By Kurt R. Karst –      

Suppose FDA approves a New Drug Application (“NDA”) – NDA No. 1 – and grants a period of 5-year New Chemical Entity (“NCE”) exclusivity, but there are no patents listed in FDA’s Orange Book for the NDA, and therefore, there is no opportunity for a generic drug sponsor to submit to FDA an ANDA containing a Paragraph IV certification on the so-called “NCE-1 date.”  Suppose further that a couple of years after the approval the NDA No. 1, FDA approves a second NDA from the same sponsor – NDA No. 2 – for a drug product containing the same active moiety as in NDA No. 1, but perhaps in a different dosage form, but the NDA sponsor does submit to FDA for listing in the Orange Book a patent for NDA No. 2.  While the remainder of the period of NCE exclusivity granted for the approval of NDA No. 1 would apply under FDA’s “umbrella policy” to NDA No. 2, does the fact that NDA No. 1 is not listed in the Orange Book with a patent preclude an NCE-1 Paragraph IV ANDA submission for the drug product covered under NDA No. 2?  It’s an interesting scenario – and probably quite rare – but one we thought should be tackled. 

The statutory 5-year NCE exclusivity provision at FDC Act § 505(j)(5)(F)(ii) applicable to ANDAs (there is a slightly different parallel provision at FDC Act § 505(c)(3)(E)(ii) applicable to 505(b)(2) applications) governing the scope of NCE exclusivity states in relevant part:

If an application submitted under subsection (b) for a drug, no active ingredient (including any ester or salt of the active ingredient) of which has been approved in any other application under subsection (b), is approved after the date of the enactment of this subsection, no application may be submitted under this subsection which refers to the drug for which the subsection (b) application was submitted before the expiration of five years from the date of the approval of the application under subsection (b), except that such an application may be submitted under this subsection after the expiration of four years from the date of the approval of the subsection (b) application if it contains a [Paragraph IV certification]. [(Emphasis added)]

Is the emphasis in this statutory provision on the phrase “the drug” (subsequently clarified by FDA to mean “active moiety”), which would argue in favor of an NCE-1 Paragraph IV ANDA submission for NDA No. 2, or on “the subsection (b) application,” which would seem to argue otherwise?

FDA’s regulation at 21 C.F.R. § 314.108(b)(2) implementing FDC Act § 505(j)(5)(F)(ii) sheds some light on this statutory provision and states, in relevant part, that:

If a drug product that contains a [NCE] was approved after September 24, 1984, in an application submitted under section 505(b) of the act, no person may submit a 505(b)(2) application or [ANDA] under section 505(j) of the act for a drug product that contains the same active moiety as in the [NCE] for a period of 5 years from the date of approval of the first approved [NDA], except that the 505(b)(2) application or abbreviated application may be submitted after 4 years if it contains a [Paragraph IV] certification . . . .[(Emphasis added)]

This regulations seems to say that the decisive factor in determining the scope of NCE exclusivity is the active moiety.  Indeed, if FDA intended the reference to “the subsection (b) application” in FDC Act § 505(j)(5)(F)(ii) to be the decisive factor in determining the scope of NCE exclusivity, then 21 C.F.R. § 314.108(b)(2) presumably would not emphasize the active moiety as it does.  Thus, if FDA were presented with the scenario above, it seems that the Agency would determine that NCE exclusivity prevents the submission of an ANDA for a proposed drug product containing the protected active moiety for 5 years – whether that protected active moiety is in a drug product approved under NDA No. 1 or under NDA No. 2 – unless an ANDA for a generic version of the drug product covered under NDA No. 2 protected by the umbrella NCE exclusivity stemming from the approval of NDA No. 1 contains a Paragraph IV certification to an Orange Book-listed patent.  In other words, an ANDA for a generic version of the drug product covered by NDA No. 2 could be submitted on the NCE-1 date if it contains a Paragraph IV certification.

Such an interpretation of FDC Act § 505(j)(5)(F)(ii) seems to be consistent with FDA’s NCE exclusivity “umbrella policy.”  Under that policy:

[W]hen exclusivity attaches to an active moiety or to an innovative change in an already approved drug, the submission or effective date of approval of ANDA’s and 505(b)(2) applications for a drug with that active moiety or innovative change will be delayed until the innovator’s exclusivity has expired, whether or not FDA has approved subsequent versions of the drugs entitled to exclusivity, and regardless of the specific listed drug product to which the ANDA or 505(b)(2) application refers.

FDA, Proposed Rule, ANDA Regulations, 54 Fed. Reg. 28,872, 28,897 (July 10, 1989) (emphasis added). 

Thus, NCE exclusivity protects the active moiety in subsequent NDA approvals made within the 5-year NCE exclusivity period; however, that exclusivity would seem to apply separately with respect to each approved drug product, particularly when there is a patent listed in the Orange Book covering NDA No. 2 in our scenario but not for the original NDA No. 1 approval from which the NCE exclusivity flows. 

By Kurt R. Karst –

On July 19th, President Obama announced his intent to nominate Maureen K. Ohlhausen as a Commissioner of the Federal Trade Commission (“FTC”).  Ms. Ohlhausen is currently a partner at Wilkinson Barker Knauer LLP, where she specializes in privacy, data protection, and cybersecurity.  Ms. Ohlhausen previously worked at the FTC from 1997 to 2008.  From 2004 to 2008, she served as Director of the Office of Policy Planning, where she supervised the development of reports, amicus briefs, and advocacy filings on competition and consumer protection topics, principally focusing on e-commerce, advertising, and technology issues.  Additional background information is available here.

If confirmed by the Senate, Ms. Ohlhausen would serve a 7-year term on the 5-member board, which currently includes Commissioners Jon Leibowitz, J. Thomas Rosch, William E. Kovacic, Edith Ramirez, and  Julie Brill.  Ms. Ohlhausen would be replacing William E. Kovacic, whose term expires in September.

