By Karla L. Palmer –

The Senate passed a bill last Thursday, December 11, 2014, that will prohibit the use of certain designer anabolic steroids.  H.R. 4771, titled the Designer Anabolic Steroid Control Act (“DASCA”), adds 25 specific over-the-counter designer substances to the category of "anabolic steroids" classified as Schedule III under the Controlled Substances Act.  Senator Orrin Hatch (R-Utah), a co-sponsor of the legislation, stated that the law is intended to prevent steroid products from being marketed as nutritional supplements or being distributed using false labeling.   "Designer steroids are produced by reverse engineering existing illegal steroids and then slightly modifying their chemical composition, so the resulting product is not on the [DEA’s] list of controlled substances," Senator Hatch explained.

In the United States, both possession and distribution of anabolic steroids can be an illegal felony offense; unless the drug substance is prescribed by a physician for a legitimate medical purpose (and enhancing athletic performance or building muscles typically does not achieve that requirement).

The DASCA also provides that a drug or hormonal substance (other than estrogens, progestins, corticosteroids, and dehydroepiandrosterone) that is not listed as a scheduled drug, but which is derived from, or has a chemical structure substantially similar to, an anabolic steroid that is listed, shall be considered to be a listed anabolic steroid if the drug or hormonal substance:

1. has been created or manufactured with the intent of producing a substance that either promotes muscle growth or otherwise causes a pharmacological effect similar to that of testosterone; or
2. has been, or is intended to be, promoted in any manner suggesting that consuming it will promote any pharmacological effect similar to that of testosterone.

So, any substance “like” one of the newly listed steroids that is manufactured or promoted for muscle growth or an effect similar to testosterone will be regulated. 

Importantly, the Attorney General will be authorized to issue an order adding a substance to the definition of "anabolic steroid" upon finding that: (1) the substance satisfies the criteria for being considered an anabolic steroid, and (2) such addition will assist in preventing abuse or misuse of the substance.  This authority permits temporary scheduling for a period of 24 months (to occur not less than 30 days after publication of the temporary scheduling notice). This is a far less cumbersome and complicated process than engaging in legislative scheduling or the eight-factor scheduling analysis under 21 U.S.C. § 812.  The Act also provides that the temporary scheduling order is not subject to judicial review.   The new law will give DEA significantly more power to quickly act to schedule substances that are similar to their illegal counterparts.  

However, DASCA specifically prohibits a substance from being considered to be a drug or hormonal substance covered by the Act if it is:

1. an herb or other botanical, a concentrate, metabolite, or extract of, or a constituent isolated directly from, an herb or other botanical, or a combination of two or more such substances; or
2. a dietary ingredient for purposes of the FDCA and is not anabolic or androgenic.

However, any person claiming the benefit of the herbal/dietary supplement exception bears what is likely a difficult burden of providing the appropriate evidence supporting the exception. 

The law will also increase penalties for importing, exporting, manufacturing, distributing, or dispensing anabolic steroids unless the product is clearly identified as an anabolic steroid or is approved by FDA. Violators may be fined up to $500,000 per violation.

DASCA will allow DEA to quickly crack down on criminals creating new anabolic substances that closely resemble red-flagged counterparts listed, but altered minimally with the intent of evading enforcement.  “When criminal outliers are not stopped, not only does it put consumers at risk, but it unjustly blackens the reputation of responsible dietary supplement companies that manufacture and market legitimate, high-quality and beneficial supplements for sports nutrition and performance,” Mister said. “The passage of DASCA brings a welcome protection against that.”

By Karla L. Palmer –

On December 4, 2014, in the United States District Court for the District of Tennessee, Main Street Family Pharmacy, LLC and its co-owner David Newbaker each pled guilty to a misdemeanor criminal violation of the Federal Food, Drug, & Cosmetic Act (FDCA).  Under the terms of the plea deal, David Newbaker was sentenced to 12 months probation, and the pharmacy and Newbaker were ordered to pay a fine of $25,000.  The Court also entered a civil Consent Decree of Permanent Injunction under 21 U.S.C. 332(a) against both Newbaker and the company’s co-owner, Christy Newbaker.  The decree prohibits the co-owners and the pharmacy from “manufacturing, holding, and distributing drug products until the company comes into compliance with the FDCA” and its implementing regulations, among other requirements.  Paragraph 29 of the Consent Decree sets forth additional penalties for any failure to comply with the Decree’s terms.

The Complaint stems from adverse event reports that FDA received in May 2013 resulting from injections of methylprednisolone acetate (“MPA”) compounded preparations dispensed by the pharmacy.  In total, the Complaint alleged 26 adverse events relating to use of the pharmacy’s MPA.  In response to the adverse events, FDA inspected the pharmacy in May and June of 2013, and analyzed samples of the product in which FDA allegedly confirmed the presence of microbiological contamination.

The case is interesting because it involves an incident and inspection that occurred on the heels of the 2012 New England Compounding Center incident and FDA’s April 2013 testimony to Congress that FDA’s authority to inspect pharmacies was hampered by “gaps and ambiguities” in the law, and that legislative action was needed.  As has been well-documented (here and here), Congress passed the Drug Quality and Security Act (Public Law No. 113-54), which reinvigorated Section 5O3A and implemented Section 503B (creating outsourcing facilities, which are statutorily permitted to compound for office use but must comply with FDA’s current good manufacturing practices (cGMP)).

Although the Main Street Pharmacy Complaint for Permanent Injunction is based on conduct prior to Congress’ reaffirmation of FDCA 503A (21U SC § 353a), the government relied on violations of Section 503A (among other FDCA violations) in its Complaint.  The government alleged that the pharmacy did not obtain patient-specific prescriptions for its compounded preparations, and thus the pharmacy was not entitled to Section 503A’s exemptions from the FDCA’s cGMP, new drug, and adequate directions for use provisions.  The Complaint further alleged: (I) the conditions at the pharmacy established that all drugs “manufactured and distributed” were “adulterated” due to insanitary conditions (enumerated in the Complaint); (2) the drug preparations fell below United States Pharmacopeia quality and/or purity standards in violation of 2l U.S.C. § 35 1(b) (Strength, quality. or purity differing from official compendium); (3) the drugs were misbranded because they purported to be sterile but were not, in violation of 21 L.S.C. § 352(a) (False or misleading label); (4) the drugs contained inadequate directions for use and were not entitled to an exemption from this provision because the pharmacy did not comply with Section 503A (it lacked patient specific prescriptions for its compounded preparations); and, (5) the drugs were allegedly misbranded in violation of 21 U.S.C. § 352U) because of the noted microbiological contamination.

