By Karla L. Palmer –

The General Accountability Office (“GAO”) recently released its Report on Drug Compounding as Congress faces dueling compounding bills in the Senate (S. 959, Pharmaceutical Compounding Quality and Accountability Act, sponsored by Sen. Tom Harkin) and the House of Representatives ( H.R. ___, The Compounding Clarity Act, authored by Rep. Morgan Griffith; H.R. 2186, Verifying Authority and Legality in Drug Compounding Act of 2013, sponsored by Rep. Ed Markey; H.R. ___, Supporting Access to Formulated and Effective (S.A.F.E.) Compounded Drugs Act, sponsored by Rep. Rosa DeLauro.  The House Committee on Oversight and Government Reform requested GAO to conduct the drug compounding investigation because of the 2012 NECC fungal meningitis outbreak and because GAO was asked to update its 2003 testimony on drug compounding.  The detailed Report addresses: (1) the current status of FDA’s authority to regulate compounding, including perceived gaps between federal and state authority; (2) FDA’s use of data and its authority to oversee or otherwise regulate compounding; and (3) state and pharmacy organization actions taken to improve oversight of compounding pharmacies.  The GAO reviewed the current federal statutory and regulatory scheme, reviewed FDA data and databases, conducted interviews of federal officials and national pharmacy organizations, and reviewed compounding in four states: California, Iowa, Connecticut, and Florida (chosen because of their varied populations, geography and pharmacy regulations).  The GAO conducted the audit from February to July 2013.  The Report recognized that drug compounding, performed by thousands of pharmacies, is “an integral part” of the pharmacy profession and is practiced in many environments, including hospitals (77% of which purchase compounded products from an outside source); community and chain drug store pharmacies; and infusion settings.  It noted that compounded drugs make up about 1-3% of the U.S. prescription drug market.  Report at 5.

The GAO reached several conclusions and made both recommendations for Congressional Consideration and Executive Acton, including the following:

• FDA’s inspection authority and inconsistent court decisions have hampered its ability to inspect and take enforcement action against pharmacies since at least 2002.  According to GAO, the “lack of consensus” concerning when compounding becomes manufacturing where FDA has clear authority (i.e., anticipatory compounding, or whether compounding drugs in large quantities and selling across state lines is manufacturing) has resulted in gaps in oversight between state and federal regulatory entities.  Report at 7-9.  GAO discussed FDA’s proposal to create a new category of “nontraditional compounding” and the objections to the same by some national pharmacy organizations. 

o GAO recommends that Congress clarifies FDA’s authority to regulate drug compounding.  Report at 27 (Matter for Congressional Consideration).

• Combined with limited oversight, GAO found that FDA “lacks timely and reliable information” to prioritize inspections, and conduct follow up and enforcement actions.  FDA’s FACTS inspection database fails to identify the Agency’s pharmacy inspection activities and the final classification of those inspection results.  Until 2012, FDA did not inspect pharmacies unless it received complaints or adverse event reports.  FDA registration of some pharmacies as manufacturers has also resulted in no additional FDA inspection oversight, and causes confusion concerning the significance of a pharmacy’s FDA registration as manufacturer.  Of the 194 pharmacy inspections since 2002 FDA failed to take enforcement action against at least 31 where significant problems were found (GAO did not consider issuance of warning letters to be enforcement action).  GAO concluded that “FDA lacks ready access to key data to inform its decision making on its oversight priorities and take appropriate action when problems are identified.”  Report at 16.  GAO also addressed FDA’s recent and ongoing inspections of sterile compounding pharmacies, blogged about here, noting that these inspections revealed numerous sterility issues.

o GAO recommends that FDA ensure its databases (including its FACTS database) collect “reliable and timely” information on all inspections including recommendations from districts and actions taken.  FDA also must differentiate in its database “those manufacturers of FDA-approved drugs that FDA inspects for compliance with good manufacturing practices from those entities compounding drugs that are not FDA-approved and that FDA does not routinely inspect.’’  Report at 27 (Recommendations for Executive Action). 

While it made no specific recommendations as a result of the state regulatory schemes it reviewed, GAO detailed for each of the four identified states their vastly different abilities to effectively oversee compounding activities.    In its separate comments concerning the Report, HHS agreed generally that the Report “accurately details the limitations associated with FDA’s authority to oversee drug compounding,” and thus supports GAO’s conclusion that Congress should consider clarifying FDA’s authority to “oversee entities that compound drugs.”  Report at 27.  With three very different, and controversial, compounding bills pending, and after several hearings on these issues, Congress is indeed already “considering” FDA’s authority to regulate compounding pharmacies.  Faced with significant and mounting opposition from pharmacy groups and other stakeholders concerning the reach and provisions of the proposed legislation, whether Congress ultimately passes any of the three remains uncertain.  Stay tuned.

The American Conference Institute (“ACI”) will be holding two events in the coming months that are of particular interest to FDA Law Blog readers. . . . and, importantly, for which our readers can get a discount.

The first event is ACI’s Legal, Regulatory, and Compliance Forum on Over-the-Counter Drug, which will take place on October 29-30, 2013 at the Carlton Hotel in New York City.  This is the only legal and regulatory gathering of this nature that we know of that is specifically designed for the OTC drug industry.  The Honorable Edward R. Korman, U.S.D.J. will be presenting on the PLAB B decision.  Judge Korman will join a distinguished faculty of over two dozen leading legal and regulatory OTC drug experts, including Hyman, Phelps & McNamara, P.C.’s Paul M. Hyman, who will be speaking on the OTC drug monograph system.  Other important topics that will be covered include the NSURE initiative, advertising and promotion, labeling, trademarks, trade names, and umbrella branding.  To obtain a copy of the conference brochure and to register for the event, please visit ACI's website – here.

The second event is ACI’s first ever Paragraph IV Disputes Master Symposium, which will take place on October 3-4, 2013 at the Millennium Knickerbocker Hotel in Chicago, Illinois.  This event is designed as a brand-name and generic drug think tank where the leading legal minds in this area meet to exchange information and insights.  Critical sessions will address all facets of Paragraph IV litigation from pre-litigation concerns to the commencement of suit through final adjudication, and the event speakers will delve deeply into each of these elements.  In addition, the symposium will include a panel of several esteemed Federal Jurists from the Districts of Northern Illinois, Eastern Texas, and New Jersey.  Hyman, Phelps & McNamara, P.C.’s Kurt R. Karst will be speaking on recent brand-side and generic-side challenges to marketing exclusivity.  To obtain a copy of the conference brochure and to register for the event, please visit ACI's website – here.

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

By Allyson B. Mullen –

You may recall that French device maker PREVOR previously sued, and won, in litigation against FDA regarding FDA’s classification of Diphoterine® Skin Wash (“DSW”), a product used in industrial settings as a “first response” method to minimize chemical burns.  Hyman, Phelps & McNamara, P.C. represented, and still represents, PREVOR.  The Honorable Rosemary Collyer issued a lengthy Opinion granting PREVOR’s Motion for Summary Judgment and remanding the matter to FDA for further action consistent with her Opinion.  The original Complaint and the Judge’s September 2012 Opinion were discussed here and here. 

Despite the clear ruling from the Court, it took nearly eight months for FDA to issue a new classification decision for DSW.  In its May 25 letter to PREVOR, however, FDA reached the same conclusion to regulate DSW as a drug, disregarding the Court, the law, and earlier FDA precedent.

