Earlier this week, the U.S. District Court for the District of Columbia issued a Memorandum Opinion granting summary judgment to FDA in a lawsuit Lannett Company Inc. and Lannett Holdings, Inc. (collectively “Lannett”) filed in June 2016 challenging FDA’s rescission of Lannett’s ANDA 202750 for the oral chemotherapy drug Temozolomide Capsules, 5 mg, 20 mg, 100 mg, 140 mg, 180 mg, and 250 mg. (Copies of the briefs filed in the case are available here, here, here, and here.)

As we previously reported, on May 17, 2016 FDA issued a letter to Lannett rescinding the approval of ANDA 202750 for Temozolomide Capsules, which the Agency had approved on March 23, 2016. According to FDA, the Agency approved the ANDA in error.  ANDA 202750 identified Chinese company Chongqing Lummy Pharmaceutical Co. Ltd. (“Lummy”) as the manufacturer of the active pharmaceutical ingredient for the drug product.  FDA inspected Lummy in mid-March 2016, and on April 19, 2016, the Agency placed Lummy on Import Alert, pointing to concerns over the company’s Current Good Manufacturing Practices (“CGMPs”) as the reason for the Import Alert.  On June 21, 2016, FDA issued a Warning Letter to Lummy summarizing significant CGMP deviations.

Lannett alleged in a five-count Complaint that FDA’s rescission of ANDA 202750 violates the Administrative Procedure Act (“APA”) and the Fifth Amendment’s due process right to a hearing in connection with deprivation of a property right. Lannett asked the DC District Court to, among other things, set aside and declare as unlawful FDA’s ANDA approval rescission, and to enjoin FDA from revoking the approval of ANDA 202750 without a hearing and the procedures established at FDC Act § 505(e).

In a 17-page Opinion granting FDA’s Cross-Motion for Summary Judgment and denying Lannett’s Motion for Summary Judgment, Judge Reggie B. Walton concluded that FDA’s approval rescission of ANDA 202750 is not final agency action subject to APA judicial review, and that Lannett failed to exhaust available administrative remedies under 21 C.F.R. § 314.110(b) before filing its June 2016 Complaint.

FDA argued that Lannett’s lawsuit is essentially an attempt to bypass the administrative process, and that the doctrine of exhaustion of administrative remedies is a conclusive factor that should prevent the Court from consideration of Lannett’s claims at the present time. After all, argued FDA, the Agency “has not made a final, judicially reviewable decision on the manufacturing compliance status of the facilities named in Lannett’s ANDA,” because “[a]fter [the Agency] afforded Lannett due process and properly rescinded the ANDA approval, the application returned to pending status and was subject to regulatory requirements described in [FDA’s] Complete Response Letter.”

In response, Lannett argued that FDA’s ANDA approval rescission meets the test for a final agency action under the APA because it “was the consummation of the agency’s decision-making process to revoke the approval (not a tentative or interlocutory decision), and definitively adjudicated and revoked Lannett’s legal right to market Temozolomide capsules.” Lannett also asserted that the company “was not required to exhaust administrative remedies before filing this case” because FDA’s ANDA approval rescission “formally and definitively deprived [the company] of its legal entitlement to market Temozolomide capsules.”

After noting that “[a]An agency action is final if it ‘1) marks the consummation of the agency’s decision making process’ and 2) affects the ‘rights or obligations . . . [or the] legal consequences’ of the party seeking review,” and that whether “FDA’s rescission of a mistakenly approved ANDA and placement of that ANDA back into the review process queue is a final agency action” seems to be a case of first impression, Judge Walton proceeded with his analysis.

As to Lannett’s position that FDA’s action resulted in the “consummation of the agency’s decision-making process to revoke the approval” of ANDA 202750, Judge Walton said that that position “is too narrow for the Court to accept, primarily because Lannett’s position focuses solely on the rescission of the approval, which Lannett equates as a final agency action.”

Applying the principle that a court must look at the way in which an agency subsequently treats a challenged action when assessing whether a particular agency action qualifies as final for purposes of judicial review, Judge Walton concluded that “although the FDA did rescind Lannett’s ANDA approval, the FDA expressly advised Lannett that its ANDA was ‘now in pending status,’” among other things. As such, “FDA’s rescission action did not represent the conclusion of its decision-making process regarding the review process for Lannett’s ANDA or its ultimate decision to either approve or deny Lannett’s ANDA.”

