JP Ellison –

The U.S. Attorney's Office for the Western District of Missouri announced three guilty pleas to misdemeanor violations of the FDC Act in connection with the "nationwide recall of pet food and the death and serious illness of countless pets across the United States in 2007."

Sally and Stephen Miller – husband and wife and the owners of ChemNutra Inc. – and ChemNutra itself each pled guilty to 2 misdemeanor counts "one count of selling adulterated food and one count of selling misbranded food." 

Given the defendants' alleged role in this high profile case and the public outrage associated with the widespread death of pets, it seems a pretty safe bet that the U.S. Attorney's Office concluded that there was not evidence against these defendants of intent to defraud and mislead the public or the FDA, which would have made these offenses felonies.  Assuming that there was no such evidence in this case, it is a reminder to all "responsible corporate agents" that the FDC Act imposes strict liability criminal penalties under U.S. v. Park, 421 U.S. 658 (1975). 

By Riëtte van Laack –

The FDA Amendments Act (“FDAAA”) amended the Food, Drug, and Cosmetic Act (“FDC Act”) to create section 417, which directs FDA to establish a Reportable Food Registry (“Registry”).  The purpose of the Registry is to provide a “reliable mechanism to track patterns of adulteration in food [which] would support efforts by [FDA] to target limited inspections resources to protect the public health.”  Section 417 includes requirements for a responsible party (defined as “owner, operator or agent in charge of a . . . facility engaged in manufacturing, processing, packaging or holding foor for consumption in the United States”) to submit “instances of reportable food” to FDA.  In addition, the responsible party must notify immediate previous sources and subsequent recipients of the reportable food.  A “reportable food” is a food “for which there is a reasonable probability that the use of, or exposure to, such article of food will cause serious adverse health consequences or death to humans or animals.”

Pursuant to FDAAA, FDA was to establish the Registry by September 27, 2008.  On May 27, 2008, FDA issued a Federal Register notice stating that the Agency would not meet this deadline, but that the Agency expected to have the Registry ready for operation in Spring 2009.  On June 11, 2009, FDA issued a second Federal Register notice stating that the Registry is again delayed and will be operational on September 8, 2009.  In the same notice, FDA announced the availability of a draft guidance document addressing questions regarding the Reportable Food Registry. 

The draft guidance clarifies the duties of a responsible party under FDC Act § 417.  Most of the information in the draft guidance could be obtained by a careful reading of section 417 and other sections which are referenced in section 417.  However, the draft guidance also clarifies some of the less obvious issues such as the notification duties when more than one responsible party is involved (see question 22); the notification duties when there are multiple immediate previous sources or subsequent recipients (see question 24); and acceptable means of notification (see question 26).

Although not required by law, FDA encourages “responsible parties to contact their FDA district office and state or local public health or regulatory officials as soon as possible if they determine that [a food] is a reportable food.”

The draft guidance also clarifies that FDC Act § 417 does not affect FDA’s position (FDA Compliance Policy Guide 7126.20) regarding salvage of adulterated human or animal food by diverting that food to an acceptable animal food use. 

The guidance does not appear to address questions submitted to FDA in response to the Agency’s May 2008 Federal Register notice, such as how FDA will address issues regarding coordination between FDA and the U.S. Department of Agriculture and whether anyone can report to the internet portal required by FDC Act § 417.

To ensure that FDA considers comments to the draft guidance, the Agency asks that comments be submitted by July 27, 2009.

By Kurt R. Karst & Frank J. Sasinowski –      

FDA’s recent decision to approve the Pancreatic Enzyme Product (“PEP”) CREON (pancrelipase) to help patients with cystic fibrosis and others with Exocrine Pancreatic Insufficiency (“EPI”) digest and absorb nutrients from foods has apparently left the Agency in a quandary about whether or not to grant five years of New Chemical Entity (“NCE”) exclusivity for the drug product.  Although FDA approved CREON in early May 2009, the most recent Orange Book Cumulative Supplement does not yet show any period of exclusivity applicable to the drug product.  (FDA has already granted exclusivity with respect to more recent approvals.)

PEPs have a long and interesting regulatory history.  PEPs have been available in the U.S. since before the enactment of the 1938 FDC Act.  In 1995, FDA concluded as part of its Over-the-Counter (“OTC”) Drug Review for PEPs that OTC PEPs are not generally recognized as safe and effective.  In December 1996, FDA approved one PEP – Organon Inc.’s COTAZYM (pancrelipase [amylase; lipase; protease]) Capsules (NDA No. 20-580) – for the treatment of EPI.  That drug product, which has since been discontinued from marketing, was apparently not granted any period of market exclusivity. 

In April 2004, FDA announced in a Federal Register notice that all PEPs are new drugs and described the conditions for continued marketing of these drug products.  In particular, FDA announced that manufacturers who wish to continue to market PEP drug products must submit NDAs.  In April 2008, FDA published a guidance document to assist manufacturers in preparing and submitting NDAs and stating that the Agency would exercise enforcement discretion for firms who submitted INDs by April 28, 2008 and NDAs by April 28, 2009.  CREON is the first PEP approved under the process described in FDA’s guidance document.

