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On June 25, FDA released a draft guidance entitled “Expedited Programs for Serious Conditions—Drugs and Biologics” and a related Manual of Policies and Procedures entitled “Review Designation Policy: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   The draft guidance provides important insight into FDA’s breakthrough therapy designation program and serves as a de facto desktop reference for FDA’s four expedited programs: 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FDA’s draft guidance offers the agency’s interpretation of the breakthrough therapy designation program.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  The draft guidance was highly anticipated, as FDA has already received 62 requests for breakthrough therapy designation.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  The draft guidance also describes the conditions under which a breakthrough therapy can lose its designation.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  The draft guidance states that FDA intends to interpret the term “serious” consistent with how it has done so in the past.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.

By Dave B. Clissold –

Earlier this week, FDA’s Center for Tobacco Products ("CTP") released its first determinations regarding the marketing of new tobacco products through the substantial equivalence (SE) pathway.  CTP authorized the marketing of two new tobacco products and denied the marketing of four others.  Under the Family Smoking Prevention and Tobacco Control Act of 2009, one way manufacturers can legally sell a new tobacco product is to establish that their product is substantially equivalent to a predicate product that has been marketed at least since February 15, 2007 (for more on the SE pathway, see our previous posts here and here).  Before marketing the new product, the manufacturer must submit a SE Report under Section 905(j) of the Federal Food, Drug, and Cosmetic Act.  If the new and predicate products have different characteristics, the SE Report must demonstrate that the new product will not raise new questions of public health compared with the predicate product.  After reviewing the SE Reports for two Lorillard Tobacco Company cigarette products, Newport Non-Menthol Gold Box 100s and Newport Non-Menthol Gold Box, CTP issued each a SE Marketing Order.

According to the Technical Project Lead Memorandum released for each product (Newport Non-Menthol Gold Box 100s and Newport Non-Menthol Gold Box), the original SE Reports were both submitted in October 2011 and amended several times in response to questions from CTP.  As outlined in the memoranda, the CTP Office of Compliance and Enforcement agreed with the predicate product identified in the SE Reports (Newport Lights Menthol 80 Hard Box and Newport Lights Menthol 100s Hard Box).  CTP compared the characteristics of the new products with the predicates and noted three differences:  absence of menthol; presence of fire standard compliant (“FSC”) cigarette paper (as opposed to conventional cigarette paper); and, changes to design features to maintain consistency of smoke delivery.  Scientific reviews were then conducted by the CTP Office of Science for the following disciplines:  Chemistry, Engineering, Toxicology, Social Science, and Addiction.  These reviews all concluded that the new product did not raise different questions of public health.

CTP also released a document summarizing the reasons it had determined that four new products were not SE.  CTP determined that in all four cases there were differences in characteristics between the new products and the predicate products, but the SE Reports did not show that the new products would not raise different questions of public health.  Accordingly, CTP determined that they would require a premarket tobacco product application.  Neither the applicants nor the four products were identified, but CTP stated that they were deficient in one or more of the following areas:  failure to establish the predicate tobacco product was marketed as of February 15, 2007; inadequate description of design features; inadequate information presented regarding the type of tobacco used; inadequate information submitted about new chemicals or higher levels of chemicals used in the new product; or, inadequate information presented regarding harmful and potentially harmful constituents of the new tobacco product.

More than 3,000 SE Reports have been submitted to FDA since the law was enacted, and reducing the backlog has been a high priority for CTP.  In announcing the authorizations, CTP Director Mitch Zeller, J.D., stated:  “FDA has been working diligently to review all pending SE submissions.  We know it’s taken time, but expect the process will move more quickly in the future as everyone involved gains more experience.”  The decisions announced yesterday will be scrutinized by tobacco companies and public health organizations alike for any insights they may provide regarding how CTP will address all of the pending SE Reports.

By Jamie K. Wolszon & Alan M. Kirshenbaum ¬−

On June 3, 2013, the U.S. District Court for the Southern District of New York ruled that a drug company co-pay subsidy program did not violate the Racketeer Influenced and Corrupt Organizations Act (RICO) under theories of alleged mail and wire fraud.  Specifically, the court held that the defendants’ co-pay subsidy program did not cause misrepresentation at the point-of-sale, nor was there routine waiver of co-pays by the defendants.  Am. Fed‘n of State, Cnty. & Mun. Emps. Dist. Council 37 Health & Security Plan et al. v. Bristol-Meyers Squibb Co. et al., No. 12-cv-2238, (S.D.N.Y. June 3, 2013) (opinion), at 10.  In addition, the court ruled that the savings program did not constitute commercial bribery under the Robinson-Patman Act.  Id. at 34.

However, the court’s ruling allows the plaintiffs in the case, two union health plans, to file an amended complaint limited to a third theory that the defendant drug companies engaged in a pattern of mail and wire fraud and violated RICO because the companies reported benchmark prices (including Average Wholesale Price and Wholesale Acquisition Cost) for the drug to reporting agencies, and those benchmark prices did not take into account the reduced prices from the savings programs. 

This lawsuit is one of several filed by various union health plans alleging that brand-name drug-makers violated RICO and committed commercial bribery when they provided co-pay subsidy coupons to privately-insured consumers for branded prescription drugs.  We previously reported on these lawsuits here.  The new opinion already is affecting pending cases with similar allegations, as both plaintiffs and defendants have explicitly mentioned it in pleadings to the court.

Court dismisses with prejudice two of the three alleged RICO theories

Plaintiffs alleged that the co-pay savings program, offered jointly by the defendants, Bristol-Myers Squibb and Otsuka America Pharmaceutical, Inc., constitutes substantive RICO violations and a conspiracy to violate RICO.  To allege a RICO violation, plaintiffs must allege acts in furtherance of a pattern of racketeering activity.  Since the savings program was carried out using the mail and Internet, plaintiffs alleged mail fraud (18 U.S.C. § 1341) and wire fraud (18 U.S.C. § 1343). 

The plaintiffs advanced three separate fraud-based theories to attempt to establish their RICO case: (1) Defendants caused misrepresentations to be made at the point of purchase (misrepresentation theory); (2) Defendants committed fraud through the routine and hidden waiver of personal co-pay obligations (waiver theory); and (3) Defendants committed fraud by causing inaccurate price benchmarks to be published (benchmark theory).  Id. at 10.

Court rules against “misrepresentation” theory

Plaintiffs alleged that Defendants cause “misrepresentations to be made…at the time of the point of sale transaction…when…the pharmacist electronically charges the health benefit provider the full benchmark price without accounting for the existence of co-pay subsidies (as instructed by defendants).”  The court dismissed with prejudice this “misrepresentation” theory.  The court stated that there is no deception in a pharmacist’s point-of-sale assertions that insureds have satisfied their co-pay obligations.  Nor is there any duty for the brand-name drug company to disclose to the insurance plan the use of the subsidy, according to the court.  Moreover, the court added, the insurance plan’s reimbursement of the pharmacy is governed by contract, and does not depend on any point of sale representation by the pharmacy.  Id. at 11-13.

