By Karla L. Palmer & Delia A. Stubbs –

Last week, DEA continued the temporary scheduling of a single synthetic cathinone, methylone (3, 4-methylenedioxy-N-methylcathinone) in Schedule I of the Controlled Substances Act (“CSA”).  The temporary scheduling will expire on April 20, 2013, or upon completion of rulemaking proceedings, whichever occurs first.  77 Fed. Reg. 64,032 (Oct. 18, 2012).  DEA also initiated rulemaking proceedings to permanently schedule methylone on October 17, 2012.  77 Fed. Reg. 63,766 (Oct. 17, 2012).  This represents DEA’s latest step in combatting synthetic drug abuse in response to increased reports of abuse of substances contained in products marketed as “bath salts” and “plant food” and incense.  See 76 Fed. Reg. 55,616, 55,617 (Oct. 21, 2011).  As previously reported, DEA Administrator Leonhart stated DEA is “committed to targeting these new and emerging drugs with every scientific, legislative and investigative tool at [its] disposal.”

As background, methylone was subject to DEA’s October 2011 final order temporarily scheduling it and two other synthetic cathinones in Schedule I on an emergency basis.  See 21 U.S.C. § 811(h); 76 Fed. Reg. 65,371 (Oct. 21, 2011).  Then, after introduction of the Synthetic Drug Control Act (“SDCA”), Congress permanently scheduled 11 cathinones (including two of the three that DEA had temporarily placed in Schedule I in the October 2011 emergency order) as part of FDASIA.  Methylone is the only substance from that order that Congress did not legislatively add to Schedule I when it enacted FDASIA, despite being in earlier drafts of the SDCA.  See FDASIA, Pub. L. No. 112-144, § 1152 (2012); 77 Fed. Reg. 64032 (Oct. 18, 2012); H.R. 1254 112th Cong. (2012). See also S. 3189 112th Cong. (2012).  DEA continued its synthetic drug war on yet another front through “Operation Log Jam.”  On July 26, 2012, the operation seized 167,000 packets of synthetic cathinones (and products to produce an additional 392,000 cathinone products).  In additional legislative efforts, in August 2012, a bill was introduced to place 15 cathinones in Schedule I, to include methylone.  H.R. 6312, 112th Cong. (2012).  The bill was referred to committee but no further action was taken.

It is unclear why methylone was left off of FDASIA’s Schedule I classification, which included other cathinones.  It may be because, as lawmakers raised in debates about the SDCA concerning cathinones and other substances generally, it is more difficult to obtain a substance for research purposes (or any purpose) in Schedule I.  See 112 Cong. Rec. H8238 (daily ed. Dec. 7, 2011).  It appears, based on aggregate quotas that DEA has granted for the substance, that researchers are interested in methylone.  See 77 Fed. Reg. 39,737 (July 5, 2012), 77 Fed. Reg. 55,500 (Sept. 10, 2012), 77 Fed. Reg. 59,980 (Oct. 1, 2012).  Once scheduled, DEA limits via quotas the aggregate amount of a Schedule I substance that may be manufactured annually, making the product more difficult to obtain. 21 U.S.C. § 826; 21 C.F.R. § 1303.11.

It is significantly more onerous for DEA to pursue a scheduling classification through the rulemaking process than it is for a drug to be scheduled via legislative process.  The administrative rulemaking process mandates that the agency procure a scientific and medical report from FDA, conduct a detailed, multifactor analysis, and provide the public an opportunity to comment, unlike the simpler statutory scheduling procedures observed with the passage of FDASIA.  See 21 U.S.C. § 811. 

The scheduling of methylone is not the only scheduling proceeding that DEA could face in the near future.  On October 29 and 30th, the FDA will convene a meeting to take public comment on the potential rescheduling of hydrocodone, likely a much more controversial initiative.  77 Fed. Reg. 34,051 (June 8, 2012).

By Kurt R. Karst & Jeffrey N. Gibbs –  

We’ve been following litigation involving the Florida veterinary compounding pharmacy Franck’s Lab, Inc. (“Franck’s”) for a couple of years.  We won’t get into all of the case details here – for that, see our previous posts here, here, here, and here – but here’s a summary . . . .

In September 2011, the U.S. District Court for the Middle District of Florida ruled that FDA did not have authority to enjoin the “long-standing, widespread, state-regulated practice of pharmacists filling a veterinarian’s prescription for a non-food producing animal by compounding from bulk substances.”  The court reached its decision after wading through the various guidance documents FDA had issued through the years laying out the Agency’s criteria for when it would decline to exercise “enforcement discretion,” and instead initiate enforcement action against a compounding pharmacy.  In November 2011, the government appealed that decision to the U.S. Court of Appeals for the Eleventh Circuit.  Briefing in the case was completed, several amici weighed in, and oral arguent was scheduled to take place on November 1, 2012.

That’s right . . .  we used the past tense in our last sentence. 

Our hopes for a decision out of the Eleventh Circuit were dashed when the government and Franck’s filed a Joint Motion to Vacate and Dismiss as Moot that we expect the Court will grant.  According to the motion, Franck’s was acquired by Wells Pharmacy Network, LLC (“Wells”) through an asset sale and “no longer engages in compounding and no longer owns or operates the facilities at issue.”  “Nor is there any reasonable probability that [Franck’s] will resume the challenged conduct,” and the company “has turned in the permits required by Florida law to operate as a compounding pharmacy, sold all its assets, and terminated all its employees.”  Moreover, Paul Franck, the owner of Franck’s and the individual defendant in the case, “is no longer engaged in veterinary compounding of any kind,” “has no intention of reentering that profession in the anticipated future,” and has “executed a seven-year non-competition agreement with Wells,” according to the motion.

Given these circumstances and controlling law (i.e., Laidlaw Envtl. Servs., 528 U.S. 167 (2000)), the parties agreed that the case has become moot and jointly moved the Eleventh Circuit not only to dismiss the appeal, but to vacate the Florida district court’s judgment, and remand the case with instructions to dismiss the complaint. 

That’s unfortunate.  As Hyman, Phelps & McNamara, P.C.’s Karla L. Palmer and Jeffrey N. Gibbs noted in a Legal Backgrounder published by the Washington Legal Foundation, if the Eleventh Circuit ultimately upheld the Florida federal district court ruling, the implications from such a decision would have extended broadly to other areas of FDA law, particularly as it relates to FDA’s increasing use of guidance documents to expand regulatory requirements (see our previous post here for more on that topic).  Why?  Because the decision “will be invoked by interested parties seeking to constrain FDA’s use of non-binding guidance documents to define prohibitions against which FDA may take enforcement action or impose new requirements on applicants, and to attack FDA assertions that it is entitled to Chevron deference,” wrote Ms. Palmer and Mr. Gibbs. 

It is also unfortunate because an Eleventh Circuit ruling could have brought greater clarity to a contentious issue: whether all compounding is illegal, as FDA has maintained.  Given recent developments and the renewed focus on FDA’s authorty to regulate compounding pharamcies (see our previous post here), such a decision would have been particularly timely.  C’est la vie!  Still, the logic of the district court decison will provide a roadmap for other parties disputing FDA’s use of guidance documents and FDA’s theory that pharmacists violate the law whenever they compound drugs. 

