By Karla L. Palmer – 

FDA Commissioner Margaret A. Hamburg, M.D., sent open letters (here and here) to “Hospital Purchasers” and state officials including governors, state boards of pharmacy and health departments, informing them of the passage of the Drug Quality and Security Act (Public Law 113-54,127 Stat. 587), specifically Title I, the Compounding Quality Act.  FDA’s stated purpose of the letters is to urge state officials and hospitals to encourage outsourcing facilities to register with FDA as outsourcing facilities.  The letters recount a brief history of events leading to the legislation, noting that new “problems continue to be identified at compounding pharmacies across the country, which number over 15,000.” (citing 2012 NCPA Digest In-Brief. Retrieved November 14, 2013, from National Community Pharmacists Association (“NCPA”)).

The letters describe generally requirements for voluntarily registering as an outsourcing facility under section 503B of the Federal Food, Drug, and Cosmetic Act (“FD&C Act”).  FDA notes that an outsourcing facility can qualify for exemptions from FDA approval requirements and the requirement to label products with adequate directions for use, but it still must comply with current good manufacturing practice (“cGMP”) requirements.  FDA reminds hospital purchasers that when a drug is FDA-approved, FDA has reviewed the safety and efficacy of the drug and the adequacy of the manufacturing process.  Because compounded drugs do not go through the drug approval process, such drugs do not provide such assurance.  Thus, compounded drugs, says FDA, should only be used when an FDA-approved product is not available to meet the medical needs of an individual patient. 

In the letter to state officials, Dr. Hamburg asks them to consider how they can encourage compounding pharmacies located out of state that ship compounded sterile drugs into the state to register with FDA as outsourcing facilities.  FDA notes that registration of pharmacies as outsourcing facilities will help FDA identify and more effectively regulate these facilities.

As to hospital purchasers of compounded products, Dr. Hamburg tells them that they can play an important role in improving the quality of compounded drugs by requiring compounding pharmacies that supply drugs to register as outsourcing facilities. Once they register, such facilities and the patients they serve, says FDA, can be assured that FDA will inspect these facilities on a risk-based schedule, hold them to CGMP requirements, monitor the adverse event reports they are required to submit to the agency, and require appropriate labeling.  As required by the new law, FDA has also posted a list of facilities that have already registered as “outsourcing facilities.”   

By Ricardo Carvajal –

As we noted in a prior posting, several courts have stayed or dismissed class actions based on the doctrine of primary jurisdiction in cases that raise the question of whether a GMO-containing food can properly be labeled as “natural.”  In response to referrals from those courts, FDA issued a letter on January 6, 2013 (available here) declining to determine whether “food products containing ingredients produced using bioengineered ingredients may be labeled ‘Natural’ or ‘All Natural’ or ‘100% Natural.’”  The letter states several reasons for the agency’s decision not to engage on the issue:

• Revocation or amendment of the agency’s policy on the use of “natural” claims in labeling should be conducted through a public process that engages all stakeholders, and not in the context of private litigation.
• Defining “natural” would involve the interests of other Federal agencies, including USDA, and have implications that go “well beyond the narrow scope of genetically engineered food ingredients.”  Thus, even if FDA were to engage in the process, “there is no assurance that [FDA] would revoke, amend, or add to the current policy, or develop any definition at all.”
• The agency’s limited resources are largely occupied by public health and safety matters, including FSMA implementation under court-ordered deadlines and the issuance of nutrition labeling regulations (including menu labeling).

In September 2010, FDA declined a similar request from a federal court.  It appears that the subsequent enactment of FSMA and the burdens associated with implementation of that law have given the agency an additional reason to shy away from attempting to define “natural.”

By Ricardo Carvajal –

In the latest major rulemaking initiative under the Food Safety Modernization Act ("FSMA"), FDA issued a proposed rule to implement provisions of FSMA that address intentional adulteration.  Further below we summarize major provisions of the proposed rule.  However, we note at the outset that the scope of the proposed rule is limited to acts of intentional adulteration that are high risk, meaning “acts intended to cause massive public health harm, including acts of terrorism.”  The proposed rule excludes from its scope economically motivated adulteration ("EMA") and acts motivated by an intent to harm a company’s reputation.  Those types of intentional adulteration would be addressed under the preventive controls rules for human and animal food.  Because the proposed preventive controls rules currently do not address intentional adulteration, FDA “plans to provide new language and an analysis of costs” associated with any intentional adulteration provisions added to those rules, and to seek comment. 

Folding intentional adulteration provisions into the preventive controls rules would place the burden on facilities covered under those rules to identify hazards related to EMA that are reasonably likely to occur, “for example, when obtaining certain ingredients from a country in which [EMA] has occurred in those ingredients in the past.”   In the case of a well-known economic adulterant such as melamine, EMA might be judged as reasonably likely to occur “even if there is no known history regarding the specific supplier or the specific food product.”   The potential for EMA of products exempt from the preventive controls rules (namely seafood, juice, and dietary supplements) would be addressed through amendment of the HACCP and GMP regulations specific to those products.

Turning to the proposed rule on intentional adulteration, that rule would require registered food facilities to implement a HACCP-type system of controls to prevent high risk acts of intentional adulteration.  Failure to comply with the requirements of the rule would constitute a prohibited act.  The rule would require facilities to prepare and implement a written food defense plan that incorporates the following, as appropriate:

• Identification of actionable process steps, meaning “a point, step, or procedure in a food process at which food defense measures can be applied and are essential to prevent or eliminate a significant vulnerability or reduce such vulnerability to an acceptable level” (an actionable process step is analogous to a critical control point under HACCP);
• Identification and implementation of “focused mitigation strategies at each actionable process step to provide assurances that the significant vulnerability at each step will be significantly minimized or prevented and the food manufactured, processed, packed, or held by the facility will not be adulterated” (a focused mitigation strategy is analogous to a preventive control under HACCP);
• Establishment and implementation of procedures for monitoring focused mitigation strategies;
• Establishment and implementation of corrective action procedures when there is a failure to properly implement focused mitigation strategies;
• Verification activities; 
• Training of personnel;
• Establishment and maintenance of certain records.

Certain types of activities would be exempt, including holding food (except liquid storage tanks), activities subject to FDCA 419 (produce safety), further manufacturing activities where the food’s immediate container remains intact, and manufacturing, processing, packing, or holding of animal food.

