By Peter M. Jaensch - 

In the latest installment in the criminal prosecution of Lauren Stevens, an attorney formerly employed by GlaxoSmithKline ("GSK"), the U.S. Department of Justice announced on April 14, 2011, that a grand jury in the U.S. District Court for the District of Maryland has reindicted Ms. Stevens on six counts alleging that she obstructed an official proceeding, concealed and falsified documents to influence a federal agency, and made false statements to the FDA.

As we previously reported, Ms. Stevens was originally indicted on November 8, 2010 on what the Justice Department states were essentially the same charges. The earlier charges arose in connection with an FDA investigation of alleged off-label promotion of drugs by GSK.  The government alleged that, among other things, Ms. Stevens falsely denied that GSK engaged in any activity promoting off-label use, that she falsely denied that attendees at company promotional speaker events had been provided gifts and entertainment, and that evidence of these gifts as well as other documentary evidence were not included in the documents provided by the company to FDA.

However, that indictment was dismissed without prejudice by District Judge Roger W. Titus on March 23, 2011, citing concerns that the prosecutors had incorrectly explained the advice of counsel defense to grand jurors such that the instruction raised “grave doubts about the grand jury’s decision to indict.”  The absence of actual misconduct by the prosecutors was cited by the Judge in his determination that dismissal with prejudice was unwarranted.

The Government was not to be dissuaded from continuing to pursue this case.  Judge Titus has tentatively scheduled a new trial date for April 26, 2011.

By Kurt R. Karst –      

Since the U.S. Court of Appeals for the Federal Circuit issued its December 2009 decision in Forest Group, Inc. v. Bon Tool Co. concerning the maximum $500 per violation penalty for intentionally falsely marking a product (in that case, spring-loaded parallelogram stilts) with a patent in violation of 35 U.S.C. § 292, setting off a barrage of hundreds of false patent marking qui tam lawsuits (including challenges to the Constitutionality of the statute), we have followed with some passing interest the various legal (and legislative) twists and turns of the issue, because scores of lawsuits involve FDA-regulated products – see our previous posts here and here.  Although the Gray On Claims Blog recently reported that the number of false marking qui tam lawsuits appears to have slowed since the Federal Circuit’s March 15, 2011 decision in In re BP Lubricants USA Inc., in which the Court held that the particularity requirement of Fed. R. Civ. P. 9(b) applies to false marking cases, that did not stop Pharmaceutical Technologies, LLC (“PharmaTech”) from lodging a Complaint last week in the U.S. District Court for the District of Arizona (Phoenix Division) against Eisai, Inc. and Eisai Medical Research, Inc. (collectively “Eisai”) for allegedly falsely marking ARICEPT (donepezil HCl) Tablets.

What makes the Eisai/ARICEPT case of particular interest to us is PharmaTech’s use of FDA’s Orange Book and the allegation of false Orange Book “advertising.”  Although the Orange Book has be raised in some false marking cases (see, e.g., Hollander v. Ortho-McNeil-Janssen Pharmaceuticals, Inc., No. 2-10-cv-00836 (E.D. Pa.), it has not, to our knowledge, previously been used as the primary basis for filing a false marking complaint. 

ARICEPT Tablets is listed in the Orange Book with four unexpired patents – U.S. Patent Nos. 5,985,864 (“the ‘864 patent”), 6,140,321 (“the ‘321 patent”), 6,245,911 (“the ‘911 patent”), and 6,372,760 (“the ‘760 patent”) – and one expired patent – U.S. Patent No. 4,895,841.  The ‘760 patent is listed with a “delist requested” flag, indicating that the NDA sponsor requested that FDA remove the patent from the Orange Book, but that the Agency would not do so because of a Paragraph IV certification to that patent.  On November 26, 2010, FDA approved Ranbaxy’s ANDA No. 76-786 with a period of 180-day exclusivity that expires on May 28, 2011 based on Ranbaxy's Paragraph IV certifications to the ‘864, ‘321, ‘911, and ‘841 patents.  Waiting in the wings for the expiration of Ranbaxy’s 180-day exclusivity is Teva’s tentatively approved ANDA No. 77-344.

PharmaTech alleges in its false marking Complaint that Eisai has violated 35 U.S.C. § 292 by falsely advertising ARICEPT in the Orange Book as patented by the ‘864, ‘321, ‘911, and ‘760 patents with the purpose of deceiving the public, and that such alleged false marking has been a part of the reason for the delay in FDA’s approval of ANDA No. 77-344.  Specifically, PharmaTech states that Eisai statutorily disclaimed the ‘864 and ‘321 patents, but that they continue to be “advertised” in the Orange Book, and that “not one claim in either of the ‘911 patent or the ‘760 patent reads on Aricept® tablets.”  Thus, according to PharmaTech:

By maintaining its false Orange Book advertisings/listings for each of the ‘864 patent, the ‘321 patent, the ‘911 patent, and the ‘760 patent for Aricept® tablets – despite actual knowledge that none of those patents cover Aricept® tablets – Defendant(s) have, in the past and present, engaged in conduct that violates the false marking statute.  By way of that unlawful conduct, Defendants are also quelling competition in the United States market for Aricept® tablets, at least by manipulating the Hatch-Waxman Act in a manner that effectively and substantially delays the generic drug manufacturer, Teva Pharmaceuticals USA, Inc., from bringing its generic version of Aricept® tablets, which has been tentatively approved by the FDA, to market in the United States.

