By Alan M. Kirschenbaum –

Exclusion from Medicare and Medicaid is a potent weapon used by the government against program-related fraud, but it can be a double edged sword when wielded against drug and medical device companies.  Exclusion of a drug or device company means that the federal programs may not reimburse providers for any of the company’s products.  This would be a severe detriment to any drug or device company, but it is perhaps equally undesirable for the government, since the exclusion of just one large pharmaceutical company, for example, would deprive Medicare and Medicaid beneficiaries of a multitude of necessary drugs.  For this reason, where the HHS Office of the Inspector General ("OIG") has invoked exclusion against drug manufacturers that have pleaded guilty to antikickback law violations, which the OIG is required to do under the mandatory exclusion statute (42 U.S.C. § 1320a-7(a)) , the penalty has been imposed on a shell or defunct affiliate of the drug company, leaving Medicare and Medicaid free to cover the manufacturer’s drugs. 

During its brief existence, which ended last week, section 6502 of the Patient Protection and Affordable Care Act earned notoriety because it threatened to preclude this practice.  Section 6502 added to the Social Security Act a provision requiring, among other things, that State Medicaid agencies exclude from Medicaid any affiliate (or any individual or entity that owned, controlled, or managed an affiliate) of an entity excluded from a Federal health care program.  In other words, a drug or device manufacturer’s plea of guilty would necessarily subject the entire company, including all affiliates, to exclusion under Medicaid.  The provision would have severely constrained the Department of Justice’s ability to negotiate settlements that would impose appropriate penalties on drug and device manufacturer without harming Medicaid beneficiaries.  Fortunately, Congress relatively quickly saw the need for a fix.  Section 205(a) of the Medicare and Medicaid Extenders Act of 2010, which was signed into law last Wednesday, December 15, repealed the affiliate exclusion provision. 

By Jeffrey N. Wasserstein –

As our loyal blog readers know, we are great fans of social media, and follow these topics in earnest (here, here, and here).  We have just learned that the long-awaited FDA guidance that was promised to come out by year-end will be delayed until the first quarter of 2011 (hat tip: Eye On FDA).  While the pharmaceutical industry is clamoring for some clear guidelines (other than those that come from warning letters!), the dream will be deferred for at least a few months (at a minimum). 

By Jamie K. Wolszon –  

Hyman, Phelps & McNamara, P.C. Directors Douglas B. Farquhar and John R. Fleder presented a webinar on Monday December 20, 2010 for Thompson Interactive entitled: “Are Attorneys the FDA’s New Enforcement Target?”  The webinar slides can be found here.  The webinar discussed the November 9, 2010 six-count indictment of Lauren Stevens, former Vice President and Associate General Counsel for GlaxoSmithKline, for her alleged role in responding to FDA’s investigations into the company’s promotion of its anti-depressant drug Wellbutrin.  The charges, which include obstruction of justice and false statement offenses, could result in jail time.  We previously reported on the indictment.  

The webinar included discussion of two recent developments in the case that have yet to capture widespread attention.  The government filed a motion for a protective order that indicated that the investigation is ongoing.  “These charges are part of a broader, ongoing investigation.  The discovery relevant to the instant case thus contains information not only about this case, but also relates to the ongoing, underlying health care fraud investigation, including potential criminal activity by others,” the government revealed in the motion.  

In another recent development in the case, the government filed a motion on December 17, 2010 to preclude Ms. Stevens and her legal team from invoking the “advice of counsel” defense.  This defense can negate the wrongful intent element of crimes that require wrongful intent.  It generally applies if a lawyer provides legal advice that the defendant’s conduct was legal and the defendant relied in good faith on that advice, even if the legal advice was wrong, assuming that the defendant meets other criteria.    

The government claimed that the advice of counsel defense is not available for one of the obstruction of justice charges against Ms. Stevens.  With regard to the other two types of charges, the government claimed that Ms. Stevens cannot invoke the defense because (1) it claimed there is evidence that Ms. Stevens did not share all pertinent facts with the attorneys from the law firm that provided legal counsel; (2) Ms. Stevens knew that her representations to FDA were not true and it was not reasonable for her to rely on an attorney to knowingly make false statements; and (3) Ms. Stevens did not hire counsel to advise her personally, as the lawyers represented only the corporation.  

