By Kurt R. Karst –      

“… — …” – That’s the international Morse code distress signal commonly shown as SOS.  SOS is also in the title of the acronymized “FDA SOS Act,” or the “FDA Safety Over Sequestration Act,” which a bipartisan group of members of the House of Representatives consisting of Reps. Anna G. Eshoo (D-CA), Leonard Lance (R-NJ), Doris Matsui (D-CA), and Mike Rogers (R-MI) introduced on July 18th in an effort to spare FDA from having the funding the Agency gets through industry-paid user fees from being further sequestered.  “Sequestration” is a term we have become all too familiar with in the U.S.  It refers to automatic spending cuts to the U.S. federal budget that went into effect earlier this year as a result of the Budget Control Act of 2011 and the American Taxpayer Relief Act of 2012.

Even before sequestration went into effect, there was concern about how user fees paid to FDA would be handled (see here).  Once it became apparent that at least some of the user fee funding would not be exempt from sequestration (about $85 million in Fiscal Year 2013), there was an immediate push by many stakeholders, FDA, and some Members of Congress to remedy the situation by excluding user fees.  But, as with so many things in Washington, D.C., user fees got caught up in a larger political battle.  (The Alliance for a Stronger FDA has been closely tracking the situation for many months now.) 

In recent weeks, however, the effort to exempt FDA user fee funding from sequestration has picked up steam.  For example, reports accompanying both the House (H.R. 2410) and Senate (S. 1244) FDA Appropriation Bills were highly critical of sequestering user fees.  The House Report (page 56) includes a passage stating:

The Committee is concerned about subjecting FDA user fees to sequestration as these fees are not normal tax revenue.  It is important to maintain the integrity and industry support for user fee programs.  The Committee encourages FDA to reevaluate its calculations of sequestration in regard to user fees.

Similarly, the Senate Report (page 84) states:

The Committee is aware that FDA user fee programs have been subjected to sequester, and is concerned because these user fees are not normal tax revenue.  The Committee believes that it is important to maintain industry support for user fee programs, and for FDA to continue to meet negotiated performance standards.  Therefore, the Committee encourages the Administration to reconsider the inclusion of FDA user fees when calculating sequester.

But these are only statements of concern.  They have no real effect.  What was needed was a stand-alone bill specifically addressing FDA user fees and sequestration.  And that’s what the FDA SOS Act does in just a few passages.  A fact sheet released along with the text of the bill in a press release nicely outlines the issue and solution as follows:

The Problem:

Industry-financed user fees to FDA are being sequestered alongside traditional appropriated monies to the Agency.  Fees are negotiated periodically between industry and FDA and are intended for a specific purpose, such as the review and approval of a new medical therapy.  These are private monies and should not be subject to the sequester.

Why This is Important:

FDA relies on user fees to supplement congressional appropriations when approving new drugs and devices. User fees began in 1992 after industry, consumer groups, and FDA agreed it was taking far too long from time of submission to approval. The agreement negotiated between industry and FDA was required to meet two goals: faster approval times and the promise that fees would supplement, rather than replace funding that Congress appropriated to the FDA.

The Solution:

The FDA SOS Act would exempt FDA user fees from sequestration.

Of course, now the real heavy lifting has to happen.  Both the House and the Senate have to pass the bill for the President to sign into law.  If that happens, then FDA (and industry) will almost certainly say to Congress: “- …. .- -. -.- / -.– — ..-”  That’s Morse code for “thank you.”

By Joseph W. Cormier –

Last week, the Administrative Conference of the United States ("ACUS") made four recommendations to the Executive Branch and independent agencies, three of which may be of interest to readers of this blog.

Among its first recommendations this year, the ACUS discusses transparency with respect to scientific decision-making, best practices with respect to administrative records and informal rulemaking, and best practices for the use of benefit-cost analysis in rulemaking by independent agencies (including, for example, the FTC). 

Before we get to the substance of the recommendations, if the first thought in your mind when reading this post was “The Administrative Conference of what??”, you would be forgiven.  The ACUS, an oft-forgotten corner of the government, is an independent federal agency tasked with providing nonpartisan advice and recommendations for the improvement of federal agency procedures.  Although formally established by statute in 1964, the ACUS was defunded in 1995, only to be resurrected nine years later in 2004.  ACUS 2.0 made its first recommendation in 2010 (wading into the turbid waters of state law preemption), and has issued eight recommendations in each of 2011 and 2012.  Three of the first four for 2013 are discussed below.

Transparency and Scientific Decisions

From the beginning of the Obama administration (see here), the Executive Branch has placed a focus on “transparency in the preparation, identification, and use of scientific and technological information in policymaking.”  Ostensibly, such means will serve the purpose of providing “a bulwark against misuse of science for political ends.”  78 Fed. Reg. 41,357. 

The ACUS recommends that federal agencies:

1. explain in documents accompanying proposed and final decisions how a rigorous review of the scientific information underlying decisions is ensured;
2. describe their scientific review in a manner that is clear to the public;
3. to the extent permitted by law, disclose the underlying data used in the decision-making process;
4. explain decisions to initiate, stop, or reopen consideration of research or scientific debate;
5. identify research opportunities to reduce or eliminate uncertainty in future decisions;
6. give appropriate attribution to agency personnel involved in research and policy decisions;
7. encourage the publication of agency data in peer-reviewed journals and protect dissenting opinions from reprisal;
8. share best practices with other agencies;
9. attempt to eliminate obstacles to public access to agency decisions the their underlying scientific data;
10. review policies regarding disclosure of information to avoid over inclusion of information as confidential business information; and
11. require conflict-of-interest disclosures for all submitted data and information.

Administrative Records for Informal Rulemaking

With respect to its recommendations regarding the extent of records agencies should keep and maintain when engaging in informal rulemaking, the ACUS first defines a few phrases.  These provide that a document is not “considered” until an individual with substantive responsibilities reviews a document in order to evaluate its possible significance for the rulemaking unless the document is considered not germane to the rule’s subject.  The “public rulemaking docket” should include any document that the agency considered and determined was a key document for the establishment of the policy.

The ACUS supposes that the agency administrative record will take one of three forms: the Rulemaking Record; the Public Rulemaking Docket, and the records prepared for judicial review.  The Rulemaking Record would include many of the types of information one would expect: copies of proposed and final rules, comments on proposed rules, transcripts of recordings, and any other materials required by statute.  The Public Rulemaking Docket will cover similar territory, though it should include all data and information considered for the rulemaking.  As one might expect, ACUS recommends that agencies make public the information pertaining to those types of issues detailed above, but takes care to allow agencies to avoid disclosure of privileged or other information where there is a legal basis for withholding the information.

The ACUS also recommends that agencies designate custodians of the various records and that agencies work with the National Archives and Records Administration ("NARA") to ensure that records are properly kept.  Agencies should also develop their own guidance document that implements the detailed recommendations in the ACUS notice. 

Here, although the ACUS recommendations are broad in application, they are expressly limited to informal rulemaking; the ACUS states that they do not apply to formal rulemaking, adjudications, or guidance documents. 

Benefit-Cost Analyses for Independent Agency Rulemaking

Finally, ACUS provides a number of recommendations regarding the use of benefit-cost analyses.  These recommendations apply only to independent agencies, as they are exempt from the various Executive Orders requiring such analysis of pure Executive Branch agencies. 

Although the CPSC is already required to conduct such analysis by statute (15 U.S.C. § 2068(f)), other independent agencies do not have such requirements.  Of note for our readers, the FTC is one such agency. 

For these entities, ACUS recommends that agencies, among other things:

1. develop written guidance regarding the preparation of benefit-cost analyses;
2. engage in such analysis early on in the decision-making process, and revisit the analysis over time;
3. consult with other agencies, as needed;
4. make their analyses as transparent and reproducible as possible; and
5. concisely summarize the agency’s overall estimates for cost and benefit in the preamble to the final rule.

Because ACUS recommendations are simply that – recommendations – it is difficult to know which, if any, agencies are likely to follow.  Although these recommendations are not binding, when submitting comments to FDA, DEA, FTC, CPSC, or other agencies, or when submitting briefs or other pleadings to courts or to the DOJ, entities may find the ACUS documents useful if specific agencies are not following the ACUS-identified best practices and recommendations. 

Stay tuned as we continue to monitor agency actions in response to the ACUS recommendations.

By James E. Valentine* & Anne K. Walsh –

Despite Congress giving FDA new powers to regulate the integrity of the drug supply chain, the globalization of the pharmaceutical market continues to present clear challenges for the Food and Drug Administration (“FDA”).  FDA’s new authorities are outlined in Title VII of the Food and Drug Administration Safety and Innovation Act of 2012 (“FDASIA”). (A comprehensive overview of Title VII can be found in our detailed summary and analysis of FDASIA here). 