If PharmaTech is successful in its false marking lawsuit, it’s possible that other potential plaintiffs will be scouring the Orange Book for allegedly false Orange Book patent “advertisements” on which to hang a complaint.  Watch out!

Thanks to Sean Mahoney for bringing the PharmaTech Complaint to our attention.

By Kurt R. Karst –      

FDA has responded to requests included in two reports accompanying the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act of 2010 (Public Law No. 111-80) – House Report No. 111-279 and Senate Report 111-39 – requesting information from FDA on generic Anti-Epileptic Drugs (“AEDs”), and in particular, whether there are increased risks to patients who are switched from a brand-name AED to an approved, bioequivalent generic version.  FDA concludes in the Agency’s 9-page report recently submitted to Congress that small analyses conducted by FDA do not show that generic AEDs are less effective than their brand-name counterparts, but that further study is necessary.

We initially reported on the Congressional requests in November 2009, and have been closely following the issue.  In November 2010, we reported that FDA responded to a request from New Jersey State Senator Joseph F. Vitale (D) concerning legislation that would require pharmacists in New Jersey to dispense epilepsy drugs from the same manufacturer as previously dispensed for certain patients, unless otherwise prescribed, and noted that FDA’s response seemed to give some foreshadowing as to what conclusions the Agency would include in its report to Congress.  That appears to be the case.

The report to Congress notes that:

Several small analyses conducted by FDA using data available in its Adverse Event Reporting System (AERS) do not provide evidence that generic anti-epileptic drug products are less effective than brand name products.  However, it is difficult to draw reliable conclusions about therapeutic equivalence from the AERS data because the adverse event reports are not necessarily representative of a random sampling of the patient population, nor can they be corrected for the relative market share of the various brand and generic products to determine if there is actually a difference in the incidence of adverse events for generic products.

In particular, FDA analyzed post-marketing surveillance reports of two AEDs for which safety and efficacy concerns were reportedly raised by stakeholders – Levetiracetam and Lamotrigine – for evidence of therapeutic inequivalence.  Based on FDA’s analyses, the Agency notes that the so-called “Weber effect” – a phenomenon that states that the number of reported adverse reactions for a drug increases until about the middle to the end of the second year of marketing – is likely “a factor contributing to increased patient complaints following switches from brand name to newly-approved generic anti-epileptic drugs.”  In addition, FDA says that “it is possible that the wide publicity given to negative literature about generic anti-epileptic drugs, much of which is disseminated by various epilepsy societies, may influence patients that recently switched to generics.”  Thus, according to FDA, “background breakthrough seizure and adverse event rates may be comparable whether the same patient is being treated with a generic drug or the brand drug, but because of the generic switch, the patient may be more likely to complain of adverse events and breakthrough seizures.” 

To better evaluate differences between brand and generic AEDs, FDA says in the report that some studies are in the works, including a study by the National Institutes of Health’s National Institute of Neurological Disorders and Stroke intended to determine whether  some epilepsy patients respond differently to AEDs from different manufacturers, and a similar study designed by the Office of generic Drugs that will be performed under FDA’s Critical Path Program and that is intended “to evaluate bioequivalence of an ‘older’ generic AED, such as carbamazepine, and a ‘newer’ generic AED, such as zonisamide, versus their respective reference products.” 

With respect to AED bioequivalence testing, FDA states that the Agency “is currently exploring the pros and cons of narrowing the acceptance criteria for the 90 percent confidence interval for AUC for certain drugs.”  In April 2010, FDA’s Pharmaceutical Science and Clinical Pharmacology Advisory Committee held a meeting and discussed, among other things, tightening bioequivalence standards (e.g., from the current 80%-125% standard to 90%-111%) for drugs whose dosing must be carefully adjusted to avoid adverse events, including Narrow Therapeutic Index (“NTI”) drugs.  Although the advisory committee was supportive of tightening the bioequivalence standards for NTI drugs, FDA’s report to Congress notes that “not all anti-epileptic drugs are considered NTI drugs based on their efficacy and toxicity profiles.  Therefore, other selection criteria would need to be established as a basis for changing the current bioequivalence standards for the AEDs.”

By Dara Katcher Levy –

FDA’s Division of Drug Marketing, Advertising, and Communications (“DDMAC”) has announced that it will be holding a series of Enforcement Webinars that will provide an opportunity for attendees to ask DDMAC questions about the Warning and Untitled Letters it issues each quarter.  This pilot program “will support DDMAC’s mission to protect the public health by assuring prescription drug information is truthful, balanced and accurately communicated.” 

The first of its programs will be held on May 3, 2011, from 2:00 to 2:30 p.m. (ET) and will cover Warning and Untitled Letters issued by DDMAC from January 2011 to April 2011.  Given that the Webinar will only be a half hour, it is unclear whether DDMAC will be able to respond to all questions from attendees.  We note that DDMAC has issued 4 Letters between January and April 2011, down from 18 Letters issued between January and April 2010. We will see whether DDMAC will plan for longer webinars in the future, where the number of Letters issued in a given quarter may be greater than 4. 
The web address for the webinar is: https://collaboration.fda.gov/ddmac1/

Hat tip, Patrick O'Brien

By Kurt R. Karst –      

On occasion we dream about Hatch-Waxman and wake up in the morning with a burning question.  One of the recent questions we wondered about is whether FDA would take the position that an ANDA sponsor who amends a long-pending ANDA to include a Paragraph IV certification to a newly (and timely) listed patent in the Orange Book and qualifies as a “first applicant” would simultaneously forfeit 180-day exclusivity eligibility for failure to obtain timely tentative approval.  FDA’s answer to that question appears to be “yes” absent application of one of the statutory savings provisions. 