FDA acknowledges that the imposition of regulatory requirements to reduce the risk of intentional adulteration is unprecedented, and that the agency’s “endeavor is further complicated by the low probability and potentially high impact nature of such an attack which makes estimating potential public health benefits and establishing an appropriate threshold for requiring action difficult.”  FDA further acknowledges that the agency is “challenged by the paucity of data on the extent to which facilities have already implemented programs to mitigate this risk, and the effectiveness of various strategies to prevent intentional adulteration of food caused by acts of terrorism.”  For these reasons, FDA specifically requests comment on the following issues:

• From which entities would implementation of measures to protect against intentional adulteration derive the greatest benefit to public health protection? How could this proposed regulation be modified to better target such entities?
• Would it be feasible to require measures to protect against intentional adulteration only in the event of a credible threat? If so, would such an approach be consistent with the intentional adulteration provisions of FSMA? How would such requirements be communicated to industry in a timely and actionable manner?
• What is an appropriate level of public health protection with respect to intentional adulteration, considering the intentional adulteration provisions of FSMA?
• Are there other ways to further focus the scope of the rule?

FDA also requests comment on the scope of any exemption for certain activities conducted by small or very small businesses.

According to FDA’s economic analysis, the proposed rule carries an estimated $370 million price tag.  The benefits – namely “reduction in the possibility of illness, death, and economic disruption resulting from intentional adulteration of food” – are not quantifiable.  However, the economic analysis examines various scenarios in which the prevention of attacks would yield benefits that exceed costs.  Also, the preamble to the proposed rule notes that melamine contamination is estimated to have cost the Chinese dairy industry $3 billion in losses.  Comments are due by March 31, 2014.   

By Kurt R. Karst –      

Sandoz Inc. (“Sandoz”) is appealing 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 – 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 was initially licensed in November 1998 under BLA No. 103795.  The November 2013 decision is the first from a court interpreting the complex patent resolution provisions added to the PHS Act by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), which created a pathway for the submission and approval of biosimilar versions of brand-name reference products.

According to the Sandoz Complaint, the ‘182 and ‘522 patents, which the U.S. Patent and Trademark Office “unlawfully” issued in November 2011 and April 2012, respectively, “place[] a cloud of legal uncertainty over Sandoz’s etanercept product,” which the company began developing as far back as 2004, and has discussed with FDA since 2010.  Prior to the issuance of the ‘182 and ‘522 patents, Sandoz believed that there were only a couple of relevant patents remaining covering etanercept: U.S. Patent No. 5,395,760 (“the ‘760 patent”), which expired in 2012, and U.S. Patent No. 5,605,690 (“the ‘690 patent”), which is scheduled to expire in 2014.  Armed with this belief,

Sandoz took significant steps in preparation for commercializing etanercept in reliance on the expectation it would be able to begin marketing immediately upon FDA approval and without the cloud of potential infringemet claims.  Sandoz is now faced with the quandary that any further significant investment it makes in its etanercept product may be wasted, and its commercial marketing will be met with claims for substantial damages or injunctive relief, based on Amgen’s allegations about it new patent position.  To remove this cloud of uncertainty, Sandoz seeks a declaration that the ‘182 and ‘522 patents are invalid and that its etanercept product does not infringe any of their claims.

Sandoz has not yet submitted a so-called “351(k)” application to FDA seeking approval to market a biosimilar version of ENBREL; however, the Complaint indicates that submission may occur in the not too distant future.  According to Sandoz, the company “timed its product development such that its commercial marketing would coincide with, or post-date, the expiration of [the ‘760 and ‘690] patents.”  In a later court filing, Sandoz identifies an “intended 2016 launch” of its etanercept biosimilar.

Amgen and Roche fired back in their Motion to Dismiss, alleging that Sandoz had jumped the gun and that the path to biosimilar approval is far from certain (thus, not supporting the declaratory relief requested by Sandoz):

[T]his action comes too soon because Plaintiff is just beginning the determinative phase of the clinical trial process and many uncertainties remain as to if and when Plaintiff’s alleged biosimilar will ever be approved and ready to market in the U.S. . . .  On the long journey to product approval, one must travel an obstacle-laden path through acres of uncertainty before ever arriving at a dispute of sufficient immediacy and reality.  A multitude of facts that do not yet exist must all come to pass.  Plaintiff must meet its Phase III trial completion date—a difficult proposition given the state of Plaintiff’s recruiting efforts and the strict requirements of its study.  That Phase III trial must succeed.  The Plaintiff must submit an application to the FDA.  And that application must be approved. . . .  Depending on how a series of future events turn out, there may one day be a dispute between the parties concerning an etanercept “biosimilar.”  But today is not that day.

Moreover, wrote Amgen and Roche, the BPCIA’s patent resolution procedures for biosimilars (PHS Act § 351(l)(6)), like the Hatch-Waxman Amendment’s patent resolution procedures for generic drugs (FDC Act §§ 505(j)(5)(B)(iii), 505(j)(5)(C)), “set the triggering act for statutory jurisdiction at the filing of an application for FDA approval to market the product candidate.”  “These statutory schemes reflect the Congressional judgment that the appropriate time for the courts to have jurisdiction to resolve patent disputes is at the filing of an FDA application, coincident with the applicant’s representation to the FDA that it has completed sufficient clinical testing and analysis of its product candidate to justify FDA approval.”  Accordingly, Amgen and Roche ask the court to exercise its discretion not to take the case.

In its Opposition Memorandum to the Amgen/Roche Motion to Dismiss, Sandoz proffers various arguments in support of the company’s position that declaratory judgment jurisdiction exists and that the Amgen/Roche Motion to Dismiss should be denied.  Sandoz also takes issue with the Defendants’ characterization of the BPCIA (and the Hatch-Waxman Amendments) as reflecting a Congressional intention the delay patent litigation until after an application is submitted to FDA:

If this statement were true, however, there would be statutory provisions confirming it. . . .  There is none.  On the contrary, a declaratory judgment action is necessary to achieve patent certainty prior to Sandoz’s commercial marketing. . . .  [C]onsistent with this goal, the BPCIA provides DJ actions can be filed by either party upon the biosimilar manufacturer’s notice of commercial marketing, which Sandoz has given here.  See 42 U.S.C. § 262(l)(8)-(9).  This action is thus entirely consistent with the text and the policy of the BPCIA.  [(Internal reference omitted.)]

Briefing continued with an Amgen/Roche Reply Brief (which included a declaration from a former FDA Chief Counsel), and a Sandoz Surreply, leading up the court’s November 12, 2013 decision.

Clocking in at just over 5 pages, Judge Maxine M. Chesney granted the Amgen/Roche Motion to Dismiss.  Despite her brevity, however, Judge Chesney’s decision says loads about her view of the relevance of the BPCIA’s multi-step “patent dance” procedures at PHS Act § 351(l): Step 1 – Transmission of Biosimilar Application; Step 2 – Reference Product Sponsor’s Paragraph 3(A) Patent List; Step 3 – Biosimilar Applicant’s Paragraph 3(B) Patent List; Step 4 – Reference Product Sponsor’s Response; Step 5 – Patent Resolution Negotiations; Step 6 – Patent Resolution If No Agreement; and Step 7 – Filing of the Patent Infringement Action.