The Consent Decree entered by the Court permanently enjoins the co-owners and the pharmacy from directly or indirectly “manufacturing, holding or distributing” drugs unless and until they meet the strident terms of the Decree, including but not limited to retaining an independent expert to comprehensively inspect the premises and certify compliance with the terms set forth in the Decree. and an FDA re-inspection of the premises.  The Decree sets forth comprehensive requirements for coming into compliance (Paragraph 14) so that the pharmacy may compound for individually identified patients under Section 503A.  In addition, it also sets forth even more stringent requirements should the pharmacy ever choose to register as an outsourcing facility under Section 503B.  Though the Main Street Pharmacy incident involves conduct that occurred prior the passage of the DQSA, it bears noting that we are still waiting on the outcome of the September 2014 federal grand jury indictment related to the NECC matter (which also occurred prior to passage of the DQSA). where the allegedly tainted medications caused far more significant injuries (including deaths) than the 26 adverse events reported in the Main Street Pharmacy case.

By Jeffrey N. Gibbs & Allyson B. Mullen –

A new article published on Medical Device and Diagnostic Industry’s (MDDI) website by Hyman, Phelps & McNamara, P.C.’s Jeff Gibbs, Allyson Mullen, and Graematter, Inc’s Melissa Walker, shows that there is more to 510(k) review time statistics than the statistics that FDA publishes.  (A shorter version of the full length article will also appear in MDDI’s magazine in early 2015.)  The authors analyzed 510(k) review time data from FDA’s publicly available database using SOFIE, Graematter Inc.’s Regulatory Intelligence System.  The article points out several interesting conclusions from the analysis:

• Use of the third-party review program has significantly declined, while the review times for these 510(k)s have increased.
• Contrary to expectations, there is no review-time advantage to submitting an Abbreviated 510(k) compared to a Traditional 510(k).
• Analyzing review times for specific device types can show surprising patterns. Even those devices most frequently reviewed by FDA still saw an increase in their overall review times between 2008 and 2012.
• There can be substantial jumps in average review times for certain types of products; steep declines are rarer.

Another finding is that in vitro diagnostic device (IVD) 510(k)s take significantly longer to review than 510(k)s for other types of devices.  Between 2008 and 2012, the average review time for an IVD 510(k) was 183 days compared to a non-IVD 510(k), which was 127 days.  This finding is of particular importance given FDA’s proposed plan to regulate laboratory developed tests (LDTs) as IVDs (see our earlier posts on this proposal).  The same reviewing divisions that are already experiencing higher than average review times will begin seeing a great deal more work, if FDA’s plan to regulate LDTs is finalized.  It is reasonable to conclude, in an era of fiscal cliffs and government shutdowns, that FDA will not be given a large number of resources to deal with this increased workload.  IVD manufacturers have expressed concerns about the impact of LDT regulation on review times.  These data suggest the concerns are well-founded.

By Jamie K. Wolszon & Jeffrey N. Gibbs –

The House Energy & Commerce Committee, which has jurisdiction over FDA, has issued a “white paper” announcing that as part of its efforts to prepare a draft discussion legislative package in early 2015 related to the overall 21st Century Cures Initiative, that it seeks input on specific questions related to the FDA Laboratory-Developed Test (LDT) proposed Framework.  This key House panel is also seeking “advice on what role Congress should play in addressing any other related issues.” The white paper requests comments by January 5, 2015.  We previously reported on the overall 21st Century Cures initiative here, here, and here.  

The white paper states: “The committee understands that FDA’s approach has led to a number of important questions about administrative process and policy.  In addition to questions about the framework proposed, we are aware that the agency’s release of the guidance documents has served as a catalyst for broader conversations about the overarching need to modernize governmental oversight of these unique and increasingly important medical products.  As the 21st Century Cures initiative proceeds, with preparations for a discussion draft early in the New Year, the committee appreciates all interested stakeholders” input on the issues.”  The administrative process issues referenced here likely refer to calls for the agency to use notice-and-comment rulemaking instead of guidance to issue the framework.  We previously reported that in November 2014, several laboratory and medical groups and laboratory directors sent FDA Commissioner Margaret A. Hamburg a letter arguing that if the agency proceeds with the framework, it must do so through notice-and-comment rulemaking. 

The specific issues related to FDA oversight of LDTs that the panel seeks comments on include: how to draw lines “separating the practice of medicine, the actual conduct of a diagnostic test and the development and manufacturing of diagnostic tests;”  what constitutes a “device” in the context of LDTs; how FDA will define risk; the applicability of pre-market review standards for kits to LDTs; the potential role of pre-market controls in easing premarket review; when a supplemental premarket submission is required for a modification; what constitutes labeling for an LDT; potential overlap between the Clinical Laboratory Improvements Act of 1988 (CLIA) and FDA regulation, particularly in the area of quality systems; how to address tests for rare disorders; grandfathering provisions; and incentives to encourage development of new tests. 

In the white paper, the Committee notes that its health subcommittee held a September 9, 2015 hearing on the issue of FDA regulation of LDTs.  We previously reported that at the hearing, which lasted for hours, several members of the subcommittee questioned FDA Center for Devices and Radiological Health (CDRH) Director Jeff Shuren at length. 

January 2015 promises to be an interesting time for the regulation of LDTs.  As we previously reported, FDA will hold a public meeting to discuss the draft guidances on January 8-9, 2015 at the National Institutes of Health (NIH) campus in Bethesda Maryland.  FDA identified specific topics for each session during that upcoming meeting.  It is unclear whether presenters could make a general comment that they oppose the very concept of FDA regulation of LDTs.  Consistent with prior FDA statements, FDA is looking for feedback on its framework and not whether there should be FDA regulation of LDTs at all.  However, the white paper calls for comments “on what role Congress should play in addressing any other related issues,” which could include comments that the agency should not regulate LDTs at all.  While FDA is not receptive to a “do not regulate” message, Congress may be receptive to this message. 