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

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

The 2007 FDA Amendments Act clarified FDC Act § 505(j)(5)(D)(i)(IV), such that if “approval of the [ANDA] was delayed because of a [citizen] petition, the 30-month period under such subsection is deemed to be extended by a period of time equal to the period beginning on the date on which the Secretary received the petition and ending on the date of final agency action on the petition (inclusive of such beginning and ending dates) . . . .” (FDC Act § 505(q)(1)(G)). 

Under FDC Act § 505(j)(5)(D)(i)(IV), the date the 30-month period begins is the date of ANDA submission.  The statute does not specifically reference the date of the submission of a Paragraph IV certification.  Thus, the statute leaves open the possibility that an ANDA is initially submitted to FDA without a Paragraph IV certification, thereby beginning the 30-month period, and is only later amended to include the first Paragraph IV certification to an Orange Book-listed patent covering the Reference Listed Drug (“RLD”).  (Perhaps in the context of a later-listed patent, or where all ANDA sponsors initially – and post-MMA –  submitted Paragraph III certifications to all Orange Book-listed patents and one ANDA sponsor then changed a certification to a Paragraph IV.)  If, however, that first applicant-qualifying Paragraph IV certification is made more than 30 months after ANDA submission, then it seems that FDA could take the position that FDC Act § 505(j)(5)(D)(i)(IV) comes into play and 180-day exclusivity eligibility is automatically forfeited absent “a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed” or a decision by FDA that “approval of the [ANDA] was delayed because of a [citizen] petition.” 

Indeed, FDA appears to have been faced with a similar circumstance in the context of ANDA approvals for generic versions of DORYX (doxycycline hyclate) Delayed-Release Tablets.  Two ANDAs – ANDA No. 90-431 and ANDA No. 90-505 – were reportedly submitted to FDA in March 2008 at a time when patents could not be submitted to FDA for Orange Book listing for so-called “old” antibiotics.  Section 4 of the “QI Program Supplemental Funding Act of 2008” (the “QI Act”), which was enacted on October 8, 2008 and amended the FDC Act to add new § 505(v) – “Antibiotic Drugs Submitted Before November 21, 1997” – created Hatch-Waxman benefits for “old” antibiotics, including the ability to list patents in the Orange Book.  A QI Act transition provision also provides for 180-day exclusivity eligibility for each ANDA sponsor that not later than 120 dates after enactment of the QI Act (i.e., February 5, 2009) amended a pending application to contain a Paragraph IV certification to a newly-listed antibiotic drug patent on the RLD.  ANDA Nos. 90-431 and 90-505 were both amended to contain a Paragraph IV certification, qualifying the applications for 180-day exclusivity. 

According to one Doxycycline Hyclate Delayed-Release Tablets ANDA approval letter, FDA calculated the 30-month period under FDC Act § 505(j)(5)(D)(i)(IV) from the date of original ANDA submission (March 18, 2008) and not from the date of the amendment adding the exclusivity-qualifying Paragraph IV certification (most likely December 9, 2008), thereby resulting in a 30-month period ending in September 2010 instead of June 2011.  FDA approved both ANDA Nos. 90-431 and 90-505 on December 28, 2010 without having previously granted tentative approval.  Although FDA determined that the 30-month period under FDC Act § 505(j)(5)(D)(i)(IV) was missed, the Agency says that there was a change in or a review of the requirements for approval of the applications and a related citizen petition (Docket No. FDA-2008-P-0586) that saved them from forfeiting 180-day exclusivity eligibility. 

The Doxycycline Hyclate Delayed-Release Tablets ANDA approvals thus appear to stand for FDA’s interpretation that 180-day exclusivity eligibility can be forfeited where the first exclusivity-qualifying Paragraph IV certification is submitted to FDA more than 30 months after a first applicant’s ANDA is submitted to FDA.  A cursory review of FDA’s Paragraph IV Certification List shows that there may be a few cases in which FDA’s interpretation of FDC Act § 505(j)(5)(D)(i)(IV) could come into play and result in a forfeiture (absent application of one of the statutory savings provisions). 

Of course, there may be instances in which, despite a forfeiture of 180-day exclusivity eligibility under FDA’s interpretation of the start of the 30-month period, there is still some benefit to being a “forfeited first applicant,” as FDA discussed in the Agency’s September 2009 Letter Decision concerning 180-day exclusivity for Nateglinide Tablets – see our previous post here.  Any benefit, however, would only materialize if there are multiple first applicants and where at least one first applicant has not forfeited 180-day exclusivity eligibility.  In the case of a single first applicant, FDA’s interpretation of FDC Act § 505(j)(5)(D)(i)(IV) would result in a total forfeiture unless one of the statutory savings provisions applies.