Yesterday, PREVOR filed a Complaint in the U.S. District Court for the District of Columbia challenging, for a second time, FDA’s determination that DSW is a drug-device combination product with a “drug” primary mode of action.  The Complaint alleges that FDA failed to follow the Court’s September 2012 ruling when, on remand, it arrived at the same conclusion it had reached in its earlier decisions.  PREVOR continues to assert that the administrative record demonstrates that DSW meets the statutory definition of a “device” because its primary intended purposes are not achieved through chemical action, but through physical or mechanical actions.  PREVOR alleges that FDA’s jurisdictional determination was therefore unlawful, and challenges FDA’s application of an entirely new test for whether a product is a device.

With this new litigation, PREVOR again seeks to vacate FDA’s finding, and asks the Court to declare that DSW is a “device,” or, in the alternative, that DSW is a drug-device combination product with a “device” primary mode of action.

By Kurt R. Karst –  

Now that we've put the theme from The Jeffersons in your head . . . . On August 2, 2013, FDA will officially announce in a series of Federal Register notices the Fiscal Year 2014 (“FY 2014”) user fee rates under various user fee programs, including the Prescription Drug User Fee Amendments of 2012 (“PDUFA V”) (see here), the Generic Drug User Fee Amendments of 2012 (“GDUFA I”) (see here), the Biosimilar User Fee Act of 2012 (“BsUFA I”) (see here), the Medical Device User Fee Amendments of 2012 (“MDUFA III”) (see here), the Animal Generic Drug User Fee Amendments of 2013 (“AGDUFA II”) (see here), the Animal Drug User Fee Amendments of 2013 (“ADUFA III”) (see here), and the FDA Food Safety Modernization Act (“FSMA”) (see here).  It will probably not come as a surprise to anyone that, as a general matter, the FDA-regulated industry will be expected to pay more in FY 2014 than in FY 2013.  Below we focus on PDUFA, BsUFA and GDUFA user fees.

The FY 2014 PDUFA application user fee rate is set at $2,169,100 for an application requiring “clinical data,” and one-half of a full application fee ($1,084,550) for an application not requiring “clinical data” and a supplement requiring “clinical data.”  (The term “clinical data” for PDUFA user fee purposes is explained in an FDA guidance document available here.) These figures reflect FDA’s estimate of 116.333 fee-paying full application equivalents – an average of the number of full applications that paid fees over the lateset 3 years.  This figure is lower than last year’s estimate of 122.3 fee-paying full application equivalents and explains somewhat the increase in the application fee rate.  Annual establishment and product fees have been set at $554,600 and $104,060, respectively, and are based on estimates of 455 establishments (the same as for FY 2013) and 2,425 products (a decrease of 10 compared to FY 2013).

The FY 2014 PDUFA fees go into effect on October 1, 2013 and represent a hefty change vis-à-vis the FY 2013 user fee rates.  All BsUFA user fees – i.e., the initial and annual biosimilar Biological Product Development (“BPD”) fees, the reactivation fee, and the biosimilar biological product application, establishment, and product fees – are keyed to PDUFA user fees.  The FY 2014 rates have thus been set at $216,910 (initial and annual PBD), $433,820 (reactivation), $2,169,100 (application), $554,600 (establishment), and $104,060 (product).

As we have done in past years, we provide tables (below) showing the increase/decrease in PDUFA user fee rates since the previous FY for each fee type (and in this case for all FYs under PDUFA IV).  The next set of tables illustrate the historical trend for each PDUFA user fee.

The FY 2014 GDUFA user fee rates are (as shown in the table below) significantly higher than the FY 2013 rates.  Of course this was expected given the lack of an ANDA backlog fee in FY 2014.  GDUFA establishes several types of user fees that together generated (not accounting for any sequestered fees paid – see Aug. 1, 2013 letter here) $299 million in funding for FDA in FY2013 (including $50 million from the ANDA backlog fee).  That $299 million base amount is adjusted annually, and in FY 2014 has been set at $305,659,000.  The FY2014 GDUFA fee rates go into effect on October 1, 2013. 

The original ANDA and PAS fees, which make up 24% of the $305,659,000 ($73,358,000 rounded to the nearest thousand dollars), are based on a total number of 1,148.8 fee-paying full application equivalents expected to be received in FY 2014.  The DMF fee, which makes up 6% of the $305,659,000 ($18,340,000 rounded to the nearest thousand dollars), is based on an estimate of 583 fee-paying DMFs in FY 2014. 

The API (Active Pharmaceitical Ingredient) and FDF (Finished Dosage Form) facility fees are based on data submitted by generic drug facilities through the self-identification process (see here).  The FDF facility fee revenue makes up 56% of $305,659,000 ($171,169,000 rounded to the nearest thousand dollars), and the API facility fee makes up 14% of $305,659,000 ($42,792,000 rounded to the nearest thousand dollars).  According to FDA, the total number of FDF facilities identified through self-identification was 748 (315 domestic and 433 foreign), and the total number of API facilities identified through self-identification was 903 (128 domestic and 775 foreign).  The number of self-identifying facilities used to calculate the FY 2013 facility fees is somewhat comparable to that in FY 2014.  With respect to the FY2013 facility fees, FDA reported that 758 facilities (325 domestic and 433 foreign) self-identified as FDF facilities, and that 885 facilities (122 domestic and 763 foreign) self-identified as API facilities.

By Riëtte van Laack –

In March 2012, in a consumer action against Jamba Juice, filed in California, plaintiffs asserted, among other things, that steviol glycosides should not be considered natural because of the “chemical processing” used to extract them. 

Earlier this month, another lawsuit concerning a natural claim for a stevia sweetener was filed in the U.S. District Court for the District of Hawaii. In a putative class action, Plaintiff sued Cargill, Inc. (“Cargill”) for alleged misleading marketing of Cargill’s sweetener, Truvia, as natural.

Plaintiff alleges that the stevia extract Reb-A is not natural because, although it is derived from the natural source stevia, it is allegedly “purified through a harsh chemical process” that includes washing a watery stevia extract with ethanol, methanol, and rubbing alcohol.  Citing the USDA natural policy as an example of the interpretation of the term “natural,” Plaintiff alleges that consumers “do not consider a product with an ingredient that is harshly chemically processed to be natural.”

Plaintiff further alleges that Cargill misrepresents Truvia as a stevia-derived sweetener, asserting that Reb-A (derived from stevia) comprises only 1% of Truvia.  Allegedly, the main ingredient (99%) is erythritol.  According to plaintiff, although erythritol is naturally present in fruits such as pears, Cargill’s patented manufacturing process causes the product to be synthetic. 

Plaintiff’s requested relief, individually and on behalf of the all purchasers of Truvia in the United States, and the subclass of all purchasers of Truvia in Hawaii, includes injunctive relief, corrective advertising, restitution, and disgorgement.

By Kurt R. Karst –      

A series of decisions handed down earlier this week by Judge Mary Jane Bowes of the Superior Court of Pennsylvania arising from mass tort litigation in Philadelphia County involving REGLAN (metoclopramide) and its generic versions can only be drescibed as brutal.  In four separate decisions – here, here, here, and here – the court largely affirmed Orders entered in November 2011 in the Court of Common Pleas of Philadelphia County against brand-name and generic drug manufacturers concerning liability for harm alleged by plaintiffs who consumed various versions of metoclopramide, and considered whether such claims are preempted by the FDC Act and the U.S. Supreme Court’s decisions in Mutual Pharmaceutical Co. v. Bartlett (2013), PLIVA Inc. v. Mensing, 131 S.Ct. 2567 (2011), and Wyeth v. Levine, 555 U.S. 555 (2009).  The court also quashed appeals lodged by several defendant drug manufacturers. 

