By Kurt R. Karst –      

Following the recent decision by the U.S. Court of Appeals for the First Circuit in Bartlett v. Mutual Pharmaceutical Co., which our friends over at the Drug and Device Law Blog commented on as making no sense (“while a simple warning claim involving a generic drug is indisputably preempted under PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011), a claim much more fundamentally in conflict with FDA approval of generic drugs – that state tort law can impose liability for not removing an FDA-approved product off the market entirely – supposedly is not”), we’re happy to report on another decision – a state court decision – that turned out the other way and that provides yet another rebuke of the so-called Reference Listed Drug (“RLD”) theory of liability. 

As we’ve previously discussed (here, here, and here), the RLD theory of liability goes something like this: because FDA’s regulations impose new or additional responsibilities on an ANDA sponsor whose drug product is unilaterally designated by FDA as an RLD in the Orange Book when the brand-name NDA RLD is no longer marketed, the U.S. Supreme Court’s pro-preemption Mensing decision is inapplicable and a court should instead employ the preemption analysis utilized in the Court’s decision in Wyeth v. Levine, 555 U.S. 555 (2009), concerning NDA’d drug products.  Every court (federal and state) that has thus far been asked to accept the RLD theory of liability has refused to do so (see here).  Invariably, the courts have said that RLD status of an ANDA’d drug product (even in the case of a drug product approved under an ANDA pursuant to an approved suitability petition) does not convert a generic drug manufacturer into a brand-name drug manufacturer with the right to use FDA’s Changes Being Effected (“CBE”) process to change drug labeling.

The most recent rejection of the RLD theory of liability comes out of the Superior Court of New Jersey in In re Reglan Litigation, Case No. 289 (N.J. Super. Ct. May 4, 2011), and involes the familiar drug metoclopramide (in tablet, syrup, and injectable dosage forms).  Plaintiffs sued several generic drug manufacturers, including Morton Grove Pharmaceuticals, Inc. (“MGP”) whose ANDA’d metoclopramide syrup drug product is identified in FDA’s Orange Book as an RLD. 

Plaintiffs’ Second Master Long Form Complaint pled several causes of action (e.g., defective design, failure to warn, negligence, negligence per se, fraud, misrepresentation and suppression, constructive fraud, breach of express and implied warranties, unfair and deceptive trade practices, and unjust enrichment) that the court (Judge Carol E. Higbee) said in its decision granting Defendants’ Motion to Dismiss are “all based on generic manufacturers’ alleged failure to provide adequate information or warnings, and thus are preempted under Mensing.”  Only to the extent that any generic drug manufacturer failed to update its drug product labeling to be the same as the brand-name label would such manufacturer be excluded from preemption, as such “absense of ‘sameness’ runs afoul of the preemption ruling in Mensing.” 

Plaintiffs attempted to argue around Mensing with various theories, including that the FDA Amendments Act of 2007 (“FDAAA”) altered the preemption analysis, that federal law permits generic drug manufacturers to disseminate “Dear Doctor Letters” or otherwise communicate warnings to the medical community thereby making compliance with both state and federal laws possible, and that the generic drug manufacturers could have simultaneously complied with federal and state law duties by suspending product sales.  Judge Higbee rejected each theory, stating, for example, that:

While it is true that the Supreme Court in Mensing considered federal statutes and regulations that were in place before [FDAAA] took effect, it is clear that the amendments do not change or eliminate any ofthose laws or regulations which control this decision.  The “sameness” requirement remains in full effect.  The generic manufacturers’ inability to use the CBE process to unilaterally change their warnings also continues. . . .  The new changes in FDAAA do not eliminate or alter the conflict the Supreme Court described in Mensing.  As a result, claims based on any such duty are preempted post-FDAAA to the same extent as they were pre-FDAAA. . . . 

Plaintiffs’ “failure to suspend sales” argument is a solution that goes beyond the duties and remedies that have ever been applied in state courts.  The duty has always been to prove that the product was defective, not that it should have been withdrawn from the market.  Tort law remedies allow compensation but never an order to stop selling the product.

In a separate decision directed to Plaintiffs’ RLD theory of liability arguments against MGP, Judge Higbee said that there is insufficient authority for Plaintiffs’ argument that FDA’s unilateral designation of an ANDA’d drug product as an RLD means that the generic drug manufacturer can strengthen its label independently through the CBE process: 

Plaintiffs fail to cite to any case, statute, or regulation that supports the argument that the product labeling can be unilaterally altered without FDA’s prior approval simply because the generic manufacturer has been designated as an RLD.  It is very difficult to conclude that the FDA’s unilateral designation is sufficient to automatically transform [MGP], an ANDA holder, into an NDA holder.  In fact, the FDA regulations are clear in putting the agency in charge when no NDA holder is in the market. . . .  At this point in time, this court refrains from imposing additional obligations over and above what the regulations have indicated.  The court concludes that Mensing’s preemptive impact on plaintiffs’ claims against [MGP] is not diminished by the fact that [MGP] has been designated as an RLD, because this designation does not turn it into a brandname manufacturer. 

Accordingly, the court granted MGP’s Motion to Dismiss. 

By Kurt R. Karst –     

On Tuesday, May 8th, the House Energy and Commerce Committee, Subcommittee on Health is scheduled to hold a markup session to consider draft legislation to ensure the continuation of existing FDA user fee programs (i.e., PDUFA and MDUFA) and the creation of new ones (i.e., GDUFA and BsUFA).  In addition to the UFAs (user fee acts), the draft legislation includes a host other provisions, including provisions on FDA administrative reforms, drug shortages, medical device regulatory reforms, and drug regulatory reforms.  (A background memo on the nearly 300-page bill, which includes a section-by-section overview, is available here.)  While all of the provisions in the draft bill are of interest, two sections concerning citizen petitions caught our attention.

Section 863 of the draft Energy and Commerce UFA bill would amend FDC Act § 505(q) to shorten the timeframe FDA has to respond to certain citizen petitions.  FDC Act § 505(q), which was added to the law as part of the FDA amendments Act of 2007, provides that FDA shall not delay approval of a pending ANDA or 505(b)(2) application as a result of a citizen petition submitted to the Agency pursuant to 21 C.F.R. § 10.30 (citizen petition) or § 10.35 (petition for stay of action), unless FDA “determines, upon reviewing the petition, that a delay is necessary to protect the public health.”  Under current FDC Act § 505(q), “[FDA] shall take final agency action on a petition not later than 180 days after the date on which the petition is submitted.”  FDA may not extend the 180-day period “for any reason,” including consent of the petitioner, and may summarily deny a petition submitted with the primary purpose of delaying ANDA or 505(b)(2) application approval. 