FDA held a meeting last Friday as part of the process for implementing FDASIA.  During the first portion of the meeting, FDA updated the public on the progress it has made to date.  Commissioner Hamburg and other FDA officials touted the recent release of two documents related to enforcement under Title VII:

• A proposed rule that details the procedures FDA will employ to prevent distribution or subsequent use of potentially adulterated or misbranded drugs encountered during inspections, until the Agency has had time to consider what action it should take concerning the drugs, and to initiate legal action, if appropriate.   
• A draft guidance that defines the types of actions, inaction, and circumstances that FDA considers to constitute delaying, denying, or limiting inspection, or refusing to permit entry or inspection. 

John Taylor III, Acting Deputy Commissioner for Global Regulatory Operations and Policy, explained the need for these enforcement tools in the face of the “staggering” increases in FDA-regulated shipments into U.S. ports in the recent decade. 

During the second portion of the meeting, FDA solicited input on how to implement two sections of Title VII, both of which amend Section 801 of the Federal Food, Drug, and Cosmetic Act (“FD&C Act”):

• Section 713 – FDA may now require importers to demonstrate that the drug does not violate the FD&C Act by submitting certain information, such as evidence of compliance with current Good Manufacturing Practices and a satisfactory inspection.   
• Section 714 – FDA may now require a commercial drug importer to register with the Agency and include with their registration a unique identifier for the principle place of business at the time of registration.  As part of this scheme, FDA must establish good importer practices with specific directives for importers to follow to avoid importing products in violation of the FD&C Act and the Public Health Service Act. 

The comprehensive list of questions FDA posed about these sections can be found in the meeting notice.  Following is a summary of the top, and most interesting, points of discussion.

Industry Wants FDA to Level the Global Playing Field.

Martin Van Trieste, Senior Vice President, Quality, Amgen Inc., spoke on behalf of Rx-360 Consortium, a nonprofit international supply chain organization led by volunteers from the pharmaceutical and biotech industry.  According to him, traditional pharmaceutical and biotech manufacturers and suppliers want standards for importation, registration of importers, and good importer practices (“GIPs”), that would differentiate them from the “criminals” that affect the drug supply chain.  For law-abiding industry players, companies that either intentionally or negligently supply counterfeit or adulterated drugs are undermining the industry, especially when these unsafe products are priced more competitively than legitimate products (e.g., as seen with the supply of counterfeit Avastin distributed to U.S. oncology practices a year ago).

Overall, manufacturers appreciated the risk-based framework in these sections because FDA can impose lesser requirements on “highly compliant importers” by allowing for a streamlined import process for those importers with validated compliance histories.

Excipient Manufacturers Hope to Be Exempted from Importer Regulations.

Pleading its case to FDA, David Schoneker from IPEC-Americas, the trade association for excipient manufacturers, distributors, and users, said that while excipients are “drugs” under the FD&C Act, they are different from active ingredients in important ways.  The trade group argued that, because there is already a burden on the end user of an excipient to provide oversight, putting standards on excipient manufacturers for importing under Section 713 would create a redundant regulatory scheme. 

Excipient manufacturers also commented that it is unnecessary to impose on them importer registration requirements and GIPs under Section 714 because the industry is already held to facility registration requirements, as well as current Good Manufacturing Practices and Good Distributor Practices. 

Importers Should Provide CoAs and Evidence of Compliance with USP Standards.

Multiple public stakeholders (such as the Certified Importer Program Coalition, United States Pharmacopeia Convention (“USP”), and Six Degree Counterfeit Prevention LLC) supported requiring drug importers to supply the Certificates of Analysis (“CoA”) for their products.  While most stakeholders believed the CoA would be a useful tool to determine compliance, both FDA and stakeholders shared a concern regarding their authenticity.  Many cited the 2007 global tragedy of counterfeit glycerin that resulted in poisonings and deaths (see related FDA MedWatch Safety Alert).  In that case, the CoA was falsified to attest to its purity, and the name of the manufacturer and previous owner were removed.  Reid Graves, Manager, Global Master Data Management, Pfizer, spoke on behalf of Six Degrees Counterfeit Prevention LLC, regarding the use of “a non-mathematical polymorphic encryption technology” to prevent forgery or falsification of CoAs, which would allow FDA to decrypt the CoAs and authenticate them. 

In addition, Ben Firschein, Director of Government Affairs and Policy, USP, suggested that it should be a critical requirement of Section 713 to require evidence demonstrating compliance with compendial standards.  He emphasized that many of the compounds included in the USP would allow for some import oversight for special categories of drugs, such as compounding ingredients.

Conclusion

Unfortunately, the meeting revealed no concrete answers about how to implement these FDASIA sections, especially concerning the sufficiency of evidence necessary to demonstrate compliance with the FD&C Act.  FDA continues to struggle with the variability of evidence based on level of risk posed by a specific imported product.  At the meeting, however, FDA seemed very eager for industry and other external input as it navigates these questions.  The public comment period is open for these dockets until August 12, 2013 (see here).  FDASIA requires the Agency to promulgate regulations within three years, and to provide a “reasonable period of time” for an importer of a drug to comply with good importer practices. 

The transcript and slides from the meeting should be available for review at the FDA Division of Dockets Management and http://www.regulations.gov approximately 30 days from July 12, 2013, the date of the meeting.

* Law student

By Kurt R. Karst –

Touchdown!  It was just last month that we posted on the first instance in which FDA resolved what has become known as a “180-day exclusivity punt.”  As we explained then, “180-day exclusivity punts” are instances in which a first applicant eligible for 180-day exclusivity gets ANDA approval, but FDA decides not to decide on whether or not to grant exclusivity.  FDA has issued such decisions for years now, beginning in 2006 (see our previous post here). 

Usually FDA’s punt decisions have been in the context of the failure-to-obtain-timely-tentative approval 180-day exclusivity forfeiture provision added by the 2003 Medicare Modernization Act (“MMA”) (FDC Act § 505(j)(5)(D)(i)(IV)), but there’s at least one instance where FDA used the mechanism under the failure-to-market forfeiture provision (FDC Act § 505(j)(5)(D)(i)(I)) added by the MMA (see here).  There was also one curious instance late last year in which FDA used the punt mechanism in a pre-MMA 180-day exclusivity case: the December 28, 2012 approval of Mallinckrodt Inc.’s ANDA No. 202608 for a generic version of Janssen Pharmaceuticals, Inc.’s CONCERTA (methylphenidate HCl) Extended-Release Tablets, 27 mg, 36 mg, and 54 mg.  That’s the topic of our post today. 

As we explained in a January posting, although the first ANDA containing a Paragraph IV certification for all four approved strengths of CONCERTA (18 mg, 27 mg, 36 mg, and 54 mg) was submitted to FDA post-MMA on July 19, 2005, the first ANDA containing a certification to an Orange Book-listed patent for CONCERTA was made pre-MMA.  As such, generic CONCERTA is a pre-MMA/post-MMA straddle drug governed by the pre-MMA rules on 180-day exclusivity (see here).  Under the pre-MMA version of the statute, 180-day exclusivity is patent-based, such that an ANDA applicant (or different applicants) may be eligible for 180-day exclusivity with respect to different Orange Book-listed patents covering the Reference Listed Drug (“RLD”) if the applicant submitted the first ANDA to FDA containing a Paragraph IV certification to a particular patent.  Pre-MMA 180-day exclusivity is triggered by either first commercial marketing (for all relevant patents), or by a court decision favorable to an ANDA applicant (with respect to a particular patent), whichever is earlier. 

The Orange Book lists three patents for CONCERTA: U.S. Patent Nos. 6,919,373 (“the ‘373 patent”), 6,930,129 (“the ‘129 patent”), and 8,163,798 (“the ‘798 patent”).  180-Day exclusivity with respect to the ‘373 and ‘129 patents was likely triggered and ran several years ago.  The ‘798 patent, however, is a new patent that was not listed in the Orange Book until May 18, 2012.  Mallinckrodt was the first company to certify to the patent – as an amendment to ANDA No. 202608 – making it eligible for 180-day exclusivity with respect to the patent.  Despite Mallinckrodt’s eligibility for exclusivity, FDA punted on exclusivity, saying:

Mallinckrodt may be eligible for 180 days of generic drug exclusivity . . .  The agency is not, however, making a formal determination at this time of Mallinckrodt’s eligibility for 180-day generic drug exclusivity.  It will do so only if another paragraph IV applicant becomes eligible for full approval (a) within 180 days of the earlier of the commercial marketing or court decision dates identified in section 505(j)(5)(B)(iv), or (b) at any time prior to the expiration of the ‘798 patent if neither the commercial marketing nor court decision events identified in section 505(j)(5)(B)(iv) has occurred.

