By Kurt R. Karst –

FDA’s recent response to two Citizen Petitions (Docket Nos. FDA-2013-P-0995 and FDA-2011-P-0869) helped to shed some additional light on an issue that continues to vex companies considering submitting a 505(b)(2) NDA to FDA for a new drug: When do I have to cite an approved drug as a “listed drug” in my 505(b)(2) application?  After all, the choice of listed drug can have some pretty significant consequences.  If there is patent information listed in the Orange Book for the listed drug, then that raises the prospect of a 30-month stay on approval (pursuant to a Paragraph IV certification) while the parties sort out things in patent infringement litigation.  Then there’s the question of the scope and applicability of any non-patent exclusivity listed in the Orange Book for the listed drug.  And don’t forget issues surrounding intervening NDA approvals and change in listed drug (see here and here).

By way of background, the FDC Act describes a 505(b)(2) NDA as an application that contains full reports of investigations of safety and effectiveness, where at least some of the information required for approval comes from studies not conducted by or for the 505(b)(2) applicant, but instead from published literature reports and/or FDA’s findings of safety and/or effectiveness for one or more listed drugs, and for which the 505(b)(2) applicant has not obtained a right of reference or use.  While there are no FDA regulations governing how a 505(b)(2) applicant should choose a listed drug when various options are present, the Agency has spoken to the issue in guidance and in citizen petition responses.  For example, FDA’s 1999 draft guidance states that “[i]f there is a listed drug that is the pharmaceutical equivalent of the drug proposed in the 505(b)(2) application, the 505(b)(2) applicant should provide patent certifications for the patents listed for the pharmaceutically equivalent drug” (emphasis added).  (FDA’s regulation at 21 C.F.R. § 320.1(c) defines the term “pharmaceutical equivalents.”)  FDA explained in a 2004 Citizen Petition response (Docket No. FDA-2004-P-0089) concerning Fenofibrate (“Fenofibrate CP response”) that citing a pharmaceutical equivalent as a listed drug serves to “ensure that the 505(b)(2) applicant does not use the 505(b)(2) process to end-run patent protections that would have applied had an ANDA been permitted.”  Additionally, FDA commented that these provisions “further ensure that the 505(b)(2) applicant (and FDA) can rely, to the maximum extent possible, on what is already known about a drug without having to re-prove (or re-review) what has already been demonstrated.” 

“When there is no listed drug that is a pharmaceutical equivalent to the drug product proposed in the 505(b)(2) NDA, neither the statute, the regulations, nor the 1999 draft guidance directly addresses how to identify the listed drug or drugs on which a 505(b)(2) applicant is to rely.”  In FDA’s Fenofibrate CP response, however, the Agency stated that:

[I]t follows that the more similar a proposed drug is to the listed drug cited, the smaller the quantity of data that will be needed to support the proposed change.  Accordingly, to avoid unnecessary duplication of research and review, when a section 505(b)(2) application has been submitted and no pharmaceutically equivalent drug product has previously been approved, the 505(b)(2) applicant should choose the listed drug or drugs that are most similar to the drug for which approval is sought.  Similarly, if all the information relied on by FDA for approval . . . is contained in a single previously approved application and that application is a pharmaceutical equivalent or the most similar alternative to the product for which approval is sought, the 505(b)(2) applicant should certify only to the patents for that application.  This is the case even when another application also contains some or all of the same information. [(Emphasis added)]

Based on this stated policy, FDA could reject an applicant’s choice of listed drug if the Agency determines that another (or an additional) drug product is more appropriate (i.e., more similar). 

FDA’s recent response to Citizen Petitions concerning Buprenorphine (“Buprenorphine CP response”) further explains the Agency’s Fenofibrate CP response:

The Fenofibrate CP response describes a suggested approach intended to enhance the efficiency of a prospective 505(b)(2) applicant’s development program.  An applicant choosing to rely on FDA’s finding of safety and/or effectiveness for a listed drug very similar to the proposed product submitted in the 505(b)(2) application would generally need to submit less additional data to support the differences between the proposed product and the listed drug for approval of the 505(b)(2) application.  However, as stated in the Fenofibrate CP response, this suggested approach does not reflect a statutory or regulatory requirement.  Further, the determination of which listed drug is “most similar” to a proposed product may be difficult (except in cases in which a pharmaceutical equivalent previously has been approved) and dependent on the sponsor’s approach to its development program.  Accordingly, a sponsor interested in submitting a 505(b)(2) application that relies upon FDA's finding of safety and/or effectiveness for one or more listed drugs should determine which listed drug(s) is most appropriate for its development program.  If there is a listed drug that is a “pharmaceutical equivalent” to the proposed drug product, the applicant should identify the pharmaceutically equivalent product as a listed drug relied upon and provide patent certifications for the patents listed for the pharmaceutically equivalent drug.

This guidance is certainty useful, as it provides a more fulsome explanation of FDA’s thinking on choice of listed drug; however, it also suggests (at least at first blush) that if there is a listed drug that is a “pharmaceutical equivalent” of the drug proposed in the 505(b)(2) NDA, then that drug must be identified as a listed drug in the application.  But that’s simply not the case.  FDA has a much more nuanced, case-by-case approach to determining whether a 505(b)(2) applicant has identified the appropriate listed drug (or drugs) in its application.  A couple of examples illustrate this approach.

If a 505(b)(2) applicant relies solely on published literature for which it does not have a right of reference and that does not describe an approved drug, then would FDA require the 505(b)(2) applicant to cite an approved pharmaceutical equivalent as a listed drug?  The answer is “No.”  FDA explained this in a May 2011 Citizen Petition response (Docket No. FDA-2010-P-0614) concerning Colchicine.  In that case, the petitioner, Mutual Pharmaceutical Company, Inc., referenced FDA’s 1999 draft guidance and asserted that “even a 505(b)(2) application that relies solely on the literature must identify [a listed drug].”  FDA said that assertion was incorrect:

The 505(b)(2) Draft Guidance states at p. 8: “Even if the 505(b)(2) application is based solely upon literature and does not rely expressly on an Agency finding of safety and effectiveness for a listed drug, the applicant must identify the listed drug(s) on which the studies were conducted, if there are any” (emphasis added).  However, published literature that does not expressly describe studies conducted with Colcrys or ColBenemid (i.e., non-product-specific published literature) may be relied upon by any 505(b)(2) applicant without necessitating citation of Colcrys or ColBenemid as a listed drug.  Similarly, to the extent that portions of the approved product labeling for Colcrys are based on non-product-specific studies of colchicine described in published literature, a subsequent 505(b)(2) applicant that does not cite Colcrys as a listed drug would not be restricted in relying upon those same studies to support approval.

Also consider this scenario: There is an approved pharmaceutical equivalent, but the prospective 505(b)(2) applicant does not need to rely on that approval because, for example, the applicant has completed its own testing, but needs to access FDA’s previous findings with respect to an excipient (e.g., pharm/tox findings) from another drug approval.  Would FDA require the 505(b)(2) applicant to cite an approved pharmaceutical equivalent as a listed drug in this case?  Again, the answer is “No.”  This is because the application is otherwise complete and would be a “full” 505(b)(1) if it were not for the safety information needed on the excipient.  Citing the approved pharmaceutical equivalent would not serve any purpose; that is, it would not inform the approval of the 505(b)(2) application.

Where FDA would apparently require identification of a pharmaceutical equivalent as a listed drug is where reliance on a previous approval is necessary and the Agency somehow determines that a 505(b)(2) applicant’s choice of listed drug is intended to avoid patent or non-patent exclusivities on a pharmaceutical equivalent. 