FDA has only missed the 180-day timeframe twice between FYs 2008 and 2010, according to the Agency’s most recent annual report (see here) and our popular FDC Act § 505(q) Citizen Petition Tracker.  The draft Energy and Commerce UFA bill would shave 30 days off of FDA’s response timeframe, from 180 days to 150 days.  Is FDA a victim of its own success?

A second provision in the draft UFA bill concerning citizen petitions would establish a timeframe for FDA to respond to requests for an Agency determination of the reasons for a voluntary withdrawal of a listed drug. 

Under FDC Act § 505(j)(4)(I), FDA may refuse to approve an ANDA if the Agency determines that the Reference Listed Drug (“RLD”) was withdrawn from sale for reasons of safety or effectiveness.  In addition, FDA can withdraw (or suspend) approval of an ANDA if the RLD is withdrawn from sale for reasons of safety or effectiveness (FDC Act § 505(j)(6)).  In that case, the RLD is removed from the Orange Book (FDC Act § 505(j)(7)(C)).

As FDA acknowledged in the preamble to the Agency’s July 1989 proposed regulations implementing the 1984 Hatch-Waxman Amendments, the law does not “specify procedures to be followed in determining whether a drug that is voluntarily withdrawn from sale by its manufacturer is withdrawn for safety or effectiveness reasons” (54 Fed. Reg. 28,872, 28,907 (July 10, 1989)).  As such, FDA took it upon itself to create such a procedure.

FDA’s interpretation of the Hatch-Waxman Amendments is embodied in the Agency’s  regulations at 21 C.F.R. § 314.161, which state, in relevant part:

(a) A determination whether a listed drug that has been voluntarily withdrawn from sale was withdrawn for safety or effectiveness reasons may be made by the agency at any time after the drug has been voluntarily withdrawn from sale, but must be made:

(1) Prior to approving an abbreviated new drug application that refers to the listed drug;

(2) Whenever a listed drug is voluntarily withdrawn from sale and abbreviated new drug applications that referred to the listed drug have been approved; and

(3) When a person petitions for such a determination under 10.25(a) and 10.30 of this chapter.

(b) Any person may petition under 10.25(a) and 10.30 of this chapter for a determination whether a listed drug has been voluntarily withdrawn for safety or effectiveness reasons.  Any such petition must contain all evidence available to the petitioner concerning the reason that the drug is withdrawn from sale.

FDA’s timeframe for responding to withdrawal petitions has been all over the board.  In some cases FDA has responded within months (e.g., Docket No. FDA-2011-P-0128), while in other cases it has taken FDA more than three years to respond (e.g., Docket No. FDA-2008-P-0527).  One likely explanation for FDA’s different response timeframes is that FDA only responds to such a petition when it becomes necessary to do so; that is, when the Agency is poised to make an approval decision. 

Section 364 of the draft Energy and Commerce UFA bill would amend the FDC Act to add new § 505(w) (“Deadline For Determination On Certain Petitions”), which would state: “The Secretary shall issue a final, substantive determination on a petition submitted pursuant to [21 C.F.R. § 314.161(b)] (or any successor regulations), no later than 270 days after the date the petition is submitted” (emphasis added).  The amendment would apply to any withdrawal petition submitted to FDA on or after the date of enactment of the UFA bill. 

Both of the citizen petition provisions in the draft Energy and Commerce UFA bill seem to have come out of the blue.  The section-by-section backgrounder to the draft bill says that proposed FDC Act § 505(w) “should result in the quicker approval of generic drugs.”  That raises the possibility that inclusion of at least that section may be intended as an offset for other provisions in the bill. 

By Ricardo Carvajal –

The Washington Post recently reported on the delay in getting clearance from the Office of Management and Budget (OMB) for the regulations that would implement the key provisions of the Food Safety Modernization Act.  Industry groups and consumer advocates purportedly are baffled, but there is a recent precedent for similar delays in the issuance of a regulation backed by industry and consumer groups – the dietary supplement good manufacturing practice ("GMP") regulation. 

If memory serves, the dietary supplement GMP regulation was parked at OMB for over a year.  A quick perusal of the economic analysis section of that regulation reveals the complexity of the required analyses of costs and benefits, and offers a reminder of some unpleasant truths.  An example of the latter is that the GMP regulation was estimated to place over 170 small and very small manufacturers at risk of going out of business, resulting in the potential loss of @2,250 jobs.  Further, it was estimated that the costs of compliance would discourage new small businesses from entering the industry (the annual costs of that regulation for each business were estimated to range from $46k to $184k, depending on the size of the business).  Moreover, the total quantifiable costs of the regulation handily exceeded the total quantifiable benefits. 

We’re not privy to the precise sticking points in the review of the FSMA regulations, but we bet that the economic analysis sections will make for interesting reading.

By Alan M. Kirschenbaum –

On May 3, 2012, CMS posted on its website a notice announcing that manufacturers will not be required to collect data under the physician payment sunshine provisions of the Patient Protection and Affordable Care Act before January 1, 2013.  As we have reported in earlier posts, the sunshine provisions, among other things, require manufacturers of drugs, devices, biologicals, and medical supplies that are covered under Medicare, Medicaid, or the Children’s Health Insurance Program ("CHIP") to report annually to CMS certain payments or other transfers of value to physicians and teaching hospitals.  Although the statute requires the first report to be submitted by March 31, 2013 for payments made in calendar year 2012, CMS has long exceeded its statutory deadline of October 1, 2011 for issuing implementing procedures.  CMS published a proposed rule last December (see our summary here), and will not be issuing a final rule until “later this year.”  According to the notice, the postponement of required data collection will give CMS an opportunity to address over 300 comments submitted on the proposed rule, and will give applicable manufacturers additional time to prepare for transparency report submission.  In view of the postponement of data collection, it appears likely that the March 31, 2013 deadline for the first transparency reports will also be extended. 

By Kurt R. Karst –      

Representative Tom Reed (R-NY) recently introduced legislation (H.R. 5283) that is intended to clarify that the PHS Act’s clinical trial registry data bank reporting requirements apply to clinical trials regardless of a trial’s outcomes.  The bill would also amend the PHS Act to withhold federal grant funding – including funding from the Department of Defense – for responsible parties that fail to comply with the law’s clinical trial registry and results submission requirements.

Section 113 of the Food and Drug Administration Modernization Act of 1997 amended the PHS Act to add Section 402, which directs the Secretary of Health and Human Services (“DHHS”), acting through the Director of the National Institutes of Health (“NIH”), to establish, maintain, and operate a data bank of information on clinical trials for drugs for serious or life-threatening diseases and conditions (i.e., ClinicalTrials.gov).  Section 801 of the FDA Amendments Act of 2007 (“FDAAA”) expanded ClinicalTrials.gov to include a broader range of “applicable clinical trials” that must be registered and to require responsible parties to submit certain results information from applicable clinical trials to the clinical trial registry data bank.