It did not take us long to put two and two together and surmise the reason for FDA’s punt: The U.S. District Court for the District of Columbia’s decision in Watson Laboratories, Inc. v. Sebelius, et al., Case No. 12-1344 (ABJ) (D.D.C. Oct. 22, 2012).  In that case, which concerned pre-MMA 180-day exclusivity for generic ACTOS (pioglitazone), the district court overruled FDA’s determination that Watson was not eligible to share in 180-day exclusivity because the company was not the first (or among the first) to amend its pending ANDA to convert a patent certification to Paragraph IV.  Instead, the district court ruled that Watson was entitled to share in another applicant’s 180-day exclusivity period, because FDA’s long-standing interpretation of the FDC Act was contrary to the terms of the statute, and ordered the Agency to approve Watson’s ANDA.  FDA appealed the decision to the U.S. Court of Appeals for the District of Columbia Circuit (Docket Nos. 12-5332 & 12-5342).  Ultimately, a motion for vacatur was filed (because the expiration of 180-day exclusivity mooted the case), and the appeal was ordered dismissed in June.

The ACTOS decision could potentially be interpreted to say that what is in an amendment to an ANDA does not count for 180-day exclusivity purposes.  Rather, it is the original ANDA submission that counts.  In the case of generic CONCERTA, Mallinckrodt became eligible for 180-day exclusivity as the result of an ANDA amendment.  So, at the time FDA approved Mallinckrodt’s ANDA No. 202608, when the ACTOS case was on appeal to the D.C. Circuit, it probably seemed logical to FDA to punt on 180-day exclusivity.  But once the appeal was dismissed and the D.C. District Court was ordered to vacate its October 22, 2012 Order and Memorandum Opinion, FDA probably decided that it was safe to take make a firm decision on exclusivity. 

And that’s clearly what happened when FDA, on July 9, 2013, approved Kudco Ireland’s ANDA No. 091695 for Methylphenidate HCl Extended-Release Tablets, 18 mg, 27 mg, 36 mg, and 54 mg.  FDA granted final approval for the 18 mg and 27 mg strengths, but only tentative approval for the 36 mg, and 54 mg strengths (see here).  Mallinckrodt launched its 27 mg strength shortly after approval in December 2012 (see here), thereby triggering 180-day exclusivity that had expired by July 9th.  But Mallinckrodt delayed launch of the 36 mg and 54 mg strengths until late March 2013 (see here).  Thus, Mallinckrodt’s 180-day exclusivity for these two strengths did not expire by July 9th, meaning that FDA could only tentatively approve Kudco’s ANDAs for these strengths.  Implicit in the Kudco tentative approvals is that FDA resolved the previous punt on 180-day exclusivity in favor of Mallinckrodt (i.e., a punt return for a touchdown). 

It’s that time of year again when we at the FDA Law Blog ask our loyal readers to nominate us for the American Bar Association’s (“ABA’s”) Blawg 100.  It’s a list of the top 100 legal blogs – or “blawgs” – in the blogosphere.  With your help, we’ve made the top 100 list twice before.  We would like nothing more than to make the 2013 list so that we can add another badge to the “Awards and Honors” collection posted on our blog webpage.

We ask that FDA Law Blog readers use the ABA’s Blawg 100 Amici Form – available here – and submit a friend-of-the-blawg brief nominating the FDA Law Blog!  Although it’s called a brief, it’s not legal in nature.  In fact, you only have 500 characters to say why you’re a fan of the blog.  Remember, when you complete the nomination form, our URL is www.fdalawblog.net.  Friend-of-the-blawg briefs are due no later than Friday, August 9, 2013.  We'll be filling out our own friend-of-the-blawg briefs for some of our favorite blogs (several on our blogroll).

ABA editors make the final decisions about what’s included in the Blawg 100.  We hope they’ll be impressed with what our readers have to say about us.  Thank you!

By Jennifer D. Newberger –

At long last, 16 years after the most recent version, FDA has issued a new draft guidance about medical device reporting for manufacturers.  Companies have long complained about the ambiguities in the regulation.  In a typical case of “be careful what you wish for,” the draft MDR guidance leaves industry with more concern than clarity.

Much of the 47 page draft guidance simply repeats the requirements put forth in the regulations at 21 C.F.R. Part 803, and mirrors the 1997 guidance.  However, there are some important distinctions that have the potential to substantially alter the landscape of MDR reporting requirements.  We discuss some of the highlights (or, rather, lowlights) below.

Let’s begin with the “presumption” that once a malfunction has caused or contributed to a death or serious injury, the malfunction is “likely” to do so again if the malfunction were to recur.  In the 1997 guidance, FDA stated:  “This presumption will continue until the malfunction has caused or contributed to no further deaths or serious injuries for two years, or the manufacturer can show, through valid data, that the likelihood of another death or serious injury as a result of the malfunction is remote.”  The two-year time limit is gone from the recently issued draft guidance.  Rather than the passage of time, FDA states that “once a malfunction causes or contributes to a death or serious injury, you have an obligation to file MDRs for additional reports of that malfunction. . . .  Documentation that a malfunction has not caused or contributed to any additional deaths or serious injuries can be used to support a request for an exemption from further reporting of this malfunction . . . .”  Draft Guidance, at 12.  (We wrote about a Warning Letter portending FDA's new position here.)  Therefore, unless and until a manufacturer seeks and is granted an exemption, it must continue to file MDRs for a malfunction that previously caused or contributed to death or serious injury.  It is not clear how long after the initial malfunction that led to the death or serious injury a manufacturer could reasonably seek and expect to be granted an exemption.  Nor does FDA explain why the two-year presumption has been abolished, or why two years without an event shouldn’t automatically be sufficient.  What is clear is that substituting exemption requests for presumptions will increase the workload for FDA and industry.

Next up, there are several instances in the draft guidance where FDA encourages duplicate reporting.  For example, traditionally, a contract manufacturer and specification developer/distributor would enter into an agreement assigning regulatory responsibilities, including reporting of MDRs.  Usually this task would fall on the specification developer, whose name is on the label and generally is responsible for other regulatory obligations.  It has not been common for the contract manufacturer to seek an exemption from the MDR reporting requirements. 

In July 2011, FDA issued a Warning Letter to Laboratorios B. Braun ("LLB") based on an inspection.  During the inspection, FDA noted that the company did not have in place policies and procedures for filing MDRs.  LLB had responded stating that it had a quality agreement with B. Braun Medical USA ("BBMU") that established BBMU as the entity responsible for reporting, since LLB was a contract manufacturer.  Prior to receipt of the Warning Letter, LLB requested, and FDA granted, an exemption from the MDR reporting requirements.  It was only due to the granting of this exemption that FDA found LLB’s response satisfactory.  This appears to be the first time that FDA indicated contract manufacturers must seek an exemption from reporting MDRs, even if those responsibilities are assigned in an agreement.

The draft guidance affirms this position, stating that both the firm that manufactured the device (the contract manufacturer) and the firm that initiated the specifications and distributed the device are manufacturers who are required to report.  Draft Guidance, at 13.  If the firms decide that only one should be responsible for reporting, they should “submit a joint request specifying which firm will submit the reports,” and the exemption request “should provide a description of any agreement between the firms pertaining to MDR reporting for events involving the device.”  Most significantly, FDA states that it “may condition [its] approval of such an exemption on agreement by the firm requesting the exemption from reporting to be responsible for ensuring that the required reports are, in fact, submitted to FDA.  If Firm A is designated to submit the MDR reports, but failed to do so, [FDA] would consider such a failure to report to be sufficient grounds to revoke Firm B’s exemption from reporting.  If revoked, both Firms A and B would be required to report MDR reportable events in compliance with all applicable MDR regulations.”  Draft Guidance, at 14.  The net effect of this action would be to compel duplicative reports.

This is a surprising position for FDA to take, essentially a “sins of the father shall be visited upon the sons.”  A contract manufacturer generally has little ability to control or monitor the regulatory activities of the specification developer for which it is performing the manufacturing, and blaming the contract manufacturer for the specification developer’s failures is not necessary to assure compliance.  FDA could simply take enforcement action against the specification developer for failure to report, if necessary.  If a specification developer makes a decision in good faith not to report an MDR and FDA disagrees with that decision, FDA is saying it can revoke the exemption of the contract manufacturer on the grounds of its disagreement with the specification developer.  This is unprecedented and not necessary to assure compliance with the MDR requirements. 

FDA extends this same line of thinking to a foreign manufacturer who seeks an exemption from filing MDR reports when the initial importer agrees to do so:  “If the importer is to submit the MDRs, the foreign manufacturer still bears responsibility for ensuring that the importer submits the MDR reports in compliance with all applicable MDR requirements.  We would consider such a failure to report to be sufficient grounds to revoke the manufacturer’s exemption from reporting.”  Draft Guidance, at 23.

