By John A. Gilbert –

The UN Commission on Narcotic Drugs (“CND”) held its 53rd meeting last week in Vienna, Austria. This meeting routinely coincides with the publication of the International Narcotics Control Board’s (“INCB’s”) annual report.  The INCB report provides an annual summary of the status of compliance with the international drug control treaties.  Highlights of the 2009 INCB report include concerns about the increase in prescription drug abuse, especially in the United States, and that increased consumption of narcotic drugs may be a source of increased diversion. The INCB also stated that diversion of precursor substances used in the illicit manufacture of controlled drugs had also increased and noted that among legitimate drugs, stimulants, benzodiazepines and buprenorphine were substances most often reported diverted and abused. The Board singled out buprenorphine for an expanded discussion of reports of abuse and requested countries to reexamine whether current control measures were adequate to prevent diversion and abuse of this drug.  The Board also expressed continued concern over the abuse of drugs in committing sexual assaults.

At the CND meeting discussions centered on ways to improve compliance by all member states in reducing demand and supply of illicit drugs and ongoing concerns about abuse of precursor drugs such as phenylacetic acid.  The CND adopted a resolution to move phenylacetic acid from Table II to Table I of the 1988 Convention thereby requiring additional licensing, recordkeeping and reporting requirements for use of this chemical.  Phenylacetic acid has been increasing reported as being used in the illicit manufacturing of methamphetamine.  

The CND considered numerous resolutions to strengthen drug control.  An important resolution adopted by the CND involved "Promoting adequate availability of internationally controlled licit drugs for medical and scientific purposes while preventing their diversion and abuse."  The resolution was drafted by the United States and calls for countries, the INCB and WHO to ensure adequate availability of opiates for medical and scientific purposes, while working towards reducing the potential for diversion. The resolution also calls on the INCB to report on the progress of these efforts in its 2010 annual report and for the CND to consider this as an agenda item at its 54th meeting in March 2011.

The adoption of this resolution is a welcome recognition by the INCB and the CND of the continued problem of ensuring adequate supply of pain medicine in many parts of the world and the importance of considering the impact on medical availability in drug control decisions.  

By John R. Fleder –

We earlier reported that the United States Sentencing Commission issued an interesting Federal Register notice on January 21, 2010.  We reported that the Commission has proposed to amend the Sentencing Guidelines to require companies to make restitution to identifiable victims, and take other remedial steps including self reporting the violation to the government, as soon as the company learns that it has engaged in criminal conduct.  Of course, any “prohibited act” violation of the FDC Act could be deemed to be criminal conduct under the Park doctrine.  For companies regulated by FDA, this would presumably mean that they would be expected to undertake those actions as soon as they learn through their own audits, and/or receiving an FDA Form 483 that establishes in the company’s view, that a violation of the FDC Act has occurred.  In other words, the Commission would be setting forth the federal government’s position that companies should undertake these actions whether or not they are ever prosecuted or convicted for violating the FDC Act.

On March 17, 2010, Hyman, Phelps & McNamara, P.C. submitted a letter to the Sentencing Commission setting forth our firm’s concerns about this proposed amendment.  The Commission’s January Notice states that comments can be submitted to the Commission on or before March 22, 2010.

By Kurt R. Karst –      

It has been quite a wild ride since a 3-judge panel of the D.C. Circuit issued its March 2, 2010 opinion ruling that FDA’s interpretation of the 180-day exclusivity forfeiture provision at FDC Act § 505(j)(5)(D)(i)(I)(bb)(CC) fails at Chevron step one and that the patent delisting counterclaim provision at FDC Act § 505(j)(5)(C)(ii)(I) added by the 2003 Medicare Modernization Act (“MMA”) must be read together with the patent delisting forfeiture provision at FDC Act § 505(j)(5)(D)(i)(I)(bb)(CC), and 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.”  The D.C. Circuit’s decision reversed a decision from the U.S. District Court for the District of Columbia.  The case, which concerns the availability of 180-day exclusivity for generic versions of Merck & Co., Inc.’s (“Merck’s”) COZAAR (losartan potassium) Tablets and HYZAAR (hydrochlorothiazide; losartan potassium) Tablets, was remanded to the district court for further proceedings “as the court has yet to address the appropriateness of each form of relief that Teva has sought. . . .”  Teva’s Complaint requested declaratory and injunctive relief.  

Shortly after the March 2, 2010 decision was issued, Teva filed an Emergency Motion To Issue Mandate Forthwith, because althought FDA ordinarily has 45 days within which to seek rehearing, the earliest date that the D.C. Circuit’s mandate could be issued under that order (i.e., April 23, 2010 in this case) would be 17 days after the anticipated April 6, 2010 approval deadline for ANDAs for generic COZAAR/HYZAAR.  FDA’s opposition brief threw a new issue into the mix: did Teva forfeit 180-day exclusivity under FDC Act § 505(j)(5)(D)(i)(VI) because the only exclusivity-qualifying patent – U.S. Patent No. 5,608,075 (“the ‘075 patent”), which was previously identified in the Orange Book as expiring in March 2014 – “expired” in March 2009 after Merck had ceased paying certain patent “maintenance fees”?  (In conjunction with its brief, FDA also established a public docket (Docket No. FDA-2010-N-0134) requesting public comment (here and here) on the issue.)  FDC Act § 505(j)(5)(D)(i)(VI) states that 180-day exclusivity eligibility is forfeited if “[a]ll of the patents as to which the applicant submitted a certification qualifying it for the 180-day exclusivity period have expired.”  Teva, characterizing this new issue as a “thirteenth-hour attempt” to deprive Teva of the benefit of the D.C. Circuit’s decision, vigorously argued in its reply brief that the court should reject FDA’s new argument. 

The D.C. Circuit promptly granted Teva’s motion to issue the mandate (but noting that “the mandate would be recalled if rehearing en banc were granted”).  And in doing so, the court stated that its decision was based “[u]pon consideration of appellant Teva Pharmaceutical’s emergency motion to issue the mandate forthwith, and the opposition thereto.”  That is, the court considered Teva's arguments in the company's reply brief and rejected FDA’s new patent expiration forfeiture theory. 

Now back to the district court, where Judge Rosemary M. Collyer granted Teva’s request for an expedited status conference (which was held on March 15, 2010) and was asked to consider a renewed motion by Apotex to intervene in the case. . . .

On March 16, 2010, Judge Collyer issued an Order declaring that Teva has not forfeited its right to 180-day marketing exclusivity, and ordering FDA not to approve ANDAs for certain strengths of generic COZAAR and HYZAAR until the expiration of Teva’s 180-day exclusivity.  Judge Collyer also granted Apotex’s renewed motion to intervene in the case. 

