By Kurt R. Karst –      

Earlier this week, and just a day after the second anniversary of the 2012 FDA Safety and Innovation Act that, among other things, includes the Generic Drug User Fee Amendments (“GDUFA” ), FDA announced the release of two draft guidance documents that explain how the Agency (and the Office of Generic Drugs in particular) intends to implement the rather complex ANDA amendment and Prior Approval Supplement (“PAS”) provisions and performance metric goals contained in the Program Performance Goals and Procedures (“Commitment Letter”) accompanying GDUFA.  The draft guidances, along with pre-recorded webinars (here and here) and slides (here and here), come less than three months before the October 1, 2014 date when GDUFA goes into full effect, and when the generic drug industry will be forever changed.

The amendment and PAS provisions of the Commitment Letter – and the amendment provisions in particular – are not for the faint of heart.  You’re left scratching your head after the first readthrough of the Commitment Letter wondering how this system is going to work, but by the tenth readthrough things begin to start sinking in.  And the two new draft guidances – ANDA Submissions – Prior Approval Supplements Under GDUFA and ANDA Submissions – Amendments and Easily Correctable Deficiencies Under GDUFA – go a long way to elucidate how the submission system will work under GDUFA, and provide several very helpful real-world examples.

Let’s start with a few basics from GDUFA and the Commitment Letter, and some concepts shared among both draft guidances before moving on to some specifics from each draft guidance:

• ANDAs are now categorized according to cohort year (i.e., FY 2015, FY 2016, FY 2017).  PASs are also identified by the fiscal year of submission, but the term “cohort year” is not specifically used to refer to a particular submission year.
• Once an original ANDA is in a particular cohort year based on the original submission date made through FDA’s electronic gateway (see our previous post here), dates of submission of an amendment to that original ANDA do not change the cohort year.   In other words, if you submit your original ANDA in FY 2015, that application will forever be a cohort year 3 ANDA.  The same holds true for a PAS fiscal year submission. 
• FDA agreed to review and act on 60% of original ANDA submissions within 15 months from the date of submission for the year 3 cohort (FY 2015); 75% of original ANDA submissions within 15 months from the date of submission for the year 4 cohort (FY 2016); and 90% of original ANDA submissions within 10 months from the date of submission for the year 5 cohort (FY 2017). 
• FDA agreed to review and act on 60% of complete PASs that do not require inspection within 6 months from the date of submission, and within 10 months from the date of submission that require inspection for receipts in FY 2015; 75% of complete PASs that do not require inspection within 6 months from the date of submission, and within 10 months from the date of submission that require inspection for receipts in FY 2016; and 90% of complete PASs that do not require inspection within 6 months from the date of submission, and within 10 months from the date of submission that require inspection for receipts in FY 2017. 
• Acting on an original ANDA and PAS includes issuance of a Complete Response (“CR”) letter, an approval letter, a tentative approval letter, or a refuse-to-receive action.
• The date of submission of an original ANDA or PAS is calculated in months beginning on the receipt date of arrival of the submission in the electronic submission gateway.  For example, if a complete PAS (not requiring an inspection) is submitted on November 3, 2014, the 6-month GDUFA goal date for FDA review and action is May 2, 2015.  Note that this calculation differs from the goal date calculation under the Prescription Drug User Fee Act.
• The 15-month and 10-month base period action dates for cohort year 3-5 ANDAs can change (i.e., are incremental and can be recalculated to a longer period/date) based on the type and number of amendments submitted to FDA and how they are tiered (i.e., Tier 1, Tier 2, and Tier 3).  Similarly, the 6-month and 10-month base period action dates for PASs can be recalculated.  GDUFA established certain review goals for the various types and tiers of amendments that are fully explained (with examples) in the draft guidances.

ANDA Submissions – Amendments and Easily Correctable Deficiencies Under GDUFA:  The draft guidance delves into the details of the various categories of amendments to an original ANDA or PAS.  The number, classification, and tier group of amendments can affect FDA’s goal date for acting on an original ANDA or PAS, as well as the need for an inspection.  Amendments to an original ANDA or PAS are classified as solicited, unsolicited, or administrative.  Solicited amendments are identified as major, minor, or as an Easily Correctable Deficiency (“ECD”).  Unsolicited amendments are identified as delaying and non-delaying.  In addition, amendments are grouped as Tier 1, Tier 2, or Tier 3.  Together, they result in the matrix below from the draft guidance.

A solicited amendment is a submission made by an applicant in response to a CR letter.  The classification of such an amendment as major or minor (or as an ECD) is largely a matter of FDA discretion.  Nevertheless, FDA applies the following general principles, which are further explained with examples in appendices to the draft guidance:

• “Major amendments contain a substantial amount of new data or new information not previously submitted to or reviewed by FDA, requiring, in FDA’s judgment, a substantial expenditure of FDA resources.  In general, the type, quantity, or complexity of data contained in a major amendment requires a lengthy review by FDA, and consults from other divisions or offices may be required to complete the review.”
• “FDA review of a minor amendment requires, in FDA’s judgment, fewer FDA resources than are necessary to review a major amendment, but more than are necessary to review the information submitted in response to an ECD.”
• “FDA review of information submitted in response to an ECD requires, in FDA’s judgment, a modest expenditure of FDA resources.  An applicant should be able to respond to an ECD quickly as the applicant should already possess or be able to quickly retrieve the information needed for an adequate response to an ECD.”

Unsolicited amendments, which are either delaying (Tier 1) or non-delaying (Tier 2), are submitted on an applicant’s own initiative and not in response to a CR letter.  As FDA explains, “[d]elaying amendments address actions by a third party that would cause delay or impede application review or approval timing and that were not a factor at the time of submission. ”  Thus, for example, “if a [citizen petition] requests certain [bioequivalence] data be submitted to support an ANDA for a particular drug product and FDA grants that petition, an ANDA applicant may submit the [bioequivalence] data reflected in the [citizen petition] response prior to FDA’s request of the data from the ANDA applicant.”  In contrast, non-delaying amendments “are unsolicited amendments that contain information that is not requested by FDA and is not the result of changes to the RLD or USP monograph, changes to the RLD labeling, a REMS and REMS modification, or generic approval requirements reflected in citizen petition responses issued by FDA.”  Finally, administrative amendments “are routine in nature and do not require scientific review.”  They do not fall within the tier matrix, and therefore do not affect GDUFA action dates.

The draft guidance also provides instructions for applicants that want to challenge FDA’s classification of an amendment by requesting reconsideration:

• “If an applicant is requesting reconsideration of a CR amendment, the applicant will submit a written request for a post-CR-letter meeting within 10 business days from issuance of the CR letter. . . .  The division will issue a decision about the request for reconsideration and notify the applicant of the decision within 10 business days from the date of the meeting.”
• “If an applicant wishes to request reconsideration of a change in classification that occurred after submission of the applicant’s CR amendment, the applicant should submit a request for reconsideration within 10 business days from issuance of the goal letter. . . .  The division will notify the applicant of the decision within 10 business days from the date the request for reconsideration was received.”

ANDA Submissions – Prior Approval Supplements Under GDUFA:  This draft guidance, which should be read in conjunction with the first draft guidance, addresses various topics in relation to PASs to approved ANDAs, including how the GDUFA performance metric goals apply to a PAS subject to the refuse-to-receive standards, a PAS that requires (or does not require) an inspection, and PAS amendments.  (It bears noting that the statutory and regulatory criteria for submitting information to an ANDA as a PAS – or as a changes being effected supplement, or as an annual reportable change – based on a major, moderate, or minor change were not altered by GDUFA.  These reporting criteria should not be confused with FDA’s categorization of amendments as major or minor.) 

Most ANDA sponsors have experienced at some point in time a delay in the approval of a submissions to FDA because of an “expired” inspection.  But FDA explains in the draft guidance that in some cases the Agency will cut sponsors some slack:

FDA intends to continue the practice of using a risk-based assessment in determining the need for an inspection, guided by a 2-year cycle for finished dosage product sites and a 3-year cycle for API sites and consideration of the type of finished product or API in the application.  Practically, this means that in making decisions about pending supplemental applications for which FDA does not have current inspection information within the time period indicated, FDA may use previous FDA inspection information and/or use inspection information from another regulatory authority as appropriate.  If FDA determines that an actual inspection is not required, the goal date would be revised from 10 months to 6 months.