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,” Judge 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 court was not persuaded that PHS Act § 351(l)(8), cited by Sandoz (see above), provides declaratory judgment jurisdiction. . . . for several reasons:

First, as set forth in the section on which Sandoz relies, a “notice of commercial marketing” is required to be given by the applicant to the reference product sponsor “not later than 180 days before the date of the first commercial marketing of the biological product licensed under [PHS Act § 351(k)].”  Here, Sandoz cannot, as a matter of law, have provided a “notice of commercial marketing” because, as discussed above, its etanercept product is not “licensed under subsection (k).”  Second, even after an applicant provides a “notice of commercial marketing,” it cannot bring an action for declaratory relief until, at a minimum, it has complied with its obligations under [PHS Act § 351(l)(2)(A)].  [(Internal citations omitted)]

Moreover, Judge Chesney ruled that Sandoz did not establish an injury caused by Amgen/Roche that could establish declaratory judgment jurisdiction, and that Sandoz’s allegation that it intends in the future to submit a Section 351(k) biosimilar application for etanercept is insufficient to create a case or controversy for such jurisdiction. 

A briefing schedule for the appeal to the Federal Circuit has not yet been set.  We’ll be keeping a close eye on this case given its importance to the development of the nascent U.S. biosimilars industry.

By Alan M. Kirschenbaum –

Hyman, Phelps & McNamara, P.C. has updated the firm’s outline on the Application of the Health Care Fraud and Abuse Laws to the Marketing of Pharmaceuticals and Medical Devices.  The outline, which was last updated in 2009, has been expanded to cover devices as well as drugs.  It provides an overview of the Federal health care program antikickback law, the Federal False Claims Act, and other federal and state fraud and abuse laws and related laws, identifying noteworthy cases and OIG precedents that interpret these laws.  The outline also discusses the major enforcement risk areas for which drug and device companies have been targeted in recent years, including the offer of free goods and services, bundled discounts, consulting fees, grants, post-marketing studies, inflation of reported prices, off-label promotion, and other areas, citing relevant OIG guidance and examples of enforcement actions and settlements in each area. 

By Kurt R. Karst –      

Last week, in an unusual move, the U.S. Court of Appeals for the Federal Circuit waded into non-patent territory when the Court issued its decision in Allergan, Inc. v. Athena Cosmetics, Inc. (Case No. 2013-1286), a consolidated appeal of several decisions by the U.S. District Court for the Central District of California.  The defendants in the case allegedly manufacture, market, and/or sell products (formulations of Athena’s RevitaLash line) containing a prostaglandin derivative for eyelash (and hair) growth and that compete with Allergan’s LATISSE (bimatoprost ophthalmic solution), which FDA approved under NDA No. 022369 in December 2008 for “treatment of hypotrichosis of the eyelashes by increasing their growth including length, thickness and darkness.” 

Although the case has roots in a patent dispute, which the Federal Circuit  previously considered (see here and here), it evolved into a dispute over FDC Act preemption and “intended use” for the Federal Circuit to consider when the California District Court found that Athena’s products qualify as “drugs” rather than as “cosmetics.”   Based on this finding, the California District Court granted Allergan’s Motion for Summary Judgment that Athena violated California’s Unfair Competition Law (“UCL”) and entered a nationwide injunction against Athena prohibiting the company from selling “any and all eyelash growth product(s).”

After dispensing with a jurisdictional dispute raised by Allergan that the Federal Circuit does not have jurisdirction over the appeal, the Court went on to address Athena’s appeal of the California District Court decisions that the company violated the California UCL “by marketing, distributing and selling, without regulatory approval, products that qualify as drugs,” and challenge of the district court’s entry of a nationwide injunction and denial of Athena’s Motion for Judgment on the Pleadings that the FDC Act impliedly  preempts Allergan’s UCL claim.  Briefs in the Federal Circuit appeal are available here, here, and here.

Athena argued on appeal that Allergan’s UCL claim involves the violation of a California statute that is not rooted in state law tort principles, but simply incorporates FDC Act provisions.  As such, argued Athena, under the U.S. Supreme Court’s decision in Buckman Co. v. Plaintiffs’ Legal Committee, 531 U.S. 341 (2001), and the Ninth Circuit’s application of that decision in PhotoMedex, Inc. v. Irwin, 601 F.3d 919 (9th Cir. 2010), a state law claim is impliedly preempted if it does not implicate a traditional state law tort principle and exists solely by virtue of a federal statute.  Thus, according to Athena, Allergan’s UCL claim “interferes with the FDA’s discretionary authority whether to regulate an article in interstate commerce as a drug,” and under the prudential doctrine of primary jurisdiction, the California District Court “abused its discretion by declining to stay this case pending the FDA’s determinations about the products at issue.”

Allergan, using the U.S. Superme Court’s decision in Wyeth v. Levine, 555 U.S. 555 (2009), argued that there is no implied preemption where it is possible to have simultaneous compliance with state and federal law, and that the California law is not an obstacle to the realization of federal goals under the FDC Act.  Specifically, Allergan argued that compliance with both the California Health Code and the FDC Act is possible, and that the California district court “did not abuse its discretion by retaining jurisdiction because the resolution of this case did not require the FDA’s specialized knowledge.”

Siding with Allergan, the Federal Circuit held that the FDC Act does not impliedly preempt the Company’s UCL claim:

The fact that the California Health Code parallels certain FDCA provisions does not mean that it does not implicate an historic state power that may be vindicated under state law tort principles. . . .  We do not find a clear purpose by Congress to preempt the state law claim at issue. Congress expressed its intent to preempt state-law causes of action regarding, for example, non-prescription drugs and medical devices.  Allergan’s contention, however, is that the products at issue must ultimately be regulated as prescription drugs—about which Congress “declined to enact such a provision.” . . .  Moreover, the California Health Code is not an obstacle to realizing federal objectives.  To the contrary, it contains provisions that parallel the FDCA, such that the statutes have consistent goals. [(Internal citations omitted.)]

Moving on to the California District Court’s Summary Judgment finding that Athena “objectively intended to market past and present formulations of the products at issue to affect the structure of eyelashes” – i.e., as “drugs” for eyelash growth, instead of as “cosmetics” for eyelash appearance – the Federal Curcuit affirmed that decision as well. 

Athena argued that there is genuine issue of material fact about its objective intent that made Summary Judgment inappropriate.  Specifically, Athena argued “that its intent should turn only on labeling and marketing materials related to its most recent formulation, and that the physical properties of the products at issue and marketing of past formulations are irrelevant.”  In addition,  Athena contended that the company ultimately “limited its marketing to claims about eyelash appearance,” and that “statements by resellers about eyelash growth do not reflect Athena’s objective intent.”  Allergan contended otherwise, saying that “there is no genuine factual dispute that Athena objectively intends for the products at issue to be used as drugs,” and that Athena’s marketing “consistently references eyelash length, which depends on growth,” thereby making it a “drug” rather than a “cosmetic.”