This case is not likely over yet.  FDA or Apotex could appeal the decision.  Stay tuned . . . .

By Kurt R. Karst –      

In a March 16, 2010 opinion and order, Judge Claude M. Hilton of the U.S. District Court for the Eastern District of Virginia (Alexandria Division) vacated the Patent and Trademark Office’s (“PTO’s”) denial of a Patent Term Extension (“PTE”) for U.S. Patent No. 5,196,404 (“the ‘404 patent”) covering The Medicines Company’s (“MDCO’s”) ANGIOMAX (bivalirudin), and remanded the case to the PTO “for reconsideration as to the date of approval under [35 U.S.C. § 156] and to take such actions as necessary to ensure that the ‘404 patent does not expire pending further resolution of these proceedings.”  The question of the availability of a PTE for the ‘404 patent has been going on for many years, and has involved all three branches of government.  The ‘404 patent is scheduled to expire on March 23, 2010, and is subject to a 6-month period of pediatric exclusivity.

FDA approved ANGIOMAX at 5:18 PM on Friday, December 15, 2000 under New Drug Application (“NDA”) No. 20-873, and MDCO submitted its PTE application to the PTO on February 14, 2001 – 62 days after NDA approval (including the December 15, 2000 date of 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” (i.e., within 60-days of the date of NDA approval).  Under 35 U.S.C. § 156(g)(1)(B)(ii), for purposes of calculating the PTE “regulatory review period,” the approval phase begins on the date the NDA application was initially submitted under FDC Act § 505 for the approved product and ends “on the date such application was approved under such section.”

Judge Hilton’s decision stems from a January 2010 Complaint and Motion for Summary Judgment following the PTO’s January 8, 2010 denial of MDCO’s December 2009 Request for Reconsideration asking the PTO to employ a “rule of construction” under which the Office would consider the 60-day PTE application submission period at 35 U.S.C. § 156(d)(1) to commence on the first business day after the day the FDA transmits notice of NDA approval of the drug product if that transmittal occurs after normal business hours.  In the case of the PTE application for the ‘404 patent covering ANGIOMAX, that would mean the 60-day period would have begun on December 18, 2000 and the PTE application would have been timely filed within 35 U.S.C. § 156(d)(1). 

MDCO’s Complaint alleges that the PTO’s denial of the company’s PTE application for the ‘404 patent and FDA’s decision regarding PTE application timeliness violated the Administrative Procedure Act (5 U.S.C. § 706(2)(A)).  Among other things, MDCO argues that there is a discrepancy in how FDA (and the PTO) treats the dates of NDA receipt and approval:

[U]nder the government’s approach to [the PTE] statute, an application for approval of a new drug received by the FDA after business hours is deemed to be filed on the following business day.  By contrast, when a [NDA] is approved after business hours, the government deems the approval to have occurred on the same business day and takes the position that this day starts the 60-day period for filing a patent term extension application.  Despite this inconsistency, the PTO somehow concluded that its interpretation was mandated by statute and regulation.

As a result, MDCO alleges that “[t]he PTO’s decision is not merely arbitrary and capricious; it is profoundly unfair and undermines the remedial design of the patent term restoration system.” 

In his 18-page decision, Judge Hilton included a litany of reasons that the PTO’s PTE denial was supposedly deficient:

• There is a strong presumption that when Congress repeats the same word in the same statute, it intends for that word to be given the same meaning. In this case, the PTO and the FDA interpreted the word date to have two different meanings in the very same provision, and the PTO offered no explanation for that inconsistency.  The PTO also misperceived the scope of its authority.  The PTO believed that it was precluded from adopting a business hours interpretation of the word date in § 156(d)(1).  But, neither the statutory text nor any other authority forecloses that reading. While the PTO believed that the term date can only be construed to mean calendar day, the statute cannot be so inflexible because the FDA interprets the same word in the same section to mean business day.

• The PTO incorrectly thought a business hours interpretation was foreclosed and did not consider central arguments MDCO advanced, and gave no reason for rejecting them.

• The PTO erroneously believed that it was compelled to follow the FDA's interpretation of the provision of § 156(g)(1)(B)(ii) marking the end of the regulatory review period.  The agency also incorrectly believed that a business hours interpretation of § 156(d)(1) was foreclosed by the plain text of the statute, Federal Circuit precedent, and its own regulations.  Because it believed its hands were tied, the PTO never even considered whether it should exercise its discretion to adopt a "business hours" rule.  Indeed, the PTO must have believed it had no option but to construe the statute as it did: Had the PTO recognized any statutory ambiguity, it should have addressed in its decision the issues raised by MDCO.

• The PTO also incorrectly concluded that Unimed. Inc. v. Quigg, 888 F.2d 826 (Fed. Cir. 1989), controlled this case. Unimed never addressed the question presented here. . . . A few sentences in Unimed could be read to suggest that the date that starts the 60-day period in § 156(d)(1) is the date stamped on the FDA approval letter. But the question at issue here – the proper treatment of an after hours letter – was not presented in Unimed because the extension application at issue there was filed "more than a year after the FDA's final approval letter."

• The PTO's decision was also flawed because the Office erroneously concluded that a next business day rule would be contrary to regulations.

• Finally, the PTO incorrectly believed that in interpreting § 156(d)(1), it was bound to follow the FDA's interpretation of § 156(g)(1)(B)(ii).  Although the PTO asserted that it was independently interpreting § 156{d)(1) and relying on the FDA only to provide it with facts regarding the drug approval process, the PTO effectively determined that the 60-day period under § 156(d)(1) must necessarily start to run whenever the FDA determined that the regulatory review period under § 156(g)(1)(B)(ii) ends.  Consistent with the FDA's interpretation, the PTO concluded that the date stamped in a NDA approval letter is the appropriate trigger for section 156(d)(1).  The PTO's position, however, ignores material differences between § 156(d)(1) and § 156(g)(1)(B)(ii).  The relevant statutory language is different. Section 156(d)(1) calls for the PTO to determine when the product received permission, while § 156(g)(1)(B)(ii) calls for the FDA to determine when the new drug application was approved.  Congress's use of different words suggests that the two terms do not necessarily have the same meaning. . . .   Moreover, the two provisions serve distinct purposes.