The draft guidance also explains FDA’s approach to so-called “grouped supplements” – i.e., “multiple supplements (typically five or more) submitted to ANDAs by a single applicant for the same chemistry, manufacturing, and controls (CMC) change to each application.”  FDA says that each supplement in the group is considered an indivdual submission assessed a separate PAS user fee (with generally the same GDUFA goal date).  Alternatively, an ANDA sponsor may want to consider submitting a PAS with a comparability protocol outlining the change and the support for it.  “Once the PAS is approved, the agreed-upon reporting category could be used.  Thus, at the time the PAS containing the comparability protocol is approved, FDA can designate, where appropriate, a reduced reporting category for future reporting of changes covered by the approved comparability protocol (e.g., from a PAS to a CBE-30 supplement).”  This means that while the GDUFA performance metric goals and applicable user fees would apply to the initial PAS, they would not apply to future supplements submitted under the reduced reporting category.  What a deal (or not), depending on what’s more important to you – time or money.  (Though time is money, no?)

By Kurt R. Karst –   

Earlier this year we posted on two pending lawsuits brought by potential biosimilar applicants challenging the the so-called “patent dance” patent resolution provisions added to the PHS Act by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).  The BPCIA created a pathway for the submission and approval of biosimilar (both “highly similar” and interchangeable) versions of brand-name reference products under a Section 351(k) application.  The first case was brought by Sandoz Inc. (“Sandoz”), which has appealed to the U.S. Court of Appeals for the Federal Circuit (Docket No. 14-1693) a November 2013 decision from the U.S. District Court for the Northern District of California granting Amgen Inc.’s (“Amgen’s”) and Hoffmann-La Roche Inc.’s (“Roche’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) (see our previous post here).  The second case was brought by Celltrion Healthcare Co., Ltd. and Celltrion, Inc. (collectively “Celltrion”), which filed a Complaint for Declaratory Judgment in the U.S. District Court for the District of Massachusetts seeking a judgment with respect to certain patents allegedly covering Janssen Biotech, Inc.’s (“Janssen’s”) biological product REMICADE (infliximab) (see our previous post here).  Both cases are moving steadily towards resolution, though an appeal is likely in both no matter how the courts rule.  (A third case – also involving  infliximab and a Celltrion Complaint for Declaratory Judgment – was filed in the U.S. District Court for the Southern District of New York against The Kennedy Trust for Rheumatology Research, which holds third-party patents – here, here, and here – that allegedly cover infliximab.)  

When we last left off with the Sandoz case, the company had filed its opening brief with the Federal Circuit, saying, among other thinge, that the district court’s decision undermines the BPCIA’s purpose of advancing competition for biologic products because that decision “completely deprives federal courts of jurisdiction over any declaratory judgment action implicating a biosimilar product until after the FDA had already approved the product.”  The district court dismissed the case after ruling that Sandoz was subject to, but had not satisfied, any of the BPCIA’s limitations on declaratory judgment, and that Sandoz had not presented a case or controversy.

A couple of months later, Amgen and Roche shot back with a 95-page filing arguing, among other things, that it is Sandoz’s interpretation of the law would eviscerate the statutory biosimilars patent dance framework:

Sandoz argues that the BPCIA’s patent provisions limit declaratory judgment actions only after (1) a biosimilar applicant has submitted a subsection (k) application to the FDA, (2) the FDA has accepted that application for review, and 20 days thereafter (3) the applicant “fails to provide” the application and additional manufacturing information to the RPS.  Until such “failure” has occurred, Sandoz argues, the patent provisions of the BPCIA do not limit the prospective biosimilar applicant’s ability to bring biosimilar-related declaratory judgment patent actions that would otherwise be restricted under the BPCIA.  Sandoz’s construction, however, eviscerates the statutory framework, is inconsistent with the BPCIA’s cross-referencing within the PHSA and between it and the DJ Act, furthers no logical public policy, undermines orderly access to the courts, and invites gamesmanship. [(Emphasis in original.)]

Most recently, Sandoz filed its reply brief hammering home the company’s points that the BPCIA is not the exclusive mechanism for resolving patent disputes involving biological products, and that the BPCIA in no way bars the company’s Complaint for Declaratory Judgment:

[T]he BPCIA creates one potential mechanism to resolve patent disputes, by amending 35 U.S.C. § 271(e) to create a new infringement action based on the “artificial” activity of parties exchanging patent contentions.  However, nothing in the BPCIA says that a § 271(e) action is the only way to resolving biologic patent disputes.  The BPCIA does not purport to deprive federal courts of jurisdiction where it would otherwise exist under the Patent Laws, such as for declaratory judgments filed under §§ 271(a)-(c).

By their express terms, the BPCIA’s sole limitations on a declaratory judgment remedy apply after a subsection (k) application is filed, and then, only “if” a subsection (k) applicant first “fails” to cooperate in prescribed informational exchanges, 42 U.S.C. §§ 262(l)(9)(B)-(C), or does not identify particular patents on a final list, § (l)(9)(A).  Sandoz is not a “subsection (k)” applicant; it has not “failed” to comply with any obligations; and thus, no provision of the BPCIA bars Sandoz’s Complaint. [(Emphasis in original.)]

To our knowledge, a date for Oral Argument as not yet been set in the case, though Sandoz has pressed the Federal Circuit to schedule Oral Argument as soon as possible.

Moving on to the Celltrion case and Celltrion’s REMSIMA biosimilar version of REMICADE, Janssen not surprisingly filed a Motion to Dismiss Celltrion’s Declaratory Judgment Complaint for lack of subject matter jurisdiction.  Alternatively, Janssen asks the district court to decline to exercise declaratory judgment jurisdiction on the basis that to proceed would be inconsistent with the BPCIA.  Mirroring some of the arguments in the Sandoz case, Janssen says:

Under the law, if Celltrion had already filed its biosimilar application it would be statutorily barred from bringing the instant declaratory judgment action.  Instead, Celltrion filed this suit prematurely – before filing its biosimilar application – in an attempt to avoid the patent resolution procedures of the BPCIA.  There is no justification for permitting Celltrion to avail itself of the biosimilar approval pathway in the BPCIA while at the same time skirting the patent resolution procedures.

Celltrion, in the company’s opposition brief filed earlier this week, vigorously defends its position, saying that the case is ripe based on the U.S. Supreme Court’s decision in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), and the “totality of the circumstances:”  “In this case, all the circumstances weigh in favor of jurisdiction.  They include Celltrion’s substantial preparation to market Remsima; the fact that Remsima’s formula is fixed and will not change in any way relevant to the three disputed patents; Janssen’s aggressive efforts to defend its patents and oppose Remsima; and Janssen’s repeated refusal to grant licenses to Celltrion.”

As to whether or not the district court should exercise declaratory judgment jurisdiction, Celltrion says that doing so would be an abuse of discretion:

First, Janssen’s proposal proceeds from a false premise.  The BPCIA’s information- exchange process is not an alternative to litigation or a “dispute resolution” process Celltrion is trying to end-run. . . . It is a dispute preparation process designed to facilitate and culminate in litigation.  Dismissing this case because Celltrion and Janssen have not yet engaged in that process will not keep the dispute out of court; it will only delay the time when a court resolves it.

Second, forcing Celltrion and Janssen to engage in the information-exchange process before adjudicating their patent dispute would serve no purpose.  Celltrion already has identified the three disputed patents, and if Janssen thinks there are more, it can file counterclaims alleging infringement of them.  The only consequence of dismissal would be to extend Janssen’s exclusivity for Remicade by the time it would take to complete the information-exchange process.  That would turn the process on its head.  Congress designed it to provide certainty and to ripen unripe disputes so that a court can adjudicate them in a timely fashion without practically extend-ing the 12-year exclusivity term.  Here, Celltrion’s dispute is already ripe, and Janssen’s 12-year term has already expired. The Court should reject Janssen’s effort to mis-use a tool for promoting competition as a weapon to delay it.

Third, Janssen’s argument rests on an invalid policy premise.  In drafting the BPCIA, Congress addressed declaratory-judgment actions between biologics manufacturers and decided to bar only a subset—those filed after the information-exchange process begins but before it ends.  Dissatisfied with Congress’s policy choice, Janssen asks the Court to bar declaratory-judgment actions between biologics manufacturers filed before the information-exchange process even begins. T his Court cannot use its discretion under the Declaratory Judgment Act in a way that rejects Congress’s deliberate policy choice. [(Emphasis in original; citations omitted.)]