By Alan M. Kirschenbaum –

A CMS final regulation implementing changes to the Medicaid Drug Rebate Program (MDRP) is now scheduled to be published in April 2015, according to OMB’s updated current Unified Agenda of Regulatory and Deregulatory Actions.  Before you mark that in your calendar in pen, be aware that CMS has missed at least four previous “final action” dates published in the Unified Agenda since the proposed rule was issued on February 2, 2012.  (You can find our summary of the proposed rule here.)  The final rule has not yet been submitted to OMB for review as of this writing.

In a related development, CMS recently issued a notice that, at or around the same time that CMS publishes the final MDRP rule, it will also release finalized Federal Upper Limits (FULs) calculated pursuant to an Affordable Care Act amendment to the Medicaid statute.  That amendment replaces published prices with average manufacturer price (AMP) as the basis for calculating FULs (as explained at pages 3-4 of our summary.  FULs establish Medicaid payment limits on multiple source drugs where there are at least three A-rated drugs available nationally.  CMS has been issuing monthly draft FULs since 2011, but is waiting until the MDRP rule is finalized before finalizing the FULs.  After the FULs are finalized, CMS is expected to provide a transition period for state Medicaid agencies to implement the new FULs.

If all goes as planned, we will have two important Medicaid drug rebate and payment issuances in April.  If not – April Fools!

By Andrew J. Hull* & William T. Koustas –

Piece by piece, FDA has been releasing guidance documents to implement the Drug Supply Chain Security Act (“DSCSA”).  As we reported last week (see our previous post here), FDA created a database to allow wholesale drug distributors and third-party logistics providers (“3PLs”) to comply with the DSCSA’s annual state licensure reporting requirements.  Unexpectedly, and perhaps caught up in the holiday spirit, FDA has now published a draft guidance, entitled “DSCSA Implementation: Annual Reporting by Prescription Drug Wholesale Distributors and Third-Party Logistics Providers” (“Draft Guidance”), to provide some much-needed direction for wholesale distributors and 3PLs attempting to comply with DSCSA reporting requirements. 

Under the DSCSA, wholesale distributors and 3PLs are required to report certain facility and state licensure information to FDA on an annual basis.  FDCA §§ 503(e)(2), 584(b).  3PLs were required to begin reporting this information as of November 27, 2014, and wholesale distributors must begin to report on January 1, 2015.  While FDA is required by statute to make all reported information from wholesale distributors public on its website, the Draft Guidance states that FDA will also make all information reported by 3PLs available on its website.  The Draft Guidance lays out what must be reported in initial and subsequent reports, when such reports must be made to FDA, and how to make such reports.

Content of Reports

The Draft Guidance distinguishes between information that wholesale distributors and 3PLs must report (i.e., as required by statute) and information that, according to FDA, they should report on a voluntary basis.  Additionally, FDA requests in the Draft Guidance that wholesale distributors and 3PLs report the same information in order for there to be one “public database to serve as a single repository of licensing and facility information for wholesale drug distributors and 3PLs conducting business in the United States.”  Draft Guidance at 3. 

Initial Reports

By statute, wholesale distributors must report certain information for each facility they operate:

1)    Identifying information for the facility

• Name of the company (While not required by statute, FDA recommends providing the company name in the same form as it appears on the license)
• Address of the facility
• Contact information (While not required by statute, FDA recommends providing the name of a contact person to interact with FDA, an email address, and a telephone number)
• All trade names that the company does business as (i.e., any other names listed as “dba”)

2)     Licensure information for each state

• State
• State license number (identification number)
• Significant disciplinary actions by any state or federal agency (FDA recommends describing any significant disciplinary action that occurred in the 12 months preceding the initial report by identifying the type of disciplinary action, the date of final disciplinary action, and the state where the disciplinary action occurred)

In addition, the Draft Guidance states that wholesale distributors should report the following information for each facility they operate:

1)     A unique facility identifier (FDA recommends a Dun & Bradstreet number)

2)     Expiration date for the license

3)     Documents associated with the disciplinary action, such as a consent decree, final state board ruling, etc.

By statute, 3PLs must report certain information for each facility they operate:

1)     Name of company (While not specifically required by statute, FDA recommends providing the company name in the same form as it appears on the license)

2)     Address of the facility

3)     All trade names that the company does business as (i.e., any other names listed as “dba”)

4)     Licensure information for each state

• State
• State license number (identification number)

In addition, the Draft Guidance states that 3PLs should report the following information for each facility:

1)     Name of contact person to interact with FDA

2)     Email address

3)     Telephone number

4)     Unique facility identifier

5)     Expiration date for the license

6)     Significant disciplinary actions by any state or federal agency that occurred in the 12 months preceding the initial report

• State where disciplinary action occurred
• Date of final action
• Type of disciplinary action
• Description of violation
• Documents associated with the disciplinary action, such as a consent decree, final state board ruling, etc.

While 3PLs are considered to be licensed under the DSCSA until the effective date of FDA’s forthcoming 3PL licensing regulations, the Draft Guidance clarifies that they are still required to report to FDA under the DSCSA, even if they are not licensed under a state 3PL licensing program.

Subsequent Reports

All annual reports submitted by wholesale distributors and 3PLs subsequent to the initial reports are considered subsequent reports.  The Draft Guidance states that the same mandatory and voluntary information set forth in the initial reports is also required in subsequent reports.

Reporting Dates

Initial reports by wholesale distributors must be submitted between January 1 – March 31, 2015, while 3PLs must submit the same information between November 27, 2014 – March 31, 2015.  Facilities that obtain new federal or state licenses after these dates should submit their initial report within 30 days of obtaining the license.

Subsequent annual reports for wholesale distributors and 3PLs are due annually  during the annual reporting period of January 1st – March 31st.

Significant disciplinary action reports for both wholesale distributors and 3PLs should be submitted to FDA within 30 days of final action.

Facilities that go out of business or voluntarily withdraw a license should notify FDA within 30 days.

Method of Reporting

The Draft Guidance states that FDA prefers that reports be submitted with extensible markup language (“XML”) files in Structured Product Labeling (“SPL”) format.  Information can be submitted by a link to a web portal on FDA’s website.