In each of the four decsions, Judge Bowes took a rather narrow view of preemption, holding, for example, in two cases that “only [pre-FDA Amendments Act of 2007] failure-to-warn claims based solely on a label that was in conformity with the RLD label are pre-empted under Mensing,” and that all remaining claims, such as strict liability and negligence for defective design claims, breach of warranty (express and implied) claims, and fraud and misrepresentation in drug advertising and promotion claims, are not preempted.  We’re not going to delve into three of the decisions in any great detail, including dissents from Senior Judge William H. Platt (see here, here, and here).  Perhaps our colleagues over at Drug & Device Law Blog will do so.  But one decision in particular caught our attention, because it involves is an issue we have been following for quite some time now: the RLD theory of liability. 

As we discussed in November 2011 (see here), the RLD theory 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 Mensing decision is inapplicable to the generic drug manufacturer because it has stepped into the role of an NDA sponsor.  Rather, a court should employ the impossibility preemption analysis utilized by the Court in Wyeth applicable to brand-name drug products approved under an NDA.  Over the past few years, both state and federal courts have rejected the RLD theory of liability (see here, here, and here).  As one court noted, regardless of whether FDA unilaterally has designated a manufacturer’s ANDA drug product as the RLD, “[t]he bottom line is that they are an ANDA manufacturer and that’s the whole distinction here.”  Judge Bowes, however, in a decision involving ANDA sponsor and RLD designate Morton Grove Pharmaceitucals, Inc. (“Morton Grove”), is, to our knowledge, the first judge to give any merit to the RLD theory of liability. 

Morton Grove argued that despite its FDA-assigned status as the RLD holder for liquid syrup metoclopramide, the company remained a generic manufacturer of an ANDA-approved product.  As such, Morton Grove had no ability to use the Changes Being Effected (“CBE”) process to modify labeled warnings for the drug product, and cannot be liable under state tort law for failure to change its label.  Plaintiffs argued otherwise, saying that FDA’s designation of Morton Grove as a successor RLD places the company “in the ‘shoes of the pioneer manufacturer,’ with the authority and the duty to update warnings on the drug’s label,” and that to hold otherwise, “would result in a finding that no entity had the ability to use the CBE process to change the RLD label.” 

Delving into Wyeth, Judge Bowes commented that “the name-brand manufacturer was both the NDA applicant and the RLD holder, and the Court held that it had the power to utilize the CBE process to change its label.  The Wyeth Court did not specifically state, however, whether that authority stemmed from Wyeth’s status as a brand-name manufacturer that filed the NDA or as the RLD holder.”  Turning to Mensing, Judge Bowes commented that “none of the generic defendants was also the RLD holder,” and that “[i]n concluding that the generic defendants did not have the power to unilaterally change the label, the Court did not address the issue before us: whether a generic holder which is subsequently designated as the RLD can unilaterally change its label.”  Judge Bowes does note, however, that the Court in Mensing “referred to RLD holders and brand-name manufacturers interchangeably in its opinion.”  Moving on to FDA, Judge Bowes did not find clarity in FDA’s regulations, saying that the CBE regulations do not distinguish between brand-name and generic holders, but only use the general term “applicant.”

Dismissing as “suspect” and unsupportive, Judge Bowes was not swayed by federal district court decisions in Cooper v. Wyeth, Inc., 2010 U.S. Dist. LEXIS 29209 (M.D. La. 2012) and Esposito v. Xanodyne Pharm., Inc. (In re Darvocet, Darvon and Propoxyphene Prods. Liability Litig.), 2012 U.S. Dist. LEXIS 30593 (E.D. Ky. Mar. 5, 2012), rejecting the RLD theory of liability.  Those cases, did not, said Judge Bowes, answer the question of whether a successor generic RLD can utilize the CBE process.  Instead, Judge Bowes devised her own rationale, apparently totally ignoring the status of Morton grove as an ANDA holder:

In our examination of the regulations regarding the CBE process, we find no indication that only brand-name manufacturers that obtained NDA approval, rather than RLDs generally, can utilize the process.  If the CBE process is available only to the original NDA/RLD holder, there would be no need to designate a successor RLD in a situation where the original RLD withdraws its drug.  Generic manufacturers could continue to file ANDAs demonstrating that their proposed generic drugs are equivalent to that of the obsolete NDA/RLD, but no manufacturer would bear any responsibility for the content of the label or the continued safety and efficacy of the drug.  The purpose for designating a successor RLD is to have a standard to which subsequent ANDAs must correspond.  This includes labeling.

Herein, we have a generic RLD seeking to avoid liability under the Mensing rationale. The burden of proving the basis for the pre-emption defense rests with Morton Grove, and it has not established with the requisite certainty that it was impossible to modify its label.

Of course, all the court had to do was look at FDA guidance the Agency issued in draft form in April 2011 (see here, Docket No. FDA-2011-D-0164) concerning drug product labeling changes to know that FDA draws a distinction between RLD NDAs and "ANDAs marketed without an NDA RLD."  That guidance, titled "Safety Labeling Changes — Implementation of Section 505(o)(4) of the FD&C Act," was released in final form earlier this week (see here).  Among other things, both the draft and final guidance clarify that:

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 (with some exceptions, as described in 21 CFR 314.94(a)(8)(iv)).  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.

In a dissenting opinion on the RLD issue, Senior Judge Platt clearly understood the import of the caselaw and the holes in the court’s rationale for accepting the RLD theory of liability:

I would conclude that [Morton Grove] had no additional duties or liability under state law as the FDA designated holder of the RLD (Reference Listed Drug) for liquid syrup metoclopramide, precluding any separate basis for the overrule of the preliminary objections as to these Appellants.

I find no support for the Majority’s conclusion that Morton Grove failed to meet its burden of proof to establish pre-emption.  (See Majority, at *12-*13).  Further, I find the Majority’s conclusions unsupported by pertinent caselaw.  The Majority’s mere identification of inconsistent use of terminology in the caselaw or FDA regulations is, in my view, insufficient to establish the imposition of additional affirmative duties on a successor RLD holder.

Whether rehearing will be sought in the case or an eventual appeal to the Supreme Court of Pennsylvania is not currently clear.  Plaintiffs’ attorneys throughout the country will undoubtedly latch on to Judge Bowes’ deicison to support thier own cases.  FDA’s planned rulemaking to “create parity between NDA holders and ANDA holders with respect to submission of CBE labeling supplements” (see our previous post here) may also come into play in pending and future litigation on the RLD issue. 

Update:

• Drug & Device Law Blog: Can't Blame Philadelphia For These

By Ricardo Carvajal –

Last Friday, FDA released two additional proposed rules that are fundamental to the agency’s implementation of the Food Safety Modernization Act (FSMA): Foreign Supplier Verification Programs for Importers of Food for Humans and Animals (FSVP rule) and Accreditation of Third-Party Auditors/ Certification Bodies to Conduct Food Safety Audits and to Issue Certifications (Third-Party Auditor rule).   Federal Register publications of the two rules are available here and here.  Background information and explanatory materials on the two rules’ major provisions are available here and here.

