By Allyson B. Mullen –

On November 3, 2014, the law firm of McKenna Long & Aldridge LLP filed suit on behalf of Plymouth Direct, Inc. (Plymouth) and Natures Pillows, Inc. (NPI) in the United States District Court for the District of Columbia against FDA claiming that FDA unlawfully detained multiple shipments of the companies’ medical device, the BeActive® Brace, that were imported into the U.S. 

According to the companies’ Complaint, BeActive is manufactured in China and sold by Plymouth and NPI in the United States through retail and mail order channels.  BeActive is a wrap brace that puts pressure on the wearer’s calf muscle, thereby reducing tension on the sciatic nerve, which can reduce lower back pain.  In April 2014, Plymouth and NPI’s supplier (Base4 Group Inc.) sent an email to FDA with BeActive’s packaging and labeling and sought FDA’s opinion as to the product’s classification (see court document here).  Based on the information provided in the court filings, the draft labeling explained that the brace was used to apply pressure to the calf muscle to relieve back pain – the device’s fundamental principle of operation.  FDA responded stating that BeActive was a Class I, 510(k)-exempt, Limb Orthosis, pursuant to 21 C.F.R. § 890.3475. 

Plymouth and NPI began selling BeActive in August 2014.  The Complaint states that between September 27, 2014 and October 20, 2014, FDA subjected seven shipments of the product to Detention without Physical Examination because BeActive lacked 510(k) clearance.  Specifically, FDA indicated that BeActive’s claim that it can relieve back pain caused by pregnancy and piriformis syndrome requires 510(k) clearance.  In addition, FDA indicated that BeActive could be an acupressure device because of how the product achieves its intended effect, and acupressure devices could be subject to 510(k) premarket notification requirements (see court document here).   FDA subsequently released all seven shipments on the grounds that although the product appeared violative, the violation was a minor violation. 

According to the Complaint, two more BeActive shipments were detained on October 28, 2014 – six days before the Complaint was filed.  As part of the detention, FDA indicated that it was in the process of adding BeActive to an Import Alert for failure to have a 510(k) clearance. 

In an effort to resolve the import detentions, the Complaint states that Plymouth and NPI proposed changing BeActive’s packaging, labeling, and promotional materials to remove the “objectionable” claims.  In addition, the companies offered to file a 510(k) for BeActive, provided that they could continue selling while the 510(k) was pending.  The Complaint reports that these proffers were made between October 24 and 28, 2014, and as of the date of the Complaint, FDA had not responded. 

The Federal Food, Drug, and Cosmetic Act (the FD&C Act) establishes procedures for the FDA and U.S. Bureau of Customs and Border Protection (CBP) to work together to admit or deny import of medical devices into the U.S.  Through this process, set out in the statute and regulations, FDA or CBP can take samples of devices to determine if they are adulterated or misbranded.  21 U.S.C. § 381(a). If samples are taken, the medical devices must be held until they are cleared for sale into interstate commerce.  21 C.F.R. § 1.90.  These procedures also allow for an informal hearing if import is denied.  21 C.F.R. § 1.94.  In addition, as an alternative to the process in the statute and regulations, FDA has created the “Detention without Physical Examination” process in its Regulatory Procedures Manual.  Through the Detention without Physical Examination process, FDA does not actually take samples of the devices.  Rather, FDA requires the recipient of the devices to hold the devices while the importer provides documentation demonstrating that the devices do not meet the criteria for import refusal. 

The Detention without Physical Examination process is the method employed by FDA in this case, and it is also the method most commonly used to detain imports of medical devices subject to enforcement action (e.g., a Warning Letter that includes an import alert).  FDA believes this process is less burdensome on FDA’s resources than having to take physical samples of products that are delivered into the U.S., when FDA has already determined that the product is adulterated or misbranded.  Thus, if a court found this process to be unlawful, it could significantly change the way that FDA and CBP handle import detentions of medical devices.

Additionally, this case raised an interesting question about how FDA handles enforcement actions that are based on a regulatory finding that is contrary to an earlier FDA opinion.  At least according to Plymouth and NPI’s recital of the facts in this case, FDA concluded that BeActive was 510(k) exempt after reviewing draft copies of the product’s packaging and labeling.  FDA’s import detention, however, was based on the premise that BeActive lacked 510(k) clearance (which would not be necessary if the product is 510(k) exempt).  Based on the materials provided in the court filings, the specific claims for piriformis syndrome and pregnancy that FDA objected to were not included in the packaging and labeling reviewed by FDA in April.  However, the April labeling appeared to explain that the device operated by applying pressure to the calf muscle to relieve back pain.  Therefore, at least from an outsider’s perspective, it appears that FDA changed its mind as to the device classification based on the devices mode of action, even though FDA knew the mode of action when it reviewed the device’s labeling in April.  Certainly, if FDA did change its mind regarding the device classification based on the mode of action without any explanation to the company, this action would appear to be arbitrary and capricious.

Given the very short timeframe in which these facts have transpired, we wonder if FDA considered Plymouth and NPI’s offer to modify BeActive’s packaging, labeling and promotional claims before the companies filed this lawsuit.  This offer was likely made about a week and a half before the companies filed this suit.  However, it appears to have worked in Plymouth and NPI’s favor. 

While the information regarding the two most recent shipments of BeActive in FDA’s import system has not been updated, this case was voluntarily dismissed by the companies on November 6, 2014.  We can assume that, based on the voluntary dismissal, that FDA and the companies likely came to an agreement to release the detained product and a pathway forward for future shipments.

Although we will not have any legal resolution as to the interesting questions raised by this case, it is a recent example of a lesson that can often be forgotten in a regulatory framework where companies usually want to work with the Agency to resolve disputes – sometimes litigation is the answer.  Particularly when it comes to import alerts and detentions that companies have trouble (or cannot) resolve with FDA, history shows us that litigation can be a very effective tool.  A recent review by HPM of cases in which companies challenged an FDA import alert or detention in court showed that the company typically prevailed.  In fact, in most of these cases, soon after the case was filed, it was dismissed, usually, if not always, because the import alert or detention was vacated by FDA.   

By Kurt R. Karst –      

We learned this week that FDA finally approved ANDAs for generic versions of Hoffmann-LaRoche, Inc.’s VALCYTE (valganciclovir) Tablets, 450 mg (NDA 021304).  We don’t usually post on FDA’s daily ANDA approval activities, but the valganciclovir ANDA approvals are of special significance. . . . and might foreshadow another FDA action on a long-awaited generic version of AstraZeneca LP’s NEXIUM (esomeprazole magnesium) Delayed-Release Capsules, 20 mg and 40 mg (NDA 021153).

Ranbaxy Laboratories, which entered into a Consent Decree with FDA and the Department of Justice in January 2012, was believed to be the first applicant eligible for 180-day exclusivity for generic VALCYTE.  Indeed, the company acknowledged this in a 2008 press release after FDA tentatively approved the company’s ANDA, stating “Ranbaxy believes that it has First-to-File status on Valganciclovir tablets, thereby providing a potential of 180-days of marketing exclusivity, offering a significant opportunity in the future.”  (Interestingly, that tentative approval was recently removed from FDA’s website.)  But it appears almost certain that the company’s data integrity and manufacturing problems prevented FDA from granting final ANDA approval. 