Importantly, FDA states in the PEP notice and guidance document that, for purposes of seeking FDA approval for a generic version of an approved PEP, two PEPs cannot be the same:

For a [PEP] to be submitted as an ANDA, the proposed drug product would have to be shown to contain the same active ingredient(s) as an approved reference listed drug.  Because of the complexity of [PEPs], it is unlikely that currently available physiochemical and biological analytical tools would be able to demonstrate that the active ingredients in [PEPs] from two different manufacturers are the same. [(emphasis added)]

With regard to patient needs, FDA’s PEP notice states:

To meet the needs of patients requiring pancreatic enzyme replacement therapy, [PEPs] in varying dosage forms, enzyme content, and activity are currently being marketed. . . . [T]here is a need for a range of products to remain available for patient use.  The dosage requirements of patients vary, and the appropriate daily dose of pancreatic enzyme supplements must be individualized and adjusted when clinically indicated.  Furthermore, physicians have identified and stabilized their patients on currently available products with different ratios of lipase, protease, and amylase that meet the patients’ needs.  Thus, to meet the dosing requirements and to maintain compliance with treatment, pancreatic supplements are needed with varied concentrations of lipase, protease, and amylase.  Accordingly, FDA will permit currently marketed [PEPs] to be marketed without approved applications until April 28, 2008, to give manufacturers time to conduct the required studies and to prepare and submit applications, and to allow time for [FDA] review of and action on these applications.  [(emphasis added)]

As we previously reported, although FDA initially determined that one PEP was an orphan drug eligible for seven years of orphan drug exclusivity, that designation was revoked after the Agency determined that the U.S. prevalence of EPI was greater than the statutory 200,000 person prevalence established under the Orphan Drug Act when orphan drug designation was requested.  FDA has since stated that “[p]eople of all ages with EPI due to cystic fibrosis, chronic pancreatitis, and other conditions take these products.  The estimated number of patients in the United States with EPI is over 200,000.”

Although FDA stated in the preamble to the Agency’s proposed 1989 regulations implementing the Hatch-Waxman Amendments that “FDA will consider whether a drug contains a previously approved active moiety on a case-by-case basis,” the usual situation in which a drug product is eligible for five-year exclusivity is when it contains only known previously unapproved (that is “new”) active moieties.  FDA has, however, found a drug to be an NCE – post-NDA approval – despite the presence of its active moiety in a previously approved drug.  For example, in July 1993, FDA granted five-year exclusivity to CONDYLOX (podofilox) Topical Solution (NDA No. 19-795), a refined, single-ingredient version of a product already approved in an NDA as a mixture, after the Agency determined that the record of previous NDA approvals did not demonstrate that podofilox was an active ingredient in the mixtures FDA approved.  Specifically, FDA stated in response to a citizen petition (FDA Docket No. 1992P-0051) that although “several previously approved NDA’s contained podophyllum or podophyllum resin . . . these previously approved NDA’s did not characterize podofilox as an active ingredient.  Consequently, your request for five-year exclusivity for podofilox is granted . . . .”  Thus, in rendering its decision that CONDYLOX was entitled to five-year NCE exclusivity, FDA relied on the fact that previously approved NDAs containing podofilox failed to characterize podofilox as an active ingredient. 

More recently, FDA presumed NCE status and granted NCE exclusivity for a drug about which the Agency has insufficient information to know whether or not it contains a previously approved active moiety.  FDA stated this “presumption in favor of NCE status” policy in the context of the Agency’s approval of various non-recombinant hyaluronidase drug products.  In the case of hyaluronidase, uncertainty arose from the fact that such drug products are complex proteins that are not fully characterized.  FDA stated in an October 2005 citizen petition response (FDA Docket No. 2005P-0134)  concerning hyaluronidase exclusivity that:

Generally, if the Agency has insufficient information to know whether a product contains a previously approved active moiety, the applicant would be required to submit an NDA containing substantial clinical safety and efficacy data.  These data requirements could reasonably be expected to be comparable to those that would be needed for approval of an NCE.  Under the presumption, if it is not known whether a product contains a previously approved active moiety, the product also would be treated as an NCE for marketing exclusivity purposes, and, accordingly, granted 5-year exclusivity.  [(emphasis added)]

Importantly, with respect to pancrelipase, FDA stated in the Agency’s exclusivity determination contained in the summary basis of approval package for one hyaluronidase drug product – HYDASE (hyaluronidase) Injection (see pages 15-21) – that “[i]n at least two instances, however, the Agency did not grant NCE status in a circumstance where it might have been presumed . . .  (menotropin/urofollitropin and pancrelipase)” (emphasis added).  It seems reasonable to conclude that FDA’s delayed exclusivity determination for CREON is the result of debate within the Agency over the further application of FDA’s presumption in favor of NCE status, and how FDA can meet the stated “need for a range of products to remain available for patient use” if the Agency ultimately decides to grant three-year new clinical investigation exclusivity instead of five-year NCE exclusivity.  It is unclear whether FDA will soon make a decision, but we will be closely watching this case.  

By Jamie K. Wolszon –

Earlier this month, a U.S. District Court for the Northern District of California judge refused to dismiss a criminal indictment of the former Chief Executive Officer (“CEO”) of InterMune for misbranding and wire fraud charges connected to the off-label promotion of Actimmune (Interferon gamma-lb).  The judge rejected an argument that the First Amendment of the U.S. Constitution prohibits the government from relying upon a company press release and related communications alleged to be part of the wire fraud and misbranding that the defendant reportedly committed. 

The judge also held that the press release and related communications discussing the off-label promotion are labeling.  Although FDA views press releases as labeling, and has issued warning letters based on this position, the judge’s order appears to be the first judicial ruling to explicitly endorse that agency position.