Also in the vein of duplicate reporting, FDA addresses reporting under the IDE requirements versus the MDR requirements.  The understanding historically was that an adverse event was either reportable as an MDR or an IDE, depending on the nature of the event, but would not be reported as both.  In the draft guidance, FDA states there may be circumstances in which reporting under both schemes would be appropriate:  “If a device is legally marketed in the US and is also under IDE, any adverse events that involve the investigational use of the marketed device are subject to reporting under both the IDE regulation and the MDR regulation.”  Draft Guidance, at 32.  This is inconsistent with prior practice and the regulatory requirements, in which an event would be reported under the IDE regulation only if it arose in the context of the investigation.  An event that arose during commercial, non-investigational use would be reported as an MDR, not under the IDE regulation. 

The outcome of these changes would be more MDRs.  Given the huge volume of MDRs already being submitted and FDA’s difficulties in processing them, it is not clear why the agency wants to encourage duplicate submissions.

In a section titled “Specific Issues and Situations,” FDA attempts to address issues that arise in the reporting of MDRs.  The responses to some of the questions posed are so vague and non-specific that they provide no actual guidance, while others take an approach seemingly inconsistent with the regulatory requirements.  For example, the first question asks whether MDRs must always be filed for any situation in which a surgery is delayed.  FDA begins by repeating the reportability standard, which is not specific to this question and does not provide any useful guidance.  FDA then states:  “An event should not be considered to be an MDR reportable event solely on the basis of a delay in surgery.  For example, a delay of surgery due to the surgical team setting up the wrong size device and requiring time to obtain the correct size device for the patient would not be a reportable event if the patient remains stable with no adverse consequences.”  Draft Guidance, at 28.  This example is not relevant to the question being addressed.  More important, even if the patient did not remain stable, this would not be a reportable malfunction since the device did not actually malfunction—the team simply selected the wrong device, an act which can hardly be attributed to the manufacturer.  The implication that a surgical team’s error in choosing a device could be an MDR is startling.

The last example we will address here (though certainly not the last one in the draft guidance that raises questions) is whether an event is reportable if a health care provider intervenes before the malfunctioning device can harm the patient.  The draft guidance states:  “If the device malfunctions but an alarm alerts the user to intervene before there is any harm to the patient, the event should be reported as a malfunction because of the potential to cause or contribute to a death or serious injury if the malfunction recurred and either the alarm did not work or there was no one to respond.”  Draft Guidance, at 35.  This may be the most disturbing of all of FDA’s new positions in this draft guidance.  First, the draft guidance states this “malfunction” should be reported because of the “potential” to cause or contribute to a death or serious injury.  That is not the legal standard for reporting malfunctions.  The legal standard is that a manufacturer must report a malfunction only if the malfunction “would be likely” to cause or contribute to death or serious injury if the malfunction were to recur.  Although there was a malfunction, because of the alarm functioning properly, the malfunction is not “likely” to meet this standard.  (Also, the question assumes that an alarm is automatically associated with a potentially dangerous event.)  Second, the example is asking the manufacturer to assume a malfunction that has not occurred, e.g., to assume the alarm will fail in the future.  And third, asking a manufacturer to report a malfunction because of the possibility that no one might be present to respond to the alarm is not, by any stretch of the imagination, consistent with the regulatory requirement.  The manufacturer cannot be responsible for hospital or clinic staffing of devices with alarms.  All the manufacturer is responsible for is assuring its devices work as intended, including that the alarm operates when it is supposed to.  If the device has an alarm to alert the user to a potential problem, and the alarm operates as intended, there is no reportable malfunction.

This draft guidance is troubling in the number of new positions FDA stakes out, the potential increase in duplicate reporting, and the “big brother” nature of the relationship FDA is attempting to impose between parties working together by requiring one to assure the regulatory compliance of the other.  There is no recognition of the burdens that will be imposed either on FDA or industry.  These perspectives are inconsistent with historical understanding of MDR reporting requirements, and some of them are inconsistent with the statutory and regulatory requirements (see the alarm and IDE reporting examples).  Try as it might, FDA cannot change regulatory requirements via a guidance. 

By Kurt R. Karst –      

You know the drill . . . .  One organization comes out with a report saying one thing supported by various data.  Days later, another organization comes out with a report saying another thing supported by other data. 
 
In what appears to be a hastily drafted counterpoint to a report released earlier this week by the IMS Institute for Healthcare Informatics, titled “Impact of Patent Settlements on Drug Costs: Estimation of Savings” (see our previous post here), Community Catalyst and the federation of state Public Interest Research Groups, U.S. PIRG, announced the release of their own report on drug patent settlements, titled “Top Twenty Pay-for-Delay Drugs: How Drug Industry Payoffs Delay Generics, Inflate Prices and Hurt Consumers.”  The analysis concludes, among other things, that drug patent settlement agreements, which are (not surprisingly) characterized as sweetheart “pay-for-delay” deals, have held back generic competition for 5 years on average, and as long as 9 years, resulting in $98 billion in sales for brand-name drug companies, with a resulting loss for U.S. consumers and the government.  Those sales figures are based on drug prices “as available at 14 CVS locations in Boston, MA, for the default dosage and quantity, as advertised at www.GoodRx.com on 6/10/2013 or 6/13/2013” and that are “typical of those available across the country,” according to the report.

Of course, we knew what the report would conclude even before seeing the title.  After all, Community Catalyst, via its Prescription Access Litigation project, and U.S. PIRG  submitted amicus briefs to the U.S. Supreme Court in Louisiana Wholesale Drug Co., Inc., et al., v. Bayer AG, et al. and Federal Trade Commission v. Actavis, Inc., 570 U.S. ___ (2013) (see our previous posts here and here) vigorously opposing drug patent settlement agreements.  Moreover, both organizations scored the Supreme Court’s June 17th decision in Actavis as a win (see here and here), even though the Court declined to hold that reverse payment settlement agreements are presumptively unlawful, and that “Courts reviewing such agreements should proceed by applying the ‘rule of reason,’ rather than under a ‘quick look’ approach.”

The 20 drugs identified in the Community Catalyst/U.S. PIRG report are vastly different from those in the IMS report, which is based on an analysis of patent settlement agreements reached between 2005 and 2012 for 33 molecules.  According to the IMS report, patent settlement agreements for those drugs have resulted in a reduction of $25.5 billion in drug costs from 2005 through December 31, 2012.  Of the six drugs that appear to overlap in both reports – ADDERALL XR, ALTACE, EFFEXOR XR, LIPITOR, WELLBUTRIN XL, and ZANTAC – Community Catalyst/U.S. PIRG say that generic competition was delayed by 3 years (ADDERALL XR), 3 years (ALTACE), 4.7 years (EFFEXOR XR), 1.7 years (LIPITOR), 1 year (WELLBUTRIN XL), and 2 years (ZANTAC).  Based on numbers we have come across, however, the supposed delays for these six drugs have, as a result of early entry before patent expiration, resulted in savings of $87,337,054 (ADDERALL XR), $886,852,636 (ALTACE), $3,762,782,030  (EFFEXOR XR), $3,240,019,077 (LIPITOR), $4,586,004,699 (WELLBUTRIN XL), and $144,697,745 (ZANTAC).

The problem with the Community Catalyst/U.S. PIRG report, and with the opposition to drug patent settlement agreements in general, seems to be a fundamental misunderstanding of how the drug industry operates and the risks involved.  According to available data, generic drug manufacturers are successful in just 48% of the Paragraph IV patent infringement cases brought against them.  That’s right – it’s just a crap shoot!  If patent infringement litigation is carried through to its natural conclusion without settlement and a generic version of a brand-name drug is unable to go to market until patent expiration, then drug prices will remain high.  If, however, a period of patent protection can be lopped off as a result of a settlement, then a lower-cost version can go to market. 

Additional Reading:

• GPhA Statement on Community Catalyst/U.S. PIRG report

Two companies, DKSH Italia Srl and Polycell Technologies LLC, have filed a citizen petition with FDA asking that it expand the health claim on soluble fiber and coronary heart disease to include their product, Glucagel.  The petition describes Glucagel as a “barley beta-glucan fiber that provides a high purity (75%) form [that] lends itself to inclusion in a wide array of foods and beverages at rates of 1gram or more per serving.” 

If the petition is granted, the companies will be eligible to use model claims provided by FDA.  The model claims include information about how much soluble fiber a particular food source provides and state that the food source, “as part of a diet low in saturated fat and cholesterol, may reduce the risk of heart disease.”  The companies propose that the qualifying level for  Glucagel “be consistent with the minimum of 3 grams per day of beta-glucan intake, as provided in 4 servings daily of a minimum of 0.75 grams per serving, as previously specified for oat bran, rolled oats, oat flour, specified oatrims, whole grain barley, certain dry milled barley products, and barley betafiber.”

According to the petitioners, Glucagel “is efficacious in lowering serum cholesterol and related risk factors for [coronary heart disease]” and has been shown to “modulat[e] post-prandial blood glucose levels, [thereby] promoting satiety and helping in weight management.”  The petitioners further state that “barley beta-glucan soluble fibers have demonstrated cholesterol efficacy in a number of human studies using cooked, baked or otherwise prepared foods, using high purity isolates (>50% beta-glucan), concentrates (20-30% beta-glucan), and barley flours (<19% beta-glucan).”