Under current law, an “applicable clinical trial” is defined to mean an “applicable device clinical trial” or an “applicable drug clinical trial.”  Each of those terms is further defined in the law at PHS Act § 402(j)(1)(A).  Rep. Reed’s bill would amend the “applicable clinical trial” definition at PHS Act § 402(j)(1)(A)(i) to clarify that a drug or device trial is an applicable clinical trial “whether or not such a clinical trial results in a positive or negative outcome.”  This proposed change appears to be intended to address concerns about the underreporting of clinical trial results on ClinicalTrials.gov.  As we previously reported, according to an article published in the January 2012 issue of the British Medical Journal, a database search of trials registered on ClinicalTrials.gov which completed in 2009 and that are covered by FDAAA showed that “[o]f the 738 trials that were classified as subject to mandatory reporting, 163 (22%) had reported results.  In comparison, 76/727 (10%) trials covered by the FDAAA but not subject to mandatory reporting had reported results . . . . ”  More recently, there have been concerns expressed about pediatric clinical trial reporting issues – see here. 

Rep. Reed’s bill would also amend PHS Act § 402(j)(5)(A), which concerns clinical trials supported by grants from certain federal agencies, both with respect to scope and enforcement.

Under current law (PHS Act § 402(j)(5)(A)(i)), “[i]f an applicable clinical trial is funded in whole or in part by a grant from any agency of the [DHHS], including the [FDA], the National Institutes of Health, or the Agency for Healthcare Research and Quality, any grant or progress report forms required under such grant shall include a certification that the responsible party has made all required submissions to the Director of NIH” under PHS Act § 402(j)(2) and (3) concerning clinical trial reporting requirements.  First, H.R. 5283 would broaden the law to include any agency of the Department of Defense.  That change would also make PHS Act §§ 402(j)(5)(A)(ii)-(iv) applicable to clinical trials supported by Department of Defense grants.  Those sections of the law require, among other things, the heads of the agencies identified under PHS Act § 402(j)(5)(A)(i) to “verify that the clinical trial information for each applicable clinical trial for which a grantee is the responsible party has been submitted under [PHS Act § 402(j)(2) and (3)] before releasing any remaining funding for a grant or funding for a future grant to such grantee,” and if the agency head “verifies that a grantee has not submitted clinical trial information . . . , such agency head shall provide notice to such grantee of such non-compliance and allow such grantee 30 days to correct such non-compliance and submit the required clinical trial information.”

Second, Rep. Reed’s bill would amend PHS Act § 402(j)(5)(A) to add a new subsection on “enhanced enforcement” that would withhold grant funding for failure to report required clinical trial information on ClinicalTrials.gov.  Specifically, the new section of the law would state:

(v) ENHANCED ENFORCEMENT. – After the 30-day period described in [PHS Act §§ 402(j)(5)(A)(iii)], if the head of an agency referred to in [PHS Act §§ 402(j)(5)(A)(i)], as applicable, verifies that a grantee has not submitted clinical trial information as described in [PHS Act §§ 402(j)(5)(A)(ii)], with respect to an applicable clinical trial that is funded in whole or in part by a grant from the agency, such grantee –

(I) shall not be eligible to receive any remaining funding for the grant or funding for a future Federal grant until such time as the grantee comes into compliance with all applicable reporting requirements under this subsection; and

(II) shall be liable to the United States for repayment of any amount provided under the grant for the clinical trial for which the grantee failed to comply with such reporting requirements.

According to a May 3, 2012 press release from Rep. Reed, although current law requires that results of clinical trials conducted with federal money be publicly reported, “the enforcement mechanism is very weak” and as a result not all research – and in particular cancer research – is being reported.

By Kurt R. Karst –      

A report released earlier this week by the Government Accountability Office (“GAO”) says that FDA has met most of the Agency’s PDUFA performance goals for priority and standard original NDA and BLA submissions and for priority and standard original efficacy supplements to approved NDAs and BLAs, although in each case FDA review times have increased slightly.  The GAO’s analysis covers applications in the Fiscal Year 2000 to 2010 cohorts, as well as preliminary information for applications submitted in Fiscal Year 2011. 

The GAO report was sent to Senators Richard Burr (R-NC) and  Tom Coburn (R-OK).  Both Senators have long criticized FDA, saying that the Agency‘s “regulatory malaise” harms patients and manufacturers.  Sen. Burr has also threatened to delay the passage of PDUFA and other user fee legislation unless FDA speeds up application approval times.  In addition, as we previously reported, Sen. Burr was successful in getting an amendment added to the FDA appropriations bill passed last year that seeks to “improve the transparency and accountability of the FDA in order to encourage regulatory certainty and innovation on behalf of America’s patients.”  That amendment requires the submission of information to Congress on, among other things,

• “the average number of calendar days that elapsed from the date that drug applications (including any supplements) were submitted to such Secretary under [FDC Act § 505] until the date that the drugs were approved under such section 505;” and
• “the average number of calendar days that elapsed from the date that [BLAs] (including any supplements) were submitted to such Secretary under [PHS Act § 351] until the date that the biological products were licensed under such section 351.”  [(Emphasis added)]

The GAO’s report responds to the requests in Sen. Burr’s appropriations bill amendment – at least insofar as NDAs and BLAs are concerned (ANDAs are not covered in the GAO report).  The report also provides a wealth of additional information on FDA approval statistics and addresses some stakeholder concerns that were raised as GAO conducted its analysis. 

The GAO’s analysis (reflected in the tables below) shows that except for Fiscal Year 2008, FDA met PDUFA goals in all of the Fiscal Year 2000 to 2010 cohorts.  (FDA recently provided similar statistics in testimony before Congress.)  Moreover, the GAO found that an average of 44% of all original NDAs and BLAs submitted to FDA in Fiscal Years 2000 to 2010 were approved during the first review cycle and 75% were ultimately approved.  FDA and industry stakeholders the GAO interviewed suggested that FDA failed to meet Fiscal Year 2008 goals as a result of implementation of the Risk Evaluation and Mitigation Strategy (“REMS”) requirements added to the FDC Act by the 2007 FDA Amendments Act.

Although FDA met most PDUFA goals for the Fiscal Year 2000 to 2010 application cohorts (and is on track to meet Fiscal Year 2011 goals for the applications submitted in that cohort), the GAO’s analysis (reflected in the tables below) shows that average FDA review times (i.e., the time elapsed from when FDA received a submission until it issued an action letter) hve increased slightly from Fiscal Year 2000 through Fiscal Yeat 2010 for both priority and standard NDAs and BLAs and priority and standard original efficacy supplements to approved NDAs and BLAs.

