By Susan J. Matthees –

Earlier this week, the U.S. Court of Appeals for the District of Columbia Circuit affirmed the U.S. District Court for the District of Columbia’s decision granting FDA’s Motion to Dismiss a lawsuit filed in April 2010 by a group of ear candle advocates.  As we previously reported, ear candle advocates filed suit after FDA issued about 15 Warning Letters to companies marketing ear candles, an alternative medicine practice that advocates claim improves general health and well-being.  FDA stated in the Warning Letters that ear candles are unapproved devices, a determination the ear candlers alleged violated their First, Ninth, Tenth, and Fourteenth Amendment Rights.  

The District Court granted FDA’s Motion to Dismiss on the ground, among others, that the Warning Letters were not final agency action subject to judicial review under the Administrative Procedure Act (“APA”).  The Court of Appeals affirmed this decision, explaining that the Warning Letters are not final agency action because “they neither mark the consummation of the agency’s decisionmaking process nor determine the appellants’ legal rights or obligations.”  Citing FDA’s Regulatory Procedures Manual, the Court noted that FDA Warning Letters provide an opportunity for a company to correct their actions before the Agency initiates enforcement actions and are merely “informal and advisory.”  The Court also noted that FDA does not commit to taking action in a Warning Letter and that FDA acknowledges that it can only ban a device through a formal process that was not taken in this case.  Because there was no final agency action, the ear candlers’ claims could not hold a candle to the requirements of the APA.   

The D.C. Circuit’s decision is consistent with previous judicial rulings.  Indeed, it appears that almost every court to consider the question has held that an FDA Warning Letter does not constitute “final agency action.”  See, e.g., Biotics Research Corp. v. Heckler, 710 F.2d 1375 (9th Cir. 1983); Clinical Reference Lab., Inc. v. Sullivan, 791 F. Supp. 1499 (D. Kan. 1992), rev’d sub nom. on other grounds, United States v. Undetermined No. of Unlabeled Cases, 21 F.3d 1026 (10th Cir. 1994); Estee Lauder, Inc. v. FDA, 727 F. Supp. 1 (D.D.C. 1989); IMS Ltd. v. Califano, 453 F. Supp. 157 (C.D. Cal. 1977).  More recently, the U.S. District Court for the District of Wyoming considered the issue in Cody Laboratories, Inc. v. Sebelius in the context of a Warning Letter for a marketed unapproved drug and found there was not final agency action.  On appeal, the U.S. Court of Appeals for the Tenth Circuit did not grapple with the issue.  However, in 1992, Den-Mat Corporation sued FDA for sending a Warning Letter that concluded that its product was a drug, not a cosmetic.  The Warning Letter stated that FDA would recommend that actions be taken against the products, and Den-Mat reported that its business was suffering as a result of the letter and would continue to suffer until there was a determination whether FDA was correct in its position.  FDA sought to have the case dismissed, but the U.S. District Court of the District of Maryland permitted a company to continue a case against FDA because FDA’s warning letter stated an “unqualified intent” to take affirmative action against the company.  Den-Mat Corporation v. United State of America, No. MJG-92-44, 1992 U.S. Dist. LEXIS 12233 (D. Md. Aug 17, 1992). The court stated that FDA may have “gone beyond a statement of its position and taken an affirmative action to enforce its decision.”  There was no similar affirmative action by FDA in the case against the ear candlers.

By Kurt R. Karst –

In what appears to be a further sign of FDA’s efforts to clamp down on differences between brand-name Reference Listed Drugs (“RLDs”) and their proposed generic counterparts, FDA’s Office of Generic Drugs (“OGD”) is now looking more closely at tablet size differences.  The increased scrutiny may be intended to address, at least in part, criticism about some generic drugs not acting the same as their brand-name counterparts (see our previous post here). 

OGD recently issued letters to companies with pending ANDAs for one product, stating that the applications are not approvable because of tablet size differences when compared to the corresponding strengths of the RLD.  According to the letters:

The larger tablet size poses greater potential safety issues such as choking, tablet arrest, and prolonged transit time, which could result in esophageal injury and/or pain.  The larger tablet size also raises product efficacy concerns due to patients’ inability or unwillingness to swallow the larger tablets. . . .  Therefore, from a clinical standpoint, this product is unacceptable for approval as a generic and we recommend that you redesign your product to be closer in size to the relevant strengths of the RLD.

The legal basis for FDA’s decision is not stated in the letters, but may be based on FDC Act § 505(j)(4)(H), which states that FDA shall approve an ANDA unless the Agency finds that:

information submitted in the application or any other information available to the Secretary shows that (i) the inactive ingredients of the drug are unsafe for use under the conditions prescribed, recommended, or suggested in the labeling proposed for the drug, or (ii) the composition of the drug is unsafe under such conditions because of the type or quantity of inactive ingredients included or the manner in which the inactive ingredients are included.

Unfortunately, the letters do not provide any guidance on what is an acceptable size difference between a proposed generic and its corresponding RLD, leaving ANDA sponsors with several questions, including whether OGD is taking a one-size-fits-all approach (i.e., a set, permissible size difference applicable to all generics) or a case-by-case approach.  Absent guidance on an acceptable size difference, ANDA sponsors will be stumbling around in a dark room, unable to make informed decisions on how to redesign their products.  Such concerns are heightened when there is a patent on the RLD that covers size (or shape).  And what about drug products already on the market?