Once again siding with Allergan (and the California District Court), the Federal Circuit held that “there is no genuine dispute that Athena objectively intends for the products at issue to be used to affect the structure of eyelashes—i.e., as drugs.”  Noting that the Ninth Circuit, in United States v. Storage Spaces Designated Nos. “8” & “49”, 777 F.2d 1363 (9th Cir. 1985), found that the intended use of a product may be “derived or inferred from labeling, promotional material, advertising, or any other relevant source,” the Federal Circuit disagreed with Athena “that the only relevant evidence is labeling and marketing, or that the only relevant formulation is the most recent one.”  Among other things, the Federal Circuit pointed to the company’s website, which “collectively refers to the RevitaLash ‘line-up of products,’ and describes formulation changes as ‘improve[ments]’ to the intended use of ‘one or more of our products.’”  “Athena’s marketing of the products at issue consistently discusses physical changes to eyelashes,” wrote the Court.  “There is no dispute that Athena made drug-related claims about an early formulation—and it never expressly disavowed such claims as it reformulated its products.  Instead, the company continued to suggest that the products at issue change eyelash structure.”

The one bright spot for Athena is the Federal Circuit’s decision to vacate the California District Court’s nationwide permanent injunction.  “[T]he district court abused its discretion by entering an injunction that regulates any and all out-of-state conduct,” wrote the panel.  “The injunction impermissibly imposes the UCL on entirely extraterritorial conduct regardless of whether the conduct in other states causes harm to California. . . .  Neither the California courts nor the California legislature are permitted to regulate commerce entirely outside of the state’s borders.  To do so would violate the Commerce Clause” of the U.S. Constitution.  Instead, wrote the Court, “The FDA—and the FDA alone—has the power and the discretion to enforce the FDCA. . . .  California does not have the authority to stand in the shoes of the FDA to determine whether Athena’s sale of the products at issue amounts to the sale of an unapproved drug under the FDCA.” 

Now that the Federal Circuit has hit the ball into FDA’s court, whether the win for Athena on the nationwide permanent injunction will continue to be a bright spot for the company (or whether it will be an evanescent win) will depend on whether or not FDA decides to take enforcement action against the company for marketing an unapproved new drug. 

By Dara Katcher Levy –

Recently, a bill was introduced into the House of Representatives that would legalize personal importations and re-importations of certain foreign drugs.  The Personal Drug Importation Fairness Act of 2013 (H.R. 3715) would allow Americans to buy prescription drugs from certain countries deemed to have comparable safety standards to the United States, including Australia, Canada, Israel, Japan, New Zealand, Switzerland, South Africa, and countries in the European Union.  The drug imported must have the same active ingredients, route of administration, and strength as an FDA-approved prescription drug, and the purchase must be accompanied by a valid prescription for a supply not exceeding 90 days to be dispensed by a licensed pharmacist. 

The stated intent of the bill is to permit individuals access to drugs at lower costs. Although FDA prohibits the import of unapproved drugs, FDA’s current policy is to exercise enforcement discretion to allow certain personal imports that meet set criteria.  FDA has repeatedly reminded consumers and industry that such imports are illegal and FDA’s exercise of enforcement discretion has been inconistent.  Read more about FDA’s policy on these imports here, here, and here. 

The bill comes on the heels of Maine’s recent law that effectively legalized the import of certain prescription drugs from certain pharmacies.  In mid-October 2013, Maine became the first state to permit its residents to legally import foreign drugs from accredited pharmcies in Canada, the U.K. and certain other countries (see our previous posts here and here).  This bill may be an attempt by the federal government to curtail similar statutes from other states and to establish standards for the types of permissible imports.

By Riëtte van Laack –

On December 17, FDA published a proposal to amend the 1994 tentative final monograph (“TFM”) for OTC topical antimicrobial drug products, which addressed antiseptic healthcare products.  The proposed rule concerns consumer antiseptic products intended for use with water, referred to as “consumer antiseptic washes.” 

As detailed in the proposal, FDA believes that currently available data suggest that consumer antiseptic wash ingredients may not be as safe as previously thought and that they require new clinical studies that support their efficacy.  The new safety and efficacy data are due by June 16, 2014.  Unless the Agency receives evidence to the contrary, consumer antiseptic wash active ingredient will be non-monograph (i.e., unapproved new drugs and/or misbranded drugs).  The additional evidence must include safety data as well as clinical data that do not just support a reduction in bacteria but demonstrate a clinical benefit from the use of consumer antiseptic wash products compared to non-antiseptic soap and water.  FDA proposes that a final rule would become effective one year after publication.

FDA’s proposal is, at least partly, the result of a settlement with Natural Resources Defense Council (“NRDC”), which in 2010 sued FDA alleging that FDA violated the Administrative Procedure Act (“APA”) and the FDC Act by unreasonably delaying the issuance of monographs establishing conditions for use of certain products containing triclosan as the active ingredient.  In the NRDC case Consent Decree, FDA agreed, inter alia, to publish a TFM for consumer antiseptic hand wash products by December 16, 2013.  (The TFM was released for public inspection on that date, but published the following day.)  As we previously reported, although the Consent Decree literally applies only to triclosan OTC drug monograph proceedings, FDA did not limit the proposal to that active ingredient. 

The proposal amends the 1994 TFM.  At that time, FDA determined that only povidone/iodine met the requirements to support a classification as generally recognized as safe and effective (“GRASE”) for antiseptic wash products.  Various other ingredients were found to be GRAS but not deemed effective.  In light of comments received on the TFM, scientific developments since 1994, and changes in the use patterns of consumer antiseptic washes (which FDA asserts now are used on a daily basis), FDA has determined that additional safety and effectiveness data are necessary to support a determination that any of these products, including povidone/iodine, are GRASE. 

In 1994, FDA proposed that a log reduction standard (the “glove juice test”) be used to provide evidence of effectiveness.  However, in light of the increased safety concerns associated with antiseptics, including possibly endocrine disruption and antimicrobial resistance, the Agency now proposes to require demonstration of an actual clinical benefit compared to soap and water.  According to FDA, “[d]ata from these clinical outcome studies will help assure that any potential risk from consumer antiseptic wash products is balanced by a demonstrated clinical benefit.”

Safety data also are a key focus of the TFM.  Among other things, FDA proposes to require evaluation of the potential for chronic toxicity and effects on reproduction and development as part of the safety assessment.

The proposed rule is available for public comment for 180 days, with a concurrent one-year period for companies to submit new data and information, followed by a 60-day period for rebuttal comments.  Assuming that the Agency will meet the deadlines under the Consent Decree, a final monograph is scheduled for Sept. 15, 2016.