By JP Ellison –

In Dickens’ A Christmas Carol, the main character is visited by three ghosts who by scaring him with visions of his past, present and future, seek to change him.  On December 13, 2010, in the form of a U.S. District Court for the District of Columbia decision, three former Purdue executives received news about their future based on their past that is scary enough that many FDA- regulated companies and the executives who work for those companies, aka “responsible corporate officers (“RCOs”), may wish that someone–FDA, DOJ, the HHS OIG, or perhaps even Congress, will change the current enforcement environment by eliminating punitive actions that do not serve the public interest.

The decision at issue was the latest chapter in the ongoing saga of the government’s battle with Purdue and three of its former executives.  The court upheld a decision of HHS to permissively exclude three former executives from participation in Medicare, Medicaid and all other federal health care programs for twelve years.

What is scary for those regulated industry–and specifically those responsible corporate officers –is that the decision takes the already scary “Park Doctrine” even farther than previously thought possible.  The Supreme Court’s Park case, as we have been recently pointing out, imposes strict criminal misdemeanor liability on RCOs for FDA violations.  The small comfort of Park was that an RCO could not get prosecuted under the FDC Act for fraud absent “intent to defraud or mislead.”

Last Monday’s decision appears to allow just that under the distinct but increasingly related HHS OIG authority to exclude persons from participating in federal healthcare programs.  While the government and the three former executives agreed to misdemeanors as part of a global plea deal, the district court nevertheless upheld an HHS decision that their conviction was one “relating to fraud.”  Under the FDC Act it is well established that a misdemeanor is not a fraud conviction.  In fact, one’s intent to defraud or mislead can result in a felony under the Act.

Monday’s decision allows that not only do RCOs have Park liability for the FDC Act violations of their companies, but through the HHS exclusion authority, they may also be sanctioned for their company’s fraud conviction–without any evidence whatsoever against the RCO relating to fraud.

In Dickens, the main character awakens from his bad dreams and proceeds to right his prior wrongs.  For the three former Purdue executives, any wrongs to be righted would now need to come in an appeal to the D.C. Circuit.  For the rest of the regulated industry, one can only hope that the government wakes up and declares itself changed by its visions of how the current enforcement scheme affects RCOs.

By Ricardo Carvajal –

Capping a week-long flurry of legislative activity, the Senate reportedly passed the Food Safety Modernization Act by a voice vote Sunday night.  The legislation now returns to the House, where approval is likely.  Given that the President’s signature is certain, it now appears as if 2011 will be ushered in with major amendments to the food-related provisions of the Federal Food, Drug, and Cosmetic Act.  No, we won’t make analogies to sausage-making – folks who practice that art would take offense.

By Riëtte van Laack –

On December 15, 2010, FDA took several steps to increase its enforcement against products that are marketed as dietary supplements but contain analogs of, or the same active ingredients as, FDA-approved drugs, or other substances that do not qualify as dietary ingredients, e.g., synthetic steroids. 

In a letter to the Dietary Supplement Industry, followed by a call for the media, FDA stressed that the manufacture and marketing of these products is illegal and constitutes a criminal activity.  According to FDA, the “spiked” products pose a serious public health threat and have been associated with serious adverse events, including strokes, acute liver injury, kidney failure, and death.  Spiking appears to be more prevalent in products promoted for weight loss, sexual enhancements, and bodybuilding.  Since 2007, FDA has issued warning letters and initiated seizures and criminal prosecutions concerning approximately 300 products.  In addition, FDA has issued consumer alerts and a fact sheet on retailer and distributor responsibilities.  Although these enforcement efforts have been effective, the Agency has concluded that more needs to be done to protect the public health and is stepping up its efforts.

In its December 15, 2010 letter, FDA asks the industry for support in its efforts.  The allegedly illegal active ingredients do not ordinarily appear in a product by accident.  Somewhere in the production chain, a party intentionally incorporates an illegal ingredient.  However, under the law, any party in the chain of manufacturing and marketing a dietary supplement is responsible for ensuring that the product complies with the law and regulations.  Thus, accountability and liability are not limited to the party that adds the ingredient.  FDA recommends that those involved in the manufacturing and marketing of dietary supplements give special attention to products in the weight loss, sexual enhancement and body building categories.