The petition provides a brief history of the soluble fiber-coronary heart disease health claim.  According to the petition, since first approving the health claim in 1997, FDA has allowed for expansions on four occasions.  First, in response to a 1998 petition by Kellogg Company, FDA expanded the health claim to include psyllium.  Next, in response to a 2002 petition by Quaker Oats Company and Rhodia, Inc., FDA expanded the health claim to cover Oatrim, which the companies described as an acid base and enzymatic hydrolosis produced beta-glucan concentrate.  Finally, in 2005 and 2008, respectively, FDA expanded the health claim to include whole grain and dry milled barley (under an interim final rule) and barley betafiber.  The National Barley Foods Council had sought the inclusion of whole grain and dry milled barley products.  Cargill, Inc. petitioned for the inclusion of barley betafiber.

By Kurt R. Karst –

Although the battle over the appropriate test to apply to drug patent settlement agreements (aka “reverse payment” or “pay-for-delay” settlement agreements) when evaluating whether or not they are immume from antitrust attack ended with the U.S. Supreme Court’s June 17th decision in Federal Trade Commission v. Actavis, Inc., 570 U.S. ___ (2013) (Docket No. 12-416), where the Court declined to hold that reverse payment settlement agreements are presumptively unlawful and ruled that that “Courts reviewing such agreements should proceed by applying the ‘rule of reason,’ rather than under a ‘quick look’ approach” (see our previous post here), the battle over the amount of saving (or not) to U.S. consumers and the government from such agreements rages on.  The latest salvo in that battle was launched today with the release of a report by the IMS Institute for Healthcare Informatics, titled “Impact of Patent Settlements on Drug Costs: Estimation of Savings.”

The IMS report (supported by GPhA) is intended to “quantify the impact of patent settlements and early generic market entry on drug costs, measured at the trade price level.”  Based on an analysis of patent settlement agreements reached between 2005 and 2012 for 33 molecules (identified in Appendix 1 of the report and in an accompanying presentation) IMS concludes that the effects of the settlement agreements through 2012 are as follows:

1. Generic pharmaceuticals launched prior to patent expiry as a result of the 33 settlements analyzed, have resulted in a reduction of $25.5 billion in drug costs from 2005 through December 31, 2012.

2. Average annual savings per year since 2005 amount to $3.2 billion from these 33 settlements.

3. Savings varied widely by molecule, ranging from $0.1 million to more than $4 billion during the full period and on average, generics had a 64.5 percent share of the molecule’s market by the end of 2012.

4. Almost one third of the estimated savings accrues to the Federal Government or $8.3 billion over the past 8 years.

Moreover, says IMS, for those settlement agreements where the patent expiration date reflected in the Orange Book is in 2013 or later, significant savings will continue to be realized: “the remaining savings resulting from the 33 settlements would be $61.7 billion if the level of savings remained at the current level through patent expiry for each molecule.” 

Although apparently 65 molecules were the subject of drug patent settlement agreements from 2005 to 2012, 32 molecules were excluded from analysis for various reasons, including because a generic version of the brand-name drug has not yet launched, insufficient data were available to IMS, or the calculated price of the generic was not less than the brand-name price.

The IMS savings estimate differs significantly from other estimates of the effects of drug patent settlement agreements.  In January 2010, the Federal Trade Commission (“FTC”), a longtime opponent of such agreements (with consideration), issued a report, titled “Pay-for-Delay: How Drug Company Pay-Offs Cost Consumers Billions,” that concludes that pay-for-delay agreements “cost American consumers $3.5 billion per year – $35 billion over the next 10 years” (see our previous post here).  In addition, in June 2010, the Congressional Budget Office (“CBO”) estimated (see here) that the Federal government would save $0.9 billion during 2010-2015 and $2.7 billion during 2010-2020 (both on net) if S. 369, the Preserve Access to Affordable Generics Act, was enacted (see our previous post here).  To be fair, however, the IMS, FTC, and CBO analyses do concern somewhat different data sets.  As the IMS explains in its report:

A direct comparison of the results of this analysis with the previous estimates of the economic impact of patent settlements published by the FTC and CBO would be difficult, however, since the detailed methodology, specific products, sales estimates and impact assessments have not been disclosed.  The 33 settlements analyzed for this report are a subset of those submitted and reviewed by the FTC.  Moreover, the FTC and CBO assessments are based solely on a subset of patent settlements that include consideration (often referred to as “reverse payments”).

Nevertheless, says IMS, “[w]hile direct comparisons with these analyses are difficult absent additional information, an arithmetic modeling of the results of patent settlements under different assumptions is possible . . . .” 

Using a January 2010 RBC Capital Markets analysis of litigation success rates in the pahrmaceutical industry from 2000-2009, which found that generic drug manufacturers were successful in 48% of the Paragraph IV patent infringement cases brought against them, IMS posits that “[i]f this success rate is applied to account for cases that might have been won by the generic manufacturers had a settlement not been achieved, the total savings of $87.2 billion [(i.e., $25.5 + $61.7 billion)] would be discounted to $45.3 billion, assuming the generic entry date would have been the same as the entry date agreed to as part of the settlement.”  To make a more-apples-to-apples comparison, the IMS then uses the FTC’s estimate (from the March 25, 2013 Oral Argument in Federal Trade Commission v. Actavis) that approximately 26%-30% of all drug patent settlements are settled with consideration.  “If this percentage were applied to the $45.3 billion in savings from cases that the patent holder would have won had a settlement not been reached, the related savings would amount to $11.8 billion to $13.6 billion,” says the report.  Moreover, “[a]pplying a Federal Government’s share of 32.6%” – calculated based on the aggregate share of total retail drug costs in 2011 attributed to Medicaid, Medicare Part D, and other Federal programs including the Department of Defense and Veterans Affairs – “would result in $3.8 billion to $4.4 billion in savings,” according to IMS. 

IMS cautions that its arithmetic modeling “is not intended to represent in any manner whatsoever what would have happened absent the patent settlement agreements that occurred,” but rather, that “it is presented to illustrate the magnitude of the potential impact based on the specific and actual cases of 33 settlements that occurred since 2005.”  The organization also says that “[f]urther analysis and modeling of outcomes under different scenarios is required, with more specific information of the actual cases documented, in order to advance the understanding of patent settlements and their impact on consumers, payers, and manufacturers.”

The use of the IMS analysis in antitrust litigation to somehow influence a “rule of reason” analysis is speculative; however, the analysis could come in handy on Capitol Hill.  Still unclear is whether legislators, in light of the Supreme Court’s decision, will continue to pursue legislation effectively banning drug patent settlement agreements.  If they do, however, the IMS analysis could be useful in dampening concerns about such agreements, and serves to highlight the benefits of such agreements.

Additional Reading:

• Understanding Current Trends and Outcomes in Generic Drug Patent Litigation: An Empirical Investigation
• FTC Working Paper: Estimating the Effect of Entry on Generic Drug Prices Using Hatch-Waxman Exclusivity
• PricewaterhouseCoopers 2013 Patent Litigation Study

By Kurt R. Karst –      

Back in July 2010 we took a look at the historical growth of so-called “Patent Use Codes” (“PUCs”), those numbers and narratives listed in an Orange Book Addendum corresponding to a listed method-of-use patent.  This was long before the U.S. Supreme Court even considered – or was asked to consider – whether the counterclaim provision added by the Medicare Modernization Act (“MMA”) at FDC Act §505(j)(5)(C)(ii)(I) can be used to challenge a PUC descriptor listed in the Orange Book for a particular method-of-use patent covering a brand-name listed drug.  Our analysis showed a doubling of PUCs since FDA’s June 2003 regulations went into effect requiring NDA sponsors (under 21 C.F.R. § 314.53(c)(2)(ii)(P)(3)) to supply the PUC descriptor language on Form FDA 3542.  The post was apparently popular enough that it appeared in a few briefs (here, here, and here) submitted to the Supreme Court in Caraco Pharmaceutical Laboratories, Ltd. v. Novo Nordisk A/S.  In April 2012, the Supreme Court held in Caraco (see our previous post here) that a PUC 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. 

Use of the counterclaim provision at FDC Act §505(j)(5)(C)(ii)(I), as well as its parallel provision at FDC Act § 505(c)(3)(D)(ii)(I) applicable to 505(b)(2) application sponsors, has been pretty low in the almost ten years it has been around.  In a previous post we provided a run-down of the cases in which we know one of the counterclaim provisions has been raised, either with respect to PUCs or to seek actual delisting of Orange Book-listed patents.  We suspect that other counterclaims have been filed in Hatch-Waxman patent infringement litigation, but that they may be under seal or buried in dockets we have not yet explored.  With an increasing number of Orange Book-listed PUCs, however, the probability that new counterclaims will be filed appears to increase. 