For the import community, one of the key questions posed by FSMA’s import provisions was whether the statutory definition of “importer” would be interpreted by FDA to sweep in importers of record.  As amended by FSMA, FDC Act section 805(a)(2) defines “importer” as ‘‘(A) the United States owner or consignee of the article of food at the time of entry of such article into the United States; or (B) in the case when there is no United States owner or consignee as described in subparagraph (A), the United States agent or representative of a foreign owner or consignee of the article of food at the time of entry of such article into the United States.”  Concerns were raised that, if FDA were to interpret “importer” to sweep in importers of record, such importers would be saddled with obligations that some might be ill positioned to meet.  Evidently, FDA was sympathetic to those concerns.  For purposes of FSVP, proposed 21 CFR § 1.500 states:

Importer means the person in the United States who has purchased an article of food that is being offered for import into the United States. If the article of food has not been sold to a person in the United States at the time of U.S. entry, the importer is the person in the United States to whom the article has been consigned at the time of entry. If the article of food has not been sold or consigned to a person in the United States at the time of U.S. entry, the importer is the U.S. agent or representative of the foreign owner or consignee at the time of entry.

In the preamble, FDA explained its rationale as follows:

Under the proposed definition, the importer of an article of food might be, but would not necessarily be, the importer of record of the article, i.e., the individual or firm responsible for making entry and payment of import duties.  We agree with the majority of comments we received on how to define “importer,” which stated that the person who caused a food to be imported is the person who should be responsible for verifying that the food was produced in accordance with applicable U.S. safety requirements. This person has a direct financial interest in the food and is most likely to have knowledge and control over the product’s supply chain. This person is more likely to be the food’s U.S. owner (or consignee) than the importer of record for the food, which might be an express consignment operator with little to no knowledge of the safety regulations applicable to the products for which they obtain clearance from U.S. Customs and Border Protection (CBP).

Under proposed § 1.509, the importer for purposes of FSVP would have to be identified by name and DUNS number for each line entry of food offered for import when filing an entry with CBP.  FDA intends to use importers’ identifying information for several purposes, including (1) helping the agency to evaluate risks presented by imported foods and to target its resources accordingly (as noted by FDA, FSMA directs FDA to examine imported foods based on specified risk factors, “including the rigor and effectiveness of the importer’s FSVP”); (2) helping FDA “create a comprehensive and up-to-date database that will enable [the agency] to efficiently and effectively monitor compliance with and enforce the FSVP regulations”; and (3) maintaining on FDA’s website a list of the names, locations, and other information about importers “participating under” the FSVP. 

While some who ply their trade as importers of record should be more at ease in light of FDA’s proposed definition of “importer,” any individuals or entities that are likely to fall within that definition will find much to digest in the proposed FSVP and Third Party-Auditor rules – particularly when considered in light of the previously published Preventive Controls and Produce Safety rules.  Among the questions to consider is whether vertical integration of supply chains might offer potential advantages under the coming regime.  FDA’s preamble suggests that corporate structure could matter:

Some importers obtain food from foreign suppliers who are part of the same corporate structure as the importer and who may, along with the importer, be subject to a single integrated, company-wide approach to food safety in which hazards are controlled and verified by a common supply chain management system. We request comment on whether importers should not be required to conduct foreign supplier verification, or should be subject to different FSVP requirements, when importing food from entities under the same corporate ownership and, if so, the specific justifications and conditions under which foreign supplier verification should not be required or should be modified.

Comments on the rules are due by November 26.

By James E. Valentine* & Alexander J. Varond –

Since the breakthrough therapy designation came into existence a year ago, drug companies (and their investors) have been trying to figure out the value of the program.  The designation was initially proposed as a way to accelerate the regulatory process for products that show early clinical evidence of substantial improvement over existing therapies.  Companies have had little guidance on how FDA makes this determination, since FDA does not make public its rationale for granting or denying individual requests for designation. 

To date, 24 drugs have received the breakthrough therapy designation (for a list,see here), and FDA has begun to shed light on how it plans to implement the program through the issuance of a draft guidance on all of the expedited drug review programs, including the breakthrough therapy designation program (we discussed the draft guidance in a previous post here). 

At a July 24, 2013 congressional briefing on breakthrough therapies and the other expedited drug review programs, a panel, moderated by Kate Rawson, a Contributing Editor at Prevision Policy, discussed FDA’s and industry’s current experience with the designation.  The panel consisted of CDER’s Janet Woodcock, representatives from J&J, Vertex, and Friends of Cancer Research, and a patient advocate from the Cystic Fibrosis Foundation.

An Overview of the Progress to Date

Although many more drugs have received the breakthrough therapy designation than the projected two to four drugs per year, Dr. Woodcock made no indication that the number was excessive and explained that the program was still in a transition phase.  She acknowledged that the newness of the program meant that even products that were in later stages of development (i.e., Phase 3) are being granted the designation despite the fact that the program was originally designed for drugs in early clinical development (i.e., Phase 1 and 2).  Some concern was expressed over whether FDA’s resources and attention were being diverted away from therapies without the designation, but the panelists agreed that it was too early to determine how the program would affect the agency in the long run.

J&J and Vertex, having both received early breakthrough therapy designations, agreed that the designation’s greatest value was that it prompted an “all-hands-on-deck” mentality at CDER.  This “all-hands-on-deck” approach brings together the needed review disciplines, including chemistry and manufacturing, and involves senior leadership early on.  The designation also provides more direct and collaborative engagement with the agency.

A Regulatory Approach to Keep Pace with Advances in Drug R&D

In certain therapeutic areas, drug research and development has changed dramatically over the past several decades.  FDA and industry agreed that drug companies have become better at leveraging the basic science underlying certain disease spaces to develop targeted, highly effective therapies.  Thus, a regulatory response was needed to keep pace with drug research and development.  The panelists agreed that breakthrough therapy designation represents an important step in the right direction, by speeding up the review of these highly effective therapies and increasing cooperation between FDA and industry.

New Rate-Limiting Factors Emerge

Dr. Woodcock noted that investigational drugs that receive breakthrough therapy designations should, in theory, be able to demonstrate efficacy with smaller, shorter, and fewer clinical trials.   The reduced time needed for clinical programs can render other development activities rate-limiting.  The panel identified manufacturing as one of the most important potential rate-limiting factors.  In response, the industry panelists indicated that FDA should be more flexible with its manufacturing requirements.  Meanwhile, FDA is looking for a more systematic solution that would utilize modern approaches to manufacturing.  Dr. Woodcock noted that for the last five to six months, FDA has been working on an internal effort to launch a new program to overhaul drug manufacturing in the United States.  Dr. Woodcock drew parallels to the two-year initiative launched in 2002, Pharmaceutical cGMPs for the 21st Century: A Risk-Based Approach (a.k.a. “21st Century Initiative”), but indicated that she would see to it that the new program would fare better than its predecessor.

Co-Development of Companion Diagnostics with Breakthrough Therapies

The panel noted that many of the targeted therapies likely to receive breakthrough therapy designations rely on companion diagnostics to identify their target patient subpopulations.  This raises the concern that the breakthrough therapy designation will provide little benefit if co-development of companion diagnostics does not have a similar expedited development program.  The industry panelists called for FDA to respond by expanding the “all-hands-on-deck” model to CDRH.

* Law student

By Kurt R. Karst –

FDA’s recent approval of Caraco Pharmaceutical Laboratories, Ltd.’s (“Caraco’s”) ANDA No. 077571 for a generic version of PRANDIN (repaglinide) Tablets is interesting on several fronts.  For starters, it is the ANDA at the heart of the U.S. Supreme Court’s decision in Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S, in which the Court held that a patent use code  qualifies as “patent information” submitted under FDC Act §§ 505(b) and (c) and may be the subject of a counterclaim to correct or delete patent information.  But the Caraco approval also marks FDA's resolution of an important exclusivity issue: whether 180-day exclusivity may be granted for an ANDA tentatively approved on the date that is the 30-month submission anniversary date.