FDA is reaching out to people who know the industry well and know about products that may be spiked.  FDA asks the industry to report any suspected "tainted" supplements or supplement ingredients and the manufacturers or distributors who market these products.  For this purpose, FDA has created an e-mail address taintedproducts@fda.hhs.gov.  Alternatively, for those who prefer to submit reports anonymously, there is the option of using the form “Report Suspected Criminal Activity” located at www.fda.gov/oci.

During the call for media, various trade associations, including the Council for Responsible Nutrition, Natural Products Association, United Natural Products Alliance, Consumer Healthcare Products Association and American Herbal Products Association, expressed their support of FDA’s actions.  The groups subsequently issued a press release.

Dr. Joshua Sharfstein, principal deputy commissioner of the FDA, will lead an online chat Monday at 1 p.m. about "tainted" products marketed as dietary supplements. Directions to join the chat are here.

By Ricardo Carvajal –

The massive spending bill to which food safety legislation was attached (and that also includes provisions on rare and neglected diseases) – the Fiscal Year 2011 Omnibus Appropriations Act – has been pronounced dead.  Although Congress may yet find another vehicle for food safety legislation, that prospect seems increasingly tenuous, and opponents are cautiously predicting victory.  The fate of the legislation in the next Congress is unpredictable.  

As we have previously noted, FDA isn’t sitting on its haunches pending the passage of food safety legislation that would give the agency clear authority to take certain measures it views as essential to modernization of the nation’s food safety system.  As it has done in the past, the agency can be expected to adapt its existing authorities to fulfill its objectives (e.g., GMP modernization).

Hyman, Phelps & McNamara, P.C.’s Ricardo Carvajal will be presenting "Food Safety: Unintended Components/Contaminants of Food" at the Food and Drug Law Institute's ("FDLI’s") January 24-25, 2011 conference, "Introduction to Food Law and Regulation: How the Government Regulates the Food Industry," which is part of FDLI’s Food Week 2011. The food safety session will address the adulteration provisions of the Federal Food, Drug, and Cosmetic Act, GMP’s, HACCP, low acid canned foods, control of microbial hazards in fresh produce, FDA’s retail food program, and the latest on the Reportable Food Registry.  Registration information is available here.

By Ricardo Carvajal –

FTC announced a proposed settlement with Dannon over the latter’s allegedly deceptive advertising claims for two of its probiotic products, Activia and DanActive.  FTC’s complaint alleged that Dannon explicitly or implicitly represented that one serving of Activia relieved temporary irregularity and helped with slow intestinal transit time, and that DanActive was clinically proven to help to avoid colds or flu.  Notably, the advertising described in the complaint explicitly claimed only that DanActive helps strengthen the body’s defenses in the context of a reference to immunity – a claim frequently made for many probiotic products.  Under the terms of the settlement, Dannon would forego making some claims unless they are permitted by FDA regulations, and other claims unless they are supported by “at least two adequate and well-controlled human clinical studies. . . conducted by different researchers, independently of each other, that conform to acceptable designs and protocols and whose results, when considered in light of the entire body of relevant and reliable scientific evidence, are sufficient to substantiate that the representation is true.”  

This is but the latest in a string of FTC actions that target allegedly deceptive marketing of foods.  As we noted in a prior posting, FTC has specifically signaled its interest in probiotics and immunity-boosting claims, and in products marketed for use by children.  Thus, the advertising for DanActive cited in FTC’s complaint was a “two-fer” – a probiotic with immunity-boosting claims marketed for use by children. 

According to FTC’s press release, “FTC worked in close coordination with 39 state attorneys general” who are also settling their inquiries into Dannon’s advertising to the tune of $21 million – a welcome infusion to cash-strapped states.

By Ricardo Carvajal –

A class action lawsuit has been filed in California alleging that the McDonald’s Corporation engages “in the unfair, unlawful, deceptive and fraudulent practice of promoting and advertising McDonald’s Happy Meal products to very young California children, using the inducement of various toys.”  The Center for Science in the Public Interest ("CSPI") is representing the named plaintiff as a non-profit law firm, thus making good on its threat of legal action if McDonald’s didn’t stop using toys in its marketing.  In the words of the complaint:

• McDonald’s exploits very young California children and harms their health by advertising unhealthy Happy Meals with toys directly to them. Children eight years old and younger do not have the cognitive skills and the developmental maturity to understand the persuasive intent of marketing and advertising.
• Children nonetheless influence the purchasing decisions of their parents. McDonald’s exploits that influence, by bombarding children with advertisements for Happy Meals with toys, knowing that it will result in kids nagging parents to purchase nutritionally poor Happy Meals for their children.
• These marketing practices are unfair to parents as well as their children because they interfere with the parents’ ability to instill good eating habits in their children and because they cause conflict between parents and their children.
• McDonald’s is engaged in a highly sophisticated scheme to use the bait of toys to exploit children’s developmental immaturity and subvert parental authority.