OGD gave a heads-up that the Office would be looking more closely at tablet size (as well as shape and color) during a presentation at the October 2011 GPhA/FDA Fall Technical Conference.  According to Dr. Vilayat Sayeed, Director, Division of Chemistry III., OGD, draft guidance is in the works and will published to address concerns about generic tablet size, shape, and color compared to the RLD.  Clearly, FDA has decided to move forward with its policies before issuing guidance. 

Once published, FDA’s guidance on tablet size, shape, and color will join a host of other recent guidances that address generic drug sameness issues.  In January 2011, FDA issued draft guidance titled “Size of Beads in Drug Products Labeled for Sprinkle” after OGD issued several refuse-to-receive letters to generic drug applicants who had proposed products with fewer beads (e.g., mini-tablets) than in the RLD product, making sprinkling the product on food an impossibility, according to FDA.  In the guidance, FDA suggests a maximum bead size of 2.0 mm for drug products labeled for sprinkle based on information demonstrating that food is chewed to approximately 2 mm in median particle size before swallowing.  More recently, in August 2011, FDA issued draft guidance, titled “Tablet Scoring: Nomenclature, Labeling, and Data for Evaluation,” in which the Agency discusses the need for consistent scoring between a generic product and its RLD.

Ratcheting up ANDA standards may be one way for OGD to gain better control of the ANDA review queue, particularly with the likely enactment of the Generic Drug User Fee Act (“GDUFA”) in 2012 (see our previous posts here and here).  Among other things under GDUFA, FDA will agree to certain staged performance goals and will commit to substantially reducing the ANDA backlog.  In addition, the draft version of the “Generic Drug User Fee Act Program Performance Goals and Procedures” states that by the end of year 1 of the program “FDA will develop enhanced refusal to receive standards for ANDAs and other related submissions.”  FDA is supposed to, under the agreement with the generic drug industry, publish those standards in advance of implementation.  The enhanced standards, which we understand are intended to provide more clarity as a whole for less experienced filers and to improve agency efficiency, are not related to topics such as tablet size.

Additional Reading:

• New England Journal of Medicine – Why Do the Same Drugs Look Different? Pills, Trade Dress, and Public Health

By James R. Phelps –

Over the New Year's Day weekend, The New York Times reported on the shortage of ADHD drugs, with this quote:  “‘We have reached out to the D.E.A. and told them that there are shortage issues,’ said Valerie Jensen, associate director of the F.D.A.’s drug shortage program. ‘But the quota issues are outside of our area of responsibility.’”  The DEA responded, contending that there is plenty of supply, and the manufacturers are to blame for the shortages, saying, according to the Times: “… any supply disruptions (are attributable) to decisions made by manufacturers.”  Sorting out the “blame” will depend upon understanding the process by which manufacturers are able to work within the quota system.

Production of the supply of Schedule II drugs is controlled by DEA through quotas granted by the agency, on a yearly basis.  Manufacturers must calibrate production based upon DEA’s decision concerning how much they may produce (i.e., within the quota allocations granted by DEA based on the company’s submissions to the agency).  In order for the system to work properly, DEA should process quota requests in a predictable and timely manner.  Further, the agency should articulate clearly the bases upon which it makes quota allocations.   

It would be of interest for the public to be provided the usual timelines for quota requests and DEA responses.  Does DEA routinely grant quota allocations in time for sensible manufacturing decisions?  A public expression of the criteria that DEA uses in setting quotas would also help to clarify the situation.  The manufacturers, dependent upon DEA for quotas, might not be the best source to expose any difficulties that exist, so perhaps congressional oversight is warranted.

The controversy, with its dreadful health implications, brings to light – again – the tension that exists between the medical regulation and the police regulation of those medicines that might be abused.  Most would agree that patient access should be the priority; patients who require these medicines should receive the same respect and attention as any other medical patient.  Certainly the policing of drugs through quotas should be done in an efficient, thoughtful manner.

The Food and Drug Law Institute’s (“FLDI”) annual Food Week Conference is being held in Washington, DC on January 23-26, 2012.  FDLI Food Week features a two-day introduction to food law and regulation, as well as three days of advanced programming on advertising and labeling, food safety, and global issues.  Hyman, Phelps & McNamara, P.C. Director Ricardo Carvajal is presenting at the conference.  As a result, we secured a discount code for our friends and colleagues.  To receive a 15% discount off registration, use the following promotional code: FOODPRTNR.  To register for the event and to view a copy of the conference brochure, see here.

By Kurt R. Karst –      

Representatives Cliff Stearns (R-FL) and Ed Towns (D-NY) recently introduced H.R. 3737, the Unlocking Lifesaving Treatments for Rare-Diseases Act (“ULTRA”).  The bill would amend the FDC Act to “improve access to the existing accelerated approval pathway for patients with life threatening ultra-rare genetic diseases with the added attribute of promoting private investment in new biotechnology companies and job growth in the United States,” according to a statement issued by Rep. Stearns.  More specifically, the bill would amend FDC Act § 506 (titled “Fast Track Products”), added to the statute by the 1997 FDA Modernization Act, to permit FDA to approve an application for a drug designated both as an orphan drug and as a fast track product using a “surrogate endpoint” as defined in proposed FDC Act § 506(e)(2).  In addition, the orphan disease or condition must affect a “small number of patients in the United States,” which is short-hand for an ultra-rare or ultra-orphan disease – a disease or condition with a U.S. prevalence that some have pegged at 6,000 or fewer people (see here).

