly mark the device.  If the company still chooses to directly mark the device, doing so will require a new 510(k), or PMA or BLA supplement.  If the manufacturer determines that directly marking the device will not affect safety or effectiveness, then the device must be directly marked, and no premarket submission is required, e.g., no new 510(k) or PMA or BLA supplement.

The draft guidance, however, is ambiguous as to whether this decision making process is the same for all devices.  As an initial matter, to address whether directly marking a device would require a new 510(k), PMA supplement, or BLA supplement, FDA split the answer in two, depending on the regulatory pathway of the device subject to the direct marking requirement.  As discussed above, it first addressed the process with respect to products cleared through the de novo or 510(k) process.

The draft guidance then specifically addresses devices approved in a PMA or BLA.  This additional discussion is ambiguous, and seems to be saying that devices approved through a PMA or BLA cannot take advantage of the exception. 

For instance, in the discussion of 510(k) or de novo devices, the draft guidance explicitly says that if the manufacturer determines the direct marking would affect the safety or effectiveness, the manufacturer can “make use” of the exception that would permit the manufacturer not to directly mark the device.  But there is no such language in the discussion of devices that are PMA or BLA approved.  Instead, the draft guidance states that if adding a UDI direct marking would affect the safety or effectiveness of the device, the addition of the direct marking “will” require a supplemental PMA or BLA.  Unlike the paragraph discussing devices cleared through the 510(k) or de novo process, the draft guidance does not state that the manufacturer may make use of the exception. 

If this reading is correct, the draft guidance appears to say that a manufacturer of a PMA or BLA cannot take advantage of the exception, as it could if the device were cleared through the 510(k) or de novo process.  As noted, this language is not very clear, and this outcome may not have been intended.  If that is the case, any final guidance issued should clarify that the exception to the direct marking requirement applies equally to all devices, regardless of classification or regulatory pathway.