And even if FDA’s ANDA approval rescission “could be perceived as the consummation of its decision-making process,” Judge Walton was not convinced that Lannett’s action satisfies the second prong of the finality doctrine above. Quoting from American Therapeutics v. Sullivan, 755 F. Supp. 1 (D.D.C. 1990) (here), a case that also involved FDA’s rescission of an ANDA approval because of CGMP concerns, Judge Walton wrote that Lannett “pictures itself, quite incorrectly, as having been deprived of a vested right.  [Rather, i]t had no right to put on the market a drug when facts were available indicating that the public health might be injured.”

Moving on to the doctrine of exhaustion of administrative remedies, Judge Walton concluded that “FDA’s rescission action cannot be considered final because Lannett has yet to exhaust all of its available administrative remedies.” Citing FDA’s regulation at 21 C.F.R. § 314.110(b) concerning Complete Response Letter actions, Judge Walton said that “Lannett was obligated to comply with the procedures provided in the FDA’s regulations by either resubmitting or supplementing its ANDA, withdrawing its ANDA, or requesting an opportunity for a hearing.”  But, instead of pursuing one of the specified actions, as the company should have done, “Lannett opted to file this action seeking judicial review.”

Our April 16^th blog post regarding 510(k) exemptions (here) garnered a lot of comments from our readers. So we thought it was worth a second post.

As you will recall, the .9 limitation says that a device of the generic type in a 510(k)‑exempt classification regulation is exempt so long as its characteristics were “existing and reasonably foreseeable” as compared to the generic type of device subject to the exemption. The regulation elaborates on what this phrase means by way of examples. Our original post covered the two main examples – intended use and fundamental scientific technology – applicable to all devices. In our original post, we explained that 510(k) clearances occurring prior to issuance of a 510(k) exemption for a category of devices can shape whether a new device’s characteristics are considered “existing and reasonably foreseeable.” This position has been acknowledged by FDA. See 63 Fed. Reg. 59222, 59224 (Nov. 3, 1998) (here).

We also indicated that post-exemption 510(k) clearances set the bounds of devices that fall outside the exemption and similar devices would also require 510(k) clearance prior to marketing. Based on our research, FDA has not articulated an official position as to what (if any) affect a post-exemption clearance has on the scope of a 510(k). Absent an interpretation from FDA, we performed our own analysis. The .9 regulations indicate that a 510(k) exemption applies to a new device in an exemption category, “to the extent that the device has existing or reasonably foreseeable characteristics of commercially distributed devices within that generic type.” The .9 regulations do not state when the characteristics of the exempt category were set or if they can change over time. It seemed reasonable to us that the characteristics must have been reasonably foreseeable at the time of the 510(k) exemption. If a type of device falls outside the exemption, it would require a 510(k) clearance. It did not seem to us that FDA would likely agree that such a 510(k) would modify the foreseeability of a subsequent device’s characteristics as it related to the exemption. Thus, if a device’s characteristics were not foreseeable, a future device with similar characteristics would also not be foreseeable as it relates to the exemption.

As stated above, based on our prior research, we have not identified any official statement from FDA regarding the effect of post-exemption clearances on the scope of the 510(k) exemption. In an effort to get some sort of an answer, we reached out to the 510(k) Premarket Notification Section within the Office of Device Evaluation. Last week, we received the following response:

When a company submits a 510(k) for a device under a 510(k) exempt regulation, it is because the device exceeded the limitations of exemption for that regulation.  If the device is then found substantially equivalent, the technology and/or indications newly cleared within that 510(k) would then expand the limitations of exemption within that regulation.

This response clearly articulates that a post‑exemption 510(k) clearance permanently adds to or broadens the scope of a 510(k) exemption. In the recent past, we have received responses to this same question from other Office of Device Evaluation (ODE) officials that have been either contrary to the above position or less clear. None of this correspondence “between representatives of FDA and an interested person outside FDA on a matter within the jurisdiction of the laws administered by [FDA],” is likely to be considered final agency action subject to judicial review. 21 C.F.R. § 10.65(a). Nonetheless, the response above is unambiguous and it does come from an office that is located within the Office of the ODE Director, so it seems to us reasonably definitive.