With that in mind, we decided to take a look at the change (i.e., growth) in PUCs over the past three years and historically.  And the growth has been quite significant: from a little more than 1,000 in 2010 to a little more than 1,400 today (with new PUCs being added weekly, and sometimes daily).  The tables below show the year-by-year growth of PUCs since they were first added to the annual Orange Book in 1988 (Orange Book 8th Ed.).

The growth in PUCs mirrors an overall growth in Orange Book patent listings.  Between 1998 and 2012, the number of patents submitted to FDA for Orange Book listing increased from 159 to 458.  Meanwhile, the number of NDAs and supplements approved by FDA has apparently decreased.  For example, according to numbers put out by FDA, the Agency approved 115 NDAs in 2000, but only 86 in 2012; FDA approved 99 NDA supplements in 2000, but only 62 NDA supplements in 2009 (see, e.g., here and here).  This would appear to mean that a greater number of patents are beling listed for each brand-name listed drug.

The growth of 117 PUCs from 2012 to 2013 was a record-breaker, albeit just 13 PUCs greater than the previous year.  The growth for the current period (2013-2014) is on pace to shatter that record.  Of course, just because there is a growth in PUCs does not necessarily mean that counterclaims challenging those PUCs will grow.  The devil is in the details; that is, how the PUCs are tailored (or not) to the approved method-of-use of a listed drug.  But one thing is clear: if anyone thought the Supreme Court’s Caraco decision would put the brakes on the growth in PUCs, they were wrong. 

By Kurt R. Karst –      

As you might imagine, we’re pretty avid FDA docket watchers.  As followers of this blog know, we track FDA petition decisions and regularly update our popular FDA Citizen Petition Tracker.  Keeping close tabs on FDA decisions and announcements posted on Regulations.gov allows us to stay on top of what’s going on at the Agency and in the FDA-regulated industry.  It also allows us to follow trends and identify outlier decisions.  One of those outlier decisions popped up late last week when we returned to the office the morning after enjoying the Independence Day fireworks in Washington, D.C. celebrating America’s 237th birthday.  

On July 3, 2013, FDA denied a January 2, 2013 Citizen Petition (Docket No. FDA-2013-P-0040) submitted by Lupin Pharmaceuticals, Inc. (“Lupin”) requesting that the Agency amend the Orange Book to assign Reference Listed Drug (“RLD”) status to Roxane’s ANDA No. 077728 for Calcium Acetate Capsules, 667 mg (equivalent to 169 mg calcium).  The drug product approved under ANDA No. 077728 is a generic version of PhosLo (calcium acetate) Gelcaps, 667 mg, which FDA originally approved on April 2, 2001 under NDA No. 021160.  PhosLo Gelcaps is listed in the Orange Book as the RLD for ANDA submission purposes.  That is, it is the reference standard for purposes of demonstrating bioequivalence.  (See our previous post on the difference between what we’ve termed the “big RLD” and the “little rld.”)  In addition to Roxane’s ANDA No. 077728, the Orange Book also lists Paddock’s ANDA No. 091312 as an AB-rated generic version of PhosLo Gelcaps. 

Lupin’s petition requesting that FDA designate Roxane’s ANDA No. 077728 as a second RLD contends that, to the best of the company’s knowledge, neither PhosLo Gelcaps approved under NDA No. 021160, nor the AB-rated generic equivalent approved under Paddock’s ANDA No. 091312 is available on the market.  Therefore, according to Lupin, it is unable to procure product sample to conduct bioequivalence testing, and FDA should  designated Roxane’s ANDA No. 077728 as an RLD because that product is available on the market.

FDA stated the Agency’s policy for designating RLDs way back in 1992 in the preamble to the Agency’s final regulations implementing certain provisions of the 1984 Hatch-Waxman Amendments.  There (57 Fed. Reg. 17,950, 17,958 (Apr. 28, 1992)), FDA stated:

FDA will designate all reference listed drugs.  Generally, the reference listed drug will be the NDA drug product for a single source drug product.  For multiple source NDA drug products or multiple source drug products without an NDA, the reference listed drug generally will be the market leader as determined by FDA on the basis of commercial data.  FDA recognizes that, for multiple source products, a product not designated as the listed drug and not shown bioequivalent to the listed drug may be shielded from direct generic competition.  If an applicant believes that there are sound reasons for designating another drug as a reference listed drug, it should consult FDA. Once FDA designates that reference listed drug, that drug will continue to be the reference standard even if the drug is later replaced as the market leader.  

FDA’s policy is further described in the preface to the Orange Book:

By designating a single reference listed drug as the standard to which all generic versions must be shown to be bioequivalent, FDA hopes to avoid possible significant variations among generic drugs and their brand name counterpart.  Such variations could result if generic drugs were compared to different reference listed drugs.  However, in some instances when multiple NDAs are approved for a single drug product, a product not designated as the reference listed drug and not shown to be bioequivalent to the reference listed drug may be shielded from generic competition.  A firm wishing to market a generic version of an NDA listed drug that is not designated as the reference listed drug may petition the Agency through the Citizen Petition procedure . . . .

Over the years, FDA has received and responded to several citizen petitions requesting that the Agency assign RLD status to various NDA and ANDA approved drug products.  For example, off the tops of our heads, FDA has granted RLD designation petitions in Docket Nos. FDA-2012-P-1127, FDA-2012-P-1043, FDA-2011-P-0606, FDA-2011-P-0059, and in various decisions concerning levothyroxine (see, e.g., here, here, and here).  

FDA’s regular granting of RLD designation petitions has let most folks to consider them as merely administrative red tape, and to assume that FDA would grant an RLD designation petition after a perfunctory review of the petition and relevant facts.  But FDA’s recent denial of Lupin’s RLD designation petition – to our knowledge, the first instance in which FDA has denied such a petition – shows that the answer to “Who is buried in Grant’s tomb?” (a “gimme question” popularized by Groucho Marx during the 1940s and 1950s on the “You Bet Your Life” quiz show so that a contestant could get at least one question correct) may not always be “General Grant, of course!”

In denying Lupin’s petition, FDA relied on the reported existence of an authorized generic version of PhosLo Gelcaps:

We have determined that you have not stated sufficient grounds to establish the need to designate an additional RLD for Calcium Acetate Capsules, 667 mg (eq. to 169 mg calcium).  Based on our records, PhosLo is still being marketed under its NDA as an authorized generic.  An ANDA applicant may use the authorized generic version of the current RLD as the reference standard in the in vivo bioequivalence study with proper documentation.  Because the RLD is still available as an authorized generic under NDA 21-160, FDA does not agree that the Roxane drug product approved under ANDA 77-728 should be designated as an additional RLD.  You have not provided any other basis for justifying designation of Roxane's product as an additional RLD.

The “records” referenced in FDA’s petition denial is the Agency’s Listing of Authorized Generics, which is a database of authorized generic versions of approved drug products created as a result of FDC Act § 505(t) added by the 2007 FDA Amendments Act.  Under FDC Act § 505(t), an “authorized generic drug” is defined as a listed drug as defined in 21 C.F.R. § 314.3 that has been approved under FDC Act § 505(c) and “is marketed, sold, or distributed directly or indirectly to retail class of trade with either labeling, packaging (other than repackaging as the listed drug in blister packs, unit doses, or similar packaging for use in institutions), product code, labeler code, trade name, or trade mark that differs from that of the listed drug.”

FDA’s treatment of the marketing of an authorized generic version of a listed drug as a basis for precluding designation of an additional RLD means that companies considering petitioning FDA will need to consult the Agency’s Listing of Authorized Generics before making an RLD designation request.  A quick review of some pending RLD designation petitions shows that FDA’s decision on Lupin’s PhosLo Gelcaps petition may not be the last denial of a RLD designation petition.   

By Kurt R. Karst –      

When the U.S. Supreme Court handed down its decision in Mutual Pharmaceutical Co. v. Bartlett (Docket No. 12-0142) on June 24th, ruling that state-law design-defect claims that turn on the adequacy of a drug’s warnings are preempted by the FDC Act and under the Court’s 2011 decision in PLIVA Inc. v. Mensing, 131 S.Ct. 2567 (2011), in which the Court held that FDA’s regulations preventing generic drug manufacturers from changing their labeling except to mirror the label of the brand-name manufacturer preempt state-law failure-to-warn claims against generic drug manufacturers (because it is impossible for generic drug manufacturers to comply with both federal and state duties to warn), we commented that the Court’s decision was unlikely to be the end of the matter and that the generic drug industry is likely in for more controversy on the preemption front.  After all, the United States, in an amicus brief in Bartlett, commented that “FDA is considering a regulatory change that would allow generic manufacturers, like brand-name manufacturers, to change their labeling in appropriate circumstances.  If such a regulatory change is adopted, it could eliminate preemption of failure-to-warn claims against generic-drug manufacturers.” 