No word yet on whether additional actions will be filed that target the use of playlands and clowns as child bait.

Correction: In our original posting, we referred to CSPI as a plaintiff.  CSPI is not a plaintiff, but rather is representing the named plaintiff as a non-profit law firm.

Hyman Phelps & McNamara, P.C. is pleased to announce that Diane B. McColl has been elected Vice-President of the Council of the International Society for Regulatory Toxicology and Pharmacology (“ISRTP”).   ISRTP provides an open public forum for policy makers and scientists promoting sound toxicologic and pharmacologic science as a basis for regulation affecting human safety and health, and the environment.  The Society’s official journal is the Regulatory Toxicology and Pharmacology Journal. 

By Riëtte van Laack –

The Animal Drug User Fee Amendments of 2008 (“ADUFA”) directs FDA to prepare annual summaries of antimicrobials sold or distributed for use in food-producing animals.  The data are derived from information sponsors of new animal drug applications provide to FDA (as required by Sectin 105 of ADUFA).  Last week, FDA published its first annual report summarizing the data.  The report shows that approximately 29 million pounds of antibiotics for use in food-producing animals were sold in 2009.  More than 9 million pounds of the antibiotics were tetracyclines.  The report does not include anti-fungal or anti-viral drugs because, with the exception of formalin and hydrogen peroxide water immersion products, no approved anti-fungal or anti-viral products for use in food-producing animals were marketed in 2009.

The data on antimicrobial drugs sales and distribution information are intended to assist FDA in the Agency’s evaluation of antimicrobial resistance trends as well as FDA’s  analysis of other issues that may arise relating to the safety and effectiveness of antimicrobial drugs approved for use in food-producing animals.  Because this is the first report, meaningful trend analysis are not yet possible.

By Kurt R. Karst –      

Earlier this week, Senate Appropriations Committee Chair Senator Daniel Inouye (D-HI), released the text of the proposed Fiscal Year 2011 Omnibus Appropriations Act.  The almost 2,000-page bill, if enacted, would fund the government until September 30, 2011.  In addition to an increase in funding for FDA ($37.5 million more than the President’s request) and the FDA Food Safety Modernization Act, buried in the bill are provisions intended to promote the development and approval of products for rare and neglected diseases (as well as an increase in funding for the orphan drug grants program and funding for the Office of the Associate Director for Rare Diseases).  Specifically, Section 743 of the bill provides:

SEC. 743. (a) When implementing the authority provided in paragraphs (2) and (3) of section 740(c) of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2010 (Public Law 111–80) that requires the Commissioner of Food and Drugs to develop updated guidance documents and review standards for the development of safe and effective products to treat rare diseases and neglected tropical diseases, the Commissioner shall —

(1) maximize the use of accelerated approval where feasible and appropriate;

(2) work with sponsors to facilitate expanded access to investigational therapies;

(3) increase coordination and interaction with the World Health Organization, European Medicines Agency, and other international regulatory agencies;

(4) implement mechanisms for enhanced collaboration between the Food and Drug Administration and National Regulatory Authorities in developing countries;

(5) develop guidance on clinical development programs for rare diseases;

(6) develop guidance on the use of surrogate endpoints that are reasonably likely to predict clinical benefit of drugs and biological products under the regulations under subpart H of part 314 of title 21, Code of Federal Regulations and subpart E of part 601 of title 21, Code of Federal Regulations; and

(7) increase coordination among individual drug, biological product, and device review divisions across Food and Drug Administration centers to support the development of safe and effective medical products for rare and neglected diseases.

(b) The Commissioner of Food and Drugs shall submit a report to the Committee on Appropriations of the Senate and the Committee on Appropriations of the House of Representatives not later than 180 days after the report required in section 740(c)(1) of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2010 (Public Law 111–80) is submitted: Provided, That the report submitted in response to this section shall describe in detail how the Food and Drug Administration is implementing subsection (a).