Court rules against “waiver” theory

Plaintiffs also alleged that “routine and hidden waiver of personal copay obligations is fraud.”  Id. at 13.  The court also dismissed with prejudice this “waiver” theory.  The court stated that the drug companies do not waive the co-pay.  To the extent that there was any waiver, it would be the pharmacy that waives the co-pay, according to the court.  But in fact, according to the court, there is no actual waiver of the co-pay; “[p]harmacies collect the full amount of the co-pay obligation every time, either from the patient or BMS,” the court stated.  Id. at 18.

Court dismisses without prejudice the “benchmark” theory

Plaintiffs also claimed that Defendants “engaged in an intentional scheme to defraud plaintiffs and the class by reporting benchmark prices to reporting agencies while failing to account for the routine waiver of co-pays.”  The court dismissed without prejudice this “benchmark” theory, allowing the plaintiffs to bring back the benchmark theory in an amended complaint.   Id. at 19.

Court rules that co-pay savings program does not constitute commercial bribery

In addition to the RICO claims, plaintiffs also alleged that the subsidy program violates an anti-trust law prohibition against commercial bribery.  Plaintiffs alleged that the savings program bribes consumers with co-pay subsidies to induce them to purchase branded drugs that cost their insurance plans more.  The court ruled that the subsidy program does not constitute commercial bribery because plaintiffs could not make a required showing that insureds owe a judiciary duty toward, or are agents of, their insurance plans.  Id. at 29-30.

BMS ruling is affecting pending cases involving other drug firms’ co-pay subsidy programs

This ruling comes on the heels of another court’s ruling dismissing similar RICO and anti-trust claims against Merck & Co. (Merck) for its co-pay subsidy program.  On April 29, 2013, U.S. District Court for the District of New Jersey Judge Michael A. Shipp granted Merck’s motion to dismiss on standing grounds.  See Plumbers & Pipefitters Local 572 Health & Welfare Fund v. Merck & Co., No. 12-cv-1379 (D.N.J. Apr. 29, 2013) (opinion).  Unlike the BMS ruling, Judge Shipp’s ruling dismissed all of the claims without prejudice, providing the plaintiffs an opportunity to amend those claims.  Plaintiffs filed a partial motion for reconsideration of that decision granting the motion to dismiss on May 13, 2013.  See Plumbers & Pipefitters Local 572 Health & Welfare Fund v. Merck & Co., No. 12-cv-1379 (D.N.J. May 13, 2013) (partial motion for reconsideration).  Merck filed an opposition to that partial motion for consideration on June 3, 2013.  See Plumbers & Pipefitters Local 572 Health & Welfare Fund v. Merck & Co., No. 12-cv-1379 (D.N.J. June 3, 2013) (opposition to partial motion to dismiss).

The BMS and Merck opinions are already affecting pending cases that raise similar allegations.  In another case with similar allegations in a federal district court in New Jersey, the court ordered, in response to a request made by plaintiff and agreed to by defendant, that the plaintiff has until August 16, 2013 to file an amended complaint to address the objections raised in the Merck and BMS opinions.  See Plumbers and Pipefitters Local 572 Health and Welfare Fund v. Novartis Pharmaceuticals Corp., 12-cv-1403 (D. N.J. June 24. 2013) (stipulation and order).

In another case with similar allegations in a federal district court in Illinois, the plaintiff notified the court that in light of the Merck and BMS opinions, it intends to file an amended complaint by July 15, 2013.  New England Carpenters Health and Welfare Fund v. Abbott Laboratories, No. 12-cv-1662 (N.D. Ill. June 14, 2013) (notice to file amended complaint).  Defendant Abbott responded that the plaintiffs cannot remedy the deficiencies in the allegations by amending the complaint.  New England Carpenters Health and Welfare Fund v. Abbott Laboratories, No. 12-cv-1662 (N.D. Ill. June 18, 2013) (response to notice to file amended complaint).  

Meanwhile, Defendant GlaxoSmithKline LLC. has requested that a federal district court in Pennsylvania allow it to submit the BMS decision as supplemental authority in its case with similar allegations.  New England Carpenters Health and Welfare Fund v. GlaxoSmithKline LLC., No. 12-cv-1191 (E.D. Pa. June 11, 2013) (second motion for leave to file supplemental authority).

By Kurt R. Karst – 

It was 75 years ago today, on June 25, 1938, that President Franklin Delano Roosevelt signed into law the Federal Food, Drug, and Cosmetic Act (“FDC Act”), which replaced the Pure Food and Drug Act of 1906, 34 Stat. 768, enacted by President Theodore Roosevelt less than 32 years before on June 30, 1906.  Clocking in at just under 20 pages of text, the Public Law version of the 1938 FDC Act, 52 Stat. 1049, is a far cry from the 700-plus page behemoth statute of today.  (The June 11, 1938 Conference Report on S. 5, which became the FDC Act, was also quite short – just 24 pages in length.  See our previous post on the expansion of the FDC Act and FDA regulations.)  And the statute will continue to expand with likely changes to the law concerning drug compounding and drug supply chain (i.e., track and trace) currently being debated by Congress. 

Originally termed the “Tugwell Bill” after then Assistant Secretary of Agriculture Rexford G. Tugwell, the bill that was first introduced to change food and drug law, S. 1944, was dropped by New York Senator Royal S. Copeland on June 12, 1933.  A little more than 5 years later, and just days after Senator Copeland’s death, President Roosevelt signed the bill into law. 

As you can imagine, we’ve done our homework in researching the history of the FDC Act for this post.  We’ve looked over records of the FDA maintained by the U.S. National Archives & Records Administration, reviewed FDA’s history website, paged through the 34 volume (including appendices) “A Legislative History of the Federal Food, Drug and Cosmetic Act and Its Amendments” put out by FDA in 1979, and looked over several law review articles.  In celebration of the FDC Act’s diamond jubilee, we’d like to share with our FDA Law Blog readers a couple of the gems we uncovered in our walk through history. 

First up is a firsthand account of the political and legislative wrangling to get the FDC Act enacted.  In “The Food, Drug, and Cosmetic Act of 1938: Its Legislative History and Its Substantive Provisions,” 6 Law & Contemp. Probs. 2 (1939), David F. Cavers traces and documents the conception and birth of the law.  The article is chock-full of details interesting to students of food and drug law and its history.  Here are just a couple of excerpts from the article that piqued our interest (and that will hopefully prompt you to give the entire piece a once-over):

Perhaps the most striking characteristic of the history of the Food, Drug, and Cosmetic Act is the fact that this measure, which was of consequence to the health and pocketbook of every citizen of the country and which importantly affected industries whose annual product totals roughly ten billion dollars, never became the object of widespread public attention, much less of informed public interest.  The affected industries were kept posted by their associations and their journals; some national women’s organizations sought to apprise their membership of major developments; but the public at large, including persons ordinarily well-informed on national affairs, knew little or nothing of what was transpiring in Congress. . . .  For the existence of this situation, the nation’s press must stand primarily accountable.  In the long history of the bill, the New York Times seems to have seen fit to give it front-page mention on but a single occasion and then only to report a disturbance in the Senate galleries. . . .