FDA approved Actimmune to treat chronic granulomaous disease.  It subsequently approved the use of the drug to treat severe, malignant osteopetrosis in 2000.  The facts that led to the criminal charges, as alleged in the indictment, are as follows:

• InterMune conducted a Phase III clinical trial to determine the efficacy of treating idiopathic pulmonary fibrosis (IPF) patients (patients with fibrotic scar tissue in their lungs) with Actimmune.  In August 2002, data from the clinical trial failed to show efficacy for this indication.  The company performed after-the-fact subgroup analysis suggesting a survival trend for patients with mild-to-moderate IPF. 

• Former InterMune CEO, W. Scott Harkonen and other InterMune officials met with FDA reviewers who informed them that the trial data, including the subgroup analysis, were insufficient for approval of the indication.  Harkonen designed and enrolled patients for another study, but ultimately discontinued the additional study. 

• On August 28, 2008, the company released the press release with the headline: “InterMune Announces Phase III Data Demonstrating Survival of Actimmune in IPF,” with the subheading “Reduces Mortality by 701 percent in Patients with Mild to Moderate Disease.” Harkonen wrote both the headline and the byline and controlled the content of the press release. 

• In addition to the press release, the company conducted a market research study that indicated that the press release would increase the willingness of pulmonologists to prescribe Actimmune for IPF.  Harkonen also collaborated with a specialty pharmacy that sent a fax blast of the press release to more than 2,000 pulmonologists.  The pharmacy distributed information from the press release in a letter to patients taking Actimmune.

The first count of the March 2008 two-count indictment charged Harkonen with violating the federal wire fraud statute.  The second count charged Harkonen with “making false and misleading statements and doing acts, with ‘intent to defraud or mislead,’ resulting in drugs being misbranded while held for sale following shipment in interstate commerce under” the Federal, Food, Drug and Cosmetic Act.”

Harkonen’s attorneys filed a motion in limine, or, in the alternative, a motion to dismiss the indictment.  Defendant argued that the court should exclude from jury consideration the press release and related communications because they are not labeling and because the First Amendment protects those communications.  In the alternative, Harkonen requested dismissal of the indictment in its entirety.

The order discussed the constraints that the First Amendment imposes on FDA.  “While the FDCA prohibits speech that promotes off-label uses for approved drug products (which thereby ‘misbrands’ the drug), the government cannot wholesale prescribe the open dissemination of scientific opinions and ideas.  Such a prohibition has been deemed to violate the First Amendment rights of the speakers to communicate scientific information and engage in scientific discourse about such products.”  In particular, the court referenced the Washington Legal Foundation’s challenge to FDA restrictions on the dissemination of reprints of truthful, non-misleading peer-reviewed articles and text book excerpts.

The judge found the free speech argument to be unavailing as to the InterMune press release. “It is undisputed that the government has the right to regulate false and misleading statements made to doctors and patients about drug products in interstate commerce.  Accepting the indictment’s allegations as true for the purposes of this motion, it is clear to the court that the speech at issue is not outside the bounds of the FDCA’s regulatory reach as being wholly protected by the First Amendment as a matter of law.”

The judge also held that the press release and related materials are labeling under the FDCA and the guidelines the U.S. Supreme Court established in the landmark case Kordel v. United States.

Along with its discussion of the specific communications, the court noted generally that “both the FDA regulations and the case law make clear that labeling under the FDCA is construed expansively, such that it may encompass nearly every form of promotional activity, including package inserts, pamphlets, mailing pieces, fax bulletins, reprints of press releases, and all other literature that supplements, explains, or is otherwise textually related to the product.”

By Ricardo Carvajal –

In an increasingly common exercise of the agency’s authority under FDC Act § 404, FDA announced that is has it has suspended the temporary Emergency Permit issued to Evanger's Dog & Cat Food Co., Inc. in April 2008.  Under § 404 and its implementing regulations at 21 CFR Parts 108 and 113, FDA has authority to issue an Order of Need for Emergency Permit to a processor of thermally processed low-acid canned food ("LACF") that fails to meet statutory and regulatory requirements applicable to the processing of that food.  A subsequent failure to comply with the terms of the emergency permit can result in a suspension of that permit, effectively shutting down the processing operations that fall within the scope of the permit.

FDA cranked up its § 404 enforcement machinery in 2007 when human consumers came down with botulism attributed to under-processed chili.  Subsequent inspections uncovered potentially under-processed green beans.  This latest action suggests that FDA is serious about bringing both pet and human LACF processors to heel.

By Kurt R. Karst –      

Will FDA apply the Agency’s pre-Medicare Modernization Act (“MMA”) “holding-on-the-merits standard” to the post-MMA “failure to market” 180-day exclusivity forfeiture provisions?  It is a reasonable question, and one that FDA has not yet definitively answered.  Nevertheless, there appears to be some indication that FDA will apply a holding-on-the-merits standard post-MMA.  

Prior to the enactment of the MMA, 180-day exclusivity was triggered by the earlier of: (1) the first commercial marketing of the drug by a first filer; or (2) “the date of a decision of a court in [a patent infringement action] holding the patent which is the subject of the certification to be invalid or not infringed.”  Under the MMA, only the first commercial marketing of the drug by a first applicant triggers 180-day exclusivity.  The pre-MMA court decision trigger was essentially moved to FDC Act § 505(j)(5)(D)(i)(I)(bb), where it serves to calculate a “later of” date under the failure to market forfeiture provisions. 