All in all, FDA’s Draft Guidance seems to provide some clarity for wholesale distributors and 3PLs attempting to comply with DSCSA reporting requirements.  FDA’s interpretation of the statutory reporting date allows submission of required information by March 27, 2015, which seems reasonable in light of impending (and expired) statutory deadlines for reporting.  Now, with a method of reporting in place and direction from FDA, wholesale distributors and 3PLs should have a better understanding of the process of complying with the DSCSA licensure reporting requirements.  We may update this post as we further digest the Draft Guidance.

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

By James C. Shehan –

Over the past year, the plight of seriously ill patients seeking access to unapproved drugs has led five states to pass laws that permit manufacturers to provide patients in those states with investigational drugs on an emergency basis without going through the FDA’s expanded access process (see here and here). Now the public debate over this issue has led to the introduction of a bill, H.R.5805, in the House of Representatives. Taking a different approach than the state laws, H.R. 8505 would not bypass FDA but instead supplement FDA’s expanded access process with provisions requiring companies to provide FDA and patients with more information about how they deal with requests for expanded access.

H.R. 8505, sponsored by Representative Michael McCaul (R-TX), would create the Andrea Sloan Compassionate Use Reform and Enhancement (CURE) Act. The bill is named after Andrea Sloan, an Austin resident who died on New Year's Day after unsuccessfully seeking access to a potentially lifesaving drug to treat her ovarian cancer.

The bill has five major provisions. First, all sponsors of “covered breakthough drugs,” must file with FDA their expanded use policies. The policies must designate a single point of contact for expanded access requests, contain procedures for making requests, provide minimum criteria for the sponsor’s consideration or approval of such requests and provide the amount of time the sponsor anticipates is needed to make a decision on an expanded access request.

The bill defines a “covered breakthrough drug’ as those designated as breakthrough therapies, fast track products or qualified infectious disease products under FDC Act § 505E, those given accelerated approval under 506, and those for which sponsors have been awarded priority review vouchers under FDC Act §§ 524 and 529.

The second major provision requires sponsors who deny requests for expanded access to give written notice of the denial within five days to the patient or doctor making the request and to provide a written explanation of the reason for the denial.

A third major provision of the bill requires the Government Accountability Office to analyze the current expanded use program and within 180 days of enactment submit a report to Congress. This report must qualitatively analyze the extent to which individual patients currently have access to investigational drugs and make recommendations for improving such access. The report must also identify trends and patterns in expanded access requests and denials, identify barriers to drug sponsors granting requests, examine how FDA evaluates safety and efficacy data submitted in expanded access requests, detail how long it takes physicians, sponsors and FDA to make and process requests, provide expanded use request approval and denial statistics, make recommendations for improving regulations and policies, and specify the effect of adverse events from expanded access has on rug development.

H.R. 8505 also establishes a nine member Expanded Access Task Force assigned to provide recommendations for improving the expanded access program. Eight members of this task force, including the chair would be appointed by Congress and one by the Secretary of HHS. The Congressionally appointed members would include representatives of industry (2), patients (2), payors (2) and a bioethicist. This task force would submit a report to Congress within 180 days of being convened, which would occur after the GAO report is submitted.

The fifth major provision of the bill requires FDA to finalize its May 2013 draft expanded access guidance for industry. The final guidance must take into account the GAO and Expanded Access Task Force Reports and clarify how FDA interprets and uses expanded access adverse drug event data.

The bill does not preempt state right to try laws.

Prospects for passage of the Andrea Sloan CURE Act are unclear but quick action is not expected. In the press release accompanying the bill, Congressman McCaul stated that he plans to re-introduce the bill in the next Congress.

By Kurt R. Karst –

'Tis the season to give back.  And that’s exactly what the U.S. Court of Appeals for the Third Circuit did late last week when it vacated and remanded for further proceedings a September 3, 2013 decision from the U.S. District Court for the District of New Jersey stemming from a 2012 Complaint Endo Pharmaceuticals, Inc. (“Endo”) filed against Actavis. Inc. and Actavis South Altantic LLC (collectively “Actavis”) alleging that Actavis violated the federal Lanham Act and the New Jersey Fair Trade and Consumer Fraud Acts by marketing its Oxymorphone HCl Extended-release Tablets drug products (approved under ANDA 079046) as “AB-rated” to Endo’s OPANA ER (oxymorphone HCl extended-release) Tablets drug products. 

As we previously reported, OPANA ER is approved under two NDAs: (1) NDA 021610 covers an old formulation of OPANA ER that is no longer marketed and is listed in the “Discontinued Drug Product List” section of FDA’s Orange Book without a therapeutic equivalence rating; and (2) NDA 201655 covers Endo’s currently marketed crush-resistant version of OPANA ER, and for which no generic versions are approved.  NDA 021610 is the application referenced in Actavis’s approved ANDA 079046, which is listed in the Orange Book with an “AB” therapeutic equivalence rating with respect to other approved generic versions of OPANA ER (NDA 021610).

Endo alleged that “[d]espite the fact that its Generic Oxymorphone ER Tablets are not crush-resistant and were not approved based on the current Opana® ER [NDA], Actavis is falsely marketing its Generic Oxymorphone ER Tablets as ‘AB Rated to Opana® ER’,” and that “Actavis’s Generic Oxymorphone ER Tablets are not and never have been AB rated to the only Opana® ER tablets sold by Endo since May 2012, i.e., the crush-resistant tablets, and those Generic Oxymorphone ER Tablets are not designed to be crush-resistant like Opana®ER.”  Actavis subsequeently filed a Motion to Dismiss the case, arguing that the federal Lanham Act cannot be used as a tool to privately enforce the FDC Act. 

In his September 2013 decision, District Court Judge Dennis M. Cavanaugh ruled for Actavis, granting the company’s Motion to Dismiss.  Applying the doctrine of primary jurisdiction, Judge Cavanaugh said that the issue of AB-rating is one for FDA to decide: “This Court defers to the FDA to determine whether the new formulation of Opana ER is no longer AB equivalent to the generic Actavis product. . . . [I]t would be improper for the Court to make a determination on this matter before the FDA has had an opportunity to do so.”