By Ricardo Carvajal –

The integration of federal and state food safety systems is one of the goals of the Food Safety Modernization Act.  To that end, FDA recently announced the availability of grant funding to help with the “design, development, delivery, and maintenance of a national food/feed training program” to ensure “a competent workforce doing comparable work at all levels of the integrated food system.”

Budgetary realities suggest that the effort might not go smoothly.  Minnesota, generally regarded to be in the vanguard of states that prioritize food safety, was recently forced to designate critical services that would continue to be provided during that state government’s shutdown. Food safety and disease outbreak investigation and response made the cut, albeit “with limited staff.”  Conditions could be similarly grim in other states, particularly given that the playing field was not level even before the economic downturn.

Doubtless FDA will push forward.  An Agenda for Strengthening State and Local Roles in the Nation’s Food Safety System was laid out by Deputy Commissioner for Foods Michael Taylor before he assumed that mantle at FDA – and when the FSMA was just a gleam in the eyes of its sponsors.

By Kurt R. Karst –      

Last week, Judge Ellen S. Huvelle of the U.S. District Court for the District of Columbia dismissed without prejudice for lack of subject matter jurisdiction a Complaint filed by Cephalon, Inc. (“Cephalon”) on March 15, 2011 challenging FDA’s January 7, 2011 approval of Watson Laboratories, Inc.’s (“Watson’s”) ANDA No. 079075 for a generic version of FENTORA (fentanyl) buccal tablets (approved under NDA No. 021947).  Watson, represented by Hyman, Phelps & McNamara, P.C. and Crowell & Moring, intervened in the case as an Intervenor-Defendant.  

Cephalon’s lawsuit is related to two citizen petitions – Docket Nos. FDA-2010-P-0383 and FDA-2010-P-0396 – Cephalon submitted to FDA in July 2010.  One petition requests that FDA withdraw its acceptance of Watson’s ANDA and require Watson to submit a 505(b)(2) on the basis that Watson’s generic FENTORA drug product contains two active ingredients – i.e., fentanyl citrate and an additional salt form, fentanyl starch glycolate – whereas FENTORA contains only fentanyl citrate.  The second petition requests that FDA establish certain bioequivalence requirements for the approval of any generic version of FENTORA.  FDA denied both petitions on January 7, 2011 (the same date FDA approved ANDA No. 079075) saying that Cephalon had “not submitted sufficient evidence establishing that the Watson product contains an additional salt form of fentanyl, fentanyl starch glycolate,” and that the additional parameters proposed by Cephalon are not necessary to determine bioequivalence.  Cephalon alleges in its Complaint that FDA’s rejection of the citizen petitions and approval of Watson’s ANDA were unlawful and in violation of the FDC Act and the Administrative Procedure Act. 

Watson’s ANDA contains Paragraph IV certifications to two Orange Book-listed patents – U.S. Patent Nos. 6,200,604 (the ‘604 Patent) and 6,974,590 (the ‘590 Patent) – both of which are scheduled to expire on March 26, 2019.  Cephalon filed a patent infringement lawsuit against Watson in the U.S. District Court for the District of Delaware with respect to both patents, thereby triggering a 30-month stay of ANDA approval.  Cephalon also asserted a third, non-Orange Book-listed patent – U.S. Patent No. 6,264,981 (“the ‘981 Patent”).  FDA approved ANDA No. 079075 once the 30-month stay naturally expired. 

Cephalon filed is Complaint against FDA just four days after the Delaware district court ruled in Watson’s favor on the ‘604 and ‘590 Patents.  Shortly thereafter, however, the court ruled in Cephalon’s favor on the non-Orange Book-listed ‘981 Patent and issued an injunction barring Watson from infringing the patent, which expires in 2019.  Watson filed a notice of appeal with the U.S. Court of Appeals for the Federal Circuit, but the Court has not yet scheduled the case for argument. 

Given the ruling on the ‘981 Patent, FDA filed a Motion to Dismiss Cephalon’s Complaint on the basis that Cephalon lacks standing and that the company’s claims are not ripe.  According to FDA:

Cephalon does not have standing because the injury it cites is not “actual or imminent,” nor is it redressable by the Court.  In its complaint, Cephalon alleges harms purportedly caused by FDA’s approval of Watson’s generic drug: (1) harm to the public because the FDA “will usher into the marketplace a generic drug of untested safety and efficacy,” (2) “rapid and significant erosion of sales [of Fentora] that cannot be recouped,” and (3) harm to Cephalon’s reputation if Watson’s generic fentanyl citrate product is less effective than Fentora because Fentora “will thus be wrongly associated with bad outcomes.”  These purported injuries can exist only if and when Watson’s generic drug enters the market; as noted, Watson is currently enjoined from making, using, or selling its generic product until 2019. [(Internal citations omitted)]

With respect to ripeness, FDA argued that:

although FDA denied Cephalon’s citizen petitions, those agency decisions have had no impact on Cephalon’s day-to-day operations because, despite receiving FDA approval, Watson is nonetheless barred from marketing its generic fentanyl citrate product until the ‘981 patent expires.  Therefore, Cephalon is asking this Court to render a decision that may have no effect on the parties until 2019, or until a speculative appellate decision.  It is a waste of this Court’s resources to undertake review now, especially when Cephalon suffers no hardship. 

FDA further argued that the U.S. Court of Appeals for the District of Columbia Circuit’s decision in Pfizer Inc. v. Shalala, 182 F.3d 975 (D.C. Cir. 1999), is applicable to the instant case.  In Pfizer, the D.C. Circuit considered FDA’s denial of a citizen petition to be final agency action, even though FDA had not finally ruled on the ANDA at issue.  The Court found that Pfizer’s claims were not ripe because the citizen petition denial did not cause any of the economic harm alleged by Pfizer.  Similarly, says FDA in its Motion to Dismiss, “Cephalon’s claims relate to no imminent, certain harm.”

Judge Huvelle agreed with FDA and dismissed the case based on ripeness grounds in a 15-page decision issued on July 14, 2011.  Applying the two-part ripeness analysis – i.e., (1) “the fitness of the issues for judicial decision” and (2) “the hardship to the parties of withholding court consideration” – Judge Huvelle ruled that Cephalon did not meet either prong. 

