By James P. Ellison –

FDA’s November 12, 2008 Federal Register Notice of its Direct Final Rule to comply with the Federal Civil Penalties Inflation Adjustment Act, 28 U.S.C. § 2461 note, is not in itself a blogworthy event, but it could be part of something bigger. 

While FDA has used its civil penalty authority sporadically (for example settling in July of this year with Advanced Bionics LLC for $1.1M based on an administrative complaint seeking $2.2M), generally speaking, based on historical enforcement, one would not list FDA civil penalty actions among the top ten things likely to keep CEOs in FDA regulated industries up at night.  But see The Pursuit of Civil Money Penalties— An Important Weapon in FDA’sEnforcement Arsenal (discussing the TMJ Implants case).

A new administration, the FDA Amendments Act ("FDAAA"), and an inflation increase for older civil penalties may just be the triple threat that civil penalties need to move up that top ten list of things keeping CEOs awake, however. 

The law requires FDA to adjust its civil monetary penalties at least one time every 4 years to account for inflation, and FDA last adjusted these penalties in 2004.  While the increases do not affect the new civil penalty authority granted FDA under FDAAA in 2007, the Notice does list the nine (9) new civil penalties created by FDAAA, which we previously described.

The resulting new 21 C.F.R. § 17.2  may now have sufficient heft to warrant more FDA enforcement resources, especially because of coincidental timing that nevertheless almost compels one to speculate about the enforcement priorities of an Obama administration FDA.

The FDA’s Rule was published as a direct final rule, which means that FDA did not believe notice and comment rulemaking was necessary under the Administrative Procedure Act.  To prevent the Rule from becoming final, significant adverse comments on it are due by January 26, 2009 (i.e., 6 days after Inauguration Day).  If no such comments are received, the increased civil penalties become effective on March 27, 2009, by which time a new President may have selected a new FDA Commissioner who is just getting down to work on enforcement priorities.

By Jeffrey N. Wasserstein –

First, it was the son of the former Nigerian dictator who wanted my bank account information (I’m still waiting for the bank transfer, by the way!).  Now, apparently FDA “special agents” are in on the act.  In a scam originating out of the Dominican Republic, scammers impersonating FDA personnel are extorting money from unwitting consumers.  Don’t be fooled:  FDA personnel do not call you on the phone demanding money – they leave that to the Department of Justice. 

By Ricardo Carvajal & Diane B. McColl – 

FDA has announced a pretest of a survey instrument designed to gather information about five issues relevant to modernization of the food CGMP regulations at 21 C.F.R. Part 110.  The food CGMP regulations are essentially unchanged since 1986, and the information to be solicited by the survey will assist FDA in its effort to revise the regulations. The survey will focus on five issues: employee training, sanitation and personal hygiene, allergen controls, process controls, and recordkeeping.  Selection of these issues was based on a report issued in 2005 by CFSAN’s Food CGMP Modernization Working Group.  After considering public comments, that group concluded that there is “generally strong support for limited revision of the CGMP regulation.”

Several factors are likely to influence the outcome of FDA’s food CGMP modernization effort.  First and foremost is whether FDA will have sufficient resources to devote to the task given its other existing food safety and defense responsibilities, and the new ones that are almost certain to be heaped upon the agency in the coming year. Second is whether FDA chooses to maintain the relative vagueness of the existing regulations, which has been lauded by some as permitting needed flexibility for a highly heterogeneous industry, but criticized by others as being so flexible as to mean little.  If the dietary supplement CGMP final rule is any indication, a revised food CGMP regulation could be considerably more detailed than current Part 110.  Third is whether someone chooses to raise a challenge on some of the more contentious issues at play (records maintenance and access requirements other than those mandated under the Bioterrorism Act stand out in this regard).

For the moment, an overhaul of Part 110 appears to be what FDA has in mind.  But as events unfold, if that climb proves to be as steep and lengthy as it did with FDA’s issuance of the dietary supplement CGMP final rule (10 years!), FDA could choose to tackle the highest risk food CGMP issues piecemeal by issuing more guidance documents such as those that address fresh-cut fruit and vegetable safety and Listeria in ready-to-eat foods.  That approach would not satisfy those who want specific, enforceable requirements, but it’s an approach that could yield a decent return on investment – not a small thing in these lean times.