The issue of whether the pre-MMA court decision trigger requires a decision of a court that on its face evidences a holding on the merits of patent non-infringement, invalidity, or unenforceability was litigated on several occasions.  Historically, FDA interpreted the court decision trigger at FDC Act § 505(j)(5)(B)(iv)(II) (2003) to mean an actual court decision holding on the merits that a patent is invalid, not infringed, or is unenforceable.  Based on two decisions of the U.S. Court of Appeals for the District of Columbia Circuit in 1999 and 2000 concerning generic TICLID (ticlopidine), however, FDA began interpreting the court decision trigger under an estoppel-based standard that required FDA to evaluate whether a patentee is estopped from suing for patent infringement.  Those district court decisions are Teva Pharm. USA, Inc. v. FDA, 182 F.3d 1003 (D.C. Cir. 1999) (“Teva I”) and Teva Pharm. USA, Inc. v. FDA, No. 99-5287, 2000 U.S. App. LEXIS 38667 (D.C. Cir. Nov. 15, 2000) (“Teva II”).  FDA believed that as a result of the Teva I and Teva II decisions, the Agency was compelled to apply an estoppel-based standard, under which the Agency evaluated whether a patentee was estopped from suing for patent infringement for 180-day exclusivity triggering purposes.

Several years later, in Teva Pharm., USA, Inc. v. FDA, 398 F. Supp. 2d 176 (D.D.C. 2005), Teva challenged an FDA decision that a dismissal of a declaratory judgment action brought by Apotex concerning generic PRAVACHOL (pravastatin sodium) triggered Teva’s 180-day exclusivity.  On appeal, the U.S. Court of Appeals for the District of Columbia Circuit held in Teva Pharm., USA, Inc. v. FDA, 441 F.3d 1, 5 (D.C. Cir. 2006) (“Teva III”) that FDA’s decision was arbitrary and capricious because “FDA mistakenly thought itself bound by our decisions in Teva I and Teva II,” and stated that rather than establishing a requirement for FDA to apply an estoppel-based standard, the court in Teva I had simply found FDA’s decision to apply a holding-on-the-merits standard lacking in reasoned decision-making.  In short, the court only found the court decision trigger ambiguous and “left the final decision to FDA” to interpret the statute.  

FDA responded to the Teva III decision in an April 11, 2006 letter to ANDA applicants.  In that letter, FDA states that the Agency:

interprets the language of the court decision trigger provision . . . to require a court decision with an actual “holding” on the merits that the patent is invalid, not infringed, or unenforceable.  The holding must be evidenced by language on the face of the court’s decision showing that the determination of invalidity, noninfringement, or unenforceability has been made by the court.  FDA’s experience in making court decision trigger determinations bears out the difficulty in implementing a broader, estoppel-based standard that requires the agency to evaluate whether the patentee is estopped from suing for infringement.  FDA’s “holding-on-the-merits” interpretation adheres closely to the language of the statute, and will provide a bright line that is more easily administrable by FDA and that will enable industry to make appropriate business planning decisions.

(Although FDA’s pravastatin decision was issued after the enactment of the MMA, because the earliest pravastatin ANDA containing a Paragraph IV certification was submitted to FDA prior to the MMA’s enactment date – i.e., December 8, 2003 – the pre-MMA version of the FDC Act with respect to triggering 180-day exclusivity applied.)

Therefore, FDA decided in the pravastatin case that Teva’s 180-day exclusivity had not been triggered by the dismissal of Apotex’s patent infringement litigation.  Apotex promptly sued FDA and lost – both in the U.S. District Court for the District Columbia and the U.S. Court of Appeals for the District of Columbia Circuit. 

Apotex subsequently sued FDA on the Agency’s application of the holding-on-the-merits standard with respect to generic ZOFRAN (ondansetron) ANDAs.  (As with the pravastatin ANDAs discussed above, the pre-MMA 180-day exclusivity triggers applied.)  In that case, Apotex challenged a November 3, 2006 FDA decision in which the Agency determined that a stipulation of dismissal of patent infringement litigation does not satisfy FDA’s holding-on-the-merits standard.  FDA stated in its November 3, 2006 decision that “[i]t is not enough that the court order reflects the views and commitments of the parties.  The court itself has to have made a substantive determination on the merits of the patent claim.”  Both the U.S. District Court for the District Columbia and the U.S. Court of Appeals for the District of Columbia Circuit denied Apotex’s requested relief. 

FDA has not, to our knowledge, definitively stated whether or not the Agency will apply its pre-MMA holding-on-the-merits standard post-MMA.  Indeed, FDA states in both the pravastatin and ondansetron decisions that “[t]he agency’s determination to apply the ‘holding-on-the-merits’ standard under the pre-MMA statute does not reflect an agency view as to the proper scope or interpretation of . . . any . . . forfeiture provision in the MMA.”  Notwithstanding a definitive decision from FDA, as well as some legislative history (i.e., 149 Cong. Rec. S15885 (daily ed., Nov. 25, 2003)) made at a time when FDA – and presumably Congress – believed that under the pre-MMA version of the FDC Act FDA was compelled by the courts to apply an estoppel-based standard, FDA appears to be leaning towards applying its holding-on-the-merits standard post-MMA. 