It is noteworthy that the foregoing position could lead to a competitive disadvantage for companies filing a 510(k) for a device believed to trip the .9 limitation. Competitors looking to enter the market after a post-exemption clearance will be able to enter the market immediately, because the clearance expanded the scope of the exemption. The company that obtains a post-exemption clearance must do all the work to expand it. The second comers will not have to do anything from a premarket perspective. This approach could deter companies from obtaining post-clearance exemptions, and some may wait until they receive an untitled or warning letter from FDA indicating that they must do so.

A reader also requested that we address the IVD-specific limitations in the .9 regulations. IVDs are subject to the same general limitation that its characteristics must be “existing and reasonably foreseeable” at the time the generic type of device became exempt from the 510(k) requirements. In addition to the intended uses and fundamental scientific technology examples, the .9 regulations also include a number of IVD specific examples for when the .9 limitations are tripped. Specifically, a 510(k) is required if the proposed device is intended:

• For use in the diagnosis, monitoring, or screening of neoplastic diseases with the exception of immunohistochemical devices;

• For use in screening or diagnosis of familial or acquired genetic disorders, including inborn errors of metabolism;

• For measuring an analyte that serves as a surrogate marker for screening, diagnosis, or monitoring life-threatening diseases such as acquired immune deficiency syndrome (AIDS), chronic or active hepatitis, tuberculosis, or myocardial infarction or to monitor therapy;

• For assessing the risk of cardiovascular diseases;

• For use in diabetes management;

• For identifying or inferring the identity of a microorganism directly from clinical material;

• For detection of antibodies to microorganisms other than immunoglobulin G (IgG) or IgG assays when the results are not qualitative, or are used to determine immunity, or the assay is intended for use in matrices other than serum or plasma;

• For noninvasive testing as defined in 812.3(k) of this chapter; and

• For near patient testing (point of care).

These examples are much more specific than the broad intended use and fundamental scientific technology examples. In addition, they are additive to the other two examples for IVD companies looking to take advantage of a 510(k) exemption. Thus, IVD manufacturers should be aware of these examples and ensure that a new IVD potentially fitting within a 510(k)-exempt category does not trip the .9 exemption for any of these reasons.

FDA finalized a guidance that clarifies FDA and EPA jurisdiction over mosquito-related products, including mosquitoes produced through the use of biotechnology.  FDA had issued the draft guidance as part of a batch of biotech-related documents that were released in the final days of the Obama administration (see our prior post here).

The final guidance takes greater pains to explain the factors that govern whether FDA or EPA have jurisdiction over a given product, and makes explicit the conclusion that “products intended to reduce the population of mosquitoes” are pesticide products regulated by EPA – regardless of “whether the product is a traditional chemical product or involves a different technology (e.g., a recombinant DNA construct or bacteria intended to reduce the population of mosquitoes)” (emphasis ours).  Consistent with that conclusion, FDA announced that Oxitec’s genetically engineered mosquito falls under EPA’s regulatory authority because it claims to control the population of a certain species of mosquito.  As we discussed in a prior posting, FDA had given a green light to investigational release of the Oxitech mosquito.  In accord with the final guidance, FDA will have no further involvement in the regulation of the Oxitech mosquito, absent a change in its intended use.

No, the first part of the title of this post is not some Halloween reference to Jigsaw, the game master of the “Saw” movie franchise.  Instead, it’s a reference to a more gentle game.  If you have (or have had) young children, then you’ve probably played a “What’s Missing?” memory-type game with them.  For example, in the board version of the game, a player removes one object from play, hiding it somewhere.  The other players then search the table to try to decipher what’s missing, yelling out the answer as soon as they think they know.  Today, we’re going to play a Hatch-Waxman version of the “What’s Missing” memory game.  Good luck!