With respect to Sen. Burr’s request for the average number of calendar days that elapsed from the date of NDA or BLA (including supplement) submission to final FDA action, the GAO says that it was unable to calculate average FDA review times in any meaningful way because most cohorts were still open; that is, “fewer than 90 percent of submissions had received a final action such as approval, denial, or withdrawal.”  Specifically, for priority original NDAs and BLAs, only four cohorts had at least 90% of submissions closed (Fiscal Years 2001, 2002, 2005, and 2006), and for standard original NDAs and BLAs, only one cohort had at least 90% of submissions closed (Fiscal Year 2002).  For priority efficacy supplements, only four cohorts had at least 90% of submissions closed (Fiscal Years 2000, 2001, 2004, and 2007), and for standard efficacy supplements, only one cohort had at least 90% of submissions closed (Fiscal Year 2005).

Stakeholders the GAO interviewed identified some issues that they believe hamper the the NDA and BLA approval process, including REMS implementation, the use of outside expertise for reviewing applications, insufficient communication between FDA and stakeholders, and a lack of predictability and consistency in FDA reviews.   FDA commented in the Agency’s response to the GAO report that it is taking or has agreed to take steps (as part of PDUFA V) that may address these issues, including issuing new guidance, establishing new communication-related performance goals, training staff, and enhancing scientific decision making.

By Nisha P. Shah –

FDA issued a final rule that amends the regulations to expand the scope of disqualification of clinical investigators.  77 Fed. Reg. 25353 (Apr. 30, 2012).  We previously reported on the proposed rule issued in April 2011, and there are no substantive changes between the proposed and final rules.  Under the final rule, a clinical investigator, including a sponsor-investigator, disqualified pursuant to 21 C.F.R. Parts 312 (drugs and biologics), 511 (animal drugs), or 812 (devices) will be ineligible to conduct any clinical investigation supporting an application for a research or marketing permit for FDA-regulated products, including “drugs, biologics, devices, new animal drugs, foods, including dietary supplements, that bear a nutrient content claim or a health claim, infant formulas, food and color additives, and tobacco products.”  In other words, the amended rule closes a gap in the regulations.  An investigator who is disqualified and ineligible to receive one type of investigational product (e.g., drugs) will now be ineligible to conduct clinical studies that support marketing applications for other types of products regulated by FDA.  The rule is effective May 30, 2012. 

The procedural steps for disqualifying investigators essentially remain the same.  Certain changes are meant to harmonize the investigator disqualification regulations across the FDA-regulated industries.  For instance, similar to the medical device regulations, FDA adds to 21 C.F.R. Parts 312 (drugs and biologics) and 511 (animal drugs) that the applicable FDA Center will initiate disqualification proceedings when the Center has information indicating that a clinical investigator has “repeatedly or deliberately” failed to comply with the relevant requirements or has “repeatedly or deliberately” submitted to FDA or to the sponsor of the investigation false information in any required report.  Previously, the drug and animal drug regulations applied the “repeatedly or deliberately” qualifier to the failure to comply allegations, but not to the submission of false information allegations. 

FDA will continue to issue to the investigator written notice of the allegations, and allow the investigator to respond in writing or in an informal conference.  If the response is unsatisfactory to the applicable Center, the investigator will be given an opportunity for a regulatory hearing under 21 C.F.R. Part 16.  The final rule adds a notification to reviewing institutional review boards (“IRBs”) about the investigator’s disqualification, in addition to the current notification requirements to the investigator and sponsor.  The preamble explains that FDA will provide a redacted copy of the investigator’s notice of initiation of disqualification proceedings and opportunity to explain (“NIDPOE”) letter to the study sponsor and IRBs.  77 Fed. Reg. at 25355.  If an investigator is deemed to be disqualified, a notification will be sent to the investigator, study sponsors, and reviewing IRBs that explains the basis for FDA’s determination.  This notice is also posted on FDA’s website.

Significantly for study sponsors, the final regulations will continue to permit the Commissioner to examine whether continued approval or clearance of a product for which data were submitted by the disqualified investigator is not justifiable and that approval or clearance of the product be withdrawn.  In the preamble, FDA explains that all products for which the investigator submitted data are subject to scrutiny, not only those products that caused the disqualification.  77 Fed. Reg. at 25356.  FDA also clarifies that products that have been on the market for a long period of time without significant safety concerns “would probably remain on the market if sufficient reliable product-approval data support the continued approval of the product.”  77 Fed. Reg. at 25355.  To support continued marketing of a product, the Agency may request from study sponsors statistical analyses of study results after eliminating the disqualified investigator’s data.  77 Fed. Reg. at 25356.  Further, FDA may take steps to terminate studies conducted by the disqualified investigator. 

Finally, a disqualified investigator may be reinstated as eligible to receive a test article when the Commissioner determines that the investigator has presented adequate assurances that the investigator will use test articles and conduct clinical investigations in compliance with the applicable clinical trial regulations.  FDA stated it will notify interested parties of the reinstatement and will post a list of these investigators on its website.

By Kurt R. Karst –      
 
In yet another decision out of the U.S. Court of Appeals for the Eleventh Circuit concerning patent settlements (or what opponents refer to as "pay-for-delay" deals), the Court affirmed a February 2010 decision by the U.S. District Court for the Northern District of Georgia largely dismissing multidistrict litigation brought by the Federal Trade Commission (“FTC”) (and others not involved in the appeal) challenging certain 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).  As we previously reported, the FTC’s complaint (originally filed in the U.S. District Court for the Central District of California) alleged that Solvay and certain generic companies violated various federal antitrust laws when they agreed to dismiss patent infringement litigation on U.S. Patent No. 6,503,894 (“the ‘894 patent”) 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.
 
The FTC appealed the decision and argued, among other things, that Solvay was “not likely to prevail” in the patent infringement litigation and that the ‘894 patent “was unlikely to prevent generic drug entry.”  According to the FTC, as a result of the settlement agreements, Solvay extended the company’s monopoly in a fashion that the patent laws do not authorize, and that unlawfully restrains competition.  The FTC urged the Court to adopt “a rule that an exclusion payment is unlawful if, viewing the situation objectively as of the time of the settlement, it is more likely than not that the patent would not have blocked generic entry earlier than the agreed-upon entry date.”  Under the FTC’s rule, the Commission argued that its allegation that Solvay was “not likely to prevail” in the patent litigation would state a plausible antitrust claim.
 
Reviewing the district court’s decision de novo, the Eleventh Circuit quickly showed its hand.  “The difficulty at the heart of this case is deciding how to resolve the tension between the pro-exclusivity tenets of patent law and the pro-competition tenets of antitrust law.  That difficulty is made less difficult, however, by the law’s pro-precedent tenets.  Our earlier decisions carry us much of the way to a resolution in this case,” wrote the Court.  Those earlier Eleventh Circuit decision are Valley Drug Co. v. Geneva Pharms., Inc., 344 F.3d 1294, 1303 (11th Cir. 2003), Schering-Plough Corp. v. Fed. Trade Comm’n, 402 F.3d 1056 (11th Cir. 2005), and Andrx Pharmaceuticals, Inc. v. Elan Corp., 421 F.3d 1227 (11th Cir. 2005).  And the rule those cases established is that, “absent sham 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.”
 