Judge Hilton remanded the case to the PTO for reconsideration and directed the PTO to take steps to ensure that the ‘404 patent does not expire pending further resolution of the PTE litigation.  Unless the case is resolved before expiration of the ‘404 patent next week (which seems unlikely), the PTO will probably issue an interim PTE.  35 U.S.C. §  156(e)(1) provides for a PTE to compensate for delays in FDA regulatory review of an NDA, and 35 U.S.C. § 156(e)(2) provides for an interim PTE if the patent “would expire before a certificate of extension is issued or denied under paragraph (1).”  Although the Federal Circuit ruled in 2007 in Somerset Pharmaceuticals v. Dudas that an interim PTE is not available when the PTO has already denied a PTE application, Judge Hilton’s decision vacating the PTO’s denial of a PTE for the ‘404 patent should clear the way for an interim PTE. 

By Riëtte van Laack –

For several years, the Consumers Union and the Organic Consumers Association (“Petitioners”) have urged the U.S. Department of Agriculture (“USDA”) to require that personal care products that use the term “organic” in product labeling comply with the requirements of the Organic Foods Production Act of 1990 (“OFPA”) and the USDA National Organic Program (“NOP”) implementing regulations.  USDA has consistently refused to do so on the grounds that the Agency has no authority over the labeling of personal care products that do not claim to meet USDA organic standards, or that do not consist of agricultural ingredients.  The Agency has, however, agreed that a personal care product may carry the USDA organic seal (permitted only on products that are “100% organic” and “organic”), provided that the product meets the applicable NOP standards.  Thus, a personal care product that bears the USDA organic seal must meet NOP standards; however, if the same product is labeled as “organic” but does not carry the USDA seal, then the NOP standards do not apply. 

USDA’s approach has complicated matters because under certain circumstances NOP standards apply and under seemingly similar circumstances NOP standards do not apply.  For a personal care product labeled as “organic,” the presence of the seal is crucial to determining applicability of the NOP standards.  In contrast, a food labeled as “organic” always must comply with the NOP standards, even if it does not carry the USDA organic seal.  In addition, because USDA does not regulate the use of organic claims without the USDA organic seal on personal care products, other independent organizations have stepped in and launched their own organic certification programs.  As a result, a multitude of standards, including the OFPA/NOP standards, exist for personal care products.  Petitioners assert in a recent complaint to the Federal Trade Commission ("FTC") that the presence of these different standards causes confusion in the marketplace and weakens consumers’ confidence in the organic label on foods.  

Petitioners believe that the OFPA, specifically 7 U.S.C. §§ 6501 and 6505, gives USDA the authority to enforce OFPA’s and NOP’s requirements to any personal care product carrying an “organic” claim.  Petitioners do not address USDA’s position that personal care products that are not agricultural products are not covered by the OFPA, or USDA’s assertion that it lacks authority over personal care products that do not claim to meet USDA organic standards.  Instead, Petitioners ask FTC to stop and prevent any further deceptive use of “organic” claims not compliant with the NOP standards.  They assert that organic labeling of personal care products not compliant with the NOP standards constitutes a violation of section 5 of the FTC Act.  Petitioners ask FTC to further investigate organic claims on personal care products, to consider means of working with USDA to prevent the deceptive use of organic claims, and to prohibit the use of non-NOP compliant organic claims on personal care products.

By Kurt R. Karst –      

FDA’s recent response to a 2009 citizen petition filed by Sandoz, Inc. concerning the appropriate certification to certain Orange Book-listed patents for Takeda’s ACTOS (pioglitazone HCI) Tablets and ACTOPLUS MET (pioglitazone HCl; metformin HCI) Tablets can be summed up in two (Latin) words: Caveat Utilitor (That is, let the user beware).  The cautionary note is to companies that plan to submit (or have already submitted) to FDA ANDAs for generic versions of reference listed drug products with old (i.e., pre-August 2003) Orange Book patent listings.

The Sandoz petition requested that FDA refuse to approve any ANDA for a generic version of ACTOS and/or ACTOPLUS MET if the ANDA includes a so-called “section viii statement” (for the omission of certain patent-protected information) with regard to U.S . Patent Nos. 5,965,584 (“the ‘584 patent”) and/or 6,329,404 (“the ‘404 patent”), but does not also include a Paragraph IV certification to the respective patent.  This is referred to as a split certification.  FDA has previously explained that although a Paragraph IV certification and a section viii statement “are not overlapping, and an applicant does not have the option of making a [Paragraph IV] certification . . . in lieu of, or in addition to, a [section viii] statement,” a split certification with respect to the same Orange Book-listed patent may be appropriate in certain instances:

If [] there are listed patents that present both a product and method of use claim, the applicant may file a paragraph IV certification with respect to the product patent or patent claim and a [section viii] statement that the product that is the subject of the application does not involve a patented method of use with respect to the method of use patent or patent claim.

Both the ‘584 and ‘404 patents were initially listed in the Orange Book prior to August 18, 2003 and were flagged with method-of-use claims.  August 18, 2003 is the date on which FDA’s June 2003 regulations implementing the FDC Act’s patent listing provisions went into effect, and when the Agency made a technological leap in identifying Orange Book-listed patents.  As FDA explains in the Sandoz petition response:

[A]t the time [the ‘584 and ‘404 patents] were submitted, FDA’s Orange Book database lacked the technological capacity to display a single patent as claiming more than one aspect of the drug.  At that time, FDA’s practice was to display a patent that had been submitted as claiming both a drug product and a method of use only for the method of use for which it had been submitted.  Thus, FDA's Orange Book lists each patent as claiming only a method of use and provides a use code for each patent to identify the use for which it was submitted by Takeda.  To alert users to the limitations of patent listings for patents submitted before August 2003, and make them aware that the Orange Book may not describe the complete universe of patent claims to which an ANDA applicant must certify, the Orange Book includes a notation that “[p]atents listed prior to August 18, 2003 are flagged with method-of-use claims only as applicable and submitted by the sponsor” and that “[t]hese patents may not be flagged with respect to other claims which may apply. . . .”

Patents submitted to FDA after August 18, 2003 may be identified in the Orange Book as covering the drug product, drug substance, and/or an approved method of use. 

Relying on statements in complaints filed by Takeda in patent infringement litigation against other generic applicants for allegedly infringing the ‘584 and/or ‘404 patents, Sandoz asserted that Takeda characterized both patents as including not only method-of-use claims, but drug product claims as well.  As such, Sandoz took the position that FDA could, of its own accord, flag the ‘584 and ‘404 patents in the Orange Book with drug product claims and require generic applicant to submit a split certification to both patents.   

In the meantime, Takeda notified FDA that when the company first submitted the  ‘584 and ‘404 patents to FDA for Orange Book listing, such patents were characterized as containing both method-of-use and drug product claims.