Meanwhile, generic competition was stalled because of Ranbaxy’s eligibility for 180-day exclusivity.  Frustration mounted by many people seeking generic competition, and earlier this year, our firm submitted a Citizen Petition to FDA requesting that the Agency take action to remove Ranbaxy’s block on competition for generic VALCYTE, as well as for generic NEXIUM and DIOVAN (valsartan) Tablets (see our previous posts here and here).  (FDA later approved Ohm Laboratories Inc.’s [Ranbaxy’s] ANDA 077492 for generic DIOVAN and granted 180-day exclusivity.)

According to FDA’s ANDA approvals for generic VALCYTE:

The Agency determined today that the applicant who was first to file a substantially complete ANDA with a paragraph IV certification to the remaining patent listed for the reference listed drug (RLD) has forfeited its eligibility for 180-day generic drug exclusivity under section 505(j)(5)(B)(iv) of the act.

Our presumption was that FDA stripped Ranbaxy of 180-day exclusivity eligibility under the terms of the Consent Decree, which states in relevant part:

If Corporate Defendants have not completed their substantial completeness submissions pursuant to paragraph XIV.A, audit plans pursuant to paragraph XIV.B.1, and audits pursuant to paragraph XIV.B.2, for each of the following Excepted Applications by the following dates, Corporate Defendants shall, upon written notification from FDA, be deemed to have relinquished any claim to 180-day exclusivity for such Excepted Application(s) and shall not interpose any objection in any forum to FDA’s approval of any other ANDAs held by other sponsors for the drugs subject to such Excepted Application(s) after such date: ANDA 1, by December 31, 2012; ANDA 2, by January 31, 2013; ANDA 5, by July 31, 2013; and ANDA 4, by September 30, 2014.

But according to a press report, FDA informed Ranbaxy that the Agency’s tentative approval decision was “in error because of the compliance status of the facilities.”  “The FDA also told the Indian drugmaker there were no ‘data integrity’ issues related to the company's filings for the two drugs,” continues the report.  In other words, Ranbaxy forfeited eligibility for exclusivity under FDC Act § 505(j)(5)(D)(i)(IV) for failure to obtain timely tentative approval within 30 months of ANDA submission.  (In the case of generic DIOVAN, where FDA granted 180-day exclusivity, any failure to have obtained timely tentative approval was excepted – see here.)

FDA’s action on Ranbaxy’s ANDA for generic VALCYTE necessarily raises the question as to whether or not the Agency is poised to take a similar action with respect to Ranbaxy’s ANDA for generic NEXIUM.  When FDA tentatively approved the company’s ANDA in 2008, Ranbaxy commented in a press release that it “believes that it has a FTF (First to File) status on the drug, providing it with a potential 180 days marketing exclusivity, thereby offering a significant opportunity in the future.” 

Although recent press reports (see here) say that Ranbaxy continues to believe it has 180-day exclusivity, FDA’s action on generic VALCYTE calls that belief into question.  Moreover, we note that FDA recently removed from its Drugs@FDA website any mention of the company’s tentative ANDA approval for generic NEXIUM, just as with generic VALCYTE.  

By Kurt R. Karst –      

Last week when this blogger reported on the lawsuit filed by Amgen, Inc. (“Amgen”) in the U.S. District Court for the Northern District of California alleging that Sandoz Inc. (“Sandoz”), in its efforts to obtain approval of a Section 351(k) application for a biosimilar version of NEUPOGEN (filgrastim), unlawfully refused to follow the patent resolution procedures outlined in the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), I had it in the back of my mind that something more might be in the works.  A citizen petition perhaps?  As it turns out, that thought was prescient. 

In an October 29, 2014 Citizen Petition (Docket No. FDA-2014-P-1771), Amgen asks FDA to adopt policies and procedures to require biosimilar applicants – before their applications are accepted for review by FDA – to certify to the Agency that they will comply with PHS Act § 351(l)(2)(A) (42 U.S.C. § 262(l)(2)(A)) by providing the reference product sponsor with a copy of the 351(k) application “and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application” within 20 days after FDA informs the biosimilar applicant that its 351(k) application has been accepted for review.  “This certification should be required for all biosimilar applications that have not been accepted for review by the FDA,” says Amgen. 

According to Amgen, what’s at stake here goes way beyond delays in the initiation of patent infringement litigation – it’s the entire fabric of the BPCIA that is is in jeopardy, including biosimilar exclusivity:

Non-compliance with subsection (l)(2)(A) vitiates the entire scheme that Congress created.  If the biosimilar applicant does not disclose the biosimilar application and manufacturing information, the reference product sponsor may not know that an application referencing its product has been submitted.  Even if the reference product sponsor learns of this filing from other sources (e.g., the press), its ability to identify relevant patents is undermined as it may not have the information describing the biosimilar product and its manufacture necessary for meaningful judicial resolution and that should have been exchanged under subsections (l)(2) through (l)(5).  This, in turn, prevents or delays the initiation of court proceedings to enforce infringed patents.  A patent infringement action commenced by means other than as set out in subsections (l)(2) through (l)(6) also may call into question the biosimilar applicant’s obligation to notify FDA, and public notice via the Federal Register may not result. 

The timely initiation of patent litigation under (l)(6) also affects the Agency’s administration of other portions of BPCIA. Pursuant to subsection (k)(6), the sponsor of the first biosimilar product to be designated an “interchangeable” biosimilar product earns a period of exclusivity that will expire on the earliest of five defined dates . . . .  This exclusivity is implemented by the Secretary withholding designation of another biosimilar product as being “interchangeable” until the expiration of the first of these five periods to occur.

Delays in compliance with subsection (l)(2)(A) will delay commencement of, or possibly even eliminate, litigation under subsection (l)(6).  That, in turn, delays the expiration of the periods specified in subsection (k)(6)(B), rendering those potential expiration dates inapplicable.  That result would frustrate a clearly stated Congressional intent. 

Moreover, writes Amgen, a decision by FDA to stand on the sidelines makes the Agency culpable:

By not implementing measures to ensure timely compliance with the subsection (l)(2)(A) disclosures, FDA is contributing to that uncertainty to the detriment of the legitimate interests of reference product sponsors, subsequent biosimilar applicants who may wish to seek an interchangeability designation, and the public.

The remedy Amgen seeks – a certification of compliance with PHS Act § 351(l)(2)(A) – is well within the Agency’s authority, according to the company.  “FDA has the power to remind parties of existing statutory duties without going through any particular level of formality,” writes Amgen.  “Similarly, FDA has broad authority to determine the manner in which parties present themselves or their viewpoints to the agency.  Thus, either as a matter of interpretative or procedural authority, FDA has the power to require that biosimilar applicants certify compliance with subsection (l)(2)(A).”

Whatever the merits of Amgen’s Citizen Petition, we are eager to find out what FDA thinks.  But it may be some time until the Agency responds to Amgen.  Although the petition includes a certification pursuant to FDC Act § 505(q), we question whether or not FDA will deem Amgen’s petition a “505(q) petition” subject to the statutory 150-day response deadline. 

