At a time when some influencers are making good money – and sometimes millions of dollars – for endorsing and promoting everything from fake eyelashes on Instagram to the latest video game on YouTube, the Federal Trade Commission (FTC) announced on February 12, 2020 that it is seeking public comment on whether to make changes to its Endorsement Guides as part of the agency’s retrospective review of all current rules and guides.

The Guides were first issued in 1980 and designed to assist businesses and others in conforming their endorsement and testimonial advertising practices to the requirements of Section 5 of the FTC Act.  The Guides were updated in 2009 to more directly address social media (see our posting on that here).  Since 2009, the FTC has issued various guidance documents directed to businesses and influencers – see, for example, our previous post discussing the 2015 updates to their Q&A here.

In a Federal Register notice, the FTC asks for comments on a range of questions, including:

• whether the Guides should be changed to account for changes in technology or the economy;
• whether some of the FTC’s guidance documents should be incorporated into the Guides;
• whether children are capable of understanding disclosures of material connections;
• whether incentives like free or discounted products bias consumer reviews, and whether or how those incentives should be disclosed;
• whether composite ratings that include reviews based on incentives are misleading, even when reviewers disclose incentives in the underlying reviews;
• whether the Guides should address the use of affiliate links by endorsers; and
• what, if any, disclosures advertisers or operators of review sites need to make about the collection and processing of publication of reviews to prevent them from being deceptive or unfair.

Commissioner Rohit Chopra issued a separate statement, advocating for developing formal rules which codify elements of the currently voluntary endorsement guides so that violators can be liable for civil penalties and damages under 15 U.S.C. §§ 45(m)(1)(A) & 57.  He also suggests instituting requirements for technology platforms (e.g., Instagram, YouTube, and TikTok) that directly or indirectly profit from influencer marketing.

Comments will be due within 60 days of publication of the Federal Register notice. Because of the impact of the 2009 updates, any new changes to the Endorsement Guides can be expected to have far-reaching effects.  We will be monitoring comments.

On February 13, the FDA released the final installment of guidance to support compliance with the Intentional Adulteration (IA) Rule under the FDA Food Safety Modernization Act (FSMA). The FSMA final rule on intentional adulteration, entitled “Mitigation Strategies to Protect Food against Intentional Adulteration” (IA rule), 21 C.F.R. Part 121, was published in May 2016. The rule is designed to address hazards that may be intentionally introduced to foods, including by acts of terrorism, with the intent to cause wide-spread harm to public health. This latest draft guidance adds to the draft guidance previously published in March 2019. The latest chapters cover the following topics:

• Chapter 5: Food Defense Corrective Actions
• Chapter 6: Food Defense Verification
• Chapter 7: Reanalysis, and
• Chapter 9: Recordkeeping

It also includes appendices on FDA’s mitigation strategies database and how businesses can determine their status as a small or very small business under the rule.

The initial draft guidance included chapters on:

• the components of the food defense plan;
• how to conduct vulnerability assessments using the key activity type method;
• how to identify and implement mitigation strategies; and
• food defense monitoring requirements.

As a reminder, compliance requirements for large facilities under the IA Rule began in July 2019, but the FDA delayed enforcement of the Rule until March 2020. The IA Rule generally applies to food facilities that are required to register with the FDA, absent an exception. Both domestic and foreign companies who sell product in the U.S are affected.

Animals, shmanimals.  Or so says FDA.  Well, FDA didn’t actually say that, but that’s the effect of the District Court of D.C.’s recent ruling in Vanda Pharmaceuticals v. FDA.  In a case we have been following for the last year or so, the District Court deferred entirely to FDA’s decision to place a clinical hold on Vanda’s human studies until studies in dogs were completed.  Vanda argued that FDA’s decision to place its trial on clinical hold lacked an articulated scientific basis and treated a guidance as binding.  In its initial Complaint, Vanda also argued that the mandated testing needlessly wastes dogs’ lives.  As such, Vanda alleged that FDA’s imposition of a clinical hold was arbitrary and capricious in violation of the Administrative Procedure Act (“APA”).  FDA asked to remand the issue to the Agency, the Court granted the request and stayed the litigation, but the Agency went back and made the same decision – this time providing significantly more explanation.  In response, Vanda revived its litigation.

In its second round of briefing, Vanda alleged procedural violations of the APA, as well as substantive violations of the Food, Drug, and Cosmetic Act with respect to FDA’s interpretation of the studies.  Vanda argued that FDA’s remand response is “impermissible post hoc rationalization” including new reasons for the imposition of the hold.  The Court rejected these arguments, noting that the justifications provided in the Remand Response were merely “amplified articulation” rather than post hoc rationalization.  Vanda also argued that the “proper decisionmakers” (the Medical Policy and Program Review Council or “MPPRC”) had not been responsible for the remand response and that the remand response amounted to the review division (Office of Drug Evaluation III) impermissibly “overruling” the MPRCC’s previous findings.  The Court quickly dismissed this argument noting that it had no support in statute or regulation, and, in any event, the remand response was issued by FDA.

Additionally, Vanda argued that FDA “skewed the administrative record on remand” by selectively opening the record and adding new studies supporting its position while ignoring studies Vanda and the Humane Society of the U.S. pointed out.  (Of note, the Humane Society tried to file an amicus brief in this case, but the Court rejected it, saying that all of the arguments it made had already been made by Vanda or were not adequately in front of the Agency prior to its decision.)  Explaining that FDA was required only to examine the record before it at the time the decision was made, the Court held that FDA was not required to consider any additional evidence in support of Vanda’s position.  The Court explained that “no provision in the APA requires FDA to give Vanda an ‘opportunity to offer contrary evidence’ on remand” and a “fundamental fairness” requirement would impose additional procedures on FDA without statutory basis.  Further, the Court noted that Vanda could have introduced its evidence into the administrative record through a “written request” containing “sufficient information” to support the removal of a clinical hold but chose not to do so.  As such, the Court rejected all of Vanda’s procedural arguments.  Finally, the Court noted that Vanda had not availed itself of the administrative pathway of dispute resolution once the clinical hold was imposed.

The Court divided Vanda’s substantive claims into two main arguments: FDA improperly used guidance as a binding legislative rule, and FDA relied on flawed scientific judgment.  Specifically,  Vanda objected to FDA’s reliance on the non-binding policy document, Guidance for Industry, M3(R2) Nonclinical Safety Studies for the Conduct of Human Clinical Trials and Marketing Authorization for Pharmaceuticals (Jan. 2010).  This guidance, referred to as the “ICH Guidance” because it was created by the International Conference for Harmonization, addresses the use of nonclinical safety studies to support the conduct of human clinical trials and marketing authorization for pharmaceuticals.  FDA has adopted this policy and relied on it as justification for requiring Vanda to conduct additional animal studies.  The Court concluded that the “the Remand Response makes clear that the ICH Guidance is a policy statement exempt from the notice-and-comment process, and that FDA did not rely upon it as a binding rule in imposing the clinical hold.”  As a general statement of policy (rather than a legislative rule), the Court explained that the guidance was not subject to notice and comment requirements.  Contrary to Vanda’s allegations, the true legal authority for the hold was FDA’s clinical hold regulations – not the guidance, which had no actual legal effect.