By Kurt R. Karst –      

We’ve previously noted the resurgence of interest in (and controversy over) brand-side exclusivity.  There’s the QI Program Supplemental Funding Act of 2008 (Pub. L. No. 110-379), which gave new life to “old” antibiotics.  FDC Act § 505(u), titled “Certain Drugs Containing Single Enantiomers,” and created by the 2007 FDA Amendments Act (see summary here), permits sponsors of enantiomers to elect to claim “new active ingredient” status and be awarded 5-year NCE exclusivity when new indications are developed for the enantiomers (see our previous post here).  The Generating Antibiotic Incentives Now Act (“GAIN Act”), passed as part of the 2012 FDA Safety and Innovation Act (see summary here) amended the FDC Act to add Section 505E to, among other things, grant an additional 5 years of marketing exclusivity upon the approval of an NDA for a drug product designated by FDA as a Qualified Infectious Disease Product. 

Myriad proposals for new or add-on exclusivities (or abolishment of exclusivity) have also cropped up in Congress in recent years.  For example, there’s the Combination Drug Development Incentive Act of 2013 (H.R. 2985), which would amend the FDC Act to allow for a grant of NCE exclusivity for a new combination of drugs even if both were previously approved separately (see our previous post here). There’s also the Life-Threatening Diseases Compassion through Combination Therapy Act of 2012 (H.R. 6502) (modeled after the GAIN Act) that would amend the FDC Act to add 6 months of marketing exclusivity to 5-year NCE exclusivity, 3-year new clinical investigation exclusivity, or 7-year orphan drug exclusivity for a drug product approved under an NDA and that contains a “significant drug combination” designated as such by FDA (see our previous post here).  

These types of exclusivity incentives, realized after a product has been developed, have been described as “pull” incentives, and are different than so-called “push” incentives, which focus on removing barriers to product development (e.g., tax credits and grants) (see our previous post here).  A recent report from the Institute of Medicine (“IOM”), titled “Delivering High-Quality Cancer Care: Charting a New Course for a System in Crisis,” recommends the creation of a new “pull” incentive to achieve the goal of expanding the “breadth of data collected on cancer interventions for older adults and individuals with multiple comorbid conditions.”  According to the report, “Congress should amend patent law to provide patent extensions of up to six months for companies that conduct clinical trials of new cancer treatments in older adults or patients with multiple comorbidities.”  The recommended exclusivity incentive is part of a broader conceptual framework for improving the quality of cancer care that includes various components, such as engaged patients, an adequately staffed, trained and coordinated workforce, evidence-based care, learning health care information technology, translation of evidence into clinical practice, quality measurement and performance improvement, and accessible and affordable care.

The new exclusivity incentive recommended in the IOM report is inspired by the pediatric exclusivity incentive added to the statute (at FDC Act § 505A) by Section 111 of the 1997 FDA Modernization Act, and now known as the Best Pharmaceuticals for Children Act (“BPCA”).  Citing a 2012 IOM report on the BPCA (and its sister law, the Pediatric Research Equity Act) (see more here), the 2013 IOM report states:

A recent IOM committee concluded that studies conducted under the pediatric patent exclusivity laws “are yielding important information to guide clinical care for children” (IOM, 2012c, p. 26). . . .  In addition, the pediatric patent exclusivity has contributed to researchers conducting more than 300 pediatric studies between 1997 and 2002 (Li et al., 2007; Milne, 2002).  These studies have led to revised labeling of dosing, safety, efficacy, new pediatric formulations, and extended age limits for many of the studied drugs (Li et al., 2007; Rodriguez et al., 2008).  It is probable that patent exclusivity in cancer would lead to a similar increase in research conducted in older adults and individuals with multiple comorbidities, and to an increase in knowledge about how to treat this population.  Thus, the committee recommends that Congress amend patent law to provide patent extensions of up to six months for companies that conduct clinical trials of new cancer treatments in older adults or patients with multiple comorbidities (Recommendation 5).

The IOM report goes on to note, however, that ther are some concerns with and criticisms of the BPCA:

The committee is concerned about some of the known limitations of the patent extension program in pediatrics, but believes the need for more data on older adults with cancer and individuals with multiple comorbidities is so great that it justifies modeling this program in drugs used to treat older adults with cancer and individuals with multiple comorbidities. . . .  FDA registration trials are conducted for the narrow goal of bringing new treatments to the market.  Alternative strategies that mandate the inclusion of older adults and patients with multiple comorbidities in FDA registration trials have serious limitations.  Such a mandate could make it more challenging to determine the efficacy and safety of a new treatment.  This could make drug development more expensive, potentially require larger trials, and delay or prevent new drugs from entering the market.

. . . .  A recent review of the pediatric exclusivity provision noted that it is difficult to measure any improvements in children’s health care that have resulted from the program (Kesselheim, 2011).  The research conducted for the purpose of achieving a pediatric extension often has serious methodological limitations, including the only rare inclusion of drugs most frequently used by children.  Most of the studies are conducted in populations of older pediatric patients (not children under the age of 6 or 2), and often at sites outside of the United States (Boots et al., 2007; Grieve et al., 2005; Pasquali et al., 2010).  The results of the research are often unpublished, and thus, not subject to peer review (Benjamin et al., 2009).  When the research is published, it often focuses on findings substantively different from those highlighted in the FDA reviews and labeling changes (Benjamin et al., 2008; 2009).  Additionally, society has borne substantial costs from the delayed entry of less expensive generic versions of a drug onto the market. . . .  The high cost of patent extension is of particular concern when the higher drug prices are passed on to patients, because this could lead to reduced medication adherence during the extra six months of elevated prices (Kesselheim, 2011).  Due to the high price tag, the program has been criticized for overcompensating manufacturers (Kesselheim, 2011). The median cost of conducting clinical trials under this program was more than $12 million between 2002 and 2004, and the median net economic benefit to manufacturers was more than $134 million (Li et al., 2007). Another study found the ratio of net economic return to cost was 17 to 1 (Baker-Smith et al., 2008). 

Despite these perceived limitations with the BPCA, however, the IOM report says that they “may be preventable in a geriatric oncology exclusivity program by having stringent requirements on the types of clinical trials that qualify for market exclusivity.”

This is not the first time a BPCA-like exclusivity proposal has been suggested as a mechanism to incentivize drug development.  In June 1998, the Alliance for Aging Research published a report, titled “When Medicine Hurts Instead of Helps: Preventing Medication Problems in Older Persons,” recommending the creation of an exclusivity provision for companies that study their products in the elderly.  In addition, in 2005, Congress considered (but ultimately rejected) a proposal to create so-called “wildcard” exclusivity as part of the Biodefense and Pandemic Vaccine and Drug Development Act (see here and here) to spur the development of medical countermeasures for terrorist attacks involving chemical, biological, radiological, or nuclear agents. 

Whether the new IOM report will result in Congress putting pen to paper to propose yet another new exclusivity regime remains to be seen.  As the government shutdown enters its third week, Members of Congress have other concerns on their minds.

By Riëtte van Laack –

As previously reported, the American Meat Institute (“AMI”) and several international meat industry organizations filed a lawsuit in an effort to stop the Agricultural Marketing Service ("AMS") of the USDA from implementing the Country of Origin Labeling ("COOL") rule.  On September 11, 2013, Judge Ketanji Jackson of the U.S. District Court for the District of Columbia denied the motion for preliminary injunction.

Not surprisingly, AMI et al. appealed this denial and requested an expedited briefing schedule.  Pursuant to the expedited schedule, appellants’ 61-page opening brief was filed on September 23, 2013. 

AMI et al. contend that COOL violates the First Amendment because it compels speech in the form of a label that does not advance a government interest.  They claim that the District Court applied the incorrect standard for the analysis of their free speech argument.  They argue that, as AMS suggests, some individual consumers might be interested in the additional information provided by the detailed statement about where an animal is born, raised, and slaughtered is insufficient to balance the burden of the new regulation.  There is no evidence that the alternative labeling statement, i.e., a statement that merely lists the countries without specifying what phase of the production took place in those countries, is misleading.  Moreover, until recently, AMS did not claim that such a labeling statement was misleading.  In fact, the COOL regulations for ground meat and other commodities allow such statements. 