Briefly, under the version of FDC Act § 505(q) in effect since 2012, FDA cannot delay approval of a pending ANDA, 505(b)(2) application, or 351(k) biosimilar application as the result of a result of a citizen petition submitted to the Agency pursuant to 21 C.F.R. § 10.30 (citizen petition) or § 10.35 (petition for stay of action), unless FDA “determines, upon reviewing the petition, that a delay is necessary to protect the public health.”  (See our previous post here for additional background on FDC Act § 505(q).)  Amgen’s petition, however, does not seem to apply to Sandoz’s 351(k) application.  As noted above, Amgen’s “ask” of FDA is for a certification of compliance with PHS Act § 351(l)(2)(A), but only for “biosimilar applications that have not been accepted for review by the FDA” (emphasis added).  Sandoz’s 351(k) application does not fit the bill because the application was already accepted by FDA.  Unless there is another 351(k) application pending at FDA that could be affected by Amgen’s petition, the Agency might simply put the petition on a backburner and respond at a later date. 

By Michelle L. Butler & Kurt R. Karst –

On November 3, 2014, just short of the 60-day deadline, FDA filed a notice appealing to the U.S. Court of Appeals for the District of Columbia Circuit the Final Judgment and Order entered on September 5, 2014 by the U.S. District Court for the District of Columbia in Depomed Inc. v. U.S. Department of Health and Human Services et al., Case No. 1:12-cv-01592.  As we previously reported, the District Court granted Depomed’s Motion for Summary Judgment and ordered FDA to recognize orphan drug exclusivity for Gralise (gabapentin) Tablets “without requiring any proof of clinical superiority or imposing any additional conditions on Depomed.” 

While the filing of the Notice of Appeal answers one of questions arising from the Court’s decision – namely, will FDA accede to the decision – many questions remain.  For example, we know that FDA is still granting orphan drug designations.  (Indeed, according to FDA’s Orphan Drug Designations and Approvals database, the Agency has granted 50 orphan drug designations since September 6, 2014 – the day after the District Court’s decision.)  However, we don’t know if FDA has changed its view on the necessity of articulating a plausible hypothesis of clinical superiority in order to obtain designation of a second drug containing the same active moiety as an approved drug for the same orphan indication. 

We also don’t know for sure what FDA’s views are on the scope of orphan drug exclusivity post-Depomed.  Post-Depomed, one issue is whether or not orphan drug exclusivity applies broadly, such that FDA is prohibited from approving any marketing application for a drug containing the same active moiety for the same indication, including an ANDA for a generic version of a brand-name drug that does not itself have a period of orphan drug exclusivity remaining.  For example, it could be argued that orphan drug exclusivity applicable to Gralise for postherpetic neuralgia prevents FDA from approving ANDAs for generic Neurontin for postherpetic neuralgia. 

We will continue to monitor the case and FDA’s activities and will post further information as it becomes available.

By Jennifer D. Newberger & Alan M. Kirschenbaum –

On October 31, 2014, the Centers for Medicare & Medicaid Services ("CMS") finalized changes to the regulations implementing the Affordable Care Act’s transparency reporting provisions, otherwise known as the Physician Payment Sunshine Act ("Sunshine Act").  The original Sunshine Act regulation, published on February 8, 2013 (which we summarized here), excluded from the reporting requirement payments to speakers at a certified continuing medical education ("CME") event if the event met certification or accreditation requirements and standards for continuing education established by one of the five accrediting organizations specified in the rule; the applicable manufacturer did not pay the covered recipient speaker directly; and the applicable manufacturer did not select the covered recipient speaker or provide the program provider with recommendations for speakers. 

In July 2014, CMS proposed to eliminate this exclusion on the ground that it is unnecessary because payments to CME program providers would already be excluded under the “indirect payment” rule.  An indirect payment is not reportable if the manufacturer does not know the identity of the covered recipient during the reporting year or by the end of the second quarter of the following reporting year.  42 C.F.R. § 403.904(i)(1).  In response to this proposal, industry stakeholders objected that the indirect payment rule would not exclude payments to CME organizations because the manufacturers could learn the identity of the physician speakers by looking at brochures and other informational literature. 

CMS has nevertheless proceeded to eliminate the CME exclusion, continuing to believe that it is redundant to the indirect payment rule.  The preamble explains that “payments or other transfers of value, including payments made to physician covered recipients for purposes of attending or speaking at continuing education events, which do not meet the definition of an indirect payment, as defined at § 403.902, are not reportable.” In other words, no reporting is required so long as the applicable manufacturer “does not require, instruct, direct, or otherwise cause the continuing education event provider to provide the payment or other transfer or [sic] value in whole or in part to a covered recipient,” regardless of whether the manufacturer knows or later learns the identity of the physician faculty.  See page 595. 

Thus, CMS appears to believe that the mere knowledge by an applicable manufacturer that a CME grant will be used by a program provider, in whole or in part, to subsidize physician faculty honoraria, travel expenses, registration fees, or other expenses is not sufficient to trigger Sunshine reporting, as long as the CME support agreement does not specify, and the manufacturer does not otherwise “require, instruct, direct, or otherwise cause” the funding to be used for such purposes.  In other words, CME funding provided without restriction as to the program-related expenses that the funding may be used to defray is not reportable.

CMS has also finalized two other changes to the Sunshine regulations.  The original Sunshine rule required an applicable manufacturer to report the marketed name for each covered drug or biological product related to a payment or other transfer of value, but there was no similar requirement for covered devices.  Instead, a manufacturer of a covered device could report either (1) the marketed name, or (2) the product category or therapeutic area of the covered device.  The new change will require reporting of both the marketed name on one hand and the product category or therapeutic area on the other.  CMS states this will align reporting requirements across all product categories and “enhance consumer’s [sic] use of the data.”  Id. at 597. 

The final change to the Sunshine rule pertains to reporting the form of a payment or other transfer of value.  Instead of permitting aggregate reporting of stock, stock options, and other ownership interests, the revised rule will require reporting these three forms of transfers in distinct categories.

All three changes are effective January 1, 2016.

By Wes Siegner –

In the October 30 Federal Register, FDA announced that it will hold a public meeting on December 9 to consider significant changes to its guidance titled  “Toxicological Principles for the Safety Assessment of Food Ingredients,” or “Redbook”.  FDA also invited comment to be submitted by February 9, 2015.

FDA’s Redbook has for decades provided a system of tiered recommendations for the animal toxicological studies that FDA would expect to see in a submission requesting approval of a food or color additive.  The implications of applying the Redbook or a similar process to other regulated product categories are not clear.  On the positive side, guidance could make review and approval, or in the case of new dietary ingredient notifications, “filing,” more streamlined.  However, as happens all too often with FDA guidance, new guidance may effectively require additional animal testing that would erect costly new barriers to market access. 

Participation of the affected industries in this process will, therefore, be essential to assuring FDA’s expansion does not become a hindrance to market access and have negative impacts on public health.

By Alexander J. Varond –

In one of the clearest signs that the U.S. Consumer Product Safety Commission ("CPSC") is stepping up enforcement of CPSC requirements, the Commission recently announced that it had reached a record $4.3 million civil penalty settlement with Baja Inc., and its corporate affiliate, One World Technologies, Inc.   The settlement was in connection with the companies’ alleged failure to report defects involving 11 models of go-carts and minibikes.