The Eleventh Circuit was not convinced by the FTC’s arguments and equated patent infringement litigation with a game of Russian roulette:

The FTC’s position equates a likely result (failure of an infringement claim) with an actual result, but it is simply not true that an infringement claim that is “likely” to fail actually will fail. . . . In few cases that are settled is the probability needle pointing straight up.  One side or the other almost always has a better chance of prevailing, but a chance is only a chance, not a certainty.  Rational parties settle to cap the cost of litigation and to avoid the chance of losing.  Those motives exist not only for the side that is likely to lose but also for the side that is likely, but only likely, to win.  A party likely to win might not want to play the odds for the same reason that one likely to survive a game of Russian roulette might not want to take a turn.  With four chambers of a seven-chamber revolver unloaded, a party pulling the trigger is likely (57% to 43%) to survive, but the undertaking is still one that can lead to undertaking. . . . Patent litigation can also be a high stakes, spin-the-chambers, all or nothing undertaking.

The Eleventh Circuit also proffered other reasons to reject the FTC’s approach, including that it “would require an after-the-fact calculation of how ‘likely’ a patent holder was to succeed in a settled lawsuit if it had not been settled,” which is “precarious at best” and is “unlikely to be reliable.”  Moreover, noted the Court, “Congress has given the United States Court of Appeals for the Federal Circuit exclusive appellate jurisdiction over patent cases. . . .  The FTC’s approach is in tension with Congress’ decision to have appeals involving patent issues decided by the Federal Circuit.”
 
The Eleventh Circuit’s decision coincided with a push by U.S. Senator Jeff Bingaman (D-NM) to get a version of the Fair And Immediate Release of Generic Drugs Act, or the “FAIR GENERxICS Act,” added to the Senate’s user fee reauthorization bill, the FDA Safety and Innovation Act.  As we previously reported, the FAIR GENERxICS Act is aimed at addressing the perceived ill-effects on generic competition of patent settlement agreements between drug companies and would make significant changes to the FDC Act’s 180-day exclusivity provisions.  Sen. Bingaman, one of the primary sponsors of the FAIR GENERxICS Act, offered a version of the bill as an amendment to the FDA Safety and Innovation Act during the Senate Health Committee’s consideration of the legislation, but later withdrew the amendment.  Sen. Bingaman said that he plans to introduce his patent settlement bill again when the FDA Safety and Innovation Act is considered by the full Senate and that he is seeking a score on his bill from the Congressional Budget Office. 

By Riëtte van Laack—

On April 18, 2012, Rep. Leonard Lance introduced the Cosmetic Safety Amendments Act of 2012, a bill (H.R.4395) “to establish new procedures and requirements for the registration of the cosmetic product manufacturing establishments, the submission of cosmetic product and ingredient statements, and the reporting of serious and unexpected cosmetic product adverse events, and for other purposes.”  The bill would significantly increase FDA’s oversight of cosmetic products. 

The proposed requirement for registration would apply only to manufacturing establishments that perform the final manufacturing of the cosmetic.  Packers, distributors and facilities that perform part of the manufacturing but do not manufacture the final product need not register.  Establishments that have registered voluntarily under 21 C.F.R. Part 710, are exempt from the registration requirement.  FDA may suspend the registration if an establishment violates the FDC Act and the violation presents a significant risk of serious adverse health consequences or death to humans.  Also, FDA may cancel the registration if, after a notice of cancellation, the establishment has not updated its registration.  There is no requirement for registration fees. 

The registered manufacturing establishments would be required to submit to FDA cosmetic and ingredient statements that contain the establishment registration numbers where the product is manufactured, the brand names of the cosmetic products, the cosmetic category for the cosmetic, the ingredients in the cosmetic products (in accordance with FDA regulations, 21 C.F.R. § 701.3), and information about the party responsible for submission of these statements.  FDA, in turn, must assign a unique number to each cosmetic and ingredient statement.  FDA also must establish and maintain a database containing these statements.  As with the establishment registration, products for which the manufacturer already has submitted cosmetic and ingredient statements under 21 C.F.R. part 710, are exempt from this requirement.

The bill also adds a requirement that FDA establish regulations for mandatory Good Manufacturing Practice (GMP) for cosmetics.  However, it does not provide a time line for this activity.

The bill aims to create formal processes, with specific timelines, for FDA to review ingredients for safety, set safety levels for trace impurities (called nonfunctional constituents),  and review all safety determinations made by the Cosmetic Ingredient Review (CIR) Expert Panel.  For example, FDA must publish a petition for review of a trace impurity in the Federal Register no later than 60 days after receipt of the petition, provide 180 days for public comment to the petition, publish a proposed rule or guidance within 180 days after the public comment period closes, keep the proposed rule or guidance open for public comments for 90 days, and publish a final rule or guidance another 90 days after closing of the comment period.  Except under certain circumstances, industry gets time to implement or adapt to a regulation or guidance because the bill proposes that these new regulations or guidances go into effect two years after they have been issued.

With respect to post-market requirements, Rep. Lance’s bill includes a requirement for serious adverse event reporting.  The provisions are similar to those for dietary supplement adverse event reporting.  The bill specifies that a cosmetic label must include a phone number through which a serious adverse event may be reported.

In an effort to create national uniformity for cosmetics regulations, the bill would preempt state requirements that differ from those established at the federal level.  Preemption, however, would not apply to pre-existing State requirements adopted by a State public initiative or referendum, presumably including California’s Proposition 65.

To fund FDA’s increased responsibilities, Rep. Lance included an appropriation provision authorizing almost 12 million dollars per fiscal year 2014 through 2018.  This would cover the equivalent of 11 full-time positions, ten in the Office of Regulatory Affairs and one in the Office of Chief Counsel.  

The bill has the support of the Personal Care Products.

By Ricardo Carvajal—

The American Bar Association’s Section of Ligation (specifically the Food and Supplements Subcommittee of the Products Liability Committee) is presenting its Second Annual Workshop on Food and Supplements on June 12 in Downers Grove, Illinois.  Hyman, Phelps & McNamara, P.C.’s Ricardo Carvajal will participate in a panel on the impact of the Food Safety Modernization Act on the food industry.  The program will also address consumer fraud class actions, food labeling and advertising enforcement actions, dietary supplement compliance issues, and ethical considerations when dealing with complex compliance issues.  You can access on-line registration and a brochure with additional information here.