Appellants further argue that AMS’s elimination of the allowance for commingling muscle cuts from different countries in the COOL regulation is outside AMS’s jurisdiction.  (Commingling occurs when a processor processes meat from animals with different countries of origin in a single production day, or when a retailer offers meat products with different countries of origin in the same retail case.)  The COOL statute concerns labeling and does not authorize the AMS to regulate (i.e., prohibit) production practices.  Moreover, this prohibition is particularly onerous for U.S. meat processors that are located near the border of Mexico and Canada.  The elimination of this allowance will require strict segregation procedures requiring a restructuring of the business. 

The Appellees’ and Intervenor Appellees’ briefs are due on October 23, 2013.  Although oral arguments have not yet been scheduled, Appellants requested scheduling as soon as possible after they file their reply brief, due Nov. 1, 2013 (presumably before the November 24, 2013 date on which AMS plans to start enforcing the COOL regulation).

Meanwhile, in light of the uncertainty of the future of the COOL regulation, AMI requested that AMS delay the implementation of the COOL regulation.  

By Kurt R. Karst –

On October 12th, California Governor Jerry Brown finally acted on Senate Bill 598, vetoing the measure.  If enacted, the bill would have amended California’s Pharmacy Law to require, among other things, a pharmacy to notify a prescriber within 5 business days whether the prescription dispensed was a biological product or an interchangeable biosimilar (or enter the information in a patient record system shared by the prescriber) for prescriptions filled prior to January 1, 2017.  The bill is similar to legislation introduced in other states around the country over the past year (see our updated Biosimilar State Legislation Scorecard) concerning the substitution of biosimilar and interchangeable biological products licensed pursuant to Section 351(k) of the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).  Although FDA has not yet approved a biosimilar biological product (or even accepted a biosimilar application), there has been a significant push in the states to enact legislation governing their substitution.  The stakes are high.  Earlier this month ratings agency Fitch issued a report stating that acceptance of biosimilars is expected to be strong in the United States (vis-à-vis Europe).  The defeat of bills like that introduced in California could increase that acceptance even further.

SB 598 handily passed the State Assembly and State Senate, but ran into a brick wall of opposition when it landed on Governor Brown’s desk.  More than 30 organizations called for the Governor to veto the bill, including CalPERS, California Pharmacists Association, AARP, Walgreens, California Retailers Association, California Association of Health Plans, CVS Caremark, California Correctional Health Care Services, Pacific Business Group on Health, nine state labor unions, Express Scripts Inc., and Kaiser Permanente.  The Generic Pharmaceutical Association (“GPhA”) also urged Governor Brown to veto the bill (see here), and was particularly tenacious in its lobbying efforts against the enactment of a bill the organization alleged was designed to “thwart competition from biosimilars.”  The trade group regularly cited an Express Scripts study released in September to bolster its case that SB 598 would frustrate the State’s ability to capitalize on an estimated $27 billion in savings over 10 years from biosimilar substitution. 

In vetoing SB 598, Governor Brown wrote in a letter to the members of the California State Senate that:

Senate Bill 598 would effect two changes to our state’s pharmacy law. First, it would allow interchangeable “biosimilar” drugs to be substituted for biologic drugs, once these interchangeable drugs are approved by the federal Food and Drug Administration (FDA).  This is a policy I strongly support.

Second, it requires pharmacists to send notifications back to prescribers about which drug was dispensed.  This requirement, which on its face looks reasonable, is for some reason highly controversial.  Doctors with whom I have spoken would welcome this information.  CalPERS and other large purchasers warn that the requirement itself would cast doubt on the safety and desirability of more cost effective alternatives to biologics.

The FDA, which has jurisdiction for approving all drugs, has not yet determined what standards will be required for biosimilars to meet the higher threshold of “interchangeability.”  Given this fact, to require physician notification at this point strikes me as premature.

For these reasons, I am returning SB 598 without my signature.

California is considered a bellwether state, and therefore, particularly important for those advocates on either side of the issue.  As several states prepare to begin new sessions next January, many folks in the nascent biosimilars industry will be asking whether the old adage – as California goes, so goes the nation – will hold true.

The next battle over biosimilars is poised to take place later this month when the World Health Organization convenes its 57th Consultation on International Nonproprietary Names (“INNs”) for Pharmaceutical Substances.  At issue is whether biosimilar versions of brand-name reference products should have unique names, or share the name of their brand-name counterpart.  In August, GPhA submitted a Citizen Petition (Docket No. FDA-2013-P-1153) to FDA requesting that the Agency implement its INN naming policy equally to all biologics (see our previous post here). 

By Ricardo Carvajal –

People have been eating insects for thousands of years, and the practice certainly has its devotees in the U.S.  Notwithstanding that history of consumption, industrial production of insects for food use has remained a rarity.  Now there are signs of a push to bring insect production and consumption into the mainstream.  Recently, a team from McGill University was awarded the million-dollar Hult Prize for a business plan focused on marketing of crickets as food – and that team is not the only venture trying to crack the cricket market.

The Food and Agriculture Organization ("FAO") has lent its voice to the cause with a fascinating report issued earlier this year titled “Edible Insects: Future Prospects for Food and Feed Security.”  The report discusses in detail the nutritional and other benefits of entomophagy (there – we used the “e” word).  However, the report cites a lack of regulatory clarity as a barrier to establishing a market for insect-derived foods:

Unclear regulations and legislation on farming and selling insects for human consumption and feed are an obstacle. For example, in the United States, the FDA’s Food Defect Action Levels lists allowable percentages of insect fragments in food, yet insects as food do not seem to fall into any category. In the EU, the European Novel Food Regulation, which regulates food and ingredients that were not used for human consumption to a significant degree prior to 15 May 1997, restricts the trade of insects, even if they are consumed in other countries. (Citations omitted)

Whatever the case in the EU, we think the observation that insects don’t fall into any category in the U.S. misses the mark.  To the extent that insects are used for food, they are food, and thereby subject to the applicable adulteration and misbranding provisions of the Federal Food, Drug, and Cosmetic Act.   Put succinctly, the U.S. food regulatory system is both robust and flexible enough to accommodate at least some of our six-legged friends – and we might eat to that. 

By Riëtte van Laack –

In May of 2012, Plaintiff Matthew Dronkers filed a complaint in the United States District Court for the Southern District of California, on behalf of himself and other class members against Kiss My Face, LLC (“KMF”) claiming that KMF’s marketing of personal care products labeled as “obsessively organic” was false and misleading.  According to Mr. Dronkers, consumers interpret the term “organic” as applied to personal care products to mean that the product “is derived from fruits, vegetables and other crops that are grown, products, handled, and processed according to strict guidelines.”  Among other things, these “guidelines” include a requirement that the personal care products “must contain no synthetic ingredients.”  The complaint alleged that KMF’s products did not satisfy these criteria.  Plaintiff acknowledged that (“regrettably”) the Organic Food Production Act (“OFPA”) and the National Organic Program’s (“NOP’s”) implementing regulations do not apply to personal care products, but alleges that KMF’s claims did not comply with those standards either.

Somewhat curiously, Plaintiff did not cite or appear to rely on the California Organic Products Act (“COPA”).  COPA prohibits any product handled, processed, sold, advertised, represented or offered for sale in California from being sold as organic unless it is labeled with terminology similar to terminology set forth in the regulations by the NOP.  Under COPA, only personal care products with at least 70 percent organically produced ingredients may be labeled “organic.”  Plaintiff instead, appears to have relied on his own (more narrow) definition of “organic.”  Remarkably, this strategy seems to have worked.

KMF filed a motion to dismiss arguing express and implied conflict preemption because Plaintiff’s claims were (indirectly) premised on the labeling of the personal care products as organic when they did not comport with the requirements of the OFPA and the NOP regulations.  In the alternative, Defendant moved to dismiss the case under the primary jurisdiction doctrine and because of the Plaintiff’s failure to satisfy Federal Rule of Civil Procedure 9(b). 