To Rexford G. Tugwell, then Assistant Secretary of Agriculture, must be given credit for initiating the movement for revision of the Act of 1906.  That act had been amended in but five particulars since its adoption, and one of those amendments had served only to restore in part the damage wrought by an unfortunate Supreme Court decision.  Criticism of the Act, emanating both from the Food and Drug Administration (hereinafter termed the “F & DA”) and from students of the field, had been ignored by successive national administrations.  The public was unaware of the limited character of the protection accorded them.  It was not until the success in 1927 of “Your Money’s Worth” by Stuart Chase and Fred Schlink, the creation of  Consumers Research under the latter shortly thereafter, and especially publication of the best-selling “100,000,000 Guinea Pigs” by Kallet and Schlink in 1933 that an appreciation of the deficiencies of the existing law and the advantages taken of them by elements in the industries became at all general.

Mr. Tugwell was acquainted not only with these works but with their authors.  When he came into the Department of Agriculture, he sounded out the Chief of the F & DA, Walter G. Campbell, as to the adequacy of the existing law, and obtained confirmation of weaknesses alleged by its critics.  His next step was to secure Presidential sanction for the revision of the Act.  This was granted, and he then undertook to organize a group to draft a measure designed to correct the defects in the existing law.

The second gem we uncovered is not from the 1930s, but from the 1950s during the Presidency of Dwight D. Eisenhower. 

From time to time the question comes up: “Has Congress ever considered rewriting or overhauling the 1938 FDC Act?”  After all, with numerous amendments to the statute over the past 75 years, the FDC Act has gotten  quite complex.  As one judge commented several years ago when trying to plow through just the Hatch-Waxman Amendments to the FDC Act, “There’s a special place in Hell where they torture people who write things like this.”  Well, the answer to whether an overhaul was ever in the works is “yes.” 

In 1954, Congress considered H.R. 9728, titled “A Bill to Revise, Codify, and Enact Into Law, Title 21, of the United States Code, Entitled ‘Food, Drugs, and Cosmetics.’”  The House and Senate Reports of the bill (available here and here) explain:

The purpose of this bill is to revise, codify, and enact into law title 21 of the United States Code.  Revision, as distinguished from codification, means the substitution of plain language for awkward terms, reconciliation of conflicting laws, omission of superseded sections, and consolidation of similar provisions.  The primary purpose of this revision is not to change substantive law, but to put that law in a form which will be more useful and understandable.

Although H.R. 9728 was passed by Congress, the bill never made it past President Eisenhower’s desk.  In a September 3, 1954 “Memorandum of Disapproval of Bill To Revise and Codify the Laws Relating to Food, Drugs, and Cosmetics,” President Eisenhower explained the reasons for withholding his John Hancock on the bill:

I HAVE WITHHELD my approval from H.R. 9728, “To revise, codify, and enact into law, title 21 of the United States Code, entitled ‘Food, Drugs, and Cosmetics.’”

The legislative history of this measure indicates that it was enacted in the view that existing law would not be substantially changed by the bill or that no changes in existing law would be made which would not meet with substantially unanimous approval.

Notwithstanding this, the bill makes one very important substantive change and casts serious doubts on the status and interpretation of other statutory provisions.  The most important change is the deletion from the multiple seizure powers of the present law the authority which the Food and Drug Administration has had for a number of years to make more than one seizure of food, drugs, and cosmetics, where they bear identical labeling which is believed fraudulent or so materially misleading as to injure or damage the purchaser or consumer.  In the cases subject to removal of authority made by the bill, the Food and Drug Administration would be able to seize only one shipment of the articles believed to be so misbranded.  Such a limitation would make it possible for fraud and material deception to continue unabated until the validity of the labeling involved in the seizure case is definitely settled by the courts.

The enactment also contains a new substantive provision affecting the administration of the Federal Food, Drug, and Cosmetic Act, the meaning of which is very uncertain, namely, that the Administrative Procedure Act “shall continue to apply to all activities of the Food and Drug Administration.”  The Administrative Procedure Act already applies to both rule-making and adjudication under this regulatory statute, as it does to other Acts of Congress not expressly excepted.  The Federal courts, I am informed, have discussed on several occasions the relationship of these two enactments.  The new language, unless it should be regarded as mere surplusage, might be held to effect basic changes in existing procedures, thereby placing the Food and Drug Administration under requirements not applicable to any other Federal agency.  Such a change in the scope of the Administrative Procedure Act should not be adopted without full consideration.

The interest of the consumer public is the principal objective of the Federal Food, Drug, and Cosmetic Act.  I believe that substantive changes which may seriously affect the administration of this law should not be placed in the statute books without extending to the responsible enforcement agency, the great industries affected, and the consumer public, the full opportunities for hearing and discussion afforded by the usual operation of the legislative process both in the Committees and in both Houses of the Congress.

Finally, the enactment, through oversight, may nullify the provisions of legislation relating to the importation of animals and poultry into the Virgin Islands, approved on July 22 of this year (P.L. 517).  The enrolled measure apparently does not take into consideration the amendments to the Organic Act of the Virgin Islands which were made by that Act.  Here again the adverse effects would be serious.

In the nearly 60 years since the push to revise the FDC Act, we’re not aware of a similar attempt undertaken by Congress, although the statute could probably use some cleaning up.  At this point, however, an overhaul of the FDC Act seems unlikely.  So, we have what we have. . . .  and celebrate that legislative accomplishment today.

By John R. Fleder –

The Children’s Online Privacy Protection Act (“COPPA”) will celebrate its super, sweet 16 next year.  The FTC handles most COPPA enforcement and will no doubt mark the occasion with not-so-super or sweet enforcement.  The FTC has issued an amended COPPA rule, which will take effect on July 1, 2013.  Once the rule goes online, so will the FTC – in search of enforcement opportunities.

Here, we provide a brief primer on COPPA and when a food, drug, or device company might be at risk of enforcement.  In general, food companies engaged in online marketing that is directed to children, or likely to appeal to children, are at the greatest risk.

COPPA governs companies’ collection, use, or disclosure of personal information (“PI”) provided by a child through a website, app, or other online program.  COPPA and the FTC’s COPPA rule, in short, seek to place a parent or legal guardian between the PI that a child might provide and the companies seeking to collect, use, or disclose PI.