Adieu Franck’s.  We enjoyed the ride while it lasted.

By Kurt R. Karst –      

The Federal Trade Commission (“FTC”) is seeking leave to file a second amicus brief in private antitrust litigation espousing the Commission’s views that a branded drug company’s commitment, as part of a settlement agreement, not to launch an Authorized Generic (“AG”) to compete with a generic version of the product approved under an ANDA – a “no-AG” agreement – constitutes a “payment” under the Third Circuit’s recent decision in In re K-Dur Antitrust Litig., 686 F.3d 197 (3d Cir. 2012).  In K-Dur, the Third Circuit rejected the so-called “scope of the patent test” when considering whether patent settlement agreements violate the antitrust laws, and instead applied a “quick look rule of reason” under which “the finder of fact must treat any payment from a patent holder to a generic patent challenger who agrees to delay entry into the market as prima facie evidence of an unreasonable restraint of trade, which could be rebutted by showing that the payment (1) was for a purpose other than delayed entry or (2) offers some pro-competitive benefit.”  K-Dur did not involve a “no-AG” agreement, but rather a cash payment, and is currently the subject to two Petitions for Writ of Certiorari (Supreme Court Docket Nos. 12-245 and 12-265).  

The FTC’s latest amicus brief was filed earlier this month with the U.S. District Court for the District of New Jersey in litigation brought against GlaxoSmithKline (“GSK”) and Teva Pharmaceutical Industries Ltd. and Teva Pharmaceuticals USA, Inc. (jointly, “Teva”) by direct purchasers of certain anti-epileptic drug products containing the active ingredient lamotrigine and marketed by GSK as LAMICTAL.  According to the Complaint, GSK and Teva allegedly “delayed generic competition in the markets for Lamictal Tablets and Lamictal Chewables . . . and improperly manipulated the Hatch-Waxman Act to impede, rather than promote, generic competition as intended by the statute.”  The direct purchasers allege that GSK and Teva violated Sections 1 and 2 of the Sherman Act when they entered into an agreement providing, among other thing, that GSK would not market an AG of Lamictal Tablets and Lamictal Chewables, and that such agreement was well beyond the exclusionary scope of a now-expired patent listed in the Orange Book for GSK’s lamotrigine drug products and constitutes a naked market allocation agreement.

GSK and Teva have each filed a Motion to Dismiss the case (see here and here), which the direct purchasers have opposed (see here).  Both defendants have also filed a Joint Motion to Stay the litigation pending resolution of the appeal of the K-Dur case to the U.S. Supreme Court.  The direct purchasers have also opposed that motion (see here).  One motion the direct purchasers are unlikely to oppose is the FTC’s motion to file its amicus brief.  According to the FTC:

[GSK and Teva] insist that the no-AG commitments cannot be payments under K-Dur.  They claim instead that (1) Teva received nothing more than the ability to market its generic product based on a “negotiated entry date,” a type of settlement permitted under K-Dur; and (2) exclusive licenses are not subject to antitrust scrutiny.

Both of Defendants’ claims are incorrect.  First, Teva received more than the right to enter on a negotiated entry date – it is undisputed that it also received commitments that GSK would not market AG versions of the two Lamictal products.  As such, they guaranteed that Teva would be protected from generic competition on each of its generic Lamictal products for at least six months.  In the unique context of the Hatch-Waxman Act, such commitments are often quite lucrative to the generic.  Thus, as with the cash payment in K-Dur, it is logical to conclude that each of these commitments could have acted as the quid pro quo for Teva to accept a later entry date than it otherwise would have.

Second, while in many contexts exclusive patent licenses may be procompetitive, they are not necessarily so, nor are they immune from antitrust scrutiny. . . .  In direct contravention of the Third Circuit’s holding in K-Dur, both of Defendants’ arguments rely on superficial labels rather than the actual substance of the agreements at issue.  Although GSK and Teva effected the no-AG commitments through exclusive licenses, the legal form of the agreements does not alter the “economic realities,” which is the required focus of the Third Circuit’s rule. 

The FTC’s proposed amicus brief is quite similar to the amicus brief the Commission proposed to file in private antitrust litigation concerning Wyeth Pharmaceuticals Inc.’s anti-depressant drug EFFEXOR XR (venlafaxine HCl) Extended-release Tablets.  As in the LAMICTAL case, one issue in the EFFEXOR case is whether a “no-AG” agreement constitutes a “payment” under the Third Circuit’s ruling in K-Dur.  The EFFEXOR case is also before the U.S. District Court for the District of New Jersey, but with a different judge.  Interestingly, just three days before the FTC filed its motion for leave to file its brief in the LAMICTAL case, Judge Joel A. Pisano denied the FTC’s motion for leave to file its  amicus brief in the EFFEXOR case.  In denying the FTC’s motion, Judge Pisano found that “the FTC has not expressed an interest that is not represented competently in this case,” and that “the extent to which the FTC is partial to a particular outcome weighs against granting the agency’s motion.”  Will Judge William H. Walls, who is presiding over the LAMICTAL litigation, come out the same way?  Stay tuned.

By John A. Gilbert, Jr. & Larry K. Houck –

A bipartisan group of thirteen congressional representatives penned a letter to Administrator Michele Leonhart last week requesting “clarification, guidance and collaboration” about the Drug Enforcement Administration’s (“DEA’s”) efforts to combat prescription drug abuse.  While voicing strong support of DEA’s efforts to fight prescription drug abuse, the letter states that recently “pharmacies across the country have identified a disturbing trend that is threatening the ability of legitimate patients from getting needed, lifesaving prescription drugs.”  It states that small pharmacies have experienced difficulty obtaining certain controlled substances because wholesalers have severely limited or shut off sales.  The representatives expressed concern “that inconsistent interpretation and application of DEA policies, and a lack of clear guidance and communication from DEA to supply chain stakeholders, are leading to patient care issues and supply chain disruption.”

The letter highlights the ongoing issues created by DEA’s failure to clearly define the requirements for identifying and reporting suspicious orders.  Couple this with aggressive government enforcement and the result is that manufacturers and distributors have needed to be ultra-conservative in decisions on distributing controlled substances.  It is understandable that the impact has been that certain pharmacies in certain areas of the country have had difficulty obtaining needed medicines.  Rather than continuing to rely on ad hoc guidance, DEA should engage the industry in a negotiated rulemaking to establish clear and concise standards for suspicious orders to protect against diversion while ensuring legitimate DEA registrants are able to obtain the needed medicines.

Prescription drug abuse is this nation’s fastest growing drug problem and DEA has considered innovative methods to combat it.  The expanded role of pharmacies, distributors and manufacturers as controlled substance gatekeepers is a continuously evolving one.  As the lawmakers’ letter asserts, improved communication between DEA and pharmacies, distributors and manufacturers “will ensure that these stakeholders understand and perform their legal and ethical responsibilities and will result in less prescription drug abuse.”  Clarification, guidance and collaboration, and administrative rulemaking addressing these issues will also help ensure that legitimate patients have access to needed medication.