Presumably FDA will explain its various interpretations of FDC Act § 505(j)(5)(D)(i)(IV) and the other forfeiture provisions in regulations the Agency is drafting to implement the 2003 MMA, although it might be a while until these regulations see the light of day.  We understand that FDA plans to issue two sets of proposed regulations.  The first set will reportedly deal with all of the MMA’s non-180-day exclusivity provisions and might be out by the end of 2011.  (We’ve heard that those proposed regulations currently total about 350 double-spaced pages.)  The second set of regulations will reportedly deal with 180-day exclusivity and is still under development. 

By Cassandra A. Soltis –

In an opinion dated April 6, 2011, Judge Beryl Howell of the U.S. District Court for the District of Columbia granted summary judgment for the FDA in a case challenging the dietary supplement good manufacturing practice (“GMP”) regulations.  Alliance for Natural Health U.S. v. Sebelius, No. 09-1523, 2011 U.S. Dist. LEXIS 37027 (D.D.C. Apr. 6, 2011).  The plaintiffs included Duke Pearson and Sandy Shaw, scientists who formulate dietary supplements and license their formulations to dietary supplement manufacturers and retailers, as well as two organizations affiliated with the dietary supplement industry – the Alliance for Natural Health USA, and the Coalition to End FDA and FTC Censorship.  The plaintiffs sought to have various provisions of the dietary supplement GMPs declared invalid and to have their enforcement enjoined. 

After concluding that the two scientist plaintiffs had standing, the court addressed the plaintiffs’ challenges to the GMP regulations – that (1) various GMP regulations exceeded FDA’s statutory authority to regulate dietary supplements, (2) some GMP regulations were unconstitutionally vague, in violation of the Due Process Clause of the Fifth Amendment, and (3) because of the vague sections of the GMP regulations, the regulations were arbitrary and capricious and an abuse of discretion under the Administrative Procedure Act ("APA"). 

Plaintiffs asserted FDA exceeded its statutory authority because Section 402(g) of the Federal Food, Drug, and Cosmetic Act ("FDC Act") prohibits FDA from issuing GMP regulations “that impose ‘standards for which there is no current and generally available analytical methodology.’”  Id. at *16-17.  The court explained that “the plaintiffs read this clause to mean that the FDA is only permitted to issue GMP regulations that are based on analytical methodologies and that these methodologies must also be current and generally available”; in “contrast, the FDA reads the clause to mean that if and when the FDA issues a regulation that incorporates a standard based on an analytical methodology, then that analytical methodology must be one that is current and generally available.”  Id. at *18-19. 

Before addressing the conflicting interpretations of the FDC Act, the court stated that the plaintiffs were precluded from contesting FDA’s regulatory authority because the plaintiffs failed to raise this issue during the rulemaking process.  Id. at *30.  (This serves as a good reminder to submit comments on proposed regulations when there are regulatory and legal concerns.)  Nevertheless, the court proceeded to analyze the plaintiffs’ challenge to FDA’s statutory authority using Chevron’s two-step process – an analysis we predicted would be critical to the outcome of this case.  Under Chevron step one, the court analyzed the statutory text, structure, and legislative history and “conclude[d] that the clear meaning of Section 402(g) is the FDA’s interpretation of the statute.”  Id. at *42.  The court explained that “[i]f the FDA imposes a standard that requires the use of an analytical methodology, the methodology must be current and generally available to manufacturers.  The statute does not mean that the FDA may only adopt GMP regulations that require the use of such an analytical methodology.”  Id.

Even though the court found the meaning of Section 402(g) to be clear, it proceeded to analyze this section under the second step of the Chevron analysis.  Under Chevron step two, “if a statute is ambiguous with respect to a specific issue, the Court must uphold the agency’s interpretation if it is ‘based on a permissible construction of the statute.’”  Id. at *43 (quoting Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 843 (1984)).  The court determined that, given all of the reasons that support FDA’s interpretation of the statute, “the Court could not conclude that the FDA’s construction of the statute is impermissible.”  Id.

Regarding the plaintiffs’ argument that certain GMP regulations are unconstitutionally vague, the court disagreed, explaining that, although certain terms like “adequate,” “qualified,” and “suitable” are not defined in the GMPs, the regulations essentially explain the meaning of the terms by providing “numerous details clarifying what the FDA means by ‘adequately installed and maintained plumbing,’” for example.  Id. at *48-49.  The court stated that “[t]here are clearly many applications of the challenged GMP regulations under which the regulations would not be impermissibly vague.”  Id. at *54.  For this reason, the court concluded that the regulations are not facially unconstitutional and “are not arbitrary and capricious under the APA.”  Id. at *57-58.

Hyman, Phelps & McNamara's Ricardo Carvajal will be speaking on the Reportable Food Registry at the American Conference Institute’s 2nd Advanced Summit on Food Safety Regulatory Compliance, taking place in Chicago from June 15-16, 2011.  See here for a copy of the brochure and to register for the conference.  Early bird registration rates expire on April 15.  Loyal readers of the FDA Law Blog may obtain a $200 discount by using discount code 801L11.HPM.

By Ricardo Carvajal –

FDA has a web page devoted to the Food Safety Modernization Act (“FSMA”) that provides ready access to useful information on the new law and on FDA’s implementation activities, including:

• the text of the law;
• Q&A’s;
• descriptions of the work groups charged with implementation;
• the text of relevant speeches by the Commissioner and Deputy Commissioner for Foods;
• interviews with senior staff;
• archived webcasts of public meetings; and
• translations of certain materials into several languages.

The page also provides a link to FDA’s Product Recall Page, which was revamped to be more user friendly as directed by the FSMA.