For the purposes of COPPA, the FTC has defined PI to include information such as a first and last name, telephone numbers, electronic files containing a child’s image or voice, and “persistent identifiers” that can be used to recognize a user over time and across different online programs.  According to the FTC, COPPA applies to three types of entities that might come into contact with this type of PI:

• Operators of commercial websites or online programs (including mobile apps) that are directed to children under 13 and collect, use, or disclose PI provided by children under 13;
• Operators of commercial websites or online programs that are directed to a general audience if the operator has “actual knowledge” that it is collecting, using, or disclosing PI provided by children under 13; and
• Companies that have actual knowledge that they are collecting PI via another company’s website or online service that is directed to children.

If a company is covered by COPPA, the FTC expects that it will

• Post a clear and comprehensive privacy policy describing its practices for PI collected from children;
• Provide a parent or legal guardian with prior “direct notice” of the collection of PI from children;
• Obtain a parent or legal guardian’s prior “verifiable consent” for any collection (subject to some limited exceptions);
• Provide the parent or legal guardian access to their child’s PI to review and/or delete;
• Maintain the confidentiality, security, and integrity of PI collected from children;
• Retain PI collected from children for only as long as is necessary to fulfill the purpose for which it was collected; and
• Delete PI collected from children using reasonable measures to protect against unauthorized access or use.

Food companies, including those with well-known, national brands, have faced COPPA enforcement in the past over child-directed web programs promoting candy, cookies, and popcorn.  The FTC’s new round of enforcement will likely include at least one or two food companies that use websites, apps, or other online programs that collect, use, or disclose PI from children.

Drug and device companies are probably less likely to be at risk of enforcement, given that they are less likely to employ online programs that children might use.  There have been no enforcement actions to our knowledge against a drug or device company.  Nevertheless, in developing online programs or services for children’s drug or device products, COPPA could come into play.  For example, a child-directed app intended to assist parents in training a child about proper use of a product, like an inhaler, could fall under COPPA.

By Kurt R. Karst –      

Shortly after 10:00 AM this morning, the generic drug industry let out a collective sigh of relief.  It was at that time the U.S. Supreme Court issued its highly anticipated ruling in Mutual Pharmaceutical Co. v. Bartlett (Docket No. 12-0142).  In a big win for the generic drug industry, the Court, in a 5-4 decision penned by Justice Alito (and joined in by Chief Justice Roberts and Justices Scalia, Kennedy, and Thomas), held that state-law design-defect claims that turn on the adequacy of a drug’s warnings are pre-empted by the FDC Act and under the Court’s 2011 decision in PLIVA Inc. v. Mensing, 131 S.Ct. 2567 (2011).  Jutice Breyer filed a dissenting opinion joined in by Justice Kagan.  Justice Sotomayor filed a separate dissenting opinion joined in by Justice Ginsburg.  The composition of Justices in the 5-4 Bartlett decision mirrors that of the 5-4 decision in PLIVA.

As we previously reported (here, here, and here), the question presented to the Court was whether the U.S. Court of Appeals for the First Circuit erred when it ruled that federal law does not preempt state-law design defect claims concerning generic drug products because any conflict between federal and state law can be avoided if the the generic drug manufacturer stops selling its products.  Interestingly, the First Circuit characterized Wyeth v. Levine, 555 U.S. 555 (2009) as a general no-preemption rule and PLIVA as an exception to that rule.  By way of background, in PLIVA, the Court ruled 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.  In contrast, in Wyeth, the Court held that a state-law tort action against a brand-name drug manufacturer for failure-to-warn is not preempted.

The opening paragraphs of Justice Alito’s majority opinion nicely summarize the Court’s holding:

We must decide whether federal law pre-empts the New Hampshire design-defect claim under which respondent Karen Bartlett recovered damages from petitioner Mutual Pharmaceutical, the manufacturer of sulindac, a generic nonsteroidal anti-inflammatory drug (NSAID).  New Hampshire law imposes a duty on manufacturers to ensure that the drugs they market are not unreasonably unsafe, and a drug’s safety is evaluated by reference to both its chemical properties and the adequacy of its warnings.  Because Mutual was unable to change sulindac’s composition as a matter of both federal law and basic chemistry, New Hampshire’s design-defect cause of actioneffectively required Mutual to change sulindac’s labeling to provide stronger warnings.  But, as this Court recognized just two Terms ago in PLIVA, Inc. v. Mensing, 564 U. S. ___ (2011), federal law prohibits generic drug manufacturers from independently changing their drugs’ labels.  Accordingly, state law imposed a duty on Mutual not to comply with federal law.  Under the Supremacy Clause, state laws that require a private party to violate federal law are pre-empted and, thus, are “without effect.”  Maryland v. Louisiana, 451 U. S. 725, 746 (1981).

The Court of Appeals’ solution—that Mutual should simply have pulled sulindac from the market in order to comply with both state and federal law—is no solution.  Rather, adopting the Court of Appeals’ stop-selling rationale would render impossibility pre-emption a dead letter and work a revolution in this Court’s pre-emption case law.

Accordingly, we hold that state-law design-defect claims that turn on the adequacy of a drug’s warnings are preempted by federal law under PLIVA.  We thus reverse the decision of the Court of Appeals below.

In two different dissenting opinions, Jutices Breyer and Sotomayor take issue with the majority’s decision.  For his part, Justice Breyer does not believe that it is literally impossible for a generic drug manufacturer to comply with conflicting state and federal law.  “Without giving [FDA’s] views special weight, Iwould conclude that it is not impossible for petitioner to comply with both state and federal regulatory schemes and that the federal regulatory scheme does not pre-emptstate common law (read as potentially requiring petitioner to pay damages or leave the market),” writes Justice Breyer in his 4-page dissent. 

For her part, Justice Sotomayor sees the majority decision as expanding the scope of impossibility preemption, leaving injured consumers without any remedy.  “Today, the Court unnecessarily and unwisely extends its holding in Mensing to pre-empt New Hampshire’s law governing design-defects with respect to generic drugs. . . .  If our established pre-emption principles were properly applied in this case, and if New Hampshire law were correctly construed, then federal law would pose no barrier to Karen Bartlett’s recovery,” writes Justice Sotomayor in her 26-page dissent.

And so, with the Supreme Court’s decision, yet another attempt to chip away at the PLIVA decision has failed.  But the generic drug industry is likely in for more controversy – and not just in product liability litigation.  As we previously discussed, the United States’ amicus brief in Bartlett signals that changes are afoot at FDA.  According to footnote 2 of the brief, “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.”  Now that the Supreme Court has decided Bartlett, might FDA unveil its plan in the coming months? 

Additional Reading:

• Public Citizen – Inability of Generic Drug Manufacturers to Warn of Newly Discovered Hazards Puts Patients at Risk; Serious Safety Hazards Often Take Years to Emerge (see also Public Citizen Petitions FDA to Amend Generic Drug Labeling Regulations in the Wake of Mensing)
• GPhA – Statement from Ralph G. Neas, President and CEO of the Generic Pharmaceutical Association on the Mutual v. Bartlett Supreme Court Ruling

The National Institutes of Health ("NIH") recently launched a database of labels of dietary supplements being sold in the United States.  The database includes, among other information, directions for use, ingredients, business contact information, and claims taken directly from product labels. 