Hand sanitizers, wipes, and antibacterial products used in health care settings are not affected by the current proposal.  However, the Consent Decree requires that FDA review these products as well.  For example, the Agency must issue a TFM for Healthcare Antiseptic Products by April 30, 2015, and a TFM for Consumer Antiseptic Hand Rub Products by June 30, 2016.  Thus, we anticipate rulemaking for those categories of products as well.

By JP Ellison –

In early 2014, the Supreme Court will meet in conference to decide whether to hear a case concerning whether, and to what extent, a private party can pursue a Lanham Act claim based on labeling regulated under the FDC Act.

The Court will consider whether to address that issue in connection with the POM Wonderful LLC v. Coca-Cola Co. case.  We have previously blogged on POM’s legal wrangling with the FTC in which POM’s marketing of its pomegranate juice products is being challenged. 

POM has been fighting its juice battles on multiple fronts, defending its products’ marketing before the FTC while at the same time challenging competitors that it claims are unlawfully marketing competing products.  In the POM v. Coca Cola case, it is POM that is challenging Coca-Cola’s marketing of its Minute Maid brand pomegranate blueberry juice product.  POM brought suit in September of 2008.  Coca-Cola argued that POM was challenging, under the Lanham Act, labeling that was regulated and authorized by the FDC Act and implementing regulations.  The district court ruled that POM could not base its Lanham Act claims on Coca-Cola’s name or labeling, but could pursue claims based on other advertising or marketing. 

By way of background, the Lanham Act is an often-considered and sometimes employed option for FDC Act regulated companies that believe that their competitors are falsely or misleadingly marketing their products.  In those cases that are litigated, a central issue is often whether the plaintiff is attempting to use the Lanham Act to privately enforce the FDC Act.  While parties routinely disagree about how that question should be answered in any given case, there is agreement that the Lanham Act may not be used to circumvent the FDC Act’s prohibition against private enforcement. 

In the POM case, following the district court’s ruling, POM appealed to the United States Court of Appeals for the 9th Circuit.  The 9th Circuit ruled that POM could challenge neither the name of the Coca-Cola product, nor its labeling.  The 9th Circuit reached this conclusion after consideration of FDA’s regulations regarding naming and labeling of juices.   The crux of the 9th Circuit’s holding seems to be the following analysis:  “In concluding that POM’s claim is barred, we do not hold that Coca-Cola’s label is non-deceptive. . . . We are primarily guided in our decision not by Coca-Cola’s apparent compliance with FDA regulations, but by Congress’s decision to entrust maters of juice beverage labeling to the FDA and FDA’s comprehensive regulation of that labeling.”  679 F.3d 1170 (9th Cir. 2012).  In the 9th Circuit’s view, that conclusion was consistent with its earlier decision in Photomedex, Inc. v. Irwin, 601 F.3d 919 (9th Cir. 2010), in which it held that claims regarding the “cleared” status of a medical device were similarly barred.

POM disagreed with the 9th Circuit’s analysis and filed a cert. petition in the Supreme Court.  The Court sought the views of the Solicitor General, which is a good sign for those seeking cert., because the Court grants cert far more frequently in cases in which is seeks input from the SG’s office.  In November of 2013, the SG’s office weighed in.

The SG’s amicus brief is a notable foray by the government into Lanham Act jurisprudence. The federal government does not litigate Lanham Act cases and in most instances, private parties and courts are left to characterize the government’s view of the interplay between federal regulatory schemes and Lanham Act claims.  Indeed, we cannot recall any other case where the federal government has expressed views regarding whether the FDC Act bars a Lanham Act case.  In its brief, the SG’s office opines that the 9th Circuit was wrong about the preclusive effect of the FDC Act on Lanham Act claims relating to food but that the Supreme Court should not take up the case.

On the interplay between the FDC Act and the Lanham Act, the SG’s Office asserted that “although Section 43(a) of the Lanham Act and the FDCA overlap in that each applies to the label of respondent’s juice, each can be given effect, except where the Lanham Act would undo what Congress or FDA specifically required or permitted under the FDCA.”  Id. at 9.  In the SG’s view, the 9th Circuit was wrong in concluding that the FDA’s authority to regulate juice labeling further precluded private enforcement based on that same juice labeling. 

On the question of whether the Court should take up the case, the SG’s office opined that cert. should be denied because, among other reasons, there was not a developed circuit split that warranted Court review.  Id. at 19-21.  That view is not good news for POM, as the Court follows the SG’s advice on cert. denials in the overwhelming majority of cases.

Since November, both POM and Coca-Cola have filed supplemental briefs characterizing the import of the SG’s brief.  POM’s December 10 supplemental brief focused on the SG’s opinion that the 9th Circuit decision was wrong.  Coca-Cola’s December 17 supplemental brief focused on the SG’s view that cert. should be denied. 

If the Supreme Court grants cert and takes up the case, the Court would provide its own guidance on the interplay between the FDC Act and the Lanham Act.  If the Court denies cert., we expect that we’ll see parties in Lanham Act cases citing the SG’s position and arguing about whether an act or omission allegedly actionable under the Lanham Act was specifically required or permitted by Congress or the  under the FDC Act.  The SG’s brief suggests that such analysis may very well be different based on the particular facts and circumstances of the regulatory scheme.  In minimizing any alleged split in the circuit courts, the SG’s brief  noted that cases concerning animal drugs, OTC drugs, and brand name prescription drugs, “each of which is distinguishable because (among other things) each concerned the preclusive effect of provisions of the FDCA that apply to a product other than food.”  Id. at 9. 

In any case we’ll be watching to see what the Supreme Court does and how the SG’s brief influences future Lanham Act cases.     

By Kurt R. Karst –      

In a recent memorandum to Center for Drug Evaluation and Research (“CDER”) staff (reprinted below, and a condensed version of which was posted on FDA’s website, here), CDER Director Janet Woodcock, M.D. announced that the Department of Health and Human Services approved the reorganization of FDA’s Office of Generic Drugs (“OGD”).  The proposed elevation of OGD into a “super office” was announced in September 2012 (and was even the topic of legislation introduced in March 2012 as we previously reported), just months after the enactment of the Generic Drug User Fee Amendments (“GDUFA”).  The reorganization of OGD is intended to, among other things, make it easier for the Office to meet “the evolving needs of generic drug review” and GDUFA performance goals.  Another recent announcement that FDA and the European Medicines Agency are launching a joint initiative to share information on inspections of bioequivalence studies submitted in support of generic drug approvals may also go a long way to help FDA meet its GDUFA goal of achieving parity of inspections for foreign and domestic manufacturing facilities.

The reorganization – actually, an almost total restructuring – of OGD as a result of GDUFA has been a hot topic of discussion and debate here on this blog (see our previous posts here and here) and in the generic drug industry in general.  At the Generic Pharmaceutical Association Fall Technical Conference, several presenters from OGD, including Acting OGD Director Kathleen “Cook” Uhl, M.D. and OGD Regulatory Counsel Keith Flanagan laid out in presentations the Office’s accomplishments and introduced the GDUFA Steering Committee – a committee composed of senior FDA personnel to oversee GDUFA implementation and to ensure alignment across CDER components. 