By Roger C. Thies –

On March 30, 2011, FDA publicly announced that it would not take enforcement action under certain conditions against pharmacies that compound hydroxyprogesterone caproate for injection for the reduction of the risk of certain preterm births in women who have had at least one prior preterm birth contrary to FDA's long standing policy to not permit pharmacy compounding of drugs that are commercially available and approved by FDA. See FDA, Compliance Policy Guide 460.200 – Pharmacy Compounding.  Please refer to our blog posting of March 31.

The Georgia Department of Community Health Medicaid Division, in reliance on FDA's refusal to enforce its own policies, has gone one step further.  According to a “Makena™ Position Statement,” in order to prescribe the FDA-approved drug instead of a compounded drug, a physician must demonstrate the medical necessity for the approved product instead of the compounded product notwithstanding FDA’s statement that “greater assurance of safety is provided by an approved product.”  This bizarre twist is a direct result of FDA deciding that a drug product’s cost and political pressure should dictate the Agency’s enforcement priorities.  Any manufacturer who decides to comply with FDA’s requests for approvals of marketed unapproved drugs and makes the investments in time and money to obtain approval must now ask itself whether it too will be punished by FDA’s apparent indifference to the Agency's enforcement policies.

By Carmelina G. Allis –

A March 24, 2011 warning letter from FDA cites a rarely invoked provision in the Investigational Device Exemption (“IDE”) regulations.  It is not clear whether this warning letter is an outlier or a harbinger of more aggressive inspections by the Division of Bioresearch Monitoring (“BIMO”).

The recipient of the letter was Valor Medical, Inc.  FDA alleged that the company violated 21 C.F.R. § 812.27(a) (and Section 520(g) of the Federal Food, Drug, and Cosmetic Act) by failing to submit two animal study reports in its IDE application.  That is the only violation listed in the letter.

Pursuant to 21 C.F.R. § 812.27(a), an IDE sponsor must submit “reports of all prior clinical, animal, and laboratory testing of the device . . . to justify the proposed investigation.”  Generally, sponsors submit reports of those tests that are relevant to the proposed investigation – they don’t just simply submit all of the tests conducted on the device.  For example, if an animal study was conducted on a prototype device that differs significantly in technology or design to the proposed device, the sponsor may not submit that information in the IDE.  The same would apply if the study was conducted, for example, using an animal model that proved to be inadequate to assess the device performance or its safety or effectiveness (necessitating a second study in a different animal model).  In both of those cases, the test results would not provide any valuable safety or effectiveness data regarding the proposed device, and the information would not be relevant to justifying the proposed investigation.

It is rare for a warning letter to cite § 812.27:  the only other one we can find is a warning letter issued to Staar Surgical in 2007.  That letter cited the company for withholding information regarding a human clinical study that the company had conducted prior to submission of the IDE.

FDA failed to describe in the Valor Medical warning letter the importance or relevance of the animal studies for purposes of the IDE study.  This is unfortunate because there is no way to judge whether the omitted animal studies were clearly relevant, or whether FDA has expanded its interpretation of what studies must be submitted.  

As noted, we are not sure if this warning letter is an outlier or a harbinger.  It does underscore that companies should carefully consider what studies are properly included in an IDE application.

By Ricardo Carvajal –

Rep. Henry Waxman, Ranking Member of the Committee on Energy and Commerce, sent FDA Commissioner Margaret Hamburg a letter urging the agency to investigate Kretek International’s (Kretek) marketing of clove-flavored cigars, and to ban flavored cigars that are “marketed for the purpose of circumventing” the recently effected ban on flavored cigarettes.  FDA banned the sale of flavored cigarettes in September 2009 under the authority of the FDC Act, as amended by the Family Smoking Prevention and Tobacco Control Act ("Tobacco Act").   The letter summarizes evidence of the dangers purportedly presented by clove-flavored tobacco products – including their use as “‘gateway’ products that introduce young people to smoking.”  The letter then details what it terms “a plan to subvert the FDA ban on flavored cigarettes by introducing a nearly identical product as a flavored cigar,” based on the Committee’s review of voluminous records provided by Kretek in response to the Committee’s request.  Although the letter gives no hint of how FDA could distinguish between flavored cigars marketed for the purpose of circumventing the ban on flavored cigarettes and those marketed for other (presumably legitimate) purposes, the letter might nonetheless find a welcoming ear at FDA.  As we noted in a prior posting, the agency has already signaled its intent to go after flavored cigarettes masquerading as cigars.

By Kurt R. Karst –      

Some court decisions just leave us scratching our heads after we read them, and the decision handed down last week by Judge Freda Wolfson of the U.S. District Court for the District of New Jersey in Medeva Pharma Suisse A.G. v. Par Pharmaceuticals, Inc., Case No. 3:10-cv-04008 (D.N.J., Mar 29, 2011), is one of them.  We’ve all heard of FDA’s 180-day exclusivity forfeiture “punts” under FDC Act § 505(j)(5)(D)(i)(IV), where a first applicant fails to obtain tentative (or final) ANDA approval within 30-months of application submission and FDA says that the Agency is not making a formal forfeiture determination at the time of ANDA approval and will do so only if another applicant becomes eligible for approval within 180 days after the first applicant begins commercial marketing.  Last week’s decision in Medeva, concerning a generic version of ASACOL (mesalamine) Delayed-Release Tablets, 400 mg, and in the context of a subsequent ANDA applicant’s standing to bring a declaratory judgment action to trigger a first applicant’s 180-day exclusivity, seems to create a new type of court-created punt. 