Judge Houston denied the motion to dismiss.  He held that the OFPA and NOP implementing regulations are for foods and nothing from Congress or USDA to date suggests that federal legislation should preempt state law when it comes to organic claims for personal care products.  Moreover, because there was no evidence that the USDA was considering whether the NOP regulations apply to personal care products, the primary jurisdiction doctrine was inapplicable.  The court further concluded that Plaintiff had met the requirements for the Rule 9(b) heightened pleading standard.  In doing so, the opinion does not address the requisite showing of “falsity” based on what Plaintiff seems to admit is his own definition of “organic.”  The complaint does not appear to allege that Defendant (or anyone else) knew or should have known of Plaintiff’s definition of “organic.”  In other contexts, federal courts, including the Ninth Circuit, have distinguished between false claims and claims that are not true.  See, e.g., Wang v. FMC Corp., 975 F.2d 1412, 1420-21 (9th Cir.1992); (“The phrase “known to be false”  . . . does not mean ‘scientifically untrue’; it means ‘a lie.’”).

In any event, the lawsuit seeking class-action status against Kiss My Face for false advertising will move forward.  As the lawsuit moves forward, we will be watching to see whether Plaintiff’s seemingly home-grown definition of organic remains viable.

By Kurt R. Karst –  

We were reminded earlier today that a new law has gone into effect in the state of Maine permiting the importation of drug products into the state from licensed retail pharmacies located in certain foreign countries.  As we previously reported, in September, the Pharmaceutical Research and Manufacturers of America (“PhRMA”), along with several other trade groups – the Maine Pharmacy Association, Maine Society of Health-System Pharmacists, and Retail Association of Maine – and two pharmacists, filed a Complaint and Motion for Preliminary Injunction against Maine’s Attorney General and Commissioner of Administrative & Financial Services in the U.S. District Court for the District of Maine in an effort to block implementation of the importation law.  Plaintiffs allege in their filings that the Maine importation law is preempted under the Supremacy Clause of the U.S. Constitution (U.S. Const. Art. VI, cl. 2) because federal statutes, like the FDC Act and the 2003 Medicare Modernization Act (“MMA”), “occupy the field and the Maine law conflicts with and obstructs compliance with those statutes.”  Plaintiffs also allege that the Maine law violates the Foreign Commerce Clause (U.S. Const. Art I, § 8 cl. 3) because it “purports to regulate in an area where the federal government possesses exclusive and plenary power.”   That is, the state law violates the requirement that the federal government “speak[] with one voice in the area of international pharmaceutical trade” and discriminates against foreign commerce.

In recent court filings, Maine has opposed Plaintiffs’ Motion for Preliminary Injunction and has moved to dismiss the Complaint.  According to those pleadings, the new state law (referred to as the “2013 Amendment”):

does not affirmatively “authorize” Maine residents to buy prescription drugs from pharmacies located in Canada or any other country, and it does not “aid and abet violations” of the [FDC Act].  Rather, the 2013 Amendment simply restricts the reach of the Maine Pharmacy Act.  No constitutional provision requires Maine as a state to regulate in an area it chooses not to regulate.

Bearing that proposition in mind, Defendants say that “[t]he crux of plaintiffs’ lawsuit is the proposition that they can require a state to affirmatively regulate pharmacies in accordance with plaintiffs’ view of federal law where that state has chosen not to regulate.  No court of which defendants are aware has ever adopted such an extraordinary principle.”  “The 2013 Amendment is a classic example of a state acting to limit the extent of its traditional police powers – deciding not to assert its regulatory authority over certain conduct,” says Maine.  “The State of Maine has every right to take such steps.  To the extent that plaintiffs seek to require the State to enact laws to further the policies underlying the FDCA, plaintiffs run afoul of the Tenth Amendment.”  Under the Tenth Amendment, powers not granted to the federal government by the Constitution, nor prohibited to the States, are reserved to the States or the people.  “Maine is free to choose not to regulate the conduct of pharmacies located in other countries – even if those pharmacies may engage in conduct that violates the FDCA.  There is no constitutional principle that requires that a state regulate pharmacies (or any other industry),” continues Maine.

Moving on to the Foreign Commerce Clause, Defendants say that Plaintiffs’ theories are meritless.  “The foreign Commerce Clause is concerned with state laws that discriminate against foreign commerce or that excessively interfere with foreign affairs. . . .  [P]laintiffs filed this lawsuit because they are upset that the 2013 Amendment allegedly ‘authorizes’ foreign commerce at the expense of in-state commerce.  Even assuming that were true, however, the 2013 Amendment does not violate the foreign Commerce Clause” (citation omitted). 

But these arguments all assume that Plaintiffs have standing to bring the lawsuit in the first place.  They don’t, says Maine: 

This suit should be dismissed because no plaintiff has standing to assert violations of these constitutional provisions.  The 2013 Amendment, which restricts the reach of the Maine Pharmacy Act, does not directly affect plaintiffs.  No plaintiff is a retail pharmacy located outside the United States, and no plaintiff alleges that it plans to provide or facilitate the export of prescription drugs into Maine from a pharmacy located outside the United States.  In short, no plaintiff alleges that it has engaged or plans to engage in conduct covered by the 2013 Amendment.  Plaintiffs seek to enjoin the enforcement of an amendment that does not apply to them.

Moreover, plaintiffs purportedly seek to vindicate the interests of third persons – (A) Maine residents who may decide to purchase less expensive prescription drugs for their personal use from licensed pharmacies located in such places as Canada or the United Kingdom, and (B) pharmacies located in countries other than Canada, the United Kingdom, Australia, or New Zealand.  Plaintiffs’ own alleged injuries from the 2013 Amendment are indirect, remote, and speculative.

Plaintiff’s have requested that Oral Argument on the various motions in the case be scheduled for the week of November 4, 2013.  The court has not yet set a hearing date. 

By Jay W. Cormier –

Notwithstanding the government shutdown, on Tuesday, October 1st, FDA’s Center for Devices and Radiological Health (“CDRH”) issued a final guidance regarding filing for an investigational device exemption (“IDE”) for medical device early feasibility studies.  At the heart of the guidance is that an IDE application for an early feasibility study may be based on less nonclinical data than would be expected for a traditional feasibility or pivotal study.

For purposes of the guidance document, FDA defines an “early feasibility study” as:

a limited clinical investigation of a device early in development, typically before the device design has been finalized, for a specific indication (e.g., innovative device for a new or established intended use, marketed device for a novel clinical application).  It may be used to evaluate the device design concept with respect to initial clinical safety and device functionality in a small number of subjects (generally fewer than 10 initial subjects) when this information cannot practically be provided through additional nonclinical assessments or appropriate nonclinical tests are unavailable.  Information obtained from an early feasibility study may guide device modifications.  An early feasibility study does not necessarily involve the first clinical use of a device.

It is important for our readers to note that the guidance only applies to early feasibility studies for significant risk devices, as defined in 21 C.F.R. § 812.3(m). 

The guidance document discusses how to report prior investigations, establishing the investigational plan for the device, study changes, and design controls for these devices that are defined to be subject to significant changes before final designs have been established.  The guidance document details, with at times extreme specificity, the particular content and format the CDRH expects for these IDE applications.  For example, when discussing prior investigations using the device, FDA asks that sponsors submit such information in a device evaluation table consisting of nine specific columns that each contains pre-specified types of information. 

The upside for sponsors is that CDRH acknowledges that although the basic principles of an IDE apply to all device clinical studies, in these very early studies a smaller amount of supporting data is expected, and data gaps are not necessarily deal breakers for the IDE application.  Additionally, CDRH will be more flexible with how it approaches device and protocol changes during the studies.  Because of the nature of an early feasibility study, CDRH will also allow 5-day notification of five categories of changes that would otherwise not be permitted in a pivotal study.