By Ricardo Carvajal –

A few weeks ago, we posted on a decision by a divided three-judge panel of the D.C. Circuit Court of Appeals vacating FDA’s regulations that require graphic warnings on cigarette packages (see here).  FDA has now petitioned the D.C. Circuit Court of Appeals for rehearing and rehearing en banc.

The petition draws heavily on the administrative record and the dissent to the panel’s decision to argue that the proposed graphic warnings are an effective means of conveying the health risks of smoking, and “directly advance a crucial government interest” without imposing undue burdens on industry.  Rejecting the majority’s characterization of the warnings as “subjective – and perhaps even ideological,” the petition contends that the “extraordinary health risks identified in the warning text are indisputably accurate, and substantial evidence shows that the graphics help to ensure that this accurate health risk information is noticed and understood.”  The petition further argues that the majority erred in considering the images selected by the agency divorced from their accompanying text, and that the fact that the images “’evoke emotion… does not mean that the health warnings are inaccurate.”  The petition closes with a flourish borrowed from the dissent:

[N]othing in the Supreme Court’s commercial speech precedent would restrict the government to conveying these risks in ways that have already proved ineffective or would prohibit the government from employing the communication tools tobacco companies have wielded to great effect over the years.

We’ll continue to monitor this case as it inches closer to the Supreme Court.

The U.S. Pharmacopeial Convention (“USP”) recently announced at an Awards and Recognition Program for USP Expert Volunteers that the 2012 USP Award for an Innovative Response to Public Health Challenges went to the Food Ingredients Expert Committee.  Hyman, Phelps & McNamara, P.C. Director Diane B. McColl is a member of the Food Ingredients Expert Committee, which is chaired by Andrew Ebert, Ph.D., and is responsible for the development and revision of monographs and their associated USP Reference Standards for food ingredients.  The award is presented to a USP standards-setting body in recognition of efforts in addressing a special public health need or challenge.  The Food Ingredients Expert Committee was selected for its outstanding work and exemplary leadership in transitioning the Food Chemicals Codex (“FCC”) from the Institute of Medicine to USP. 

USP Council of Experts Chairman, Roger L. Williams, M.D., said that the “Food Ingredients Expert Committee not only provided its expertise and guidance for the transition of FCC to USP, but also ensured its growth and continuity as the leading international compendium of food ingredient standards.”  Furthermore, commented Dr. Williams, the “Food Ingredients Expert Committee guided USP staff in a significant expansion of the scope of the FCC to include new and novel ingredients essential in keeping the FCC relevant to all stakeholders worldwide as well as specifically addressing the public health challenge of food adulteration.  The Food Ingredients Expert Committee exemplified the volunteer spirit that defines USP’s commitment to address public health challenges.”

Congratulations to Diane and the other members of the Food Ingredients Expert Committee on their significant accomplishment.

By Kurt R. Karst –      

It was 50 years ago today (October 10th) that President John F. Kennedy signed into law the Kefauver-Harris Amendments of 1962, Pub. L. No. 87-781, 76 Stat. 780 (1962), which amended the 1938 FDC Act to require, among other things, proof of the effectiveness of a drug product before approving it.  FDA has been celebrating the anniversary with some wonderful historical information and storyboards (see here).  

The Kefauver-Harris Amendments forever changed the way new drugs are approved and regulated in the United States.  Like many significant changes to the FDC Act, the Kefauver-Harris Amendments were prompted by a tragedy.  In 1961, as FDA was reviewing an NDA for the sedative drug KEVADON (thalidomide) for morning sickness, reports surfaced from Europe where the drug was approved that thousands of children whose mothers were taking the drug during pregnancy were born with severe birth defects.  The thalidomide tragedy fueled the passage and enactment of the 1962 Drug Efficacy Amendments.  (Coincidentally, October 11th is the 75th anniversary of the date on which the American Medical Association received a report of several deaths caused by Elixir Sulfanilamide, which led to the enactment of the FDC Act in 1938 requiring that new drugs be show safe.)

Fast-forward 50 years and we once again find ourselves faced with a tragedy – an outbreak of fungal meningitis caused by a reportedly contaminated injectable steroid prepared (see here and here).  According to press reports, the contaminated injectable has already resulted in more than 10 deaths (and more than 100 confirmed cases).  And, not surprisingly, there have been calls for changes to the law.  Although what’s different this time is that 50 years ago FDA lacked specific legal authority to require proof of efficacy; in 2012, FDA would assert that it has the authority to take action against compounders, but uses it only at its discretion. 

For years, FDA has struggled to establish an enforcement mechanism with respect to compounded pharmaceutical products that passes muster with Congress and the courts, as well as with FDA’s own resource constraints.  We won’t recount the long history of compounding here, or FDA’s enforcement (or non-enforcement) of its compounding policies.  We note, however, that there have been several cases in recent years, including the Franck’s Lab compounded veterinary drug case – see here – and the recent lawsuit over MAKENA and compounded 17p – see here – that show an inconsistent FDA posture.  Under current FDA policy (Compliance Policy Guide 460.200 – Pharmacy Compounding), the Agency does  not permit pharmacy compounding of drugs that are commercially available and approved by FDA, but exercises discretion in deciding whether or not to take enforcement action.  Perhaps the breadth of FDA’s assertion of authority was best expressed in the Franck’s Lab case, where the Agency contended that the 1938 FDC Act prohibits all pharmacy compounding, which industry practice has continued only as a matter of FDA’s unreviewable enforcement discretion.  Thus, according to FDA, when Congress enacted the FDC Act in 1938, it “quietly criminalized” all pharmacy compounding practices, yet had exercised enforcement discretion for decades.  At the same time, FDA has acknowledged that pharmacy compounding is medically essential.  Hyman, Phelps & McNamara, P.C. Director Jeff Gibbs discussed FDA’s oversight of compounding pharmacies and the current tragedy on The Diane Rehm Show on October 10th (see here).

Enter the legislators . . . .

Now that compounding is front page news, there are calls from Congress to strengthen FDA’s oversight of compounding pharmacies.  Multiple letters were sent to FDA earlier this week saying that there is a clear and present need for stronger accountability and oversight, and querying the Agency about current regulations and oversight practices, including letters from Senator Richard Blumenthal (D-CT) (here) and Representative Ed Markey (D-MA) (here).   

But that was only the beginning.  Several members of the House Energy and Commerce Committee have now requested an investigation and hearings on the meningitis outbreak.  The calls for legislative reform are also streaming in.  Reps. Markey and Rosa DeLauro (D-CT) have separately stated their plans (here and here) to introduce legislation to require greater oversight by FDA of compounding pharmacies.  Public Citizen has also entered the fray, saying in a press release that “Congress should conduct an investigation into this tragic situation and hold oversight hearings as soon as possible,” and that “Congress should act immediately to pass legislation” if there are holes in FDA’s existing legal authority. 

We’re likely to see increasing interest in and calls for legislation as the fallout from this tragedy builds. 