By John R. Fleder & Jennifer M.Thomas—

As previously reported here, on April 13, 2012 ViroPharma Incorporated (“ViroPharma” sued FDA to challenge the agency’s April 9, 2012 approval of three Abbreviated New Drug Applications (“ANDAs”) for generic versions of the company’s antibiotic drug Vancocin® (vancomycin hydrochloride).  ViroPharma alleged that (1) FDA impermissibly interpreted the Food, Drug, and Cosmetic Act (“FDCA”) when it denied the company three-year exclusivity for its NDA supplement (“sNDA”) (“exclusivity claim”); and (2) FDA violated its own regulations—and changed established policy without the procedure required by law—when it chose to accept in vitro bioequivalence data for oral vancomycin (“bioequivalence claim”).  The owners of the three approved ANDAs for generic oral vancomycin—Akorn, Incorporated (“Akorn”), Watson Laboratories, Inc. (“Watson”), and Alvogen, Inc. (“Alvogen”)—intervened in this suit on the side of the government.  Hyman, Phelps & McNamara P.C. represents Akorn in this matter.  At a hearing on April 19, 2012, the parties agreed to treat ViroPharma’s Motion for a Temporary Restraining Order and/or Preliminary Injunction as a Preliminary Injunction Motion.

Judge Ellen Segal Huvelle denied ViroPharma’s Motion for a Preliminary Injunction (“PI”) in a Memorandum Opinion issued on April 23, 2012.  Judge Huvelle determined that the company had not demonstrated a likelihood of success on the merits of either its exclusivity claim or its bioequivalence claim.  First, she found that the statutory provision governing exclusivity for “old antibiotics” under the QI Act is ambiguous, and that FDA’s interpretation of the phrase “condition of use” in that provision is entitled to deference.  Moreover, the agency’s interpretation is likely to be found reasonable in light of the QI Act’s purpose and legislative history.  Second, with regard to bioequivalence, Judge Huvelle noted that the agency’s interpretation of its own bioequivalence regulations is controlling unless it is plainly erroneous or inconsistent with the regulations.  While she concluded that FDA’s purpose at the time of promulgating a regulation—as expressed in the regulation’s preamble—is relevant to determining its correct interpretation, the preamble to the bioequivalence regulations contains statements that would support either party’s reading.  In view of the above findings, and the degree of deference warranted in this case, ViroPharma failed to demonstrate a likelihood of success.

Judge Huvelle was also unpersuaded by ViroPharma’s irreparable injury argument.  Her Opinion cited ViroPharma’s own statements in an investor update call on April 10, 2012, which substantially undermined the company’s alleged case for irreparable injury.  Judge Huvelle found that ViroPharma failed to demonstrate that it was threatened with serious injury, because its statements constituted only vague allegations of economic impact without specific numbers or concrete harms to the company’s operations.  Judge Huvelle noted that the company’s allegations of reputational harm were also entirely speculative and lacking in evidentiary support.

Finally, Judge Huvelle found that both the balance of equities and the public interest weighed against granting ViroPharma’s requested injunctive relief.  She determined that the harm to ANDA-holders Akorn, Watson, and Alvogen would be significant in having to pull their generic oral vancomycin from the market and lose any benefits of early market entry.  On the other hand, the harm to ViroPharma upon denial of injunctive relief would be much less, since the company could continue selling both its branded product and an authorized generic.   Further, the public benefit of lower-priced generic vancomycin would be lost if an injunction issued.

The parties’ briefs in opposition can be found here, (Gov’t), here (Akorn), here (Watson), and here (Alvogen).

By Ricardo Carvajal —

FDA’s second annual reportable food registry (RFR) report confirms that foodborne pathogens and undeclared allergens continue to account for the vast majority of instances of reportable food.  There has been little change in the total number of primary reports submitted (i.e., initial reports submitted by industry or public health officials).  However, FDA commented on changes in the numbers of reports for certain commodities, with the caveat that two years of data preclude “meaningful statements about trends or patterns”:

• There was a rise (from 14 to 27) in the number of reports submitted for produce, attributed by FDA to sampling by USDA under its Microbiological Data Program. 
• There was also a rise (from 17 to 25) in the number of reports submitted for spices and seasonings.  FDA expects that number to decline with the issuance of guidance by the American Spice Trade Association.  In addition, FDA is conducting a “risk profile” that will “describe the nature and extent of public health risk posed by consumption of spices by identifying the most commonly occurring microbial and filth hazards in spices,” and that will identify mitigation and control options. 
• There was a rise (from 14 to 20) in the number of reports for undeclared allergens in baked goods, which will also be addressed in guidance developed by industry.

FDA claims to have put RFR data to use in “very important ways” (e.g., to identify “commodity risk points” and develop guidance for preventive controls, to support the issuance of import alerts and import bulletins, and to “target inspections, plan work, and identify and prioritize risks”).

By Jennifer D. Newberger –

On Tuesday, April 17, 2012, Senators Burr and Coburn introduced the Promoting Accountability, Transparency, Innovation, Efficiency, and Timeliness at FDA Act, or the “PATIENTS’ FDA Act.”  This bill is intended to complement the proposed user fee agreements negotiated between FDA and the drug and device industries by “requiring transparency in the review and decision progress against the initiatives and metrics agreed to in the prescription drug, generic drug, biosimilar, and medical device user fee agreements.”

If enacted, this bill could address many of the concerns raised by sponsors about FDA’s review and approval process for medical products, particularly medical devices.  Though the bill applies generally to all medical products, many of the provisions relate specifically to improving the review process for medical devices by making it more predictable, holding FDA more accountable for its decisions, and allowing industry more insight into how FDA reaches a final decision.

Some highlights of the bill include the following: 

Development of “a strategy and implementation plan for advancing regulatory science for medical products in order to promote the public health and advance innovation in regulatory decisionmaking,” and provision of reports to Congress on its progress in implementing the plan.

Documentation of the “scientific and regulatory rationale for any significant decision” made by CDER, CBER, or CDRH.  Perhaps most importantly, FDA would be required to provide the rationale to the sponsor of the submission resulting in the decision if requested.  This is intended to respond to concerns by industry that reviewers often request large amounts of “additional information about a drug or device that is beyond the scope of data needed to meet the FDA’s approval standard.”  By documenting the scientific and regulatory rationale and making it available to sponsors upon request, Congress hopes to increase transparency of the review process.

To assess the safety and effectiveness of a device “from the perspective of a reasonable patient in the intended use population who would assign the most value to the effect the device purports to have or is represented to have under the conditions of use prescribed, recommended, or suggested in the labeling or proposed labeling, and who would be willing to accept the probable risks that may be associated with the use of the device as prescribed, recommended, or suggested in the labeling or proposed labeling.” This language reflects the position taken by FDA in its recently issued guidance, “Factors to Consider When Making Benefit-Risk Determinations in Medical Device Premarket Approval and De Novo Classifications,” on which we posted previously. 

To work with regulatory counterparts in other countries to reduce duplicative clinical or non-clinical studies and facilitate the acceptance of foreign clinical data.