FDC Act § 506 is generally considered to have codified FDA’s December 1992 accelerated approval regulations, under which the Agency will accelerate the approval of certain new drugs and biologics for serious or life-threatening illnesses, and when such products provide a meaningful therapeutic benefit to patients over existing treatments.  These accelerated approval regulations are located in Subpart H (21 C.F.R. Part 314) of FDA’s drug regulations, and in Subpart E (21 C.F.R. Part 601) of the Agency’s biologics regulations.  If a product meets these criteria, then FDA may grant marketing approval based on a demonstrated effect on a surrogate endpoint reasonably likely to predict clinical benefit and a sponsor’s commitment to complete with due diligence the required postmarketing studies to confirm the product’s clinical benefits.  A surrogate endpoint is an alternative measurement of the symptoms of a disease or condition that is substituted for measurements of observable clinical symptoms.  Surrogate endpoints are expected to predict clinical benefit (or harm, or lack of benefit or harm).

Specifically, under FDA’s accelerated approval regulations at 21 C.F.R. § 314.510, “FDA may grant marketing approval for a new drug product on the basis of adequate and well-controlled clinical trials establishing that the drug product has an effect on a surrogate endpoint that is reasonably likely, based on epidemiologic, therapeutic, pathophysiologic, or other evidence, to predict clinical benefit or on the basis of an effect on a clinical endpoint other than survival or irreversible morbidity” (emphasis added).  Similarly, under FDC Act § 506(b), FDA “may approve an application for approval of a fast track product under [FDC Act § 505(c)] or [PHS Act § 351] upon a determination that the product has an effect on a clinical endpoint or on a surrogate endpoint that is reasonably likely to predict clinical benefit” (emphasis added). 

For more prevalent diseases, there may be independent clinical data that make a surrogate endpoint reasonably likely to predict clinical benefit; however, “[m]ost ultra-rare diseases do not have the same pre-existing body of clinical management or historical study data currently required to utilize the [accelerated approval] pathway,” according to a recent article co-authored by Dr. Emil D. Kakkis of the Kakkis EveryLife Foundation For Rare Diseases on the potential effects on investment in the development of treatments for low prevalence rare diseases with  improved access to accelerated approval.  Thus, according to the article, “[w]ith this essential requirement for independent clinical data, the [accelerated approval] pathway is virtually unavailable for novel drugs developed for untreated ultra-rare diseases.”  The Kakkis EveryLife Foundation was a major driving force behind H.R. 3737 – see here and here – and worked with Rep. Stearns to build support for the legislation. 

To address the issue raised by Dr. Kakkis, ULTRA would amend the law to provide that for a product for an ultra-rare disease or condition designated both as an orphan drug and as a fast track product, FDA “may use a surrogate endpoint for the approval of the drug as a fast track product based on the existence of reasonable scientific data that support and qualify the relevance of the surrogate endpoint to the disease state and treatment.”  In addition, the legislation says that FDA “shall not require clinical treatment data or other historical clinical data on the surrogate endpoint as a prerequisite to assessment of the surrogate endpoint under this subsection if such data are not available;” however, FDA “may take into consideration any reliable clinical data that are readily available and published.”  The bill would also require FDA to issue guidance “providing details and options for qualifying surrogate endpoints without clinical data” within one year of the date of enactment of ULTRA. 

By Ricardo Carvajal –

Several nonprofit groups sued FDA for its failure to respond to a May 2006 citizen petition asking that products of nanotechnology be subject to specific regulatory requirements, and that FDA stop the marketing of sunscreens that contain nanoparticles.  The complaint alleges that manufactured nanomaterials have properties that “create unique human health and environmental risks” that FDA has failed to address.  Citing an inventory maintained by the Project on Emerging Nanotechnologies, plaintiffs contend that “nano-consumer products” are rapidly entering the marketplace with inadequate government oversight or research on their potential effects on human health and the environment.  Plaintiffs single out personal care products (e.g., sunscreens) as a category of special concern because of their relative prevalence in the marketplace, “and their repeated, intimate use by consumers.”  Plaintiffs request a court order declaring that FDA is in violation of the Administrative Procedure Act, and to compel FDA to respond to the 2006 citizen petition “as soon as reasonably practicable.”

By Jennifer D. Newberger –

To finish out a year in which the Center for Devices and Radiological Health ("CDRH") issued what appeared to be an unprecedented number of draft guidance documents, CDRH issued two more on December 27, 2011.  This blog post discusses one such draft guidance, titled “The 510(k) Program:  Evaluating Substantial Equivalence in Premarket Notifications [510(k)].”  A primary purpose of the draft guidance is to clarify certain critical points in the substantial equivalence decision-making process, and to do so, the draft guidance proposes a new decision-making flowchart.  It also updates the approaches to the Special 510(k) and the Abbreviated 510(k) programs.  If finalized, this draft guidance document could potentially have a more significant impact on the 510(k) notification process than any of the other draft guidance documents issued this year, since it addresses the heart of the 510(k) program:  how FDA determines substantial equivalence. 