FDA, once again affirming the Agency’s ministerial role in Orange Book patent listing issues, and citing the Agency’s regulations at 21 C.F.R. § 314.53(f) for interested persons to challenge Orange Book patent listings, ruled that the Agency would not independently consider Sandoz’s assertions that statements in Takeda patent infringement complaints serve as evidence that the ‘584 and ‘404 patents cover both method-of-use and drug product claims.  Instead:

In keeping with our practice of relying solely on the NDA sponsor’s patent declaration describing relevant patent claims in Orange Book-listed patents, FDA will rely on Takeda’s patent declarations submitted to FDA.  We have evaluated our records and confirmed that Takeda’s original patent declaration to FDA for the ‘584 and ‘404 patents stated that the patents included drug product claims and method-of-use claims.

So, FDA granted the Sandoz petition and stated that the Agency would consider ANDAs that do not address the relevant drug product claims in the ‘584 and ‘404 patents to be ineligible for final approval. 

FDA also commented that:

Under the plain language of the statute, the patent certification requirement is not triggered by the publication in the Orange Book of patent information submitted to FDA.  Rather, . . . the statute requires certification where the patent (or patent claim) claims a listed drug, and where the NDA holder is required to submit and has submitted that patent information to FDA.  This obligation to certify attaches regardless of whether that submission is accurately reflected in the Orange Book.  Thus, the pre-2003 technological limitations that prevented our Orange Book listings from reflecting the fact that Takeda submitted the patents as claiming both a drug product and a method of using that drug product do not limit Takeda’s rights to receive patent certifications for the drug product claims in the ‘584 and ‘404 patents. . . .  Nor does the absence of the drug product information in the Orange Book deprive the eligible ANDA applicant with the first paragraph IV certification with respect to the patent of eligibility for a l80-day exclusivity period . . . . [(emphasis added; internal citations omitted)]

Thus, generic applicants that plan to submit, or that have pending at FDA, ANDAs for generic versions of drug products with pre-August 2003 Orange Book-listed patents would be wise to check that the appropriate certification was submitted to FDA, and, if there are questions about the accuracy of a particular patent listing, submit to FDA a 21 C.F.R. § 314.53(f) request.

By Kurt R. Karst –      

Just one day after FDA Commissioner, Dr. Margaret Hamburg, testified last week before the U.S. Senate Committee on Appropriations, Subcommittee on Agriculture, Rural Development, FDA, and Related Agencies on FDA’s Fiscal Year 2011 budget request, which includes new user fees, Representative Maurice Hinchey (D-NY) announced the introduction of H.R. 4816, the FDA Improvement Act of 2010 (“FDAIA”).  FDAIA is a sweeping reform bill that would unravel the Prescription Drug User Fee Act and other similar legislation establishing user fee systems for medical devices and animal drugs.

Alleging that FDA “as an institution remains too closely tied to the pharmaceutical industry,” the bill would amend the FDC Act to add § 743 to prohibit FDA from collecting user fees paid by companies, and instead require that those funds be deposited into the general fund of the U.S. Treasury.  And “to ensure there is no reduction in FDA services as a result of the loss of those fees, [FDAIA] provides mandatory funding levels that would be appropriated by Congress to ensure no services are lost.” 

FDAIA would also terminate any existing and future user fee agreements concerning FDA review and action goals on drugs, devices, animal drugs, or generic animal drugs.  Under proposed FDC Act § 744:

On and after the date of the enactment of [FDAIA] . . .  The Secretary may not enter into agreements with such persons on particular uses of the fees, including agreements on priorities, performance goals, or other commitments . . . . Any such agreement or understanding that was in effect on the day before the date of [FDAIA] is terminated . . . .  The Secretary is relieved of responsibility for meeting any particular goals concerning such review times that were established in such letters.

Instead:

The Secretary of Health and Human Services . . . shall submit to the Committees on Appropriations and Energy and Commerce of the House of Representatives and the Committees on Appropriations and Health, Education, Labor, and Pensions of the Senate a comprehensive review of the drug and device application and amendment process to identify ways to increase efficiency, reduce paperwork, speed analysis, and promote the quickest possible decision process designed to ensure the entry of safe, effective drugs and devices into the marketplace.

In addition to significantly changing the long-established user fee systems, FDAIA would:

• Establish an independent Center for Postmarket Drug, Device and Biologic Safety and Effectiveness as a separate center at the organizational level immediately below the Office of the Commissioner.  The new center would monitor all approved drugs and create standards for drug advertisements (FDAIA § 3); 

• Require all direct-to-consumer advertisements to include a toll-free phone number to allow consumers to report negative side effects of prescription drugs to the FDA, and impose new user fees on drug and device advertisements (FDAIA § 4 & § 9); 

• Amend FDC Act § 521 to add a new subsection, titled “No Effect on Liability Under State Law,” which states: “Nothing in this section shall be construed to modify or otherwise affect any action for damages or the liability of any person under the law of any State.”  The provision would apply to any civil action pending or filed on or after the date of the enactment of FDAIA, and would be retroactive to the enactment of the Medical Device Amendments of 1976, which added FDC Act § 521 (FDAIA § 5);

• Enable FDA to mandate changes to labels of FDA-approved products if a new risk is discovered, require Secretary of Health and Human Services to review and revise FDA’s drug labeling regulations “to improve the clarity and readability of such labeling,” and require FDA to make available information on all clinical trial adverse events (FDAIA § 6 & § 7);

• Require that all FDA advisory panels be composed of qualified experts who do not have any financial ties to companies who have a stake in the topic under discussion (FDAIA § 8); and

• Amend the FDC Act to add § 1101 requiring FDA to promulgate regulations requiring that, before prescribing a drug “the physician inform the patient that the use for which the physician intends to prescribe the drug has not been approved by the Food and Drug Administration” and “the physician obtain from the patient an acknowledgment of such fact and the consent of the patient to use the drug for such use notwithstanding such fact.require doctors to inform their patients when they are prescribing a drug for an unapproved use” (FDAIA § 10).

Although Rep. Hinchey is reportedly working to “actively garner support among his colleagues in the House” for FDAIA, there are currently no co-sponsors listed for the bill on THOMAS.  It has little likelihood of passage.

By Ricardo Carvajal –

During a webinar on immunity claims sponsored by the Food and Drug Law Institute, Richard Cleland, Assistant Director of FTC's Division of Advertising Practices, confirmed that enforcement actions are in the works against probiotic products that make inadequately substantiated claims.  FTC is particularly concerned about any "immunity claim [that] conveys a general or specific health benefit beyond just maintaining one's immune system."  In FTC's view, such claims must be supported by "competent and reliable scientific evidence of a clinically significant enhancement of that benefit."  This is the second time in as many months that an FTC attorney has singled out probiotics for scrutiny in public remarks (see our prior post here).