According to the CPSC, Baja sold the go-carts and minibikes at issue from November 2004 to June 2010.  By 2010, the company had received four reports of fires from leaking gas caps and burn injuries to customers, including a serious burn injury to a child.  It had also, as the CPSC alleged, learned of a defect that caused the company’s throttles to stick and for the vehicles to unexpectedly accelerate.  CPSC alleged that, despite this, Baja failed to file a full report required under section 15(b) of the Consumer Product Safety Act ("CPSA") until June 2010.  The company also allegedly failed to notify CPSC or consumers of the design changes it made to the go-carts and minibikes to address the stuck throttle issue.

This settlement is an important reminder that, pursuant to 16 C.F.R. § 1115.14(e), manufacturers, distributors, and retailers of consumer products must immediately report (within 24 hours) to CPSC after learning that a product contains a defect that “could create a substantial product hazard, creates an unreasonable risk of serious injury or death, or fails to comply with any consumer product safety rule or any other rule, regulation, standard, or ban enforced by CPSC.”

CPSC alleged that the company “knowingly failed to report to CPSC immediately . . . defects and an unreasonable risk of serious injury,” in violation of section 15(b) of the CPSA.  In addition, the Commission alleged that, in failing to inform CPSC about the products immediately, Baja knowingly violated CPSA section 19(a)(4), which makes it unlawful to fail to “furnish information required by section 15(b).”

In addition to the record $4.3 million civil penalty levied under CPSA section 20, 15 U.S.C. § 2069, Baja agreed to implement a program designed to ensure compliance with reporting requirements of section 15(b) of the Consumer Product Safety Act.  The compliance program includes:

• Written standards and policies;
• Systematic procedures for reviewing and referring consumer and retailer incident reports for potential safety issues;
• Confidential employee reporting of compliance concerns to a senior manager;
• Effective communication of compliance policies and procedures, including training;
• Senior manager responsibility for compliance and accountability for violations;
• Oversight of compliance by the firm’s governing body; and
• Records retention requirements.

Importantly, the settlement does not amount to an admission of defect, substantial product hazard, or unreasonable risk of serious injury or death.  It also expressly states that Baja does not admit that the company failed to notify the Commission in a timely manner.

As further evidence of the CPSC’s increasing enforcement in this area, the Commission imposed a $700,000 civil penalty against Williams-Sonoma on October 30, 2014 for its alleged failure to report defective Pottery Barn Kids Roman shades.

By Ricardo Carvajal & Riëtte van Laack – 

FTC filed a complaint in the district court of New Jersey alleging that certain of Gerber’s advertising claims for its hydrolyzed-whey-based infant formula constitute deceptive acts or practices and the making of false advertisements, in violation of the FTC Act.  FTC challenges as unsubstantiated Gerber’s claims that its formula reduce the risk of allergies in infants who have a family history of allergy.  FTC also challenges as false or misleading Gerber’s advertising of its qualified health claim (QHC).

In May 2009, Nestlé Nutrition submitted a QHC petition to FDA requesting that the agency exercise enforcement discretion for a QHC characterizing the relationship between consuming 100% whey-protein partially hydrolyzed infant formula and a reduced risk of atopic dermatitis.  FDA determined that the relationship was “uncertain, because there is very little scientific evidence for the relationship.”  FDA’s letter of enforcement discretion issued in May 2011 sets forth tightly worded qualified claims that are limited to one type of allergy, namely atopic dermatitis.

According to FTC’s blog posting, “Gerber took the FDA’s narrow letter and turned it into a prominent gold badge that read: ‘1st & Only Meets FDA Qualified Health Claim.’ The leap Gerber made from FDA’s cautious admonition to what the FTC says consumers would view as an FDA approval claim” is at the heart of one of the counts in the complaint.  The other count addresses Gerber’s allegedly unsubstantiated allergy prevention claims.  FTC requests permanent injunctive relief, consumer redress, and additional relief as the Court may determine to be just and proper.

By Kurt R. Karst –      

Ever since the July 2014 announcement by Sandoz Inc. (“Sandoz”) that FDA accepted the first ever application for a biosimilar biological product submitted pursuant to Section 351(k) of the Public Health Service Act (“PHS Act”) – in this case, a biosimilar version of Amgen, Inc.’s (“Amgen’s”) NEUPOGEN (filgrastim) approved under BLA 103353, and which 351(k) application could be acted on by May 2015 under the performance goals agreed to as part of the Biosimilar User Fee Act of 2012 – we wondered how the so-called “patent dance” procedures added to the law by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”) were progressing (or not).  Apparently Amgen has been left on the dance floor without a partner.  And Amgen doesnt take rejection well.  Feeling dissed and spurned, last week Amgen filed a Complaint in the U.S. District Court for the Northern District of California alleging that Sandoz has unlawfully refused to follow the BPCIA’s patent resolution procedures, and is seeking declaratory and injunctive relief. 

By way of background, the BPCIA lays out a multi-step “patent dance” at PHS Act § 351(l) for an applicant seeking approval of a biosimilar version of a reference product: Step 1 – Transmission of Biosimilar Application; Step 2 – Reference Product Sponsor’s Paragraph 3(A) Patent List; Step 3 – Biosimilar Applicant’s Paragraph 3(B) Patent List; Step 4 – Reference Product Sponsor’s Response; Step 5 – Patent Resolution Negotiations; Step 6 – Patent Resolution If No Agreement; and Step 7 – Filing of the Patent Infringement Action.  Under Step 1, not later than 20 days after FDA informs a 351(k) applicant that its application has been accepted for review (i.e., filed), the applicant must provide to the reference product sponsor “a copy of the application submitted to the Secretary under subsection (k), and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application” (PHS Act § 351(l)(2)(A); 42 U.S.C. § 262(l)(2)(A)) and “may provide to the reference product sponsor additional information requested by or on behalf of the reference product sponsor” (PHS Act § 351(l)(2)(B); 42 U.S.C. § 262(l)(2)(B)). 

In addition, the BPCIA provides that a 351(k) applicant must provide notice to a reference product sponsor “not later than 180 days before the date of the first commercial marketing of the biological product licensed under [Section 351(k)].”  After receiving that notice, a reference product sponsor may seek a preliminary injunction prohibiting the 351(k) applicant from manufacturing or selling its biosimilar product until a court decides the issue of validity, infringement, and enforcement of certain patents (PHS Act § 351(l)(8); 42 U.S.C. § 262(l)(8)).

Thus far, controversy surrounding the BPCIA’s patent resolution procedures has focused on whether or not a prospective 351(k) applicant can seek patent certainty by filing an action for declaratory judgment.  As we previously reported, in November 2013, in Sandoz Inc. v. Amgen Inc., Case No. 3:13-cv-02904-MMC (N.D. Cal.), the U.S. District Court for the Northern District of California granted Amgen’s Motion to Dismiss a June 2013 Complaint for Declaratory Judgment and Patent Invalidity and Non-infringement concerning two patents Roche licensed to Amgen that purportedly cover Amgen’s biological product ENBREL (etanercept).  According to the California District Court, “Sandoz does not contend, and cannot contend, it has complied with its obligations under [PHS Act §§ 351(l)(2)-(6)], because . . . it has not, to date, filed an application with the FDA.”  In addition, the court noted that “Sandoz cannot, as a matter of law, have provided a ‘notice of commercial marketing’ because . . . its etanercept product is not  licensed under subsection (k).’”  That decision was appealed to the U.S. Court of Appeals for the Federal Circuit where a decision is pending (see our previous post here).  Meanwhile, two other declaratory judgment complaints were filed.  Both of those cases involve REMICADE (infliximab) and Celltrion Healthcare Co., Ltd. and Celltrion, Inc.’s biosimilar version of the product (see our previous post here).  One of the cases was recently dismissed voluntarily (see here), while the other case is progressing and is in the Motion to Dismiss stage (briefs available here, here, and here).