By Kurt R. Karst –      

In a Complaint recently filed in the U.S. District Court for the District of New Jersey, Actelion Pharmaceuticals Ltd. and Actelion Clinical Research, Inc. (collectively “Actelion”) seek declaratory relief that Actelion is under no duty or obligation to supply prospective ANDA applicants, Apotex Corp. (“Apotex”) and Roxane Laboratories, Inc. (“Roxane”), with TRACLEER (bosentan) Tablets for purposes of bioequivalence testing and ANDA submission.  TRACLEER is approved with a Risk Evaluation and Mitigation Strategies (“REMS”) program with Elements To Assure Safe Use (“ETASU”) because of the potential of the drug to cause serious side effects (see here). The REMS limits distribution of the drug through pharmacies, practitioners, and health care settings that are specially certified and that are “bound by contract to follow a strict protocol to monitor and protect patient health,” acording to Actelion.  A prior case, brought by a prospective ANDA sponsor, that raised issues with providing a restricted distribution brand-name drug to an ANDA sponsor for biostudy purposes was eventually dismissed (see here).  The Actelion case is the first preemptive strike by a brand-name company whose drug product is covered by an ETASU REMS.  An on-the-merits decision would be the first of its kind since the REMS provisions were added to the FDC Act by the 2007 FDA Amendments Act (“FDAAA”).

According to Actelion, the lawsuit “concerns the fundamental right of a business to choose for itself with whom to deal and to whom to supply its products.”  Apotex and Roxane both sent correspondence to Actelion seeking TRACLEER sample for use in bioequivalence testing.  After Actelion refused to provide drug sample to Apotex and Roxane, “maintaining its right to choose with whom it does business” and citing certain REMS compliance issues, Apotex and Roxane allegedly threatened Actelion with antitrust litigation and with notifying the Federal Trade Commission (“FTC”).  Instead of waiting for the other shoe to drop, Actelion took a proactive approach and sued the generic companies, saying that “Apotex and Roxane are seeking to force Actelion to supply them with product, turning well-settled law, not to mention basic free-market principles, on their head,” and that “Apotex’s and Roxane’s demands would also require Actelion to violate its regulatory obligations.” 

In its Complaint, Actelion notes, among other things, that there is no provision in the FDC Act that the owner of a drug subject to an ETASU REMS is required to provide product sample upon the request of a potential generic competitor.  Indeed, to the contrary, says Actelion, Congress twice rejected legislation to address the sale of product under a REMS to generic drug sponsors – once in 2007 when Congress was considering REMS legislation, and another time earlier this year when Congress was debating what provisions to include in the FDA Safety and Innovation Act (“FDASIA”). 

As we previously reported, Section 1131 of the FDASIA bill as passed by the Senate would have amended FDC Act § 505-1 to state, among other things, that:

Notwithstanding any other provision of law, if a drug is a covered drug, no elements to ensure safe use shall prohibit, or be construed or applied to prohibit, supply of such drug to any eligible drug developer for the purpose of conducting testing necessary to support an application under [FDC Act § (b)(2) or § 505(j) or PHS Act § 351(k)] if the Secretary has issued a written notice described in paragraph (2), and the eligible drug developer has agreed to comply with the terms of the notice.

Even that language, which stopped short of requiring sale of a brand name drug to a generic competitor, was not enacted.  Instead, current law merely states that “[n]o holder of an approved covered application shall use any element to assure safe use required by [FDA] under [FDC Act § 505-1(f)] to block or delay approval of an application under section 505(b)(2) or (j) or to prevent application of such element under [FDC Act § 505-1(i)(1)(B)] to a drug that is the subject of an [ANDA].” 

FDA, for its part, has largely remained silent on the issues raised in the Actelion Complaint.  In June 2009, Dr. Reddy’s Laboratories, Inc. submitted a citizen petition (Docket No. FDA-2009-P-0266) requesting that FDA “establish procedures to facilitate the availability of generic versions of drug products subject to a [REMS] and enforce the FDC Act to prevent companies from using REMS to block or delay generic competition.”  FDA has not substantively responded to the petition. 

FDA merely includes the following statement into REMS approval letters: “We remind you that section 505-1(f)(8) of FDCA prohibits holders of an approved covered application with elements to assure safe use from using any element to block or delay approval of an application under section 505(b)(2) or (j).  A violation of this provision in 505-1(f) could result in enforcement action.”  FDA does not comment on what sorts of actions the Agency might construe as use of an ETASU element to block or delay approval.  FDA has also in at least one recent draft bioequivalence guidance stated, consistent with previous FDA-ANDA sponsor correspondence, that the Agency would be willing to notify the sponsor of the brand-name Reference Listed Drug (“RLD”) that the Agency has received sufficient assurance that the generic drug sponsor’s bioequivalence studies “will be conducted in such a manner as to ensure the safety of the subjects, and that the sponsor of the RLD may provide the sponsor of the BE studies or their agent with [sufficient drug product sample] for the purpose of conducting bioequivalence (including dissolution) testing.”  Such language falls short of compelling sale.  Absent Congress weighing in on the matter with legislation, debate over the next step in the process – supplying the product – will be an issue for the courts to address.

By Jeffrey K. Shapiro & Jessica A. Ritsick –

Under FDA’s regulations (10 C.F.R. § 10.75), the decision of an FDA employee (other than the Commissioner) is subject to supervisory review in four circumstances: (1) when an employee so requests; (2) when a supervisor initiates review; (3) when an interested person outside the agency so requests; and (4) when delegations of authority so require.  Id. § 10.75(a)(1)-(4).  Those in industry know, of course, that appeals can be triggered by interested persons outside the agency (circumstance #3, above).  But there also can be appeals pursuant to an employee’s request (circumstance #1, above). 

On September 4, 2012, CDRH released internal Standard Operating Procedures ("SOP"), titled "Resolution of Internal Differences of Opinion in Regulatory Decision-Making," to explain how to resolve internal differences of opinion in making regulatory decisions, implementing 21 CFR § 10.75 “for internal review of CDRH decisions, as it applies to supervisory review of regulatory decisions on the initiative of Center employees in the process of reaching those decisions.” 

One can imagine such appeals occurring in a situation where an employee vehemently disagrees with a decision either favorable or unfavorable to a firm.  Thus, those in industry do have some stake in the procedure governing FDA internal appeals. 

Interestingly, the SOP permits an employee to approach CDRH’s Ombudsman to discuss the situation if the employee is uncomfortable with approaching management.  The SOP gives the Ombudsman three additional duties: (1) reviewing the dispute (called the “Initiation Memo”), and determining if the dispute moves up the chain to higher management or if it is dead in the water; (2) suggesting alternative ways to resolve the dispute beyond the formal SOP procedures; and (3) if he sees fit, activating accelerated dispute review when an initiator believes the dispute “may have a significant and immediate impact on the public health.”  None of these duties are in his job description, at least according to FDA’s website, which says the Ombudsman’s duty is to investigate “complaints from outside FDA and [facilitate] the resolution of disputes between CDRH and the industry it regulates” (emphasis added).  On the other hand, making use of the Ombudsman in sensitive internal disputes does likely fall within the Ombudsman’s core competency.