CDRH notes that, when submitting an IDE for an early feasibility study, sponsors should be able to answer the following six questions with supporting information:

1. What is the clinical condition to be treated or assessed by the device?
2. What is the standard of care for the clinical condition and expected clinical outcomes associated with the standard of care?
3. What are the anticipated benefits associated with use of the study device?
4. Is the information included in the Report of Prior Investigations (Section 6 of the guidance) adequate to support initiation of the study?
5. Does the Investigational Plan include a thorough risk analysis, sufficient risk mitigation strategies, adequate human subject protection measures, and an appropriate clinical study protocol (see Section 7 of the guidance)?
6. Are the potential risks associated with the device use likely to be outweighed by the anticipated benefits of the early feasibility study, that is, is initiation of the clinical study justified based on the clinical need for the device, Report of Prior Investigations and Investigational Plan?

Because there will be less supportive data regarding the benefit-risk calculus, CDRH will, not unexpectedly, take a closer look at the various mechanisms available to mitigate potential risks associated with the device.  These additional risk mitigation strategies may include: more stringent criteria for study site and investigator selection, limiting the size of the study, more timely reporting of serious adverse events, and increased patient follow-up assessments.

Due to the flexibility given to sponsors of IDEs for early feasibility studies in significant risk devices, and because the specific expectations from CDRH will differ depending on the particulars of the study device, CDRH strongly recommends that sponsors consult with them prior to submitting the IDE application via the pre-submission process.  Although the guidance document provides a lot of detail and direction to sponsors, we agree that such pre-submission meetings should be helpful in avoiding unnecessary delays in obtaining IDE approval for these important device studies.

By Kurt R. Karst –      

We’re now entering the second week of the shutdown of the federal government (or “the lapse period” as some have called it), and there does not appear to be an end in sight.  In fact, the environment in Washington, D.C. has been described as “toxic.”  On the FDA front, confusion (both in and out of the Agency) seems to have been the state of affairs for several days last week.  What’s on and what’s off for FDA has been an ongoing topic of discussion since before the shutdown and after FDA issued an initial statement on affected activities (see our previous post here).  

Meanwhile, on Capitol Hill, a bill – H.J. Res. 77, Food and Drug Administration Continuing Appropriations Resolution, 2014 – cleared the House Rules Committee last week that would provide continued funding for FDA under Fiscal Year 2013 levels through December 15th, thereby effectively ending the partial shutdown of FDA (for the time being).  (A score of the bill by the Congressional Budget Office is available here.)  Although the House of Representatives passed the bill by a 235-162 vote Monday evening, the prospects of that bill, along with other bills providing appropriations for targeted government activities, getting past the President’s desk, are slim to none.  In a Statement of Administration Policy, the Office of Management and Budget indicated that “[i]f the President were presented with . . . H.J. Res. 77 [and other other similar resolutions], he would veto the bills.”

Last Friday, the Alliance for a Stronger FDA sent out a helpful list of FDA activities anticipated to be affected by the shutdown.  The list is from a posting on FDA’s website that was taken down later in the day (a copy of the original FDA posting is available here).  On October 7th, FDA reposted an updated version of the list, which we provide below for posterity (because you never know when the next shutdown might occur).  Following FDA's list are some additional notes based on our experience.

Medical Product Activities During the Federal Government Shutdown

This document summarizes the anticipated scope of FDA’s activities beginning on October 1, 2013, and continuing until the date of enactment of an FY 2014 appropriation or Continuing Resolution for FDA (the “lapse period”). Please note that FDA’s anticipated activities are subject to resource constraints on the Agency due to the lapse in appropriations and may change in the event of a protracted lapse period.
 
Overview

• During the lapse period, FDA activities related to medical products generally will be limited to the following:
  • Excepted work involving the safety of human life or the protection of property, including Criminal law enforcement work; and
  • Activities funded by carryover user fee balances, including user fee balances under the Prescription Drug User Fee Act (PDUFA), Generic Drug User Fee Amendments (GDUFA), and the Medical Device User Fee Amendments (MDUFA).
• Carryover user fee balances will be spent on activities for which the fees are authorized under PDUFA, GDUFA, or MDUFA, as applicable.
• FDA will not have legal authority to accept user fees assessed for FY 2014 until an FY 2014 appropriation or Continuing Resolution for FDA is enacted.  This means that FDA will not be able to accept any regulatory submissions for FY 2014 that require a fee payment and that are submitted during the lapse period.
• We do not anticipate that the lapse in appropriations will affect our routine product review process for submissions within the scope of the PDUFA or GDUFA programs, provided that applicable fees were paid before October 1, 2013. We cannot predict whether we will experience delays in these programs in the event of a protracted lapse in appropriations.
• Due to resource constraints, certain review activities for products within the scope of the MDUFA program may be suspended during the lapse period.
• Generally, scheduled advisory committee meetings regarding the approval of, or postmarketing safety issues regarding, products within the scope of the PDUFA, GDUFA, or MDUFA programs may go forward during the lapse period, subject to constraints on resources and travel. Other advisory committee meetings that can be conducted with carryover user fee balances will be handled on a case-by-case basis.

PDUFA

• During the lapse period, FDA will not accept PDUFA applications or supplements that require payment of a fee (e.g., New Drug Applications (NDAs) or certain Biologics License Applications (BLAs)), unless the FY 2014 fee was paid prior to October 1, 2013.  FDA expects to continue to review PDUFA applications and supplements for which all applicable user fees were received prior to October 1. 
  • For example, for an application or supplement that requires a fee, if the FY 2014 fee was received on September 30, 2013, FDA expects to review the application, even if the application or supplement itself is submitted during the lapse period.
  • However, if an application or supplement was received on September 30, 2013 and the fee was received on October 1, then FDA will not review the submission, because it cannot accept the fee.
• During the lapse period, FDA will accept new regulatory submissions for which no fee is required, if the product is within the scope of the PDUFA program.  These types of submissions include, for example:
  • Investigational new drugs applications (INDs)
  • Annual reports
  • Supplements to NDAs and BLAs for which clinical data with respect to safety or effectiveness are not required for approval (this includes most manufacturing and labeling supplements)
  • NDAs or BLAs that only have orphan designated indications, or a supplement for an orphan designated indication
  • Submissions that fall within the exemption for previously filed applications or supplements
  • Applications for which FDA has waived the application fee (e.g., small business waiver)
  • General correspondence
• Sponsors who have not yet paid PDUFA product or establishment fees for FY 2014 should not remit payment during the lapse period, because FDA cannot accept the fees.  Sponsors will not be in arrears for FY 2014 product or establishment fees during the lapse period.  The due date for these fees will be the first business day after enactment of an appropriation for FY 2014 or a Continuing Resolution for FDA.

GDUFA

• During the lapse period, FDA will not accept generic drug submissions that require payment of a fee (e.g., Abbreviated New Drug Applications (ANDAs), prior approval supplements to approved ANDAs).  FDA expects to continue reviewing GDUFA applications and supplements that were submitted on or before September 30, provided that all applicable fees are paid within 20 calendar days of the due date.  (FDA can continue to receive FY 2013 fees, but not FY 2014 fees, during the lapse period).
• During the lapse period, FDA will accept generic drug submissions for which no fee is required, if the product is within the scope of the GDUFA program.  These types of submissions include, for example:
  • Changes Being Effected (CBE) supplements
  • Amendments
  • Annual reports
  • Applications for positron emission tomography drugs
  • General correspondence
• Sponsors who have not yet paid GDUFA facility fees for FY 2014 should not remit payment during the lapse period because FDA cannot accept the fees.  Sponsors will not be in arrears for FY 2014 GDUFA facility fees during the lapse period.  The due date for the facility fee is the first business day after enactment of an appropriation for FY 2014 or a Continuing Resolution for FDA.
• During the lapse period, FDA will accept Drug Master Files (DMFs), including Type II Active Pharmaceutical Ingredient (API) DMFs, intended to be referenced in generic drug applications.
• FDA will not conduct initial completeness assessments on Type II API DMFs for which the fee has not been paid and these new DMFs will not be placed on the Available for Reference List.
  • If a generic drug application references, for the first time after October 1, 2013, a Type II API DMF for which the fee has not been paid, then FDA will notify the applicant that the fee must be paid within 20 calendar days.  If the fee is not paid within 20 calendar days of that notice, FDA will not receive the application.  At this time, FDA has not determined what approach it will take if the 20 calendar day period expires during the lapse period.
• Type II API DMF fees should not be submitted during the lapse period because FDA cannot accept the fees.  Fees that are due during the lapse period may be paid as soon as the lapse period ends.