Regardless of how the district court rules in the Celltrion case, it seems destined to go up to the Federal Circuit.  But timing will be everything.  If the Federal Circuit rules first in the Sandoz case, then we might have different appellants and appellees.

By Wes Siegner –

Just in time for the windup to ad campaigns for the fall/winter cold/flu season, FDA has sent Zarbee’s, Inc. a Warning Letter alerting the company that its dietary supplement products are in fact illegal drugs, some prescription drugs, given the claims that the company is making on the web, Facebook, and Twitter.  FDA also notified Zarbee’s that it is responsible for the content of testimonials on the company’s Facebook page.  Zarbee’s has 15 days from June 27 to notify FDA of the specific steps that the company intends to take to correct the violations noted in the Warning Letter.

By Kurt R. Karst –      

The years-long, knock-down, drag-out fight between the K-V Pharmaceutical Company (“KV”) – now known as Lumara Health Inc. – and FDA (and the Department of Health and Human Services) involving KV’s pre-term birth orphan drug MAKENA (hydroxyprogesterone caproate) Injection, 250 mg/mL, has ended.  But that ending is more akin to the final scene from the hit HBO series “The Sopranos” than the final scene from ABC’s “Lost.”  In the former, viewers were treated to a “cut to black” final scene leaving some to feel cheated.  In the latter, there was at least some final resolution of what happened to the “survivors” of Oceanic Airlines Flight 815. 

Last week, just before the Independence Day holiday, KV and FDA filed a Joint Stipulation of Dismissal With Prejudice with the U.S. District Court for the District of Columbia to dismiss the litigation.   The case is now over and we’ll never know what might have been had the court issued a merits decision.  We’re also left hanging as to what (if anything) KV got out of a deal to settle the case. 

As we previously reported (here, here, and here), KV sued FDA on July 5, 2012 alleging that the Agency violated myriad provisions of the FDC Act, the Administrative Procedure Act Section 706(2), and the Due Process Clause of the Fifth Amendment to the U.S. Constitution by failing to take sufficient enforcement action to stop the unlawful competition with MAKENA by pharmacies that were compounding 17P during KV’s period of orphan drug exclusivity.  The DC District Court ruled for FDA in September 2012, and KV appealed to the U.S. Court of Appeals for the District of Columbia Circuit. 

Earlier this year, in an interesting turn of events, the DC Circuit issued an unpublished judgment ordering and adjudging that the DC District Court’s September 6, 2012 order dismissing KV’s claims be vacated and that the case be remanded to the district court for reconsideration in light of the DC Circuit’s July 23, 2013 decision in Cook v. FDA, 733 F.3d 1 (D.C. Cir. 2013), and the November 27, 2013 enactment of the Drug Quality and Security Act (“DQSA”), Pub. L. No. 113-54, 127 Stat. 587 (2013) (see our previous post here).  As we previously noted, in Cook, the DC Circuit largely affirmed a March 2012 decision from the DC District Court permanently enjoining FDA from permitting the entry of (or releasing any future shipments of) foreign manufactured thiopental into interstate commerce.  Title I of the DQSA, the Compounding Quality Act, concerns state and federal oversight of compounding of human drugs. (FDA recently issued several notices concerning the DQSA’s compounding provisions – see here and here).

Perhaps the writing was on the wall that a settlement might be forthcoming.  In several recent court filings, the parties requested (and were granted) extensions to file supplemental briefs “because the parties were engaged in active settlement discussions.”  Most recently, a filing indicated that settlement discussions “have continued, and the parties have reached agreement in principle to resolve this litigation.”  It’s unclear to us what the settlement between KV and FDA might entail. . . . and we might never have a clear picture of that. 

By Ricardo Carvajal –

FDA finalized three guidance documents that address various aspects of the use of nanotechnology in products regulated by the agency: Considering Whether an FDA-Regulated Product Involves the Application of Nanotechnology, Safety of Nanomaterials in Cosmetic Products, and Assessing the Effects of Significant Manufacturing Process Changes, Including Emerging Technologies, on the Safety and Regulatory Status of Food Ingredients and Food Contact Substances, Including Food Ingredients that Are Color Additives.  FDA also issued a fourth guidance document in draft form, Use of Nanomaterials in Food for Animals.

The overall thrust of FDA’s approach to regulating products derived through nanotechnology remains unchanged.  That is, FDA will continue to regulate those products under its existing authorities, is not establishing any nanotechnology-specific regulatory definitions, and remains principally interested in products “deliberately manipulated by the application of nanotechnology” (as opposed to “products that contain materials that naturally occur in the nanoscale range”).  That said, the final guidance documents include a number of modifications that make them worth a close read for those with an interest in the topic.

For example, the draft guidance on considering whether a product involves nanotechnology identified two points to consider, one of which was “whether an engineered material or end product has at least one dimension in the nanoscale range (approximately 1 nm to 100 nm).”  The final version of the guidance tweaks that point to state “whether a material or end product is engineered to have at least one external dimension, or an internal or surface structure, in the nanoscale range (approximately 1 nm to 100 nm)” (emphasis ours).  The revision is more consistent with FDA’s interest in “deliberate and purposeful” application of nanotechnology, and also appears to more clearly acknowledge the wide range of morphologies achievable through nanotechnology.

As an additional example, the draft guidance on nanomaterials in cosmetics briefly noted that traditional toxicity testing might need to be modified with respect to a number of factors, such as methods to prevent agglomeration.  The final version of the guidance delves into this issue in greater detail, and provides several examples of why traditional methods might not be suitable. 

Similarly, the draft guidance on effects of manufacturing changes on the regulatory status of food ingredients briefly noted that traditional safety tests might have limited applicability to nanomaterials, and stated that safety studies should be appropriately validated for such materials.  The final guidance explains that “variability has been reported when traditional toxicity tests have been used to assess nanomaterials,” and goes on to lay out FDA’s expectations for method validation. 

The draft guidance on nanomaterials in food for animals addresses similar analytical challenges.  Comments on that draft guidance are due by September 10.

By Jeffrey N. Wasserstein –

On July 2, 2014, five U.S. Senators sent a letter to the head of the Office of Management and Budget (“OMB”) urging OMB to release a draft guidance proposed by the U.S. Food and Drug Administration (“FDA”) relating to the regulation of laboratory developed tests (“LDTs”). 

LDTs are diagnostic tests developed and performed by a laboratory.  They are widely used; among other tests, this category includes genetic tests, tests for rare conditions, and companion diagnostics.  Thousands of different LDTs are currently available, many of which are the standard of care.  Starting in 1992, FDA stated that LDTs were medical devices but that it generally was exercising enforcement discretion.  FDA announced in June 2010 that it was revisiting this years-long policy of exercising enforcement discretion over LDTs and was holding a public workshop to discuss the issue in July 2010.  FDA officials subsequently indicated that it was developing a plan to more actively regulate LDTs under a risk-based framework, to be issued for comment as guidance.  The recently enacted Food and Drug Administration Safety and Innovation Act (“FDASIA”), requires FDA to notify Congress at least 60 days prior to issuing a draft or final guidance on the regulation of LDTs.  The notice must include anticipated details of the action.  We have previously blogged on this here, here, here, and here.

According to the letter, the draft guidance has been in front of OMB for several years.  As the five Senators stated that they are in favor of additional regulation of LDTs, they urged OMB to release the draft guidance.

By Karla L. Palmer – 

Yesterday FDA provided drug compounders some pre-Fourth of July fireworks by issuing a slew of “policy documents” as part of the Agency’s implementation of the Compounding Quality Act (“CQA”) (Title I of the Drug Quality and Security Act (“DQSA”)), which was enacted November 27, 2013.  The policy documents include a draft interim guidance, a proposed rule, a Final Guidance, and two revised requests for nominations for the bulk drug substance lists for both Section 503A and Section 503B compounders.  FDA stated in its press release that these “actions are essential next steps in providing the compounding industry with the appropriate tools to comply with the law and advancing the FDA’s efforts to continue protecting patients.”