Assuming, as we do, that our readers know what the typical ANDA “fact board” looks like, here’s what our Generic COPAXONE 40 mg/mL “memory board” looks like:

• On January 28, 2014, FDA approved a supplement to Teva Pharmaceuticals USA’s (“Teva’s”) NDA 020622 for COPAXONE (glatiramer acetate) Injection to add a “new dosing strength of 40 mg per mL administered three times per week.”
• Mylan Pharmaceuticals Inc. (“Mylan”) submitted ANDA 206936 to FDA on February 12, 2014 seeking approval to market a generic version of Glatiramer Acetate Injection, 40 mg/mL.
• On or about February 26, 2014, information on seven patents (five expiring on May 24, 2014, and two expiring on August 19, 2030) appeared in the Orange Book for COPAXONE NDA 020622. The two patents expiring on August 19, 2030 are U.S. Patent No. 8,232,250 (“the ‘250 patent”) and U.S. Patent No. 8,399,413 (“the ‘413 patent”). Subsequently, information on U.S. Patent No. 8,969,302 (“the ‘302 patent”); U.S. Patent No. 9,155,776 (“the ‘776 patent”); and U.S. Patent No. 9,402,874 (“the ‘874 patent”) was added to the Orange Book.
• FDA’s ANDA Paragraph IV Certifications List identifies February 26, 2014 as the first date on which an ANDA was submitted to FDA containing a Paragraph IV ccertification to patents listed in the Orange Book for COPAXONE Injection, 40 mg/mL.
• Teva timely sued Mylan in the U.S. District Court for the District of Delaware (Civil Action Nos. 14-cv-1278) and in the U.S. District Court for the Northern District of West Virginia (Civil Action No. 14-cv-0167), alleging infringement of the ‘250 and ‘413 patents (and later, the later-listed patents). The West Virginia District Court identified a 30-month stay “deadline” expiring “on or about February 28, 2017.” The Delaware District Court also identified a 30-month stay “deadline” expiring “on or about 2-28-2017.”
• On January 31, 2017, Mylan, in In Re Copaxone Consolidated Cases, prevailed with respect to, among other patents, the ‘250 and ‘413 patents.
• On October 3, 2017, FDA approved Mylan’s original ANDA 206936 for generic Glatiramer Acetate Injection, 40 mg/mL, and noted that Mylan, as a “first applicant,” is eligible for a period of 180-day exclusivity.
• According to FDA’s approval letter for Mylan ANDA 206936:

Your ANDA contains paragraph IV certifications to each of the patents¹ under section 505(j)(2)(A)(vii)(IV) of the FD&C Act stating that the patents are invalid, unenforceable, or will not be infringed by your manufacture, use, or sale of Glatiramer Acetate Injection 40 mg/mL, under this ANDA. You have notified the Agency that Mylan Pharmaceuticals Inc. (Mylan) complied with the requirements of section 505(j)(2)(B) of the FD&C Act and that litigation was initiated within the statutory 45-day period against Mylan for infringement of the ‘250 and ‘413 patents in the United States District Court for the District of Delaware and the Northern District of West Virginia [Teva Pharmaceuticals USA Inc., Teva Pharmaceutical Industries Ltd., Teva Neuroscience, Inc., and Yeda Research and Development Co. Ltd. v. Mylan Pharmaceuticals Inc., Mylan Inc. and Natco Pharma Ltd., Civil Action Nos. 14-cv-1278 and 14-cv-0167] and for infringement of the ‘302, ‘776, and ‘874 patents in the United States District Court for the District of Delaware [Teva Pharmaceuticals USA Inc., Teva Pharmaceutical Industries Ltd., Teva Neuroscience, Inc., and Yeda Research and Development Co. Ltd. v. Mylan Pharmaceuticals Inc., Mylan Inc. and Natco Pharma Ltd., Civil Action Nos. 15-cv-0306, 14-cv-1171, and 16-cv-1267].

• The “¹” reference is to an endnote in the ANDA approval letter stating: “The Agency notes that the ‘250, ‘413, ‘302, ‘776 and ‘874 patents were submitted to the Agency after submission of your ANDA. Litigation, if any, with respect to these patents would not create a statutory stay of approval.” (Note that the last sentence is typical for an approval letter – see, e.g., here, here, and here.)

Given these game pieces on our board, what’s missing? (Cue up the Jeopardy Theme)

If you take a look at the three approval letters linked to above, you’ll notice that in each case FDA addresses – either implicitly or explicitly – the absence, existence, or termination of a 30-month litigation stay that is triggered as a result of timely filed patent infringement litigation for patents listed at the time of ANDA submission. This occurs at the end of the paragraph of an ANDA approval letter beginning with either “Your ANDA contains paragraph IV certifications to each of the patents¹ under section 505(j)(2)(A)(vii)(IV) of the FD&C Act. . . ,” or “With respect to the ‘XXX and ‘XXX patents,¹ your ANDA contains paragraph IV certifications under section 505(j)(2)(A)(vii)(IV) of the FD&C Act. . . .” For example, FDA may conclude the paragraph with “You have also notified the Agency that the cases have been dismissed,” or with “this litigation is ongoing,” or with “Although these litigations remain ongoing, the 30-month period identified in section 505(j)(5)(B)(iii) of the FD&C Act, during which FDA was precluded from approving your ANDA, has expired.”