This same provision was included in the FY 2011 Agriculture, Rural Development, FDA, and Related Agencies Appropriations bill (S. 3606) introduced earlier this year (see our previous post here), and has thus far survived the omnibus appropriations chopping block.   The Senate is expected to take up the omnibus appropriations bill this week.  If it passes in the Senate it will go to the House of Representatives as a substitute for the full-year Continuing Resolution the House passed earlier this month.

By Kurt R. Karst – 

When we last left you in the battle over FDA’s approval of a generic version of sanofi-aventis U.S. L.L.C.’s (“sanofi’s”) blockbuster anti-coagulant drug LOVENOX (enoxaparin sodium injection), Judge Emmet G. Sullivan of the U.S. District Court for the District of Columbia denied sanofi’s Motion for Preliminary Injunction.  Sanofi did not appeal the decision, but the case has moved forward for a decision on the merits.  In a Motion for Summary Judgment sanofi filed earlier this week, the company continues to allege that that FDA’s approval of generic LOVENOX is unlawful and should be set aside.  Sanofi’s brief also highlights some interesting disagreements that allegedly took placed within FDA on generic LOVENOX.

Sanofi sued FDA on July 26th requesting that the court issue a declaratory judgment that FDA acted unlawfully in approving Sandoz Inc.’s ANDA No. 77-857, as well as a temporary restraining order and preliminary injunction directing FDA to immediately suspend and withdraw approval of the ANDA, and a permanent injunction under the same terms.  (Sanofi later agreed to consolidate its temporary restraining order request with its preliminary injunction request.)  In addition to the approval of ANDA No. 77-857, Sanofi also challenged FDA’s July 23rd response to a February 2003 citizen petition, in which the Agency outlined five criteria (i.e., standards for identity) that an ANDA applicant needs to demonstrate sameness of its active ingredient as compared to LOVENOX.  Those five criteria are: (1) equivalence of physicochemical properties; (2) equivalence of heparin source material and mode of depolymerization; (3) equivalence in disaccharide building blocks, fragment mapping, and sequence of oligosaccharide species; (4) equivalence in biological and biochemical assays; and (5) equivalence of in vivo pharacodynamic profile. 

In sanofi’s initial court filings the company set forth three merits arguments as to why a preliminary injunction is necessary: (1) FDA exceeded its authority under the FDC Act (specifically FDC Act § 505(j)(2)(A)) by requiring Sandoz to submit studies beyond what is permitted for ANDAs (i.e., immunogenicity studies that, according to Sanofi, are studies intended “to demonstrate safety and effectiveness,” rather than, as FDA argued, chemistry, manufacturing, and control information); (2) FDA departed from Agency precedent by approving ANDA No. 77-857 when the product has not yet been fully characterized; and (3) FDA approved ANDA No. 77-857 without sufficient evidence that the drug product has the “same” active ingredient as LOVENOX (as required by FDC Act § 505(j)(2)(A)). 

Judge Sullivan noted in his denial of sanofi’s Motion for Preliminary Injunction that the court’s decision was not a final decision on the merits and that “Sanofi may be able to establish that there are grounds for overturning the grant of Sandoz’s ANDA.”  Sanofi’s Motion for Summary Judgment tries to do just that, building on the company’s previous merits arguments.  According to sanofi’s latest motion:

First, the plain language of the FDCA precludes FDA from requiring immunogenicity testing, as it did here, as part of the ANDA approval process. Section 505(j)(2)(A) of the Act sets forth eight categories of information FDA is permitted to require of an ANDA applicant and expressly forbids FDA from mandating submission of additional information.  Immunogenicity testing is not encompassed by any of the categories.  FDA’s argument to the contrary – that a provision of the Act authorizing it to require “a full description of the methods used in, and the facilities and controls used for, the manufacture, processing, and packing of [a generic] drug,” encompasses immunogenicity testing – does not withstand scrutiny.  FDA’s interpretation of the FDCA would upset the three-tiered framework Congress crafted for approval of new drugs and render Section 505(b)(2) of the Act wholly superfluous.