The database can be browsed by various categories, or it can be searched via several options, including key word searching of product names or claim language.  A key word “Quick Search” can also be conducted of the entire database.  For example, a Quick Search using the term, “probiotic” yields the following:

An NIH official stated that the database “will be of great value to many diverse groups of people, including nutrition researchers, healthcare providers, consumers, and others.”  We add to the “others” category – for better or for worse – competitors, regulators, self-regulators, the Center for Science in the Public Interest, and plaintiffs’ lawyers. 

The database currently contains information from 17,000 labels, but the NIH plans to make regular updates and incorporate “most of the more than 55,000 dietary supplement products in the U.S. marketplace.” 

Questions remain at this point, such as how frequently the database will be updated and exactly what the scope will be.  For instance, an industry stakeholder speaking to Nutraingredients-USA.com raised the question whether the database will include products sold through channels, such as network marketing. 

One point to bear in mind if you attempt to Google-search for the new database: an older and far more limited NIH database of dietary supplement labels remains online. 

By Etan J. Yeshua –

FDA has announced several key areas on which it plans to focus its food- and cosmetic-related research and regulatory efforts.  The plan specifically names imported foods, nanoparticles in cosmetics, dietary supplement toxicology, and obesity, among others, as specific areas of concern.

On Tuesday the Center for Food Safety and Applied Nutrition (“CFSAN”) published the CFSAN Science and Research Strategic Plan, which CFSAN said was part of an effort “to implement new Food Safety Modernization Act-mandated regulatory responsibilities,” and “to inform the center’s regulatory role as it applies to food and cosmetic safety, food defense, and applied nutrition.”

In the plan, CFSAN identifies five “Strategic Goals” that CFSAN believes will have “the greatest impact on modernizing the nation’s food safety system and protecting the public health:”

• Better controlling and preparing for hazards
• Creating faster and validated methods
• Influencing consumer behavior toward healthy dietary choices
• Developing leading edge technology for understanding and evaluating scientific information; and
• Improving FDA’s adaptability and responsiveness

CFSAN elaborated by providing “Research Outcomes” that would indicate progress toward each Strategic Goal:

• Better controlling and preparing for hazards
  Perhaps the broadest of the Strategic Goals, this goal calls for developing better control of and response to hazards by performing research in microbiology, analytical chemistry, toxicology, food science, bioinformatics, and nanotechnology.  CFSAN’s research focuses on microbial pathogens, chemical contaminants, and food safety evaluation.  Thus, as examples of research outcomes, CFSAN mentions improved preventive controls for certain pathogens, “better detection and quantitation of allergens,” safety assessment of nanoparticles in cosmetics, and “toxicological data on dietary supplements of concern.”  
• Create faster and validated methods
  With this goal, CFSAN will seek to “reduce the time it takes to detect contaminants and adulterants in food and to validate all of the regulatory methods [it] use[s].”  For example, CFSAN intends to validate its methods for detecting Salmonella and E.coli in fresh produce; to be able to detect norovirus and hepatitis A in foods in two-days; and to be able to screen chemical contaminants in high-risk products.
• Influence consumer behavior toward healthy dietary choices
  CFSAN explained that, although nutrition labeling is “continually being improved,” consumers may not be using the information to select their diets in light of “growing problems of obesity, diabetes, and cardiovascular disease.”  Therefore, CFSAN intends to evaluate the effectiveness of “communication and change in behavior practices,” and to promote research to measure the benefits of certain dietary changes, including adherence to the 2010 Dietary Guideline for Americans.
• Develop leading edge technology for understanding and evaluating scientific information
  Given the high volume of data that food safety regulation entails, CFSAN plans to develop information technology that will aid in assessing these data.  For example, CFSAN plans to research new technologies to assess the safety of food additives and to help characterize and sub-type microbes in order to better detect and respond to foodborne outbreaks.
• Improve our adaptability and responsiveness
  Finally, CFSAN has set an organizational goal to better adapt and respond to new regulatory concerns by prioritizing research, collaborating with other regulatory bodies, and planning for variability in research funding.

By Riëtte van Laack –

Last week, Health Science Funding, LLC filed what might be the first medical food lawsuit against FDA.  (A copy of the Complaint is available here, and a copy of the Motion for a Preliminary Injunction is available here.)  Plaintiff markets what it claims to be a medical food for women with lupus, Prastera® DHEA.

The concept of a “medical food” is a legal category recognized by Congress in 1988 in the Orphan Drug Amendments, and later incorporated into the Federal Food, Drug, and Cosmetic Act ("FDC Act").  A medical food is:

a food which is formulated to be consumed or administered enterally under the supervision of a physician and which is intended for the specific dietary management of a disease or condition for which distinctive nutritional requirements, based on recognized scientific principles, are established by medical evaluation.

Medical foods may be marketed without prior approval or notice to FDA. In fact, no law or regulation on its face gives FDA the authority to approve medical food labels.  Nevertheless, Plaintiff submitted the label for Prastera® DHEA to FDA and asked that FDA confirm that the product is a medical food under the law.  Plaintiff claims that, rather than confirming that the product is a medical food, FDA raised two concerns:  1.)  Dietary supplements are not “automatically” Medical Foods; and 2.) FDA is not aware of any “distinct nutritional requirements” for DHEA in female lupus patients.  In addition, FDA allegedly “verbally threaten[ed] Plaintiff with enforcement action.”

Plaintiff claims that FDA’s concerns are irrelevant to the question of whether the product is a medical food.  Notably, although Plaintiff asked FDA to confirm that the product is a medical food, it claims that FDA is not qualified to determine whether lupus patients have distinctive nutritional requirement for DHEA (an essential element of the medical food definition).  Plaintiff claims that FDA’s knowledge of such nutritional requirements is irrelevant.  Unsatisfied with FDA’s response, Plaintiff now turns to the Court and asks that the Court confirm that Prastera® DHEA is a medical food.  In addition, it asks that the Court enjoin FDA from taking enforcement action against Plaintiff until the Court rules. 

Plaintiff claims that the case involved a “straightforward issue of statutory construction.”  However, FDA history regarding medical foods suggests that Plaintiff’s interpretation of the medical food definition is not that simple.  For numerous legal reasons we anticipate that the Court will not seize what Plaintiff identifies as a rare “opportunity to create a legacy” and “help save four women’s lives today, and another four tomorrow, and another four every tomorrow for years into the future.”

By Jennifer D. Newberger –

It is not often that CDRH guidance documents get much attention outside the trade press and medical device circles.  So when The Wall Street Journal and The Washington Post both publish articles about a draft guidance document on the same day, it must mean big, important news.  Or must it?