During the webinar, Bruce Silverglade, Director for Legal Affairs at the Center for Science in the Public Interest (“CSPI”), presented that organization's objections to the use of structure/function claims that it regards as misleading.  In CSPI's view, any immunity claim is an implied disease claim, and CSPI is "encouraging" states and the private bar to act accordingly.  Several class actions have already been pursued against major food manufacturers for immunity and other claims on probiotic products, and San Francisco recently challenged the use of an immunity claim on a popular cereal.

By Susan J. Matthees –

A new preemption decision has just come down from a California appeals court (the sixth circuit appellate district).  In two consolidated cases,  McGuan v. Endovascular Technologies, Inc., et al. and Johnson v. Endovascular Technologies, Inc., the appeals court upheld a lower court’s ruling that the Medical Device Amendments Act of 1976 ("MDA") preempt these two personal injury and products liability actions.

Each case involved plaintiffs who suffered injuries after they were implanted with the Ancure Endograft System (Ancure Device).  They were consolidated on appeal.  The appeals court relied on the decision in Riegel v. Medtronic, but with an interesting new twist that may broaden the reach of that case.

The Ancure Device was designed, manufactured, and distributed by Endovascular Technologies ("EVT"), a subsidiary of Guidant.  FDA approved the device in September 1999, but a number of safety problems related to the device soon arose.  Guidant investigated and ultimately recalled the device in March 2001.  After the recall, Guidant allegedly “provided evasive, if not false, information to the FDA” in response to FDA’s request for an audit report.  FDA then approved a modified version device in August 2001.  EVT ultimately entered into a plea agreement in June 2003 for shipping misbranded medical devices between September 1999 and March 2001.  The device was off the market as of June 23, 2003.

Both plaintiffs had the Ancure Device implanted after 2001 and allegedly suffered severe injuries.  McGuan sued under the usual theories of strict product liability, negligence, breach of express and implied warranty, but also added a cause of action for fraudulent concealment.  Johnson likewise added to the usual theories a cause of action for fraud and misrepresentation.  The trial court granted defendants’ motion for summary judgment on the ground that plaintiffs’ claims were preempted by 21 U.S.C. § 360k(a).

Plaintiffs appealed, arguing that their causes of action were not preempted because of the fraudulent conduct by the defendants.  McGuan alleged that defendants “had the duty and obligation [to the plaintiff] to disclose . . . the true facts concerning the Ancure Device product” (i.e., that the device was dangerous and defective).  The court of appeals, however, stated that in order to prevail on this cause of action, a jury would have to find that the warnings were inaccurate.  FDA approved the warnings, so a verdict for the plaintiff would impose warnings that are “different from, or in addition to” those imposed by FDA and thus be preempted.  Thus, the court held that allegations that the defendant has defrauded the plaintiff are not sufficient to evade Riegel preemption. 

Johnson alleged a similar fraud cause of action, but added that the fraud was against “governmental agencies.”  Here, the appeals court concluded that this claim was preempted under Buckman Co. v. Plaintiffs’ Legal Comm, in which the U.S. Supreme Court held that state law fraud-on-the-FDA claims are preempted by federal law.  Johnson tried to distinguish her case from Buckman on the grounds that, unlike in the case against EVT and Guidant, the defendant in Buckman had not been investigated by FDA.  Johnson pointed out that in a concurring opinion in Buckman, Justice Stevens suggested that there might have been a different outcome if “the FDA had determined that petitioner had committed fraud during the § 510(k) process and had taken the necessary steps to remove the harm-causing product from the market.”  The court of appeals was not persuaded, explaining that although FDA investigated the defendants in this case, the agency did not take action and allowed the device to be marketed, so the situation Justice Stevens described did not apply.  In addition, because FDA found no violations of federal law after March 2001, a decision for plaintiff would “conflict with the FDA’s responsibility to police fraud consistently.”

By Kurt R. Karst –      

FDA’s recent announcement that the Agency approved IMPAX Laboratories, Inc.’s (“IMPAX”) ANDA No. 90-377 for the first generic version of Boehringer Ingelheim Pharmaceuticals, Inc.’s (“BI”) popular ($2.1 billion/year) treatment for benign prostatic hyperplasia, FLOMAX (tamsulosin hydrochloride) Capsules, has an interesting Hatch-Waxman backstory to it.  In the words of the A-Team's Hannibal Smith, the folks at IMPAX must have been saying “I love it when a plan comes together” when word came of the ANDA approval. 

FLOMAX is listed in the Orange Book with a single patent – U.S. Patent No. 4,703,063 (“the ‘063 patent”).  The ‘063 patent expired on October 27, 2009, but is subject to a period of pediatric exclusivity scheduled to expire on April 27, 2010.  Several companies, including IMPAX and Ranbaxy, submitted ANDAs for generic FLOMAX prior to expiration of the ‘063 patent.  The IMPAX and Ranbaxy ANDAs contained a Paragraph IV certification to the ‘063 patent.  (Other applicants presumably submitted a Paragraph III certification to the patent.)  Ranbaxy is reported to be a first applicant eligible for 180-day exclusivity.  BI filed patent infringement lawsuits in response to the Paragraph IV certifications: (1) Astellas Pharma Inc. et al. v. Ranbaxy, Inc., Civil Action No. 3:05-cv-02563 (filed May 13, 2005 in the District Court of New Jersey); and (2) Astellas Pharma Inc. et al. v. Impax Laboratories, Inc., Civil Action No. 5:08-cv-03466 (filed July 18, 2008 in the Northern District of California). 

In the patent infringement case against Ranbaxy, the district court ruled in February 2007 in favor of the plaintiffs (ruling that the ‘063 patent is not invalid on grounds of double-patenting).  Ranbaxy appealed the decision to the Federal Circuit.  During the appeal, however, the parties settled the case and entered into a joint stipulation of dismissal without prejudice.  Under the terms of the settlement agreement, Ranbaxy had the opportunity to launch its generic tamsulosin drug product on March 2, 2010, which is 8 weeks prior to the expiration of pediatric exclusivity applicable to the ‘063 patent.  FDA tentatively approved Ranbaxy’s ANDA in June 2007.