According to Dr. Woodcock, a new OGD-centric team has also been formed – the “OGD Transition Team” – to implement the new OGD super office and reporting structures.  The new OGD structure will consist of four offices (with various divisions): (1) the Office of Research and Standards; (2) the Office of Bioequivalence ; (3) the Office of Regulatory Operations; and (4) the Office of Generic Drug Policy. 

This last office – the Office of Generic Drug Policy – includes the Division of Legal and Regulatory Support and the Division of Policy Development, and it really caught our attention.  Why?  Because, as we understand it, one of the major focuses of this office will be handling and resolving Hatch-Waxman disputes.  Previously, disputes over issues like 180-day exclusivity eligibility and forfeiture were handled by a conglomeration of FDAers from various Agency components.  Bringing together a team of attorneys and regulatory professionals – which likely means that FDA/OGD will be on a hiring spree to bring on board some bright young attorneys – should be a welcome move for the generic drug industry.  Like the CDER Exclusivity Board, which focuses on 5-year new chemical entity exclusivity, 3-year new clinical trial exclusivity and exclusivity for biological products, but not on 180-day exclusivity (or orphan drug exclusivity), and that is intended to bring clarity and consistency to exclusivity decisions, a division or group within OGD to handle ANDA and 180-day exclusivity issues and disputes could bring greater clarity (and speed?) to FDA’s decisions and decision-making process.  It may also mean a change in how FDA does business to address disputes, and could result in some innovative thinking on how to better inform the generic drug industry about 180-day exclusivity forfeitures or whether another applicant’s eligibility for exclusivity will block approval. 

Janet Woodcock Memorandum to CDER Staff (December 2013)

CDER Staff:
 
In September 2012, with the historic passage of the Generic Drug User Fee Amendments of 2012 (GDUFA) and a heightened public focus on generic drugs, I announced plans to elevate the Office of Generic Drugs (OGD) to a “super office” – an office that houses subordinate offices within its organizational structure and which reports directly to me. This reorganization will strengthen OGD’s operations and allow the office to meet the evolving needs of generic drug review.
 
Today, I am excited to inform you that the OGD reorganization has been approved. Acting OGD Director Kathleen “Cook” Uhl, M.D. will continue in this role, leading our generic drug program, executing on our GDUFA performance obligations and enhancing our ability to ensure timely access to high-quality, safe, and effective generic drugs.
 
Generic drugs make up 84 percent of prescriptions filled in the United States and represent affordable access to treatment for many patients and consumers. These individuals depend on FDA to ensure that generic drugs perform clinically in the same way as their brand name counterpart drugs. Transforming OGD into a super office is a critical and necessary step in recognizing the importance of generic drugs to public health and our national economy. As a super office, OGD will coordinate and manage the abbreviated new drug application (ANDA) review process, provide safety, surveillance, clinical, and bioequivalence reviews for generic products, as well as contain new offices to develop policy and regulatory science for generic drugs. It will also integrate all Risk Evaluation and Mitigation Strategy (REMS) and safety labeling issues with other CDER offices.
 
Under GDUFA, FDA made a commitment to achieve certain performance goals. I am pleased to announce that we met or exceeded all of our Year One GDUFA goals. For example, the user fee collection system is in full operation, first-year user fees have been collected, and we exceeded our first-year hiring goals.
 
Next Steps
 
An OGD Transition Team is implementing the new office and reporting structure. OGD will have a centralized administrative support function and centralized project management for both review and policy work. OGD will have its own governance structure which means it will set its own policy and strategic agenda, ratify its own budget, resolve any disputes, and perform as an executive team. The approved structure consists of the following:

• Office of Research and Standards (includes the Division of Therapeutic Performance and the Division of Quantitative Methods and Modeling)
• Office of Bioequivalence (includes three divisions of bioequivalence and a Division of Clinical Review, which includes the OGD Safety and Surveillance Team)
• Office of Generic Drug Policy (includes the Division of Legal and Regulatory Support and the Division of Policy Development)
• Office of Regulatory Operations (includes a Division of Project Management, a Division of Labeling Review, a Division of Filing Review, and a Division of Quality Management Systems)

The Transition Leads for the above offices are Robert Lionberger, Ph.D., John Peters, M.D., Keith Flanagan, J.D., and Jason Woo, M.D., respectively. The Transition Team also includes Cook, Kristin Hornberger (acting senior management officer) and Mary Dempsey (associate director for regulatory affairs). 
 
To keep OGD staff involved in the reorganization and informed of the implementation plans, the OGD Transition Team will hold several upcoming “lunch and learn” information sessions. These sessions will offer an opportunity to discuss the office’s future structure and its related functions with OGD staff. 
 
As a part of the Office of Pharmaceutical Quality (OPQ) proposal, OPQ is proposed to house the product quality-related groups, including CMC and Microbiology review functions, which had previously been in OGD to ensure efficiency and consistency of standards and actions across the Center and drug product lifecycle. As OGD is now a super office, approximately 200 CMC and Microbiology reviewers in OGD will remain in the Office of Pharmaceutical Science, and then move into the new OPQ when it is established. The impact of these proposed OPQ changes will be reviewed in advance and negotiated, as applicable, with the National Treasury Employees Union (NTEU) in accordance with the FDA NTEU Collective Bargaining Agreement.
 
The OGD reorganization is a part of our ongoing efforts to ensure that the generic drug industry is held to standards of high quality – and our ongoing efforts to expedite the availability of safe, effective, and high quality generic drugs to patients. It also underscores our commitment to maintaining the public’s confidence in an Agency that continues to meet the ever-changing needs of the American public health.
 
I want to thank Cook, the OGD Transition Team, and all those individuals who have worked so hard and so diligently to make this reorganization a reality. Congratulations on achieving this important milestone.
 
Janet Woodcock

By Ricardo Carvajal –

A California district court granted Defendants’ motion to dismiss in a putative class action brought by Plaintiffs who alleged that certain plant-based beverages, including soymilk, almond milk, and coconut milk, were misbranded because FDA defines “milk” as being derived from lactating cows.  Plaintiffs alleged several violations of state law, including unlawful practices in violation of the California Unfair Competition Law, and misleading and deceptive advertising in violation of the California False Advertising Law.

Plaintiffs argued that the federal standard of identity for milk precludes the use of the term “milk” in relation to beverages not derived from cows.  The court was unpersuaded:

Here, the Court agrees with Defendants that the names “soymilk,” “almond milk,” and “coconut milk” accurately describe Defendants' products. As set forth in the regulations, these names clearly convey the basic nature and content of the beverages, while clearly distinguishing them from milk that is derived from dairy cows. Moreover, it is simply implausible that a reasonable consumer would mistake a product like soymilk or almond milk with dairy milk from a cow. The first words in the products names should be obvious enough to even the least discerning of consumers.