We did not think it would take long for FDA to get the ball rolling on the promised “regulatory change.”  And we were correct.  The Office of Management and Budget (“OMB”) website was recently updated to show plans for FDA to issue a Notice of Proposed Rulemaking titled “Supplemental Applications Proposing Labeling Changes for Approved Drugs and Biological Products.”  According to the abstract posted on the OMB website:

This proposed rule would amend the regulations regarding new drug applications (NDAs), abbreviated new drug applications (ANDAs), and biologics license applications (BLAs) to revise and clarify procedures for changes to the labeling of an approved drug to reflect certain types of newly acquired information in advance of FDA’s review of such change. The proposed rule would describe the process by which information regarding a “changes being effected” (CBE) labeling supplement submitted by an NDA or ANDA holder would be made publicly available during FDA’s review of the labeling change. The proposed rule also would clarify requirements for the NDA holder for the reference listed drug and all ANDA holders to submit conforming labeling revisions after FDA has taken an action on the NDA and/or ANDA holder’s CBE labeling supplement. These proposed revisions to FDA’s regulations would create parity between NDA holders and ANDA holders with respect to submission of CBE labeling supplements.  [(Emphasis added)]

Obviously, the devil will be in the details of the proposed rule, which may be available within the coming weeks. 

Public Citizen, which announced the news in a press release, commented that the organization is “extremely pleased to see that [FDA plans] to issue a proposed rule to revise FDA regulations about prescription drug labeling.  When finalized, the revisions will fill a regulatory gap that poses a risk to patient safety.”  In August 2011, and just two months after the Supreme Court’s Mensing decision, Public Citizen submitted a Citizen Petition (Docket No. FDA-2011-P-0675) to FDA requesting that the Agency amend its regulations to permit ANDA sponsors to revise their labeling through the CBE and Prior Approval Supplement (“PAS”) procedures (see our previous post here).  On the same day the Supreme Court ruled in Bartlett, Public Citizen renewed its request for FDA to revise its regulations, and released a report detailing what the organization says are “significant labeling changes made after a generic drug came on the market during a five-year period.”

The extent to which FDA might effectively grant the Public Citizen petition in the Agency’s proposal to amend its labeling regulations remains to be seen.  But you can bet that there will be significant comment from interested parties.  One issue we’ll be on the lookout for is how FDA’s proposal might affect the so-called “RLD theory of liability.”  As we previously reported, 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, and that Mensing is inapplicable under such circumstances.  The theory has not gotten much traction in court, but that could change with FDA’s proposal. 

We’ll let you know once FDA’s proposal goes live. 

By Kurt R. Karst –      

It’s a quiet news week here in the U.S. with the Independence Day holiday approaching.  But the news void has given us an opportunity to catch up on a few items we put on a backburner and intended to tackle at some point.  First up off the backburner is the statutory provision added by the December 2003 Medicare Modernization Act (“MMA”) prohibiting ANDA and 505(b)(2) sponsors from amending a pending application to change the Reference Listed Drug (“RLD”) (in the case of an ANDA) or a listed drug relied on for approval (in the case of a 505(b)(2) NDA).

The MMA amended the FDC Act to add Section 505(j)(2)(D)(i), which states that “[a]n applicant may not amend or supplement an [ANDA] to seek approval of a drug referring to a different listed drug from the listed drug identified in the application as submitted to [FDA].”  The parallel provision applicable to 505(b)(2) applications is located at FDC Act § 505(b)(4)(A) and states that “[a]n applicant may not amend or supplement [a 505(b)(2) application] to seek approval of a drug that is a different drug than the drug identified in the application as submitted to [FDA].” 

Way back in November 2008, we posted on an FDA citizen petition decision (Docket No. FDA-2008-P-0329) in which the Agency was asked to determine that any company with a pending ANDA for a proposed Venlafaxine HCl Extended-Release Tablets drug product be required to submit to FDA a new ANDA citing another company’s approved Venlafaxine HCl Extended-Release Tablets drug product as the appropriate RLD, and that FDA require any such ANDA applicant to conduct new bioequivalence studies comparing its proposed drug product to a different approved drug product.  FDA granted the petition.  In explaining the statutory prohibition on amending a pending ANDA to change RLD (FDC Act § 505(j)(2)(D)(i)), FDA also explained the Agency’s interpretation of the parallel provision applicable to 505(b)(2) applications (FDC Act § 505(b)(4)(A)):

We note that our interpretation of § 505(b)(4)(A) of the Act, also added by the MMA, for 505(b)(2) applications is influenced by and intended to be consistent with section 505(j)(2)(D)(i) regarding ANDAs.  Accordingly, a 505(b)(2) applicant may not amend or supplement a 505(b)(2) application to seek approval of a drug that relies on the Agency’s finding of safety and/or effectiveness for a drug that is different from the drug identified in a previous submission of the application.

FDA’s November 2008 citizen petition decision was the first time the Agency publicly explained FDC Act § 505(b)(4)(A).  But we wondered . . . had FDA already been faced with a scenario in which a 505(b)(2) applicant sought to amend a pending 505(b)(2) application?  And if so, how did FDA handle that case?  Well, it turns out that FDA did have a case.

Back in June 2006, Cipher Pharmaceuticals (“Cipher”) submitted a 505(b)(2) NDA for Tramadol HCl Extended-release Capsules, 100 mg, 200 mg, and 300 mg (referred to as “Cip-Tramadol ER” in various FDA documents) for the management of moderate to moderately severe chronic pain in adults, and that cited ULTRAM (tramadol HCl) Tablets (NDA No. 020281) as the listed drug relied on for approval.  FDA completed its review of the NDA but did not approve the application; rather, FDA issued an “approvable” decision.  FDA explained in a May 2, 2007 letter that, among other things, “[i]t will be necessary for the sponsor to perform at least one additional adequate and well-controlled clinical trial that clearly demonstrates efficacy for their drug product.” 

After a post-action meeting in May 2007, Cipher filed for formal dispute resolution.  In January 2008, FDA denied Cipher’s formal dispute resolution request and reiterated the need for additional clinical trial data.  But FDA provided Cipher a way out of conducting a new study – the company could cite NDA No. 021692 for ULTRAM ER (tramadol HCl) Extended-release Tablets as an additional listed drug and bridge its proposed product to ULTRAM ER. 

Cipher took FDA up on its offer, but there were a couple of catches.  Because FDC Act § 505(b)(4)(A) precludes a 505(b)(2) applicant from amending its pending application to change listed drug, FDA required the company to submit a new NDA – NDA No. 022370 – containing appropriate patent certifications to any patents listed in the Orange Book as covering the approved listed drugs cited in Cipher’s new NDA.  FDA’s decision and the consequences of a new NDA submission are documented in a memorandum (included in FDA’s Summary Basis of Approval for NDA No. 022370) that states, in part:

We interpret section 505(b)(4)(A) of the Food, Drug, & Cosmetic Act (FD&C Act), added by the Medicare Modernization Act, in a manner consistent with its counterpart provision at section 505(j)(2)(D)(i), such that an applicant may not amend a 505(b)(2) application to seek approval of a drug that relies on the Agency's finding of safety and/or effectiveness for a drug that is different from the drug identified in a previous submission of the application.  This interpretation also is informed by amendments to section 505(c)(3) of the FD&C Act which limit the availability of a 30-month stay of approval in certain circumstances involving amendments and supplements.  Accordingly, the identification of Ultram ER as an additional listed drug relied upon is not the type of change that may be made in an amendment to a 505(b)(2) application such as a response to an approvable letter.

You may elect to withdraw and resubmit your 505(b)(2) application to identify Ultram ER as an additional listed drug relied upon.  Under these circumstances, a resubmission of your application that identifies an additional listed drug relied upon and otherwise complies with section 736(a)(1)(C) of the FD&C Act would not be subject to new user fees.  The Division intends to review a resubmission of this type using the same review timeframe goal that would have applied to a complete response to the approvable letter.  We note that the regulatory requirements for a 505(b)(2) application (including, but not limited to, an appropriate patent certification or statement) apply to each listed drug upon which a sponsor relies.  Therefore, we cannot consider this complete response to our action letter.  The review clock will not start until we receive a complete response or a new NDA submission.  If you decide to resubmit your application as a new NDA, the review clock would be the equivalent of a Class 2 resubmission and would have a six-month review clock.

Cipher submitted NDA No. 022370 to FDA on April 14, 2008.  At that time, there were two patents listed in the Orange Book for the listed drugs relied on by Cipher: (1) U.S. Patent No. 6,339,105 (“the ‘105 patent”), a method-of-use patent listed for ULTRAM, the pediatric exlusivity for which expires on April 12, 2020; and (2) U.S. Patent No. 6,254,887 (“the ‘887 patent”), a drug substance patent listed for ULTRAM ER that expires on May 10, 2014.  Cipher submitted the 505(b)(2) equivalent of a “section viii” statement to the ‘105 patent carving out of its proposed labeling the protected use.  Instead of challenging the ‘887 patent in a Paragraph IV certification, however, Cipher submitted a Paragraph III certification, seeking approval of NDA No. 022370 on May 10, 2014.