We’ll spare you a full recitation of the facts in this case, but here’s what you need to know . . . .   There are two patents listed in the Orange Book for Warner Chilcott Pharmaceuticals, Inc.’s (“Warner Chilcott’s”) ASACOL – U.S. Patent Nos. 5,541,170 (“the ‘170 patent”) and 5,541,171 (“the ‘171 patent”), both of which expire on July 30, 2013.  Par Pharmaceutical, Inc. (“Par”) is a subsequent ANDA applicant whose ANDA contains Paragraph IV certifications to the ‘170 and ‘171 patents.  FDA has not yet approved, or even tentatively approved, an ANDA for a generic version of ASACOL. 

Warner Chilcott (and Medeva Pharma Suisse A.G.) sued Par for infringement of the ‘170 patent, but not for the ‘171 patent.  Par filed papers seeking a declaratory judgment of non-infringement or invalidity with respect to both patents, presumably in an effort to trigger the first applicant’s 180-day exclusivity (reportedly Roxane, which submitted an ANDA in June 2007).  In response, Warner Chilcott offered Par a covenant not to sue only with respect to the ‘171 patent and then filed a Motion to Dismiss Par’s declaratory judgment action for lack of standing.  Warner Chilcott’s papers also note that the first applicant “may be deemed to have lost its 180-day exclusivity period as a result of a forfeiture event” (presumably under FDC Act § 505(j)(5)(D)(i)(IV) for failing to obtain timely tentative approval). 

Par opposed the Motion to Dismiss arguing that pursuant to the Federal Circuit’s decision in Teva Pharmaceuticals USA, Inc. v. EISAI Co., Ltd., 620 F.3d 1341 (Fed. Cir. 2010), “this Court has and should exercise jurisdiction over defendants’ declaratory judgment counterclaims,” and that any argument that the first applicant forfeited 180-day exclusivity eligibility is speculative.  Indeed, Par notes that in an August 2010 citizen petition response, “FDA announced particular bioequivalence requirements for mesalamine drugs,” and that as a result FDA might determine that there was a change in or review of the requirements for ANDA approval and that the first applicant’s failure to obtain timely tentative approval might be excused under the exception provision at FDC Act § 505(j)(5)(D)(i)(IV).  (And although we did not see anything to this effect in the various court filings, FDA could also extend the 30-month period under FDC Act § 505(j)(5)(D)(i)(IV) pursuant to FDC Act § 505(q)(1)(G), which states that if “approval of the [ANDA] was delayed because of a [citizen] petition [subject to FDC Act § 505(q)], the 30-month period under [FDC Act § 505(j)(5)(D)(i)(IV)] is deemed to be extended by a period of time equal to the period beginning on the date on which the Secretary received the petition and ending on the date of final agency action on the petition (inclusive of such beginning and ending dates) . . . .”)  

Warner Chilcott’s Reply presses the company’s point that “[a]ny apprehension of potential litigation involving the ‘171 Patent has been extinguished by Plaintiffs’ express covenant not to sue.” 

Judge Wolfson, in her March 29, 2011 decision, punted on the issue of the appropriate standard for declaratory judgment jurisdiction in Hatch-Waxman Orange Book patent listing cases, and instead grabbed onto the first applicant’s potential forfeiture of 180-day exclusivity under FDC Act § 505(j)(5)(D)(i)(IV) as the basis for granting Warner Chilcott’s Motion to Dismiss Par’s declaratory judgment action with respect to the ‘171 patent.  According to Judge Wolfson:

Seizing on the Act’s language exempting a failure to obtain tentative approval “caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed,” 21 U.S.C. § 355(j)(5)(D)(i)(IV), Defendants argue that its allegations do not suggest that Roxane forfeited its eligibility because, in August 2010, the FDA announced a change to the bioequivalence requirements for a class of drugs covering Roxane’s application.  The flaw in Defendant’s argument is that this alleged announcement came four months after Defendants allege that Roxane’s 30-month tentative approval period had expired and, therefore, could not have been the cause of Roxane’s failure to obtain approval.  Moreover, nothing in the record suggests that an approval or extension of Roxane’s application from the FDA is imminent; in fact, at this juncture, more than 10 months after Roxane’s 30-month approval allotment has expired, the Court cannot discern whether an approval or extension will ever be granted.  Therefore, based on the allegations in Defendants’ counterclaim, and the plain language of the Act, Defendants have not sufficiently alleged that they are barred from entry into the market.  This means that any potential barrier that could result from a subsequent approval and reinstatement of Roxane’s market exclusivity is speculative at best, and does not meet the Article III requirement of actual or imminent injury for standing. [(emphasis in original)]

Of course, just because FDA responds to a citizen petition after the 30-month date for obtaining tentative approval (or final approval) has passed does not necessarily mean that FDA did not earlier change the requirements for ANDA approval . . .  or that a citizen petition affects the 30-month period pursuant to FDC Act § 505(q)(1)(G).   And what if FDA rules that the first applicant did not, in fact, forfeit 180-day exclusivity eligibility.  Would a subsequent applicant (here, Par) then have standing . . . . and if so, would it be too late to trigger a forfeiture event under the failure-to-market provisions?