Finally, as is the norm, the Court largely deferred to FDA’s scientific expertise in this case.  Absent clear error or malfeasance, it’s almost impossible to overcome deference to scientific expertise – particularly in the area of necessary clinical studies.  Vanda argued that FDA ignored or misinterpreted cited studies; failed to explain why toxicity in nonrodent studies would be predictive of human toxicities; and that the Remand Response was a litigation-driven interpretation of a study.  In response, the Court asserted that Vanda failed to show that FDA’s interpretation of its study was unreasonable.  Additionally, because the legal framework mandates animal studies, the Court explained, the legal framework presumes some connection between animal and human toxicity.  The Court added: “If Vanda has a quarrel with animal studies and their predictive power for humans in general, its fire would be more appropriately aimed at the controlling statute and regulations, not at FDA’s actions in this case.”  Finally, the Court stated that Vanda’s litigation-driven “argument is dead in the water: the administrative record makes clear that FDA had noticed and was concerned about the adverse toxicity findings in the 3-month nonrodent studies well before the lawsuit was filed in February 2019.”

The results of the case are not surprising.  Back in February 2019, we predicted both a remand and deference to the Agency, concluding that “Vanda would then be left in the same place it is now but after several years of litigation” and still required to complete a dog study.  Based on our experience, this outcome was essentially guaranteed.  Almost a year later, we are back to the same question: what was in this for Vanda?

Nonetheless, as avowed animal lovers, our interest in this case was no less due to the implications for animal studies as it was on the implications for FDA jurisprudence.  Unfortunately, the Court was silent on this aspect of the case.  Instead, the Court left the question of the necessity of animal studies to FDA, which has committed to reduce, refine, and replace.  This commitment, emphasized as recently as 2018, is intended to “potentially replace much of the need to use dogs in future trials with new informatics tools.”  FDA wants to “do one single study involving a small number of dogs—where the dogs will only be subject to minimally invasive blood sampling, and adopted as pets at the completion of the short trial—to eliminate the need for the use of dogs in certain types of future studies, some where they might have been euthanized.”  Perhaps this statement, combined with the inconsistent demand of further dog testing, is really what prompted Vanda to file this lawsuit.  We may never know.  But, given FDA’s zealous defense in this lawsuit, with allegedly questionable scientific rational, there may be some activists questioning FDA’s actual commitment to reduce, refine, and replace.

On January 24, 2020, the Food Safety Inspection Service (FSIS) announced that it had received a Petition by Marler Clark LLP, on behalf of several individuals (victims of food poisoning from Salmonella containing meat or poultry products) and three consumer advocacy organizations (Food & Water Watch, Consumer Federation of America, and Consumer Reports), requesting that FSIS declare 31 salmonella serotypes adulterants; Petitioners identified the 31 serotypes because they have been implicated in one or more outbreaks associated with poultry or meat or product recalls.

Petitioners request that FSIS act through interpretive rulemaking.  According to Petitioners, an interpretative rule is the appropriate action.  Pointing to an FSIS action in 1994 when the Agency declared E. coli O157:H7 in ground beef an adulterant, they discuss that the Federal Meat Inspection Act (FMIA) and the Poultry Products Inspection Act (PPIA) do not require that FSIS engage in substantive rulemaking requiring notice and comment procedures.  In fact, under the Administrative Procedures Act, 5 U.S.C. § 553(b)(3)(A), FSIS may issue “interpretive rules, general statements of policy, or rules of agency organization, procedure, or practice.”

Whether Salmonella is an adulterant has been a topic of discussion for decades.  Most recently in 2011, when the Center for Science in the Public Interest petitioned FSIS to classify four strains of antibiotic resistant (ABR) Salmonella as adulterants.  In 2014, FSIS denied CSPI’s petition because, according to the Agency, there was insufficient information to support the requested action; among other things, FSIS concluded that the CSPI petition provided insufficient information about differences between ABR and non-ABR Salmonella.

The current Petition specifically identifies the 31 Salmonella serotypes as are adulterants because:

1. they are not naturally present in the final products but a result of contamination during processing after slaughter, and
2. the serotypes’ associations with outbreaks due to consumption of meat and poultry demonstrates that the serotypes ordinarily render meat and poultry products injurious to human health.

Thus, the Petitioners claim, the 31 Salmonella serotypes are “added substances,” and they must only meet the “may be injurious,” rather than the ordinary injurious criterion to be deemed adulterants.  That said, even if FSIS were to disagree that the Salmonella in meat and poultry is an added substance, Petitioners assert and discuss evidence that the identified serotypes are “ordinarily injurious.”  Thus, they claim, the serotypes are adulterants under the FMIA, 21 U.S.C. § 601(m)(1), and the PPIA, 21 U.S.C. § 453(g)(1).

Petitioners discuss at some length the argument that cooking will inactivate the pathogens; FSIS and others have asserted that Salmonella in meat and poultry can be inactivated by cooking.  To counter this argument, Petitioners present evidence that some Salmonella serotypes are more heat resistant than previously believed.  Moreover, it is not just undercooking; the bigger threat comes from cross-contamination and studies show that consumers are uninformed about the proper way to handle (Salmonella-containing) meat and poultry.  The continued reliance on inexpert consumers to prevent foodborne outbreaks due to Salmonella contamination of meat and poultry has been shown ineffective; Petitioners believe FSIS should become proactive and place the responsibility on the industry to avoid the introduction of Salmonella into meat and poultry.

As mentioned above, Petitioners claim that FSIS does not need to engage in substantive rulemaking as a predicate to interpret the FMIA and PPIA and deem a substance an adulterant.  Although FSIS could continue to make such determinations on a case-by-case basis, Petitioners believe that an interpretive rule declaring the Salmonella serotypes adulterants would encourage the meat and poultry industry to engage in more effective oversight measures and create and implement effective preventative measures.  Petitioners point to the effect of the 1994 interpreted rule on E. coli O157:H7 incidence in meat and poultry as evidence of the effectiveness of the requested action.

FSIS opened a docket on regulations.gov.  Comments are due Mar. 23, 2020.

The FDA is taking very seriously the threat of the coronavirus from China (2019‑nCoV).  Makers of medical devices, drugs and biologics should consider whether their products can contribute to countering this threat.

In late January, FDA announced its strategy to advance development of medical countermeasures to prepare for the coronavirus threat.  FDA made clear in its January strategy statement that private industry has a role:

As with any emerging public health threat, the FDA will collaborate with interagency partners, product developers, international partners and global regulators to expedite the development and availability of medical products needed to diagnose, treat, mitigate and prevent such outbreaks.  (Italics added.)