By Dara Katcher Levy & Ricardo Carvajal –      

On November 12, 2008, FDA issued an Import Alert on all food containing milk products from China.  The Import Alert was issued because of concerns over melamine contamination of China’s milk products, including Chinese infant formula, which has been linked to 53,000 illnesses and at least four infant deaths.  To request removal from the new Import Alert, firms will need to provide (1) evidence of five consecutive non-violative shipments (demonstrated through independent laboratory analyses and subsequent FDA release); (2) documentation from a third-party, in whom FDA has sufficient confidence, demonstrating that controls are in place such that products will not be contaminated with melamine and melamine analogues; and (3) documentation that the firm is in compliance with all Chinese government requirements for exporting the product to the United States. 

Notably, the new Import Alert references appropriate standards for third party laboratories to test for melamine and cyanuric acid in foods.  In 2007, FDA issued an Import Alert on bulk vegetable proteins from China before it had established acceptable testing standards for melamine.  For several weeks thereafter, compliant products were subjected to unnecessary import delays.  Without appropriate testing standards in place, importers were left with no means of providing adequate information to FDA to secure the product’s release from Customs.  It appears that this scenario will not repeat itself.  However, a different, equally unpleasant scenario appears to be unfolding.  Although the Import Alert is for food containing milk products, foods that do not contain milk products but are imported using a product code listed in the Import Alert also are likely to be detained (e.g., cereal preparations, snack foods, and candy specialties).

On November 13, 2008, FDA published a Federal Register notice requesting comment on its October 3, 2008 “Interim Safety and Risk Assessment of Melamine and its Analogues in Foods for Humans.”  The agency’s interim assessment concludes that, “based on currently available data and information, there is too much uncertainty for FDA to establish a level of melamine and its analogues in infant formula that does not raise public health concerns.”  For other foods, the assessment concludes that levels of melamine below 2.5 ppm do not raise public health concerns.  The Federal Register notice states that the assessment “was developed rapidly due to the extremely time-sensitive need to understand the nature of the potential risk.”  In addition to seeking public comment, the agency will seek peer review of the assessment.

FDA’s initial conclusion that the presence of melamine in food (other than infant formula) at levels below 2.5 ppm does not raise public health concerns will be of no comfort to importers.  Under the new Import Alert, the amount of melamine permitted in foods is zero.

By Kurt R. Karst –      

On November 12, 2008, the U.S. Supreme Court issued its opinion in Winter v. Natural Resources Defense Council, Inc.  The case concerns the Navy’s power to use “mid-frequency active” sonar in military training exercises.  The Court, dividing 6-3 (Chief Justice Roberts wrote for the majority), overturned a federal judge’s order against the Navy’s use of the active sonar. 

Okay . . . so what does this have to do with Food and Drug Law, you ask?  Well, the Court clarified the law regarding the standard for obtaining a preliminary injunction.  And motions seeking a preliminary injunction are commonplace in Food and Drug Law litigation – most notably in Hatch-Waxman litigation. 

According to the Court, a plaintiff seeking a preliminary injunction must meet a four-part test.  He must establish: (1) that he is likely to succeed on the merits; (2) that he is likely to suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in his favor; and (4) that an injunction is in the public interest.  In this case, the district court and the Ninth Circuit held that when a plaintiff demonstrates a strong likelihood of succeed on the merits, a preliminary injunction may be entered based only on a “possibility” of irreparable harm.  In commenting on this “possibility” standard, the Supreme Court concluded that:

[T]he Ninth Circuit’s “possibility” standard is too lenient.  Our frequently reiterated standard requires plaintiffs seeking preliminary relief to demonstrate that irreparable injury is likely in the absence of an injunction. . . .   Issuing a preliminary injunction based only on a possibility of irreparable harm is inconsistent with our characterization of injunctive relief as an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.

Keep this opinion and the Court’s high “irreparable harm” standard in mind the next time you consider seeking injunctive relief. 

By Jeffrey N. Wasserstein & William T. Koustas –

On November 12, 2008, Senate Finance Committee Chairman Max Baucus released a white paper detailing what he sees as the substantial problems in our health care system.  The paper, titled “Call to Action: Health Reform 2009” (“the Baucus Plan”) details the Chairman’s concerns about the state of our nation’s current health care system as well as possible solutions.