Perhaps most interesting is CDRH’s attempt to do away with its longstanding acceptance of “split predicates,” with nothing more than a conclusory statement in a footnote.  A split predicate refers to a situation in which a manufacturer is attempting to “split” the 510(k) decision-making process by demonstrating that a new device has the same “intended use” as one marketed device and the same “technological characteristics” as a second marketed device.  In its 510(k) Working Group Preliminary Report and Recommendations (Preliminary Report), CDRH stated that it should “explore the possibility of explicitly disallowing the use of ‘split predicates.’”  Rather than “exploring” this possibility, the draft guidance document states in footnote 15 that the use of a split predicate “is inconsistent with the 510(k) regulatory standard.”  It does not explain how it reached this conclusion.  Perhaps by changing its longstanding approach to split predicates in a footnote, CDRH hoped the change would go unnoticed.  We hope that, by pointing it out, this policy reversal can at least be “explored” before being finalized.

While the draft guidance officially does away with split predicates, it introduces a new concept called “reference devices,” stating that, in certain circumstances, “a manufacturer may refer to legally marketed devices that have a different intended use or different technological characteristics that raise different questions of safety and effectiveness, to address specific scientific questions for a new device.”  In other words, reference devices may be used “to address certain performance characteristics of the new device.” 

The draft guidance is clear that a reference device is not a predicate device, which raises the question:  if it is not a predicate device, what is it, and why is it permitted?  The statute allows comparison to a predicate device, not to a reference device.  The draft guidance states that the reference device scenario is “very complicated,” and therefore FDA “will need to rely on its scientific and regulatory expertise to determine when this scenario may be applied.”  While the draft guidance provides one illustrative example, it is not clear when a reference device may be appropriate, or what factors FDA will consider in making this determination, giving FDA broad leeway to accept—or, perhaps more importantly to industry, reject—a reference device at its discretion.

Although the draft guidance indicates that FDA will continue to permit multiple predicates, “FDA recommends that the manufacturer identify the primary predicate device to which a substantial equivalence claim is being made” (emphasis added).  Perhaps in exchange for requiring that of the 510(k) submitter, FDA will require itself to “clearly cite the predicate device relied upon in determining substantial equivalence.”  Additionally, the submitter “should identify each device and explain why more than one predicate or a reference device” is necessary and appropriate to support substantial equivalence.  Of course, because the draft guidance does not describe the circumstances in which either multiple predicates or a reference device may be appropriate, such justification may be difficult.

The draft guidance also attempts to clarify the distinction between “intended use” and “indications for use,” and states that the intended use “encompasses the indications for use.”  It also describes how CDRH determines intended use, and seems to take an approach slightly different from that described in the statute.  Section 513(i)(1)(E)(i) of the Federal Food, Drug, and Cosmetic Act ("FDCA") states that a determination of the intended use of a device “shall be based upon the proposed labeling submitted in a report for the device under section 510(k).”  The statute does not allow for consideration of information outside the proposed labeling in determining the intended use of a device.  Nevertheless, the draft guidance states that “FDA may rely upon publicly-available scientific information or Agency knowledge about how a disease progresses to determine whether indications for use to treat a certain disease or anatomical site constitute a new intended use.”   Not only does this go beyond FDA’s statutory authority, but allowing FDA to use “Agency knowledge” to determine the intended use of a device without providing scientific support will only further hinder the transparency and predictability of FDA’s decisions.

Finally, the draft guidance addresses whether differences in technological characteristics raise different questions of safety and effectiveness, stating: “A ‘different question of safety or effectiveness’ is a question raised by the technological characteristics of the new device that was not applicable in the 510(k) for the predicate device, and poses an important safety or effectiveness concern for the new device.”  The draft guidance includes examples of differences in technological characteristics that it believes raise different questions of safety and effectiveness.  It seems, however, that whether the questions are “different” just depends on how the question is phrased.  For example, FDA states that there are different questions of safety and effectiveness for a new device made of “significantly different materials and processes” than the predicate.  In explaining why the questions of safety and effectiveness are different, the draft guidance asks questions very specific to the new material, rather than more a more general question about whether the material might negatively interact with the body.  It seems like the latter question could lead to a conclusion that there are not different questions of safety effectiveness, while the former will.  If FDA poses the questions such that they are too specific to the new technology, it seems that there will nearly always be different questions of safety and effectiveness.  By virtue of having new technological characteristics, there will be specific questions not raised by the predicate.  This should not necessarily preclude a finding of substantial equivalence.

As with all the draft guidance documents issued this year, it remains to be seen whether FDA gives any weight to the comments submitted, what the guidance will look like when finalized, and how FDA will implement it.

By Jamie K. Wolszon & Alan M. Kirschenbaum –

FDA has issued two important documents bearing on communications regarding off-label uses and (in one of the documents) not-yet-approved products.  The first, which was posted on FDA’s web site earlier this week, was a draft guidance on how a drug, biologics, or device manufacturer should respond to unsolicited requests for off-label information.  The draft guidance addresses both private requests and requests made in public forums, including emerging electronic media such as product websites, discussion boards, or web chat-rooms.  Although FDA’s policy permitting companies to respond to unsolicited requests dates back at least to 1982, this guidance is the most detailed exposition of the policy to date, and, of course, the only one that addresses emerging electronic media.  FDA explains that, if a manufacturer responds to an unsolicited request in the manner set forth in the guidance, FDA will not use the response as evidence of the firm’s intent that the product be used for an unapproved or uncleared use, and the response also will not be regulated as promotional labeling or advertising.