In the patent infringement case against IMPAX, IMPAX filed a motion for summary judgment of patent invalidity for double-patenting.  The plaintiffs and IMPAX settled the case in October 2009 before a district court decision, and after FDA tentatively approved ANDA No. 90-377.  The court entered a Consent Judgment acknowledging a negotiated settlement between the plaintiffs and IMPAX.  According to FDA’s ANDA approval letter and an IMPAX press release, the agreement is similar to the agreement reached with Ranbaxy insofar as an early launch date is concerned.  FDA’s approval letter provides additional details on the terms of the agreement: 

This settlement applies to [BI’s] selective and limited waiver of its pediatric exclusivity to IMPAX Laboratories, Inc. for the ‘063 patent as of March 2, 2010, with respect to this ANDA. Concurrent with the agency’s approval of this ANDA, the waiver effectively permits IMPAX Laboratories, Inc. to market Tamsulosin Hydrochloride Capsules, USP beginning on March 2, 2010, prior to the expiration of [BI’s] pediatric exclusivity for the ’063 patent on April 27, 2010.  The selective waiver also applies to [BI’s] exclusivity with respect to product labeling associated with the M-54 exclusivity code due to expire on June 22, 2013.

Interestingly, of the 7 ANDA applicants identified by FDA with tentative approval, IMPAX was the last applicant to obtain tentative approval (in October 2009), but the first company to obtain final ANDA approval.  Although Ranbaxy was eligible for 180-day exclusivity, that exclusivity was forfeited when the ‘063 patent expired, thereby opening the door to subsequent ANDA approvals. 

As we previously reported, Ranbaxy has had good manufacturing practice problems with FDA.  In early 2009, FDA announced that the Agency was taking the unusual step of invoking its Application Integrity Policy (“AIP”) against Ranbaxy’s Paonta Sahib manufacturing facility in India.  FDA takes such regulatory action under the Agency’s AIP procedures when FDA believes that a company’s actions raise significant questions about the integrity of data in marketing applications.  Importantly, FDA notes in the AIP letter with respect to pending ANDAs that:

In accordance with FDA policy, the Agency will assess the validity of the data and information in all of Ranbaxy’s affected applications which contain data developed at the Paonta Sahib site. . . .  This means that the Agency does not intend ordinarily to conduct or to continue its normal substantive scientific review (including review of data and labeling) of any such pending application or supplement, or of any new application or supplemental applications filed after the date of this letter, that contain data developed at the Paonta Sahib site, during a validity assessment of that application.

It is unclear whether Ranbaxy’s inability to obtain final ANDA approval for the company’s ANDA for its generic FLOMAX is due to FDA’s AIP and whether information supporting the ANDA file was generated from the company’s Paonta Sahib facility.  This is reportedly the case, but the basis for this report is not known.  Because 180-day exclusivity for generic FLOMAX was forfeited when the ‘063 patent expired, the issue of how FDA will handle Ranbaxy’s 180-day exclusivity eligibility for pending ANDAs implicated in the Agency’s AIP will apparently have to be saved for another day.

Although the Federal Trade Commission is generally opposed to generic drug settlement agreements, and has expressed support for legislation that would ban such agreements, FDA’s approval of ANDA No. 90-377 is a good example of the benefits of such agreements.  And it is also a good example of how a settlement agreement and a little bit of luck can take an ANDA applicant from last to first. 

By Nisha P. Shah and Ricardo Carvajal –

The title of a report issued by the U.S. Government Accountability Office (“GAO”) neatly sums up that agency’s perspective: “FDA Should Strengthen Its Oversight of Food Ingredients Determined to Be Generally Recognized as Safe (GRAS).”  The report was requested by Tom Harkin, Chair of the Senate Health, Education, Labor, and Pensions Committee, and Rosa DeLauro, Chair of the House Subcommittee on Agriculture, Rural Development, Food and Drug Administration, and Related Entities of the Committee on Appropriations.

The Food, Drug, and Cosmetic Act exempts GRAS substances from the definition of “food additive” and the corresponding requirement that companies obtain FDA premarket approval.  This exemption permits companies to self-determine whether the intended use of a substance is GRAS.  Under a program established by FDA pursuant to a rule proposed in 1997, companies may voluntarily notify FDA of their GRAS self-determination.  FDA has yet to issue a final rule.

In part, the GAO report concludes:

• FDA lacks information about certain GRAS determinations because of the voluntary nature of the GRAS notification program;

• FDA does not systematically reconsider the safety of GRAS substances as new information or methods become available; 

• Because GRAS notification is voluntary and companies are not required to identify engineered nanomaterials in their GRAS substances, FDA has no way of knowing the extent to which these nanomaterials have entered the food supply.

In part, the GAO report recommends:

• FDA should “develop a strategy to require any company that conducts a GRAS determination to provide FDA with basic information … about this determination, such as the substance’s identity and intended uses, and to incorporate that information into relevant agency databases and its public Web site;” 

• FDA should “finalize the rule that governs the voluntary notification program, including taking into account the experience of the program to date, incorporating input from a new public comment period, and reporting to Congress and the public the agency’s timeline for making it final;”

• FDA should “develop a strategy that ensures the safety of engineered nanomaterials that companies market as GRAS substances without the agency’s knowledge, including taking steps such as issuing guidance recommended by the agency’s nanotechnology taskforce, developing an agency definition of engineered nanomaterials, and requiring companies to inform FDA if their GRAS determinations involve engineered nanomaterials.”

More broadly, the report recommends that, “[i]f FDA determines that it does not have the authority to implement one or more of these recommendations, the agency should seek the authority form Congress.”

In its response to the report, FDA generally agreed with GAO’s findings and recommendations.  Although FDA conceded that certain actions are beyond the scope of its current authority (e.g., collecting information about company reconsiderations of the safety of GRAS substances), FDA sidestepped GAO’s broader recommendation that the agency seek whatever additional authority is necessary to implement the report’s specific recommendations.  However, FDA’s response suggests that FDA is mulling all options:

FDA is actively considering steps it can take under current law to improve both premarket and post-market oversight of all added food substances, whether they enter the market based on a GRAS determination or through a formal FDA approval process.  In particular, FDA believes that its ability to oversee the safety of added food ingredients, including GRAS substances, would be enhanced if the manufacturer were required, prior to marketing any new substance or new use of an existing substance, to notify FDA and submit scientific evidence demonstrating the safety and legality of the intended use.  FDA also agrees with GAO that there is a need for enhancement of post-market oversight, including more effective tools for FDA to obtaining from sponsors new information related to the safety of marketed food ingredients sot that FDA is better able to identify substances meriting a substantive post-market review.  Implementation of these ideas would require additional resources, and some may require new legislation.