More specifically, the policy documents include the following: 

• cGMP for Section 503B:  Draft interim guidance describing FDA’s expectations for compliance with current good manufacturing practice (“cGMP”) for voluntarily registered outsourcing facilities under Section 503B of the FDC Act. The draft guidance focuses on cGMP requirements related to sterility assurance of sterile drug products and the general safety of compounded drug products.  (More details are included in our separate blog post, and i the Federal Register announcement).
• Drugs Withdrawn for Safety/Effectiveness; proposed additions: A proposed rule that would revise FDA’s list of drug products that may not be compounded because they have been withdrawn or removed from the market for reasons of safety or effectiveness.  The proposed rule seeks to modify the description of one drug product on the current list and add 25 drug products to this list.  The list applies to both compounders under 503A and outsourcing facilities under 503B. 
• Final Guidance for Section 503A Compounders: Final Guidance for individuals or pharmacies that intend to compound drugs under Section 503A.  The non-binding Guidance generally sets forth and restates the provisions of Section 503A, addresses FDA’s interim policies concerning certain provisions that require implementing regulations or other actions, and includes a non-exhaustive list of potential enforcement actions against individuals or pharmacies that compound human drug products in violation of the FDC Act.   

            Some further points on the Final 503A Guidance:

• FDA states that until a bulk drug substances list is published as a final rule, human drug products should be compounded using only bulk drug substances that are components of drugs approved under FDC Act Section 505, or are the subject of United States Pharmacopeia or National Formulary monographs.
• FDA does not intend to enforce the 5% limit on interstate distribution until after FDA has finalized a Memorandum of Understanding (“MOU”) and made it available to the states for their consideration and signature.   FDA will announce the availability of the MOU and specify a time period during which the MOU will be made available for states to sign.  After the time period expires, FDA intends to begin enforcing the 5% limit in states that have not signed the MOU.  Notably, FDA retreated from its position in draft guidance on Section 503A, which required states to sign the MOU within 90 days after presentation to them.  The 90-day deadline had attracted a number of negative comments.
• FDA expects to employ a “risk-based enforcement approach” concerning violative compounded drugs.  It will give “highest enforcement priority” to compounded drugs that pose the greatest risks to public health.  FDA emphasizes that it does not need to identify a particular safety problem before pursuing enforcement action.  Based on recent actions, we expect FDA to pay particular attention to whether a pharmacy may not have “adequate assurance of sterility.”
• The Guidance is silent concerning the permissibility of office use compounding – even for non-sterile drug preparations – which several industry groups and members of Congress have continued to stress should be permitted, at least for low-risk, non-sterile products, under Section 503A.  Section 503B expressly addresses and permits only sterile compounding for office use, although there is no apparent reason that outsourcing facilities capable of compounding sterile drugs could not also be permitted to compound nonsterile products.
• Bulk Drug Nomination Process; Sections 503A and B:  FDA issued Notices advising that it is “reopening” the nomination process for the two bulk substance lists (specifically, active pharmaceutical ingredients) that may be used to compound drug preparations. The Notices are available here and here. 
• Bulk Substances for Section 503B Outsourcing Facilities:  The Agency says it is requiring the nomination “do-over” because many of the 753 comments received from interested parties included nominations that were not for bulk drug substances used in compounding as “active ingredients,” and “none included sufficient information to justify inclusion of the nominated substances on the list.”  (This may reflect insufficient clarity as to what data FDA expected to see.)  Some nominations were “en bloc” nominations of thousands of substances and entire compendia.  FDA noted that such bulk nominations provided “no justification” for inclusion on the positive list.  Of further note:   
• To improve the efficiency of the process for developing the list of bulk drug substances that may be used to compound drug products under Section 503B, FDA is providing more detailed information on what it needs to evaluate a nomination, and providing an additional 90-day period to receive nominations from interested persons.   
• Importantly, bulk substances that were previously nominated will not be further considered, unless they are re-nominated and “adequately supported.”  Substances that are not adequately supported will not be placed on the bulk substances list.
• Details Needed for Nominated Products: FDA is providing more detail on what information is needed to evaluate the nominations.  All nominations must demonstrate how the ingredient is used as an active ingredient in a particular compounded drug product.  To qualify for placement on the 503B list, the nominated bulk substance must be required to compound a drug product for which there is a clinical need.  The Agency has decided that the clinical need only exists where there is a clinical need for the specific drug product, in other words, that there are no acceptable substitutes.”  (Notice at page 5-6).  (Notice at page 5-6).   
• Clinical Need: To the extent information about the clinical need was provided for individual nominations, FDA noted many comments included a statement about the need for the use of bulk drug substances in compounding generally, rather than information about the “specific clinical need for drug products compounded using a particular bulk drug substance.  For example, many nominations included the following standardized language as the explanation of clinical need for compounding with the bulk drug substance: ‘Prescribed dosage forms and strengths not available commercially. Manufacturer backorders. Possible patient sensitivities to manufactured product dyes, fillers, preservatives and other excipients.’” (Notice at page 7).  A full description of clinical need is at 9 to 11.  FDA also includes the format for interested parties to use for submissions. (Notice at 11-13).
• Inactive Ingredients:  The Agency also clarified that inactive ingredients used in compounded drug products, which typically include flavorings, dyes, diluents, or other excipients, need not and will not be included on the list.
• Bulk Substances for Section 503A Compounders:  The Agency says it is similarly scrapping all of the prior Section 503A nominations because many of the 110 comments received from interested parties included nominations that also were not bulk drug active ingredients, included en block nominations, and did not include substances used in compounding as “active ingredients.” 
• Section 503A Submission Criteria: FDA will examine the following four criteria for proposed Section 503A bulk substances: (1) The physical and chemical characterization of the substance; (2) any safety issues raised by the use of the substance in compounded drug products; (3) historical use of the substance in compounded drug  products, including information about the medical condition(s) the substance has been used to treat and any references in peer-reviewed medical literature; and (4) the available evidence of effectiveness or lack of effectiveness of a drug product compounded with the substance, if any such evidence exists.
• To qualify for placement on the list, it is necessary to identify the above information about the nominated substances.  FDA will evaluate the nominated substances in consultation with the Pharmacy Compounding Advisory Committee. Submission criteria for bulk substances under Section 503A is set forth at pages 8-10 of the Notice.  The new, explicit criteria will substantially reduce the number of nominees and probably exclude many nominees from being listed.

The draft interim guidance for cGMP and the proposed rule for drugs withdrawn for reasons of safety or effectiveness are available for public comment for 60 days, and the dockets are open for the public to nominate bulk drug substances for compounding under Section 503A or 503B for 90 days.

By Douglas B. Farquhar –  

Drug compounders who are thinking about registering with FDA to become “outsourcing facilities” – and those 40 + that already have – will be interested in the details of FDA’s recent recognition that all of the rigid requirements for “current Good Manufacturing Practice” (cGMP) that apply to drug manufacturers are impractical for drug compounders that mix only small batches of product.  The bottom line of the draft Guidance issued by FDA earlier this week is that you can relax, but not too much.

And, in a commendable gesture of flexibility, FDA also asks outsourcing facilities and the public to comment on two alternative measures that could take some of the load off outsourcing facilities.  FDA asks for comments on proposals that would allow two types of companies– suppliers of components used in compounding and laboratories that test products for compounders – to register with FDA under the Drug Master File (DMF) process.  Then, when outsourcing facilities use DMF-registered components or have testing performed by DMF-registered laboratories, the outsourcing facilities are required to do less of their own testing.

You may remember that President Obama signed a law – the Drug Quality and Security Act (DQSA) – at the end of November 2013 that set up the new voluntary category of outsourcing facilities for those entities compounding sterile preparations for office use – sort of a “Drug Manufacturer Lite.”  We blogged on that here.  Traditional compounding pharmacies are, according to FDA and the newly reinvigorated FDCA Section 503A, prohibited from compounding drugs without a prescription for an individually identified patient.  The DQSA set up the new category of outsourcing facilities.  After registering with FDA, outsourcing facilities can compound sterile drugs without individual prescriptions.  Congress created the outsourcing facility designation to promote safer compounding practices for large-scale office use compounding of sterile preparations; used primarily to address drug shortages that keep patients and hospitals from getting access drugs they need, and for office stock compounding of those drugs on a yet-to-be-published “positive list.”  Restricting the type of drugs that can be compounded and the materials that can be used to compound them, the DQSA also requires that outsourcing facilities comply with cGMP, which FDA has defined in regulations governing traditional drug manufacturers.  The regulations are found in 21 C.F.R. Parts 210 and 211.