Chairman Baucus divides his plan into three sections: (1) increasing access to affordable health care by placing some responsibility on individuals, increasing existing government health care programs such as CHIP, strengthening the employer-based system, creating a Health Insurance Exchange for families and small businesses, increasing access to preventative care and address health care disparities in minority or immigrant communities; (2) improving the value of health care by reforming how that care is delivered to patients by using Federal reimbursement systems to improve the value placed on the role of the primary care provider, focusing payment incentives on the quality of care and not the quantity, modifying payment systems to encourage collaboration and accountability and improving the health care “infrastructure” by using health information technology and new research to determine which treatments work best; and (3) making the health care system use the money it receives more efficiently by eliminating waste, fraud and abuse, providing greater transparency in the health care system, reforming medical malpractice to reduce costs and spending, eliminating overpayments to private insurance providers in Medicare Advantage program, reforming long-term care and implementing tax incentives to promote the use of health care services directly by the consumer.

The Baucus Plan includes some provisions that may have a substantial impact on drug and device companies.  First, it mandates disclosure of “gifts and other transfers of value made by drug and device companies to physicians and other health care professionals.”  The Baucus Plan notes that the AMA and PhRMA have each adopted conduct codes to reduce inappropriate relationships, but argues that only complete and total disclosure can determine potential bias and inappropriate influences.  Presumably, this would incorporate the proposed Federal Sunshine Act. Second, the Baucus Plan seeks to create an independent private, non-profit entity called the Health Care Comparative Effectiveness Research Institute (“the Institute”).  The Institute would be responsible for conducting studies that assess the comparative utility of nearly everything used in modern medicine, from drugs and devices to procedures and services.  The results of these studies would be used by patients, providers and insurers to determine the most effective means of treatment for a specific individual, thus reducing costs and making health care delivery more efficient.  Obviously, the findings of the Institute would have a substantial impact on utilization of drugs and medical devices.

In addition to the new programs discussed above, the Baucus Plan also advocates the expansion of government programs already in place.  First, as a temporary measure, the Plan would allow Americans 55 to 64 to “buy-in” to Medicare coverage for people who could not afford private insurance or who are not receiving coverage from an employer, until the Health Insurance Exchange was created.  Second, the Baucus Plan would reform Medicaid to create a mandatory national eligibility minimum of 100 percent of the Federal poverty level and also require states to help manage costs associated with unanticipated demand for Medicaid, while also mandating Medicaid eligibility to everyone living in poverty.  Additionally, Chairman Baucus argues that Congress should extend Medicaid Rebates to drugs used by enrollees in Medicare Part D plans who are eligible for both Medicaid and Medicare (“dual eligibles”) since discounts negotiated by drug plans are usually less substantial than those required under the Medicaid Drug rebate Program.  Finally, the Baucus Plan suggests that the Federal government assist states with the costs of CHIP in order to expand enrollment.   Increasing the pool of beneficiaries eligible for the various programs will likely increase drug companies’ Medicaid Rebate liability for their covered outpatient drugs reimbursed under Medicaid, as well as providing additional downward pricing pressure as patients move into government-sponsored programs.

Finally, as part of the plan's attempt to reduce fraud, waste, and abuse, Chairman Baucus seeks to increase penalties and punishments of those who intentionally defraud the system.  In order to meet these goals, the Baucus Plan will increase resources to agencies that are primarily responsible for fighting fraud and abuse, such as HHS OIG, GAO, Medicaid Fraud Control Units, Medicare Payment Advisory Commission and law enforcement agencies. 

All of the proposed reforms discussed have far-reaching consequences to anyone involved in the health care industry, including drug and device companies.  While the ideas in Chairman Baucus’ plan may undergo substantial revision as additional healthcare reform proposals are formulated by the new Obama Administration and debated within Congress, the plan serves as a signal of the direction Congress is likely to take in the 111th Congress. 