In particular, FDA’s May 7, 2008 analysis of the applicability of the MMA’s failure to market forfeiture provisions to generic PRECOSE (acarbose) states that a declaratory judgment action of non-infringement and invalidity voluntarily dismissed without prejudice is not a litigation-related event that factors into a forfeiture analysis under FDC Act § 505(j)(5)(D)(i)(I)(bb)(AA) and (BB).  Specifically, FDA states in the letter that:

To date, no action for infringement of the ‘769 patent has been brought against Cobalt or any subsequent applicant.  As noted in the background on Cobalt’s ANDA above, on October 17, 2007, Cobalt filed an action for declaratory judgment of non-infringement and invalidity of the ‘769 patent.  This case has been voluntarily dismissed without prejudice.  No court has entered a final judgment of invalidity or non-infringement, and no court has signed a settlement order or consent decree entering final judgment of invalidity or non-infringement.  Therefore, neither of the litigation-related events factor into the forfeiture analysis. [(emphasis added)] 

FDA’s statements in the acarbose decision are not dispositive of the Agency’s position on the applicability of the holding-on-the-merits standard post-MMA.  A future court decision or FDA’s long-awaited proposed regulations implementing the MMA’s 180-day exclusivity provisions should provide clearer guidance.

On June 12th, the U.S. House of Representatives voted 307-97 on final passage of H.R. 1256 – The Family Smoking Prevention and Tobacco Control Act.  The U.S. Senate overwhelmingly passed the bill on June 11th with a 79-17 vote.  President Obama is expected to sign the bill into law shortly.  Copies of the House Report on the bill are available here (Part 1) and here (Part 2).  As we previously reported, the bill gives FDA the authority to regulate tobacco products, including cigarettes and smokeless tobacco.  Hyman, Phelps & McNamara, P.C. is analyzing the 218-page bill and will post on it in the near future.

By Ricardo Carvajal –

Much ink has already been spilled detailing the burdens that draft federal food safety legislation would impose on industry (click here for the latest version of the  Food Safety Enhancement Act of 2009 (“FSEA”)).  Little has yet been said about the burdens that the legislation would impose on FDA.  A quick tally suggests that FDA would be required to issue or amend six regulations, and perhaps as many as ten (some provisions give FDA the option of issuing a guidance document instead of a regulation).  FDA would be given discretionary authority to issue or amend four additional regulations (perhaps as many as eight).  In addition, the legislation would impose continuing reporting requirements on FDA in several areas.  All of these burdens are in addition to those that would result from the aggressive inspection schedule that the legislation would impose on the agency.

The draft legislation’s rulemaking and other requirements would surely soak up substantial resources within FDA.  To gauge their potential impact, one need look no further back than 2002, when the rulemaking requirements associated with the Bioterrorism Act appeared to derail a number of the agency’s other food-related initiatives.  Even with substantial increases in funding, a similar outcome seems likely if FSEA passes in anything resembling its current form. 

By Kurt R. Karst –      

On June 10th, the Federal Trade Commission (“FTC”) announced the release of its highly anticipated report on Follow-On Biologics (“FOBs”).  The 120-page report, titled “Emerging Health Care Issues: Follow-On Biologic Drug Competition” is the product of an FTC Roundtable held in November 2008 (see our previous post here) and public comment on competitive issues involving FOBs.  The report comes at a time when Congress is poised to consider FOB legislation (see our previous posts here and here)  with varying periods of market exclusivity and patent resolution processes.  (Another FOB bill is expected soon from Senator Ted Kennedy (D-MA).)  Earlier this week, Representative Henry Waxman (D-CA), who is the sponsor of one FOB bill, sent a letter to President Obama praising the President for his support of FOBs in the FY 2010 Budget, and urging him “to consider what steps can be taken under current law to prepare and even begin to approve safe and effective generic biologics, in advance of legislation.”  On June 11th, the Subcommittee on Health of the House Energy and Commerce Committee will hold a hearing on FOB competition issues that will specifically focus on the FTC report. 

Below are some of the general conclusions taken from the FTC report. 

1.    Competition Between a Biologic Drug and an FOB is Much More Likely to Resemble Brand-to-Brand Competition than the Dynamics of Brand-Generic Competition under Hatch-Waxman.

• The substantial costs to obtain FDA approval, plus the substantial fixed costs to develop manufacturing capacity, will likely limit the number of competitors that undertake entry with FOB products. 

• Given these high entry costs, FOB entrants are likely to be large companies with substantial resources, and it is likely that only two to three FOB entrants will seek approval to compete with a particular pioneer biologic drug.

• The lack of automatic substitution between an FOB product and a pioneer biologic drug will slow the rate at which an FOB product can acquire market share and thereby increase its revenues.

• An FOB drug also may have difficulty gaining market share due to concerns about safety and efficacy differences between a pioneer biologic drug and the competing FOB.

• The specialty pharmaceutical characteristics of FOBs also are likely to constrain the ability of an FOB entrant to obtain market share.

• Biologic drugs currently are not reimbursed pursuant to strategies that payors often use to incentivize the use of lower-priced drugs; this, too, may limit market share acquisition by FOBs.

• As a result of these factors, FOB competition against a pioneer biologic drug is likely to develop as follows:  FOB entry is likely in biologic drug markets of greater than $250 million. Only two or three FOB manufacturers are likely to attempt entry for a given pioneer drug product. These FOB entrants are unlikely to introduce their FOB products at price discounts any larger than between 10 and 30 percent of the pioneer products’ price.  Although not as steep a discount as small-molecule generic drugs, a 10 to 30 percent discount on a $48,000 drug product represents substantial consumer savings. Pioneer manufacturers are expected to respond and offer competitive discounts to maintain market share. This price competition is likely to lead to an expanded market and greater consumer access.  Nonetheless, the lack of automatic substitution will slow significant market share acquisition by FOB products. As a result, pioneer manufacturers are likely to retain 70 to 90 percent of their market share and, therefore, will likely continue to reap substantial profits years after entry by FOB drugs.