As a first step, on February 4, the Secretary of Health and Human Services (HHS) issued a public health emergency determination for the coronavirus.  This determination effectively authorizes FDA to issue emergency use authorizations (EUAs) for unapproved devices, drugs, and biologics (or unapproved uses of otherwise approved products) that may be effective medical countermeasures to combat a pandemic.  FDA also has additional authorities, e.g., to waive expiration dating and Good Manufacturing Practice (GMP) requirements.

On the same date as the determination, FDA issued its first EUA, authorizing use emergency use of the Centers for Disease Control and Prevention’s (CDC) 2019-nCoV Real-Time RT-PCR Diagnostic Panel.  Prior to the EUA, this test was limited to use at CDC laboratories; FDA’s authorization allows the use of the test at any CDC-qualified lab across the country.

Products made by private industry are also eligible for EUAs.  FDA has issued a detailed guidance on how to work with the agency to obtain one.  In a nutshell, to issue an EUA, FDA must find:

• The threat (e.g., coronavirus) is capable of causing a serious or life-threatening disease or condition. (That requirement is clearly met.)
• The potential product is intended to to diagnose, treat, or prevent the coronavirus. It must be shown that it “may be effective” in achieving this intended use.
• The known and potential benefits of the product outweigh the known and potential risks, looking at the totality of the scientific evidence. Such evidence may include (but is not limited to): results of domestic and foreign clinical trials, in vivo efficacy data from animal models, and in vitro data.
• There must be no adequate, approved, and available alternative to the candidate product for diagnosing, preventing, or treating the coronavirus. A potential alternative product may be considered “unavailable” if there are insufficient supplies of the approved alternative to fully meet the emergency need. A potential alternative product may be considered “inadequate” if, for example, there are contraindicating data for special circumstances or populations (e.g., children, immunocompromised individuals, or individuals with a drug allergy), if a dosage form of an approved product is inappropriate for use in a special population (e.g., a tablet for individuals who cannot swallow pills), or if the coronavirus is or may be resistant to approved and available alternative products.

The bottom line – if a firm has a device, drug or biologic not yet FDA‑cleared or approved, but that could help fight the corona virus ‑ now is the time to look at FDA’s guidance and see whether an EUA might be appropriate.

On February 10, the Court of Appeals for the Federal Circuit ruled that the Department of Veterans Affairs (“VA”) erred in interpreting the Trade Agreements Act of 1979 (“TAA”) and the Federal Acquisition Regulation (“FAR”) to exclude from procurement pharmaceutical products that are manufactured in the United States using an active pharmaceutical ingredient (“API”) made in a foreign country.  Acetris Health, LLC v. United States, No. 2018-2399 (Fed. Cir. Feb. 10, 2020).  Acetris had brought this action in the Court of Federal Claims as a result of the VA’s determination that certain of Acetris’ products were not TAA and FAR-compliant because the products contained APIs from India that were made into tablets in the United States.  The Court of Federal Claims ruled in Acetris’ favor.  (See our blog post on the lower court decision here.)

As an initial matter, the Federal Circuit rejected the government’s arguments that the case was not justiciable on grounds that the case was moot, that there was no constitutional or statutory standing, and that previously filed and pending suits in the Court of International Trade divested the lower court of jurisdiction.  Decision at 10-18.  On the merits, the Federal Circuit concluded that the VA’s interpretation of the TAA and the FAR was erroneous.  The Federal Circuit analyzed the TAA and the FAR separately.

The TAA prohibits the procurement of products that are products of a foreign country or instrumentality that is not designated by statute.  According to the Federal Circuit, in this case, the relevant question “is whether Acetris’ products, which are made into tablets in the United States using API made in India (a non-designated country), are ‘products of’ India for which procurement is prohibited by the TAA” under the TAA’s rule-of-origin test.  Id. at 18.  This test states that

An article is a product of a country or instrumentality only if (i) it is wholly the growth, product, or manufacture of that country or instrumentality, or (ii) in the case of an article which consists in whole or in part of materials from another country or instrumentality, it has been substantially transformed into a new and different article of commerce with a name, character, or use distinct from that of the article or articles from which it was so transformed.

Id. at 19 (emphasis in original; citations omitted).  The Federal Circuit found that Acetris’ products (the government conceded that the tablets are the products) are not products of India as they do not meet either prong of this test; they are neither wholly the manufacture of India nor substantially transformed in India.  Id.  The Federal Circuit concluded that because “the TAA only excludes products from government procurement if they are “products of” a foreign country like India, the TAA does not bar the VA from procuring Acetris’ products.”  Id.

Regarding the FAR, the Federal Circuit explained that the Trade Agreements contract clause is different from the TAA as it provides in relevant part that

“[t]he Contractor shall deliver under this contract only U.S.-made . . . end products.”  FAR § 52.2255.  The FAR does not adopt the TAA’s country-of-origin test for determining what are “products of a foreign country or instrumentality.”  19 U.S.C. § 2518(4)(B).  Instead, the FAR defines “U.S.-made end product” as “an article that is mined, produced, or manufactured in the United States or that is substantially transformed in the United States.”  FAR § 25.003.

Id. at 19-20.  The Federal Circuit determined that Acetris’ products are U.S.-made end products under the plain meaning of the FAR.  In coming to this conclusion, the Federal Circuit rejected an argument by the government that the products are not manufactured in the U.S. because they are not substantially transformed in the U.S.  The Federal Circuit determined that the “or” in the FAR clause “reflects an intent not to require ‘substantial transformation’ for analysis under the FAR; ‘manufacture’ does not require substantial transformation.”  Id. at 22.  The Federal Circuit did not need to and did not decide whether Acetris’ products are substantially transformed in the U.S.

While upholding the lower court’s decision, the Federal Circuit disagreed with some of its reasoning and found the judgment “imprecise and confusing.”  Id. at 23.  The Federal Circuit directed the lower court on remand to

declare that: (1) under the TAA, a pharmaceutical product using API made in India does not, because of that fact, thereby become the “product of” India; and (2) under the FAR, the term “U.S.-made end product” may include products manufactured in the United States using API made in another country.

Id.

Because the Federal Circuit did not address whether putting a product into tablets (or other finished dosage form) is considered to be substantial transformation, the decision does not address two alternative scenarios: (1) whether a product with API from a designated country (e.g., France) that is put into finished dosage form in a non-designated country (e.g., India) can be offered to the government and (2) whether a product with API from a non-designated country (e.g., India) that is put into finished dosage form in a designated country other than the U.S. (e.g., France) can be offered to the government.

The government has 90 days after entry of the judgment to appeal this decision to the Supreme Court.