The current statutory regime for independent GRAS determinations has been in effect for over 50 years, since the enactment of the Food Additives Amendments of 1958.  Independent GRAS reviews have served as a useful tool to enable food products to enter the market with comprehensive safety reviews, without tying up limited government resources.  The GAO report does not identify a single actual safety problem that has been caused by this regime, but instead raises the specter of nanomaterials as an apparent basis for the conclusion that more regulations, and possibly amendments to the FDC Act, are necessary to protect the public.  At the same time, the GAO report fails to acknowledge the current regime’s important role in fostering innovation – not least in the area of biotechnology. 

For its part, FDA currently seems disinclined to recognize the effectiveness of post-market statutory tools in ensuring the safety of food ingredients.  Even so, the considerable benefits of the current regime are implicitly acknowledged in FDA’s response to GAO: “FDA believes that the GRAS concept has continuing utility as a practical tool for distinguishing between substances and new uses of substances that merit a full pre-market safety evaluation by FDA and those that do not.”  Query whether, in tightening its oversight of GRAS, the agency would only be making safe food more expensive. 

By Kurt R. Karst –      

FDA’s recent approval of Nycomed U.S., Inc.’s ANDA No. 78-548 for a generic version of ALDARA (imiquimod) Cream, 5%, appears to be the first instance in which FDA has determined that a first ANDA applicant is eligible for 180-day exclusivity on the basis that there was not a  forfeiture of such exclusivity because of a change in or review of ANDA approval requirements and no other forfeiture provision applied.

FDC Act § 505(j)(5)(D)(i)(IV) – “Failure to obtain tentative approval” – is one of the six 180-day exclusivity provisions added to the FDC Act by Title XI of the 2003 Medicare Modernization Act (“MMA”), and provides that 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 clarrified 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)).) 

As we previously reported, there has been one case in which tentative approval was not obtained within 30 months of ANDA submission and where FDA determined that exclusivity was not forfeited because of a change in or review of ANDA approval requirements – ANDA No. 77-532 (Acarbose Tablets, 25 mg, 50 mg, and 100 mg).  In that case, FDA ruled “that a change in bioequivalence requirements resulted in a delay in obtaining a tentative approval” and did not result in a forfeiture under FDC Act § 505(j)(5)(D)(i)(IV); however, FDA also determined that there was a forfeiture under its interpretation of the failure to market forfeiture provisions at FDC Act § 505(j)(5)(D)(i)(I) (which the D.C. Circuit recently struck down).  In the Acarbose case, although a citizen petition was submitted to FDA, because the petition was submitted to FDA after the date that was 30 months after ANDA submission, FDC Act § 505(q)(1)(G) was not implicated.

FDA’s approval letter for ANDA No. 78-548 explains that the Agency’s “ongoing review” of the requirements for ANDA approval excused the 30-month tentative approval date:

With respect to 180-day generic drug exclusivity, we note that Nycomed was the first ANDA applicant to submit a substantially complete ANDA with a paragraph IV certification to the '944 patent. Therefore, with this approval, Nycomed is eligible for 180 days of generic drug exclusivity for Imiquimod Cream, 5%. . . .  The agency notes that Nycomed failed to obtain tentative approval of this ANDA within 30 months after the date on which the ANDA was filed.  However, the agency has determined that the failure to obtain tentative approval within 30 months was caused by the agency’s ongoing review of the requirements for approval of Imiquimod Cream, 5%, and therefore Nycomed did not forfeit eligibility for 180-day generic drug exclusivity. See section 505(j)(5)(D)(i)(IV) of the Act.

Although FDA received and recently denied to two citizen petitions concerning generic ALDARA Cream (here and here), both petitions were submitted to FDA in July and August 2009.   The 30-month period for ANDA No. 78-548 expired in April 2009, so FDC Act § 505(q)(1)(G) was not implicated. 

UPDATE:

• On March 8th, the U.S. District Court for the District of New Jersey denied Graceway's motion for a temporary restraining order/preliminary injunction in a patent infringement lawsuit filed late last month concerning a newly issued patent that is not Orange Book-listed for ALDARA Cream.  The court noted that the late-filed lawsuit put at risk Nycomed's 180-day exclusivity, which has already been triggered. 

By Kurt R. Karst –      

The U.S. District Court for the Eastern District of Michigan (Southern Division) recently dismissed without prejudice a Complaint filed by Wyeth and granted a Motion to Dismiss filed by Sun Pharmaceutical Industries, Ltd. and Caraco Pharmaceutical Laboratories, Ltd. (“Sun”) in a Lanham Act case concerning the identification of a “polymorph” in the labeling of Sun’s generic PROTONIX (pantoprazole sodium) Delayed-Release Tablets.  PROTONIX contains pantoprazole sodium sesquihydrate as the active ingredient.  Wyeth alleged that “[d]espite expressly representing to the public that they are selling pantoprazole sodium sesquihydrate tablets, Sun and Caraco are actually selling tablets containing a different polymorphic form of pantoprazole sodium, pantoprazole sodium monohydrate,” and that “[b]y selling pantoprazole sodium monohydrate tablets labeled as containing pantoprazole sodium sesquihydrate as the active ingredient, Sun is making a literally false statement regarding the active ingredient of its pharmaceutical product, in violation of the Lanham Act” (emphasis in original), as well as in violation of the Michigan Consumer Protection Act (Mich. Comp. Law § 445.901).

By way of background, FDA has explained in guidance – “ANDAs: Pharmaceutical Solid Polymorphism: Chemistry, Manufacturing, and Controls Information” – that polymorphs are different crystalline and amorphous forms as well as solvate and hydrate forms of the same chemical compound.  Polymorphs of a compound share the same chemical formula and molecular structure, but can have different properties, including melting point, stability, dissolution, and bioavailability.  It is FDA’s longstanding policy that active ingredient “sameness” for ANDA approval purposes is not affected by different polymorphs.  Indeed, the Orange Book Preface states that “[a]nhydrous and hydrated entities, as well as different polymorphs, are considered pharmaceutical equivalents and must meet the same standards and, where necessary . . . their equivalence is supported by appropriate bioavailability/bioequivalence studies.”  For example, FDA has approved generic versions of HYTRIN (terazosin HCL) in an anhydrous form, whereas the innovator product is in a dihydrate form.  FDA has also approved generic versions of ZITHROMAX (azithromycin) in a monohydrate form, whereas the innovator product is in a dihydrate form.  In that case, Pfizer submitted citizen petitions to FDA (here and here) challenging the accuracy of generic ZITHROMAX labeling related to polymorph identification. (FDA has not substantively responded to either petition.)