The court concluded that “brief statements” on the subject in FDA warning letters cited by Plaintiffs were “far from controlling.”  The court cited the agency’s regular use of the term “soymilk” in public statements as evidence that “the agency has yet to arrive at a consistent interpretation” of the applicability of the standard of identity for milk (other federal agencies, most notably the USDA and CDC, also use the term “soymilk” in their public communications – including the Dietary Guidelines for Americans).  The court dismissed the Plaintiffs’ claims with prejudice.

A hat tip goes to the 43(B)log.

By Kurt R. Karst –      

There’s a hot debate brewing over whether or not a biosimilar biological product licensed under Section 351(k) of the Public Health Service Act (“PHS Act”), as added by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), should share the same non-proprietary name – or International Nonproprietary Name (“INN”) – as its brand-name reference product counterpart.  Last Friday, Amgen Inc. (“Amgen”) further turned up the heat when the company announced the submission of extensive comments (89 pages in length) to two citizen petitions submitted to FDA earlier this year requesting that the Agency require that a biosimilar be identified by the same INN as the reference product it relies on for approval. 

The first petition (Docket No. FDA-2013-P-1153) was submitted by the Generic Pharmaceutical Association (“GPhA”) in September and requests that FDA “implement its INN naming policy equally to all biologics” such that all biosimilars “share the same INN name as the” reference product (see our previous post here), The second petition (Docket No. FDA-2013-P-1398) was submitted in October by the Novartis Group of companies (“Novartis”) and requests that FDA “require that a biosimilar[] be identified by the same [INN] . . . as the reference product” (see our previous post here).

According to Amgen:

Contrary to the position of GPhA and Novartis . . . , we believe that a policy of identical non-proprietary names would pose significant public health risks, and is inconsistent with applicable legal requirements.  Petitioners fail to take into account fundamental scientific principles of biological products as well as their distinctive posology and methods of administration in clinical practice.  We believe that, both as a matter of public health and as a matter of law, biological products licensed under the BPCIA should have distinguishable non-proprietary names—that is, non-proprietary names comprised of common roots and distinguishable prefixes or suffixes, as deemed appropriate by FDA, to achieve the goals of patient safety through effective post-market surveillance, and widespread physician and patient acceptance and appropriate use of this important new class of medicines.

Amgen lays out its case for distinguishable non-proprietary names – and opposition to the GPhA and Novartis petitions – in seven parts, arguing along the way that:

(1)  “Biosimilars licensed under the BPCIA are appropriately neither required nor expected to be structurally identical either to their reference counterparts or to each other. Indeed, the product quality attributes for biosimilars may fall outside even the range of variability that is acceptable for the reference product, and differences in both structure and function will become increasingly prevalent as the complexity of the reference products increases.  Because biosimilars cannot be—and are not—brought to market through the same abbreviated pathway as generic drugs, the legal requirements applicable to generic drugs (including the requirement that generics bear the same labeling and established names as their reference counterparts) do not apply to biosimilars.  This difference in regulatory treatment is both appropriate and critically important to development of biosimilar medicines using state of the art technology.”

(2) “Distinct safety and immunogenicity profiles are found among structurally related biological products.  Similar biological products cannot be fully characterized in premarket clinical trials, but instead must be subject to effective post-market surveillance that distinguishes accurately among related products. . . .  [I]t is especially important that pharmacovigilance measures account for the possibility of differences in the safety profiles of related biological products.  These differences could be intrinsic to products as a result of their distinct methods of manufacture, or they could be emergent as a result of post-approval manufacturing changes.”

(3) “Because FDA’s spontaneous reporting/post-market surveillance system does not encompass the separate tracking of [products] sharing the same non-proprietary name to be separately tracked, biosimilars with the same non-proprietary names but potentially different immunogenic profiles will be difficult to distinguish, hampering immunogenicity tracking and optimal pharmacovigilance.”

(4) GPhA and Novartis include in their petitions “numerous unsupported and erroneous objections to the use of distinguishable names for biological products.”

(5) A biosimilars naming policy that would mirror the naming rules for generic drugs “would create a significant risk of confusion regarding a biosimilar product’s bioequivalence or identity to its reference product.  Moreover, given FDA’s obligations under the Administrative Procedure Act to treat like cases alike and to explain any departures from precedent, FDA would need to reconcile any naming policy with its past statements recognizing the potential safety risks of using identical established names for similar biological products, as well as instances in which FDA has required, for safety reasons, the use of distinguishable names for similar products.”

(6) “[T]the need for better pharmacovigilance measures for all drug products does not obviate the need for distinguishable names to facilitate post-market risk management in the context of biosimilars.”

(7) Alternative pharmacovigilance mechanisms, such as those suggested by GPhA in its citizen petition, “are not sufficient to address the need for robust post-market surveillance of biological products.”  Efforts to create a federal tracing system “is not capable of ensuring the robust pharmacovigilance systems necessary for biological products if biosimilars are assigned identical non-proprietary names to their respective reference products.”

There has been growing speculation that 2014 will see the first 351(k) application submitted to and accepted by FDA for a biosimilar biological product.  If that that’s true, and if we see a biosimilar approved in in the near future, then FDA’s consideration of the GPhA and Novartis petitions – and the opposition to them – will likely finally come to a head.  Although FDA previously indicated in a 2006 policy paper sent to the World Health Organization that “INNs should not be used to differentiate products with the same active ingredient(s) when credible scientific data demonstrate that no pharmacologically relevant differences exist,” the Agency’s current position is unclear. 

By Anne K. Walsh –

With no fanfare, the U.S. Supreme Court on Monday denied a writ of certiorari in a case watched closely by the drug and device industry.  As reported earlier, the former CEO of InterMune Inc., Scott Harkonen, had filed a petition asking the Court to review his felony conviction of wire fraud related to statements he made regarding a clinical trial of the drug Actimmune.  The Pharmaceutical Research and Manufacturers of America (PhRMA) submitted an amicus brief supporting Harkonen’s position that the conviction chills commercial free speech. 

In contrast, the United States highlighted in its opposition brief the evidence establishing the fraudulent nature of Harkonen’s conduct, thus arguing that his speech was not constitutionally protected.  According to the government, the evidence presented at trial showed that Harkonen was told by multiple people on multiple occasions that the study had failed.  Harkonen allegedly also was aware that any post hoc analysis of the data was unreliable and inconclusive.  Nevertheless Harkonen’s press release allegedly touted “statistically significant survival benefit” from use of the drug, and failed to state that the positive results were based on unblended post hoc analyses that are generally considered unreliable.

Five weeks after briefing was completed, the Court included Harkonen’s case on a list of 75 other cases in which it was denying petitions for writs of certiorari.  As is common, the Court provided no explanation for its decision. 