By Michelle L. Butler –

We previously posted on the expanded certification requirements mandated by section 102(a)(1) of the Consumer Product Safety Improvement Act of 2008 (“CPSIA”).  Today, the Consumer Product Safety Commission (“CPSC”) published on its website an immediate final rule regarding these certification requirements.  CPSC, Final Rule, Certificates of Compliance with Rules under the Consume Pt Safety Act and Similar Rules, Bans, Standards and Regulations under any other Act Enforced by the Consumer Product Safety Commission (Nov. 10, 2008) (the “Final Rule”).  A copy of the document can be found here.  (Due to the federal holiday, the Federal Register was not published today.  We presume that the Final Rule will be presented for pre-publication inspection tomorrow, November 12, 2008, and published in the Federal Register on Thursday, November 13, 2008.)

The Final Rule streamlines the certification requirements of section 14(a) of the Consumer Product Safety Act (“CPSA”).  The CPSC has determined that the sole entity required to issue a certificate for imported products is the importer, and the sole entity required to issue a certificate for domestically produced products is the manufacturer.  The Final Rule states that a certificate for an imported product “must be available to the Commission from the importer as soon as the product or shipment itself is available for inspection in the United States.”   For domestic products, the certificate “must be available to the Commission from the manufacturer prior to distribution into domestic commerce.”   The preamble to the Final Rule notes that, with respect to imports, “after [an] initial period of adjustment, failure to abide by the general certificate requirement will subject shipments to refusal of admission into the country and potential destruction.” 

The Final Rule also provides information pertaining to the content of the certificate.  The CPSC “suggests” that the issuer of a certificate “maintain test records supporting the certification for at least three years.” 

According to the Final Rule, electronic certification satisfies the “accompany” and “furnish” requirements pertaining to the certification.  Specifically, the Final Rule states that:

[a]n electronic certificate satisfies the “accompany” requirement if the certification is identified by a unique identifier and can be accessed via a World Wide Web URL or other electronic means, provided the URL or other electronic means and the unique identifier are created in advance and are available, along with access to the electronic certificate itself, to the Commission or to the Customs authorities as soon as the product or shipment itself is available for inspection.

 “An electronic certification satisfies the ‘furnish’ requirement if the distributor(s) and retailer(s) of the product are provided a reasonable means to access the certificate.”  Further, “[a]n electronic certificate shall have a means to verify the date of its creation or last modification.” 

The CPSC is issuing this rule as an immediately effective final rule due to the short implementation timeline mandated by the CPSIA.  In its justification for an immediate final rule, the CPSC notes that the “certification requirements established by the CPSIA go into effect for products manufactured on or after November 12, 2008.”   The CPSC also justifies the streamlining in the Final Rule based on the multiple short deadlines imposed by the CPSIA, the CPSC’s lack of resources, and confusion over the new certification requirements as evidenced by the many inquiries received by the CPSC.   The CPSC stated that

[w]hile the Commission expects every company to make best efforts to comply promptly with the new general certificate requirements, the Commission’s resource limitations under the continuing resolution will force it to focus more on a product’s compliance with our safety rules.  The certificate is evidence of compliance and therefore it is appropriate to concentrate initially more on the substantive requirements underlying the certificate than on the certificate or the form of the certificate itself.

The preamble also notes that the CPSC recognizes the necessity of clarification for aspects of the certification program, and it will be working to resolve uncertainties, including via posting of additional FAQs. 

By James R. Phelps –

On November 7, 2008, the First Appellate District in the Court of Appeal of the State of California, which sits in San Francisco, issued a remarkable decision in Conte v. Wyeth, Inc.  The court said:  “We hold that the common law duty to use due care owed by a name-brand prescription drug manufacturer when providing product warnings extends not only to consumers of its own product, but also to those whose doctors foreseeably rely on the name-brand manufacturer’s product information when prescribing a medication, even if the prescription is filled with the generic version of the prescribed drug.”

Lawyers should read the entire opinion.  However, for present purposes, the interesting part of the decision is this:  The plaintiff’s successful argument was that Wyeth should have warned doctors that its product (metoclopramide) and the generic forms of its product should be administered for no more than 12 weeks at a time.  Conte was given a generic by her physician, and she claimed the physician didn’t give her the warning and she took the drug for a longer period, causing her harm.  Conte relied upon the fact that the alleged misrepresentations she used as the basis for her claim appeared in the labeling of Wyeth’s product, Reglan, and in a monograph on Reglan it provided for the Physician’s Desk Reference (“PDR”).  The generics used the language of the monograph in the FDA-approved labeling for their products.  Conte’s physician said he did not rely on the monograph, but he also said he had “probably” read it; he also acknowledged generally using the PDR.  That, the court ruled, was enough to raise a factual issue requiring a trial, and it reversed the summary judgment that had been granted for Wyeth.