Second, FDA’s decision must be set aside as arbitrary and capricious under the [Administrative Procedure Act] because of the Agency’s utter failure to acknowledge and provide a persuasive justification for its departure from established precedent. . . .  Prior to its unlawful approval of Sandoz’s ANDA, FDA had consistently recognized that where a drug is not fully characterized, it is impossible to conclude that it is the same as a previously approved drug. . . .

Third, and finally, FDA’s approval decision is flatly inconsistent with the FDCA’s mandate that an ANDA may not be approved unless its active ingredient is the “same as” that of the RLD.  In contravention of this statutory directive, FDA approved Sandoz’s ANDA based on application of a five-factor test that relies on unsubstantiated conjecture lacking any basis in either science or the text of the FDCA.  Moreover, the evidence before the Agency makes clear that Sandoz’s drug did not even satisfy the Agency’s own ad hoc standard for determining active ingredient sameness. [(Internal citations omitted)]

Sanofi’s Motion for Summary Judgment also brings to light some interesting tensions within FDA concerning the five criteria that an ANDA applicant needs to demonstrate sameness of its active ingredient as compared to LOVENOX.  According to sanofi, information in the administrative record shows that scientists within FDA’s Office of New Drug Quality Assessment (“ONDQA”) “expressed disagreement” with the Office of Generic Drugs’ (“OGD’s”) conclusions about the five criteria for assessing active ingredient sameness in generic LOVENOX.  According to sanofi:

ONDQA’s scientists, including FDA’s own expert on heparin and heparin-based products, Dr. Ali Al Hakim, explained that a showing of active ingredient sameness for enoxaparin is impossible without complete characterization of all of enoxaparin’s oligosaccharide chains.  ONDQA argued that, because enoxaparin consists of a mixture of oligosaccharides, it cannot be determined which components of the mixture contributed to enoxaparin’s activity.  ONDQA further explained that OGD’s five criteria are inadequate to demonstrate sameness and criticized OGD for relying on “inference” to do so.   ONDQA asserted that OGD’s proposed methodology was contrary to both the law and FDA policies.  [(Internal citations omitted)]

This disagreement was resolved in a July 20, 2010, intra-agency memorandum, according to sanofi, in which Dr. Keith Webber, Deputy Director of the Office of Pharmaceutical Science (and acting OGD Director) determined that the five criteria are a “valid approach . . . for purposes of ANDA approval.”  According to sanofi, Dr. Webber “[rejected] ONDQA’s argument that OGD’s approach was inconsistent with FDA policy involving drugs that had not been fully characterized [and] asserted that ‘[d]epending on the kind of drug at issue, there may be different ways to show active ingredient sameness’ and that OGD’s approach was acceptable as applied to enoxaparin.”

FDA’s five criteria for assessing active ingredient sameness with respect to generic LOVENOX were also raised in a December 10th citizen petition submitted on behalf of Teva Neuroscience, Inc. (“Teva”) concerning FDA’s ability to approve generic versions of the company’s COPAXONE (glatiramer acetate injection), a drug product approved for the reduction of frequency of relapses in relapsing-remitting multiple sclerosis.  In May 2010, FDA indicated in a response to a different Teva citizen petition concerning generic COPAXONE that the Agency might be considering applying similar criteria to that drug.  Specifically, FDA stated that “given the complexity of Copaxone, we may require that any ANDA sponsor demonstrate active ingredient sameness through a multi-criteria test or series of tests, each criterion of which captures different aspects of the active ingredient’s ‘sameness,’ and which together would provide overlapping evidence by which an ANDA applicant could demonstrate active ingredient sameness within the meaning of the Act and FDA regulations.” 

Teva argues in its latest petition, among other things, that “none of the five criteria that provided reasonable assurance of sameness between generic enoxaparin and Lovenox® are viable in the Copaxone® context” (emphasis in original), and that generic COPAXONE should not be approved unless and until: (1) the glatiramer acetate in COPAXONE has been fully characterized and a generic applicant proves that its proposed drug product contains exactly the same polypeptide sequences (in the same amounts and with the same structures) as COPAXONE; or (2) all polypeptide sequences that contribute to the therapeutic effects of COPAXONE’s glatiramer acetate have been identified and a generic applicant proves that its proposed drug product contains exactly the same clinically relevant polypeptide sequences (in the same amounts and with the same structures) as COPAXONE (and that any differences in the non-clinically active polypeptides in the proposed generic drug do not “undermine the clinically active polypeptides’ safety, efficacy, toxicology, and immunology profiles”). 