Thanks to Shashank Upadhye for bringing the decision to our attention.

By John A. Gilbert & Peter M. Jaensch –

Following what appears to have been the stall of the Arkansas prescription-only Pseudoephedrine bill (House Bill 1444) in mid-March, on March 23, 2011, Arkansas enacted a new law in the effort to combat illicit methamphetamine production.  Act 588 of the 2011 Regular Session (formerly Senate Bill 437, introduced by Senator Percy Malone (D)), primarily modifies several existing sections of the Arkansas Code applicable to products containing ephedrine (“EPH”), pseudoephedrine (“PSE”), and phenylpropanolamine (“PPA”) with regard to their status as controlled substances, sales limitations, acceptable forms of purchaser identification, and pharmacists’ duties.  Among these provisions, however, the Act imposes two new requirements, which are likely to create concerns.

First, the Act imposes a new requirement on pharmacists to “make a professional determination, based on a pharmacist-patient relationship, as to whether or not there is a legitimate medical and pharmaceutical need for the drug” before making any OTC dispensation of any non-exempt product containing EPH, PSE, or PPA.  The vagueness of the provision is likely to make implementation difficult.  The Act is silent as to what condition or circumstance should satisfy the dispensing pharmacist that the “medical and pharmaceutical need for the drug” is “legitimate.”  The Act offers pharmacists some guidance by enumerating several factors they may consider in making the required determination: (1) “Prior medication-filling history;” (2) “Patient screening; and” (3) “Other tools that provide professional reassurance to the pharmacist that a legitimate medical and pharmaceutical need exists.”  The Act also encourages pharmacists to err on the side of caution – that is, refusing to dispense – by providing that “[a] pharmacy or pharmacist is not civilly liable for a determination [of medical or pharmaceutical need]  or for any refusal to dispense, sell, transfer, or otherwise furnish ephedrine, pseudoephedrine, or phenylpropanolamine based on a determination of age or identity.”

Second, the Act makes it unlawful to dispense any product containing PSE, PPA, or EPH without a prescription, unless, among other requirements, the purchaser can provide an Arkansas-issued Driver’s License or ID card, or an identity card issued by the U.S. Department of Defense for active-duty military personnel.  Essentially, the Act permits Arkansas residents to obtain OTC products, but requires any out-of-state customer to obtain a prescription for the same product.  It seems likely that this provision is intended to make Arkansas pharmacies less attractive to smurfers in neighboring Mississippi, which is a prescription-only state for PSE products, without burdening Arkansans with a prescription requirement.

In summary, while existing law at the both the federal and state level would prohibit a pharmacy or pharmacist from knowingly selling these products above established limits or from selling these if there is reason to believe that it would be used for illicit purposes, the Arkansas law arguably goes further and requires the pharmacist to make a medical judgment on whether the patient has a medical need for the product.

By Kurt R. Karst –      

Last week, the U.S. District Court for the Eastern District of Pennsylvania issued a pair of decisions in a long-running dispute between Lannett Company, Inc. (“Lannett”), the self-proclaimed “oldest generic drug manufacturer” in the United States (founded in 1942), and Celgene Corp. (“Celgene”) concerning Lannett’s efforts to obtain sample of Celgene’s THALOMID (thalidomide) Capsules for purposes of bioequivalence testing and ANDA submission and approval.  The first decision, a brief Memorandum Opinion, was made in the context of Lannett’s motion “to enforce a purported settlement agreement” with Celgene – which the court denied “because there was no settlement agreement.”  The second decision was an Order denying Celgene's Motion to Dismiss the case.  The decisions could free up the case for a decision on the underlying antitrust issues and perhaps reignite a debate on generic drug availability for products that, like THALOMID, are approved and marketed under a restricted distribution system or Risk Evaluation and Mitigation Strategy (“REMS”).  (The 2007 FDA Amendments Act, or FDAAA, amended the law to create FDC Act § 505-1, which provides FDA with the authority to require a REMS if the Agency determines that such a strategy “is necessary to ensure that the benefits of the drug outweigh the risks of the drug.”  FDA may require that a REMS “include such elements as are necessary to assure safe use of the drug, because of its inherent toxicity or potential harmfulness,” which, in turn, may include certain restricted distribution, procurement, and dispensing systems.)

By way of background, the FDC Act requires that an ANDA contain, among other things, information showing that the proposed generic drug product is bioequivalent to the Reference Listed Drug (“RLD”).  Often, but not always, bioequivalence is demonstrated through in vivo testing in which the test and reference products are compared.  This necessarily requires an ANDA sponsor to obtain RLD product for testing (and reserve sample) purposes.  Usually the RLD product can be procured using normal distribution channels; however, the availability of an RLD under a restricted distribution system or REMS may be significantly limited and may not be available to an ANDA sponsor.  Such is the case with THALOMID, which has a restricted distribution program known as the S.T.E.P.S.® program (i.e., System for Thalidomide Education and Prescribing Safety). 