BsUFA

• FDA does not expect to have access to BsUFA funding during the lapse period.  Accordingly, FDA does not expect to perform any activities with respect to biosimilars, except for emergency work involving the safety of human life or the protection of property.
• FDA will suspend review of any pending regulatory submissions (e.g., INDs, IND amendments, biosimilar initial advisory meeting and Biosimilar Product Development (BPD) meeting requests), unless the submission is:
  • An emergency IND; or
  • An IND amendment that relates to the safety of human subjects (e.g., an IND safety report).
• The 30-day review clock for any pending, non-emergency BsUFA INDs will be suspended during the lapse period.  The clock will resume when the lapse period is over.
• If a sponsor sends FDA a new regulatory submission for a biosimilar during the lapse period, FDA will not consider the submission to have been received by the agency during the lapse period. The only new BsUFA submissions that FDA will consider "received" (and proceed to review) during the lapse period are:
  • New emergency INDs; and New IND amendments that relate to the safety of human subjects (during the lapse period, FDA will screen incoming IND amendments to determine if they are in this category).
• For non-emergency BsUFA INDs submitted during the lapse period, the 30-day review clock will not start until the lapse period is over.

CDER’s Non-PDUFA, Non-GDUFA Drugs

• Certain drugs regulated by CDER are not within the scope of the PDUFA program; accordingly, PDUFA carryover funding is not available to carry out activities with respect to these products.  These drugs include:
  • Over the Counter (OTC) drugs not associated with an NDA, ANDA or supplement (e.g., OTC monograph drugs);
  • Large volume parenteral drug products approved before September 1, 1992; and
  • Drugs that are not for commercial distribution and are sponsored by State or Federal government entities.
• During the lapse period, FDA will not perform any activities with respect to these products except for emergency work involving the safety of human life or the protection of property.  FDA will suspend review of any pending regulatory submissions (e.g., NDAs, ANDA, BLAs, and supplements).

CBER’s Non-PDUFA, Non-MDUFA Biologics

• Certain biological drug products regulated by CBER are not within the scope of PDUFA.  These include whole blood, blood components for transfusion, and allergenic extract products.  Accordingly, PDUFA carryover funding is not available to carry out activities with respect to these products.  During the lapse period, FDA will not perform any activities with respect to these products except for emergency work involving the safety of human life or the protection of property.
• FDA will suspend review of any pending regulatory submissions (e.g., INDs, IND amendments, NDAs, BLAs, supplements), unless the submission is:
  • An emergency IND; or
  • An IND amendment that relates to the safety of human subjects (e.g., an IND safety report).
• The 30-day review clock for any pending, non-emergency IND will be suspended during the lapse period.  The clock will resume when the lapse period is over.
• If a sponsor sends FDA a new IND or IND amendment during the lapse period, FDA will not consider it to have been received by the agency during the lapse period.  The only new INDs and IND amendments for these products that FDA will consider "received" (and proceed to review) during the lapse period are:
  • New emergency INDs; and
  • New IND amendments that relate to the safety of human subjects (during the lapse period, FDA will screen incoming IND amendments to determine if they are in this category).
• If a sponsor sends FDA a non-emergency IND during the lapse period, the 30-day review clock will not start until the lapse period is over.

MDUFA Products Regulated by CDRH and CBER

• FDA expects to continue reviewing regulatory submissions received prior to October 1, 2013.  However, the Agency may suspend work on certain submission types during the lapse period due to resource constraints.
• FDA will not accept new regulatory submissions that require fee payment.  These include:
  • Premarket Approvals (PMA)s;
  • Product Development Protocols (PDPs);
  • Premarket Reports (PMRs);
  • original BLAs and BLA efficacy supplements for medical devices reviewed by CBER;
  • some PMA and PDP supplements (e.g., panel-track, 180-day, real-time, 30-day notice);
  • 510(k)s;
  • 513(g)s;
  • annual reports for PMAs, PDPs, and PMRs; and
  • registration information submitted under section 510 by a device establishment subject to a registration fee.
• FDA can accept and review new regulatory submissions for which no fee is required.  However, the Agency may suspend work on certain submission types during the lapse period due to resource constraints.  Non-fee paying submissions include, for example:
  • Humanitarian Device Exemptions (HDEs) (originals, supplements and reports)
  • Investigational Device Exemptions (IDEs) (originals, supplements and reports)
  • De novos
  • Pre-submissions
  • Special CBE supplements
  • Site change supplements
  • Trade name change supplements
  • Post-Approval Study (PAS) labeling or protocol change supplements
  • PAS reports
  • Submissions for pediatric only indications
  • The first PMA submitted by a small business with gross receipts or sales of $30 million or less

In addition to the above activities, we at the FDA Law Blog have become aware of the following:

• FDA’s Dockets Management Branch remains closed.  Although comments on existing dockets can be submitted via www.regulations.gov, and generally appear on a daily website update, original submissions submitted to the Dockets Management Branch are not being accepted.  The regulations.gov website is currently carrying the following note: “Due to the government shutdown, information on this website may not be up to date. You can still submit comments to agencies using Regulations.gov during the shutdown.”
• Insofar as pending citizen petitions relate to user fee-funded activities, FDA continues to process petition responses and to send responses once complete.  Those responses, however, cannot be uploaded to the regulations.gov docketing system.
• FDA’s electronic Orange Book is being updated with information on new patent listings and generic drug product data.  These updates generally occur daily and are expected to continue during the shutdown.
• FDA’s Office of Orphan Products Development is operating with a reduced staff, but continues to process orphan drug designation requests. 

We also note that the shutdown, if it continues for an extended period, could result in several interesting scenarios under the Hatch-Waxman Amendments vis-à-vis ANDAs and 180-day exclusivity.  As noted above, during the shutdown, FDA will not accept new ANDAs that require payment of a user fee.  That means upcoming so-called “NCE-1” dates could be missed.  Because it is unknown when, exactly, the shutdown will end, and therefore, when an original ANDA can be submitted to and accepted by FDA with a Paragraph IV certification qualifying a company as a “first applicant” eligible for 180-day exclusivity, some generic drug sponsors might consider submitting applications on a serial basis to FDA until an application is accepted.  Following such a strategy, if FDA were to accept it, could increase the likelihood of securing 180-day exclusivity eligibility. 

In other cases, however, sponsors of new, original ANDAs may lose out on 180-day exclusivity eligibility.  Consider, for example, the following scenario, where no patent information is yet listed in the Orange Book for the Reference Listed Drug (“RLD”):  ANDA Sponsor A has a pending ANDA submitted to FDA before the shutdown.  ANDA Sponsor B did not submit its ANDA before the shutdown but had planned to submit it to FDA this week.  If information on a new patent is listed in the Orange Book for the RLD today, then ANDA Sponsor A could amend its application to contain a Paragraph IV certification to that patent and become eligible for 180-day exclusivity.  ANDA Sponsor B would not be permitted to submit its ANDA because of the shutdown, and thus may lose out on eligibility for 180-day exclusivity.  A similar story could play out where there is patent information listed in the Orange Book for an RLD, but no ANDA sponsor has yet submitted a Paragraph IV certification.  ANDA Sponsor A could certify to the patent as an amendment to a pending application, whereas ANDA Sponsor B could not submit an original ANDA.  