The implications of this finding are potentially vast.  Product liability defense lawyers have expressed surprise and deep concern that the net of liability should be spread to include those who did not make or market the drugs that are the subject of tort litigation.  The decision, if it stands or is followed, certainly will further complicate the relationship between generic and brand name manufacturers.

Hat tip to Drug and Device Law Blog.

By Ricardo Carvajal –   

According to a web site set up by GAO to aid the 2009 congressional and presidential transition, the need to revamp oversight of food safety is one of several pressing issues that demand urgent attention.  Since the early-1990’s, GAO has issued a long string of reports that criticize numerous aspects of the federal government’s system for oversight of food safety.  GAO has been especially critical of the fragmented nature of the current system, noting that multiple agencies are tasked with administering 30 or more laws, resulting in “inconsistent oversight, ineffective coordination, and inefficient use of resources.”  Resource constraints are highlighted as a particular problem for FDA.

GAO previously advocated establishment of a single food safety agency, but its new transition web site stops short of reiterating that recommendation.  Instead, GAO urges the President to  “consider alternative structures for oversight of food safety to facilitate interagency coordination,” and suggests that Congress “commission the National Academy of Sciences or a blue ribbon panel to conduct a detailed analysis of alternative organizational food safety structures,” among other measures.  GAO also recommends that Congress enact “comprehensive, uniform, and risk-based food safety legislation.”

It is not difficult to find areas of the current food safety oversight system that are sorely in need of improvement.  However, devising cost-effective measures that will yield tangible improvements is another matter.  Let’s hope that the urge to do something is tempered by the restraint needed to ensure that matters are not made worse.

By Carrie S. Martin –

On October 16, 2008, the U.S. District Court of the District of Columbia issued an opinion in Hays v. Leavitt holding that the “least costly alternative” policy implemented by the Centers for Medicare and Medicaid Services (“CMS”) was contrary to the Medicare Act, 42 U.S.C. § 1395, et seq. (the “Act”).  The court granted summary judgment for Plaintiff Ilene Hays, a Medicare beneficiary, finding that Defendants unlawfully limited the reimbursement rate of DuoNeb (albuterol sulfate; ipratropium bromide), an inhalation drug, to the “least costly alternative,” contrary to Congressional intent.  Another plaintiff, Dey, L.P., the manufacturer of DuoNeb, was dismissed as lacking standing to sue.

In April 2008, the defendants, four Medicare contractors, issued a local coverage determination (“LCD”) for DuoNeb, changing the drug’s reimbursement from the average sales price to the “least costly alternative,” in this case, separate doses of DuoNeb’s active ingredients, albuterol and ipratropium.  Plaintiffs sued, arguing that the policy was contrary to § 1395y(a) of the Act, which prohibits the reimbursement of any expenses for “items and services” that are not “reasonable and necessary.”  Although the Act allows Medicare contractors, in certain circumstances, to determine what payments are barred under the “reasonable and necessary” standard through LCDs, Plaintiffs argued that application of that policy to DuoNeb was contrary to law.  Plaintiffs pointed to the explicit payment scheme for inhalation drugs set forth in the Act (42 U.S.C. §§ 1395u(o)(1)(G)(ii), 1395w-3a.).  Defendants, however, argued that the term “reasonable and necessary” was ambiguous and could be read to modify “expenses” rather than “items” or “services.”  Such a reading justified the LCD issued for DuoNeb. 

The court, analyzing the arguments under the familiar Chevron standard, concluded that the “most natural reading” of the law is that the term “reasonable and necessary” modifies “items and services.”  Furthermore, the court found that – contrary contrary to Defendants’ arguments – the explicit language of § 1394w-3a indicated that Congress did not intend the “reasonable and necessary” requirement to be construed broadly to allow LCDs for drugs like DuoNeb, which have pre-existing statutory payment schemes.  Hence, the court held that “Congressional intent is clear and section 1395y(a) does not authorize the Secretary [of the U.S. Department of Health and Human Services] to set a payment rate for an item or service that differs from the statutory formulary in section 1395w-3a.” 