Thus, Harkonen’s sentence stands, much if not all of which has already been served: three years of probation, 6 months home detention, community service, and a $20,000 fine.  More significant is that the felony conviction continues to support the government’s exclusion of Harkonen from participating in federal health care programs.  In October, a federal court upheld the Department of Health and Human Services Office of Inspector General’s (OIG) decision to exclude Harkonen under 42 U.S.C. §1320a-7(a)(3), which mandates exclusion following a felony conviction for fraud “in connection with the delivery of a health care item or service or with respect to any act or omission in a health care program.”  The statute mandates a minimum five-year period for exclusion. 

By Riëtte van Laack & Wes Siegner –

Hyman, Phelps & McNamara, P.C. has filed comments to FDA’s Draft Guidance on Frequently Asked Questions about Medical Foods – Second Edition.  As discussed in a prior post, FDA’s Draft Guidance seeks to establish a policy with respect to medical foods that would eliminate medical foods as an FDA category for all but a very few products that, in FDA’s view, meet FDA’s criteria.  FDA’s attempt to limit medical foods to those products that meet “distinctive nutritional requirements” of a disease or condition that cannot be met by modification of the “normal diet,” combined with FDA’s inclusion of dietary supplements as part of the “normal diet,” is contrary to important public health interests as well as the First and Fifth Amendments to the United States Constitution.  It appears that FDA’s overreaching has finally united the medical food industry in opposition to agency policy, boding well for the future of medical foods and patient health.

By Kurt R. Karst –      

In a recent Complaint filed in the U.S. District Court for the Western District of Washington (at Seattle), several trade groups – the Pharmaceutical Research and Manufacturers of America (“PhRMA”), the Generic Pharmaceutical Association (“GPhA”), the Biotechnology Industry Organization (“BIO”), and the Consumer Healthcare Products Association (“CHPA”) – are challenging as unconstitutional a King County, Washington Board of Health regulation establishing an industry-funded stewardship program for the collection and disposal of unwanted household medicines from county residents.  Known as the Secure Medicine Return Regulations, King County’s regulation is the second such extended producer responsibility drug take-back program created in the United States, according to King County Board of Health Chair Joe McDermott.  The regulation was passed on June 20, 2013, and, according to an implementation timeline, requires covered entities to express their intent to participate in a stewardship plan by December 20, 2013.

The first drug stewardship law – the Safe Drug Disposal Ordinance – was passed by the Alameda County, California Board of Supervisors in July 2012 and was amended in October 2013 to extend the deadline for submitting disposal plans from November 1, 2013 to May 1, 2014, and to narrow the definition of a “producer” by removing wholesaler distributors from the scope of the ordinance (see here).  The Alameda County ordinance is also the focus of a lawsuit filed by PhRMA, GPhA and BIO, as we previously reported (here and here).  That case is currently on appeal to the U.S. Court of Appeals for the Ninth Circuit (Case No. 13-16833) after the U.S. District Court for the Northern District of California refused to find that the Alameda County ordinance is a per se violation of the Commerce Clause of the U.S. Constitution.  Briefing in that case has been expedited somewhat, with an opening brief filed on November 15, 2013, an answering brief that is due on January 6, 2014, and an optional reply brief that is due on January 24, 2014.  Amicus briefs in support of the trade organization appellants and urging reversal of the district court decision have been filed by the Chamber of Commerce of the United States of America and the Washington Legal Foundation, on behalf of itself and the California Healthcare Institute (here and here). 

King County’s Secure Medicine Return Regulations is quite similar to Alameda County’s Safe Drug Disposal Ordinance.  Both measures require brand-name and generic drug manufacturers to shoulder the financial burden of local take-back obligations, including collection, transportation, disposal, public outreach, and administrative expenses.  But the King County regulations do have a few distinctive features vis-à-vis the Alameda County ordinance. 

First and foremost, the King County law applies to both “prescription” and “nonprescription” brand-name and generic drugs.  That might explain why CHPA, “a non-profit organization representing leading manufacturers and marketers of over-the-counter medicines and dietary supplements,” joined the lawsuit against King County, but not against Alameda County. 

Second, the King County regulation states that “[a]lthough producers may not charge specific point-of-sale or point-of-collection fee, the board does not otherwise intend to preclude producers from recouping the costs of their program through other means, including allocating costs to the price of their covered drugs in King County.”  This provision might have been included in an attempt to immunize the King County regulation against the cost-shifting argument that PhRMA et al. have raised in their challenge to the Alameda County ordinance. 

Third, the King County regulation provides that pharmacies (which, like the Alameda County ordinance, are exempt from coverage) may receive “incentives” or “payment” in exchange for their willingness to serve as “collectors” – i.e., “a person that gathers unwanted covered drugs from covered entities for the purpose of collection, transportation and disposal.” 

Finally, the King County regulation imposes a specific regulatory duty on drug wholesalers.  Section 11.50.110 of the regulation states that “each drug wholesaler that sells any covered drugs in or into the county must provide a list of producers of covered drugs to the local hazardous waste management program local authorities,” and must update that list each January.  Although the inclusion of this provision in the regulation is not entirely clear, it is presumably designed to facilitate enforcement by virtue of a ready-made producers list.

The trade organizations’ Complaint alleges that the King County regulation is a per se violation of the Commerce Clause of the U.S. Constitution and violates 42 U.S.C. § 1983.  These are the same counts alleged in the Alameda County lawsuit.  According to the Complaint:

The Regulation represents a per se violation of the Commerce Clause for three principal reasons.  First, the Regulation impermissibly directly regulates and burdens interstate commerce by transferring the County’s traditional police power responsibility of waste disposal to interstate actors solely on the basis that one of their products is sold in King County after being delivered there through an interstate distribution chain.  Second, the Regulation has the impermissible primary purpose and effect of burdening interstate commerce for local advantage by shifting costs and responsibilities of a local regulatory program away from local consumers and taxpayers and directly onto entities identified by their participation in interstate commerce.  Because the Regulation prohibits charging fees to recoup the costs of the take-back program, out-of-county consumers will necessarily have to pay for a program that serves only King County residents.  Finally, the Regulation has impermissible extraterritorial effect by reaching entities with no significant connection to King County and by compelling conduct across county lines.

For its part, the U.S. Congress is not currently considering legislation to create a nationwide drug take-back program.  Although a bill was introduced in 2011 – H.R. 2939, the Pharmaceutical Stewardship Act of 2011 – it did not gain much traction.  Rather, Congress may address the issue piecemeal and supplement local and state laws and regulations as needed.  For example, last week, Representative Matt Cartwright (D-PA) introduced H.R. 3714, the Servicemembers and Veterans Prescription Drug Safety Act of 2013.  That bill would provide for a prescription drug take-back program for members of the Armed Forces and veterans.

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