Yesterday’s announcement by the U.S. Federal Trade Commission (“FTC”) that it was issuing so-called “6(b) Orders” to heavyweights in the tech industry at first glance, might not seem relevant to most readers of the blog, but it is.   As the announcement reminds us, “Section 6(b) of the FTC Act . . .  authorizes the Commission to conduct wide-ranging studies that do not have a specific law enforcement purpose.”  We’ve previously posted about the FTC’s use of 6(b) authority to compel information from companies on their practice in marketing food to children.  Moreover, because of the “vital importance of quality healthcare services at competitive prices to every American consumer” the statement of FTC Commissioners Wilson and Chopra in connection with the announcement regarding big tech specifically asks the Commission to “next” use its 6(b) authority to focus on the healthcare sector, specifically calling out pharmaceutical companies, hospitals, and dialysis chains.    These FTC Act 6(b) orders, seek significant amounts of documents and data from those who receive them.  For example, the FTC’s Order to Alcoholic Beverage Manufacturers sought detailed information “on the effectiveness of voluntary industry guidelines for reducing advertising and marketing to underage audiences.”  Recipients of 6(b) orders need to understand their rights and responsibilities.  The FTC’s own website explains the basics:

As with subpoenas and CIDs, the recipient of a 6(b) order may file a petition to limit or quash, and the Commission may seek a court order requiring compliance. If a party fails to comply with a 6(b) order after receiving a notice of default from the Commission, the Commission may commence suit in federal court under Section 10 of the FTC Act, 15 U.S.C. Sec. 50. After expiration of a thirty-day grace period, a defaulting party is liable for a penalty for each day of noncompliance. Id.; Commission Rule 1.98(f), 16 C.F.R. Sec. 1.98(f).

As a refresher, the FTC consists of five Commissioners, no more than three of which can be members of the same political party.  Commissioner Wilson is one of three Republicans and Commissioner Chopra, one of the two Democrats currently on the Commission.  Given the seeming bipartisan interest in the healthcare sector, it seems reasonable to expect a 6(b) order later this year.  In any event, we’ll continue to monitor this and other FTC developments.

Hyman, Phelps & McNamara, P.C. (“HP&M”) is pleased to announce that Karin Moore has become its newest Director.  Drawing on her years of experience as a former general counsel to leading trade associations, Karin is an industry expert and thought leader in the areas of food and beverage, personal care products, household products and beverage alcohol who can anticipate issues, aid in client innovation and transformation, and mitigate the multitude of risks to those clients.

As a Director at HP&M, Karin will provide strategic regulatory and policy advice on ingredients and finished products, and compliance with labeling and advertising requirements. She will help clients interpret the implementation of new requirements, such as those arising from the Bioengineered Food Disclosure Standard, the Food Safety Modernization Act, Prop 65 and other state ingredient labeling mandates. She will also work at the intersection of FDA regulated products and antitrust, drawing on her expertise in both areas.

Prior to joining HP&M, Ms. Moore was General Counsel of the Grocery Manufacturers Association (now Consumer Brands Association), and Co-General Counsel of the Wine & Spirits Wholesalers of America.  Before that, she practiced antitrust law as Counsel at O’Melveny & Myers LLP where she focused on antitrust litigation, civil and criminal investigations, and federal and state class action defense. She previously held a variety of positions with the U.S. Federal Trade Commission’s (FTC) Bureau of Competition, including Counsel to the Director and staff attorney. She earned her J.D., from George Mason University School of Law and her B.A. from Hobart and William Smith Colleges.

“During my time at Grocery Manufacturers Association, I worked with so many wonderful people and companies in the CPG industry, and I am excited to continue to support them at HP&M. The depth and breadth of technical expertise and industry knowledge that HP&M offers will allow me to continue to work with an industry I love, and to further broaden my own expertise,” said Ms. Moore.

Hyman, Phelps & McNamara, P.C. (“HP&M”) is pleased to announce that Richard Lewis has become its newest Senior Regulatory Device & Biologics Expert.   Coming to us after more than 4 years at FDA, Richard worked in the Center for Biologics Evaluation and Research (CBER) and the Center for Devices and Radiological Health (CDRH) in both pre-market and compliance roles.

As a one of HP&M’s regulatory experts, Richard is using the training and experience gained at FDA as a pre-market reviewer to provide regulatory advice for medical devices, diagnostics, biological products, and human cellular and tissue-based products (HCT/Ps). In the post-market compliance space, Richard uses his GMP and inspection training and experience to assist clients in the handling of complaints, MDRs, Recalls, cGMP Compliance, Inspections, and Warning Letters.

Prior to joining FDA, Richard was a chemistry researcher in academia for eight years.  He received his Ph.D. in Inorganic Chemistry at UC Santa Barbara and continued his training during a post-doctoral appointment at Yale University.

As more biosimilars are approved (we’re up to 26 now!), FDA has been rolling out guidance documents under the Biosimilars Action Plan (“BAP”).  The most recent guidance has been long awaited.  While the Hatch-Waxman Act explicitly provides that an applicant can seek approval for only some of the uses for which the reference product is approved – ultimately resulting in a labeling “carve out” – the Biologics Price Competition and Innovation Act contains no such language.   However, back in 2018, then-Commissioner Gottlieb slipped into the BAP roll-out a reference to a guidance intended to “provide additional clarity to biosimilar applicants who seek approval for fewer than all conditions of use for which the reference product is licensed because, for example, one of the licensed conditions of use of the reference product is protected by a patent,” signaling to industry that FDA intended to permit carve-outs in biosimilar labeling.

At last, that guidance has arrived.  The new guidance, Biosimilars and Interchangeable Biosimilars: Licensure for Fewer Than All Conditions of Use for Which the Reference Product Has Been Licensed, makes it explicitly clear that carve-outs are permissible for biosimilars.  Like with NDAs, the guidance explains the situations in which a carve-out (or approval of fewer than all conditions of use for which the reference product is licensed) may occur when a condition of use is protected by exclusivity, such as Orphan drug Exclusivity, or by patent.  In such a case, FDA can license the biosimilar for any indications or conditions of use that are not protected by the relevant exclusivities or patents.

As with NDAs, aBLA sponsors seeking to carve-out an indication must submit draft labeling including all information from the reference product labeling to support the relevant (uncarved-out)  conditions of use.  As part of the aBLA review, FDA will consider whether the information carved out is essential scientific information needed for safe use of the product; if it is, FDA will not permit the carve-out.

Given the stark differences between the patent dance for NDAs and BLAs, the process for carving out conditions of use in these submissions is different.  Notably, the guidance explains that “FDA does not expect an applicant to submit a justification for the applicant’s decision not to seek licensure of a biosimilar for all of the reference product’s licensed conditions of use.”  This differs from a carve-out in an NDA, in which a section viii statement or exclusivity statement is necessary to justify the carve-out.  The lack of such a requirement for aBLAs is logical, as there is no requirement to certify to any reference product patents or discuss exclusivities in a given aBLA submission.  However, FDA will accept “information that is intended to inform FDA’s review of the draft labeling,” such a justification of why certain clinical trial information can be carved-out without raising safety or efficacy issues.