For sponsors intending to investigate the safety or effectiveness of a class II or III device that has a valid marketing authorization in specified countries, and has no record of device-related serious unanticipated adverse event reports, FDA “shall permit an exemption for clinical testing of such device for the purpose of developing data to obtain clearance or approval for the commercial distribution of such device.”  It will be interesting to see whether FDA interprets the word “shall” to mean that it must grant the exemption for clinical testing, or whether it will allow only discretionary exemptions.

FDA’s Office of Chief Counsel (OCC) would be required to review warning and untitled letters before being issued.

The bill would require FDA to assign “a reviewer with prior review experience with that type of device or technology or other relevant expertise.”  Though it seems something this basic would not require statutory authority, this seems intended to address industry concerns that reviewers often do not have enough experience with the particular type of devices they are responsible for reviewing, leading to the request for information beyond what is necessary to make an assessment of safety and effectiveness.

FDA shall publish detailed decision summaries for each 510(k) clearance.  The Office of In Vitro Diagnostics currently does so, and under this requirement, the Office of Device Evaluation would be required to do so as well.  This would provide additional insight to industry about the criteria used to clear a device, and hopefully provide increased transparency about the clearance process.

Undoubtedly in response to industry criticism of a draft guidance FDA released in July 2011 regarding when a company must submit a new 510(k) notification for a modification to an existing device, discussed here, this bill would clarify when a new 510(k) is not required.  Specifically, it states that no 510(k) notification is required if the change is “validated by [the] same method applied to the classified device undergoing modification, or a current validation method that is equivalent to the validation method applied to the device undergoing modification.”  This addresses the concern that the draft guidance essentially states that validation and verification will be insufficient to demonstrate that a modification does not require a new 510(k) notification.

The bill, if implemented (and actually acted on by FDA), could address many industry concerns about the predictability, transparency, and consistency of FDA actions, particularly with regard to medical devices.

By Kurt R. Karst –      

Carrying through on his promise to introduce legislation to legislatively overturn the U.S. Supreme Court’s June 23, 2011 landmark decision in PLIVA Inc. v. Mensing, 131 S.Ct. 2567 (2011), Senator Patrick Leahy (D-VT), along with co-sponsor Sens. Al Franken (D-MN), Jeff Bingaman (D-NM), Sheldon Whitehouse (D-RI), Sherrod Brown (D-OH), Christopher Coons (D-DE), and Richard Blumenthal (D-CT), introduced S. 2295, the Patient Safety and Generic Labeling Improvement Act. (See the announcement here.)  A companion bill was introduced in the House by Representatives (H.R. 4384) by Reps. Chris Van Hollen (D-MD) and Bruce Braley (D-IA).  (See the announcement here.)  In Mensing, the Supreme Court ruled that FDA’s regulations preventing generic drug manufacturers from changing their labeling except to mirror the label of the brand-name, Reference Listed Drug (“RLD”) manufacturer (whose drug product is approved under an NDA) preempt state-law failure-to-warn claims against generic drug manufacturers, because generic drug manufacturers are unable to comply with both federal and state duties to warn.

The version of the Patient Safety and Generic Labeling Improvement Act introduced is different from (i.e., broader than) the draft version circulated several weeks ago, which we reported on here.  S. 2295 would amend FDC Act § 505(j) to add the following language to the statute:

(11)(A) Notwithstanding any other provision of this Act, the holder of an approved application under this subsection may change the labeling of a drug so approved in the same manner authorized by regulation for the holder of an approved new drug application under subsection (b).

(B) In the event of a labeling change made under subparagraph (A), the Secretary may order conforming changes to the labeling of the equivalent listed drug and each drug approved under this subsection that corresponds to such listed drug.

The draft version of the bill merely stated: “Notwithstanding any other provision of this chapter, the holder of an application approved under subsection (j) may change the ‘Warnings’ section of the labeling of a drug so approved in the same manner as the holder of an approved new drug application under subsection (b), unless the Secretary prescribes by rule another manner.”

Although there have not been any rumblings about legislation to counter S. 2295 and H.R. 4384, we note that in 2009, well before the Mensing decision was handed down, Sen. John Cornyn (R-TX) filed an amendment to pending legislation that, if enacted, would have preempted tort suits against generic drug manufacturers.  Specifically, Sen. Cornyn’s amendment would have amended the law to state:

Notwithstanding any other provision of State or Federal law, a person who manufacturers a generic drug approved under an [ANDA] shall not be liable because the label did not warn against an adverse reaction, unless the [FDA] required a change to the label to provide such warnings and the manufacturer failed to comply with such requirement, or the manufacturer failed to provide to the [FDA] health and safety information otherwise required to be provided under regulations issued by the Secretary for Health and Human Services regarding such drug.

Public Citizen, which has petitioned FDA to amend its regulations to permit ANDA sponsors to revise their labeling through the Changes Being Effected and Prior Approval Supplement procedures, not surprisingly came out in favor of the introduction of the Patient Safety and Generic Labeling Improvement Act.  GPhA issued a statement in response to the introduction of the legislation stating, in part, that “[t]he legislation introduced by Senator Leahy would disrupt [confidence in the industry] and unduly burden physicians who would have to be aware of multiple labels for the same product.”

By Kurt R. Karst –      

In a 2-1 panel decision handed down by the U.S. Court of Appeals for the Federal Circuit earlier this week, the Court affirmed a September 2010 Judgment on the Pleadings by the U.S District Court for the Southern District of New York in favor of the ANDA sponsors (Defendants-Appellees) concerning U.S. Patent No. 5,569,652 (“the ‘652 patent”), which is listed in the Orange Book for the contraceptive drug YASMIN (drospirenone 3 mg/ethinyl estradiol 0.03 mg) Tablets (NDA No. 021098) as a method-of-use patent.  Based on Federal Circuit precedent (i.e., Warner-Lambert Co. v. Apotex Corp., 316 F.3d 1348 (Fed. Cir. 2003) and Allergan Inc. v. Alcon Labs., 324 F.3d 1322 (Fed. Cir. 2003), which have been used to support the proposition that a method-of-use patent infringement claim against an ANDA sponsor cannot stand where that use is not approved by FDA), and FDA’s labeling regulations at 21 C.F.R. § 201.57(c) (stating in part that “[i]ndications or uses must not be implied or suggested in other sections of the labeling if not included in this section”), among other things, the New York District Court determined that the ‘652 patent does not claim an FDA-approved use for YASMIN because the patented use does not appear in the “Indications and Usage” section of the YASMIN labeling, but rather in the “Clinical Pharmacology” section of the labeling.  As we previously reported, the case is important enough that PhRMA filed an amicus brief in support of Plaintiffs-Appellants. 