With respect to fitness, Judge Huvelle wrote that “the fact that the agency has issued final approval of the ANDA submitted by a generic applicant does not establish ripeness,” and noted the D.C. Circuit’s decision in Pfizer “does not undercut this conclusion,” because “[a]lthough the Court reasoned that an eventual FDA approval of a generic ANDA could make the case ripe, it did not establish a per se rule that automatically makes ripe a case involving final agency action.  On the contrary, the Court acknowledged that ‘a final agency action nonetheless can be unripe for judicial review.’”

With respect to hardship, Judge Huvelle wrote that this prong of the ripeness analysis “requires the Court to consider not whether the parties have suffered any direct hardship, but rather whether postponing judicial review would impose an undue burden on them or would benefit the court” (internal quotations and citations omitted).  Judge Huvelle noted that the D.C. Circuit’s March 2, 2010 decision in Teva Pharmaceuticals USA, Inc. v. Sebelius, 595 F.3d 1303 (D.C. Cir. 2010), concerning 180-day exclusivity for generic versions of COZAAR/HYZAAR, and in which the Court reasoned that “where there are no institutional interests favoring postponement of review, a petitioner need not satisfy the hardship prong,” has not changed the hardship test for ripeness.   

According to Judge Huvelle, Cephalon’s assertions that the case is ripe “because postponing review will cause immediate, direct, and significant harm” are “too speculative to establish an undue burden on plaintiff.”  Moreover, “the Court would benefit from postponement of the case,” says Judge Huvelle, “because a number of events could occur that could either make adjudication unnecessary or materially alter the complexion of the case.”

By Wes Siegner, Ricardo Carvajal & Riëtte van Laack –

Since at least the early 1960s, FDA has attempted to exercise control over the dietary supplement market, sometimes in ways that the public, industry and Congress have found unacceptable.  In the 60s, FDA proposed a regulation that would have required FDA review and approval of vitamin products that exceeded 150% of the U.S. RDA and to require the following disclaimer on vitamin supplements: "Vitamins and minerals are supplied in abundant amounts by commonly available foods.  Except for persons with special medical needs, there is no scientific basis for recommending routine use of dietary supplements."  The proposed disclaimer was withdrawn after hearings, but the regulation setting limits on potency was finalized in 1973.  That regulation was invalidated as arbitrary and capricious by a federal appellate court, and the regulation prompted Congress to add section 411 to the Federal Food, Drug, and Cosmetic Act ("FDC Act") through the Proxmire Amendments in 1976.  Among other things, section 411 restricts FDA’s authority to set maximum limits on the potency of synthetic or natural vitamins or minerals in dietary supplements.  

In the 1980s, FDA pursued the theory that novel dietary supplements were in fact unapproved and therefore illegal “food additives,” bringing multiple seizure actions against a variety of products including evening primrose and black currant oil.  FDA’s arguments that even pure black currant oil in a gelcap or a glass bottle was a “food additive” led to unusually strong rebukes in two appellate courts, one of which found that FDA’s argument “perverts the statutory text, undermines legislative intent, and defenestrates common sense,” while the other described FDA’s theory as an “Alice-in-Wonderland approach,” and “an end-run around the statutory scheme.”  Then Congress stepped in again, 18 years after the Proxmire Amendments, and passed the Dietary Supplement Health and Education Act ("DSHEA"), clarifying that FDA has no authority to regulate dietary supplements as “food additives.”

Now, 17 years after DSHEA, FDA has published the long-awaited draft guidance on new dietary ingredients ("NDIs"), providing regulated industry with a comprehensive view of FDA’s thinking on all things NDI.  If FDA translates that thinking into regulatory action, there will be multiple negative effects on the dietary supplement industry, including:

• The “grandfather” status of many dietary ingredients marketed prior to October 15, 1994 would be eliminated through (1) unachievable documentation requirements to prove prior marketing, and/or (2) the requirement that there be no change in the manufacturing method.  Most ingredients that have been accepted as having “grandfather” status would instead be regulated as NDIs.
• DSHEA’s exemption from the notification requirement for NDIs “present in the food supply as an article used for food in a form in which the food has not been chemically altered” would be gutted by FDA’s view that (1) the “food supply” includes only conventional foods, not dietary supplements, and (2)  “chemically altered” means virtually any process applied to any dietary ingredient other than treatment with water or ethanol, even if no change in chemical structure or properties occurs.  The result is that the vast majority of NDIs would have to be the subject of a notification, unnecessarily burdening industry and swamping the agency with pointless work.
• Innovation in the supplement market, an important purpose of DSHEA, would be strangled by FDA’s view that (1) new dietary ingredient notifications ("NDINs") are applicable only to the specific manufacturer that submitted the NDIN, and (2) even minor changes in use or the manufacturing process for an NDI would require submission of a new NDIN.
• Many NDINs would be rejected as a result of FDA’s view that synthetic equivalents of certain naturally occurring NDIs do not qualify as dietary ingredients, a position that is lacking in scientific and legal merit.

In sum, if the guidance were to be finalized and implemented in anything resembling its current form, it would drastically restrict the marketing of grandfathered dietary ingredients, and stifle the development of new dietary ingredients and more efficient manufacturing methods.

The draft guidance strikes us as a missed opportunity for FDA.  Rather than craft a viable path forward for the implementation of the new dietary ingredient provisions of the FDC Act, the draft guidance both ignores the purpose of DSHEA and exceeds the statutory authority granted by that legislation.  The draft guidance shows that the agency has again declined to heed the corrective message delivered by Congress through the Proxmire Amendments and DSHEA.  Perhaps, 18 years after DSHEA, it will be time for Congress to deliver that message again.