When ready to add such a carved-out condition of use into the labeling, the aBLA holder must submit a supplement to the aBLA containing all data and information needed to support licensure of the biosimilar with that condition of use.  FDA expects that it will review and act on aBLA supplements seeking licensure for additional conditions of use within 6 months.  Though the Biosimilar User Fee Act Goals Letter gives the agency 10 months to do so, FDA thinks that it can surpass this goal, assuming the supplement does not raise novel review issues.

While carve-outs for exclusivity purposes will prevent FDA from approving a supplement adding in a carved-out condition of use until the expiration of exclusivity, the same bar does not extend to carve-outs based on patents (or other reasons).  Indeed, FDA may license a product for conditions of use protected by patent as long as FDA determines that the requirements for licensure have met.  For that reason, FDA warns applicants in this guidance that it may review and act on a supplement early, and that an applicant should request that FDA refrain from acting on a supplement before a specified date that falls within the applicable goal date.  If the applicant requests a date beyond the applicable goal date, FDA will not honor the request.

FDA’s assertion about goal dates is important for purposes of infringement litigation.  Because the PHS Act provides that the submission of a BLA is an artificial act of infringement, the submission of the supplement to add a patented condition of use constitutes an act of infringement.  While the reference product sponsor would know about the supplement if the aBLA sponsor chooses to partake in the patent dance, the aBLA patent dance is optional; as such, a reference product sponsor may not know of the existence of an application or supplement to add a condition until FDA announces its approval.  If FDA announces a supplement approval adding a condition of use and that condition of use is still protected by patent (because FDA approved the supplement early or the applicant submitted the supplement early), the reference product sponsor will become aware and can immediately sue for infringement – even if there’s only a few days left on that patent.  Therefore, the exact date of approval of a supplement adding a carved-out condition of use could have a critical effect on infringement litigation.

The guidance also states, in a footnote, that FDA expects all applications for interchangeable products to include data to support that the product can produce the same clinical result as the reference product “in all of the reference product’s licensed conditions of use” (emphasis added).  While the interchangeable can still carve-out a condition of use, the expectation is that all data demonstrating that the product is interchangeable for that condition of use is submitted with the initial interchangeable application rather than in a supplement.  This too raises questions of infringement.  Again, because the PHS Act provides that the submission of a BLA is an artificial act of infringement, if there’s a patent protecting a condition of use and an interchangeable application is submitted with the intent to carve-out that condition of use, the act of submission is enough to allege patent infringement.  Therefore, FDA’s requirement that interchangeable applications include all data for all conditions of use, even those intended to be carved out, inherently requires interchangeable applicants to infringe patents for conditions of use that will be carved out.  In a way, it actually encourages applicants not to seek approval as an interchangeable product until all patents have run out.  In other words, because FDA’s requirement leaves interchangeable sponsors vulnerable to patent infringement allegations – even if the interchangeable is carving-out a condition of use – one might expect that aBLA sponsors would be hesitant to seek interchangeable status until all conditions of use can be included in the label.

As with all draft guidance documents, this document represents FDA’s current thinking on the matter.  There is always a chance that FDA hadn’t considered the ramifications of its requirements for interchangeable products carving out a patent.  Like always, FDA will accept comments on this guidance document.  Comments are due by April 7, 2020.

Congress enacted several priority review voucher (“PRV”) programs in the past fifteen or so years with the goal of incentivizing drug companies to develop new drugs for diseases that ordinarily may not be attractive because the potential market is small or otherwise unlikely to produce the desired rate of return.  These programs are the Neglected Tropical Disease Voucher Program, the Rare Pediatric Disease Voucher Program, and the Medical Countermeasures Program.  We have blogged on these programs multiple times since they each were enacted (e.g., here, here, and here) and won’t describe program details in this blogpost.  Of course, as it was before these programs, a significant incentive for drug companies to develop drugs for less prevalent diseases remains the seven years of marketing exclusivity available under the Orphan Drug Act.

What we will talk about today is the January 2020 report issued by the Government Accountability Office (“GAO”) entitled, “Drug Development – FDA’s Priority Review Voucher Programs”.  This isn’t the first time GAO has taken a look at these programs.  Five years ago, GAO issued a report in which it concluded that it was too early to gauge the effectiveness of the pediatric voucher program (see our blog here).

The current report was required under the provisions of the 21^st Century Cures Act and provides an update on the number of PRVs awarded by FDA to date (31).  Most were for drugs to treat Rare Pediatric Diseases (19).  Of the remainder, 10 PRVs were awarded for drugs to treat eligible tropical diseases and two were for medical countermeasures.  Based on the data available to GAO, 17 of the awarded PRVs were subsequently sold to another drug sponsor.  The prices for 14 of the 17 transferred PRVs were available, and ranged from $67.5 million for one sold in fiscal year (“FY”) 2014 to $350 million for one sold in FY 2015.  The reported range has narrowed considerably for those sold since February 2017 to $80 to $130 million.  The GAO report includes details on the PRV awards and transfers in Appendix I and Appendix II, respectively.

As of September 30, 2019, 16 of the 31 PRVs awarded had been redeemed – i.e., used to obtain priority review of a drug application for a drug that would not otherwise be eligible for priority review.  This number, too, is based on available data and it is possible others have been redeemed.  GAO noted that almost half of the PRVs awarded had not yet been redeemed as of the end of FY 2019 which it says FDA has noted “may affect FDA’s ability to forecast resources needed,” even though FDA receives at least 90 days’ notice of a PRV redemption.  Others GAO interviewed noted that uncertainty exists for every year and FDA receives additional user fees from the redemption of the PRVs to fund additional positions (almost $44 million for the 16 PRVs redeemed so far).  FDA has also noted that the demands of the PRV program may require it to shift priorities away from other public health priorities.

In order to assess the effect of the PRV programs on drug development, GAO performed a literature review and interviewed seven drug sponsors, seven academic researchers with expertise in drug development, drug pricing, or the PRV programs, and seven other stakeholder groups, including trade associations, patient advocates, and organizations that partner with or provide funding to drug sponsors.

The relevant literature available was limited.  For each of the three programs, GAO found one study that examined and drew conclusions about how the PRV programs affect drug development.  A 2019 study that looked at the rare pediatric disease voucher program found that the program was not associated with an increase in the number or rate of new pediatric disease drugs that started or completed clinical trials.  It did find, however, that after initiation of the program, drugs that the authors could identify as eligible for a rare pediatric disease PRV were “more likely to advance from phase I to phase II” compared to rare adult disease drugs (which are not eligible for this PRV program).  The study also found that the time it took for drugs to progress to the next stage of development was shorter among drugs eligible for this PRV compared to drugs for rare adult diseases.