However, there are clearly some aspects of cGMP that simply are not practical for outsourcing facilities, which typically compound drugs in much smaller quantities (and yet compound a greater variety of preparations)  as traditional drug manufacturers.  Validation of the processes used to compound drugs, and the exacting stability testing that apply to each drug that is manufactured pursuant to drug approvals or FDA monographs simply won’t work when the maximum size of a lot of a drug product that is compounded is in the tens or hundreds (and frequently less), as opposed to the hundreds of thousands, or tens of millions.  Nor is full validation feasible when a drug shortage suddenly occurs.

So, while the FDA draft Guidance is not binding law, it sets forth FDA’s policy not to pursue outsourcing facilities that follow the Guidance’s somewhat less exacting standards on sterility testing and process validation.

Many of the standards governing facilities, environmental monitoring in sterile suites, gowning requirements for compounding personnel, labeling, and Quality Control/Assurance Units are identical to those for drug manufacturers.  Among other things, sterile drug manufacturing areas – either clean rooms or isolators (glove boxes) – must show unidirectional airflow under dynamic conditions, pressure differential between classified clean rooms must be monitored and alarmed, and environmental and personnel monitoring to detect particulates or other contaminants must be performed at least daily.  Sterilization and depyrogenation process must be validated, although (see page 7) outsourcing facilities can rely under certain circumstances on a certificate of analysis (COA) from a supplier for conformity with sterility of single-use containers, closures and equipment.  Bulk active ingredients and excipients can also be used based on a COA under appropriate circumstances (page 9).  But incoming testing of identity must be conducted on each lot of product received.

Here’s where FDA seeks comments: Instead of requiring every lot to be tested for identity, FDA wants to know whether people think it would work for the supplier to be registered with FDA under the DMF process, which is commonly used for ingredients of approved manufactured drugs.  The supplier would have to meet certain requirements in order to register with FDA, but that registration would take the testing requirement out of the hands of the outsourcing facilities.  Discuss among yourselves.

One area that has confounded compounding pharmacies is the requirement for sterility testing under the U.S. Pharmacopeia guidelines, which are the voluntary governing standards for some pharmacies and the state-imposed requirement for others.  The Guidance recognizes that the USP requirement of sterility testing on a minimum of four containers of product from a given lot or batch may be unreasonable.  So, the Guidance sets forth an alternative standard for batches of less than 100 containers:  Sterility testing only need be conducted on “a number of containers that equals 10%” of the lot “rounded up to the next whole number” (page 16).  Thanks, FDA.

On the next page, FDA then requests public comments on a DMF process for testing laboratories, that would take over much of the testing otherwise required to be performed in-house by outsourcing facilities.

Finally, and perhaps most importantly, the Guidance sets forth the standards for expiration dating (called the Beyond Use Date) for compounded sterile drugs.  The standards seem to replicate the USP requirements.

The Guidance is 21 pages, plus a list of sources and definitions, so this blogpost is not cannot pretend to be a comprehensive discussion of all its provisions.  We will keep you blogposted.

By John A. Gilbert, Jr.  & Larry K. Houck –

As expected, the Drug Enforcement Administration (“DEA”) published its final rule in the Federal Register today (79 Fed. Reg. 37,623 (July 2, 2014) placing tramadol (2-[(dimethylamino)methyl]-1-(3-methoxyphenyl)cyclohexanol) into schedule IV of the federal Controlled Substances Act (“CSA”).  Tramadol is currently controlled in at least ten states.  We wrote a blog here analyzing the eight-factor analyses conducted by Health and Human Services and DEA outlined in the notice of proposed rulemaking on November 4, 2013. 

DEA received 27 comments on the proposed rule; 16 supported scheduling and nine opposed the action. The scheduling action is effective August 18, 2014, which means that the regulated industry has only 45 days to ensure compliance with the registration, security, recordkeeping and reporting requirements.   One commenter, a national association that represents healthcare distributors, opined that the agency should provide an extended time period for registrants to comply with security, labeling and packaging and reporting requirements.  DEA replied that scheduling actions are generally effective 30 days after the date of publication of the final rule in the Federal Register, and asserted that the 45-day effective period “will provide a reasonable time for registrants to comply with the handling requirements for a schedule IV controlled substance and was established upon a full consideration of the totality of circumstances specific to tramadol.” 

DEA appears to underestimate the modifications that the supply chain will need to make to policies and procedures to comply with tramadol scheduling, especially for a drug that has been marketed as a non-controlled substance under federal law for almost 20 years.  While DEA and FDA cited to concerns about increased abuse of tramadol as a basis for the need to schedule the drug, there was no compelling evidence of diversion from the supply chain to warrant not providing additional time for the industry to conform its compliance systems to the new requirements.  DEA’s placement of tramadol in schedule IV subjects manufacturers, distributors, dispensers including pharmacies and physicians, importers, exporters, and anyone in possession of the drug to the applicable provisions of the CSA and its implementing regulations.  The CSA and DEA regulations impose specific registration, security, labeling and packaging, inventory, recordkeeping, reporting, prescription, and import and export requirements for schedule IV controlled substances.

It is also worth noting, the World Health Organization Expert Committee on Drug Dependence (“ECDD”) recently met to decide whether tramadol should be scheduled under the international drug control treaties.  The results of the ECDD review will not be known for several months.  

By Kurt R. Karst –

Ever since the FDC Act was amended in November 1997 by the the FDA Modernization Act (“FDAMA”) to add a new section creating a period of “pediatric exclusivity,” we’ve had more than a passing interest in the provision.  In fact, it was the topic of this blogger’s first law review article published in 2000 (see here).  Under FDC Act § 505A, now referred to as the Best Pharmaceuticals for Children Act (“BPCA”), pediatric exclusivity provides for a 6-month add-on to unexpired periods of patent and non-patent exclusivities listed in the Orange Book for a sponsor’s drug (i.e., active moiety) (as least insofar as an initial grant of pediatric exclusivity is concerned) if the sponsor has conducted pediatric studies.  The BPCA is the “carrot” in the carrot and stick metaphor often used to describe the two pediatric testing statutes.  The other statute – the so-called “stick” – is the Pediatric Research Equity Act (“PREA”), codified at FDC Act § 505B, and under which FDA can require sponsors to conduct pediatric testing for on-label uses.  (PREA was enacted after FDA’s so-called “Pediatric Rule” was struck down in court – see Association of American Physicians and Surgeons, Inc. v. FDA, 226 F.Supp.2d 204 (D.D.C. 2002).)  Together, the BPCA and PREA have been recognized by the U.S. Government Accountability Office and others as an ongoing success. 

Over the years, the BPCA has undergone several changes.  Most recently, in July 2012, the FDA Safety and Innovation Act (“FDASIA”) made the BPCA permanent.  Prior to that, FDC Act § 505A was reauthorized and amended generally every 5 years along with each iteration of the Prescription Drug User Fee Amendments.  For example, the 2007 FDA Amendments Act (“FDAAA”) authorized the BPCA for another 5 years and also tweaked some of the language in the process. 

Notwithstanding changes in the BPCA, folks have always considered one thing to be true: in order to obtain a period of pediatric exclusivity, FDA must first issue a Pediatric Written Request (“PWR”) laying out the studies to be conducted in pediatric subjects.  Indeed, FDA’s initial guidance document announced in July 1998 and revised in September 1999, titled Qualifying for Pediatric Exclusivity Under Section 505A of the Federal Food, Drug, and Cosmetic Act, said as much: “In general, a 505(b)(1) (21 U.S.C. 355(b)(1)) application will qualify for pediatric exclusivity if all of the following have occurred: 1. The Agency issued a Written Request for pediatric studies . . . .”  But a recent Citizen Petition (Docket No. FDA-2014-P-0830) submitted to FDA on behalf of Merz North America calls into question the long-held belief that issuance of a PWR is a condition precedent to FDA awarding pediatric exclusivity – at least with respect to Merz’ (formerly Shionogi Pharma, Inc.’s) orphan drug CUVPOSA (glycopyrrolate) Oral Solution, which FDA approved on July 28, 2010 under NDA No. 022571 to reduce chronic severe drooling in pediatric patients (aged 3-16) with neurologic conditions associated with problem drooling (e.g., cerebral palsy).

According to the petition:

Merz’ predecessor fulfilled the requirements for six-month pediatric exclusivity pursuant to FFDCA § 505A(h) as it existed at the time [FDA] approved Cuvposa in 2010.  The pediatric studies were performed as required under a provision of law and regulations (i.e., for NDA approval), and thus satisfied the requirements for pediatric exclusivity under § 505A(h) without a formal written request from FDA.  Although FDA waived the pediatric study requirements under the [PREA] based on Cuvposa’s orphan drug status, the Agency failed to consider that Cuvposa was still eligible for six-month pediatric exclusivity.  Accordingly, this exclusivity period should now be recognized and attached to the remaining Cuvposa orphan drug exclusivity and patent periods.