On June 13, The Washington Post published an article titled, “FDA, facing cybersecurity threats, tightens medical-device standards.”  The Wall Street Journal gets to the point more directly with the title, “Patients Put at Risk By Computer Viruses.”  The reality seems to be that FDA has not actually tightened its medical device standards (which, of course, can’t be done through a draft guidance, not legally, anyway), and that while the potential for patient harm from viruses or malware exists, neither FDA nor industry is actually aware of such harm occurring.  Despite the WSJ title, the article itself states that FDA is not actually aware of deaths or injuries resulting from computer viruses or other cybersecurity breaches. 

So what is really going on, and what does FDA’s guidance actually address?  It is not news that many more medical devices today operate using wireless and Internet- and network-connected features.  With that comes the risk that the software running these devices will get a bug or virus that could interrupt the functionality of the device, or could intentionally be hacked.  FDA has been addressing the issue of cybersecurity for medical devices at least as far back as 2005, when it issued a guidance document titled, “Cybersecurity for Networked Medical Devices Containing Off-the-Shelf (OTS) Software” ("OTS Guidance").  That guidance document focused largely on quality system, post-market controls the manufacturer could put in place to reduce the likelihood of a cybersecurity attack.  The draft guidance issued on June 13, “Content of Premarket Submission for Management of Cybersecurity in Medical Devices,” addresses what companies should include in their premarket submissions “to reduce the risk that device functionality is intentionally or unintentionally compromised.”  Draft Guidance, at 2.

The draft guidance focuses on three “security controls”:  confidentiality, integrity, and availability.  Confidentiality means data are accessible only to authorized individuals; integrity means the data are accurate and have not been improperly modified; and availability means that data are “accessible and usable on a timely basis in the expected manner.”  Id.  To maintain these controls, the guidance asks that manufacturers “consider cybersecurity during the design phase of the medical device, as this can result in more robust and efficient mitigation of cybersecurity risks.”  Draft Guidance, at 3.

The guidance states that manufacturers should provide the following information in a premarket submission to demonstrate the cybersecurity of the medical device:

1. Hazard analysis, mitigations, and design consideration pertaining to intentional and unintentional cybersecurity risks associated with the device;
2. A “traceability matrix” linking the actual cybersecurity controls to the cybersecurity risks considered;
3. Plan for providing validated updates and patches to operating systems or software as needed;
4. Appropriate documentation to demonstrate that the device will be provided to purchasers free of malware; and
5. Device instructions for use and product specifications related to recommended anti-virus software and/or firewall use.

The real question is, what does this mean for medical device development?  The Washington Post article brazenly states that the new “tightened standards” expressed in the draft guidance “will allow the FDA to block approval of devices if manufacturers don’t provide adequate plans for protecting them.”  This seems to go beyond what the draft guidelines say, and beyond what FDA has the statutory and regulatory authority to do.  Let’s not forget that for 510(k) devices, the question is only if the device is substantially equivalent to a predicate device.  If the proposed device meets that standard, FDA would be hard pressed to issue a not substantially equivalent letter based solely on whether the 510(k) notice addresses cybersecurity protection to FDA’s satisfaction.  (Of course, industry has seen many examples where FDA has applied tighter standards through draft guidance, and showing that a new device is as safe and effective as the predicate device is not enough.)  For PMAs, the standard is one of reasonable assurance of safety and effectiveness.  If FDA can show that the potential, unrealized cybersecurity risks prevent the device from making that showing, it could perhaps hold up the application.  However, both articles make clear that while there have been instances of viruses infecting computer device software, FDA is not aware of any injuries or deaths resulting from the viruses, nor is it aware of any evidence that hackers have deliberately targeted a hospital network or medical device “for a malicious cyberattack.” 

This doesn’t mean it couldn’t happen, and of course manufacturers should attempt to design against these potential risks as much as possible.  In discussing what manufacturers could be doing for currently marketed devices, the issue of what corrections need to be reported to FDA seems to have reared its ugly head.  The Washington Post article states that “manufacturers typically refuse to apply software patches, claiming the FDA does not allow updates to regulated devices, but FDA officials say that is not the case.”  According to the WSJ, “manufacturers argue that FDA regulations limit the changes that can be made to a device’s software.”

This concern on the part of manufacturers may stem from a draft guidance we discussed in a prior blog post.  In that draft guidance, FDA took a new position, stating that corrections that do not meet the definition of a recall, but rather are only “product enhancements,” still must be reported to FDA.  Under this flawed analysis, FDA may be able to take the position that something as simple as a software patch would need to be reported, if it believed the patch was introduced to reduce a risk to health.  This would significantly increase the regulatory burden for device manufacturers as well as deter these improvements.  This would also be in conflict with FDA’s earlier statements in the 2005 OTS Guidance, in which FDA clearly stated that neither a new 510(k) submission nor a report under Part 806 would usually be required for implementation of a software patch to address cybersecurity vulnerability.  OTS Guidance, at 4, 5.  In discussing the Part 806 reporting requirements, FDA said that reporting would not usually be required “because most software patches are installed to reduce the risk of developing a problem associated with a cybersecurity vulnerability and not to address a risk to health posed by the device. In most cases, therefore, you would not need to report a cybersecurity patch under 21 CFR Part 806 so long as you have evaluated the change and recorded the correction in your records.”  Id. at 5.  Hopefully, this is the position FDA would take today, and an improvement to cybersecurity would not been seen as an action taken to reduce a risk to health.

FDA will need to consider how to go about encouraging manufacturers to take the steps necessary to protect their currently marketed devices from cybersecurity, while at the same time not imposing additional regulatory burdens.  The same is true for new devices.  Manufacturers should consider the cybersecurity risks when designing a new product, but not all potential eventualities can be adequately considered and addressed, and FDA should not be looking for manufacturers to guarantee the absolute cybersecurity of their devices any more than they can guarantee there will be no adverse events associated with use of the device.  Given the pace of development in computer technology, the goal of preventing all future risks is not achievable.  Hopefully FDA and industry can work together to strike a balance that will enhance cybersecurity without inhibiting the ability of new devices to come to market.

(The title of this post is taken from Ki Mae Heussner, “FDA to medical-device manufacturers: batten the hatches, the hackers are coming,” GigaOM. )

By Jennifer D. Newberger –

On June 14, 2013, FDA issued a draft guidance, “FDA Decisions for Investigational Device Exemption (IDE) Clinical Investigations,” to provide clarity around certain IDE decisions, and to introduce a “voluntary program intended to facilitate the development of trial designs that may support a marketing approval or clearance.”  Draft Guidance, at 2. 

IDE Decisions

After evaluating an IDE, FDA takes one of the following three actions: approval, approval with conditions (traditionally referred to as “conditional approval”), or disapproval.  The draft guidance focuses primarily on the second of these options, approval with conditions.

When FDA approves an IDE with conditions, the sponsor may begin enrollment in the clinical study but must respond to the issues identified by FDA within 45 days from the date of FDA’s decision letter.  FDA may issue an approval with conditions “if FDA has determined that, despite some outstanding issues, the information provided is sufficient to justify human clinical evaluation of the device and the proposed study design is acceptable with regard to protection of study subjects.”  Draft Guidance, at 4. 