Sun argued that the complaint should be dismissed, primarily because FDA has the exclusive jurisdiction to determine the appropriate language in drug product labeling.  That argument is that Wyeth sought to inappropriately use the Lanham Act as a vehicle to privately enforce the FDC Act.  As we previously reported, many courts have ruled – including the Seventh Circuit’s recent decision in Schering-Plough Healthcare Products, Inc., v. Schwarz Pharma, Inc., 586 F.3d 500 (7th Cir., 2009) (Hyman, Phelps & McNamara, P.C. represented Schwarz Pharma, Inc. and Kremers Urban, LLC in that case) – that this is not a legitimate use of the Lanham Act.  Sun also argued that Wyeth failed to state a Lanham Act claim “because they fail to plead a necessary element of a false advertising claim – that the deception had a material effect on purchasing decisions because the allegedly false statements are in the package insert, which is not seen by the consumer until after purchase,” and that Wyeth failed to state an unfair competition claim under Michigan law. 

Explaining that “the Court finds that this is a matter that is better left to the FDA’s expertise,” the court ruled that for Wyeth to make a successful claim under the Lanham Act, the FDA must first make a finding under the FDC Act that the ingredient in Sun’s generic PROTONIX is not sesquihydrate.  Moreover, the court commented that:

Plaintiff has not identified, nor has the Court uncovered, a single instance in which a federal court has permitted the manufacturer of a pioneer drug to challenge generic-equivalency representations under the Lanham Act when the defending party markets a FDA-approved, Orange Book-listed generic version of the pioneer drug.

Although the court found that Wyeth “jumped the gun” by suing Sun before FDA addressed the polymorph labeling issue, the court, in dismissing the complaint without prejudice, commented that “[i]f the FDA confirms Plaintiff’s suspicions, however, Plaintiff may be able to sustain its Lanham Act claims.”  So, depending on the outcome of an FDA investigation, there might be more to come on this. 

By Kurt R. Karst –      

We’re food and drug attorneys, not patent attorneys.  So, when the Federal Circuit issued its decision in Forest Group, Inc. v. Bon Tool Co. in late December 2009 concerning the false marking of spring-loaded parallelogram stilts, we didn’t pay any attention to the decision.  (It’s not a Paragraph IV, Orange Book listing, or patent term extension case.)  We’re paying attention now, however!  The decision affects the FDA-regulated industry. 

Over the past several weeks, scores of qui tam actions have been filed against myriad companies – including several drug, device, and cosmetic companies – alleging so-called “false marking” in violation of 35 U.S.C. § 292.  (For a docket list, go to the Gray On Claims Blog.)  This statutory provision provides that:

(a) Whoever, without the consent of the patentee, marks upon, or affixes to, or uses in advertising in connection with anything made, used, offered for sale, or sold by such person within the United States, or imported by the person into the United States, the name or any imitation of the name of the patentee, the patent number, or the words "patent," "patentee," or the like, with the intent of counterfeiting or imitating the mark of the patentee, or of deceiving the public and inducing them to believe that the thing was made, offered for sale, sold, or imported into the United States by or with the consent of the patentee; or Whoever marks upon, or affixes to, or uses in advertising in connection with any unpatented article the word "patent" or any word or number importing the same is patented, for the purpose of deceiving the public; or Whoever marks upon, or affixes to, or uses in advertising in connection with any article the words "patent applied for," "patent pending," or any word importing that an application for patent has been made, when no application for patent has been made, or if made, is not pending, for the purpose of deceiving the public – Shall be fined not more than $500 for every such offense.

(b) Any person may sue for the penalty, in which event one-half shall go to the person suing and the other to the use of the United States.

In other words, it is a violation of 35 U.S.C. § 292 to intentionally mark an item in commerce with a patent number that has expired or that does not protect the item.  Although not a requirement, the FDA-regulated industry regularly places patent information on its product labels and labeling.

In Forest Group, Inc. v. Bon Tool Co., the Federal Circuit ruled that the $500 maximum penalty attaches to each individual article that is falsely marked; however, the Court noted that that “[t]his does not mean that a court must fine those guilty of false marking $500 per article marked. . . .  By allowing a range of penalties, the statute provides district courts the discretion to strike a balance between encouraging enforcement of an important public policy and imposing disproportionately large penalties for small, inexpensive items produced in large quantities.”  The Federal Circuit’s decision  overturned the U.S. District Court for the Southern District of Texas’ (Houston Division) decision that each “offense” is the single decision to falsely mark.  The Federal Circuit commented that:

[The] proposed statutory construction—that the statute imposes a single $500 fine for each decision to falsely mark—would render the statute completely ineffective. Penalizing those who falsely mark a mere $500 per continuous act of marking, which act could span years and countless articles, would be insufficient to deter in nearly all cases. Congress’ interest in preventing false marking was so great that it enacted a statute which sought to encourage third parties to bring qui tam suits to enforce the statute.

Enter the bounty hunters . . . . 

Complaints have been filed against the likes of Novartis, Merck, and L’Oreal for allegedly falsely marking HYPO-TEARS, CLARITIN, and mascara products with labels that bear an expired patent.  If each allegedly falsely marked item distributed is an “offense” subject to a maximum $500 fine, then the monetary damages could be astronomical. 

Although the Federal Circuit is set to hear oral argument soon in Pequignot v. Solo Cup, which concerns the question of intent to falsely mark under 35 U.S.C. § 292, and, as reported by our fellow bloggers over at Patent Docs, the U.S. Senate is considering an amendment to patent reform legislation that would appear to quash the qui tam lawsuits, at this point, the complaints will likely continue to pour in against the FDA-regulated industry.  Firms should review their product labels for expired patent information. 

By Ricardo Carvajal –

The ongoing recall of a widely used flavor enhancer known as hydrolyzed vegetable protein ("HVP") for possible contamination with Salmonella could mushroom to affect thousands of products.  Although no illnesses have been reported thus far and FDA judges the risk to consumers as “very low,” FDA is applying a zero tolerance approach with respect to potentially affected products that are marketed as ready-to-eat, meaning products that will not undergo a kill step such as cooking at the hands of the consumer.  With respect to potentially affected products that are intended to be cooked by the consumer, FDA is advising consumers to read and follow instructions on food preparation and cooking. For now, FDA is not asking for a recall of products that have a validated kill step.

According to senior agency officials, the HVP contamination incident came to FDA’s attention through the Reportable Food Registry ("RFR").  FDA is touting the importance of the RFR in bringing incidents such as this to FDA’s attention, but is also citing this incident as proof of the need for passage of food safety legislation.  In FDA’s eyes, that legislation is needed to help accomplish a shift from response to prevention, including the establishment of standards that would prevent similar incidents.  However, FDA has not as yet revealed any information about conditions of production in the facility implicated in the HVP recall, or explained how the imposition of additional requirements would have prevented the contamination of HVP with Salmonella.