2.    Existing Incentives that Support Brand-to-Brand Competition Among Biologic Drugs – Patent Protection and Market-Based Pricing – Are Likely to be Sufficient to Support FOB Competition and Biologic Innovation.

• A Twelve- to Fourteen-Year Exclusivity Period is Unnecessary to Promote Innovation by Pioneer Biologic Drug Manufacturers.

• Special Procedures to Resolve Patent Issues Between Pioneer and FOB Drug Manufacturers Prior to FDA Approval Are Unnecessary and They Could Undermine Patent Incentives and Harm Consumers.

• FOB Drug Manufacturers Are Unlikely to Need Additional Incentives to Develop Interchangeable FOB Products.

By Kurt R. Karst –      

The U.S. Court of Appeals for the Federal Circuit’s recent decision in Abbott Labs. v. Sandoz, Inc. concerning U.S. Patent No. 4,935,507 (“the ‘507 patent”) covering OMNICEF (cefdinir) has been discussed at length in the blogosphere for its possible implications on the future of product-by-process patents (see e.g., Patent Baristas and Patent Docs).  The court’s decision, which considered appeals from both the U.S. District Court for the Eastern District of Virginia (Lupin Ltd. v. Abbott Laboratories, 484 F. Supp. 2d 448 (E.D. Va. 2007)) and the U.S. District Court for the Northern District of Illinois (Abbott Labs. v. Sandoz, Inc., 486 F. Supp. 2d 767 (N.D. Ill. 2007)), is also important in that it means a court will not likely soon address the issue of multiple Patent Term Extensions (“PTE’s”).

We previously reported that the U.S. Patent and Trademark Office (“PTO”) granted two PTEs with respect to two patents following FDA’s December 4, 1997 approvals of NDAs for OMNICEF.  One PTE was for U.S. Patent No. 4,559,334 with respect to NDA No. 50-739 for OMNICEF Tablets.  Another PTE was for the ‘507 patent with respect to NDA No. 50-749 for OMNICEF Oral Suspension.  As we discussed in our previous post, the PTE statute states (at 35 U.S.C. § 156(c)(4)) that “in no event shall more than one patent be extended . . . for the same regulatory review period for any product.”  The PTO interprets 35 U.S.C. § 156(c)(4) to permit multiple PTEs under certain circumstances – specifically, for a drug product covered by several patents the PTO may extend a different patent for each NDA approved on the same first day (even when multiple NDAs share common “testing phase” and a “review phase” dates).  That is, the PTO considers each NDA “regulatory review period” to be distinct and for which a PTE is available. 

There are only a few cases in which the PTO has granted or companies have been eligible for multiple PTEs for different patents covering the same product approved under separate NDAs on the same first day.  For example, in addition to OMNICEF, the PTO has granted multiple PTEs for LYRICA (pregabalin) – one for U.S. Patent No. 6,001,876 with respect to NDA No. 21-723, and another for U.S. Patent No. 6,197,819 with respect to NDA No. 21-446.  FDA also approved two NDAs on the same first day for MYCAMINE – NDA No. 21-506 for MYCAMINE for prophylaxis of Candida infections in patients undergoing hematopoietic stem cell transplantation, and NDA No. 21-754 for MYCAMINE for the treatment of esophageal candidiasis.  In that case, the NDA sponsor applied for two PTEs based on these approvals – one for either U.S. Patent Nos. 5,376,634, 6,265,536, or 6,107,458 for NDA No. 21-506, and one for either of these same patents for NDA No. 21-754 – but ultimately decided not to elect a second PTE.  More recently, FDA approved two NDAs on the same first day for VIMPAT (lacosamide) – NDA No. 22-253 for VIMPAT Tablets and NDA No. 22-254 for VIMPAT Injection – and the NDA sponsor is seeking a PTE for different patents with respect to each NDA approval (see PTE applications here and here).

Lupin argued as part of its ‘507 patent infringement case in the U.S. District Court for the Eastern District of Virginia that “[t]he issuance of two PTEs for regulatory review periods involving cefdinir as the active ingredient was not authorized under 35 U.S.C. § 156,” and requested that the court declare the ‘507 patent PTE invalid.  However, Abbott and Lupin later entered into an agreement (a Stipulated Order of Dismissal) concerning the ‘507 patent.  As part of that agreement, Lupin’s claim concerning the PTE for the ‘507 patent was dismissed without prejudice.  However, the Stipulated Order of Dismissal also stated that Lupin may reassert that claim in the event that the court’s final judgment on other claims in the litigation are not affirmed, and are remanded, on appeal.  The Federal Circuit in Abbott Labs. v. Sandoz, Inc. affirmed that the “Eastern District of Virginia properly concluded on summary judgment that Lupin’s cefdinir product did not infringe” certain claims in the ‘507 patent.  Given this ruling, Lupin will not need to reassert its claim that the PTE for the ‘507 patent was invalid.  

By Kurt R. Karst –      

Galderma Laboratories L.P. (“Galderma”) recently submitted a citizen petition to FDA (also see our Citizen Petition Tracker) requesting that the Agency interpret the QI Program Supplemental Funding Act of 2008 (“QI Act”) to impose a 30-month stay of approval of an ANDA referencing an old antibiotic drug product if that ANDA contains a Paragraph IV certification to a patent that was listed in the Orange Book in accordance with § 4(b)(1) of the QI Act.  The QI Act was enacted on October 8, 2008 and amended the FDC Act to add new § 505(v) – “Antibiotic Drugs Submitted Before November 21, 1997” – to create Hatch-Waxman benefits for so-called “old” antibiotics. 