The draft guidance applies to all approved or cleared prescription human and animal drugs (including biologics) and medical devices for humans.  FDA explains that cleared or approved devices include, not only those subject to 510(k) notification or PMA approval, but also “devices that are legally marketed for a specific intended use without an individual product approval or substantial equivalence determination”, e.g. class I and II devices marketed for a use exempt from the PMA or 510(k) processes.  For those devices, the draft guidance defines a request for off-label information as “any request for information regarding a new use for which approval or clearance would be required.”  The draft guidance does not cover medical products that are not currently approved or cleared for any purpose.

The draft guidance defines an unsolicited request as one that is not prompted in any way by a manufacturer or its representatives and that is initiated by persons or entities that are completely independent of the relevant firm, including health care professionals, health care organizations, members of the academic community, formulary committees, patients, and caregivers.  By contrast, a solicited request is one that is “prompted in any way by a manufacturer or its representatives . . .”  A number of examples of solicited requests are provided.

The draft guidance distinguishes between public and non-public unsolicited requests.  A non-public unsolicited request is one made “directly to a firm using a one-on-one communication approach” such as an individual who calls or emails the medical information staff at a firm.  A public unsolicited request is one “made in a public forum, whether directed to a firm specifically or to a forum at large,” such as a question posed to a firm representative during a live presentation and heard by other attendees, or a question about an off-label use of a specific product posted on a firm-controlled website or a third-party discussion forum visible to a broad audience. 

The guidance on non-public unsolicited requests is generally consistent with FDA’s historical policy on such requests:  responses should be provided only to the requestor as a one-on-one communication.  They should be scientific and non-promotional in tone and presentation; generated by medical or scientific personnel independent from sales or marketing; tailored to answer only the specific question asked; and truthful, non-misleading, accurate, and balanced.  The response should be accompanied by a copy of the FDA-approved labeling, a statement that FDA has not approved or cleared the product for the use(s) described in the response, a statement of the approved or cleared indication, all important safety information, and a list of references.  Records should be kept of the request, the response, and any follow-up inquiries.

The section of the draft guidance on public unsolicited requests ventures into new areas that have not heretofore been addressed in FDA policy statements.  FDA explains that it has two concerns with providing off-label information in a public forum in response to an unsolicited public request.  First, by answering the question in public, the manufacturer exposes those who did not make the request to the off-label information.  Moreover, due to the enduring nature of websites, the information may remain available in the public domain even after it becomes outdated.  Accordingly, the draft guidance provides that a company’s public response to a public request cannot provide any of the requested off-label information.  Instead, the company representative must note that the information requested is off-label and then provide the contact information of the company’s medical/scientific personnel.  Also, a company should only respond to a request that specifically references the company’s own named product.  Note that these restrictions apply, not only to requests made on electronic forums, but also those made by attendees at a live meeting. 

If the individual making the request follows up with the company, the guidelines for responding are the same as those for responding to a non-public unsolicited request, described above. 

In a separate but related development, the December 28th Federal Register contained an FDA notice announcing the opening of a docket to receive comments on scientific exchange involving off-label uses of approved/cleared products or products for which there is not yet any approval or clearance.  FDA opened this docket in response to a Citizen Petition filed by several pharmaceutical companies requesting that FDA clarify its policies regarding communications related to off-label uses and pre-approval communications (see our previous post here).  The notice specifically requests comments on “scientific exchange.”  Under FDA’s drug and device regulations and Agency policy, the “exchange of scientific information” concerning an investigational drug or device is not subject to restrictions on promotion, but FDA has not yet attempted to define the scope of “scientific exchange.”  The Agency is seeking comments and information on scientific exchange to assist it in evaluating FDA policies on off-label and pre-approval communications.  FDA asks for responses to a number of specific questions, including how scientific exchange should be defined, what kinds of activities are included, how it should be distinguished from promotion, and whether off-label communications should be treated differently from pre-approval communications.  Comments may be submitted through March 27, 2012.

By Ricardo Carvajal –

Earlier this month, the HHS Office of Inspector General ("OIG") issued a report that identifies a number of “significant weaknesses” in FDA’s oversight of food facility inspections conducted by state agencies under contract with FDA.  OIG found that FDA:

• “failed to ensure that the required number of inspections was completed"
• “paid for many inspections that were incomplete”
• “did not ensure that all State inspections were properly classified and that all violations were remedied”
• “failed to complete the required number of audits for one-third of the States and did not always follow up on systemic problems”

According to OIG, “[t]he most common systemic problem was the inspectors’ failure to identify violations.”  It appears that approximately 16% of inspectors reportedly had this type of deficiency.  OIG’s findings are significant because, as of 2009, the majority of FDA’s food inspections were conducted by state inspectors. 

The OIG report could lend further ammunition to those who question the reliability of non-FDA inspections and audits.  Third-party auditors have repeatedly come under fire in the wake of recent outbreaks of foodborne illness, and are now being targeted in personal injury lawsuits. 