Alternatively, says Merz:

[I]f FDA determines that a written request for pediatric studies was required pursuant to § 505A(h) in 2010, then FDA’s 2001 meeting of the Pediatric Subcommittee of the Anti-Infective Drugs Advisory Committee ("2001 AC Meeting" or "Meeting") legally constitutes this written request.  The conclusions of the AC and the direction provided to FDA and the sponsor satisfy the legal and policy reasons for the written request.  The Agency did not consider this fact and therefore did not consider the eligibility of Cuvposa for six-month pediatric exclusivity.  Accordingly, this exclusivity period should now be
recognized and attached to the remaining Cuvposa orphan drug exclusivity and patent periods.

The key to the first argument for pediatric exclusivity for CUVPOSA, says the Petitioner, is FDC Act § 505A(h), which was initially codified at FDC Act § 505A(i) in 1997.  That provision has undergone several changes since 1997, initially stating:

(i) Relationship to regulations.  Notwithstanding any other provision of law, if any pediatric study is required pursuant to regulations promulgated by the Secretary and such study meets the completeness, timeliness, and other requirements of this section, such study shall be deemed to satisfy the requirement for market exclusivity pursuant to this section.

Then changing to the following with the 2007 FDAAA:

(h) Relationship to pediatric research requirements.  Notwithstanding any other provision of law, if any pediatric study is required by a provision of law (including a regulation) other than this section and such study meets the completeness, timeliness, and other requirements of this section, such study shall be deemed to satisfy the requirement for market exclusivity pursuant to this section.

And finally to the following with the 2012 enactment of FDASIA:

(h) Relationship to pediatric research requirements.  Exclusivity under this section shall only be granted for the completion of a study or studies that are the subject of a written request and for which reports are submitted and accepted in accordance with subsection (d)(3).  Written requests under this section may consist of a study or studies required under section 355c of this title [FDC Act § 505B].

The difference between the 2007 statute,which was in effect when FDA approved CUVPOSA, and the 2012 (and current) version is significant for two reasons, says Merz:

First, it includes language referencing written requests which was not present in that particular subsection when Cuvposa was approved.  Second, it facially narrows the relationship between studies conducted for pediatric exclusivity and for other required purposes.  The previous language broadly referenced pediatric studies conducted as required by another provision of law or regulation, but the new language only references PREA studies by name as being eligible for pediatric exclusivity. . . .

For Cuvposa to have been eligible for pediatric exclusivity under § 505A(h) in 2010, two requirements must have been met.  First, the pediatric studies performed must have been "required by a provision of law (including a regulation)."  Second, the studies must also have met the pediatric exclusivity requirements.  Cuvposa met the first hurdle for receiving pediatric exclusivity under § 505A(h) because the sponsor was required to complete pediatric studies for NDA approval under both the FFDCA and the regulations. . . . Cuvposa also cleared the second hurdle for pediatric exclusivity under § 505A(h) — that the studies meet the "completeness, timeliness, and other requirements" for exclusivity.  The completeness requirement was certainly met because, if not, then the NDA would not have been approved.  The timeliness factor is not relevant here, because the studies were completed as required for NDA approval.  As far as any of the "other requirements" — a written request, internal review of the request, and internal review of the completed studies — none of these were required for Cuvposa to be eligible for exclusivity under § 505A(h).

And even if FDA sticks to its long-held position that a PWR is a condition precedent to awarding pediatric exclusivity, then Merz says that requirement was already met by virtue of the 2001 AC Meeting concerning the design of clinical trials to study anti-muscarinics for drooling in children with cerebral palsy and other neurologic diseases.  According to the Petitioner, the 2001 AC Meeting “addressed the most critical elements of a written request, including pharmacokinetic studies; clinical study design including patient selection and related ethical issues; clinical study outcomes; dose titration, including safety/risk/benefit balancing; and labeling issues,” and the meeting conclusions “provided the roadmap for Cuvposa development and approval.”  In addition, says Petitioner, “the meeting satisfies the historical purpose of the written request — to provide sponsors with information regarding the conduct of pediatric studies to qualify for exclusivity.” 

By Kurt R. Karst –

It’s been quite a while since we last posted on the so-called “RLD (Reference Listed Drug) Theory of Liability.”  It’s the theory put forward by plaintiffs’ attorneys in a lot of failure-to-warn generic drug product liability cases which posits that FDA’s regulations impose new or additional responsibilities on an ANDA sponsor whose drug product is unilaterally designated by FDA as an RLD once the brand-name RLD NDA drug product is discontinued and withdrawn from the market.  Under this theory, the U.S. Supreme Court’s preemption analysis in PLIVA Inc. v. Mensing, 131 S.Ct. 2567 (2011), essentially shielding generic drug manufacturers from liability because of the FDC Act’s same labeling requirement, is inapplicable to a generic drug manufacturer because it has stepped into the role of an NDA sponsor by virtue of FDA deisignating its drug as the RLD.  Rather, say plaintiffs’ attorneys, a court should employ the impossibility preemption analysis utilized by the Court in Wyeth v. Levine, 555 U.S. 555 (2009), applicable to brand-name drug products approved under an NDA.  Although a decision last summer by the Superior Court of Pennsylvania did say that there’s some merit to the RLD theory of liability (see our previous post here), that’s the only court (federal and state) that has thus far accepted the theory.  Every other court to consider the issue has soundly rejected it (see here, here, and here).  (And there’s still a chance that the Superior Court of Pennsylvania’s decision may be overturned on appeal.)

That leads us to the latest decision on the RLD theory of liability – and it’s a good one!  Last week the U.S. Court of Appeals for the Sixth Circuit issued its decision in In re Darvocet, Darvon, & Propoxyphene Products Liability Litigation, Case Nos. 12-5368, et al. (6th Cir. June 27, 2014).  The Court affirmed in all respects relating to generic drug preemption the judgment of the Kentucky District Court that came out way back in March 2012. dismissing myriad claims against manufacurers of generic versions of DARVON (propoxyphene).  The Plaintiffs in the case put forth several theories of generic drug manufacturer liability.  We’re not going to get into most of them from the Court‘s 48-page decision (we’ll leave that to the folks over at the Drug & Device Law Blog for whom preemption is manna), but we do think the Circuit Court’s decision on RLD status and failure-to-warn liability is important to our readers (pages 18-20 of the decision). 

Pointing to and quoting from a July 2013 FDA guidance document, titled Safety Labeling Changes–Implementation of Section 505(o)(4) of the FD&C Act, the Court says that RLD designation of an ANDA’d drug product does not equate to NDA status.  That FDA guidance states, in relevant part, that while RLD designation generally means that the application sponsor must submit labeling changes when it becomes aware of new safety information, that obligation does not apply to ANDA sponsors:

Under existing FDA regulations, ANDA holders cannot make labeling changes through the formal supplement process under 21 CFR 314.70 in all circumstances in which NDA holders can because an ANDA’s labeling must be the same as the NDA RLD’s labeling. Accordingly the changes-being-effected supplement process under 21 CFR 314.70(c) is not expressly available to ANDA holders except to match the RLD labeling or to respond to FDA’s specific request to submit a labeling change under this provision.

Accordingly, the Sixth Circuit found that “the status of an ANDA holder’s product as the RLD for a given prescription drug product does not alter the ANDA holder’s obligations,” and affirmed the district court’s rejection of the RLD theory of liability.  The decision also makes clear a point we’ve raised before: there’s the “big RLD,” which is the NDA-approved product relied on for safety and effectiveness findings, and the “little RLD,” which is the reference standard used for bioequivalence testing.  Sometimes they’re the one and the same, but in the case of ANDA RLD designation, they’re different. 

Regardless of how the various state and federal courts have addressed the RLD theory of liability, it could all be irrelevant if FDA ultimately adopts a November 2013 proposal – and successfully fends off any challenges to that rule – that would allow generic drug manufacturers to independently update product labeling (with respect to product safety) through the changes being effected supplement process that is currently only available to NDA sponsors.  According to the Spring 2014 Department of Health and Human Services regulatory agenda, a final rule is scheduled to be published in December 2014. 