Importantly, while Endo’s Lanham Act case was moving through the New Jersey District Court (specifically, after briefing in this case had been completed), FDA ruled on a Citizen Petition and determined that the original formulation of OPANA ER approved under NDA 021610 and listed in the “Discontinued Drug Product List” section of the Orange Book was not withdrawn from sale for reasons of safety or effectiveness.  We previously posted on that decision here.  

Endo appealed Judge Cavanaugh’s decision to the Third Circuit where the parties sparred over, among other things, FDA’s Citizen Petition decision on the discontinuation of OPANA ER (NDA 021610) and the importance of that decision (or not) to the case.  According to Endo, the Third Circuit “should reverse the district court’s order granting Actavis’s motion to dismiss and remand to the district court to address the merits of Endo’s Lanham Act claims,” because “Lanham Act claims concerning pharmaceuticals may proceed provided they do not intrude upon the FDA’s expertise or exclusive authority to enforce its regulations,” which Endo contends is the case with OPANA ER.  The briefs in the case are available here, here, here, and here. 

In its December 5th decision, the Third Circuit decided that the best course of action is to hand the case back to the New Jersey District Court.  “The District Court applied the doctrine of primary jurisdiction because it believed that the FDA had special competence to determine ‘whether Actavis’s generic is still AB equivalent to Opana® ER,’” wrote the three-judge panel of Circuit Judges Chagares, Hardiman, and Schwartz.  “Now that the FDA has issued its [Citizen Petition] determination, however, the District Court’s rationale for applying the primary jurisdiction doctrine is moot.  The logical course is to remand for the District Court to address the remaining arguments in the first instance.”

By Kurt R. Karst –

Last Friday, the U.S. Court of Appeals for the Federal Circuit issued its highly anticipated decision in Sandoz Inc. v. Amgen Inc. and Hoffman-La Roche Inc., Case No. 2014-1693 (Fed. Cir. 2014).  The case involves two patents Roche licensed to Amgen – U.S. Patent Nos. 8,063,182 (“the ‘182 patent”) and 8,163,522 (“the ‘522 patent”) – that purportedly cover Amgen’s biological product ENBREL (etanercept), which FDA initially licensed in November 1998 under BLA No. 103795, and for which Sandoz is seeking approval to market a biosimilar version pursuant to PHS § 351(k), as added by the the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).  The decision is the first from an appellate court involving the complex patent resolution provisions of the BPCIA.  Unfortunately for BPCIA-watchers, the Federal Circuit did not delve into the BPCIA’s provisions, but instead affirmed a 2013 district court decision dismissing the case on jurisdictional grounds. 

As we previously reported, in November 2013, the U.S. District Court for the Northern District of California issued a 5-page decision in Sandoz Inc. v. Amgen Inc. and Hoffman-La Roche Inc., Case No. 3:13-cv-02904-MMC (N.D. Cal.), granting a Motion to Dismiss Sandoz’s June 2013 Complaint for Declaratory Judgment and Patent Invalidity and Non-infringement concerning the ‘182 and ‘522 patents.  According to the district court, there was not yet Article III controversy between the parties because Sandoz had not (at the time) submitted a Section 351(k) application for the company’s biosimilar version of ENBREL.  In addition, the district court ruled that the declaratory judgment action was barred by the BPCIA. Noting that the BPCIA “sets specific limitations on the timing of any litigation arising from the filing” of a biosimilar application under PHS Act § 351(k), and that “with limited exceptions not applicable here, neither a reference product sponsor, . . . nor an applicant, . . . may file a lawsuit unless and until they have engaged in a series of statutorily-mandated exchanges of information,” District Court Judge Maxine M. Chesney wrote that “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.”  The “obligations” referenced to are the BPCIA’s multi-step “patent dance” procedures that kick in once a Section 351(k) biosimilar application has been accepted by FDA. 

Sandoz timely appealed the decision to the Federal Circuit (briefs available here, here, and here), arguing, among other things, that the California District Court erred in dismissing the declaratory judgment complaint “based on a sua sponte construction of the [BPCIA], which (a) cannot be reconciled with the specific language of the statute, (b) makes a declaratory judgment action essentially useless for resolving patent disputes involving biosimilar drug products, and (c) threatens to create a six-month period of additional marketing exclusivity for all reference biologic products that Congress never envisioned in drafting the statute?”  (See our previous post here.)

While the Sandoz biosimilar ENBREL case was pending before the Federal Circuit, other lawsuits were testing the metes and bounds of the BPCIA’s patent dance procedures.  As we previously reported, Celltrion Healthcare Co., Ltd. and Celltrion, Inc. (collectively “Celltrion”) filed a Complaint for Declaratory Judgment in the U.S. District Court for the District of Massachusetts against Janssen Biotech, Inc. (“Janssen”) seeking a judgment with respect to certain patents allegedly covering the company’s biological product REMICADE (infliximab).  A second lawsuit filed by Celltrion, which is seeking approval to market a biosimilar version of REMICADE, called REMSIMA, against the patent owner, the Kennedy Trust for Rheumatology Research (“Kennedy Trust”), was also filed in the U.S. District Court for the Southern District of New York.  Celltrion’s case against Janssen was voluntarily dismissed in late October 2014, but Celltrion’s case against the Kennedy Trust progressed (briefs available here, here, and here).  Early last week, the New York District Court granted the Kennedy Trust’s Motion to Dismiss, ruling that there is no declaratory judgment jurisdiction and “in light of the existence of the BPCIA statutory framework for the resolution of patent disputes in the licensing of biosimilars.” 

Finally, as we previously reported, yet another lawsuit is challenging an alleged failure by Sandoz to comply with the initial disclosure under PHS Act § 351(l)(2)(A) in connection with Sandoz’s Section 351(k) application for a biosimilar version of Amgen’s NEUPOGEN (filgrastim).  (Sandoz recently filed its Answer to Complaint and Affirmative Defenses and Counterclaims, including a counterclaim for a declaratory judgment “that the BPCIA means what it says.”)  Amgen followed up on that action with an October 29, 2014 Citizen Petition (Docket No. FDA-2014-P-1771), asking 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) 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.  (See our previous post here.)