By Kurt R. Karst –      

A recent article published in Roll Call, titled “Hatch-Waxman Act’s Interpretations Threaten Lives, Jobs,” caught our attention.  The article was penned by Delegate Donna Christensen (D-VI) (who is chairwoman of the Congressional Black Caucus Health Braintrust) and expresses the strong support of members of the Congressional Black Caucus for Section 37 of the House-passed version of the America Invents Act (H.R. 1249).  As we recently reported, Section 37 was sponsored by Representative John Conyers (D-MI) and would amend the Patent Term Extension (“PTE”) law at 35 U.S.C. § 156(d)(1) to effectively codify Judge Claude M. Hilton’s August 3, 2010 decision in The Medicines Company v. Kappos, 731 F. Supp. 2d 470 (E.D. Va. 2010), in which Judge Hilton ordered the Patent and Trademark Office (“PTO”) to consider timely filed The Medicines Company’s (“MDCO’s”) PTE application for U.S. Patent No. 5,196,404 covering ANGIOMAX (bivalirudin) under a next business day interpretation of the PTE statute.  Although H.R. 1249 includes the PTE provision, the Senate version of the bill (S. 23) does not.  (According to IPO Daily News, some Senators are objecting to a few provisions in the House bill, including Section 37.) 

Section 37 (also dubbed the “MedCo amendment” or the “Dog Ate My Homework Act”) has been controversial, but we will not get into that here.  What is of particular interest to us is a statement in Del. Christensen’s article that Judge Hilton’s “decision benefited not only the Angiomax innovator but also another company with a lifesaving drug that this month applied for patent term restoration based on Hilton’s decision.” 

We did some digging and there appear to be two candidates out there that fit Del. Christensen’s description. 

The first is the PTE application for U.S. Patent No. 6,441,168 (“the ‘168 Patent”) (currently set to expire on April 17, 2020) covering BEYAZ (drospirenone/ethinyl estradiol/levomefolate calcium and levomefolate calcium) Tablets.  FDA approved BEYAZ under NDA No. 022532 on September 24, 2011, and a PTE application was submitted to the PTO on November 23, 2010 – or 61 days after NDA approval, including the date of NDA approval.  Under 35 U.S.C. § 156(d)(1), the submission of a PTE application must occur “within the sixty-day period beginning on the date the product received permission under the provision of law under which the applicable regulatory review period occurred for commercial marketing or use.”  But does the next business day rule from The Medicines Company decision apply to the PTE application for the ‘168 Patent?  That is, was notice of the approval letter for NDA No. 022532 received after business hours (i.e., after 4:30 P.M., Eastern Time), thereby making November 23, 2011 day 60 instead of day 61?  (The BEYAZ approval letter does not include a time stamp.)

In March 2011, the PTO issued an Order to Show Cause with respect to the PTE application for the ‘168 Patent citing The Medicines Company decision and saying:

Here, no evidence has been made of record indicating that Applicant received notice of its NDA approval from FDA after FDA’s close of business, i.e., after 4:30 PM EST.  Therefore, without any such evidence, the USPTO presumes that the notice of NDA approval was transmitted to Applicant on September 24, 2010 during FDA’s normal business hours.  Thus, Applicant filed its PTE application one day late, and the eligibility requirement set forth in section 156(d)(1) does not appear to be satisfied and the ‘168 patent appears ineligible for patent term extension for this reason.

The applicant recently responded to the Order to Show Cause providing the requested evidence to the PTO, stating:

[T]he facts are the same as described in The Medicines Company v. Kappos.  Applicant received notice of their NDA Approval from FDA after the close of FDA's business, i.e., after 4:30 PM EST, on September 24, 2010.  Thus, the time period set forth in 35 USC §156(d)(1) started on the next business day, i.e., September 25, 2010.  Thus, the sixty day period set forth in 35 USC §156(d)(1) ended on November 23, 2010, the date that applicant fIled the instant PTE application. Therefore, the application was filed "within" the sixty day period set forth in 35 USC § 156(d)(1).

In this case, the FDA provided notice of the approval in an email received at 4:45 PM on September 24, 2010.

The second candidate is the PTE application for U.S. Patent No. 5,674,860 (“the ‘860 Patent”) covering SYMBICORT (budesonide; formoterol fumarate dihydrate) Inhalation Aerosol, which we have previously reported on (here and here).  FDA approved SYMBICORT under NDA No. 021929 on Friday, July 21, 2006, and a PTE application for the '860 Patent was submitted to the PTO on September 19, 2006 – or 61 days after NDA approval, including the date of NDA approval.  According to a recent submission to the PTO, however, FDA approved NDA No. 021929 at 4:36 PM (Eastern) on July 21, 2006.  Therefore, says the applicant, "in accordance with The Medicines Company, Applicant's period to file the PTE application did not begin to run until the first business day following the FDA's after-hours transmission," or Monday, July 24, 2006, "thus rendering the submission of the PTE application on September 19, 2006, timely within the meaning of § 156(d)(1)." 

By Jamie K. Wolszon –

FDA announced earlier this week the publication of a much-anticipated draft guidance on in vitro companion diagnostic devices.  In the draft guidance, FDA stakes out a policy position that if safe and effective use of a therapeutic depends on a diagnostic, then FDA generally will require approval or clearance of the diagnostic at the same time that FDA approves the therapeutic.  Companion diagnostics are key to the advancement of personalized medicine.  Some well-known companion diagnostics are the tests used to identify patients who will benefit from cancer therapy Herceptin.

FDA outlines two exceptions to this general rule: For new therapeutics, FDA may approve the therapeutic even though the companion diagnostic has not been approved or cleared if the therapeutic product is “intended to treat a serious or life-threatening condition for which no satisfactory alternative treatment exists and the benefits from the use of the therapeutic product with an unapproved or uncleared IVD companion diagnostic device are so pronounced as to outweigh the risks from the lack of an approved or cleared IVD companion diagnostic device.”

As for the second exception to the general rule, for therapeutic products that are currently on the market, FDA would be willing to approve a supplement for new labeling even without a cleared or approved companion diagnostic under the following limited circumstances: (1) The “labeling for an already approved therapeutic product must be revised to address a serious safety issue”; (2) the change made to address this issue requires use of a diagnostic test that is not yet approved or cleared; and (3) “the benefits from the use of the therapeutic product with an unapproved or uncleared IVD companion diagnostic device are so pronounced as to outweigh the risks from the lack of an approved or cleared IVD companion diagnostic device.”