By Jeffrey K. Shapiro –

There has been a lot of talk about hostage taking during the recent federal government budget impasse.  But Congress is not the only one taking hostages in Washington.  The recent draft Medical Device Reporting (MDR) guidance reminds us (pp. 4-5) about a long forgotten hostage moldering in FDA’s statutory implementation dungeon. 

To be specific, Section 227 of the Food and Drug Administration Amendments Act of 2007 (FDAAA) amended Section 519 of the Federal Food, Drug, and Cosmetic Act (FDCA) to ease the burden of malfunction MDR reporting by requiring only summary quarterly reporting for most class I and II devices.   

Congress directed that revised malfunction MDR reporting shall be “in accordance with criteria established by [FDA] for reports … which criteria shall require the reports to be in summary form and made on a quarterly basis.”  519(a)(1)(B)(ii).  

This change does not apply to class III devices, class II devices that are permanently implantable, life supporting, or life sustaining, and such other devices as FDA may designate in a “notice published in the Federal Register or letter to the person who is the manufacturer or importer of the device.”  Section 519(a)(1)(B)(i)(III).

Unfortunately, a full six years has passed, and nothing has happened.  In 2011, FDA issued a notice reminding industry that malfunction MDR reporting should continue as usual.  76 FR 12743.  In 2013, FDA has now reminded everyone again in the draft MDR guidance that nothing has changed.

Interestingly, the FDAAA Implementation Chart on FDA’s website does not even show the malfunction MDR reporting change as an item intended for implementation.  There should be a row for Section 227, but the chart skips from Section 226 to 228, with not a word about implementation of Section 227.  

Is this long delay really necessary?  According to the federal register notice, FDA is delaying implementation of the quarterly MDR reporting change until:

1. The agency publishes a federal register notice listing the additional class I and II devices not eligible for quarterly reporting pursuant to Section 519(a)(1)(B)(i)(III) of the FDCA; and
2. The agency conducts a rulemaking to establish the criteria for summary quarterly reporting for most class I and II devices pursuant to Section 519(a)(1)(B)(ii) of the FDCA.

Thus, implementation of the change is being held hostage to the agency’s own inaction.

As to the first item, Section 519(a)(1)(B)(i)(III) was intended to give FDA the regulatory flexibility to designate additional devices ineligible for quarterly reporting.  Nothing in the statute indicates that FDA’s designation of a complete list of such devices is a threshold requirement for implementation of quarterly reporting.  FDA’s failure to issue this list is not a valid basis for holding up implementation of quarterly reporting for the majority of class I and II devices.

As to the second item, keep in mind that even when FDA finally initiates a rulemaking, it typically takes several years until a final rule is issued.  With no rulemaking even begun, FDA appears on track to exceed 10 years in implementing this simple statutory requirement.  This delay is unacceptable.

Furthermore, the statute merely says that quarterly reporting shall be under criteria to be “established” by FDA.  The word “established” does not require a rulemaking, but could be achieved by a guidance.  Given the six year delay, at this point, it would be prudent for FDA to issue a guidance.  Even that process would probably require one to two years.  A benefit to issuing a guidance would be to allow FDA to gain some experience with widespread quarterly reporting before codifying  the requirements in a regulation.  It would also allow the agency to actually implement quarterly reporting inside of a decade.

By the way, Section 226 of FDAAA amended Section 519 to require FDA to establish a system of unique device identifiers.  This provision directs FDA to “promulgate regulations establishing a unique device identification system.”  Thus, Congress knew how to direct FDA to initiate a rulemaking when one was desired.  The absence of a similar requirement to “promulgate regulations” in Section 227 bolsters the interpretation that Congress did not intend for FDA to conduct a rulemaking to establish criteria for quarterly summary MDR reporting.

Congress has made the judgment that quarterly malfunction MDR reporting is sufficient to protect the public health for most class I and II devices.  Six years later, it is long past time for FDA to let this hostage go.

Hyman, Phelps & McNamara, P.C. is pleased to announce that Kermit L. Jones, J.D., M.D. has joined the firm as an Associate.  Prior to joining the firm, Dr. Jones served as a 2012-2013 White House Fellow assigned to the Secretary of Health and Human Services, the Honorable Kathleen Sebelius.  In this role, Dr. Jones briefed the Secretary on issues of importance to senior leadership at the Department of Health and Human Services, such as the arguments and positions in the Supreme Court case, Assoc. for Molecular Pathology v. Myriad Genetics, Inc. (133 S. Ct. 2107 (2013)).  He helped lead the Secretary’s efforts to engage states, licensing bodies and federal government agencies working to secure private sector licensing for military medical personnel. 

Dr. Jones also assisted stakeholders at the NIH, FDA, and within the non-profit and pharmaceutical sectors in evaluating the effectiveness of several recent initiatives that increase private-public collaboration in the rescue and repurposing of therapeutics.   Prior to the White House Fellowship, Dr. Kermit Jones served as a Navy Flight Surgeon with the Marine helicopter casualty evacuation squadron, the HMM-364 Purple Foxes, in Al Habbaniyah, Iraq.  While in Iraq, he provided medical care for U.S. service members and Iraqi citizens. 

Dr. Jones is a graduate of the Columbia University School of International and Public Affairs (2012), and both the Duke University School of Law (2005) and School of Medicine (2005). While at Duke, Dr. Jones was a Mordecai Scholar and spent semesters abroad at the London School of Hygiene and Tropical Medicine and the Christian Medical College and Hospital, in India.  He is conversational in Hindi and Urdu and admitted to practice law in Pennsylvania and medicine in New York.  His application to practice law in the District of Columbia is pending.

By Riëtte van Laack & Ricardo Carvajal –

On September 19, 2013, Cargill entered into a $5 million settlement agreement to dispose of a class action lawsuit regarding its advertising for Truvia® products as “natural.”  Plaintiffs charged that the products are not natural because they contain ingredients that are “‘highly processed,’ synthetic and/or derived from GMOs,” and that the descriptions of the products and their ingredients, namely stevia leaf extract and erythritol, are inaccurate or misleading.  In the agreement, Cargill denies that its marketing, labeling, and advertising violate any legal requirement.

The agreement is intended to address all current and future claims concerning the marketing of the products as natural (for purposes of the settlement, Cargill recognized a nationwide class of consumers).  The agreement consists of four components: 1) the $5 million settlement to cover attorney’s costs (1.59 million) and consumer refunds, 2) an administration fund of 300,000 dollars, 3) modifications to claims on packaging and labels, and 4) modifications to the website.

Interestingly, the parties agreed that Cargill can continue the use of the tagline “Nature’s Calorie-Free Sweetener” on labels, as long as the tagline is linked to a statement referring consumers to FAQs on the website where they can obtain more detailed information on the product’s manufacture (more about that in a moment).  Cargill can also continue to describe erythritol as a “natural sweetener” on labels, but instead of stating that it is produced by a “natural process,” Cargill will state that it is produced by a “fermentation process.”

The FAQs on the website address the processing of stevia leaf in some detail.  In essence, the leaves are harvested, dried, and steeped in hot water, and the extract is then filtered, purified, and dried.  The FAQs also address the production of erythritol.  Notwithstanding the label changes described above, the FAQ agreed to for erythritol states that it is “produced through a natural fermentation process” – a reaffirmation of sorts that fermentation is a natural process.  The FAQs also include the following explanatory text on processing aids:  

Like in other finished foods, including sugar, processing aids suitable for use in food are used in the production of both stevia leaf extract and erythritol. These aids help either extract, isolate or purify components of the ingredients. Under the U.S. Food and Drug Administration regulations, our processing aids are not subject to labeling requirements because they have no technical or functional effect in the finished food and because they are either not present or are present at only insignificant levels in the finished product.

The agreement disclaims any intent to address the merits of the claims, but could still have an impact.  It would not be surprising to see a trend toward greater disclosure with respect to processing methods, especially given the continuing lack of clarity regarding the meaning and scope of “natural.”

The preliminary settlement hearing, in which the Court will consider whether it should approve the proposed settlement, is scheduled for October 23, 2013.