The paragraph in the approval letter for Mylan ANDA 206936 beginning with “Your ANDA contains paragraph IV certifications to each of the patents¹ under section 505(j)(2)(A)(vii)(IV) of the FD&C Act” ends rather abruptly and without any mention or allusion to a 30-month stay. That’s the missing piece!!  Instead, the “¹” reference – which is usually in a footnote, but appears in an endnote in the Mylan approval letter – says that the ‘250 and ‘413 patents that Mylan intially certified to (as well as the later-listed ‘302, ‘776 and ‘874 patents) do not create a statutory 30-month stay of ANDA approval.

So, what’s the deal?? After all, the statute and FDA’s regulations state that a patent is considered timely listed if information is submitted to FDA within 30 days of patent issuance or within 30 days of an NDA approval. And Teva appears to have timely submitted information to FDA on both the ‘250 and ‘413 patents for Orange Book listing after the January 28, 2014 approval of Glatiramer Acetate Injection, 40 mg/mL, under NDA 020622. Moreover, both the West Virginia District Court and Delaware District Court identified a 30-month stay “deadline” expiring “on or about February 28, 2017.” So, wouldn’t the timely listing of the ‘250 and ‘413 patents, combined with Paragraph IV certifications to them as of the date the patents were listed in the Orange Book, give rise to a 30-month stay?

While you’re chewing on that, we also note that the statute states, with respect to the availability of a 30-month litigation stay that:

If the applicant made a [Paragraph IV] certification . . . , the approval shall be made effective immediately unless, before the expiration of 45 days after the date on which the notice described in paragraph (2)(B) is received, an action is brought for infringement of the patent that is the subject of the certification and for which information was submitted to the Secretary under subsection (b)(1) or (c)(2) before the date on which the application (excluding an amendment or supplement to the application), which the Secretary later determines to be substantially complete, was submitted. If such an action is brought before the expiration of such days, the approval shall be made effective upon the expiration of the thirty-month period beginning on the date of the receipt of the notice provided under paragraph (2)(B)(i) or such shorter or longer period as the court may order because either party to the action failed to reasonably cooperate in expediting the action. . . .

FDC Act § 505(j)(5)(B)(iii) (emphasis added).

From what we gather, there was probably some ruckus at FDA about whether or not a stay on the approval of Mylan ANDA 206936, which was presumably initially submitted with a Paragraph I or “No Relevant Patents” certification, had been triggered by Mylan’s Paragraph IV certification amendment. In the end, it didn’t matter, because by the time FDA approved Mylan ANDA 206936 on October 3, 2017 any stay would have expired long ago, in February 2017. Nevertheless, FDA addressed the issue – rather covertly (or perhaps even inadvertently) – in the approval letter for ANDA 206936; and specifically in an endnote (instead of in a footnote) stating that Mylan’s February 26, 2014 Paragraph IV certifications the ‘250 and ‘413 patents did not create a statutory 30-month stay of ANDA approval.

While it’s relatively rare that an ANDA is submitted to FDA within 30 days of the date of the NDA reference listed drug approval, the scenario above shows that it can happen. What this means for all parties involved (NDA sponsors and ANDA applicants) is the need for speed. NDA applicants should submit patent information quickly after approval, and ANDA applicants should pounce at the opportunity to avoid a 30-month litigation stay by submitting as soon as possible after NDA approval.

In January 2017, the Federal Trade Commission (FTC) and New York Attorney General (collectively, “Plaintiffs”) announced a lawsuit charging that Quincy Bioscience, related entities, and two individuals (collectively “Defendants”), the marketers of the dietary supplement Prevagen, made false and unsubstantiated claims that Prevagen improved memory.  Challenged claims included “Prevagen improves memory,” Prevagen “has been clinically shown to improve memory,” and the claim that “A landmark double-blind and placebo controlled trial demonstrated Prevagen improved short-term memory, learning, and delayed recall over 90 days.” Plaintiffs alleged that Defendants relied on a single study that failed to show that Prevagen works better that a placebo on any measure of cognition.