For the tropical disease PRV program, the GAO identified a 2017 study that found that the PRV program was not associated with an increase in tropical disease drugs starting clinical testing.  The study found that the proportion of drugs in development for tropical diseases among all drugs decreased slightly after the program was created.  The authors suggested the small number of tropical disease products approved in the last decade indicates the program did not serve as a stimulus for completing late stage drug development.

For medical countermeasures, a 2018 study identified by the GAO reported that 25 of 26 medical countermeasures in clinical trials received direct or indirect public support such as funding by the Department of Defense.  The authors stated that the extent of federal funding for these programs suggests that alternatives other than a PRV program would better stimulate drug development in this area.

The drug sponsors GAO spoke with all reported that the PRV programs were an incentive and factor in their decision making.  The researchers and stakeholders had mixed views on the programs as incentives.  The drug sponsors, researchers and stakeholders contacted were mixed on whether the rare pediatric disease and medical countermeasures programs (due to expire in 2022 and 2023, respectively) should be reauthorized.  As of April 2019, FDA did not have a position of reauthorization of the programs.

Finally, GAO solicited thoughts about ways to improve the programs or other ways to incentivize drug development in these areas from the fairly small number of companies and individuals (7 drug companies, 7 researchers and 7 stakeholders).  The proposals for improvement included requiring innovation for PRV award (e.g., not awarding a voucher for drug that was already available outside the U.S.), requiring a plan to provide access to the drug if PRV was awarded in connection with its approval, limiting companies eligible for award to nonprofits or other sponsors that financially require it to develop their drug, and to making administrative changes to the program.  Potential alternatives identified included tax credits, direct federal funding or grants, and patent extensions.

Does this lackluster report foreshadow one or both of the rare pediatric disease and medical countermeasures programs expiring without reauthorization over the next several years?  Stay tuned.

Hyman, Phelps & McNamara, P.C. is pleased to publish the first FDA Law Alert of the new year. This is the fourth installment of our quarterly newsletter highlighting key postings from our nationally acclaimed FDA Law Blog.  Please subscribe to the FDA Law Blog to receive contemporaneous posts on government regulatory and enforcement activities affecting the broad cross-section of FDA-regulated industry.  As the largest dedicated FDA law firm, we are happy to help you or your clients navigate the nuances of the laws and regulations affecting them.

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Medical Devices

• Exportation: In November 2019, FDA issued final guidance on how device firms may request review of a decision to withhold issuance of a Certificate of Foreign Government (“CFG”).  A CFG provides official assurance that exported products comply with U.S. laws and regulations.  In his post, Jeff Shapiro explains the procedural rights and appeal options available through the Federal Food, Drug, and Cosmetic Act (“FD&C Act”) for companies denied a CFG.  He further explains how FDA’s final guidance implements these procedures.
• Enforcement: Sara Koblitz and Doug Farquhar discuss a recent success before the U.S. District Court for the District of Columbia.  The post describes a lawsuit filed by HPM on behalf of Genus Medical Technologies (“Genus”) challenging FDA’s attempt to regulate its device as a drug.  Koblitz and Farquhar provide detailed information on each parties’ arguments, the court’s reasoning for its decision in favor of Genus, and the future impact of this litigation on industry.

Drugs

• Drug Development: In this post, Larry Bauer describes FDA’s draft guidance, “FDARA Implementation Guidance for Pediatric Studies of Molecularly Targeted Oncology Drugs: Amendments to Sec. 505B of the FD&C Act.”  Check out the full blog post for a detailed explanation of the new requirement for pediatric investigations that involve these targeted therapies, FDA’s molecular target lists and additional considerations for rare cancers.

• Hatch-Waxman: In this post, Kurt Karst provides an overview of The Lower Health Care Costs Act of 2019 (the “Act”).  According to Karst, the Act looks strikingly similar to the BLOCKING Act of 2019.  His post describes how the Act would significantly alter the 180-day exclusivity provisions, the incentives for such exclusivity, as well as its potential to lead to higher drug prices.

Healthcare

• Qui Tam Litigation: Serra Schlanger describes the latest development in the United States ex rel. Campie v. Gilead Sciences, Inc. saga.  As False Claims Act litigators surely know, this case started back in 2010 based on allegations by two former employees that Gilead made false statements to FDA about the its anti-HIV drugs.  Schlanger details the U.S. District Court for the Northern District of California’s analysis and its ultimate decision to grant the government’s motion to dismiss.

Food & Dietary Supplements

• CBD in Dietary Supplements: Riëtte van Laack describes recent actions taken by four major trade associations, AHPA, CRN, CHPA and UNPA, in an effort to legalize hemp-derived CBD.  For example, one such action was a letter urging Congress to pass legislation that would make hemp-derived CBD a legal dietary ingredient for use in dietary supplements. The second was a citizen petition requesting swift action from FDA, including the establishment of a regulatory pathway to legally market dietary supplements containing hemp-derived CBD and to increase enforcement actions against “unscrupulous manufacturers” of CBD-containing products that use illegal drug claims.

Animal Drug Products

• Compounding: Karla Palmer discusses FDA’s latest revision to its draft guidance addressing compounding of animal drug products from bulk substances.  In her post, Palmer details the situations where FDA would exercise enforcement discretion, asserting that such discretion is an attempt by the Agency to expand its regulatory authority over animal drug compounding by pharmacies and veterinarians as well as veterinary medicine generally.

• Genetically Modified Animals: Also out of the Northern District of California, a Court upheld FDA’s authority to regulate genetic material used to modify an animal as a new animal drug.  Ricardo Carvajal outlines the Court’s basis for upholding such authority through the FD&C Act and Guidance #187.  Carvajal further analyzes the implications of the Court’s decision to defer the question of whether drug safety encompasses environmental risks.

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Hyman, Phelps & McNamara has its finger on the pulse of FDA. As the largest dedicated FDA law firm in the United States, our technical expertise and industry knowledge are exceptionally wide and deep. Our lawyers and non-lawyer experts possess extensive experience with the universe of issues faced by companies regulated by FDA.

Those familiar with the Hatch-Waxman Act and its various incentives to stimulate drug innovation know that New Chemical Entity (“NCE”) exclusivity is the holy grail of small molecule exclusivity.  Though orphan drug may give a sponsor two more years of exclusivity than NCE, it only applies to a specific indication and patient population, both of which can be designed around.  Other exclusivities, like three year or QIDP, can also be designed-around or are traditionally add-on exclusivities.  NCE exclusivity, on the other hand, blocks the submission of any 505(b)(2) application or ANDA for the same active moiety regardless of the indication.  NCE exclusivity, therefore, is coveted, as it forces any competitor seeking approval of the same active moiety to run its own expensive and time-consuming trials or wait at least four years to even submit an application—five years if the follow-on application does not include a Paragraph IV certification.  Specifically, the statute says:

. . . no application which refers to the drug for which the subsection (b) application was submitted . . . may be submitted under subsection (b) before the expiration of five years form the date of the approval of the application under subsection (b), except that such an application may be submitted under subsection (b) after the expiration of four years from the date of the approval of the subsection (b) application if it contains a certification of patent invalidity or noninfringement described in clause (iv) of subsection (b)(2)(A).