Overall confidence in third-party audits could be bolstered by FDA’s implementation of the third-party auditor accreditation system authorized by FSMA.  Although that system is expected to focus on imports, FDA has previously indicated that it might move toward recognition of third-party certification programs more generally (see our previous posting here).  However, the OIG report suggests that the success of such efforts could turn on FDA’s own capacity as an auditor of auditors.

By Alan M. Kirschenbaum & Nisha P. Shah –

In the December 19, 2011 Federal Register, CMS published a long-awaited proposed regulation to implement the transparency report requirements of the Patient Protection and Affordable Care Act.  Hyman, Phelps & McNamara, P.C. has prepared a summary of the proposed rule, which is available here.  The CMS proposal is unusual in the number of issues on which CMS is considering alternative approaches and soliciting comments.

 Among the more noteworthy features of the proposed rule are the following:

• Although the statute requires reporting by March 31, 2013 of payments and other transfers of value made in calendar year 2012, CMS has decided not to require manufacturers to begin collecting required information until 90 days after publication of the final rule.  This means that the initial report due on March 31, 2013 would cover only a portion of CY 2012.

• The reporting requirement would apply to foreign entities that market covered products in the U.S., as well as to entities that do not manufacture covered products themselves, but instead hold FDA approval, licensure, or clearance and contract out the actual manufacturing.

• The marketing of a single covered (i.e. federally reimbursable) product is sufficient to subject a manufacturer to the requirement to report all of its payments, even if it primarily manufacturers non-covered products.

• For purposes of determining whether an entity manufacturers covered products and is thus subject to the reporting requirement, covered products include prescription – not OTC – drugs and biologicals, and only devices requiring PMA approval on 510(k) clearance – not 510(k)-exempt devices.

• An activity associated with several purposes would need to be broken down into each segregable purpose and reported separately rather than as a single lump sum.  For example, if a payment to a consultant covered a service fee, travel expenses, and meals, the value of the fee, travel, and meals would have to be broken out and reported separately.

• An exemption for “educational materials that directly benefit patients or are intended for patient use” would not cover educational materials given to physicians for their own education.  This could mean that educational and promotional materials provided to physicians for their own education would have to be reported if they exceeded the de minimis threshold.

• Manufacturers who provide research funding to institutions would not have to report on the exact amount received by each principal investigator.  However, manufacturers who provide grants to third parties for CME would have to report on the amounts received by each physician faculty member if the identities of the faculty are publicly available.

• Provisions for a delay in CMS publication of payments to clinical investigators would apply to clinical investigations of new products, but not of new indications for currently marked products.

• Under an expansive definition of GPOs that are subject to a requirement to report physician ownership interests, a GPO could be interpreted to include a distributor.

These and other features of the CMS proposal that are described in our memorandum warrant comment by manufacturers.  CMS is accepting comments through February 17, 2012.

By JP Ellison –

We have previously posted both on FDA’s renewed focus on misdemeanor prosecutions of “responsible corporate officers” under the Park doctrine generally, and on the use of that doctrine against four Synthes executives (see here, here, here, here, and here).  Two recent opinions (here and here)
imposing nine (9) month terms of imprisonment for those executives, warrant renewed attention to these cases because they suggest a government approach to misdemeanor prosecutions  that may change the risk analysis of a defendant charged solely with an FDC Act misdemeanor. 

As readers may recall, Synthes and the four executives all pled guilty in 2009.  The four executives each pled guilty to a single misdemeanor count, the only charge against them in the indictment.  The corporate defendants entered into so called “C” pleas, pleas in which the parties agree to a particular sentence that the judge can accept or reject, but not revise.  In contrast, the plea agreements for the individual defendants did not agree on a sentence.  Instead, there was a contested sentencing, during which each side presented its arguments for the appropriate sentence, subject to the statutory limitation that the sentence could not exceed one year.  At the conclusion of the contested sentencing proceeding, the court imposed the sentence it considered appropriate.  In the case of these two executives, that sentence was 9 months in prison. 

Notwithstanding the fact that the government charged each executive only with a single misdemeanor and accepted a plea to that charge; during the sentencing, it presented evidence that the executives personally participated in “false[],” “fraudulent,” “deceptive,” and “intentionally deceiving” conduct.  This evidence convinced the judge that there was an “unparalleled” “pattern of deception," which in turn affected the sentence he imposed.  Indeed, while acknowledging that the pleas before him were based upon Park and the responsible corporate officer doctrine, the judge declared in one case that “[n]o similar set of facts can be located in the universe of Park doctrine cases,” and in the other that although the “Court well understands and respects historical sentencing practices for responsible corporate officers under the Park doctrine . . . This case stands alone.” 

This scenario was not necessarily what the regulated industry expected when discussions of a revitalized Park doctrine first surfaced several years ago.   Much of the renewed interest in the Supreme Court’s 36 year old Park decision had focused on the prospect of the government prosecuting a responsible corporate officer who was unaware of an FDC Act violation, but allegedly had the authority and responsibility to detect and remedy the violation.  Such attention on the unaware executive has been understandable because when a person commits an FDC Act violation with the intent to defraud or mislead, he can be prosecuted for a felony violation of the FDC Act.  Accordingly, there was some expectation that the government’s new wave of Park prosecutions would be those where the government did not believe that the defendant engaged in fraudulent conduct or was even aware of the alleged criminal conduct.  Thus, it followed that such prosecutions would not involve allegations that there was evidence of the defendant’s intent to defraud and mislead.