Also interesting in the SOP is its allowance for use of outside experts in resolving disputes.  “Reference to outside expertise may consist of an advisory panel meeting or a homework assignment to selected Special Government Employees (SGEs) with relevant expertise.”  This use of outside experts could potentially conflict with 21 CFR § 10.75(d), which states:  “Internal agency review of a decision must be based on the information in the administrative file.  If an interested person presents new information not in the file, the matter will be returned to the appropriate lower level in the agency for reevaluation based on the new information.”  Thus, it would seem possible that bringing in an outside expert to lend his or her expertise to resolve a dispute—a dispute of scientific, clinical, or regulatory opinion—would be “new information not in the file,” such that the issue should be bumped back down the chain and reevaluated, as opposed to the up-the-chain review prescribed in the SOP. 

FDA might argue that “interested person” refers to an interested person “outside the agency” and that the requirement does not apply to internal employee appeals.  However, the phrase “interested person outside the agency” appears elsewhere in this short supervisory appeals regulation, but not here.  Thus, it could be argued that FDA knew how to specify whether an interested person was within or outside the agency, and in this case, did not limit the “no new information” requirement to persons outside the agency.

By Kurt R. Karst –      

Just weeks after Federal Trade Commssion (“FTC”) Chairman Jon Leibowitz signaled in a speech that the Commission would appeal to the U.S. Supreme Court the U.S. Court of Appeals for the Eleventh Circuit’s April 2012 ruling (and subsequent July 2012 denial of the FTC’s Petition for Rehearing en banc) affirming a February 2010 decision by the U.S. District Court for the Northern District of Georgia largely dismissing multidistrict litigation brought by the FTC (and certain private plaintiffs) challenging certain drug patent settlement agreements in which Solvay Pharmaceuticals, Inc. (“Solvay”) allegedly paid some generic drug companies to delay generic competition to Solvay’s drug product ANDROGEL (testosterone gel) (see our previous posts here and here), the FTC filed a Petition for Writ of Certiorari asking the U.S. Supreme Court to take up the case (Supreme Court Docket No. 12-416). 

In Androgel, the FTC filed a Complaint (originally filed in the U.S. District Court for the Central District of California) alleging that Solvay and certain generic drug companies violated various federal antitrust laws when they agreed to dismiss patent infringement litigation on U.S. Patent No. 6,503,894 in exchange for a profit-sharing arrangement and provided the generic competitors would not launch their generic versions of ANDROGEL until 2015.  The Georgia District Court, in granting the defendants’ Motion to Dismiss, found that the settlements are not an unreasonable restraint of trade under applicable law and that the FTC failed to state an antitrust claim.  In affirming the district court decision, the Eleventh Circuit held that, “absent sham [patent] litigation or fraud in obtaining the patent, a reverse payment settlement is immune from antitrust attack so long as its anticompetitive effects fall within the scope of the exclusionary potential of the patent.”  In late September, the Georgia District Court dismissed the remaining claims in the case brought by the private plaintiffs concerning sham patent infringement litigation and concluded that they were not objectively baseless as a matter of law. 

The FTC’s Petition comes in the wake of two other Petitions for Writ of Certiorari (Supreme Court Docket Nos. 12-245 and 12-265) asking the U.S. Supreme Court to review the July 2012 decision by the U.S. Court of Appeals for the Third Circuit in In Re: K-DUR Antitrust Litigation.  In that case, and in contrast to the Androgel decision, the Court rejected the so-called “scope of the patent test” when considering whether patent settlement agreements violate the antitrust laws, and instead applied a “quick look rule of reason” (see our previous posts here and here).  Under that analysis, “the finder of fact must treat any payment from a patent holder to a generic patent challenger who agrees to delay entry into the market as prima facie evidence of an unreasonable restraint of trade, which could be rebutted by showing that the payment (1) was for a purpose other than delayed entry or (2) offers some pro-competitive benefit.” 

The K-Dur Petitions have already drawn significant attention.  Amicus briefs have been filed by PhRMA, GPhA, the Washington Legal Foundation, Bayer Corporation, and the New York Intellectual Property Law Association (available here, here, here, here, and here).  Our friends over at Patent Docs have taken a close look at several of the amicus briefs in posts over the past couple of weeks.

In its Androgel Petition, the FTC presents the following question to the U.S. Supreme Court, juxtaposing the Androgel and K-Dur decisions: “Whether reverse-payment agreements are per se lawful unless the underlying patent litigation was a sham or the patent was obtained by fraud (as the [Eleventh Circuit] held), or instead are presumptively anticompetitive and unlawful (as the Third Circuit held).”  In arguing for Supreme Court review, the FTC launches into why Androgel was wrongly decided:

The decision below is incorrect.  In the Eleventh Circuit’s view, a reverse-payment agreement is lawful unless it imposes greater restrictions on generic competition than would a judicial ruling that the brand-name manufacturer’s patent is valid and infringed.  That approach effectively equates a brand-name manufacturer’s allegation of infringement with a judgment in the manufacturer’s favor.  But defendants oftent prevail in patent-infringement suits; the Hatch-Waxman Amendments are designed to facilitate judicial resolution of validity and infringement issues in the generic-drug context; and the federal antitrust laws flatly prohibit potential competitors from forming naked agreements not to compete.  The anticompetitive potential of reverse-payment agreements – which are estimated to cost consumers billions of dollars annually – is sufficiantly clear that they should be treated as presumptively unlawful under the federal competition laws.  [(Emphasis in original.)]

The FTC puts forth several reasons why Supreme Court review is warranted and says that Androgel “is a superior vehicle for addressing the question presented because it is brought by an agency charged by Congress with challenging unfair methods of competition, and it comes to the Court in the straightforward posture of a final judgment following the dismissal of the FTC’s complaint for declaratory and injunctive relief.” 

These are the same reasons cited by FTC Commissioner J. Thomas Rosch in a speech given prior to the filing of the FTC’s Androgel Petition.  In that speech, Commissioner Rosch shared his views as to what he believes are the six reasons the Supreme Court, despite having declined several prior Petitions on drug patent settlement cases, will grant certiorari in either or both of the K-Dur and Androgel cases, and why Androgel is better postured for Supreme Court review.  According to Commissioner Rosch:

[T]he Androgel case would be the better vehicle for Supreme Court review of the pay-for-delay issue.  First, the case was decided on a motion to dismiss so it presents a pure issue of law.  In contrast, the K-Dur decision was decided on summary judgment.  Second, the Eleventh Circuit’s decision was a final judgment; the Third Circuit’s decision was not.  Further proceedings in the K-Dur case could help clarify the application of the Third Circuit’s new test.  Third, the Androgel case was brought by one of the two federal agencies charged with protecting consumer interests through the enforcement of the antitrust laws.  The K-Dur case was brought by private plaintiffs, and the FTC’s role has been limited to that of an amicus.

Commissioner Rosch also said that he expects Congress to remain relatively quiet on drug patent settlement legislation . . . at least until there is something out of the Supreme Court.  “[I]f and when the Court rules on the issue, there is likely to be a strong push by the losing side for legislation to overturn the Court’s decision,” said Commissioner Rosch.