Defendants moved to dismiss the complaint on several grounds, including the argument that Plaintiffs’ Complaint failed to adequately allege that the advertising claims for Prevagen violate the FTC Act. On September 28, 2017, the District Court of the Southern District of New York granted the motion.

As described in the decision, Defendants claims were based on a clinical study that met the “gold standard,” i.e., a double blind, placebo controlled human clinical study using objective outcome measures using 218 subjects.” Plaintiffs did not take issue with the design of the study. However, they did take issue with the Defendants’ analyses of that study in support of its marketing claims. Namely, after the study failed to show a statistically significant improvement in the experimental group over the placebo group, Defendants conducted a “number” (more than 30) post hoc analyses of the results, looking at data for smaller subgroups. Doing so, they did find some statistically significant differences. These statistically significant results provided the basis for Defendants’ challenged marketing claims. Plaintiffs argued that this post hoc subgroup analysis did not constitute valid support for the claim because the post hoc analyses increased the probability of finding a significant improvement in a subgroup for one of the parameters. They argued that ‘[g]iven the sheer number of comparisons run and the fact that they were post hoc, the few positive findings on isolated tasks for small subgroups of the study population do not provide reliable evidence of a treatment effect.’ In other words, according to the Plaintiffs, the finding of a significant difference was merely the result of the number of analyses; if you throw a dice often enough, you will get the result you want.

The Court rejected Plaintiffs’ arguments, and concluded that their challenge to Defendants’ substantiation was theoretical. They had no evidence that the claim was not supported, but only showed there was a possibility that the study results did not support Defendants’ claims. This mere possibility rather than plausibility did not entitle Plaintiffs to relief.

Not surprising, FTC has not given much publicity to this loss. Plaintiffs may be considering whether to appeal the decision. We will be monitoring further developments.

Paul Simon sang about the 50 ways to leave your lover but there are more ways to go to jail if you are regulated by FDA. Congress has increased the regulatory powers of FDA significantly in the past 20 years but largely unnoticed has been the dramatic increase in criminal offenses under the Federal Food, Drug, and Cosmetic Act (FDC Act).  The relevant statutory provision is section 301 of the FDC Act which contains a list of prohibited acts, each of which is a potential criminal violation.  There are currently 56 subsections under 301, many of which contain multiple ways to violate the law.

As many well know the FDC Act is a strict liability criminal statute with respect to misdemeanor violations. That means that intent to violate the law is not required.  Subsection 301(a) is the quintessential criminal offense.  It makes illegal the “introduction or delivery for introduction into interstate commerce” of a food, drug, device, tobacco product, or cosmetic that is adulterated or misbranded.  That prohibition is bolstered by subsection (b) which makes it a crime to adulterate or misbrand any of these products while they are in interstate commerce, subsection (c) which makes it illegal to receive in interstate commerce adulterated or misbranded products and subsection (k) which makes it a crime to adulterate or misbrand a product after shipment in interstate commence.  These provisions have been at the core of FDA civil and criminal enforcement actions over the years.

When this law firm was started in March 1980 section 301 had 18 subsections — (a) through (r). In September 1980 Congress added subsection (s) which criminalized the failure to comply with requirements for infant formulas.  It was not until 17 years later that Congress completed the first alphabet by enacting subsections (x), (y) and (z) as part of the FDA Modernization Act.  Congress has been on a roll since, adding an entire second alphabet of criminal offenses — subsections (aa) through (zz) — in 11 years from 2000 to 2011.  Congress is now in the third alphabet.  The most recent addition is (ddd) which makes it illegal to manufacture or introduce or deliver for introduction into interstate commerce “a rinse-off cosmetic that contains intentionally added plastic microbeads.”  Who knew this was a problem worthy of Congressional action?  The legislative history shows that this prohibition is an environmental measure to address the presence of microbeads in the Great Lakes.

Many of these new criminal penalties were enacted as part of broader legislation that expanded FDA regulatory authority into new areas such as tobacco or enhanced the Agency’s powers, and correspondingly industry’s obligations, in areas that FDA has long regulated, such as food.