The ‘652 patent has two independent claims – claims 1 and 11 – that recite that the claimed method achieves three effects simultaneously: (1) a contraceptive effect; (2) an anti-androgenic effect; and (3) an anti-aldosterone effect (also known as an anti-mineralocorticoid effect.  Plaintiffs-Appellants argued that FDA approved the ‘652 patent’s claim of simultaneous gestagenic, anti-androgenic, and anti-aldosterone effect, and that that approval is found in the “Clinical Pharmacology” section of the YASMIN labeling, which states in relevant part that “[d]rospirenone is a spironolactone analogue with antimineralocorticoid activity.  Preclinical studies in animals and in vitro have shown that drospirenone has no androgenic, estrogenic, glucocorticoid, and antiglucocorticoid activity.  Preclinical studies in animals have also shown that drospirenone has antiandrogenic activity.”  Defendants-Appellees argued that the only approved use for YASMIN included in the product’s labeling is contraception, and that the New York District Court decision should be affirmed.

In affirming the New York District Court’s decision, Circuit Judges S. Jay Plager and William C. Bryson said that the Court’s Warner-Lambert and Allergan decisions provide the framework for analyzing the case and are on point:

Based on Warner-Lambert and Allergan, the defendants’ conduct would constitute infringement under section 271(e)(2)(A) (or inducement of infringement under section 271(b)) only if the defendants’ ANDAs sought approval for the use protected by the ’652 patent, i.e., for the combination of a gestagenic effect, an anti-androgenic effect, and an anti-aldosterone effect in patients needing that combination of effects. . . .  The question to be answered, then, is whether the FDA has approved the use of Yasmin to achieve the combination of the three effects claimed in the ’652 patent.

Referring to the “Clinical Pharmacology” section of the YASMIN labeling quoted above, the Court said in its decision that:

While that passage states that Yasmin exhibits anti-mineralocorticoid activity and has the potential for anti-androgenic activity based on animal studies, neither that passage nor anything else on the label provides any safety or efficacy information associated with the possible use of Yasmin in treating patients who are in need of those effects.  Thus, while the label mentions potential anti-mineralocorticoid and anti-androgenic activity, it does not do so in any way that recommends or suggests to physi-cians that the drug is safe and effective for administration to patients for the purposes of inducing these effects.

Moreover, FDA’s labeling regulation at 21 C.F.R. § 201.57 “makes clear that the FDA has not approved the use of Yasmin to produce the pharmacological effects that are listed in the Clinical Pharmacology section of the label,” said the Court. 

The reference in the Clinical Pharmacology section of the label to the anti-mineralocorticoid and anti-androgenic activity of drospirenone is certainly not a direct indication of an appro-priate use for Yasmin, and even if it could be considered an “implied or suggested” indication of an appropriate use, the regulation expressly states that such implied or suggested uses do not constitute approved uses.

In addition, the FDA regulation requires the label to provide a summary of the essential scientific information needed for the safe and effective use of the drug.  See 21 C.F.R. § 201.56(a)(1).  The Yasmin label does not provide physicians with such a summary with respect to the drug’s anti-androgenic and anti-mineralocorticoid effects, which is a further indication that the FDA did not approve the use of Yasmin to exploit those effects in treating patients.

Although Defendants-Appellees argued that approved methods of use do not always appear in the “Indications and Usage” section of drug labeling, but may appear in other labeling sections such as the “Dosage and Administration” section, the Court said that fact is not helpful in this case:

The ’652 patent is narrowly focused on simultaneously achiev-ing three effects in premenopausal or menopausal pa-tients in need of all three effects; as the parties stipulated, the claim limitation referring to a “patient in need thereof” means a patient with a “perceived need for” all three effects.  The patent does not claim a method of achieving a contraceptive effect in a patient in need of contraception in which the drug used to achieve the contraceptive effect has two generally beneficial addi-tional effects.  To practice the method claimed in the ’652 patent, a physician must determine that all three effects are needed by a specific premenopausal or menopausal patient.  FDA approval of that method of use would require a showing that Yasmin was safe and effective for simultaneously obtaining those three effects in patients needing those effects.  Acknowledgement of the safety and efficacy of that specific method of use would be evidenced by including it in the Indications and Usage section of the label.  Therefore, the point is not simply that the method of use was not described in the Indications and Usage section that shows lack of FDA approval; the point is that the label, taken in its entirety, fails to recommend or suggest to a physician that Yasmin is safe and effective for inducing the claimed combination of effects in patients in need thereof. [(Emphasis added)]

As to the various pieces of evidence Defendants-Appellees proffered to support their argument that the references to anti-mineralocorticoid and anti-androgenic activity in the YASMIN “Clinical Pharmacology” labeling section indicate that FDA approved YASMIN to induce those effects, including FDA’s Orange Book patent listing regulations, the Court commented that:

That evidence, however, demonstrates only that the FDA was aware that Yasmin could cause the effects discussed in the ’652 patent.  It does not go to the critical question of whether the FDA has found Yasmin to be safe and effective for the purpose of inducing those effects in a premenopausal or menopausal patient with a specific need for those effects.  Absent that finding of safety and efficacy, and the recognition of such safety and efficacy on the Yasmin label, the Yasmin label cannot instruct (and the ANDA proposed label cannot induce infringement of) the method of use claimed in the ’652 patent.

Channeling what might be characterized as her “inner Vizzini” (from The Princess Bride), Circuit Judge Pauline Newman says in her dissenting opinion that the majority panel decision is simply incorrect and contrary to the purposes of the Hatch-Waxman Amendments and “the premises of FDA generic drug practices.”

The court holds that the listing of some of the Yasmin® properties in the Clinical Pharmacology section of the FDA label, instead of the Indications and Usage section, removes the generic counterpart of the Yasmin® product from the scope of the ’652 claims.  That ruling is in error, for the portion of the FDA label in which a product’s properties are described is irrelevant to whether the patent is infringed by sale or use of the product.  The court also finds, albeit incorrectly, that “the label, taken in its entirety, fails to recommend or suggest to a physician that Yasmin is safe and effective for inducing the claimed combination of effects in patients in need thereof,” maj. op. 16, and holds that this also requires non-infringement on the pleadings, as a matter of law. Neither the district court, nor this court, conducted a standard infringement analysis.

Moreover, writes Judge Newman, the Court’s Warner-Lambert decision does not support dismissal in this case.  “In Warner-Lambert the patented neurodegenerative use was not the label-approved use, and was not the use for which the ANDA was submitted. . . .  In contrast, for Yasmin® it is not disputed that the three properties recited in the patent claim are coextensive with the FDA-approved label. . . .  The court errs in ruling as a matter of law that the FDA-approved label for Yasmin® does not encompass the three effects stated in the label and claimed in the ’652 patent.”

The Federal Circuit’s decision seems destined to further appeal.  In the meantime, companies may be (re)considering product labeling in light of the product’s patent estate.