The Generic Pharmaceutical Association has repeatedly blasted FDA’s November 2013 proposal as unworkable (see here), and recently released results of a survey showing a high preference among doctors, physician assistants, and pharmacists for FDA pre-approval of generic drug labeling changes.  Congressional opposition to FDA’s proposal also seems to be building.  Late last week, two lawmakers penned a letter to the Office of Management and Budget questioning FDA’s legal authority and cost-benefit analysis in issuing the proposed rule.  That letter follows a hearing and several other letters, some of which have already drawn FDA responses (see, e.g, here and here).

By Kurt R. Karst –      

FDA’s recent posting of two Warning Letters (here and here) to companies that failed to pay Generic Drug User Fee Amendment (“GDUFA”) facility user fees for Fiscal Year 2014 (“FY14”) – for a grand total of three GDUFA Warning Letters thus far (see our previous post here) – reminded us of a new interpretation the Agency has arrived at after having initially issued Refuse-to-Receive (“RTR”) letters for scores of ANDAs submitted to the Agency by various companies because a facility user fee was not timely paid.  FDA’s new interpretation of the GDUFA statute harkens back to the much-quoted statement from President Bill Clinton’s grand jury testimony in August 1998, arising out of the Monica Lewinsky scandal, that showed President Clinton questioning the use of the word “is”: “It depends upon what the meaning of the word ‘is’ is.”  Well, under GDUFA, the extent to which the severe penalties of that law apply to a company for which facility fees were not timely paid depends upon what the meaning of the word “new” is.     

GDUFA established four types of user fees that together generate funding for FDA each fiscal year.  The annual facility fee must be paid by both Finished Dosage Form (“FDF”) and Active Pharmaceutical Ingredient (“API”) manufacturers.  Facility fees are the most significant of all GDUFA user fees, and account for a large portion of annual GDUFA fee revenue.  The API and FDF facility fees are based on information submitted to FDA by generic drug facility owners through the so-called self-identification process. 

Once a facility owner has incurred a facility fee, the owner must pay that fee before the due date.  Although normally the due date is the first business day on or after October 1st of each year, when there’s a delay past October 1st of the enactment of an appropriations act to fund FDA (and that provides for the collection and obligation of fees), the due date is the first business day after the enactment of such an appropriations act.  That’s what happened in FY14.  Due to delayed passage of a FY14 appropriations bill, FDA operated under non-standard operating status from October 1, 2013 to October 17, 2013 (see our previous post here).  FDA returned to a standard operating status on October 17, when President Obama signed into law the Continuing Appropriations Act, 2014, funding the federal government at FY13 levels.  As such, the due date for payment of the FY14 facility fees was set at October 18, 2013.

Under GDUFA (FDC Act § 744B(g)(4)(A)(i)), failure to pay the facility fee within 20 calendar days of the due date (i.e., November 8, 2013 for FY14) results in the following:

[FDA] shall place the facility on a publicly available arrears list, such that no new [ANDA] or [Prior Approval Supplement, or “PAS”,] submitted on or after October 1, 2012, from the person that is responsible for paying such fee, or any affiliate of that person, will be received within the meaning of [FDC Act § 505(j)(5)(A)]. [(Emphasis added)]

Importantly, GDUFA defines the term “affiliate” to mean “a business entity that has a relationship with a second business entity if, directly or indirectly—(A) one business entity controls, or has the power to control, the other business entity; or (B) a third party controls, or has power to control, both of the business entities.”  In other words, if you are a large (or even a small or mid-size) generic drug manufacturer with several affiliates, which, in turn, have multiple FDF or API manufacturing facilities, you have to be particularly careful that all facility fees that are owed by those facility owners are timely paid, because the penalties from appearing on the arrears list (the current version is posted here) [http://www.fda.gov/forindustry/userfees/genericdruguserfees/default.htm] flow downstream to the the generic drug manufacturer and to all of its affiliates. 

FDA originally interpreted GDUFA such that any generic drug submission pending at the time that a facility was placed on the arrears list should be subject to the RTR penalty specified at FDC Act § 744B(g)(4)(A)(i).  That meant some companies (and their affiliates) received a stack of RTR letters from FDA’s Office of Generic Drugs (“OGD”) for all of their pending ANDAs and PASs stretching back to October 1, 2012, because there was a facility owned by one affiliate that failed to timely pay an applicable facility fee by November 8, 2013.  As you can imagine, that didn’t settle well with generic drug companies – particuarly if one of the RTR’d ANDAs was a first-to-file opportunity with 180-day exclusivity eligibility on the line.

In a world where generic drug submissions to FDA are promptly reviewed and received or acted on by OGD, the pain of receiving one or two RTR letters for recently submitted applications may not be that bad . . . . but that’s not yet the world in which we live.  Based on information published by FDA on its Paragraph IV Certifications List, OGD is still taking an initial filing (i.e., “receipt” in generic drug parlance) look at ANDAs submitted in early 2013.  With a bolus of nearly 600 ANDA submissions so far in June 2014, as recently reported by Bob Pollock (Lachman Consultants Blog), it may be quite some time until the backlog of ANDAs awaiting a filing decision is resolved.  That means companies need continue to be vigilant to ensure all facility fees are paid so that long-pending applications are not RTR’d . . . . unless FDA were to recognize a new interpretation of GDUFA that dampens the effects of the failure-to-timely-pay provision.  And it just so happens that that’s exactly what FDA has done. 

FDA has reconsidered its original position and has concluded that, in order to give the term “new” in the statutory provision (FDC Act § 744B(g)(4)(A)(i)) its proper effect, the statute should be interpreted to require RTR of an ANDA or PAS only if that application is submitted after the facility has been placed on the arrears list.  This new interpretation is not only more consistent with the intent of the provision, but it’s more fair.  FDA’s new interpretation should generally result in providing an opportunity for ANDA applicants that could be affected to assure that the facility fee is paid and the facility is removed from the arrears list before they proceed down the submission path, because they can refer to the arrears list before submitting an ANDA or PAS and thus know whether or not the application would be RTR’d on that basis. 

Ahhhh . . . but what about all of those pending ANDAs and PASs that we heard about that were RTR’d on the basis of FDA’s prior interpretation of the GDUFA statute?  FDA determined that they were improperly refused, rescinded the RTR letters, and reinstated their original submission dates.  All’s well that ends well.

By Jamie K. Wolszon –

In the past two months we have seen two newsworthy items in the Laboratory-Developed Test (“LDT”) world.  In June, the Defense Health Agency (“DHA”) announced that TRICARE, the U.S. health care program serving Uniformed Service members, retirees and their families, has launched a three-year demonstration program that would expand the LDTs potentially eligible for coverage.  Meanwhile, in May, the Combination Product Coalition (“CPC”) sent a letter to FDA Commissioner Margaret A. Hamburg that argues that FDA should regulate diagnostic kits and LDTs the same way, and that the current dual system is arbitrary and capricious.  Although the letter is framed in terms of equal treatment, since FDA is unlikely to deregulate in vitro diagnostic tests, it appears that the letter is intended to increase FDA regulation of LDTs. 

LDTs are diagnostic tests developed and performed by a laboratory.  They are widely used; among other tests, this category includes genetic tests, tests for rare conditions, and companion diagnostics.  Thousands of different LDTs are currently available, many of which are the standard of care.  Starting in 1992, FDA stated that LDTs were medical devices but that it generally was exercising enforcement discretion.  FDA announced in June 2010 that it was revisiting this years-long policy of exercising enforcement discretion over LDTs and was holding a public workshop to discuss the issue in July 2010.  FDA officials subsequently indicated that it was developing a plan to more actively regulate LDTs under a risk-based framework, to be issued for comment as guidance.  The recently enacted Food and Drug Administration Safety and Innovation Act (“FDASIA”), requires FDA to notify Congress at least 60 days prior to issuing a draft or final guidance on the regulation of LDTs.  The notice must include anticipated details of the action (see here). 

In June 2013, Hamburg renewed FDA’s call for more active FDA regulation of LDTs and touting the Agency’s risk-based framework for regulating LDTs that is “under development.”  Only two days after Dr. Hamburg’s comments, the American Clinical Laboratory Association (“ACLA”) submitted a Citizen Petition expressly requesting that FDA refrain from issuing draft or final guidance, or a proposed or final rule, regarding the Agency’s regulation of LDTs, and also asks FDA to respond to its Citizen Petition by explicitly confirming that LDTs are not devices under the Federal Food, Drug, and Cosmetic Act (“FDCA”). 