By Jay Cormier & Alan Kirschenbaum –

The Patient Protection and Affordable Care Act made extensive changes to the 340B drug discount program, which we have previously described.  Among other things, the statute expanded the categories of covered entities entitled to purchase drugs at the statutory ceiling price.  It also provided an exemption from the ceiling price for designated orphan drugs when purchased by certain of these covered entities (the so-called “orphan drug exclusion”). 

For readers not familiar with the 340B Program, section 340B of the Public Health Services Act requires drug manufacturers, as a condition of Medicaid and Medicare Part B coverage of their product, to sell outpatient drugs to “covered entities” at a price no greater than a statutory ceiling price.  Congress’ intent was to provide outpatient prescription drug assistance to vulnerable uninsured patients.  The list of covered entities, as expanded by the Affordable Care Act, includes certain federally subsidized clinics and certain safety net hospitals, including disproportionate share hospitals, children’s hospitals, certain free-standing cancer hospitals, critical access hospitals, rural referral centers, and sole community hospitals. 

The orphan drug exclusion in the Affordable Care Act provides that a drug eligible for 340B pricing “shall not include a drug designated by the Secretary under [section 526 of the Federal Food, Drug, and Cosmetic Act] for a rare disease or condition.”  42 U.S.C. § 256b(e).  This exception applies to cancer hospitals, critical access hospitals, rural referral centers, and sole community hospitals. 

In late July, the Health Resources and Services Administration ("HRSA") issued a final implementing rule, codified at 42 C.F.R. § 10.21, providing that the orphan drug exclusion applies only to orphan drugs that are “transferred, prescribed, sold, or otherwise used for the rare condition or disease for which that orphan drug was designated.”  76 Fed. Reg. 44,016 (Jul. 23, 2013) (see our previous post regarding the proposed rule).

As threatened in their comments on the proposed rule, the Pharmaceutical Research and Manufacturers of America ("PhRMA") has filed a complaint and application for a preliminary injunction in the U.S. District Court for the District of Columbia, with supporting memorandum, claiming that HRSA’s orphan drug rule violates the Administrative Procedures Act ("APA").  Specifically, PhRMA alleges that (1) HRSA did not have the authority to promulgate the final rule, and (2), even if HRSA did have such authority, the final rule conflicts with the plain statutory language of the Affordable Care Act, which, according to PhRMA, exempts all uses of designated orphan drugs from the ceiling price, not just those used for the orphan indication.  PhRMA is seeking a declaration that HRSA violated the APA, a preliminary injunction, and an order invalidating and enjoining the enforcement of the final rule.

Will PhRMA prevail on the merits of this case?  That is the question.  We will be following this case during the coming months and will provide you with updates.

The case is Pharmaceutical Research and Manufacturers of America v. US Department of Health and Human Services, et al., Civil Action No. 1:13-cv-01501 (D.D.C.).

By John R. Fleder –

On September 26, 2013, the United States Attorney for the District of Colorado announced that he had filed a six count criminal Information against Eric and Ryan Jensen.  The government alleges that the defendants violated the FDC Act by introducing adulterated cantaloupes into interstate commerce.  The government also alleges that the cantaloupes bore Listeria monocytogenes and 33 people died.  It is quite curious (we are being charitable here) that the government’s press release alleges that 147 people were hospitalized as a result of sales of the cantaloupes, but those allegations appear nowhere in the criminal Information!

The prosecution is a misdemeanor case, and does not allege any criminal “intent” on the part of the defendants.  There is no public indication that the defendants are prepared to plead guilty and/or cooperate with the government against others.  This fact pattern strongly suggests that this case is an old style Park criminal prosecution where the government files criminal charges under the FDC Act against company officials, without allegations that the defendants intended to violate the law and without a plea bargain that a misdemeanor prosecution is a settlement of more serious felony charges.  Our speculation is that a thorough government investigation here failed to turn up evidence that the defendants violated the FDC Act “with the intent to defraud or mislead,” which would be necessary to commence felony charges under the FDC Act.  In fact, the government used a grand jury to investigate this case, even though it can file a criminal Information involving misdemeanor charges without using a grand jury.

The second interesting twist in this case is that arrest warrants were issued for the defendants.  Arresting defendants charged only with misdemeanors was certainly not the norm with regard to old style Park prosecutions.  Typically, the defendants were simply notified of the charges and came to court voluntarily to enter their guilty or not guilty pleas.

By Kurt R. Karst –   

It was not a question of whether, but when FDA would issue its first Warning Letter to a facility covered by the Generic Drug User Fee Amendments of 2012 (“GDUFA”) that failed to self-identify its facility and pay applicable user fees.  That day has come.  In a September 17, 2013 Warning Letter posted on FDA’s website earlier this week, the Agency says that Feldkirchen-Westerham, Germany-based C.P.M. Contract Pharma GMBH & Co. KG (“CPM Contract Pharma”) failed to self-identify its Finished Dosage Form (“FDF”) manufacturing facility and pay applicable user fees.

GDUFA establishes four types of user fees that together generate funding for FDA each fiscal year.  One of the fees – the annual facility fee –  must be paid by both FDF and Active Pharmaceutical Ingredient (“API”) manufacturers.  Facility fees are the most significant of all GDUFA user fees, and FDF facility fees in particular (see our previous post here).  The API and FDF facility fees are based on data submitted by generic drug facilities through the so-called self-identification process (see here and here).  In a draft guidance document titled “Self-Identification of Generic Drug Facilities, Sites, and Organizations,” and in an accompanying Q&A, FDA lays out the so-called “self-identification process.”  As explained in the draft guidance:

Self-identification is required for two purposes.  First, it is necessary to determine the universe of facilities required to pay user fees.  Second, self-identification is a central component of an effort to promote global supply chain transparency.  The information provided through self-identification will enable quick, accurate, and reliable surveillance of generic drugs and facilitate inspections and compliance.

Facilities that fail to self-identify and pay applicable user fees are subject to some pretty significant penalties:

1. Identification of the facility on a publicly available arrears list, such that no new applications from the person that is responsible for paying such fee, or any affiliate of that person, will be received by FDA;
2. New generic drug submissions to FDA that reference a non-compliant facility will not be received unless the fee is timely paid; and
3. All FDFs or APIs manufactured in such a facility or containing an ingredient manufactured in such a facility are deemed misbranded under FDC Act § 502(aa).

These pentalties apply until the facility fee is paid or until the facility is removed from all generic drug submissions that refer to the facility.  The misbranding penalty is particularly harsh.  It was a point of contention during GDUFA negotiations, but we understand FDA demanded that it be included in the law to give it some teeth.

FDA’s Warning Letter to CPM Contract Pharma pulls out all the stops.  According to FDA:

The above-referenced facility is a drug manufacturing facility as defined under GDUFA.  It was identified as a finished dosage form manufacturer in [REDACTED] on the date for self-identification for fiscal year 2013 and fiscal year 2014 and on the due date for facility fees for fiscal year 2013, but has not self-identified or paid facility fees as required by that law.  Therefore, all finished dosage forms of drugs or APIs, as well as drug containing an API, manufactured at the facility are misbranded.
 
Your facility has been placed on a publicly available arrears list.  Failure to correct these violations promptly may result in regulatory action, including but not limited to seizure or injunction without further notice.  Your facility may also be placed on import alert such that any drug the facility manufactures will be refused admission into the United States.

FDA’s Warning Letter is the latest in a string of events as the Agency continues to ramp up GDUFA implementation.  Not everything FDA has done has been welcomed by the generic drug industry (see our previous post here); however, other aspects are improvements vis-à-vis the pre-GDUFA era.  For example, earlier this week, FDA published a detailed draft guidance, titled “ANDA Submissions – Refuse-to-Receive Standards,” providing helpful insight on the circumstances under which the Agency may refuse to accept an ANDA submission, including failure to pay applicable GDUFA user fees.