In its October 24th Complaint, Amgen alleges that Sandoz received notice from FDA on July 7, 2014 that the Agency had accepted the company’s 351(k) BLA for a biosimilar version of NEUPOGEN, and that such notice should have triggered a cascade of events under the patent resolution procedures at PHS Act § 351(l), but did not because Sandoz failed to comply with the initial disclosure under PHS Act § 351(l)(2)(A).  According to Amgen:

Defendants are attempting to obtain the benefits of the BPCIA by filing their BLA under the § [351(k)] pathway without complying with the requirements that Congress also imposed through the BPCIA on biosimilar applicants.  For example, Defendants made a deliberate decision not to provide Amgen with a copy of its BLA, together with other information necessary to describe the process(es) for manufacturing the biosimilar product, within 20 days of receiving notification of FDA acceptance of their application.  Under [PHS Act § 351(l)(2)], Sandoz was required to provide Amgen with such materials by Monday, July 28, 2014.

Instead, Sandoz apparently proposed an alternative procedure in a July 8, 2014 letter to Amgen: that the parties exchange certain information without following the process at PHS Act § 351(l)(2).  Amgen rejected the offer.  Later, Sandoz letter sent Amgen another letter stating that Sandoz had decided “not to disclose our application to Amgen” and also  not to exercise the company’s “right to use the patent information exchange process of the BPCIA.”  Finally, in an October 20, 2014 letter, Sandoz allegedly reminded Amgen that Sandoz’s initial July 8th letter provided Amgen with Sandoz’s 180-day notice of commercial marketing pursuant to PHS Act § 351(l)(8)(A).  Amgen’s Complaint, which cites, among other things, the November 2013 decision in Sandoz Inc. v. Amgen Inc. for the proposition that the 180-day notice can come only after approval of a 351(k) BLA, followed a few days later. 

According to Amgen:

Each of [Sandoz’s] unlawful acts (violation of 42 U.S.C. § 262(l)(2)(A) and violation of 42 U.S.C. § 262(l)(8)(A)) independently deprive Amgen of the benefits afforded under the statute and which Congress provided to reference product sponsors.  Defendants’ failure to provide the BLA and manufacturing information to Amgen under 42 U.S.C. § 262(l)(2)(A) deprives Plaintiffs of the opportunity to seek a preliminary injunction enjoining Defendants from engaging in the commercial manufacture or sale of the Sandoz biosimilar product in time to prevent irreparable harm to Plaintiffs, i.e., after FDA approval of the Sandoz biosimilar product but before Defendants’ commercial marketing of the biosimilar product.  In addition, Defendants’ failure to provide a legally operative notice of commercial marketing deprives Plaintiffs of the opportunity to seek a court intervention to prevent Plaintiffs from suffering irreparable harm.  This too prevents Plaintiffs from enjoining Defendants in time to prevent irreparable harm.

Amgen asserts three causes of action: (1) unfair competition under Cal. Bus. & Prof. Code § 17200 et seq.; (2) conversion; and (3) infringement of U.S. Patent No. 6,162,427 covering a method of using NEUPOGEN to treat a disease requiring peripheral stem cell transplantation in a patient in need of such treatment. 

Amgen’s second cause of action – i.e., conversion – caught our attention.  It’s not a cause of action we see on a daily basis.  Conversion, better known as theft, is an intentional tort that consists of the wrongful exercise of dominion or control over personal property that so seriously interferes with another’s right to control the property that the converter (i.e., thief) is required to pay the other the full value of the property as damages for the conversion.  According to Amgen:

[Sandoz’s] use of the license for NEUPOGEN® (filgrastim) to obtain a governmental privilege (FDA approval to market, manufacture, import, and sell the Sandoz biosimilar product for use in the United States) for Defendants’ own benefit and profit is an act of conversion.  Specifically, Defendants filed a BLA for the Sandoz biosimilar product that intentionally uses Amgen’s prior demonstration of the safety, purity, and potency of NEUPOGEN® (filgrastim), but without Plaintiffs’ authorization or permission and without satisfying the mandatory provisions of 42 U.S.C. § 262(l) that apply to biosimilar applicants.  By filing their BLA for the Sandoz biosimilar product under the § 262(k) pathway rather than the § 262(a) pathway, Defendants seek to obtain a valuable benefit from the license for NEUPOGEN® (filgrastim).  Without Amgen’s efforts, the information relied on by Defendants for the safety, purity, and potency of the Sandoz biosimilar product would not exist. As a result, Defendants have converted property belonging to Plaintiffs.

Amgen is seeking declaratory and injunctive relief.  In particular, Amgen wants the court to enjoin Sandoz from “commercially marketing the biosimilar product until Amgen is restored to the position it would have been had Defendants met their obligations under the BPCIA” and until Sandoz provides Amgen with notice of commercial marketing “on or after FDA licensure of its biosimilar product (and no later than 180 days before first commercial marketing of the product by Sandoz).  In addition, Amgen wants an injunction preventing Sandoz “from continuing to seek FDA review of [the company’s 351(k)] application and/or compelling Defendants to suspend FDA review of [the company’s 351(k)] application until Defendants have obtained permission from Plaintiffs to use the NEUPOGEN® (filgrastim) license or require Defendants to restore to Amgen the benefits afforded to reference product sponsors in the statute,” and a judgment “[a]djudging and decreeing that Defendants have committed a statutory act of infringement under 35 U.S.C. § 271(e)(2)(C)(ii) of the’427 patent by submitting their BLA to the FDA for approval of the Sandoz biosimilar product without providing the required BLA and manufacturing information to Amgen.” 

Those of us who work in the Hatch-Waxman/BPCIA space predicted back in 2010 when the BPCIA was enacted that there would be a lot of controversy over the patent dance procedures (and even hesistance from some to go on to the dance floor in the first place).  We’re now seeing those predictions become reality, and in controversies that will shape the future of the biosimilar approval pathway for decades to come. 

By Jennifer M. Thomas –

Around this time last month, we wrote about the government’s motion for an order to show cause in United States v. Bayer, and the potential lessons to be gleaned from that case.  Bayer entered into a consent decree with the FTC in 2007, which prohibited the company from making any representation about the benefits, performance, or efficacy of a dietary supplement without “competent and reliable scientific evidence” to substantiate such claim.  The current proceedings arise from FTC’s assertion that Bayer lacks such substantiation for its representations about its probiotic product Phillips’ Colon Health.   Now it is time to briefly update our readers, as the saga of Bayer continues. 

Since we last wrote, Bayer filed its response to the government’s motion for an order to show cause why Bayer should not be held in contempt, and was joined by two potential amicus curiae in opposition to the government – the Council for Responsible Nutrition (“CRN”) and the Natural Products Association (“NPA”).  On October 10th, the government replied to Bayer, and subsequently responded to CRN’s and NPA’s requests for leave to participate as amici (see here and here).  Last week, on October 23rd, the court granted FTC’s motion for an order to show cause, but granted leave for CRN and NPA to appear as amicus curiae in the case.