In other drug patent settlement news, we note that the U.S. District Court for the District of New Jersey recently denied the FTC’s motion for leave to file an amicus brief (see our previous post) in private antitrust litigation concerning Wyeth Pharmaceuticals Inc.’s anti-depressant drug EFFEXOR XR (venlafaxine HCl) Extended-release Tablets.  One issue in that case is whether a branded drug company’s commitment not to launch an Authorized Generic (“AG”) to compete with a generic version of the product approved under an ANDA constitutes a “payment” under K-Dur.  The FTC’s proposed amicus brief stated that a “No-AG” agreement is a “convenient method” for brand-name drug companies to pay generic patent challengers to delay their entry into the market, and that the Third Circuit’s K-Dur decision should not be limited to overt cash payments.  In denying the FTC’s motion, the New Jersey District Court found that “the FTC has not expressed an interest that is not represented competently in this case,” and that “the extent to which the FTC is partial to a particular outcome weighs against granting the agency’s motion.”

Finally, in recent closing letters (here and here), the FTC concluded that “no further action is warranted” as a result of the Commission’s nonpublic investigation to determine whether certain companies engaged in any unfair methods of competition that violate the FTC Act by entering into agreements regarding the oral contraceptive drug products YASMIN and YAZ containing drospirenone and ethinyl estradiol.

By Carmelina G. Allis –

Should FDA’s Center for Devices and Radiological Health (“CDRH”) regulate medical mobile apps?  Or should medical mobile apps be regulated by another office within FDA? Or should they be regulated by a separate entity under the Department of Health and Human Services (“HHS”)?

At least one Representative in the U.S. Congress (Rep. Mike Honda, D-CA) believes that mobile apps deserve special attention and should be independently regulated.  Rep. Honda is introducing in the U.S. House of Representatives the “Healthcare Innovation and Marketplace Technologies Act” (“HIMTA”), a bill which seeks to establish the “Office of Mobile Health” within FDA.  The office would provide recommendations on medical mobile app issues, including establishing an app developer support program to ensure the developers are operating within privacy regulations and other HHS requirements.  Reports (see, e.g., here and here) say that the bill is being introduced to ensure that competition, innovation, and entrepreneurship in the mobile app market are not stifled by regulatory issues that generally apply to traditional, non-software device types.

This proposed bill is likely to be welcomed by many mobile app developers – in particular the small or startup ones who still wonder why their products would be subject to FDA regulatory oversight at all.  Most of those companies do not have the personnel, infrastructure, or sufficient expertise to navigate the monstrous and confusing FDA regulatory framework.

FDA has not set forth a clear regulatory path for medical mobile apps, and app developers are concerned about whether the regulatory burdens that FDA could impose on those products may limit their ability to timely enter the market.  This is a fast-paced, quickly growing market sector, and the FDA premarketing process may be too slow and unnecessarily burdensome for these new technologies.

So the question still remains as to whether medical mobile apps should be regulated by FDA’s CDRH, another office independent from CDRH, or simply an office separate from FDA altogether.  At least one person on the Hill thinks that these products should still remain within FDA, but regulated differently. 

We will keep you posted on the outcome of this proposed bill and will post a copy of the bill once it is available.

By Kurt R. Karst –      

Those of us who work in the drug approval world know that a high degree of coordination among various FDA components is necessary for a smooth and efficient approval process.  This is particularly true for ANDA generic drug approval, where the Office of Generic Drugs (“OGD”) must coordinate with the Office of Compliance to, among other things, schedule facility inspections (domestic and foreign) and close all inspectional issues.  OGD will not approve an ANDA unless the Office of Compliance has given a clean bill of health for the facilities covered under the application.  In recent years, coordination between OGD and the Office of Compliance seems to have broken down.  These days it is not uncommon that OGD is in a position to approve an ANDA, but for clearance from the Office of Compliance on a manufacturing facility covered under the ANDA.  Sometimes it is merely a paperwork exercise, and sometimes more is involved.  Well, one company has said “enough!” 

Earlier this week, Apotex Inc. and Apotex Corp. (collectively, “Apotex”) filed a Complaint against FDA in the U.S. District Court for the District of Columbia seeking declaratory and injunctive relief for FDA’s alleged failure to confirm that an Apotex facility that manufactures drug for two pending applications – ANDA Nos. 201505 and 200832 – for generic versions of the popular blood pressure-lowering drugs AVALIDE (irbesartan/hydrochlorothiazide) Tablets and AVAPRO (irbesartan) Tablets operates in conformance with current Good Manufacturing Practice.  According to Apotex, both ANDAs were ready for approval on September 27, 2012 when 180-day exclusivity expired.

Apotex states in its filing that FDA (or, more specifically, the Office of Compliance) has failed to clear the facility:

despite the fact that such compliance recommendations were made for other recently approved Apotex ANDAs that rely on this manufacturing facility, including one that was approved just last week on September 25, 2012.  FDA’s unreasonable delay is in part due to its inability to locate an inspectional report that the agency should have long-since created and reviewed.  By failing to provide this compliance confirmation, Defendants are depriving Apotex of its right to have two pending ANDAs treated the same way that FDA has treated several other, similarly situated ANDAs.

Apotex’s two-count Complaint alleges that FDA’s actions violate the Administrative Procedure Act (“APA”) “because those actions have denied Apotex approval for ANDAs 201505 and 200832 for no reason other than FDA’s inability to process necessary paperwork” (5 U.S.C. § 706), and that “FDA owed Apotex a specific duty to approve those ANDAs when 180-day exclusivity expired” (28 U.S.C. § 1361, mandamus). Apotex seeks, among other things, an interim order directing the Office of Compliance to immediately issue a compliance recommendation to OGD for ANDA Nos. 201505 and 200832, and an orANDAs.  der directing OGD to immediately approve the applications.  Apotex also wants preliminary and permanent relief enjoining FDA “from withholding a compliance recommendation for any Apotex ANDA that relies on facilities that FDA has found to be acceptable in that the methods used in, or the facilities and controls used for, the manufacture, processing, and packing of the drug are adequate to assure and preserve its identity, strength, quality, and purity.”

This is certainly a case to watch, although it could be a non-event if FDA promptly acts on the Apotex ANDAs.

By Ricardo Carvajal & Wes Siegner –

The Department of Health and Human Services Office of Inspector General released two reports (see here and here) critical of dietary supplements in the weight loss and immune support categories.  OIG focused on those categories because they were reported by experts to be among the most popular.  (Perhaps not coincidentally, products marketed in the weight loss and immune support categories have also been of keen interest to the FTC.)

The first report focused on compliance with substantiation and notification requirements for structure/function claims, and concluded as follows:

Overall, substantiation documents for the sampled supplements were inconsistent with FDA guidance on competent and reliable scientific evidence. FDA could not readily determine whether manufacturers had submitted the required notification for their claims.  Seven percent of the supplements lacked the required disclaimer, and 20 percent included prohibited disease claims on their labels. These results raise questions about the extent to which structure/function claims are truthful and not misleading.