The guidance did not provide examples of types of therapeutics or diagnostics that would qualify for these exceptions from the general rule.

The guidance defines IVD companion diagnostic as “an in vitro diagnostic device that provides information that is essential for the safe and effective use of a corresponding therapeutic product.” 

FDA provides as an example of an IVD companion diagnostic tests that “identify patients who are most likely to benefit from a particular therapeutic product.”  Companion diagnostics also include tests that “identify patients likely to be at increased risk for serious adverse reactions as a result of treatment with a particular therapeutic product” and “monitor response to treatment for the purpose of adjusting treatment (e.g., schedule, dose, discontinuation) to achieve improved safety or effectiveness.”

Companion diagnostics do not include tests intended to provide “information that is useful to the physician regarding the use of a therapeutic product, but that are not a determining factor in the safe and effective use of the product.”  For instance, biochemical assays (e.g., serum creatinine tests) used to monitor organ function are not companion diagnostics.

Ideally, according to FDA, a “therapeutic product and its corresponding IVD companion diagnostic device would be developed contemporaneously, with the clinical performance and clinical significance of the IVD companion diagnostic device established using data from the clinical development program of the corresponding therapeutic product.”  However, FDA states that it recognizes that this will not always be possible.  This expectation that the therapeutic and the companion diagnostic would be developed contemporaneously may be viewed as unrealistic.

The guidance also notes that studies of companion diagnostics generally will be significant risk devices that will require an IDE.  Most studies of other IVDs are non-significant risk.

FDA will use a risk-based approach to regulate companion diagnostics.  FDA says that in its experience to date, companion diagnostics generally will be Class III devices requiring a PMA, but there could be instances where 510(k) would be sufficient.

The guidance recommends that sponsors consult with both the device center, for a pre-IDE meeting, and the center in charge of regulating the therapeutic component.  FDA notes that it is “developing appropriate internal policies and procedures to ensure effective communication among the relevant centers and to promote consistent and efficient product review.”  FDA also states that there could be instances where viewed as combination product and thus only one application but did not state what such instances would be. 

The guidance also discusses FDA’s view of the need for cross-labeling between the therapeutic and the companion diagnostic.

The guidance has been long-awaited by industry, which has sought guidance in this area – an area that has been marked by ambiguity.  Years ago, FDA issued a draft guidance on the topic, which received criticism from industry.  FDA stated last year that it would promulgate two guidances to provide clarity that would address issues including when FDA would require simultaneous approval and what data requirements the agency would require. 

The comment period for the draft guidance will close within 60 days of issuance, which occurred July 14.

By Nisha P. Shah –

Under a bill titled, “An Act to Make Certain Prescription Drug Disclosure Laws Consistent with Federal Law,” the State of Maine repealed three laws related to the reporting of marketing costs, price reporting, and the disclosure of clinical trials by manufacturers and labelers of prescription drugs dispensed in Maine. 

One repealed law, Me. Rev. Stat. Ann. tit. 22, § 2698-A, required manufacturers and labelers that employed or used marketing representatives in Maine to submit an annual report of certain marketing costs, including, but not limited to, (1) expenses associated with food, entertainment, gifts valued at more than $25, trips, and travel in connection with all licensed health care professionals and entities, and (2) costs associated with advertising, marketing, and promotion of prescription drugs as they pertained to Maine residents (unless the costs were for a regional or the national market).  The Maine legislature also repealed the $1,000 annual fee that was associated with the marketing report.  Note that the repeal does not affect the annual report and fee for CY 2010 that were due July 1, 2011.  The Maine reporting requirement was similar to marketing reporting laws in the District of Columbia and West Virginia.  Massachusetts and Vermont also have reporting requirements for marketing practices, though these laws extend to both pharmaceutical and medical device manufacturers.  Another rescinded law, Me. Rev. Stat. Ann. tit. 22, § 2698-B, required disclosure, on a quarterly basis, of the average manufacturer price and best price for all drugs subject to the Medicaid Drug Rebate Program. 

Finally, Me. Rev. Stat. Ann. tit. 22, § 2700-A was amended to revoke the requirement that manufacturers and labelers of prescription drugs post information on clinical trials that they conducted or sponsored on a publicly accessible website.  Such information included a summary of the purpose of the clinical trial, the dates during which the trial has taken place, and the results of the clinical trial (including potential or actual adverse effects of the drug).  Manufacturers of prescription drugs that are provided through MaineCare (Maine’s Medicaid program) were required to pay an annual fee of $1,000, in part, for the posting of clinical trial results and the monitoring of adverse event reports.  Because this fee also was used to fund the state’s academic detailing program, the Maine legislature amended the bill to cut the annual fee to $500 beginning April 1, 2012. 

The repeal provisions are effective September 28, 2011, 90 days after the Maine legislature adjourned on June 29, 2011. 

By Larry K. Houck –

The Drug Enforcement Administration (“DEA”) published a Notice of Proposed Rulemaking (“NPRM”) on July 6, 2011 seeking to raise initial registration and renewal fees for all registrants.  76 Fed. Reg. 39,318 (July 6, 2011).  Citing increased diversion control activities, DEA justified increasing fees for the second time in five years.  DEA also explained the different fee-setting methodologies it considered, including the one selected, that would increase fees for each category of registrants.  The proposed fees for all registrants would increase by 33%.

The Controlled Substances Act authorizes DEA “to charge reasonable fees relating to the registration and control of the manufacture, distribution, and dispensing of controlled substances and to listed chemicals.”  21 U.S.C. § 821.  DEA is required to set registration fees “at a level that ensures the recovery of the full costs of operating the various aspects of” the Diversion Control Program.  21 U.S.C. § 886a(1)(C).  Thus, registration fees must be “reasonable” but must cover all costs of the Diversion Control Program.