Perhaps as a result of the Paragraph III certification to the ‘887 patent, FDA assigned a standard 10-month review of NDA No. 022370 instead of the 6-month review identified in the above-quoted FDA memorandum.  At the end of the review period, in February 2009, FDA tentatively approved NDA No. 022370. 

Cipher ultimately changed its mind and decided to challenge the ‘887 patent in a Paragraph IV certification submitted as an amendment to its NDA on or about September 15, 2009.  Cipher was timely sued for patent infringement in the U.S. District Court for the Eastern District of Virginia (Case No. 2:09-cv-00544-RBS-JEB).  The lawsuit triggered a 30-month litigation stay on the approval of NDA No. 022370.  But the parties were able reach an agreement and the court entered a consent judgment in late December 2009 in favor of Cipher and dismissing the patent infringement lawsuit (see here).  That decision terminated the 30-month litigation stay and cleared the path for Cipher to request final NDA approval, which FDA granted on May 7, 2010.

Although the approval of NDA No. 022370 took several twists and turns, it is instructive as to how FDA would likely handle future cases in which FDC Act § 505(b)(4)(A) is implicated.  Clearly, FDA recognizes the potentially draconian effects of the statutory provision and wants to dull them to the extent possible. 

By Alexander J. Varond –

On June 25, FDA released a draft guidance entitled “Expedited Programs for Serious Conditions—Drugs and Biologics” and a related Manual of Policies and Procedures entitled “Review Designation Policy: Priority (P) and Standard (S).”   The draft guidance provides important insight into FDA’s breakthrough therapy designation program and serves as a de facto desktop reference for FDA’s four expedited programs:  fast track designation, breakthrough therapy designation, accelerated approval, and priority review designation. 

Breakthrough Therapy Designation

FDA’s draft guidance offers the agency’s interpretation of the breakthrough therapy designation program.  This program was created by the Food and Drug Administration Safety and Innovation Act (“FDASIA”) that was signed into law nearly a year ago, on July 9, 2012 (see our summary here).  The draft guidance was highly anticipated, as FDA has already received 62 requests for breakthrough therapy designation.  Despite the fact that FDA has granted breakthrough designation to 20 potential innovative new drugs that have shown encouraging early clinical results, guidance has been wanting, especially because FDA does not publicly announce its rationales for granting or denying individual breakthrough therapy designations due to confidentiality concerns.  The draft guidance also describes the conditions under which a breakthrough therapy can lose its designation.

Section 506(a) of the FD&C Act, as amended by FDASIA, provides for the designation of a drug as a breakthrough therapy “if the drug is intended, alone or in combination with 1 or more other drugs, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on 1 or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.”

Serious condition.  The draft guidance states that FDA intends to interpret the term “serious” consistent with how it has done so in the past.  A serious disease or condition is defined in 21 CFR 312.300(b)(1) as:

a disease or condition associated with morbidity that has substantial impact on day-to-day functioning. Short-lived and self-limiting morbidity will usually not be sufficient, but the morbidity need not be irreversible if it is persistent or recurrent. Whether a disease or condition is serious is a matter of clinical judgment, based on its impact on such factors as survival, day-to-day functioning, or the likelihood that the disease, if left untreated, will progress from a less severe condition to a more serious one.

Available therapy.  While FDA’s Available Therapy Guidance issued in 2004 provided a definition of “existing therapy,” the draft guidance updates the definition in response to FDASIA.  FDA maintains that an “existing therapy” or “available therapy” is a therapy that “[i]s approved or licensed . . . for the same indication being considered for the new drug” but adds a second limitation.  Thus, to be considered an available therapy, it must also be “relevant to current U.S. standard of care (SOC) for the indication.”  As a result, if a therapy is approved but is either no longer used or rarely used, the therapy may not be considered an available therapy.  “In evaluating the current SOC, FDA considers recommendations by authoritative scientific bodies (e.g., National Comprehensive Cancer Network, American Academy of Neurology) based on clinical evidence and other reliable information that reflects current clinical practice.  In the absence of a well established and documented SOC, FDA may consult with special government employees or other experts . . . .”  The draft guidance also provides that the SOC for a given condition may evolve.

Consistent with the Available Therapy Guidance, a drug granted accelerated approval on surrogate or clinical endpoints that have not been verified is not considered an available therapy.  However, a drug approved with a risk evaluation and mitigation strategy (“REMS”) that includes elements to assure safe use (ETASU) would be considered an available therapy if the study population for the new drug is eligible to receive the approved drug under the REMS.

Substantial improvement.  To determine whether the improvement over available therapy is “substantial,” FDA weights the magnitude of the treatment effect and the importance of the observed clinical outcome.  Preliminary clinical evidence should show a clear advantage over available therapy.  The draft guidance lists a number of ways to demonstrate preliminary clinical evidence of substantial improvement, including:  direct comparison of a new drug to the available therapy showing a much greater or more important response, or a drug that treats the underlying cause of a disease where the available therapy only treats the symptoms of the disease.

Clinically significant endpoint.  For purposes of breakthrough therapy designation, FDA considers “clinical significant endpoint” generally to refer to an endpoint that measures an effect on irreversible morbidity or mortality or on symptoms that represent serious consequences of the disease.  The term can also refer to an effect on an established clinical surrogate endpoint; a surrogate endpoint or intermediate clinical endpoint considered reasonably likely to predict a clinical benefit; an effect on a pharmacodynamic biomarker(s) that does not meet criteria for an acceptable surrogate endpoint but strongly suggests the potential for a clinically meaningful effect on the underlying disease; or a significantly improved safety profile compared to available therapy.

Benefits of breakthrough therapy designation.  The benefits of breakthrough therapy designation include the features of fast track designation, “intensive” guidance on developing an efficient drug development program, beginning as early as Phase 1, and organizational commitment from FDA involving senior managers.  Breakthrough therapy designation may also be useful in distinguishing which drugs FDA believes truly have the ability to change a given disease space.

Conditions that may lead to the loss of the designation.  FDA’s draft guidance makes it clear that certain products that are granted breakthrough therapy designation can lose their designation.  For example, a drug’s development program may show that the response rate is substantially smaller than the response seen in early clinical testing.  Also, if “breakthrough therapy designation is granted to two drugs that are being developed for the same use [and i]f one of the two drugs gains traditional approval, the other would not retain its designation unless its sponsor provided evidence that the drug may demonstrate substantial improvement over the recently approved drug.”  FDA has discretion in revoking breakthrough therapy designation.

A Consolidated Desktop Reference

The guidance provides a consolidated resource for information on FDA’s policies and procedures for the four expedited programs, threshold criteria applicable to concluding that a drug qualifies for one or more programs, and certain features of each program.  In Fiscal Year 2012, 56 percent of the New Chemical Entities approved by CDER used a combination of these programs.  The programs are intended “to help ensure that therapies for serious conditions are approved and available to patients as soon as it can be concluded that the therapies’ benefits justify the risks.”  The draft guidance provides a helpful table that summarizes the four programs:

View

Importantly, the draft guidance’s definition of “available therapies,” mentioned above, applies to accelerated approval, fast track designation, and priority review, thus providing additional flexibility as compared to FDA’s current regulations.

When the guidance is finalized, it will replace the current guidances entitled “Fast Track Drug Development Programs—Designation, Development, and Application Review” (issued January 2006) and “Available Therapy” (issued July 2004).  Comments on the draft guidance are due on August 25, 2013.

By Ricardo Carvajal –

A federal district court rejected FDA’s proposed “target timeframes” for issuance of regulations to implement major provisions of the Food Safety Modernization Act ("FSMA"), finding them to be “an inadequate response to the request that the parties submit a proposal regarding deadlines that can form the basis of an injunction.”  For a summary of prior activity in this case, see here).  However, the court also rejected Plaintiffs’ proposed deadlines as “overly restrictive in light of FDA’s showing of the complexity of the task… and its showing of diligence in attempting to discharge its statutory duty to promulgate regulations.”  Further, the court rejected Plaintiffs’ plea to eliminate OMB review “absent some indication that the OMB is using its authority to unduly delay promulgation of the regulations.” 

Recognizing the need for an adequate comment period and OMB review, the court ordered that proposed regulations not yet published in the Federal Register be published by November 30, 2013, with all comment periods closing by March 31 2014.  Final regulations must publish in the Federal Register by June 30, 2015.  In essence, these publication dates show deference to FDA’s “target timeframes” – an indication of the court’s reluctance to take too strong a hand in driving FSMA implementation.