Based on those conclusions, OIG recommended that FDA “seek explicit statutory authority to review” structure/function claim substantiation, improve its notification system, and “expand market surveillance.”  FDA generally agreed with the latter two recommendations.  As for seeking an expansion of its authority, FDA agreed to consider the matter, but noted that “certain aspects of the OIG’s recommendation could place considerable demands on FDA’s resources” – likely an understatement of the burden FDA would be taking on if it were saddled with a mandate to review substantiation for structure/function claims.

Although the report acknowledges that manufacturers have a statutory obligation to substantiate their claims, it implies that the obligation has little meaning because FDA’s interpretation of the substantiation standard is set forth in guidance, and not in a regulation (“Manufacturers must have competent and reliable scientific evidence to show that claims are truthful and not misleading, but they do not have to submit the substantiation to FDA, and FDA has only voluntary standards for it.”)  This will come as news to manufacturers who have been subjected to enforcement action based on FDA interpretations of the FDC Act articulated in guidance. 

In addition, the report states that “[d]ietary supplement manufacturers must notify FDA of any structure/function claims no later than 30 days after first introducing a product into the market” (emphasis added).  However, this firm submitted a citizen petition to FDA in February 2000 (Docket No. 1998N-0044) challenging this very interpretation of the structure/function claim notification provision in the FDC Act as overbroad and directly contradicted by the language of the statute.  That petition is still pending.

The second OIG report focused on compliance with requirements for facility registration and inclusion of adverse event reporting information on product labels.  That report concluded as follows:

Twenty-eight percent of contacted companies had facilities that failed to register with FDA as required. Of the companies with facilities that did register, 72 percent failed to provide the complete and accurate information required in the registry. Finally, 20 percent of dietary supplement labels in our sample did not provide the required telephone numbers or addresses.

Based on those conclusions, OIG recommended that FDA improve the accuracy of the registration database, educate industry about the applicable requirements, and “seek authority to impose civil monetary penalties on companies that do not comply with registration requirements.”  FDA generally agreed with OIG’s recommendations.  However, FDA noted that Congress is unlikely to provide FDA with authority to impose civil monetary penalties given that those penalties were excluded from the Food Safety Modernization Act.

By Kurt R. Karst –      

The question was not whether, but when, FDA would be sued over a decision involving 180-day generic drug exclusivity and the so-called “failure to obtain timely tentative approval” forfeiture provision at FDC Act § 505(j)(5)(D)(i)(IV).  That day has finally come.  Earlier this week, Mylan Laboratories Limited and Mylan Pharmaceuticals Inc. (collectively, “Mylan”) filed a Complaint and Motion for a Preliminary Injunction (for which Mylan is seeking an Order to file under seal) against FDA in the U.S. District Court for the District of Columbia challenging the Agency’s decision that Ranbaxy Inc. (“Ranbaxy”) is eligible for 180-day exclusivity for its generic versions of Novartis Pharmaceuticals Corp.’s blockbuster antihypertensive drug DIOVAN (valsartan) Tablets, 40 mg, 80 mg, 160 mg, and 320 mg approved under NDA No. 021283.  

Under FDC Act § 505(j)(5)(D)(i)(IV), which is one of the six 180-day exclusivity forfeiture provisions added to the FDC Act by the 2003 Medicare Modernization Act (“MMA”), 180-day exclusivity eligibility is forfeited if:

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

The 2007 FDA Amendments Act (“FDAAA”) clarified FDC Act § 505(j)(5)(D)(i)(IV), such that if “approval of the [ANDA] was delayed because of a [citizen] petition, the 30-month period under such subsection is deemed to be extended by a period of time equal to the period beginning on the date on which [FDA] received the petition and ending on the date of final agency action on the petition (inclusive of such beginning and ending dates) . . . .”  FDC Act § 505(q)(1)(G).  The 2012 FDA Safety and Innovation Act (“FDASIA”) made further changes with respect to the application of FDC Act § 505(j)(5)(D)(i)(IV) to certain ANDAs.  Neither the FDAAA, nor the FDASIA provisions are at issue in the Mylan case, although a future lawsuit may very well involve them.  Over the years, FDA’s application of FDC Act § 505(j)(5)(D)(i)(IV) has led to scores of forfeitures of 180-day exclusivity (see our 180-Day Exclusivity Tracker) – and, probably, more than all of the other forfeiture provisions combined.  Curiously, however, until the Mylan lawsuit, FDA had never been dragged into court on this MMA provision. 

Over the years, FDA has issued numerous explanations of the Agency’s application of FDC Act § 505(j)(5)(D)(i)(IV).  For example, in a recent Citizen Petition decision (Docket No. FDA-2011-P-0486), FDA explained that under FDC Act § 505(j)(5)(D)(i)(IV),

it is not sufficient to show that FDA changed or reviewed the requirements for approval while the application was under review.  The applicant must also show that its failure to obtain tentative approval at the 30 month date is caused by this change in or review of approval requirements – that is, the issues holding up approval at the 30 month date must be causally connected to the approval requirements that FDA reviewed or changed. [(Emphasis added)]

DIOVAN Tablets is listed in FDA’s Orange Book with three patents, each subject to a period of pediatric exclusivity: U.S. Patent Nos. 5,399,578 (“the ‘578 patent”), 5,972,990 (“the ‘990 patent”), and 6,294,197 (“the ‘197 patent”).  Pediatric exclusivity for the ‘578 patent expired on September 21, 2012, and pediatric exclusiviy for the ‘990 and ‘197 patents expires on April 26, 2017 and December 18, 2017, respectively.  According to FDA’s List of Paragraph IV Patent Certifications, the first ANDA submitted to FDA containing a Paragraph IV certification to any of the Orange Book-listed patents for all four DIOVAN strengths approved under NDA No. 021283 was December 28, 2004.  That application – ANDA No. 077492 – was submitted by Ranbaxy and contains a Paragraph IV certification to the ‘197 patent (as well as a Paragraph III certification – now Paragraph II certification – to the ‘578 patent, and a “section viii” statement to the ‘990 method-of-use patent).  Ranbaxy was not sued with repect to its Paragraph IV certification to the ‘197 patent, so the earliest FDA could approve  ANDA No. 077492 was September 21, 2012, when pediatric exclusivity applicable to the ‘578 patent expired.  September 21, 2012 came and went, however, without an FDA approval decision on the Ranbaxy ANDA.  Meanwhile, Mylan, a subsequent ANDA Paragraph IV applicant, was awaiting an FDA approval decision on its Valsartan Tablets ANDA No. 090866, which was submitted to FDA on September 15, 2008.

FDA had already tentatively approved ANDA No. 077492.  That tentative approval came on October 25, 2007, however, which is well after the 30-month anniversary date of the submission of ANDA No. 077492 (i.e., June 28, 2007 by FDA’s calculation), and before FDA took regulatory action against the company by invoking the Agency’s Application Integrity Policy (see our previous post here).  FDA’s October 25, 2007 tentative approval letter for ANDA No. 077492, which was only recently posted on FDA’s Drugs@FDA website, states the following with respect to 180-day exclusivity:

This letter does not address issues related to the 180-day exclusivity provisions under section 505(j)(5)(B)(iv) of the Act, except to note that for purposes of sections 505(j)(5)(B)(iv) and 505(j)(5)(D)(i)(IV), the agency regards the change in the USP monograph for Valsartan, published on May 1, 2007, . . . to be a change in the requirements for approval imposed after the date on which your ANDA was filed.