If the cases against the Synthes executives are a sign of things to come, the government’s use of misdemeanor remedy may not be so limited, however.  Instead, Park may be used by the government to charge defendants with misdemeanors, but nevertheless, the government may plan to present evidence of fraud regardless of whether the defendant pleads guilty.  

For a responsible corporate officer threatened with a felony violation of the FDC Act and offered an opportunity to plead guilty to a misdemeanor, the prospect of a contested sentencing at which the government presents its “fraud” evidence may or may not affect that officer’s decision.  For a responsible corporate officer facing only a misdemeanor charge, the calculus post –Synthes may be different.  Certainly the 2 level downward adjustment for acceptance of responsibility under the Sentencing Guidelines, which was applied in the cases against the Synthes executives, must be considered, but if months of jail time is a realistic possibility based on a misdemeanor plea, a rational responsible corporate officer may elect to take his chances at trial realizing that his upside risk is statutorily capped at a 12 month prison term.

By Jennifer D. Newberger –

The Government Accountability Office (“GAO”) recently issued a report on pediatric device development.  The report “(1) describes barriers to developing pediatric devices, (2) describes how pediatric device consortia have contributed to the development of pediatric devices, and (3) examines FDA data on the number of pediatric devices approved since FDAAA was enacted.” 

The GAO was required to issue a report of this type pursuant to the FDA Amendments Act of 2007 (“FDAAA”).  FDAAA had a suite of incentives to develop devices for children, particularly devices that receive a humanitarian device exemption (“HDE”).  FDAAA also authorized “demonstration grants” for nonprofit consortia to facilitate pediatric device development, and required FDA to provide annual reports to Congress on the number of approved pediatric devices.  Finally, FDAAA also required GAO to issue a report on pediatric device development.

Perhaps the most interesting finding is that FDA does not actually maintain or track its data regarding device approvals in such a way as to allow it to provide the required information regarding pediatric device approvals to Congress.  Although FDA established an “electronic flag” for its reviewers to use to identify the devices labeled for pediatric indications, “FDA officials reported that these electronic flags are not consistently applied, and that the agency does not provide formal training or guidance to its device reviewers regarding proper implementation of the pediatric flags.  Therefore, information from FDA’s tracking system is not sufficiently reliable to identify PMA and HDE devices labeled for use in pediatric patients.”  It is certainly difficult to evaluate whether FDAAA’s provisions have increased the number of pediatric devices when FDA does not provide reliable approval data. 

GAO also spoke with stakeholders to assess the barriers to pediatric device development and whether the incentives under FDAAA helped in overcoming those barriers.  The stakeholders indicated that, while helpful, the incentives are insufficient, especially because of the small market for pediatric devices involving orphan diseases, and the outsized costs necessary to study them.   

With regard to the pediatric consortia, GAO found that the pediatric device consortia created under FDAAA assisted 107 pediatric device projects in the first two years of the grant program.  FDA awarded approximately $5 million in grants to four pediatric device consortia in fiscal years 2009 and 2010.  The support provided by the consortia varied depending on the device’s phase of development. 

Overall, while GAO was disappointed with the data maintained by FDA regarding approval of pediatric devices, it believes that the FDAAA provisions “show potential for more pediatric devices in future years.”

In a new Legal Backgrounder published by the Washington Legal Foundation, Hyman, Phelps & McNamara, P.C.’s Karla L. Palmer and Jeffrey N. Gibbs write that a recent Florida federal district court ruling in United States v. Franck’s Lab, Inc., if upheld on appeal, will have implications that extend broadly to other areas of FDA law, particularly as it relates to FDA’s increasing use of guidance documents to expand regulatory requirements. 

As we previously reported, the U.S. District Court for the Middle District of Florida (Ocala Division) ruled in September 2011 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 early November, the government appealed that decision to the U.S. Court of Appeals for the Eleventh Circuit.

Ms. Palmer and Mr. Gibbs write that if the Eleventh Circuit upholds the district court decision, 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.”  Although FDA’s desire to use guidance in lieu of rulemaking is understandable, say the authors, as guidance documents take less work to promulgate, go through less review, and can be revised more readily, “ease of use does not excuse FDA from the need to comply with the Administrative Procedure Act.”

By Riëtte van Laack –

In a December 12, 2011 decision, Judge R. Leon of the District Court for the District of Columbia granted Defendants’ Motion to Dismiss an action by Physicians Committee for Responsible Medicine (Plaintiff) requiring that Defendants FDA and USDA withdraw the “MyPyramid” food diagram and dietary guidelines, and adopt Plaintiff’s proposed “Power Plate” food diagram and dietary guidelines instead.  Plaintiff alleged that certain portions of the Dietary Guidelines do not reflect the preponderance of current and scientific medical knowledge because, among others, they only identify foods that should be eaten more frequently and do not identify which foods should be eaten less frequently.