Lannett and Celgene began duking it out in court back in January 2008 when Lannett filed a Complaint and a Motion for Preliminary Injunction in the U.S. District Court for the Eastern District of Pennsylvania (Case No. 08-0233) seeking relief requiring Celgene to provide Lannett with samples of THALOMID for bioequivalence testing purposes.  The Complaint was filed after FDA sent Lannett a letter providing bioequivalence recommendations (but before FDA approved Lannett’s proposed pilot bioequivalence study) and stating, in part, that:

To ensure that the intention of Congress is enacting the Generic Drug Approval Provisions in Section 505(j) is not frustrated by the terms of the S.T.E.P.S.® program, FDA has notified Celgene that the agency intends to exercise its enforcement discretion to permit Celgene to provide another drug manufacturer (or its agent) 500 units of Thalomid (including 200 units for the purpose of conducting bioequivalence (including dissolution) testing and 300 units for a limited number of retained samples) when Celgene has received confirmation in writing from the sponsor, its agent, or FDA that the sponsor of the study either has an IND in effect for the study or has otherwise provided the agency with sufficient assurance that the bioequivalence study will be conducted in such a manner as to ensure the safety of the subjects.

Celgene did not provide the RLD sample to Lannett, and instead requested that Lannett provide Celgene with certain “voluminous documents and information.”  The court dismissed the Complaint in March 2008 on ripeness grounds “because Lannett had not received a response from the FDA to Lannett’s proposed bioequivalence study.” 

FDA provided that response – a favorable review – on August 11, 2008, and Lannett promptly filed a new Complaint and a Motion for Preliminary Injunction alleging that Celgene’s refusal to provide Lannett with RLD sample for bioequivalence testing purposes violates Section 2 of the Sherman Act.  Celgene filed a Motion to Dismiss requesting that the court dismiss the case for Lannett’s failure to state a claim, or in the alternative, that the court stay the case pending FDA’s decisions on two citizen petitions: (1) Celgene’s September 2007 petition (Docket No. FDA-2007-P-0113) concerning THALOMID labeling carve-out issues; and (2) Dr. Reddy’s Laboratories, Inc’s June 2009 petition (Docket No. FDA-2009-P-0266) citing THALOMID and requesting that FDA “establish procedures to facilitate the availability of generic versions of drug products subject to a [REMS] and enforce the FDC Act to prevent companies from using REMS to block or delay generic competition.”  FDA has not yet substantively responded to either citizen petition.  (There is also a related December 2009 citizen petition – Docket No. FDA-2009-P-0602 – that Kaiser Permanente submitted to FDA that raises, among other things, the issue of manufacturers using REMS with restricted distribution elements to limit access of a drug to certain health care providers.  FDA has not yet substantively responded to that petition either.) 

Although the legal wrangling between Lannett and Celgene over a settlement of the case has delayed a final decision (the Court denied Lannett’s Motion for Preliminary Injunction on March 16, 2010), the overarching issue in the case is still of significant interest to folks . . . and not only to the generic drug industry.  As we previously reported, Celgene revealed in a 2010 SEC filing that:

In the fourth quarter of 2009, we received a civil inquiry and demand from the [Federal Trade Commission (“FTC”)].  The FTC requested documents and other information relating to requests by generic companies to purchase our patented REVLIMID® and THALOMID® brand drugs in order to evaluate whether there is reason to believe that we have engaged in unfair methods of competition.

We have not heard much about that inquiry as of late, nor have we heard anything from FDA on the issues raised in Dr. Reddy’s June 2009 citizen petition.  Among other things, the Dr. Reddy’s petition notes some interesting legislative history with respect to a provision included in FDAAA (creating FDC Act § 505-1(f)(8)), which states that “[n]o holder of an approved covered application shall use any element to assure safe use required by [FDA] under [FDC Act § 505-1(f)] to block or delay approval of an application under section 505(b)(2) or (j) or to prevent application of such element under [FDC Act § 505-1(i)(1)(B)] to a drug that is the subject of an [ANDA].”  Celgene’s response to Dr. Reddy’s petition addresses that history.

By Roger C. Thies –

FDA announced on March 30, 2011 that  it “does not intend to take enforcement action against pharmacies that compound hydroxyprogesterone caproate based on a valid prescription for an individually identified patient unless the compounded products are unsafe, of substandard quality, or are not being compounded in accordance with appropriate standards for compounding sterile products.”   This announcement is contrary to FDA’s long-standing policy to not permit pharmacy compounding of drugs that are commercially available and approved by FDA.  See FDA, Compliance Policy Guide 460.200 – Pharmacy Compounding.

This change in policy was apparently necessitated by FDA’s approval of Makena® (hydroxyprogesterone caproate) for the reduction of the risk of certain preterm births in women who have had at least one prior preterm birth coupled with public complaints about the cost of Makena®.

It is no secret that regulatory compliance costs industry and consumers money.  Cost is not the issue when there is a request for just one more study that delays approval or the Phase 4 commitment that FDA wants to supplement its database.  Companies are routinely faced with increased costs for more validation of manufacturing processes or more thorough investigations.  A response that compliance just costs too much does not preclude regulatory action such as consent decrees, delays in approval of new products or refusal to grant export certificates.  FDA has forced “old” unapproved drugs from the market once the same product(s) are approved.  Invariably, the monopoly provided by FDA to the company with the approved new drug has led to higher drug prices to the consumer and to other payors.  All of these added costs are justified as necessary to ensure the safety and efficacy of FDA regulated products.

Now FDA has deviated from its customary posture.  In its announcement FDA states that “greater assurance of safety is provided by an approved product.”   If so, why did FDA decide to change its enforcement priorities?  Was it product cost?   Political pressure?  It appears so.  There is a lesson here.