By Bryon F. Powell –

On November 4, 2008, the United States District Court for the Middle District of Florida granted Defendants AstraZeneca’s and Parexel’s Motions to Dismiss in Ironworkers Local Union No. 68 v. AstraZeneca Pharmaceuticals LP.  In this case, the Plaintiffs, various union health and benefit funds and an individual consumer, claimed that the Defendants violated “the federal Rackeeteer Influenced and Corrupt Organizations ("RICO") statute and state consumer protection laws as well as common law claims for fraud, misrepresentation, civil conspiracy and unjust enrichment” on the basis that the Defendants allegedly misrepresented the safety and efficacy of the antipsychotic drug SEROQUEL (quetiapine fumarate), including via alleged off-label promotion.  The court dismissed the two RICO claims based on the Plaintiffs’ failure to show that their injuries were caused by the Defendants’ alleged scheme to defraud.

AstraZeneca Pharmaceuticals LP was represented by a number of law firms.  Parexel was ably represented by the Boston law firm of Sally & Fitch LLP through attorneys Kurt S. Kusiak, Peter E. Ball, Amber Anderson Villa, and William G. Cosmas.

This case continues a trend by the courts to dismiss off label use cases filed by private (non-government) plaintiffs.  See our earlier post on this subject: “Another Court Hammers an Off-Label Use Case.”

By Kurt R. Karst –      

Earlier today, the U.S. Court of Appeals for the District of Columbia Circuit issued its opinion in Teva Pharmaceuticals USA, Inc. v. Leavitt.  The case concerns the availability of 180-day exclusivity for a generic version of Janssen Pharmaceutica’s schizophrenia drug RISPERDAL (risperidone) Tablets based on Teva’s Paragraph IV certification to U.S. Patent #5,158,952 (“the ‘952 patent”).  Teva argued that the ‘952 patent was incorrectly removed from the Orange Book after the company submitted an ANDA with a Paragraph IV certification to the patent, because the annual paper version of the Orange Book listed the ‘952 patent while FDA’s electronic version did not.  In November 2006, U.S. Court of Appeals for the District of Columbia Circuit decided in Ranbaxy Laboratories Ltd. v. Leavitt that FDA may not delist a patent from the Orange Book following the submission of an ANDA with a Paragraph IV certification to that patent.

Teva sued FDA in March 2008 after the Agency denied a citizen petition Teva submitted in August 2007 requesting that FDA relist the ‘952 patent in the Orange Book and confirm Teva’s eligibility for 180-day exclusivity.  Teva argued in its petition (and in court) that because the “official Orange Book” (that is, the printed edition of the Orange Book) listed the ‘952 patent when the company submitted its ANDA, “FDA’s putative delisting of the ‘952 patent did not become effective until January 2002, when the official Orange Book reflected the delisting of that patent.”  As such, according to Teva, given the decision in Ranbaxy, FDA could not have lawfully delisted the ‘952 patent because of the company’s Paragraph IV certification to that patent, and the company remained eligible for 180-day exclusivity.

On April 11, 2008, Judge Royce C. Lamberth of the U.S. District Court for the District of Columbia issued a 2-page order siding with Teva.  The order declared that the delisting of the ‘952 patent was unlawful, ordered FDA to relist the patent in the Orange Book and to restore Teva’s Paragraph IV patent certification, and enjoined FDA from approving any generic RISPERDAL Tablets ANDAs until Teva’s 180-day exclusivity expires.  FDA appealed the decision.

As we previously reported, on September 12, 2008 (the same day that oral argument was heard), a 3-judge panel of Circuit Judges Brown, Kavanaugh, and Senior Circuit Judge Williams filed a per curiam judgment vacating the district court’s April 11, 2008 injunction and reversing the district court’s order.  The Court also issued its mandate on September 12, 2008.