TRICARE Demonstration Project.  The TRICARE Management Authority (“TMA”), which prior to the creation of the DHA administered TRICARE, instituted a policy decision that generally required LDTs to receive FDA premarket (“PMA”) approval or 510(k) clearance before TMA would pay for LDTs.  As discussed above, FDA generally exercises enforcement discretion for LDTs, so it is rare for an LDT to be FDA approved or cleared.  As a result, TRICARE beneficiaries could not obtain coverage for almost all LDTs. 

On December 27, 2011, TMA announced a demonstration project that would allow individual laboratories to seek coverage for their LDTs for three years and, if the demonstration project was successful, possibly beyond.  However, the original demonstration project was limited to tests that had both a Centers for Medicare & Medicaid Services (“CMS”) national or local coverage determination and significantly informed clinical decision making for surveillance, surgical interventions, chemotherapy, or radiation therapy for cancer.  That demonstration program is ongoing; however, the new demonstration program expands the original demonstration program to include an LDT that DHA determines demonstrate “reliable evidence” as defined in the TRICARE regulations.  The new demonstration project also includes LDTs for rare disorders for which the test does not necessarily demonstrate “reliable evidence” as defined in the regulations.  TRICARE defines a rare disease as any disease or condition that has a prevalence of less than 200,000 persons in the United States.

In addition to LDTs for rare disorders and tests that demonstrate “reliable evidence,” the demonstration project will include LDTs for prenatal and preconception cystic fibrosis carrier screening, when provided in accordance with American Congress of Obstetricians and Gynecologists ("ACOG") guidelines. 

CPC Letter to Hamburg Advocating for Equal Treatment of LDTs and Diagnostic Kits.  The CPC sent the May 15, 2014 letter in response to ACLA’s Citizen Petition.  The CPC describes itself as an association of “drug, biologic, and device/diagnostics manufacturers dedicated to working with FDA to improve regulation of combination products.”  The letter does not provide a list of the companies that are members of the coalition. 

CPC asks FDA to create a single regulatory framework for diagnostic kits and LDTs, and argues that the current two-tier system is not legally or clinically viable.  CPC argues in its letter that the dual system does a disservice to patients and manufacturers: “If a more restrictive FDA-type system is needed to assure the safety and effectiveness of in vitro diagnostics, FDA’s failure to regulate LDTs is putting patients at risk.  Conversely, if CLIA regulation alone is sufficient, FDA is making IVD manufacturers waste billions of dollars each year complying with unnecessary requirements; dollars better spent developing new tests under a CLIA system without FDA oversight.”  The issue of LDT regulation is a long-standing one, and this letter probably will not spur the immediate issuance or release of a draft policy, but it helps to ensure that the controversy will continue.        

By Alan M. Kirschenbaum –

Today the Office of the Inspector General (OIG) of the Department of Health and Human Services issued a “Special Fraud Alert on Laboratory Payments to Referring Physicians.”  Despite the focus of the Special Fraud Alert on activities of laboratories, drug and device manufacturers would do well to heed the OIG’s warnings about one of those practices – registry payments. 

The Special Fraud Alert contains strong warnings that even registries with a public health benefit are not immune from prosecution under the Federal health care program antikickback law, if the registry is intended as a vehicle to reward or induce referrals.  The OIG cautions that “claims that Registries are intended to promote and support clinical research and treatment are not sufficient to disprove unlawful intent.  Even legitimate actions taken to substantiate such claims, including, for example, retaining an independent Institutional Review Board to develop study protocols and participation guidelines, will not protect a Registry Arrangement if one purpose of the arrangement is to induce or reward referrals.”  The Special Fraud Alert identifies a number of suspect registry characteristics that may be evidence of unlawful purpose.  Some of these are specific to laboratories, but others could easily be extrapolated to drug or device registries:

• The registry sponsor requires that physicians conduct a certain number of procedures in order to obtain compensation
• Compensation is on a per-patient or other basis that takes into account value or volume of referrals
• Compensation is greater than fair market value for the physicians’ efforts in collecting and reporting patient data
• The participating physicians’ efforts are not supported by timely submitted documentation
• The registry collects data only on the registry sponsor’s own product
• Participants are selected based on their prior or anticipated referral volume

The OIG also cautions that “carving out” Federal health care program beneficiaries (by paying physicians only for data collected on non-Federal beneficiary patients) may not protect the arrangement.

For drug and device manufacturers who conduct registries that have been required or requested by FDA, the OIG’s warnings should ordinarily not be of concern.  However, manufacturers conducting other registries should read this Special Fraud Alert and take note that even a well-designed  registry that generates useful scientific or treatment data may be at risk if there is evidence of a marketing motivation.

By James C. Shehan & Karla L. Palmer –

In a curious posting on Friday, June 20, 2014, FDA with little fanfare set forth its latest position on medical marijuana.   Amounting to little more than a statement of general support of scientific research on medical marijuana use, coming 18 years after California passed the nation’s first medical marijuana law, and with 22 states and the District of Columbia now allowing medical use, FDA’s statement is not exactly clear, not exactly bold, and is about as timely as Jeff Spicoli was for history class.

FDA’s latest position is also somewhat at odds with DEA’s refusal to grant a petition to reschedule marijuana due to a lack of adequate and well-controlled studies demonstrating safety and efficacy, which decision was upheld by the D.C. Circuit a little more than a year ago (and posted about here).  DEA staked that position notwithstanding over two hundred comments on the petition, many of which in fact addressed adequate and well-controlled studies.  DEA relied as it is required to do on HHS’s medical and scientific evaluation of medical marijuana use in denying the rescheduling petition (almost a dozen years after it was filed).  DEA stated that the limited existing clinical evidence was not adequate to warrant rescheduling.  Relying on HHS, DEA found there were no “adequate and well-controlled studies proving efficacy” of the use of marijuana in medical treatment.

FDA’s latest statement — cast as “advice to caregivers and patients“– begins with a cautionary heading likely borrowed from Reefer Madness: “Untested Drugs Can Have Unknown Consequences.”  The Agency then observes that there is a demand for “treatment options for unmet medical needs,” which has “[i]n some instances,” led patients and their caregivers to turn to marijuana for conditions such as glaucoma, AIDS wasting syndrome, neuropathic pain, cancer, multiple sclerosis, chemotherapy-induced nausea, and certain seizure disorders.  FDA acknowledges the significant scientific interest that exists for the use of marijuana for treatment of various medical conditions.  FDA also notes that it has approved one drug containing a synthetic version of an active substance present in marijuana and one drug containing a synthetic substance similar to marijuana compounds but not present in marijuana.

With this background, FDA summarizes the IND and NDA processes for studying and gaining approval for new drugs.  Interestingly, it also describes the expanded access process and declares its willingness to work with the patient and medical communities, as well as our “federal partners” to allow access to experimental treatments.  To our knowledge, expanded access has never been used for marijuana.

Turning to the likely point of the posting, — “FDA Supports Sound Scientific Research” – FDA asserts that it “has an important role to play in supporting scientific research into the medical uses of marijuana.” and expresses its support for “those in the medical research community who intend to study marijuana.” FDA also notes that it supports research into the medical use of marijuana through cooperation with the DEA and The National Institute on Drug Abuse (NIDA) within NIH.  It also refers to discussions with state officials in Florida, Georgia, Louisiana, New York and Pennsylvania about how their plans for medical research of marijuana and its derivatives can meet federal requirements and scientific standards.  The posting concludes with links to two other FDA documents: FDA and Marijuana: Questions and Answers, and Marijuana Research with Human Subjects.

Although FDA fails to mention that marijuana use – both medical and recreational – is legal in at least two states and being considered by others, there can be no doubt that state actions on medical and recreational marijuana and the conflict between state and federal laws and regulations have left the federal government in a difficult position.  And FDA’s public position in support of careful scientific research is certainly consistent with its mandate and history.  But again, coming 18 years after the states have moved forward on this topic and with hundreds of thousands of Americans already using medical  marijuana (not to mention the millions of recreational users), one questions whether this guidance comes too little and too late to matter.

For those of who are puzzled by the Jeff Spicoli reference in the first paragraph, we close with a relevant quote on timeliness from the 1982 classic film, “Fast Times at Ridgemont High.”  Mr. Hand, US history teacher: “What’s the reason for your truancy?”  Jeff Spicoli, student and habitual marijuana user: “Just couldn’t make it on time.”