As we previously reported, in June 2012, Sandoz Inc. (“Sandoz”) submitted a citizen petition to FDA (Docket No. FDA-2012-P-0661) seeking the Agency’s determination as to whether purported first applicant Ranbaxy, the sponsor of ANDA No. 077830 for a generic version of NEXIUM (esomeprazole magnesium) Delayed-release Capsules, 20 mg and 40 mg, forfeited 180-day exclusivity eligibility in connection with its ANDA as a result of FDA’s February 5, 2008 tentative approval of the application.  The ANDA was received as of August 5, 2005, so February 5, 2008 was the 30-month anniversary date of submission. 

Under FDC Act § 505(j)(5)(D)(i)(IV), 180-day exclusivity eligibility is forfeited if:

The first applicant fails to obtain tentative approval of the application within 30 months after the date on which the application is filed, unless the failure is caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed. [(Emphasis added)]

The 2012 FDA Safety and Innovation Act (“FDASIA”) made changes with respect to the application of FDC Act § 505(j)(5)(D)(i)(IV) to certain ANDAs.  In particular, for ANDAs submitted to FDA between January 9, 2010 and July 9, 2012 initially containing a Paragraph IV certification to a patent listed in the Orange Book for the Reference Listed Drug (“RLD”), or that are amended between January 9, 2010 and July 9, 2012 to first contain a Paragraph IV certification to a patent listed in the Orange Book for the RLD, the time to obtain timely tentative approval (or final approval if tentative approval is not warranted) is 40 months during the period of July 9, 2012 and September 30, 2015, and not 30 months.  

According to the Sandoz Citizen Petition:

Based on the apparent date on which Ranbaxy’s ANDA was submitted to FDA and the date on which it received tentative approval, Ranbaxy has forfeited its 180-day exclusivity under forfeiture condition (IV), failure to receive tentative approval “within” 30 months after ANDA submission, because Ranbaxy did not obtain tentative approval until the first day of the 31st month and thus not “within” 30 months. (Emphasis in original)

The same argument would apply post-FDASIA, where an affected ANDA is tentatively approved on the 40-month anniversary date.

The earliest expiring patents listed in the Orange Book for NEXIUM Delayed-release Capsules don’t expire until 2014, so it seems unlikely that FDA will substantively respond to the Sandoz petition before then.  But, in reality, FDA has already offered a response . . . . in the form of the Agency’s approval letter for Caraco’s repaglinide ANDA No. 077571 granting 180-day exclusivity.  Moreover, the Sandoz Citizen Petition identifies the then-pending 180-day exclusivity decision on Repaglinide Tablets in a footnote as another instance in which the petition applies “with equal force to the same factual scenario.”  And, back in 2010, Caraco issued a quarterly report stating with respect to 180-day exclusivity for Repaglinide Tablets that:

On May 26th, 2010, the Company received correspondence from the FDA forwarding a letter sent by Sandoz Inc. to the FDA challenging the Company’s 180 day exclusivity based on when the Company received tentative approval for its product.  The Company responded to the FDA on June 17, 2010.  On June 28th, 2010, Sandoz Inc. replied to the Company’s correspondence.  The Company issued a further letter to the FDA stating its position regarding the 180 day exclusivity on July 9, 2010.  The Company believes it received tentative approval timely, and that it has the potential to obtain 180 day exclusivity for this product.  It intends to defend that position vigorously.

FDA has, in the past, issued private letter decisions explaining the Agency’s position and interpretation of the law when confronted with exclusivity disputes raised in private correspondence.  We suspect that is the case here; however, until any decision is made public, most folks will not have clarity on FDA’s rationale for determining that exclusivity eligibility is not forfeited for 30-month anniversary tentative approvals.  But we have an inkling that FDA explains its historical and current counting methodology based on the statutory text, and how that squares with other statutory deadlines and the tentative approval forfeiture provision. 

In any case, FDA’s exclusivity decision, as reflected in the Caraco approval letter, appears to represent the Agency’s final decision on the “within 30/40 months” matter.  As such, the approval might provide a basis for an ANDA sponsor that believes it will be aggrieved by the decision, as applied to a different drug product, to take further action.

By JP Ellison –

Last week, John Roth, the Director of FDA’s Office of Criminal Investigations posted on FDA’s blog, FDA Voice.  His post concerned a criminal case that had interested us about a Montana resident who had pled guilty and been sentenced on a single count of misprision of a felony in connection with the import of counterfeit Avastin.  In his post Mr. Roth demonstrated yet again that the government can pursue its enforcement agenda not only at all phases of the civil and criminal cases, but also in the court of public opinion.  Individuals and companies who find themselves in FDA’s crosshairs need to understand all the tools available to FDA.

Misprision of a felony is a federal crime, punishable by a maximum three (3) year term of imprisonment, that one most frequently sees in connection with plea agreements.  Generally speaking, the elements of the crime are that a federal felony was committed, the defendant knew about the felony, failed to report it to authorities, and took some steps to conceal it.  While each plea negotiation is unique, the prevalence of misprision as a charge in pled cases – as opposed to jury trials – may be explained by the fact that the charge secures a felony conviction for the government without a defendant admitting to active participation in the underlying crime. For those blog readers familiar with the Park doctrine (see here)  and repeated government statements that they will increasingly seek to hold responsible corporate officers criminally liable for the acts of their companies (see here), misprision might be considered the Park doctrine on steroids, holding anyone with knowledge  of a crime responsible if they fail to report and conceal it.

Getting back to Bottomley, he had pled guilty to misprision in April of this year, and was sentenced earlier this month.  Bottomley’s case arose out of an extensive federal investigation into the import of unapproved foreign drugs and/or counterfeit drugs that spanned several continents.  From publicly available documents, it appears that Bottomley was actively involved in the import of unapproved drugs, but had no involvement in the import of a counterfeit version of what is marketed in this country as Avastin.  

Bottomley had been the owner of a company that had imported and distributed foreign versions of U.S. drugs.  He had sold his company in 2010.  After the sale the new ownership expanded the catalog of drugs that they imported.  Although Bottomley remained involved with his former company as a consultant, the government agreed that Bottomley “had no involvement in the importation or distribution of counterfeit Avastin.”  Presumably, this lack of involvement helps explain the misprision plea. 

Despite the plea agreement, even back in April, Bottomley presumably knew that FDA OCI and Mr. Roth didn’t embrace the picture of Bottomley as uninvolved in culpable conduct.  In the same press release with the “no involvement” language, Mr. Roth is quoted as saying that Bottomley “violated the law by selling grey-market, unapproved pharmaceuticals” and the Montana U.S. Attoney said Bottomley “sold potentially dangerous unapproved and misbranded pharmaceuticals at discounted prices to American physicians all for a healthy profit,” none of which was the basis for his guilty plea.  In addition to his criminal case, the government had pursued, and Bottomley agreed to, a civil forfeiture of several million dollars of Bottomley’s assets based on a prosecution theory that required his active involvement in a crime.

Even though Bottomley apparently cooperated with the larger criminal investigation, his sentencing was a contested one, with the government seeking a term of a year imprisonment and Bottomley arguing that he’d already been punished enough.  The court rejected the government’s call for prison time and imposed a sentence of 5 years of probation with 6 months of home confinement and 200 hours of community service.  Despite its setback in the sentencing phase of the criminal case, the government reiterated its view of Bottomley in its sentencing press release and on its blog, with Mr. Roth stating that Bottomley was “sentenced as a result of his participation in the wholesale marketing of unapproved and misbranded cancer medications.”