DEA listed its historical diversion control activities in the NPRM in addition to salary and other costs related to the Diversion Control Program’s expanded mission since the last fee adjustment in 2006.  DEA cited a number of factors justifying the fee increase including:

• Expansion and use of Tactical Diversion Squads comprised of DEA diversion investigators and special agents, state and local law enforcement and regulatory officers conducting criminal investigations.  (There were 37 operational Tactical Diversion Squads as of March 2011, and since 2006, DEA added 161 special agent positions, the majority assigned to Tactical Diversion Squads.  76 Fed. Reg. 39,324);
• Increased frequency of scheduled cyclic regulatory investigations of registrants;
• Increased drug and chemical scheduling initiatives;
• Improved information technology capabilities for the Controlled Substances Ordering System (“CSOS”), Automated Reports and Consolidated Orders System (“ARCOS”) and the Drug Theft/Loss database; and
• Implementation of the Combat Methamphetamine Epidemic Act of 2005, the Methamphetamine Production Prevention Act of 2008 and the Combat Methamphetamine Enhancement Act of 2010 requirements.

DEA asserts in the NPRM that it “will be unable to continue current operations” without increasing fees, and will violate the requirement that it set fees at a level that ensures the recovery of the full costs of operating the Diversion Control Program.  To that end, DEA considered four different fee-setting methodologies, explaining the benefits and disadvantages of each.  DEA selected a weighted-ratio methodology to determine the reasonable fee for each category of registrant that would increase future registration fees for all registrants by 33%.

Current and Proposed Fees for Three-Year Cycle Registrants

Current and Proposed Fees for Annual Cycle Registrants

The deadline for submitting comments is September 6, 2011. 

FDA Law Blog has learned that Elizabeth H. Dickinson, who currently serves as Associate Chief Counsel for Drugs in FDA’s Office of Chief Counsel, will serve as FDA’s Acting Chief Counsel effective on August 7th.  As we previously reported, FDA’s current Chief Counsel, Ralph Tyler, recently gave word that he will be leaving FDA effective as of August 5th.  Ms. Dickinson is very well known to the Food and Drug Bar, and in particular among the Hatch-Waxman community.  Ms. Dickinson received her B.A. in Economics from the University of Massachusetts, and her J.D. from Northeastern University.  She was law clerk to the Honorable William B. Bryant of the U.S. District Court for the District of Columbia, and has been with FDA since 1994.  Ms. Dickinson was awarded the Food and Drug Law Institute’s Distinguished Service and Leadership Award in 2009, the National Organization for Rare Disorders’ Public Health Leadership Award in 2005, and has received several FDA and Department awards for legal services.

By Dara Katcher Levy –

On July 5, 2011, seven pharmaceutical companies submitted a joint Citizen Petition requesting that FDA clarify its policies for industry about four distinct types of manufacturer-communications that often deal with off-label information – Manufacturer Responses to Unsolicited Requests; "Scientific Exchange"; Interactions with Formulary Committees, Payors, and Similar Entities; and Dissemination of Third-Party Clinical Practice Guidelines. 

The first three types of communications have been addressed by FDA over the years, with FDA acknowledging, conceptually, that these communications are permissible and recognizing certain mechanisms for dissemination as appropriate.  The Citizen Petition is requesting that FDA further clarify and formalize its policies in these areas through rule-making.  The fourth area, Dissemination of Third-Party Clinical Practice Guidelines, has been a subject of much debate within industry.  Although several DDMAC Warning and Untitled Letters have confirmed that promotional claims based on such Guidelines may be inappropriate, it is unclear whether these Guidelines can currently be disseminated in their original published state pursuant to FDA's Guidance on Good Reprint Practices.      

As part of the request, the Citizen Petition makes clear that notice and comment rule-making is strongly preferred over FDA issuance of guidance documents.  And as the Pink Sheet notes, although rule-making, and not guidance, is requested, there is hope that FDA will respond as the issues raised in the Citizen Petition are likely issues for which FDA, at least internally, already has policy and can better iterate its position.  Some in the industry speculate that this Citizen Petition may help even if (or especially if) FDA takes no action on it – to the extent the government attempts to take enforcement action against a company on the basis of a communication subject to the Citizen Petition, it is possible that FDA's failure to clarify its position can be used as part of its defense.

By Kurt R. Karst –      

A recent article in The RPM Report concerning the apparent fate of the only Priority Review Voucher (“PRV”) issued to date by FDA caught our attention.  Kudos to The RPM Report team, which took note of some statements made during a recent meeting of FDA’s Arthritis Drugs Advisory Committee to discuss Novartis Pharmaceuticals Corporation’s (“Novartis’”) supplemental Biologics License Application (“sBLA”) for ILARIS (canakinumab) for the treatment of gouty arthritis attacks in certain patients.  According to The RPM Report, during the panel discussion, FDA disclosed that the ILARIS sBLA was granted 6-month priority review status instead of the standard 10-month review: “As part of the explanation, an FDA reviewer noted the distinction between a priority and standard review, adding that Ilaris was an expedited sBLA but not because it was originally designated a priority review by the agency: ‘this one was not necessarily a priority for any unmet need.  It was a voucher the sponsor is redeeming.’”

PRVs were established by § 1102 of the 2007 FDA Amendments Act, which created  FDC Act § 524.  Under the statute, sponsors of certain new drugs and biologics for “tropical diseases” that have received priority review may receive a PRV entitling the holder to a 6-month priority FDA review of another application that would otherwise be reviewed under FDA’s standard 10-month review clock.  FDA has granted only a single PRV – in connection with the April 2009 approval of Novartis’ NDA No. 22-268 for COARTEM (artemether; lumefantrine) for the treatment of acute, uncomplicated malaria infections in adults and children weighing at least five kilograms (see our previous post here).  

PRVs are transferable and led some people to initially speculate that there would be a PRV market where the value of a PRV would be somewhere between $50 million and $500 million.  However, the paucity of PRVs, the mere prospect of saved approval time, and the often unpredictable market for a new drug have not led to the fruition of that speculation.  Moreover, FDA has set a high PRV redemption price of  $4,582,000 for Fiscal Year 2011.  That figure is in addition to the Fiscal Year 2011 full application fee of $1,542,000 that must accompany the submission of an NDA (see our previous post here). 