Earlier this year, FDA received and responded to four citizen petitions arguing that a 30-month stay should apply.  Those petitions argued, among other things, that the plain language of the QI Act requires application of the 30-month stay provisions of the original Hatch-Waxman Amendments, rather than the version of the statute amended by the Medicare Modernization Act, which limits 30-month stays such that a generic applicant with a pending ANDA that amends its application to add a Paragraph IV certification to a later-listed patent is not subject to a 30-month stay in connection with that certification.  FDA determined that:

under the QI Act, no 30-month stay of approval will apply to an ANDA referencing an old antibiotic based on the grounds that the ANDA contains a paragraph IV certification to a later-listed patent and the NDA holder or patent owner has sued the ANDA applicant for patent infringement as a result of notice of the paragraph IV certification.  We note that, under current law, a 30-month stay will apply to an ANDA referencing an old antibiotic if that ANDA contains a paragraph IV certification to a patent submitted to the Agency before the ANDA was submitted, and the NDA holder or patent owner sues the ANDA applicant for patent infringement as a result of notice of the paragraph IV certification.

Galderma’s petition concerns the old antibiotic drug product ORACEA (doxycycline).  According to Galderma, Mylan submitted an ANDA to FDA containing a Paragraph IV certification to patents listed in the Orange Book for ORACEA in accordance with the QI Act, and Galderma timely sued Mylan for patent infringement.  (FDA’s Paragraph IV Certification List does not yet identify this ANDA submission.) 

Galderma states that its citizen petition is “entirely distinguishable” from the previous QI Act 30-month stay citizen petition submitted to FDA: “Unlike prior petitioners, Galderma does not contend that Congress, via the QI Act, directed FDA to apply the applicable statutory provisions of the original Hatch-Waxman Amendments as enacted in 1984, rather than as subsequently amended by Congress.”  Furthermore, Galderma states that the company “agrees with FDAs Denial Letter that ‘it is reasonable, both as a matter of statutory construction and sound public policy, to interpret section 505(v)(4) [of the QI Act] to require the application of the current law to old antibiotics . . . there is a strong argument that Congress intended this result.’” 

Indeed, according to Galderma, “this is precisely Galderma’s position – that Congress clearly intended to treat ‘old antibiotics’ consistent with ‘new antibiotics’ pursuant to current law, and that a single 30-month stay should apply to both classes of products.”  Galderma summarizes its argument as follows:

In sum, no previous petitioner argued, as this petitioner does, that the intent of Congress, embodied in the terms of the transition provisions of the QI Act, was to grant the opportunity to obtain both a single 30-month stay of ANDA approval and 180-day generic exclusivity to the holders of NDAs and ANDAs covered by the Q1 Act.  Although FDA addressed certain issues related to this petition in its recent Denial Letter, FDA has not directly addressed the issues raised herein as applicable to ORACEA.

It is unclear how fast FDA will act on this new petition.  FDA responded to the other four QI Act petitions witin several weeks of submission.

By Kurt R. Karst –      

Recent decisions by the U.S. District Court for the Eastern District of Virginia and the U.S. District Court for the District of Columbia in PhotoCure ASA v. Dudas and Wyeth Holding Corp. v. United States, respectively, concerning certain Patent Term Extension (“PTE”) issues have been appealed to the U.S. Court of Appeals for the Federal Circuit.  The PhotoCure case is of particular interest because the Federal Circuit’s decision will likely have broad implications. 

PhotoCure concerns a PTE request for U.S. Patent No. 6,034,267 (“the ‘267 patent”) covering the human drug product METVIXIA (methyl aminoevulinate hydrochloride), which FDA approved on July 27, 2004 under New Drug Application (“NDA”) No. 21-415.  As we previously reported, the U.S. Patent and Trademark Office (“PTO”) denied a PTE for the ‘267 patent based on an analysis of the “first permitted commercial marketing” criterion in the PTE statute.  (Under 35 U.S.C. § 156(a)(5)(A), the term of a patent claiming a drug shall be extended from the original expiration date of the patent if, among other things, “the permission for the commercial marketing or use of the product . . . is the first permitted commercial marketing or use of the product under the provision of law under which such regulatory review period occurred.” (emphasis added))  Specifically, the PTO applied an “active moiety” interpretation of the PTE law (rather than an “active ingredient” interpretation) and determined that METVIXIA does not represent the first permitted commercial marketing or use of the product because of FDA’s December 1999 approval of an NDA for LEVULAN KERASTICK (aminolevulinic acid HCl) Topical Solution, which contains the active moiety aminolevulinic acid (“ALA”).  Thus, according to the PTO, METVIXIA does not represent the first permitted commercial marketing or use of ALA and the ‘267 patent is ineligible for a PTE.  PhotoCure promptly sued the PTO. 

The court in PhotoCure ruled that the PTO’s decision to deny a PTE with respect to ‘267 patent was “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law” under the Administrative Procedure Act.  In issuing its decision, the court applied the “active ingredient” interpretation of the PTE law and determined that “the ‘267 patent covering Metvixia satisfies § 156(a)(5)(A) . . . .” 