21 U.S.C. § 355(c)(3)(E)(ii), (j)(5)(F)(ii) (emphasis added).  Of course, the bar on the submission of a follow-on application for an NDA with NCE is great because it means that FDA cannot start reviewing the follow-on application until either the expiration of the five-year period (or, in the case of a follow-on application with a Paragraph IV certification, four years, subject to a 30-month stay), thereby providing a de facto extension of the five years of exclusivity.

Not so fast.  While NCE exclusivity is a major incentive, that submission provision in the statutory language provides a loophole.  While other periods of exclusivity block the approval of a follow-on application for the statutory period of exclusivity, the statutory language of the NCE provision blocks only the submission of a follow-on application.  FDA has long interpreted this provision to mean that applications submitted prior to approval of a product with NCE exclusivity are neither barred from approval, nor must they be withdrawn.  See FDA, Citizen Petition Response, Docket No. FDA-2011-P-0606 (May 17, 2011).FDA recognized this issue when adopting its regulations implementing NCE exclusivity back in 1989, noting that two applicants could submit and file 505(b)(2) applications for the same drug product, and one of the applications could subsequently be approved with an NCE exclusivity, leaving the question of what happens to the other application.  FDA decided “to interpret this phrase to mean that any 505(b)(2) application submitted to FDA before the approval of another new drug application that qualifies for [NCE exclusivity] is not affected by this exclusivity provision” other than when “the competing applicant amends its application to include the first applicant’s published data.  Where that data would be essential to the competing application, the second application will be deemed to refer to the first application.”    Abbreviated New Drug Application Regulations, 54 Fed. Reg. 28,872, 28,901 (July 10, 1989).

Last week, after several rounds of Citizen Petitions (here and here) Genus Lifesciences Inc. (“Genus”) sued FDA over its stance relating to dueling 505(b)(2)s.  In the suit, Genus accuses FDA of intentionally undermining its NCE exclusivity for its cocaine HCL nasal solution by accepting an incomplete 505(b)(2) application from a competitor mere weeks before it approved Genus’s 505(b)(2).  Genus received FDA approval for its cocaine product, called Goprelto and indicated for “the induction of local anesthesia of the mucous membranes” in certain diagnostic procedures and surgeries, on December 14, 2017.  Prior to December 2017, cocaine HCL products were on the market but only as unapproved drugs.  FDA required Genus to perform a battery of time-consuming and expensive testing prior to submission of its NDA, but Genus alleges that FDA admittedly required significantly less testing when its competitor, Lannett Company Inc. (“Lannett”), submitted its 505(b)(2) for its cocaine HCL nasal solution, Numbrino, on November 29, 2017.  Further, when Lannett received a Complete Response Letter for Numbrino in July 2018, FDA permitted Lannett to resubmit its application based on FDA’s position that a post-CRL resubmission is an amendment to the original 505(b)(2) rather than a submission.  This, Genus argues, amounts to allowing Lannett to submit an incomplete and inadequate “placeholder” application right before Goprelto’s five years of exclusivity took effect.

Genus sets forth three main arguments in its complaint: (1) That FDA’s acceptance of Lannett’s Numbrino 505(b)(2) application without the same rigorous data requirements FDA required for submission of Genus’s Goprelto 505(b)(2) treats similarly situated parties differently in violation of the Administrative Procedure Act; (2) That FDA’s acceptance of Lannett’s amendment and resubmission of its 505(b)(2) after its CRL, notwithstanding Genus’s NCE exclusivity, was arbitrary and capricious under the Administrative Procedure Act and in violation of the federal Food, Drug, and Cosmetic Act (“FDCA”); and (3) that approval of Genus’s NCE exclusivity is in violation of the NCE provisions of the FDCA.  Basically, Genus is accusing FDA  of letting the ends (approval of a competing cocaine HCL product) justify the means (disparate treatment and nullification of Genus’s NCE exclusivity), similar to litigation filed by Catalyst in its June 2019 suit against FDA challenging the approval of a Firdapse competitor.

Genus’s objections are compounded by the fact that cocaine HCL was, until Goprelto’s approval, a drug marketed without FDA approval.  Genus made a significant investment to meet FDA’s standards in an effort to voluntarily comply with FDA’s request that all unapproved drugs undergo the approval process.  As such, once a company obtains “approval of an NDA for a product that other companies are marketing without approval,” FDA is supposed to take enforcement action against “remaining unapproved drugs” because “they present a direct challenge to the drug approval system.”  FDA’s Compliance Policy Guide for Marketed Unapproved Drugs § 440.100.  Enforcement action is intended to “provide an incentive to firms to be the first to obtain approval to market a previously unapproved drug.”  Id.  Genus was in exactly this situation, but instead of exercising its enforcement authority with respect to cocaine HCL, Genus alleges that FDA held a competing product to a lower bar so that it could submit its 505(b)(2) prior to Goprelto approval and not be blocked by Goprelto’s 5-years of exclusivity.

This lawsuit is just the latest in a trend of suits against FDA, most of which have involved FDA trying to legally justify policies after-the-fact.  We saw this with Genus Medical Group (a different Genus), in which FDA tried to backfill its policy of regulating all contrast agents as devices regardless of the statutory text.   We also see this in the aforementioned Catalyst litigation, as well as the Eagle/Depomed litigation, in which FDA did not have statutory authority to require a demonstration of clinical superiority after granting orphan drug designation (the statute has since been changed to provide that authority).  Some of these recent challenges have been successful, but on Chevron Step 1 bases.  It looks like Genus will mostly be making a Step 2 arbitrary and capricious argument—though that won’t be clear until the inevitable Motion for Summary Judgment is filed—but industry has some success with Step 2 as well (e.g., Braeburn litigation).   It will be interesting to see how Genus frames these arguments in light of these recent rulings.

Hyman, Phelps & McNamara, P.C. is  pleased to announce that Sara Koblitz will be speaking in an upcoming Strafford live webinar, “Biologics and Biosimilars: FDA Initiatives and Guidance, Approvals and Exclusivity, Patent Prosecution, Litigation” scheduled for Thursday, February 13, 1:00pm-2:30pm EST. The panel will provide essential updates on FDA practice and patent law relating to biologics and biosimilars and discuss the current state of and recent changes to FDA initiatives, approvals, and exclusivities, as well as patent prosecution, post-grant proceedings, and litigation.

After the presentations, the speakers will engage in a live question and answer session with participants, so they can answer your questions about these issues directly.

As readers of our blog, you can participate in this program at half off.  Use this link, and the offer will be reflected automatically in your cart.  Alternatively, you can call 1-800-926-7926.  Ask for Biologics and Biosimilars: FDA Initiatives and Guidance on 2/13/2020, and mention code: ZDFCA.