Novartis was apparently willing to pay the PRV redemption fee and roll the dice that FDA would approve the ILARIS sBLA within 6 months of its February 28, 2011 submission.  The Arthritis Drugs Advisory Committee voted 11-1 against approval of the ILARIS sBLA.  Although FDA is not bound by the advisory committee vote, “[a]ssuming FDA follows that advice, the first [PRV] will end up translating into a faster ‘complete response’ letter—not an earlier launch date for a new product,” says The RPM Report.  While such an outcome “does not by itself prove that the voucher incentive is flawed . . . .  it will reinforce the concerns of advocates for tropical disease research that the incentive isn’t really doing much to help drive development.”

The case of ILARIS “may be another trigger for a fix to the priority voucher program as part of the PDUFA V reauthorization negotiations on Capitol Hill,” says The RPM Report.  Last week, the House Energy and Commerce Committee Health Subcommittee held a hearing on PDUFA V.  CDER Director Dr. Janet Woodcock testified at the hearing and identified several proposed enhancements to PDUFA in her prepared testimony, but her prepared remarks did not touch on PRVs.  Nevertheless, there is already pending legislation that would change the PRV program, but probably not to the extent needed to address perceived program shortcomings.  Earlier this year, the Creating Hope Act of 2011 was introduced in the U.S. Senate (S. 606).  The bill, like its nearly identical 2010 version (S. 3697), would, among other things, amend FDC Act § 524 to extend the PRV program to applications for a “rare pediatric disease,” and amend the PRV eligibility requirements for tropical disease applications (see our previous post here).  

Finally, we note that on July 11th, David Ridley of the Duke University Fuqua School of Business (and one of the authors to have first proposed in a 2006 Health Affairs article the idea of stimulating tropical disease drug development by offering a voucher system) presented on PRVs (and other issues) at the 8th World Congress on Health Economics in a session titled “The Priority Review Voucher and Other Incentives for Neglected Diseases.”  Details on the presentation are not yet available. 

By Riëtte van Laack –

Last week, Senator Richard Durbin (D-IL) introduced “the Dietary Supplement Labeling Act of 2011” (S. 1310).  The bill proposes to amend the Federal Food, Drug, and Cosmetic Act (“FDC Act”) to “improve the safety of dietary supplements.” Durbin’s bill includes a requirement that dietary supplements manufacturers register with FDA their dietary supplements, a list of dietary ingredients contained in these supplements, and copies of the label and labeling of these dietary supplements.  Failure to register a dietary supplement or keep the information up to date causes that product to be misbranded. 

In addition, Durbin’s bill would mandate FDA and the Institute of Medicine (“IOM”) to identify (based on review of the literature) dietary ingredients that cause potentially serious adverse events, drug interactions, contraindications, or potential risks to subgroups such as children and pregnant women, and establish warning statements for dietary supplements containing these potentially unsafe ingredients.  If a potentially unsafe dietary ingredient is part of a proprietary blend, the product label must disclose the amount of that dietary ingredient per serving.  The bill further proposes to require that a dietary supplement label includes a batch number, and that FDA establish a definition of “conventional foods.”

If passed, the Dietary Supplements Labeling Act of 2011 will significantly increase the administrative burden for dietary supplement manufacturers.  Particularly the requirement to disclose the amount of certain dietary ingredients in proprietary blends is cause for concern as the quantitative composition of a proprietary blend is generally considered a valuable trade secret. 

Durbin’s bill also will impose a significant burden on FDA and IOM without an apparent benefit.  FDA currently has ample authority to address safety issues of dietary supplements and remove unsafe dietary supplements from the market.  Moreover, FDA has the authority – and has used that authority – to take enforcement action against dietary supplements that are conventional foods marketed as dietary supplements. 

By Kurt R. Karst –      

Earlier this week, Judge Joel A. Pisano of the U.S. District Court for the District of New Jersey issued a 19-page decision in Nostrum Pharmaceuticals, LLC. v. FDA denying the injunctive relief sought by Nostrum in a Complaint and a Motion for a Preliminary Injunction filed last month.  The case stems from FDA’s decisions on pre-Medicare Modernization Act (“MMA”) 180-day exclusivity with respect to Nostrum’s ANDA No. 76-697 for a generic version of CARBATROL (carbamazepine) Extended-release Capsules, 300 mg, which FDA approved on May 20, 2011.  As we previously reported, at issue in the case is FDA’s application of the so-called “holding-on-the merits” standard with respect to one Orange Book-listed patent on which Nostrum qualified for 180-day exclusivity (U.S. Patent No. 5,912,013 (“the ‘013 Patent”)), and FDA’s interpretation that 180-day exclusivity terminates with the expiration of another patent on which Nostrum qualified for 180-day exclusivity (U.S. Patent No. 5,326,570 (“the ‘570 patent”)).  Lerner, David, Littenberg, Krumholz & Mentlik, LLP and Hyman, Phelps & McNamara, P.C. represent Nostrum in the lawsuit.

In a May 20, 2011 Letter Decision, FDA says that Nostrum’s exclusivity with respect to the ‘013 patent was triggered by a June 14, 2009 ruling in Shire Labs, Inc. v. CorePharma, LLC, C.A. 06-2266 (D.N.J.), in which the court entered a final judgment of its previous order granting a Motion for Summary Judgment of Non-infringement of the ‘013 patent filed by CorePharma (another ANDA sponsor).  According to FDA, this “holding is adequate as a basis to trigger the running of exclusivity as to the '013 patent,” and thus “Nostrum's exclusivity with respect to the '013 patent has expired.”  According to Nostrum, however, “the holding in CorePharma was a decision on the ground of judicial estoppel, not a decision on the merits of infringement,” and therefore, “there was no decision on the merits that could trigger Nostrum's exclusivity . . . and FDA's decision to the contrary in the Approval Letter, characterizing the ruling as a finding on the merits, was incorrect as a matter of law.”