The Bottomley case is notable, not because it is exceptional, but rather because it reflects the complexities of most FDA investigations.  We have previously posted about cases in which the government accepted an FDC Act misdemeanor plea but nevertheless attempted to prove fraud at sentencing.  It should come as no surprise that federal prosecutors will use all the tools available to them in pursuit of their enforcement agenda.  The Bottomley case is a reminder that there are a number of angles to an FDA investigation, including but not limited to contested sentencings, civil forfeitures, and last but often not least, the battle in the court of public opinion.

By Kurt R. Karst –  

In a unanimous decision handed down on July 23rd by a 3-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit in Cook v. FDA (Case No. 12-5176), the Court largely affirmed a March 2012 decision from the U.S. D.C. District Court (Judge Richard J. Leon) permanently enjoining FDA from permitting the entry of (or releasing any future shipments of) foreign manufactured thiopental into interstate commerce.  The decision is a blow to FDA on several fronts.

As we previously reported (here, here, and here), the case stems from a February 2011 lawsuit (amended in July 2011) brought against FDA by death row inmates in three states, over the importation of unapproved thiopental sodium, one of the drugs used by some states to administer a lethal injection.  The Plaintiffs alleged that FDA committed violations of the Administrative Procedure Act (“APA”) and the FDC Act.  Specifically, Plaintiffs alleged that FDA violated the law by improperly allowing shipments of a misbranded and unapproved new drug to enter the U.S., contrary to the statute (FDC Act § 801(a), 21 U.S.C. § 381(a)), and that FDA departed from longstanding policies and undermined the purpose of the FDC Act by permitting entry of the drug into the country.  Judge Leon agreed and concluded his opinion with a rather colorful statement:

In the final analysis, the FDA appears to be simply wrapping itself in the flag of law enforcement discretion to justify its authority and masquerade an otherwise seemingly callous indifference to the health consequences of those imminently facing the executioner’s needle.  How utterly disappointing!

The D.C. Circuit, in affirming Judge Leon’s decision, had similar (albeit less colorful) words for FDA, saying:

The FDCA imposes mandatory duties upon the agency charged with its enforcement.  The FDA acted in derogation of those duties by permitting the importation of thiopental, a concededly misbranded and unapproved new drug, and by declaring that it would not in the future sample and examine foreign shipments of the drug despite knowing they may have been prepared in an unregistered establishment.

The mandatory duties, said the Court, are found in the text of FDC Act § 801(a) concerning imports.  The statute states, in relevant part, that “[i]f it appears from the examination of such [imported] samples or otherwise” that the product violates the FDC Act’s misbranding or new drug approval requirements, “then such article shall be refused admission” (emphasis added).  

During the appeal, FDA pressed the so-called “Heckler defense” – that is, that under the U.S. Supreme Court’s decision in Heckler v. Chaney, 470 U.S. 821 (1985) (another death row inmate case), FDA’s decision not to take enforcement action with respect to thiopental sodium is not subject to judicial review because “agency refusals to institute investigative or enforcement proceedings are committed to agency discretion.”  But the D.C. Circuit, like Judge Leon, did not agree with FDA:

In sum, we hold 21 U.S.C. § 381(a) requires the FDA to (1) sample “any drugs” that have been “manufactured, prepared, propagated, compounded, or processed” in an unregistered establishment and (2) examine the samples and determine whether any “appears” to violate the prohibitions listed in § 381(a)(1)–(4).  If, “from the examination of such samples or otherwise,” the FDA finds an apparent violation of the Act, then it must (3) “refuse[] admission” to the prohibited drug.  Because these are clear statutory “guidelines for the agency to follow in exercising its enforcement powers,” Chaney, 470 U.S. at 833, the FDA’s compliance with § 381(a) is subject to judicial review under the standards of the APA. . . .

From the foregoing analysis it follows apodictically that the FDA’s policy of admitting foreign manufactured thiopental destined for state correctional facilities, as well as the several individual admissions of such shipments challenged by the plaintiffs, were “not in accordance with law.” 5 U.S.C. § 706(2)(A). . . .   The FDA’s individual admissions of thiopental shipments were not in accordance with law because § 381(a) requires the FDA to refuse admission to any drug that appears to violate the substantive prohibitions of the FDCA, and the FDA conceded before the district court that the thiopental in these shipments “clearly ‘appears’ to be an unapproved new drug.”

The D.C. Circuit’s decision may foreshadow the Court’s decision in another case concerning FDA’s exercise of enforcement discretion.  In K-V Pharmaceutical Co. v. FDA (Docket No. 12-5349), K-V is appealing a September 2012 decision from the D.C. District Court that stymied the company’s efforts to “restore” orphan drug exclusivity for the pre-term birth drug MAKENA (hydroxyprogesterone caproate) Injection, 250 mg/mL (see our previous post here).  K-V alleged that FDA violated the law by failing to take sufficient enforcement action to stop the unlawful competition with MAKENA by pharmacies that compound hydroxyprogesterone caproate injection.  The D.C. District Court found K-V’s claims unreviewable, because the APA “precludes judicial review of final agency action, including refusals to act, when review is precluded by statute or ‘committed to agency discretion by law,’” and because Heckler is controlling.  On appeal, K-V has vigorously argued that FDA’s refusal to take action is the equivalent of an order or license reviewable in court and that Heckler is inapplicable (see our previous post here).

Another area where the D.C. Circuit’s Cook decision may have a huge effect is in the context of drug shortages.  FDA has exercised enforcement discretion to allow the importation of unapproved drugs into the country (see here).  Does Cook put an end to that practice?

The Cook decision squarely addresses FDA’s concerns that enforcement discretion is needed in this area.  The Court rejected FDA’s arguments by ruling that FDA had other alternatives, such as allowing domestically manufactured unapproved drugs to be sold to alleviate drug shortages.  According to the Court:

By its own account, however, the FDA has ways short of allowing importation of inadmissible drugs to counteract a drug shortage, including: “Asking other firms to increase production (31%),” “Working with manufacturers” to mitigate quality problems (28%), and “Expediting review of regulatory submissions (26%).” Id.  The FDA may exercise enforcement discretion to allow the domestic distribution of a misbranded or unapproved new drug, as the Supreme Court recognized in Chaney, 470 U.S. at 837, and in some cases may invoke its express statutory authority to permit the importation of an unapproved new drug.  For example, the FDA may designate an unapproved foreign manufactured drug as an investigational new drug (IND), thereby allowing its lawful importation.  21 U.S.C. § 355(i); 21 C.F.R. § 314.410(a)(1)(ii); see also 21 C.F.R. 312.315(a)(3)(ii) (FDA may expand access to an IND “contain[ing] the same active moiety as an approved drug product that is unavailable through … a drug shortage”).  In any event, even if reading § 381(a) by its terms, as we do, deprives the FDA of one possible response to five percent of all drug shortages, that is hardly an absurd result.

By Alexander J. Varond –

Undoubtedly, most microbes in humans are nonpathogenic, if not beneficial (a.k.a., “good bacteria”).  But, since at least the advent of the microscope, humans have shown great hostility toward pathogenic microbes, and relatively little regard for those that are nonpathogenic.  Antibiotics are routinely prescribed, sometimes with little understanding of the effect such drugs might have on bacterial ecosystems.  For some patients, treatment with antibiotic courses kills normal gut flora and can contribute to severe complications, such as Clostridium difficile (“C. diff.”) infections.  These C. diff. infections can be persistent and life threatening.  Traditional treatment involves administering still more antibiotics, and prognosis for some C. diff. patients can be poor.  This is particularly concerning given the marked increase in the virulence of C. diff. in the last decade.