FDA may also grant a “staged approval,” which allows enrollment of a limited number of subjects while the sponsor responds to outstanding questions posed by FDA.  Once the sponsor addresses those issues, it may expand enrollment in the clinical trial.

IDE Disapprovals

Though FDA may deny an IDE for a variety of reasons, section 601 of FDASIA, which modified section 520(g) of the FDC Act, specified that FDA may not disapprove an FDA based on a finding by FDA that the investigation may not support a marketing application.  In the draft guidance, FDA notes that, while it will abide by this requirement not to disapprove an IDE that may not support a marketing application, it believes that the sponsor will benefit from knowing what modifications FDA believes are necessary to obtain approval.  FDA states that it “will convey such considerations to the sponsor to provide greater clarity and predictability.  In addition, FDA will convey certain considerations that FDA believes will be important for future submissions related to the proposed investigation.”  Draft Guidance, at 9.

FDA will communicate these considerations in any combination of the following:  study design assessment (e.g., are endpoints appropriate), study design considerations (e.g., randomization, statistical plan, enrollment criteria, blinding), or future considerations (e.g., limitations of the data with regard to supporting certain claims or indications, or required non-clinical testing).

Pre-Decisional IDE Review Process

This process is intended to “provide sponsors with information regarding study designs that will support market approval or clearance.”  Draft Guidance, at 12.  This process, known as a “Pre-Decisional IDE,” is “a voluntary approach to enable sponsors to obtain timely feedback from review staff on a near-final IDE application, with the opportunity for a mid-cycle interaction with the review team to promote a clearer understanding and quicker resolution of major issues with device or subject safety as well as study design.”  Id.  FDA is implementing this program in the hopes it will result in faster approval of IDEs that may support a marketing application.  Eligibility is limited to pivotal studies for which an IDE is required.

The initial step of the application process is similar to that of a traditional IDE.  Within five days of submission, FDA will evaluate whether the application is eligible and sufficiently complete for substantive review.  One the application is accepted, a 30-day review clock begins. 

At the end of the review cycle, FDA will issue to the sponsor questions agreed to by division management that would, if the application were submitted as an IDE, lead to a disapproval, result in an approval with conditions, or constitute a design consideration that FDA believes would not support a marketing application.  Draft Guidance, at 14.

A meeting to discuss the application will be scheduled to occur within 15 days after the end of the 30-day period, or at another time agreed to by both FDA and the sponsor.  The meeting should be no more than 90 minutes, and the sponsor must provide meeting minutes to FDA within seven days of the meeting.

After the meeting, the sponsor may choose to request the Pre-Decisional IDE be converted to an actual IDE.  Such a request must be made within seven days of the meeting, and FDA will issue the decision letter within 15 days of receipt of the request.  The inclusion of any additional information in the conversion request will result in the commencement of a standard IDE review, with a decision to be rendered within 30 days.

If the sponsor does not request a conversion, FDA must provide written feedback within 15 days of the meeting, including any deficiencies or recommendations noted during the review.  The sponsor may then submit a formal IDE application; respond to the issues identified by FDA in the original Pre-Decisional IDE; or respond to FDA’s feedback and submit a request to repeat the Pre-Decisional IDE process.

It is not immediately obvious from the draft guidance precisely how a sponsor will benefit from the multi-step Pre-Decisional IDE process.  If there are no concerns with the IDE, the review time is the same—30 days.  If there are concerns, the sponsor and FDA will engage in a series of exchanges to resolve the issues.  It may offer more opportunity for interactive feedback from FDA, but it is not yet clear if it will actually lead to faster IDE approvals or a higher percentage of IDE approvals.  Nevertheless, for complicated submissions, it may provide more in-depth, useful feedback at an earlier stage in the review process, giving the sponsor an opportunity to better understand and address FDA’s concerns.

Transparency and data disclosure are this year’s hot issues for pharmaceutical companies. On the clinical trial front, Europe is leading the way, with initiatives from the European Medicines Agency and the European Parliament that will impact drug research and development world-wide. The proposed TEST Act and FDA initiatives concerning disclosure of safety and efficacy data signal that the United States is not far behind (see our previous post here).  Mandatory disclosures concerning the details of trial protocols and results, if required, will have significant practical and strategic ramifications, particularly if retroactive disclosure is imposed.

Please join partners from Dechert’s Life Sciences practice and regulatory attorneys from Hyman, Phelps & McNamara, P.C. for a webinar, titled "Clinical Trial Disclosure: Keeping Ahead of the Wave," on where these initiatives stand, what to expect and how reforms could impact pharmaceutical companies.

Seminar Topics :

 Update on EU and US legislative and regulatory proposals for clinical trial disclosures:

– overview of current EU and US disclosure framework
– who is driving the push for expanded disclosure and how industry is or is not responding
– what is being proposed
– timeline for change impacting companies inside and outside the EU

 The real-world effects on current and future clinical development programs:

– considerations regarding clinical trial design and management
– implications for compliance and reporting programs

 Other immediate and long-term business impacts:

– on securities-related disclosures and securities litigation risk
– on IP protection
– increased product liability risks

Speakers:

David B. Clissold, Director, Hyman, Phelps & McNamara, P.C.  
Hope S. Freiwald, Partner, Complex Commercial Litigation/Life Sciences, Dechert LLP 
David A. Kotler, Partner, White Collar and Securities Litigation/Life Sciences, Dechert LLP
Jonathan A. Schur, Partner, Corporate and Securities/Life Sciences, Dechert LLP 
Roger C. Thies, Director, Hyman, Phelps & McNamara, P.C.

When:

Tuesday, June 25, 2013, from 12:45 PM – 1:45 PM EDT.  Please confirm your attendance by Monday, June 24. Further details, including how to connect to the webinar, will be provided closer to the program.  Application for Continuing Legal Education ("CLE") credit is currently pending in California, New Jersey, New York and Texas.  Please email Pamela Lashbrook (pamela.lashbrook@dechert.com) with any questions, or if you require CLE credit in another jurisdiction.

FTC Chairwoman Edith Ramirez announced on Monday the appointment of Jessica Rich to head the agency’s Bureau of Consumer Protection ("BCP").  Ms. Rich is a 20-year veteran of the FTC with experience overseeing policy work and enforcement especially in the areas of privacy, data security, and the use of evolving technologies, such as mobile applications, in marketing. 

Under David Vladeck, the BCP’s last non-Acting Director, the Bureau had a pronounced focus on health benefit advertising – with high-profile cases involving products such as muscle-toning tennis shoes and breakfast cereals marketed with claims about boosting children’s immunity and cognitive function.  Privacy and data security cases were not uncommon during Mr. Vladeck’s tenure; several settlements were announced with companies, such as Google and Facebook.  It would not be surprising, however, to see even greater enforcement focus on privacy, data security, and online marketing matters during Ms. Rich’s tenure.  There could also be more cases involving both emerging technologies and health benefit advertising.  The 2011 investigation of a mobile application marketed as an acne treatment provides an example of such a case.  