On the ‘570 patent, FDA ruled that Nostrum is eligible for 180-day exclusivity, which was triggered on May 20, 2011 when Nostrum began commercial marketing.  The ‘570 patent, however, expires on July 23, 2011, several months before the November 16, 2011 date that is 180 days from May 20, 2011.  (Previously, the Orange Book showed the ‘570 patent expiring on July 5, 2011.  After Nostrum filed its lawsuit, the Orange Book was updated to reflect a July 23, 2011 expiration.  The ‘570 patent was filed on July 23, 1991, and issued on July 5, 1994.  For patent applications that were pending on and for patents that were still in force on June 8, 1995, the patent term is the longer of either 17 years from the date of issuance or 20 years from the filing date.  So it appears that the NDA sponsor switched from the issued plus 17 years date to the filed plus 20 years date.)

Judge Pisano was not convinced that FDA incorrectly applied its holding-on-the merits standard with respect to the triggering of 180-day exclusivity associated with the ‘013 patent, saying in his opinion that:

As an initial matter, the FDA has never interpreted the court decision trigger provision to require a court to compare the claims of the asserted patents to the accused generic product.  Rather, the FDA has interpreted the statute’s express requirement of a court decision “holding the patent which is the subject of the certification to be invalid or not infringed” as resolution of the issues of validity, infringement and enforceability “on the merits.”  Nothing suggests that the only way a court can reach a decision “on the merits” of an infringement claims is in the manner suggested by Nostrum.  Indeed, in the context of a motion for summary judgment a court is called upon to examine evidence, weigh substantive arguments and perform legal analysis.  The court must determine whether there exists a genuine dispute of material fact and whether the undisputed facts entitle a party to judgment as a matter of law.  Addressing such a motion, the CorePharma court concluded that there were no facts from which infringement could be found and entered judgment of noninfringement of the ‘013 patent as a matter of law.  The FDA need not look any further than that. [(Internal citation omitted)]

With respect to 180-day exclusivity stemming from the ‘570 patent, Nostrum argued, among other things, that the plain language of the statute does not limit 180-day exclusivity to the term of a patent.  Judge Pisano disagreed, however:

The statutory provision entitling Nostrum to exclusivity, by its terms, applies only to paragraph IV certifications, “which cease to exist upon patent expiration.”  Applying step one of Chevron, the Court finds the FDCA unambiguously supports the FDA’s determination that it is not prohibited by 21 U.S.C. § 355(j)(5)(B)(iv) (2002) from approving later-filed ANDAs upon expiration of the ‘570 patent.

Within hours of the district court issuing its decision, Nostrum filed a notice to appeal Judge Pisano’s decision to the U.S. Court of Appeals for the Third Circuit (Case No. 11-2837).  Nostrum also says in a filing that the company intends to ask the Third Circuit for an injunction pending appeal.

By Anne K. Walsh & John R. Fleder –

Companies must proactively prepare for the strong arm tactics the government employs to investigate companies regulated by FDA.  A recent case demonstrates that the federal government can act with little regard to companies seeking to represent themselves by defending against such aggressive tactics.   As a result, without certain procedures in place, a company’s employees could disclose otherwise privileged documents, or make statements on behalf of the company without the company’s knowledge.

In In re Amgen, Inc., No. 10-MC-0249(SLT) (E.D.N.Y. Apr. 6, 2011), Amgen sought a protective order to stop the government from interviewing its current employees without coordinating through Amgen’s legal counsel.  Amgen argued that such communications violated the “no contact” rule of New York’s Code of Professional Responsibility.  The magistrate judge recommended that the court deny Amgen’s motion on the ground that it was non-justiciable, or in the alternative, without merit.  The district court later entered an Order in accordance with that recommendation on June 14, 2011.

The “no contact” rule provides that a lawyer shall not communicate (or cause another to communicate) about the subject of the representation with a party the lawyer knows to be represented by another lawyer in the matter, unless the lawyer has the prior consent of the other lawyer or is authorized to do so by law.  N.Y. Rule of Prof’l Conduct 4.2(a).  This rule applies to all federal government attorneys practicing within the State of New York by virtue of 28 U.S.C. § 530B(a).  Most states have a similar rule of professional conduct preventing lawyers from communicating with represented parties.

In its report and recommendation, the magistrate judge analyzed application of the rule to the relevant facts of the case.  The report merits review by anyone interested in the nuances of the rule of professional conduct governing these communications.  One interesting highlight is the list of alternative remedies the magistrate judge identifies for Amgen, in lieu of granting the injunctive relief it seeks: 1) seeking professional disciplinary action against the prosecutors before the relevant state bar authorities; 2) seeking disciplinary action before the court’s Committee on Grievances; 3) seeking internal disciplinary action by the U.S. Department of Justice for violating its policies; and 4) seeking to suppress in litigation any evidence resulting from a violation of the “no contact” rule.

We want to highlight that the federal government makes no apologies in purposefully and systematically directing its agents to interview employees of represented companies.  The result in this case likely will increase the number of interviews conducted in this manner.

As described in Amgen’s memorandum in support of its motion, for two years the government had coordinated with Amgen’s counsel to interview its current employees.  There appears to have been some discussion between the company and the government about this coordination, but obviously the discussions did not lead to a meeting of the minds.  The coordination ended without notice, and the government conducted interviews of several current employees at their homes.  In at least one of those interviews, government agents sought to obtain documents belonging to Amgen.  According to Amgen, the government “was looking to interview current Amgen employees outside of the presence of counsel and to attempt to obtain statements binding against Amgen about activities that might have occurred exclusively, or at least primarily, in past years.”

Given the increasing likelihood of “at home” visits to current employees, companies must have procedures for employees to respond to inquiries from federal law enforcement agents.  These procedures should require employees to immediately notify in-house counsel of any contacts made by the federal government.  In addition, employees should be instructed about the confidentiality and potential privileged status of certain documents and information, and the prohibitions on their disclosure outside the company without prior approval.  Employees should be trained about these issues.