In the presence of such unmet need, a promising therapy has emerged: fecal microbiota transplantation (“FMT”).  The therapy, also known as a stool transplant, involves the transplantation of fecal bacteria, via enema, colonoscopy, or other method, from a healthy individual to a recipient.  By introducing donor stool into the stomach or small intestine of a patient, FMT introduces beneficial flora into the colon to, in theory, overtake harmful bacteria in the gut.  And, while the therapy is relatively rare in humans, it is commonly used in animal husbandry to treat digestive ailments.

A 1958 paper documented four instances in which FMT was used to treat life-threatening digestive infections.  Since then, however, the treatment has only rarely been used and scientific evidence was lacking.  Then, in January 2013, the New England Journal of Medicine published the results of a 52-patient study that compared the efficacy of treatment with vancomycin, an antibiotic, and FMT in patients who suffered from C. diff. and had at least one relapse after antibiotics.  The results of the study overwhelmingly supported the use of FMT.

The practice then gained much wider recognition, and in February 2013, FDA announced that it would hold a public workshop “to exchange information with the medical and scientific community about the regulatory and scientific issues associated with . . . FMT.”  After the two-day public workshop on May 2-3, FDA stated that it would require FMT products to be administered under an Investigational New Drug Application (“IND”).  FDA reasoned that FMT was a biologic and that requiring INDs would help to protect patients by standardizing therapy, adding oversight, and encouraging the development of reliable products.

Advocates of FMT reacted to FDA’s new requirements by highlighting the time and cost of submitting an IND.  Moreover, they emphasized that requiring INDs could lead patients to resort to do-it-yourself procedures.  Only a month later, FDA made an informal statement that it would exercise enforcement discretion and allow practitioners to conduct FMT procedures without INDs.

Last week, FDA took an unusual step and issued a guidance entitled, “Enforcement Policy Regarding Investigational New Drug Requirements for Use of Fecal Microbiota for Transplantation to Treat Clostridium difficile Infection Not Responsive to Standard Therapies.”  The guidance only applies to the use of FMT to treat C. diff. not responding to standard therapies and requires that doctors obtain informed consent from patients or their authorized representatives before performing FMT.  Interestingly, while FDA remarked that informed consent should include a discussion of risks, the agency did not say what those risks are.  The guidance also stated that sponsors could continue to submit INDs on a voluntary basis.  FDA was careful to note that its enforcement direction was only on an interim basis, while the agency further considered the matter, and only applied to C. diff. and not other diseases or conditions.

With the Human Biome Project reporting initial results last year and the considerable growth of the market for probiotic products, it is clear that we are at the forefront of a new and exciting branch of health science.  Where FMT will fit in is not yet clear.  One can imagine a day when patients routinely store autologous fecal samples as a hedge against developing C. diff. infection.  If projects such as the Human Biome Project yield discoveries that common diseases such as obesity, diabetes, and asthma may be linked to imbalances or a lack of certain bacteria, there could be interest in the use of FMT to address such conditions. 

Because there is the potential for FMTs to be performed outside of the clinic and without doctor supervision, it is virtually guaranteed that complex regulatory and public health questions will continue to arise.  This is a fascinating subject, and we’ll be watching closely.

By Riëtte van Laack –

In a lawsuit filed in federal court, meat industry representatives have challenged the constitutionality of Country of Origin Labeling (“COOL”) regulations as amended by USDA’s Agricultural Marketing Service (“AMS”) in May of 2013.  To understand the origin of the lawsuit, it is helpful to briefly review the history of the regulatory amendments at issue. 

In 2008, the Food, Conservation and Energy Act of 2008 (2008 Farm Bill) amended the Agricultural Marketing Act of 1946 to impose COOL requirements on retailers for certain commodities.  Covered commodities include muscle cuts of beef (including veal), lamb, chicken, goat, and pork; ground beef, ground lamb, ground chicken, ground goat, and ground pork; wild and farm-raised fish and shellfish; perishable agricultural commodities; macadamia nuts; pecans; ginseng; and peanuts.  AMS published a final rule for all covered commodities on January 15, 2009, which took effect on March 16, 2009.

The authorization and implementation of the COOL requirements have been controversial, particularly the requirements for COOL of meat and meat products.  Less than a year after the AMS COOL regulations took effect, Canada and Mexico challenged them in the World Trade Organization (“WTO”), arguing that the COOL requirements for meat had a trade-distorting impact by reducing the value and number of cattle and hogs shipped to the U.S. market, thus violating WTO trade commitments agreed to by the United States.

In July 2012, the WTO’s Dispute Settlement Body adopted the WTO lower body’s findings that the COOL requirements for meat and muscle cuts were inconsistent with the U.S. obligations under the WTO Agreement on Technical Barriers to Trade.  The WTO set a deadline of May 23, 2013, for the United States to revise the COOL requirements in compliance with the WTO findings.  On May 24, 2013, AMS issued a final rule amending the regulation requiring labeling of muscle cuts of meat.  The final rule requires that labels show where each production step (i.e., born, raised, slaughtered) occurred and removes the current “allowance for commingling of muscle cuts.”

Approximately 6 weeks later, trade associations representing American meat packers, feedlot, cattlemen, and pork producers and their foreign suppliers, including the Canadian Pork Council, and the North American Meat Association, filed the instant lawsuit against USDA and its Secretary, and AMS and its Administrator.  The lawsuit does not come as a surprise, given that Plaintiffs had previously expressed their concerns and opposition to the amendments in comments to AMS. 

Plaintiffs claim that the amended final regulations violate the First Amendment, the AMS Act, and the Administrative Procedures Act.  Specifically, they allege that the amended COOL regulations conflict with definitions and requirements of the COOL statutory provisions in the AMS Act, and exceed AMS’s statutory authority.  Moreover, according to Plaintiffs, the amended regulations do not resolve the WTO violations but instead exacerbate them.  The new COOL requirements would impose costs possibly as high as 192 million dollars without a quantifiable benefit.  COOL is not a food safety program, and AMS’s claim that the labeling will benefit consumers by providing them with more specific information about the source of their food does not constitute a substantial governmental interest.  Plaintiffs claim that this lack of a governmental interest and the uncertain and speculative consumer benefit cause the COOL requirements to violate the First Amendment, in that they compel commercial speech without advancing a substantial government interest.  Plaintiffs request that the Court vacate the amended final rule and enjoin its enforcement. 

By Jennifer D. Newberger & Jeffrey N. Gibbs –

In the draft MDR guidance discussed in our prior post, FDA stated that it has not yet issued a Federal Register notice required by the Food and Drug Administration Amendments Act of 2007 (“FDAAA”) regarding certain changes to the MDR malfunction reporting requirements.  FDAAA changed the malfunction reporting requirements for all Class I devices, and Class II devices that are not permanently implantable, life supporting, or life sustaining—in other words, a majority of currently marketed medical devices.  And by “changed,” we mean that FDAAA significantly reduced the reporting obligations of manufacturers of those types of devices.  As amended by FDAAA, section 519(a) of the Federal Food, Drug, and Cosmetic Act (“FDC Act”) requires regular malfunction reporting only for Class III devices, Class II devices that are permanently implantable, life supporting, or life sustaining, and “a type of device which [FDA] has, by notice published in the Federal Register or letter to the person who is the manufacturer or importer of the device, indicated should be subject to such part 803 in order to protect the public health.”  Manufacturers of all other devices are required to report malfunctions only “in summary form and made on a quarterly basis,” as described in criteria to be issued by FDA.  FDC Act § 519(a)(1)(B)(ii).