Ms. Rich previously served, since January 2012, as Associate Director of the BCP, heading the Division of Financial Practices.  She served as BCP Deputy Director under then-Director Vladeck from November 2009 until 2012.  From 1998 until 2009, Ms. Rich served as Assistant Director of the Division of Financial Practices and as Assistant Director, and then Acting Associate Director, of the Division of Privacy and Identity Protection. 

By Karla L. Palmer –

On Friday, June 14, 2013, Congressman Morgan Griffith (R-VA) released a draft bill addressing compounding of human drugs.  The draft primarily was influenced by the revised draft guidance document the Food and Drug Administration (“FDA”) was prepared to release in the fall of 2012, prior to the New England Compounding Center (“NECC”) incident.  This bill does not define a “compounding pharmacy” or create a “compounding manufacturer” category, unlike the pending Senate Health, Education, Labor and Pensions Committee (“HELP”) legislation (S. 959).  Congressman Griffith’s draft proposal retains two categories – pharmacies and manufacturers – and clarifies how FDA would distinguish compounding pharmacies from drug manufacturers.  The issue of linking compounding to identified patients is a key feature of the bill.  

The draft also requires that all compounding pharmacies comply with both USP <795> (non-sterile compounding) and USP <797> (sterile compounding).  The draft proposal emphasizes sharing of information between FDA and states, and provides a framework to ensure FDA receives timely notifications from states concerning whether a compounding pharmacy may be acting as a drug manufacturer.  When a state provides notice to FDA that a compounder is or may be violating the law, for example, FDA would be required to provide notification to other states and make a determination whether there is enough evidence to inspect the pharmacy in question.  The draft proposal gives FDA full inspection authority of a compounding pharmacy, but only if there is prior evidence that a compounding pharmacy is acting as a manufacturer in violation of the FDCA.  Under current practice, FDA often conducts a comprehensive inspection of a pharmacy to determine whether that pharmacy was entitled to the more limited inspections authorized for pharmacies.

The draft does not include in its definition of “essentially copies of a commercially available drugs” (i.e., drugs which cannot be compounded) those products that appear on FDA’s drug shortage list.  Lastly, the draft proposal makes falsifying a prescription for a drug compounded under section 503A a violation of the FDCA subject to criminal penalties.  Comments on the proposed draft are due by close of business on Thursday June 20, 2013.  Below is a more detailed summary of the proposed bill. 

Summary of Proposed Amendments to FDCA Section 503A

The draft proposal amends Section 503A of the FDCA (21 U.S.C. § 353a).  Sections 501(a)(2)(B) (cGMPs), 502(f)(1) (adequate directions for use labeling), and 505 (new drugs) of the FDCA will not apply to a compounded drug product if each of the following conditions is met:

• Individual patient prescription requirement:  The product is for an identified individual patient based on a prescription demonstrating the compounded product is necessary for that patient; and

    o The product is compounded by a state-licensed pharmacist/physician/other licensed practitioner. 

• Anticipatory compounding:  A drug can be compounded in limited quantities prior to the receipt of an individual prescription when: 

    o The pharmacist/ physician has historically received prescriptions for the compounding of the product; and 
    o     The orders have been generated solely within an established  physician/pharmacist relationship with the patient or the physician who will write the order.

• Office use compounding:  A pharmacist/physician may compound a non-patient-specific purchase order from a health care provider, after receiving assurances that:

    o The drug will be administered within a doctor’s office, hospital or health care setting;
    o One or more patient-specific orders or notations will be submitted to the compounder within 7 days of drug administration that will account for the full amount of drug product compounded; and 
    o The drug may not be compounded for office use or in anticipation of a prescription if prohibited under state law. 

• Bulk substances:  If a drug is compounded using bulk substances, it must comply with a USP or NF monograph if such exist, and USP chapters on compounding (including sterile preparations).  If a USP/NF monograph does not exist, then the drug must be compounded using components of approved drug products.  If a monograph does not exist and the drug is not compounded using components of approved products, then it must appear on a substance list published in FDA regulations.  Bulk substances used in compounding also must be manufactured at a FDA-registered establishment, and accompanied by a valid certificate of analysis. 

    o If, however, a drug is compounded using ingredients other than bulk substances, then those ingredients must comply with USP/NF monograph, if applicable, and USP chapters on compounding (including sterile preparations). 

• Do not compound list: The compounded drug must not appear on a list published by FDA (per regulations) concerning drugs or drug components withdrawn for reasons of safety or effectiveness.  For drugs that are demonstrably difficult to compound, FDA will publish a “do not compound list” of those drugs that reasonably demonstrate an adverse effect on the safety or effectiveness of that product. 

• Essentially copies of available drugs/FDA drug shortage list: The compounded drug may not be a copy or essentially a copy of a commercially available drug.  “Essentially a copy of a commercially available drug product” would not include: (1) a drug product for which there is a change for an identified individual patient which produces for that patient a significant difference, as determined by the prescribing or  practitioner, between the compounded drug and the commercially available drug; or (2) a drug product that appears on the drug shortage list in effect under FDCA section 506E.

• Federal/State notification system: FDA is required to develop, in consultation with NABP, a notification system for receiving and reviewing submissions from state boards of pharmacy on actions taken against compounding pharmacies.  Submissions from state boards warranting FDA notification would include: (1) warning letters, sanctions or penalties for violations of state regulations; (2) suspension/revocation of a state issued pharmacy license; and (3) recall(s) of compounded drug products due to quality or purity concerns.  FDA must implement the notification system within one year after implementation of the act. 

    o The proposal requires FDA to review state submissions and other necessary information including information collected through an inspection or maintained in the Adverse Event Reporting System database; FDA would make a determination whether the pharmacy is in violation of section 503A. 

• Inspections:  Within 60 days after receipt of a state submission, FDA must assess whether there is evidence suggesting that the pharmacy is in violation of the section, and, if so, must conduct an inspection in coordination with the state board. 

• Section 704 inspection authority: FDA also would have inspection authority under FDCA section 704 (inspections) to determine whether a compounding pharmacy is not eligible for the inspection exemption under 704(a)(2) (pharmacies) only if the FDA receives the above-described submission from a state described above. 

    o If, after receiving a state submission, FDA determines that a pharmacy is in violation of section 503A, then FDA would be required to notify other state boards of pharmacy. 

• Advisory committee:  Before issuing regulations, FDA would be required to convene an advisory committee (including representatives from NABP, USP, physician and consumer groups, and experts) on compounding unless FDA claims that issuance of such regulations more promptly is necessary to protect the public health. 

• Definitions/Criminal penalties:  “Compounding” is defined as not including mixing, reconstitution, or following other directions provided by the manufacturer.  The proposal would permit criminal penalties for intentionally falsifying a prescription order for a compounded drug product.