The Circuit Court’s November 7, 2008 decision, in conformity with the Court’s September 12, 2008 mandate and per curiam judgment, reverses the district court’s decision, vacates the district court’s injunction, and directs for the entry in judgment for FDA.  In reaching its decision, the Court states:

Teva’s ANDA did not meet the clear and unambiguous requirements of the statute because it did not and could not include a certification to a patent that claimed Risperdal . . . .  [(emphasis added)]

Unfortunately for Teva, an ANDA applicant’s right to a period of marketing exclusivity does not vest merely because a paragraph IV certification is filed. Only compliance with paragraph IV triggers exclusivity, and compliance presupposes the existence of a claiming patent.  The claim is a prerequisite; without it, there can be no valid certification.  Inadvertent failure by the agency to meet its separate publication requirement cannot defeat facts. Indeed, for this Court to accept Teva’s position, we would have to accept the proposition that even partial inadvertence is sufficient.  The electronic version of the Orange Book reflected the withdrawal of the ‘952 patent at least a month before Teva submitted its certification. Teva’s argument goes beyond punishing Agency inadvertence; it would reward willful blindness on the part of manufacturers – a position clearly at odds with Hatch-Waxman’s focus on fostering competition and lowering drug prices.

In a concurring opinion, Senior Judge Williams wrote “to clarify an ambiguity in the majority decision:”

The panel opinion says on the one hand that “a ‘claim’ is simply a description of the subject a patent purports to cover as established by the NDA holder.”  Maj. Op. at 6 (emphasis added).  This seems to imply that the statute requires the FDA to accept the NDA holder’s listing and delisting decisions, imposing on it the ministerial role that it has chosen for itself.  On the other hand, the majority opinion describes the FDA’s choice to adopt a ministerial role as a “common-sense policy choice” that is merely “consistent with the statute.”  Id. at 7.  I have seen no reasoning either in this opinion or in those of other courts that would support the idea that the statute mandates a ministerial role; for this case, all that is needed is a conclusion that the FDA’s adoption of that role is reasonable.

Senior Judge Williams repeatedly refers to the Fourth Circuit's 2002 decision in aaiPharma Inc. v. Thompson, in which FDA argued that its role with respect to patent issues is purely ministerial, while the plaintiff argued that FDA has to make its own determination about Orange Book patent listing.  The Fourth Circuit adopted FDA’s interpretation of the FDC Act as reasonable; however, Senior Judge Williams notes that “had the FDA adopted the plaintiff’s position and sought to protect third-party patent holders, the aaiPharma court would have viewed that construction of the statute as reasonable too.”  He concludes that “to read the majority opinion as implying that the statute locks the FDA into a ministerial role would be inappropriate.  Such a reading would prevent the FDA from taking a more active role in the listing process, thereby better protecting third parties’ rights, and finds no support in the cases cited by the majority opinion . . . .”

By Kurt R. Karst –

Answer: "October 24, 2008" . . . .  queue Jeopardy!  think music . . . .  Question: "What is the date on which patent information was first listed in the Orange Book covering an old antibiotic drug product?"  Alex Trebek: "Correct!"   

On October 24, 2008, the Electronic Orange Book listed information on three patents covering MiddleBrook Pharmaceuticals' MOXATAG (amoxicillin extended-release) Tablets – specifically, U.S. Patent Nos. 6,544,555, 6,669,948, and 6,723,341.  MOXATAG, a once daily product, was approved earlier this year under NDA #50-813 for tonsillitis and/or pharyngitis secondary to Streptococcus pyogenes in adults and pediatric patients 12 years and older.  Hyman, Phelps & McNamara, P.C. is proud to have assisted MiddleBrook in its efforts to obtain Orange Book patent listing.   

The Orange Book listing of patent information on old antibiotic drug products – i.e., antibiotic active ingredients (and derivatives of such ingredients) included in an application submitted to FDA for review prior to November 21, 1997, the date of enactment of the FDA Modernization Act – was made possible with the October 8, 2008 enactment of Section 4 – "Incentives For The Development Of, And Access To, Certain Antibiotics" – of the "QI Program Supplemental Funding Act of 2008" (Pub. L. No. 110-379).  As we previously reported, the 1984 Hatch-Waxman Amendments excluded antibiotic drugs, which were then approved under FDC Act § 507, from the Act's patent and non-patent market exclusivity provisions (except for the availability of a patent term extension); however, Pub. L. No. 110-379 amended the FDC Act to add § 505(v) – "Antibiotic Drugs Submitted Before November 21, 1997" – to make Hatch-Waxman benefits available. 