The Court took no position on whether Bayer had actually violated the Order.  However, it did indicate that it would consider Bayer’s primary arguments with regard to the legality of the standard for “competent and reliable scientific evidence” asserted by FTC.  These arguments were echoed by CRN and NPA, and contend in sum that (1) the standard put forth by FTC is contrary to DSHEA, (2) the inflexibity of the proposed substantiation standard is inconsistent with FTC law and past practice, and (3) the standard would be tantamount to subjecting Bayer to a drug-like substantiation requirement.  CRN and NPA also argued that the standard for “competent and reliable scientific evidence” put forth by FTC – namely, two randomized controlled clinical trials on the product itself – would have dire consequences for the dietary supplement industry and for consumers, and that FTC should not be permitted to change the law applicable to dietary supplements through contempt proceedings.

The government strongly contested the implication that the standard it asserted in Bayer would be an industry-wide one, asserting that “this matter is only about determining whether Bayer possessed and relied upon competent and reliable scientific evidence, based on the expertise of professionals in the relevant area . . . not about the government trying to establish a new, one-size-fits-all, approach to all dietary supplement claims . . . .”  Gov’t Resp. to NPA at 7-8.  But it seems the Court was not sufficiently convinced by FTC’s assurances, and in granting CRN and NPA’s motions for leave to participate as amici Judge Linares noted that

[b]oth trade associations have submitted thorough and informative briefs, which are of assistance to the Court, particularly in considering the implications of the ultimate outcome of this dispute on the entire dietary supplement industry.

Order at 3.

The Court has not yet addressed one of the arguments raised in Bayer’s response that we at HPM found of particular interest.  Specifically, Bayer argued that the consent decree is not sufficiently “clear and unambiguous” with respect to the standard for “competent and reliable scientific evidence,” and thus that provision cannot provide the basis for a finding of contempt.  If Bayer were to succeed in this argument, it could certainly affect the degree to which FTC is willing to negotiate regarding a specific, versus a more general, substantiation standard in consent decrees going forward.

Of note is the fact that Bayer’s response did not seek to counter FTC’s substantiation expert, Dr. Loren Laine, with a comparable expert to opine that Bayer’s substantiation constituted “competent and reliable scientific evidence.”   Whether this factored into the court’s determination that FTC had “made a sufficient showing at this juncture to support its application for an Order to Show Cause” (Order at 1), is not clear.  However, we expect that the company may well engage such an expert going forward, despite the fact that the burden of proving contempt, by clear and convincing evidence, remains on FTC.

A status conference in U.S. v. Bayer was on October 28, and another is scheduled for March 18, 2015.  The significance of a relatively lengthy period of time before the next status conference is not clear, although it could indicate either that the parties are in negotiations to settle the case, or that there will be discovery in the interim.

By Allyson B. Mullen & Jeff N. Gibbs –

On October 23, 2014, CDRH held a webinar regarding the two Laboratory Developed Tests (LDT) draft Guidance Documents that were released on October 3 (previously blogged on here and here).  The webinar began with a high-level description of the draft guidances.   While the discussion generally restated the fundamentals of the draft guidances, one point of interest was that FDA plans to address all comments that it receives during the comment period.  Addressing all substantive comments would be a requirement had FDA gone through notice and comment rulemaking, but it is not a requirement for the issuance of a guidance document.

Afterwards, Katherine Serrano, Liz Mansfield and Alberto Gutierrez fielded questions.  The breadth of the questions were wide ranging and highlighted that these guidances, if finalized, will have a wide-reaching effect on laboratory diagnostics, patient care and the economy.  Also, the number of questions underscored that there are many open issues – some FDA easily answered, some FDA said it has considered, but had not yet addressed, and others that it sounded as though FDA had not even considered. 

Key questions and answers included:

• There was a question regarding what will constitute labeling for an LDT.  FDA did not have an answer.
• FDA said it may consider issuing a second draft of the guidance documents.  This is unusual, but if there are extensive, significant comments and the need for extensive revisions, it would be appropriate.
•  If a test falls into one of the categories in the LDT Framework Guidance, but is also a companion diagnostic, the companion diagnostic guidance document will control.
• It is not clear what rules will apply if an LDT falls into two categories within the LDT Framework Guidance.
• Laboratories will be required to submit during the timeframes in the Framework Guidance, not obtain clearance.  LDTs will only be required to come off of the market if FDA disapproves the LDT submission.  

This comment raises an interesting but important nuance regarding how FDA currently interacts with 510(k) applicants.  Under the current 510(k) process, applicants generally receive only one request for Additional Information, due to time limitations set by the user fee goals.  If additional information is still required as the 90-day review clock is nearing its end, FDA will give the applicant the option to withdraw its 510(k), gather the additional information and resubmit.  Most companies choose withdrawal over a not substantially equivalent letter.  If, however, laboratories will be required to withdraw their tests from the market if they withdraw their application, will laboratories wait for an NSE letter and then appeal?  How will FDA accommodate labs that can supply additional data relatively rapidly but not before the clock runs out?  Given that most laboratories have little to no experience working with FDA, it is very likely that many LDT 510(k)s will not be fully resolved during their first review cycle.

• For more established LDTs, clinical practice guidelines may be used to help establish clinical utility in a premarket submission.  Alberto Gutierrez stated that in the Agency’s review of IVD submission, it only considers clinical validity, not clinical utility.
• Analyte Specific Reagents (ASRs) and Research Use Only (RUO) materials can be used as components of an LDT.  If an RUO component is used, however, the LDT premarket submission will be required to establish quality control over the RUO.
•  Advisory committee panels will be used to establish the priority and timelines for LDT premarket submissions.
• Public Health laboratories and neonatal screening tests are within the scope of the draft guidances.  Laboratory Information Systems (LIS) are outside the scope of the draft guidances.
• FDA encourages laboratories to do a pre-submission to obtain FDA feedback regarding existing clinical data for their tests or for planned studies to gather data for a premarket submission (see our prior post on the pre-sub program here).
• FDA agrees that guidance regarding applicability of the Quality System Regulation (QSR) to a laboratory setting is necessary.  It is not clear when this guidance will be available for comment.  (The manner in which QSRs will be applied is a significant factor for labs; without this insight, it is difficult to assess the nature or extent of the increased operational regulatory burden labs will bear.)
• FDA does not yet know how to handle genetic profile panels.  If one marker on a genetic panel is currently cleared or approved as a companion diagnostic, then that marker will be deemed a companion diagnostic which does not fall within the Unmet Needs Category and will require approval in the highest risk group.  FDA acknowledged that it does not know what to do about the other markers in these types of panels.
• If a test is for a rare disease under the draft Framework Guidance, it is possible the lab could get an Emergency Use Authorization to run a large number of the tests during an outbreak situation, but it is unclear how this situation would be handled.  
• LDTs for Unmet Needs will have 1 year to submit a premarket application after another company receives 510(k) clearance or PMA approval for the same intended use.
• FDA considered coordinating with NY State and CAP regarding the existing laboratory certification programs, but it did not want to appear to be passing off its own responsibilities.  FDA encouraged laboratories to comment on how these programs could be useful in the FDA review process.  