Lately, FDA has been subject to criticism on almost every front.  A recent NY Times Op-Ed alleging political interference, the popular theory that FDA fueled the opioid crisis, and the quality and inspection concerns raised in the 2019 book Bottle of Lies are all emblematic of the recent and widespread criticism of FDA.  Through all of this criticism, FDA just keeps continuing on its mission of “advancing the public health by helping to speed innovations that make medical products more effective, safer, and more affordable.”  To that end, FDA approved 48 “novel drugs” in 2019—drugs never before approved or marketed in the United States.  But, as discussed in a recent Wall Street Journal article, a July 2019 study questions whether FDA should be touting all of these new approvals.  This is because, according to the study, FDA has routinely rushed approvals in an effort to meet an unofficial year-end deadline—and in doing so, has comprised patient safety.

The study, undertaken by professors from Harvard Business School, the University of Texas at Dallas, and the MIT Sloan School of Management, examines the global pattern of drug approvals in the last weeks of each year.  In the U.S., they found that there is a rush of drug approvals in December and the week before Thanksgiving.  And while this itself is not a problem, the concern arises from the significantly increased number of adverse events seen with these last-minute approvals.  According to the study abstract:

Drugs approved in December and at month-ends are associated with significantly more adverse effects, including more hospitalizations, life-threatening incidents, and deaths. This pattern is consistent with a model in which regulators rush to meet internal production benchmarks associated with salient calendar periods: this type of “desk-clearing” behavior results in more lax review, which leads both to increased output and increased safety issues.

The study notes that the “December drugs” phenomenon has been reported before, but findings that more adverse events are associated with these “December drugs” is novel to this paper.

The study evaluated FDA’s approval of new drug applications (both NDAs and BLAs) from 1980 to 2016 on a weekly and monthly basis with data derived from the Drugs@FDA database.  The authors found that there are roughly 80% more approvals in December than in any other month.  Further, more approvals occur at the end of the month than any other time during any given month.  Additionally, for each approved NDA, the authors identified and collected information on measures of post-market safety: reported adverse events, black box warnings, market withdrawal, and MedWatch reports.  They then compared the number of these safety issues arising from drugs approved in December to those approved throughout the year.

The study results showed that “drugs approved in December have higher adverse events.”   The authors found that 89% of their sample observations are associated with at least one reported adverse events.  They also found that 24 percent of their sample observations were included in Medwatch, 35 percent associated with a black-box warning, and 3.4% are withdrawn after reaching the market.  December drugs are 19% more likely to be included in Medwatch and 5.7% more likely to receive a black-box warning.

These results, in and of themselves, are not particularly concerning, but it’s not entirely clear how reflective they are of actual safety concerns.  Because the term “adverse events” is nebulous, and because it typically encompasses broad categories of events that are correlated with—rather than definitively caused by—a drug, it is not alarming that 89% of samples were associated with adverse events.  Further, as discussed below, the use of a black-box warning as a safety signal is a bit misplaced, as FDA has already assessed that safety concern.  Leading to additional questions, the authors manually determined whether reported adverse events were associated with a specific drug when multiple were listed and determined whether the events were life-threatening, led to hospitalization, disability, or death.  Additionally, the authors obtained information “on safety-related drug withdrawals following FDA approval” but provided little detail about this process.  But relying on market withdrawals to signify a safety risk is presumptuous: drugs can be withdrawn from the market for all sorts of reasons, so unless FDA has formally determined that a drug was withdrawn for reasons of safety or efficacy, this metric could skew results.  And because FDA typically makes such a determination in response to a request to do so, there are a whole host of products that have been withdrawn or discontinued for reasons that have not yet been fully assessed.  The use of this parameter, therefore, raises additional questions.

Nonetheless, taking efforts to control for drug popularity, complexity, and other circumstances, the study authors concluded that FDA may be biased towards approval for these “December drugs.”  The authors hypothesize that “informal performance benchmarks” focusing on quantity of drug approvals rather than quality, may bias FDA regulators toward approval.  Noting that the number of drugs that are approved is immediately visible and that industry and patient groups advocate for approval rather than rejection while adverse events may take years to be realized, the authors posit that internal pressure to approve drugs is high.

As the study authors themselves recognize, one major issue in the study is the inability to assess the benefits of the approved products in comparison to the risks.  But this assessment is a critical element of drug approval.  This is precisely the reason that the existence of a boxed warning should not be “counted” as a signal of safety issues with approved products.  Boxed warnings are the result of an assessment of the risk of the serious adverse event as compared to the benefit; indeed, in approving a product with a boxed warning, FDA is not only aware of the risks but has made an affirmative decision that the benefits of this potentially dangerous product outweigh the risks.  As such, using the existence of a boxed warning to suggest that FDA rushed approvals to meet an informal agency deadline inherently ignores the careful calculation that FDA undertakes when approving a product with a boxed warning.

In fact, the study’s omission of benefit analysis completely ignores the real-life context of a product’s approval.  While it is true that patient advocacy groups may be pushing FDA to approve a product that is associated with significant adverse events or risks, typically that signals that the patient benefit may outweigh the risks.  Therefore, FDA’s approval of such a product is not necessarily to meet some metric or because of internal pressure; it may approve a product with safety risks notwithstanding the risks or safety signals because of there is great patient need or benefit.  So while there may be more products approved in December and those products may be associated with more adverse events, the context in which these “less safe” products may be used is really important to why and how they got approval.  It’s too easy to say that adverse events suggest that the products are not safe enough if you discount the benefits that such products provide.

Further, the authors’ desk-clearing hypothesis seems to ignore the bureaucratic approval process.   They suggest delaying December approvals for reevaluation in January because December approvals are too rushed to make safe approval decisions, but this ignores the fact that the safety determinations required for approval may not even have occurred in December.  It’s not as though one FDA employee looks at an application for the first time in December and decides to send off an approval at Christmas break; there are several layers of approval necessary for each drug product.

This paper seems to surmise that FDA is just really focused on raising its approval statistics, and that the default stance of regulators has shifted to approval rather than rejection now that about 60% of all NDAs are approved.  But focusing on the publicly-available numbers alone is not enough to get the whole picture: the authors never discuss how many of this 60% of NDAs are approved in their second, third, fourth cycle of review.  This would suggest that the default is not necessarily approval but working with an NDA sponsor to ultimately get to approval.  And where the mission is to improve the public health and approve safe products, wouldn’t this approach make sense?  Though the study makes some really interesting points, the implied criticism, in which the authors seemingly link safety risks to rushed approvals, simply underestimates the rigorous risk/benefit analysis and bureaucratic process that each approval undergoes.  While no one is denying that more drugs may be approved in December or at the end of a given month, it’s definitely a leap to presume that the existence of additional adverse events for these products indicates a “rush” to approval comprising safety without at least a cursory review of the benefit-to-risk analysis.