With respect to Orange Book patent listing, Section 4(b)(1) of the new law states that for "a patent issued before [October 8, 2008], any patent information required to be filed with [FDA] under [FDC Act § 505(b)(1) or (c)(2)] to be listed on a drug to which [FDC Act § 505(v)(1)] applies, shall be filed with [FDA] no later than 60 days after the date of enactment of this Act."  Section 4(b)(2) of the Act requires FDA to  publish such patent information in the electronic version of the Orange Book "as soon as it is received, but in no event later than the date that is 90 days after enactment of this Act."  Generic companies that amend their pending ANDAs not later than 120 dates after enactment of the new law to include a Paragraph IV certification to a newly-listed old antibiotic drug patent are considered "first applicants" for 180-day exclusivity purposes.  Provided FDA interprets the law consistent with changes made to the FDC Act by the Medicare Modernization Act, generic applicants that amend a pending ANDA to include a Paragraph IV certification should not be subject to a 30-month stay of approval if sued by the NDA holder or patent owner for patent infringement within the statutory 45-day period.  Presumably a company that first submits an ANDA containing a Paragraph IV certification after patent information is listed in the Orange Book could be subject to a 30-month stay if such generic applicant is sued for patent infringement within the statutory 45-day period.    

By Ricardo Carvajal –      

FDA recently published a notice of a proposed collection of information that solicits comments on the use of its new electronic system, called MedWatch^Plus Portal, for the collection, submission, and processing of adverse event reports and other safety information for all FDA-regulated products.  FDA intends to use the new system to meet the agency’s obligations under § 417(b) of the FDC Act – added by § 1005 of the FDA Amendments Act of 2007 ("FDAAA") – which requires that FDA establish a Reportable Food Registry and electronic portal by September 27, 2008.  As we discussed more fully in our FDAAA summary, § 417(d) requires a responsible party to submit an instance of a reportable food to the electronic portal within 24 hours for possible inclusion in the registry.  That reporting requirement went into effect on September 27.  However, FDA previously acknowledged that it would not meet the September deadline for establishment of the electronic portal, and indicated that it was developing a system that was expected to be operational in Spring 2009.  The agency appears to be on track to meet its target date.  In the interim, FDA has instructed industry to continue reporting instances of food adulteration to the relevant FDA District office.

By Diane B. McColl & Ricardo Carvajal –  

FDA has published a final rule and a draft Compliance Policy Guide (“CPG”) on prior notice of imported food shipments under the Bioterrorism Act of 2002 (“BT Act”).  The final rule and draft CPG are available here.  The BT Act added § 801(m) to the FDC Act to require that FDA receive prior notice for food imported or offered for import into the United States.  Inadequate prior notice can lead to refusal of admission.  FDA and the U.S. Customs and Border Protection ("CBP") have operated under the terms of an Interim Final Rule (“IFR”) that they jointly issued on October 20, 2003.  The final rule will introduce some significant changes.  For example, under the IFR, prior notice cannot be submitted more than 5 calendar days before the anticipated date of arrival at the anticipated port of arrival.  Under the final rule, this period will be lengthened to 15 days for submissions made through the Prior Notice System Interface (“PNSI”), and 30 calendar days for submissions made through the Automated Broker Interface of the Automated Commercial System (“ABI/ACS”) (this change will not affect the timeframes for prior notice for food arriving by international mail).

The final rule will appear in the Federal Register on November 7, 2008, and will become effective on May 8, 2009.  FDA does not plan to adopt a phased-in approach to enforcement as it did with the IFR.  Thus, FDA can be expected to begin enforcing the final rule on May 8, 2009.  The draft CPG sets out a number of factors that FDA and CBP may consider in deciding not to take regulatory action when a food is imported or offered for import without prior notice.  These include evidence that the food is imported for non-commercial purposes, for research and analysis purposes only, or, in the case of seed, for cultivation.  Comments on the draft CPG should be submitted to Docket No. 2003D-0554 by December 8, 2008 to ensure that they receive full consideration.