Finally, when specifically asked about the “bad” LDTs that it is aware of, CDRH named OvaSure, an ovarian cancer test that has been off the market for nearly 6 years, a false whooping cough outbreak at Dartmouth where people were given antibiotics unnecessarily due, in part, to an LDT, and a New York Times article regarding Vitamin D testing.  FDA went on to say that it is aware of other “bad” LDTs, but because of the type of work the Agency does, the information sometimes cannot be made public.  In response to a question, FDA stated that it has investigated the veracity of the information that it has received regarding “bad” LDTs, particularly whether there is a conflict of interest.  Given the drastic impact that these draft guidances are poised to have on laboratory testing and healthcare, and that FDA is basing the need for regulating LDTs in part on safety issues, it would seem to us that FDA should provide a stronger record for its position.  If this were notice-and-comment rulemaking, the example cited probably would be insufficient to survive judicial scrutiny.

By Ricardo Carvajal - 

FDA released an online learning module intended “to help the seafood industry, retailers, and state regulators ensure the proper labeling of seafood products offered for sale in the U.S. marketplace.”  The learning module consists of three videos that provide an overview of applicable regulations and guidance, explain the scope of the agency’s authority to address mislabeling arising from a variety of circumstances (including nonconformance with applicable standards and species substitution), highlight the potential health consequences of misidentification, and provide tips for inspectors, retailers, and consumers on detecting substitution.

On a separate web page, FDA provides results of its DNA testing of “fish that have a history of being misidentified.”  The agency sampled fish primarily at the wholesale level, and found incorrect identification of fish species 15% of the time.  Almost all mislabeling occurred in the snapper and grouper categories. 

It remains to be seen whether the educational push will be accompanied by more enforcement activity.  In August 2013, a seafood distributor was fined and sentenced to probation after pleading guilty to selling mislabeled fish.  That followed on the heels of a few warning letters to other distributors, but there appears to have been little activity since then.

By Jeffrey K. Shapiro –

FDA has recently finalized the guidance document, now titled “Distinguishing Medical Device Recalls from Medical Device Enhancements.”  We were critical of the draft guidance, especially the proposal for a new, extra legal reporting requirement for device enhancements (see our previous post here).  

Thankfully, the final guidance does not include this proposal.  The main thrust of it is that one should distinguish a recall from an enhancement by looking at whether the device modification is intended to address a violation of the Federal Food, Drug, and Cosmetic Act against which the agency would take action versus a change that does not address such a violation. 

This concept was present in the draft guidance but is presented more forcefully.  It is a fairly obvious point that did not require a guidance.  On the really difficult questions, the final guidance punts (just like the draft guidance did). 

For example, a “market withdrawal” is by definition a correction or removal involving a minor violation not subject to legal action by the agency.  The determination as to whether a violation is “minor” is, in some cases, not easy.  A device that fails to meet specifications or perform as represented is generally considered adulterated or misbranded, and action to address such issues would be a recall rather than an enhancement.  However, there are many ways in which performance issues can arise with a device that are not addressed in the specifications or marketing representations.  The final guidance does not discuss these situations.

It is troubling that FDA’s final guidance definition of “device enhancement” still does not explicitly state whether modifications within this definition are to devices already in the field or confined to future production.  The examples do not clarify this point.  The issue of distinguishing a recall from an enhancement (which is the point of this final guidance) should arise only if a firm is correcting or removing devices in the field.  If a firm is modifying future production only, under the regulatory definitions in 21 C.F.R. Parts 7 and 806, there is not a correction or removal, and a Part 806 reporting requirement cannot apply.  (This issue was discussed at length in our post on the draft recall guidance.)

If FDA is impliedly taking the position that modifications of future production only can be a correction subject to Part 806, that is a bold and controversial proposition that the agency should forthrightly state and defend.  On the other hand, if FDA is not taking this position, then this guidance should have said so, if only to correct the misimpression left by the draft guidance.  A guidance is supposed to clarify regulatory requirements, not introduce new uncertainties.

In the end, the final guidance does not have the worst features of the draft guidance, for which industry should be grateful.  At the same time, it does not clarify much or provide much useful guidance, and it will probably soon be forgotten.  And so, a guidance episode that started with a loud bang, ends in a soft whimper.

By Etan J. Yeshua –

Drug developers targeting acute migraines may now have a new path to approval.  In a draft guidance document issued on Tuesday by the Division of Neurology Products ("DNP"), FDA offers a novel primary endpoint that has not been used before to support migraine drug approvals (primarily the triptan class of drugs).  The guidance document also addresses safety considerations, class labeling, and other study design issues.

Migraines are characterized by more than one symptom (i.e., headache, nausea, photophobia, and phonophobia) and approved treatments, at the insistence of DNP, have traditionally demonstrated efficacy on all four of these as co-primary endpoints.  In the past several years, however, DNP has taken the view that a demonstration of efficacy on headache and only one additional co-primary endpoint – nausea – could be sufficient.  Now, DNP has apparently recognized that this paradigm, while lessening the regulatory burden from four endpoints to two, suggests (perhaps inappropriately) that nausea is a more important symptom than photophobia and phonophobia.  DNP has now opened the door to an alternative approach which appears to recognize that not all migraine patients suffer equally from the same secondary symptoms.  As explained in the guidance document, FDA would still require two co-primary endpoints: (1) headache, and (2) an effect on “the [other] most bothersome migraine-associated symptom” as prespecified by each individual subject.  In other words, FDA is considering “having patients prospectively identify their most bothersome migraine-associated symptom in addition to pain,” and efficacy would have to be demonstrated on headache pain and on “the most bothersome associated symptom” – whatever that may be for a given patient.  This new approach could be an effort by FDA to recognize the varied presentations of migraine symptoms as part of the agency’s recent emphasis on “patient-focused drug development.”

The extent to which this alternative approach actually lowers the bar to approval, however, is unclear.  Although DNP is reducing the number of efficacy endpoints necessary for a new migraine therapy to obtain approval, Tuesday’s guidance document leaves out some important details, which counsels toward thorough communication with DNP early in the development process.  For example, the guidance states that, in addition to the two co-primary endpoints, “all . . . migraine-associated symptoms (i.e., nausea, photophobia, and phonophobia) should be assessed as secondary endpoints,” but it does not specify whether and/or to what extent a drug candidate must demonstrate efficacy on one or more of these secondary endpoints.  While pivotal studies are typically not required to demonstrate statistical separation from placebo on secondary endpoints, the history of FDA’s required showing for triptans – efficacy across four endpoints whether they were itemized as co-primary, or primary and key secondary – suggests that the prudent drug developer obtain program-specific clarity on this point from DNP at or before the end of phase 2. 

In addition, the guidance document does not address whether FDA will require studies to enroll some minimum number or proportion of subjects who identify each of the three associated symptoms as the “most bothersome.”  Given that DNP has previously suggested that nausea is the most significant non-headache endpoint, it remains unclear whether a study in which the majority of subjects list, say, phonophobia as their most bothersome symptom, with success on that endpoint but little or no effect on secondary endpoints of nausea or phonophobia, would be sufficient for approval in acute migraine.  Finally, while randomization should assure a balanced distribution of most bothersome symptoms across treatment groups, it is unclear whether DNP would approve a drug that showed a benefit on the co-primary endpoint when, in fact, the results were driven by different identified symptoms in the placebo and treatment groups.