By Kurt R. Karst –      

Last Friday, Teva Pharmaceuticals USA, Inc. (“Teva”) filed its opposition brief to Apotex, Inc.’s (“Apotex’s”) Petition for Writ of Certiorari, which Apotex filed with the U.S. Supreme Court in October asking for a review of the U.S. Court of Appeals for the District of Columbia Circuit’s decision involving Teva’s 180-day exclusivity for generic versions of Merck’s COZAAR and HYZAAR (i.e., losartan).  Teva’s 180-day exclusivity for losartan expired on October 3, 2010, the day before Apotex filed its petition with the Supreme Court. 

Apotex’s petition arises from the D.C. Circuit’s March 2, 2010 decision in Teva Pharms USA, Inc. v. Sebelius.  In that case, a 3-judge panel of the D.C. Circuit ruled in a 2-1 decision concerning 180-day exclusivity for losartan that there is “no reason to conclude that the 2003 addition of forfeiture provisions meant to give the brand manufacturer a right to unilaterally vitiate a generic’s exclusivity.”  Thus, a mere patent delisting request is not enough to trigger a forfeiture event under the failure-to-market forfeiture provision at FDC Act § 505(j)(5)(D)(i)(I). 

In July 2010, in separate litigation, a 3-judge panel of the D.C. Circuit issued a per curiam judgment affirming the U.S. District Court for the District of Columbia’s April 2, 2010 order denying motions for preliminary injunction filed by Roxane Laboratories, Inc. (“Roxane”) and Apotex.  The Roxane and Apotex motions challeged FDA’s March 26, 2010 letter decision in which the Agency reluctantly concluded that, as a result of the D.C. Circuit’s March 2, 2010 decision in Teva Pharms USA, Inc. v. Sebelius, Teva did not forfeit 180-day exclusivity eligibility.  (For additional background on the litigation over 180-day exclusivity for losartan see our previous post here.)

As an initial matter, Teva argues that Apotex’s petition should be denied because it moot, and therefore, dead on arrival:

Apotex’s complaint — and the preliminary injunction motion addressed by the sole D.C. Circuit decision at issue here — sought only prospective relief challenging Teva’s entitlement to 180-day marketing exclusivity.  But Teva’s 180 days of exclusivity have come and gone, and while this Court can do many things, it can’t turn back time.  There is thus no case or controversy left for the Court to resolve; any opinion regarding the merits would be purely advisory.

Nor, according to Teva, does the case present an exceptional situation involving an issue that is “capable of repetition while evading review:” 

Though Apotex has identified a handful exclusivity-grounding patents that the brand manufacturer deliberately let lapse, there is no reason why the question it seeks to raise here will evade review if, as Apotex speculates, it ever arises again. After all, challenges to the legal rules FDA applies in making exclusivity decisions can be brought well before an exclusivity period is scheduled to begin — and with ample time for this Court to review the issue Apotex seeks to raise in a case where it actually matters. [(Internal citations omitted)]

Even if the case were not moot, “it would be a poor vehicle to address the question it purports to present, because it arises in the interlocutory context of a preliminary injunction proceeding,” states Teva.  The lack of a circuit split “on the issue Apotex purports to raise” and that “Apotex in any event exaggerates the likelihood that it will recur” are separate grounds on which the Court should deny the petition, according to Teva. 

Finally, Teva argues that there is no need for the Supreme Court to grant review because the D.C. Circuit’s preliminary analysis of the merits was correct: 

As three different panels of the D.C. Circuit now have recognized, it upends both law and logic to think that Congress created an elaborate incentive scheme designed to encourage generic companies to challenge dubious brand-name patents, but simultaneously empowered the brand companies who assert those dubious patents to eviscerate that incentive scheme.  In short, because Apotex’s interpretation of the statute would allow brand companies to manipulate the exclusivity incentive despite the absence of any suggestion in the text, history, or structure of the statute that Congress intended to give brand companies that power, the D.C. Circuit properly held that Apotex was unlikely to prevail on the merits.

The case, Apotex, Inc. v. Sebelius, is docketed as Case No. 10-453.  AARP filed an amicus brief in the case on November 4th.