Rather than issuing a notice indicating the devices that FDA believes should continue to be subject to the current Part 803 malfunction requirements, in March 2011—four years after enactment of FDAAA—FDA issued a notice in the Federal Register stating that it “intends to provide notice in the Federal Register that lists the types of devices that should be subject to part 803 in order to protect the public health, as required by section 519(a)(1)(B)(i)(III) of the FD&C Act.”  76 Fed. Reg. 12743, 12744 (Mar. 8, 2011).  In the interim, however, “in the interest of public health, FDA is publishing this notice under section 519(a)(1)(B)(i)(III), to clarify that, to the extent there is any confusion as to current malfunction reporting requirements, all device manufacturers and importers of class I and those class II devices that are not permanently implantable, life supporting, or life sustaining, must continue to report in full compliance with part 803, pending further FDA notice under section 519(a)(1)(B)(i)(III), as to specific devices or device types subject to part 803 . . . .  FDA considers it necessary to subject all such devices to part 803 in the interim, in order to protect the public health by ensuring that there is no gap in malfunction reporting for any device.”  Id. (emphasis added).  In effect, through this sweeping blanket statement of policy, FDA has tried to undo a congressional directive. 

This language is repeated in the MDR draft guidance, issued six years after enactment of FDAAA.  FDA again insists that it does intend to publish a list of the types of devices that will continue to be subject to the current Part 803 requirements, but in the meantime, everyone should just keep on reporting as if FDAAA had never been enacted.  Notably, FDA does not provide a timeframe by which it intends to publish this long-absent Federal Register notice.  Given FDA’s track record with some other congressional directives, such as reclassification of Class III devices and the UDI regulation, we know FDA can take quite a while.

This language in the draft guidance is a surprise for a number of reasons.  First, it seems that this change effected through FDAAA has stayed fairly under wraps, and FDA’s failure to comply with the statutory mandate to issue a notice has gone rather unobserved.  It was not raised as an issue to address in FDASIA last year, and manufacturers don’t seem to be complaining about FDA’s failure to comply with its statutory mandate to reduce the regulatory burden of malfunction reporting for a large number of devices.  (Given that the MAUDE database reflects over 500 malfunction reports in any given week, this is potentially a large collective burden.)  Second, it is somewhat surprising that FDA bothered to address this issue in the draft guidance.  FDA could probably have issued the draft guidance with no mention of its failure to comply with a congressional mandate, and its omission may have gone unnoticed.

Most important, it is clear that Congress did not intend FDA to issue a short Federal Register notice simply stating that it believes, for the protection of public health, manufacturers of all devices must continue to comply with the Part 803 malfunction reporting requirements.  If that was Congress’s intent, it did not need to change the statutory language.  Congress obviously believed that the malfunction reporting requirements were overly burdensome, without an obvious benefit, for a majority of devices, and it sought to reduce that burden. 

Companies making low risk devices that are cited for failure to submit MDRs may want to raise this issue as a defense.  As is evidenced by FDA’s failure to comply, and the increased burdens it seeks to impose on manufacturers in the new draft guidance, it does not seem that FDA intends ever to comply with the requirements of section 519(a)(1)(B)(i)(III).  Industry should consider whether it is worth raising this issue with Congress in an effort to force FDA’s hand.  Those efforts worked for a number of issues addressed in FDASIA (e.g., appeals timeframes, the 510(k) modifications draft guidance, and pushing FDA to issue a UDI regulation).  Congress intended for FDA to develop a targeted list of products that should remain subject to the malfunction reporting requirement.  Going to Congress may be the only way to solve the mystery of the missing MDR notice.

By Doug Farquhar –

For decades (although not quite since the invention of film), the debate has raged among lawyers who advise clients about FDA inspections: can regulated industry insist that FDA investigators conducting inspections without a warrant put away their cameras, when the investigators try to take photographs in a facility?  FDA issued a draft Guidance last week, titled “Circumstances that Constitute Delaying, Denying, Limiting, or Refusing a Drug Inspection,” that explicitly gives investigators the right to take pictures, although FDA may be stretching its inspectional authority beyond what is required under the relevant statute.

Let’s start with the statute.  Section 704 of the Federal Food, Drug, and Cosmetic Act (“FDCA”) (21 U.S.C. §374(a)(1)(B)) has required, for years, FDA-regulated industry to allow FDA “officers or employees” to “inspect, at reasonable times and within reasonable limits and in a reasonable manner,” any facility and “all pertinent equipment, finished and unfinished materials, containers, and labeling therein.”  FDA has always claimed that this gives them the authority to take photographs while conducting an inspection.  Its Investigations Operations Manual states, in Section 5.3.4.1, that, if “management objects to taking photographs, explain that photos are an integral part of an inspection and present an accurate picture of plant conditions.”  The Manual then advises inspectors, if plant management continues to refuse, to cite two cases that the Manual claims authorize the taking of photographs, but those cases, in the view of critics like me, actually only authorize use of photographs in court when the investigated entity has not refused to permit photographs to be taken.  Finally, says the Manual, inspectors should obtain the names of the lawyers representing the company and call the management in their district office if an establishment still refuses to permit photographs.

To avoid any ambiguity, when FDA seeks an administrative warrant for an inspection, it usually authorizes itself to take photographs, and when Consent Decrees are signed by companies, the Decrees universally require that the companies allow FDA inspectors to take photographs.  But, as far as we know, there has never been a case in which a court has held that a company illegally refused or limited an inspection by prohibiting FDA investigators to take photographs. 

Then along came the FDA Safety and Innovation Act (“FDASIA”) (our firm’s summary of the law, which was enacted in 2012, is available here).  FDASIA authorized FDA, in Section 707(b), to issue a guidance about what constitutes refusing an authorized FDA inspection, which is a crime under Section 301(f) (21 U.S.C. §331(f)).

We were waiting for this shoe to drop, and, sure enough, the Guidance issued last week states (Section V.B):

Photographs are an integral part of an FDA inspection because they present an accurate picture of facility conditions.

Doesn’t that sound familiar? The draft Guidance then continues:

Not allowing photography by an FDA investigator may be considered a limitation if such photographs are determined by the investigator(s) to be necessary to effectively conduct that particular inspection. Examples of conditions or practices effectively documented by photographs include, but are not limited to: evidence of rodents or insect infestation; faulty construction or maintenance of equipment or facilities; product storage conditions; product labels and labeling; and visible contamination of raw materials or finished products.

Is this an unlawful extension of FDA’s inspection powers?  It would be interesting to see what would happen with a test case for a company that refused to permit photography.

And why does this matter?  One veteran lawyer once told me that, when he was at FDA, they had four “dirty warehouse” cases they could pursue, but resources only allowed FDA to take two of them.  They took the two where they had photographs.

The draft Guidance on Inspections, which is not binding law, even after it becomes final, does some other things, too.  In general terms, the Guidance defines the various types of actions, inaction, and circumstances that the FDA considers to constitute delaying, denying, or limiting inspection, or refusing to permit entry or inspection for the purposes of FDCA § 501(j).  FDASIA amended the statute to add this new section, which deems a drug to be adulterated if “it has been manufactured, processed, packed, or held in any factory, warehouse, or establishment and the owner, operator, or agent of such factory, warehouse, or establishment delays, denies, or limits an inspection, or refuses to permit entry or inspection.”