FDA asked that comments about the draft guidance be submitted by December 22, 2014.  Other topics discussed in the document include trial population inclusion criteria, dose selection, concomitant medications, additional secondary endpoints, frequency of data collection, statistical issues, safety considerations, pediatric studies, and labeling.

By Jay W. Cormier & Anne K. Walsh –

For managers and employees of drug facilities, the arrival of an FDA inspector can be an anxiety-producing experience.  Adding to the understandable nervousness surrounding an inspection is FDA’s new statutory authority to deem drug products adulterated if a facility delays, denies, limits, or refuses to permit entry during an FDA inspection (previous post here).  On October 21, 2014, FDA issued a Final Guidance that explains what FDA considers to be circumstances that constitute violative delay, denial, limitation, or refusal.  It appears FDA attempted to clarify certain issues from the Draft Guidance, yet, as we will discuss below, the Final Guidance is critically vague and legally questionable in several ways.

Application to Other Products

On its face, the Final Guidance does not apply to inspections of food, medical device, tobacco, and cosmetic facilities, but the Final Guidance is written in sweeping terms (e.g., “This guidance therefore covers facilities subject to inspection under any of the authorities in section 704”, and section 704 governs inspections of “food, drugs, devices, tobacco products, or cosmetics” facilities).  Therefore it is reasonable to expect that FDA will take a similar approach for all FDA-inspected facilities. 

We also note that the Final Guidance specifically includes “outsourcing facilities” that voluntarily register under section 503B of the FDCA, which was added since the Draft Guidance was issued.  FDA encourages all registrants, including outsourcing facilities, to keep their point-of-contact email information with FDA up to date.  In a footnote, the Final Guidance states that pharmacies are subject to inspection under section 704(a)(1) “even if [a part of] 704(a)(1) is not applicable because of 704(a)(2).”  Although not required to provide FDA with point-of-contact information, FDA encourages pharmacies to keep their point-of-contact information with State agencies up to date, as FDA may use State license information as a source of a facility’s contact information.

(Inappropriate) Regulatory Creep

FDA has frequently issued guidance without going through notice and comment rulemaking.  Try as it may, FDA cannot make law via guidance.   Although the Final Guidance claims it does “not establish legally enforceable responsibilities,” FDA may treat this document as binding authority.  Therefore, the examples that FDA provides throughout the Final Guidance illuminate FDA’s thinking, however erroneous, about the span of FDA’s authority during inspections.  Issues may arise with respect to taking photographs, requiring employees to answer questions, producing documents that are not on-site, or requiring personnel to be present at an inspected facility.

In spite of a lack of statutory language or a binding relevant court opinion, FDA maintains its general rule that investigators are entitled to take photographs during an inspection.  The Final Guidance goes even further than the Draft when claiming that “[i]mpeding or resisting photography” may constitute limiting the investigation and that such a conclusion is in the discretion of the investigator.  FDA’s only example of a “reasonable explanation” for not allowing photos during an inspection borders on ludicrous:  FDA claims it would be reasonable to not allow photos if the light from a camera flash could adversely affect product quality.  As we discussed in depth when the Draft Guidance was issued, the issue of FDA’s authority in the realm of photographs is murky, at best.

The Final Guidance also signals FDA’s view that an inspector has the authority to ask questions of, and demand oral answers from, any individual at a facility –particularly if the individual is designated as a subject matter expert.  Specifically, the Final Guidance states that it would be reasonable for a facility to delay an unannounced inspection if “appropriate personnel are not immediately available to accurately answer the FDA investigator’s questions.”  Given that FDA has no statutory authority to require anyone to answer any questions during an inspection, FDA’s example seems either (1) naïve with respect to the statute, or (2) foundation for a later FDA argument that failure to provide individuals who can “accurately answer the FDA investigator’s questions” is itself a ground for a violation. 

Likewise, the Final Guidance states: “Although FDA recognizes that facilities require a reasonable amount of time to produce records requested, especially if the records are maintained at a different site, a delay in producing records to FDA without reasonable explanation may be considered delaying the inspection.”  This statement shows FDA’s view that it is entitled to records housed at one facility while it is inspecting a different facility.  When inspecting a drug facility, section 704 applies to, among other things, “all things therein (including records, files, papers, processes, controls, and facilities).”  FDCA § 704(a)(1) (emphasis added).  The hypothetical posited in the Final Guidance confirms that FDA’s expectations of facilities extend beyond the already substantial reach Congress delegated to FDA.

It also appears that FDA considers itself entitled to observe a functioning facility during inspection.  The Final Guidance implies that sending staff “home for the day” and telling the investigator that “the facility is not producing any product” would constitute a violative delay.  While FDA may be entitled to observe a functioning facility (provided that the facility is producing product at the time of an inspection), a facility is not required to keep any personnel present at the site beyond the minimal numbers arguably required to carry out the ongoing production runs.  We do not read the Final Guidance as saying that a company cannot send anyone home once it learns of an FDA inspection; nor are we aware of any legal basis for FDA to take such a position.

Reasonable vs. Adequate

In the Final Guidance, FDA made a uniform language shift from use of the word “adequate” to “reasonable,” to define the types of justifications necessary for a delay, denial, limit, or refusal to be excused.  But is there really a difference between the two terms?

The term “adequate” seemed to render FDA the ultimate finder of fact – whether the facility’s reason for a delay is “adequate” to excuse the delay is something that appears to be clearly a discretionary finding provided that such a determination is not arbitrary and capricious.  One may be tempted, therefore, to take refuge in the softer tone of “reasonable,” particularly if that person has spent time in or around a courtroom or law office where the term “reasonable” has a very specific and long-established meaning.  In the legal world “reasonable” is an objective standard – what would a reasonable person do under a given set of facts; could a reasonable jury find the defendant liable or guilty.  Here, FDA should be held to an objective standard that permits discretion only to the extent that its findings are consistent with what a reasonable finder of fact would conclude (a relatively higher standard than an arbitrary and capricious standard). 

The Final Guidance, however, is notably silent regarding what lexicon it employs.  FDA could adopt a legal definition of “reasonable” or it could just as easily decide that it has the sole discretion to determine what constitutes a “reasonable” explanation or justification for a delay, denial, limitation, or refusal.  Because these determinations will be made in practice by investigators in the field rather than attorneys, FDA will likely become its own arbiter of reasonableness.  Under such a scenario, whether there is any daylight between “adequate” and “reasonable” will be an interesting issue to follow.

* * *

The Final Guidance, thus unfortunately, creates issues rather than clarifies issues. Whether FDA will “get away” with the regulatory creep evidenced in the Final Guidance will depend on facilities holding FDA accountable to the four corners of the FDCA and not ceding ground to FDA. 

One thing that is clear, however, is that the Final Guidance is a reminder of the importance of having written internal procedures that specifically address inspectional issues such as whether and who, if anyone, is authorized to speak to FDA during an inspection and the company’s position regarding the taking of photographs and providing documents that are off-site.  When developing and implementing such policies and revising any existing policies to reflect FDA’s new Final Guidance, companies should seek input from counsel.  Once policies are developed, employees should be trained so that all employees understand the company’s positions prior to an FDA inspection.