Thus, it would seem that FDA has determined that Ranbaxy did not forfeit 180-day exclusivity eligibility for failure to obtain timely tentative approval, because such failure was “caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application [was] filed” – that is, by a change in the USP monograph for valsartan.  Indeed, FDA’s September 28, 2012 decision to only tentatively approve Mylan’s ANDA No. 090866 cements this view.

Mylan’s Complaint alleges that FDA violated the FDC Act and the Administrative Procedure Act (“APA”) by granting Ranbaxy 180-day exclusivity.  Mylan seeks declaratory and injunctive relief, including entry of a judgment setting aside and vacating FDA’s award of 180-day exclusivity to Ranbaxy and an injunction directing FDA to immediately grant final approval of Mylan’s Valsartan Tablets ANDA.  In the alternative, Mylan seeks entry of an iterim injunction staying the approval of all Valsartan Tablets ANDAs pending resolution of the lawsuit.

According to Mylan, FDA has “impermissibly found that Ranbaxy did not forfeit its l80-day exclusivity for Valsartan Tablets, despite Ranbaxy’s failure to obtain tentative approval within the 30-month statutory timeframe,” and that “FDA has taken this final agency action without providing any reasoned basis for its decision . . . .”  Mylan apparently sought an explanation from FDA, but the Agency refused to provide one.  Mylan states in its Complaint that:

the USP monograph update/in-process revision referenced by FDA in the October 25, 2007, Tentative Approval Letter was first proposed and published by USP in January-February 2006 – well over a year before Ranbaxy’s 30-month tentative approval deadline.  The October 25, 2007, Tentative Approval Letter does not provide any explanation or reasoned basis for why this proposed update constituted a “change” in the approval requirements, or how these proposed changes, that Ranbaxy and FDA were aware of as early as February 2006, directly “caused” or otherwise was “causally connected” to Ranbaxy’s failure to meet the 30-month deadline.

Because the October 25, 2007, Tentative Approval Letter does not provide any explanation or reasoned basis for why a USP update can constitute a “change” in the approval requirements, or how these proposed changes directly “caused” or were otherwise “causally connected” to Ranbaxy’s failure to meet the 30-month deadline, Mylan sought such an explanation from the Agency. [(Italics in original)]

FDA refused to provide an explanation, stating in a response to Mylan that:

[W]e cannot provide you the basis on which the Agency detennined that the first applicant for valsartan tablets has not forfeited its eligibility for exclusivity because that analysis rested on confidential infonnation contained in that application.  FDA appreciates the challenge this presents to you and other parties affected by a forfeiture analysis, but the Agency is nonetheless prohibited at this time from disclosing any additional infonnation regarding the forfeiture decision.

FDA’s “express refusal to timely and publicly disclose the basis for its determination that Ranbaxy has not forfeited its exclusivity,” and “express refusal to timely and publicly disclose the basis for its determnination that Mylan is not entitled to final approval” violates the APA, alleges Mylan.  Mylan goes on to note how the courts have “expressly admonished FDA’s practice of frustrating judicial review by refusing to timely address generic exclusivity,” quoting Hi-Tech Pharmacal Co., Inc. v. FDA and Teva Pharm. USA, Inc. v. Sebelius.  (Judge John D. Bates, who handled the Hi-Tech case, has been assigned to the Mylan case.  In Hi-Tech, Judge Bates was particularly critical of FDA's handling of exclusivity decisions – see here.)  “Neither Mylan nor the judicial system need to accept FDA’s ‘trust me’ approach to administering a statute that it is charged with lawfully administering.  Indeed, such a response directly runs afoul of FDA’s obligations under Hatch-Waxman and the APA,” says Mylan.

By Kurt R. Karst –      

Legislation co-sponsored by Representatives Brian Bilbray (R-CA), Carolyn Maloney (D-NY) and Rosa DeLauro (D-CT), and supported by the Melanoma Research Foundation, seeks to encourge the development of so-called “significant drug combinations” by offering the carrot of an extension of marketing exclusivity. 

H.R. 6502, the “Life-Threatening Diseases Compassion through Combination Therapy Act of 2012,” was recently introduced and appears to be modeled after the Generating Antibiotic Incentives Now Act (“GAIN Act”), which was enacted under Title VIII of the FDA Safety and Innovation Act (“FDASIA”) (see here).  The GAIN Act, which is intended to encourage the development of antibacterial and antifungal drug products that treat pathogens that cause serious and life-threatening infections, amended the FDC Act to add Section 505E to, among other things, grant an additional 5 years of marketing exclusivity upon the approval of an NDA for a drug product designated by FDA as a Qualified Infectious Disease Product.  (FDA recently granted the first GAIN Act designation – see here – and there have already been winners and losers as a result of the new law – see here.)  Similarly, H.R. 6502 would amend the FDC Act – also to add Section 505E (and therefore, either an error/oversight, or perhaps an indication that the bill was in the works prior to the enactment of FDASIA) – to add 6-months of marketing exclusivity to 5-year new chemical entity exclusivity, 3-year new clinical investigation exclusivity, “or” 7-year orphan drug exclusivity for a drug product approved under an NDA and that contains a “significant drug combination” designated as such by FDA.  The bill also provides for priority (6-month) review of an NDA for a drug product containing a designated “significant drug combination.”

The bill defines a “significant drug combination” to mean a combination of two or more drugs, which can include a biologic subject to licensure under PHS Act § 351, that:

(1) when used in combination, offer the potential to significantly advance treatment for a serious or life-threatening disease;

(2) in combination, meet the criteria for codevelopment of drug combinations, as specified in the [FDA’s] guidance document entitled “Guidance for Industry: Codevelopment of Two or More Unmarketed Investigational Drugs for Use in Combination” or a successor document; and

(3) includes at least 2 drugs that are not approved under [FDC Act § 505] or licensed under [PHS Act § 351].

To qualify for the exclusivity extension under H.R. 6502, the sponsor of an NDA for a drug product containing at least two new drugs (and/or biologics) must, prior to the approval of the NDA, seek and obtain FDA designation of a drug combination as a “significant drug combination.”  In making “significant drug combination” designations FDA would be required to take into account the recommendations of a task force that would be created by the bill.  Among other things, the task force would be required to develop a list of types of drug combinations that should be designated  as “significant drug combinations.”  

The exclusivity extension under H.R. 6502 does have some limitations.  And they are reminiscent of the exclusivity limitations included in the GAIN Act and in the Biologics Price Competition and Innovation Act of 2009.  Specifically, the exclusivity extension does not apply to certain NDA supplements if an extension was previously granted, and for a subsequent NDA submitted “by the same sponsor or manufacturer of a drug in a designated significant drug combination. . . (or a licensor, predecessor in interest, or other related entity)” for certain changes, such as a new indication, or for “a modification to the structure of the drug that does not result in a change in safety or effectiveness.”