Wyeth concerns a PTE request for U.S. Patent #4,916,154 (“the ‘154 patent”) covering Wyeth’s new animal drug CYDECTIN (moxidectin) Pour-On.  FDA approved CYDECTIN Pour-On on January 28, 1998 under New Animal Drug Application (“NADA”) No. 141-099.  The NADA was reviewed under FDA’s Phased Data Review Policy and Administrative NADA process (i.e., a process permitting rolling submission and review of marketing application sections).  FDA determined that the date NADA No. 141-099 was “initially submitted” to the agency for PTE purposes was January 13, 1998, when the final NADA component was submitted to the Agency, thus resulting in a 16-day approval period and a short PTE period for the ‘154 patent.  Wyeth sued FDA and contended that a 16-day approval period “is unreasonable,” and argued that the NADA was “initially submitted” to FDA on August 8, 1995 when the company submitted the first technical section to its application.  As we previously reported, the court ultimately ruled in FDA’s favor.

Both the PTO and Wyeth have appealed their respective district court decisions to the U.S. Court of Appeals for the Federal Circuit.  Both cases will be closely watched, and in particular the PhotoCure case.  The district court decision in PhotoCure has already been used to support a PTE request for reconsideration, arguments in a recent PTE case concerning enantiomers, and was cited in a recent FDA docket submission concerning the availability of New Chemical Entity (“NCE”) exclusivity for pro-drugs. 

Specifically, AstraZeneca has argued that the PhotoCure decision supports the company’s efforts to obtain a PTE for U.S. Patent No. 5,817,338 (“the ‘338 patent”) covering PRILOSEC OTC (omeprazole magnesium) Delayed-Release Tablets.  As we previously reported, the PTO determined that the ‘338 patent is not eligible for a PTE because the PRILOSEC OTC NDA was not the first permitted commercial marketing or use of omeprazole (and also because the PTE application was not timely submitted).  That is, the PTO applied an  “active moiety” interpretation of the PTE statute and concluded that PRILOSEC OTC is not the first permitted commercial marketing or use of the product, because the term “product” in the PTE statute ultimately means “the underlying molecule or ion (excluding those appended portions of the molecule that cause it to be a salt or ester) responsible for the physiological or pharmacological action of the drug.”

The PhotoCure decision has also been cited in post-trial communications (here and here) in a case concerning a PTE granted by the PTO with respect to U.S. Patent No. 5,053,407 (“the ‘407 patent”) covering Ortho McNeil-Janssen Pharmaceutical, Inc.’s enantiomer drug product LEVAQUIN (levofloxacin).  As we previously reported, the U.S. District Court for the District of New Jersey ruled last month that the PTE granted with respect to the ‘407 patent is valid.  Lupin challenged the validity of the ‘407 patent PTE on the basis that the “marketing of levofloxacin would not be the ‘first permitted commercial marketing or use’ of the active ingredient (levofloxacin) as either a single entity or in combination with another active ingredient” given FDA’s previous approval of the racemate drug FLOXIN (ofloxacin).  Both parties contend that the PhotoCure decision is consistent with their arguments.  The district court’s decision has been appealed to the Federal Circuit. 

In addition, the PhotoCure decision has been used to support a position that FDA should affirm its decision to grant a period of five-year NCE exclusivity for the pro-drug VYVANSE (lisdexamfetamine dimesylate) Capsules.  As we previously reported (here and here), FDA has been sued over its decision to grant NCE exclusivity for VYVANSE and its refusal to accept an ANDA for a generic version of the drug product.  That litigation has been put on hold while FDA solicits and considers public comment (Docket No. FDA-2009-N-0184) on pro-drug NCE exclusivity issues.  In a recent docket submission, one company argues that the PhotoCure decision “supports FDA’s decision that Vyvanse is entitled to five-year NCE exclusivity.”

By Jamie K. Wolszon –
 
FDA has announced the establishment of a cross-agency task force to craft recommendations on how to increase transparency regarding the agency’s operations, activities, processes and decisionmaking, including product approvals, enforcement actions, and product recalls, while protecting confidential information.  The agency has set up a docket and the task force plans to convene two public meetings to gather input: FDA’s task force will hold the first public meeting on June 24th, as announced in a June 3rd Federal Register notice, with a second meeting to follow in the fall.  Additional information on FDA’s Transparency Task Force is available here, and includes, among other things, the creation of an “FDA Transparency Blog.”
 
Principal Deputy Commissioner Joshua M. Sharfstein will chair the task force.  The task force also will include the center directors, the associate commissioner for regulatory affairs, the chief counsel, and the chief scientist.  The task force will report its findings and recommendations to the commissioner approximately six months after it is convened.  The task force is part of a broader effort by the Obama administration to bolster transparency and openness across the federal executive branch. 

FDA recently launch a redesigned website that is aimed at improving the “look and feel” of all FDA websites.  According to the Agency:

The new site organization is intended to allow you to find information more quickly:

• Information is categorized by topic for easier retrieval, with related subjects consolidated in sections on the site.
• Page design and navigation have been updated and are consistent throughout the site.
• Content has been reviewed for relevance, with redundant and outdated content removed.

As a result of the new design, current web page addresses (i.e., URLs) no longer work, including those URLs that FDA Law Blog has linked to in many posts.  We are working to update URLs from previous posts; however, if you encounter a broken link, please report it to us so that we may make any corrections.  Thank you!

The thought of federal agents storming the offices of an FDA-regulated company may seem far-fetched to some, but it is becoming a common reality, according to Hyman, Phelps & McNamara, P.C. attorneys John R. Fleder and William T. Koustas in a recent article in FDLI's Update publication. FDA, in coordination with other federal agencies, is more aggressively using criminal search warrants to collect evidence, catching unsuspecting companies by surprise.

Given FDA's increasing use of criminal search warrants, companies regulated by FDA should take precautionary steps to ensure that their business is prepared to deal with the possibility of a FDA criminal search, rather than risk the consequences of being caught unaware.