Moving back to the Federal Circuit’s December 5th decision in Sandoz Inc. v. Amgen Inc. and Hoffman-La Roche Inc., Case No. 2014-1693 (Fed. Cir. 2014),  speculation was running high that the Court would resolve whether or not the BPCIA precludes pre-application declaratory judgment actions.  (At least one legal scholar has argued – see here – that pre-application declaratory judgment actions “are an important tool in the fight against submarine patents and will enhance competition.”)  But it was not to be.  The three-judge panel (Judges Dyk, Taranto, and Chen) noted upfront that while the Court was affirming the California District Court decision concluding that Sandoz did not allege an injury of sufficient immediacy and reality to create subject matter jurisdiction, “[w]e do not address the district court’s interpretation of the BPCIA.”  At least not “yet,” as the court states in a parenthetical on page one of the decision.  Later in the decision, the Court notes that while “[o]ur resolution of this case makes it unnecessary for us to address the district court’s BPCIA rationale,” “[w]e also do not decide whether, once an application is filed under the BPCIA, that statute forecloses a declaratory judgment action concerning whether the ultimate marketing of the application-defined product would infringe under 35 U.S.C. § 271(a).” 

According to the three-judge panel, “[a]ny dispute about patent infringement is at present subject to significant uncertainties—concerning whether it will actually arise and if so what specific issues will require decision,” including wether or not “Sandoz’s Phase III trial may fail in material ways.”  “If so, perhaps Sandoz will not file for approval, thereby eliminating altogether the patent dispute it has asked the district court to adjudicate,” wrote the panel.  As such, “Sandoz has not demonstrated that these possibilities for changing or eliminating the patent dispute are so unlikely to arise that they should play no significant role in the Article III determination.”

Drawing from the Court’s significant experience with Hatch-Waxman disputes, the panel states that its conclusion is consistent with decisions made under that law:

[W]e have found no justiciability where a declaratory-judgment plaintiff had not filed an application for the FDA approval required to engage in the arguably infringing activity.  On the other hand, where we have found a case or controversy in the Hatch-Waxman setting, we have focused on the presence of an application for the required FDA approval. . . .  In the Hatch-Waxman Act, Congress did provide for certain early adjudications of patent issues that would be presented by future market-entry activity in the FDA setting. It created an “artificial” act of infringement to allow suit by a patent holder; and in the BPCIA, Congress extended the provision to biological products.  The essential requirement for such actions, however, is the defendant’s filing of the FDA application needed for market entry—an application that defines what the applicant would be permitted to do (upon approval) and thus circumscribes and dominates the assessment of potential infringement.  Sandoz has not filed such an application.  Accordingly, no congressional judgment aids Sandoz in diminishing the significance of the present uncertainties about whether and when an adjudication will be needed and what issues it will involve if it occurs. [(Internal citations omitted.)]

We expect that the Federal Circuit will soon be asked to revisit its December 5th decision.  Indeed, even the U.S. Supreme Court may ultimately be asked to weigh in. 

By Kurt R. Karst –       

As we draw closer to the expected January 2015 release of a discussion draft of legislation marking a high point in the 21st Century Cures Initiative, which was launched earlier this year by Representatives Fred Upton (R-MI) and Diana DeGette (D-CO), we’re likely to see a significant uptick in ideas floated to and by Members of Congress on ways to accelerate and incentivize the development and approval of therapies.  Indeed, we’ve already started to see some suggestions.  In September 2014, we posted on a suggestion to create “[t]radable vouchers to extend patent life or market exclusivity of another drug” (i.e., “wildcard exclusivity”).  Now there’s a proposal to create a new 6-month exclusivity extension for “rare disease and condition repurposing” applicable to certain drug and biological products.  

Representative Gus Bilirakis (R-FL) recently announced the introduction of H.R. 5750, the Orphan Product Extensions Now Accelerating Cures & Treatments (“OPEN ACT”).  The bill, which is supported by the EveryLife Foundation, is clearly modeled after – and draws inspiration from – both the Best Pharmaceuticals for Children Act (“BPCA”) (FDC Act §  505A) and the Generating Antibiotic Incentives Now Act (“GAIN Act”) (FDC Act § 505E).  Both of those laws extend certain patent and/or non-patent exclusivities provided for under the FDC Act (and the PHS Act, in the case of the BPCA as amended by the Biologics Price Competition and Innovation Act of 2009). 

According to Rep. Bilirakis, “The OPEN ACT will incentivize drug makers and innovators to ‘repurpose’ major market drugs for life-threatening rare diseases and pediatric cancers, which opens the door to the development of hundreds of safe, effective, and affordable treatments for rare disease patients.”  “Repurposing,” which was the subject of another piece of legislation earlier in 2014 targeting patent term extensions (see our previous post here), is apparently gaining greater attention in the drug and biotech industries – particularly the repurposing of well-established drugs for rare (i.e., “orphan”) diseases and conditions.  Indeed, in 2010 FDA’s Office of Orphan Products Development unveiled the Rare Disease Repurposing Database, which “offers sponsors a useful tool for finding special opportunities to develop niche therapies that are already well-advanced through development,” according to FDA.

The OPEN ACT would amend the FDC Act to add Section 505F, titled “Extension of Exclusivity Periods For A Drug Approved For A New Indication For A Rare Disease Or Condition,” to authorize FDA to designate a drug (including a biological product) “as a drug approved for a new indication to prevent, diagnose, or treat a rare disease or condition,” provided, among other things, that “prior to approval of an application or supplemental application for the new indication, the drug was approved or licensed for marketing under [FDC Act § 505(c)] or [PHS Act § 351(a)], but was not so approved or licensed for the new indication.”  The term “rare disease or condition” is already defined under the Orphan Drug Act (FDC Act § 526(a)(2) to mean “any disease or condition which (A) affects [(i.e., has a prevalence of)] less than 200,000 persons in the United States, or (B) affects more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales in the United States of such drug.”  The designation of a drug under proposed FDC Act § 505F(a), which designation would be public, could not be revoked “for any reason,” except if the application resulting in the designation contained an untrue statement of material fact.

The designation of a drug approved for a new indication for a rare disease or condition would result in a 6-month extension of various exclusivities provided for under both the FDC Act and the PHS Act, including 5-year New Chemical Entity exclusivity, 3-year New Clinical Investigation exclusivity, 7-year Orphan Drug exclusivity, and 12-year Reference Product exclusivity for biological products.  In addition, patents listed in the Orange Book for a drug approved under the FDC Act would get a 6-month extension (though not a true patent term extension). 