Judge Leon dismissed the case on the grounds that Plaintiff failed to demonstrate that it had standing because it did not present evidence that it (or its members) had suffered an actual or imminent concrete and particularized injury.  As required by the National Nutrition Monitoring & Related Research Act (“Nutrition Act”), Defendants published a report of nutritional and dietary information and the Dietary Guidelines.  Plaintiff failed to present evidence as to how these Dietary Guidelines affected or interfered Plaintiff’s efforts to improve the health and well-being of Americans.  In addition, Defendants’ report and Dietary Guidelines, published every five years as required by the Nutrition Act, does not constitute an agency action.  In fact, the Nutrition Act specifically states that the Dietary Guidelines do not constitute a rule or regulation issued by a Federal agency.  Thus, they are not subject to judicial review under the APA and Plaintiff failed to state a claim upon which relief could be granted.

By Jennifer M. Thomas –

A Government Accountability Office (“GAO”) Report released on December 15, 2011, the same day as a Senate Committee hearing, finds that FDA needs increased authority in order to address the growing problem of drug shortages.  In her statement before the Senate Committee on Health, Education, Labor, and Pensions, GAO Director of Health Marcia Crosse stated that according to the Report, FDA is currently “constrained in its ability to protect the public health from the impact of [drug] shortages.” 

We first posted about the serious public health problem presented by drug shortages, and the government’s search for a solution to that problem, after President Obama issued an Executive Order in early November.  Since that time, both the executive and legislative branches have focused on addressing drug shortages.  Moreover, industry appears to be taking steps to address the problem independently.  While the “Preserving Access to Life-Saving Medications Act of 2011” (S. 296, H.R. 2245) remains pending in committee, FDA announced the December 19th publication of an interim final rule to make better use of its existing shortage-related authority under the Federal Food, Drug, and Cosmetic Act (“FDCA”).  Also, the Generic Pharmaceutical Association (“GPhA”) announced its own Accelerated Recovery Initiative to “reverse current drug shortages and prevent further ones. . . .” (see here and here)

GAO Report

In its Report, the GAO confirmed much of what on-lookers, industry, and FDA already knew or suspected.  The Report cites a 200 percent increase in drug shortages between 2006 and 2011.  The 196 shortages reported in 2010 represented a record number for one year, and 2011 is on-pace to surpass that record, with 146 shortages reported as of June, 2011.  GAO reports that the average duration of a drug shortage between 2006 and 2011 has been 286 days, or approximately 9 months.  The GAO Report then goes on to analyze the causes of fifteen drug shortages that had a significant impact on public health in-depth, using information reported to FDA and obtained from four of the manufacturers involved in those shortages. Twelve out of the fifteen shortages GAO analyzed were caused primarily by manufacturing problems with other exacerbating factors such as lengthy facility improvements, etc.  The remaining shortages GAO analyzed were caused by disruptions in the supply of Active Pharmaceutical Ingredients (“APIs”). 

Sterile injectable drugs can be difficult to manufacturer and, according to FDA officials surveyed by the GAO, are currently being produced by a few aging facilities.  These factors contribute to the increase in manufacturing problems for these drugs.  The fact that very few manufacturers are producing certain drugs also means that if one manufacturer experiences manufacturing problems or supply chain issues, the others are not able to readily increase production in order to prevent a drug shortage.

According to the GAO, FDA has demonstrated that it can prevent most drug shortages if it learns of potential supply or manufacturing disruptions in advance.  However, FDA lacks statutory authority to require manufacturers to provide the agency with advance information about shortages, or to require manufacturers to take actions to prevent, mitigate, or end shortages.  As we noted in our previous discussion of this topic, FDA’s only authority with regard to drug shortages relates to life-supporting, life-sustaining medications, or those for use in preventing a debilitating disease or condition, and only when such drugs are produced by a single manufacturer.  21 U.S.C. § 356c; 21 C.F.R. § 314.81(b)(3)(iii).  Without additional authority, FDA’s ability to prevent drug shortages is very limited.

FDA Interim Final Rule

Nevertheless, FDA announced an interim final rule (Docket No. FDA-2011-N-0898) that seeks to make the most of its current FDCA authorities.  Specifically, FDA’s interim final rule modifies the agency’s interpretation of the term “discontinuance” and clarifies the term “sole manufacturer” with respect to the FDCA’s requirement that sole manufacturers notify FDA at least 6 months in advance of discontinuing certain products. 

Under the new interim rule, FDA defines “discontinuance” to “include both permanent and temporary interruptions in the manufacturing of a drug product, if the interruption could lead to a disruption in supply of the product.”  FDA states that the following circumstances, among others, would trigger “discontinuance” reporting under the agency’s new definition of that term: (1) delay in acquiring APIs or inactive ingredients that could lead to a temporary interruption in manufacturing; or (2) manufacturing shut-downs for maintenance or other routine matters, if the shut-down extends for longer than anticipated.

Further, the interim rule seeks to clarify any confusion about the definition of a “sole manufacturer” by defining that term as “an applicant that is the only entity currently manufacturing a drug product . . . whether the product is manufactured by the applicant or for the applicant under contract with one or more different entities.”  A “sole manufacturer” is such regardless of whether there are other NDA or ANDA holders for the same drug, if those other NDA or ANDA holders are not manufacturing the drug in the United States.  

FDA’s modified definition of “discontinuance” in the interim rule, in particular, may significantly increase the instances in which sole manufacturers are required to notify FDA of an impending production disturbance.  However, without action by Congress FDA will not be able expand the shortage reporting requirements much further and will remain, as the GAO report indicates, “constrained” with regard to drug shortages.