Importantly, the 6-month addition under the OPEN ACT is additive to any extensions granted under the BPCA and the GAIN Act.  Thus, for example, a drug approved with 7-year orphan drug exclusivity, that has a 5-year GAIN Act extension, and a 6-month pediatric exclusivity extension, could apparently get another 6-months if designated under the OPEN Act, resulting in 13 years of marketing exclusivity.  On the patent exclusivity side of the equation, an Orange Book-listed patent apparently could get up to an additional year through the application of two 6-month periods – one under the BPCA and another under the OPEN ACT.  

By Ricardo Carvajal –

In tandem with its menu labeling final rule (see our prior posting here), FDA published a final rule that sets out requirements for calorie declaration for foods sold from certain vending machines.  In certain respects, the final rule is broader in scope than the proposed rule, but in other respects, the rule has also been made more flexible.  Below is a summary of some of the changes or clarifications that caught our eye:

• The rule’s requirements apply to dietary supplements sold in vending machines because these are articles of food within the meaning of section 201(f) of the FD&C Act.
• Foods that come in small packages, or that contain insignificant nutrient or caloric content, are not exempt.
• Vending machines without a selection button, such as bulk vending machines that dispense nuts by use of a crank, are not exempt.
• Calories must be provided for the article of food as vended – including any condiments bundled with the article.
• There is no provision for declaration of calorie ranges for foods that come in different varieties or flavors (as with fresh coffee); rather, calories can be declared for each option offered or for all final vended products.
• A prospective purchaser need not be able to view the entire nutrition facts panel – the calories, serving size, and servings per container will do.
• Articles of food dispensed as part of a game or other non-food related activity are exempt.

One change is so significant as to be worthy of special mention, and that is the change in the effective date from 1 year from the date of publication to 2 years – a change that will be welcome news to both vending machine operators and their suppliers.  Additional information on the vending machine rule (and the companion menu labeling rule) is available here. 

While we were busy preparing for our Thanksgiving holiday last week, we received the email we had been hoping for: a congratulatory email from the editors of the American Bar Association (“ABA”) Journal announcing that Hyman, Phelps & McNamara, P.C.’s FDA Law Blog was selected to the 2014 (and 8th Annual) ABA Journal Blawg 100.  For our newer FDA Law Blog readers, the Blawg 100 is a list of the top 100 legal blogs in the blogosphere, as selected by the ABA from a list of about 4,000 blogs.  This is the fourth time we have made the list, and makes a double-repeat after our previous selections in 2009, 2010, and 2013.  Thank you to our loyal readers who nominated us.  We now get to add yet another coveted badge to the “Awards & Honors” section of the FDA Law Blog.   

We share the 2014 Blawg 100 honors with some other blogs we regularly read, including Patent Docs in the “Intellectual Property” category.  (The ABA placed our blog in the “Torts” category.)  In addition to naming the 2014 Blawg 100, the ABA Journal added to its now 30-blog-strong Hall of Fame.  We hope to make it to that esteemed list one day with the continued support of our loyal readers. 

And while we’re on the topic of loyal readers, the ABA singled out one reader’s comment as to why we won her vote for the Blawg 100.  Here’s what Faith Pomeroy-Ward, a communications consultant in Santa Fe, New Mexico, had to say about us:  “I do not practice law, but as a consultant working in the highly regulated pharmaceutical industry, I have found [Hyman, Phelps & McNamara]’s FDA Law Blog invaluable.  More than once, I have seen a news item regarding an FDA action or guidance and thought: ‘I hope FDA Law Blog reports on this so I can understand all the ramifications.’  I have also recommended FDA Law Blog to many colleagues.  It’s enjoyable to read, and it’s a great help to me in my work.”  Thanks Faith!  And thanks to all of our readers for a making 2014 another banner year for the FDA Law Blog!

Now that the editors have made their picks, the ABA Journal is asking readers to weigh in and vote on their favorites in each of the 8th Annual Blawg 100’s 13 categories.  You can place your vote here after a quick (and free) registration.  Voting ends at close of business on Dec. 19, 2014.

REMINDER: You can follow FDA Law Blog on Twitter @fdalawblog

By Andrew J. Hull* & William T. Koustas –

Last week, FDA announced its long-awaited draft guidance to establish standards for the interoperable exchange of information as required by the Drug Supply Chain Security Act (“DSCSA”) (see our previous post here). On November 26th, FDA also released a website database to implement the DSCSA requirement that wholesale distributors and third-party logistic providers (“3LPs”) report their licensing information to FDA on an annual basis. While there has been some uncertainty among wholesale distributors and 3PLs regarding compliance with these provisions of the DSCSA, FDA’s launch of this new database, while timely, was, to our knowledge, made without much notice. However, unlike the release of the recent guidance document, we were not surprised this database was created last week as an FDA official expressed confidence that the database would be ready by the DSCSA deadline (see our previous post here).

This new database requires wholesale distributors and 3PLs to create an account with the FDA portal in order to report their licensing information. Additionally, the FDA website reminds industry that, under the DSCSA, 3PLs are required to begin reporting on November 27, 2014, and wholesale distributors are required to begin reporting on January 1, 2015.

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

By Riëtte van Laack –

The Affordable Care Act requires calorie and other nutrition information on menu and menu boards for consumers in chain restaurants and other “similar retail establishments” that sell restaurant-type food.  In 2011, FDA issued a proposed rule (see our previous post here).  FDA received 1,100 comments, many of which focused on the reach of the law.  The final rule contains few of the accommodations that industry requested.  Despite the many comments and legislative proposals to  exempt certain categories of retail food establishments (see our previous post here), the final rule significantly broadens the definition of covered establishments by redefining “restaurants and similar retail establishments” and “restaurant-type food,” and provides limited relief compared to the proposed regulation.

The Federal Register publication of the final rule is 105 pages and will require careful analysis to assess its full impact and determine how compliance can be achieved.  This blog post aims at identifying some of the notable aspects and differences between the proposed and final rule.

• In the final rule, FDA expands the reach of the rule by revising the meaning of several terms nested in the definition of “covered establishments,” a term defined, in relevant part, as a “restaurant or similar retail food establishment that is a part of a chain with 20 or more locations doing business under the same name (regardless of the type of ownership, . . .) and offering for sale substantially the same menu items.”  FDA broadened the rule’s reach by changing the definition of “restaurant or similar retail food establishment.”  Under the final rule, a “restaurant or similar retail food establishment” means any retail establishment that offers “restaurant-type food,” except for schools.  A restaurant-type food is further defined as a food that:
• is usually eaten on the premises, while walking away, or soon after arriving at another location (such as a home, a workplace, or a park); and
• is either
• (i) a food of the type served in restaurants or other establishments for immediate human consumption, or
• (ii) a food processed or prepared primarily in a retail establishment, ready to eat, offered for sale but not for immediate consumption, and not offered for sale outside such establishment. 

In the preamble and in the “Industry Questions and Answers,” FDA provides examples of what constitutes a restaurant-type food.  Nevertheless, there undoubtedly remain questions about which foods are covered. 

Under this revised definition of covered establishment, the menu labeling requirements will now apply to, among others, bakeries, bowling alleys, grocery stores, movie theaters, amusement parks and convenience stores (provided they are part of a chain with 20 or more locations and do business under the same name).

• Due to FDA’s new narrow definition of the term “location,” as “a fixed position or site,” “mobile” establishments such as food trucks, ice cream trucks, and trains, and other transportation carriers are not subject to the menu labeling requirements.  (In the proposed rule, FDA did not elaborate on the plain meaning of the term “location.”).
• The regulation applies to “standard menu items” defined as “restaurant-type food[s]” that are routinely included on a menu or menu board or routinely offered for sale as a self-service food or food on display.  Among other things, “standard menu items” do not include condiments offered for general use; custom orders (FDA interprets custom orders narrowly); daily specials; or foods appearing on a menu or menu board for less than 60 days per calendar year.
• Another change in the regulation is that alcoholic beverages listed in menus or menu boards will need to be labeled for calories.
• In response to comments, FDA did revise the proposed rule to allow restaurants to provide nutrition information for multiserving foods by serving or slice.  The final regulation permits declaration of the number of calories by whole multiserving menu item and per discrete serving unit, as long as the number of units for the whole menu time is also included – e.g., pizza pie:  200 cal/slice, 8 slices.
• “Menu or menu board” is broadly defined as “the primary writing from which a customer makes an order selection.”  According to FDA, there can be more than one primary writing.  A writing constitutes a menu or menu board if it meets three requirements:
• It lists at least one standard menu item (or an image depicting a standard menu item);
• It lists the price of the standard menu item; and 
• It can be used by a consumer to make an order selection at the time the consumer is viewing the writing.
• The provision regarding determination of nutrient content (also referred to as “substantiation”) has been changed significantly.  The final rule no longer includes the compliance testing provisions mirroring 21 C.F.R. § 101.9(g), often referred to as the 80/120 rule.  FDA acknowledges that the 80/120 rule for determining compliance would raise a host of practical problems identified in the comments.  Instead the final rule now requires that:
• Nutrient declarations must be accurate and consistent with the specific basis used to determine the nutrient values; and
• The covered establishment must take reasonable steps to ensure that the method of preparation and amount of standard menu item adhere to the factors on which the nutrient values are based (e.g., when basing the values on a cookbook recipe, the standard menu item must be prepared according to that recipe). 

Under the final rule “FDA will assess compliance on a case by case basis, taking into consideration a number of factors, including the covered establishment’s nutrition labeling, the method . . . used . . . to determine the nutrition information, and the steps taken by the establishment to ensure that the method of preparation and amount of a standard menu item adhered to the factors on which its nutrient values were determined.”  FDA may conduct its own laboratory analysis. 

• A responsible individual employed at the covered establishment or at corporate headquarters (or parent entity) must certify that the nutrient analyses are both complete and accurate.  In addition, a responsible individual employed at the covered establishment (not at the corporate headquarters) must certify that the methods of preparation in the establishments are consistent with the methods used in the determination of the nutrient values. 

In response to comments, FDA extended the time to comply with the menu labeling requirements from the proposed six months to one year.  Covered establishments must comply by December 1, 2015.

Comments on information collection under the Paperwork Reduction Act must be submitted by December 31, 2014.

By William T. Koustas & Anne Marie Murphy –

We have been closely following FDA’s implementation of the Drug Supply Chain Security Act ("DSCSA") (see here and here) and waiting for this day for over a year.  As our readers may know, the DSCSA requires certain members of the pharmaceutical supply chain (i.e., trading partners) to pass certain information beginning on January 1, 2015 in any transactions involving a prescription drug product.  The DSCSA also mandates that FDA issue a draft guidance document by November 27, 2014 that establishes standards for the “interoperable exchange of transaction information, transaction history, and transaction statements…”  (Product Tracing Information).  In a recent public appearance, an FDA official suggested that the guidance document was unlikely to by issued by the statutory deadline (see our previous post here).  So it was a surprise to us that this was released on time.

Industry has been inundating FDA with a variety of DSCSA-related questions, but this draft guidance, announced last week and titled “DSCSA Standards for the Interoperable for Tracing of Certain Human, Finished, Prescription Drugs:  How to Exchange Product Tracing Information” (Draft Guidance), only addresses one issue – how certain trading partners exchange Product Tracing Information starting on January 1, 2015.  FDA appears to have heard industry’s calls for flexibility, because the Draft Guidance indicates that trading partners may pass and receive Product Tracing Information in a variety ways, including, but not limited to, the following:

• Paper or electronic invoices;
• Paper packing slips;
• Electronic Data Interchange ("EDI") standards (e.g., 856 Advance Ship Notice ("ASN")); 
• EPIC (Electronic Product Code Information Services); and
• Email or web-based platforms.

The Draft Guidance suggests that nearly any method for passing Product Tracing Information will be acceptable on January 1, 2015, as long as it can handle all of the information required by the DSCSA.  FDA notes that it may revisit what methods of passing Product Tracing Information are acceptable as processes, capabilities, and electronic systems evolve and “are more widely accessible.”  Unfortunately, the Draft Guidance does not address any of the other issues that have been brought to FDA’s attention, such as clarifying statutory terms (e.g., co-licensed partner).  FDA notes, however, that it intends to issue additional guidance documents.  Presumably, those guidance documents will address some of the remaining questions.