Among other prohibited acts is the “charitable contribution of tobacco products,” something that would have been welcomed by the troops serving in World War II, Korea, Vietnam and maybe even today in Iraq and Afghanistan. Another recent example is subsection (jj) which makes it illegal to fail to submit information on clinical trials to Clinicaltrials.gov.  Congress also significantly expanded the potential criminal liability of those in the food business.  Subsections (uu) through (zz) make criminal the failure to comply with very detailed and complicated requirements relating to food safety.  For example, the owner, operator or agent in charge of a facility is required to identify potential food safety hazards, institute preventive measures, monitor the effectiveness of those preventive measures and verify compliance, among other things.  A failure to do any of those things correctly is a criminal violation irrespective of intent.

As the Supreme Court said in 1943 in US v. Dotterweich, 320 U.S. 277 (1943) “Hardship there doubtless may be under a statute which thus penalizes the transaction though consciousness of wrongdoing be totally wanting.”  The potential for such hardship has increased dramatically since 1943 as Congress has expanded the scope of FDA’s authority and criminalized the inadvertent failure to comply with these wide-ranging regulatory requirements.  Although FDA and the Department of Justice have yet to bring prosecutions under most of these newer prohibitions, that should provide little comfort to those who work in FDA-regulated industries.

Getting an early jump on winter, between September 29 and October 2, CDRH issued a blizzard of new guidance documents. All eleven of these guidances were issued based on commitments from MDUFA IV.  These guidances consist of:

• four guidances regarding user fees for each type of submission (510(k)s, PMAs/BLAs, 513(g)s, and de novos);
• four guidances regarding administrative procedures and review time frames for premarket submissions (510(k)s, PMAs, de novos, and CLIA categorization);\
• a guidance regarding responding to premarket submission deficiencies in a least burdensome manner (which we blogged on earlier here);
• a revised guidance regarding 517A appeals; and
• a revised pre-submission guidance.

A full list of the guidances can be found here.

The first eight guidances are mainly administrative and are consistent with the commitments described in MDUFA IV, which we summarized in our FDARA Summary. The revised 517A appeals guidance reflects the change from FDARA indicating that a substantive summary must now include an explanation regarding how the least burdensome requirements were considered and applied in the decision being appealed.  Given the boilerplate nature of least burdensome explanations, it is not clear that this will be of any real value.  In addition, the guidance adds that decisions regarding breakthrough decisions (granting/denial) are considered significant decisions, which can be appealed under Section 517A.

The revised pre-submission guidance has a few notable changes. These modifications primarily relate to meeting timing, scheduling of meetings, and meeting minutes.  The timeframe for most pre-sub types set forth in Table 1 of the guidance are unchanged.  However, consistent with MDUFA IV, the timeframe for general pre-submission has been modified.  Specifically, in the original 2014 guidance, FDA committed to having a meeting/teleconference (if requested) within 75 to 90 days from receipt of the pre-submission.  The guidance also committed to providing written feedback within 3 business days of the meeting/teleconference.  In the updated guidance, FDA now commits to generally holding meetings within 60 to 75 days of submission receipt and providing written feedback within 70 days of receipt or 5 calendar days prior to a meeting/teleconference, whichever is sooner.  The meeting timeframe is not much different from what was happening in practice prior to release of the new guidance.  In our experience, FDA has, when possible, been holding meetings within 60 to 75 days.  However, written feedback has sometimes been delayed, occasionally coming just a day before the meeting.  Receiving written feedback 5 calendar days before the meeting should allow submission sponsors more time to digest FDA’s written comments and prepare for their meetings.

The guidance also provides a more formalized process for scheduling pre-submission meetings. Sponsors will still need to propose three dates for a meeting/teleconference in its pre-submission.  Within 15 days of receipt, FDA will still conduct its acceptance review, which is unchanged.  Once accepted, FDA will either confirm one of the sponsor’s proposed dates or propose two alternative dates, which should be within 75 days of submission receipt.  FDA will work with the sponsor to set a meeting date between acceptance of the submission and 30 days after submission receipt.  If a meeting has not been scheduled by day 40, an FDA manager will call the sponsor to resolve the scheduling conflict.  In our view, this process was a much-needed addition to the guidance.  With all of its other obligations, FDA has sometimes fallen short on setting pre-submission meetings in a timely fashion.  We hope these new procedures will help facilitate timely meeting scheduling.

Another notable change is that the 2014 guidance said that an applicant could request the manner in which is preferred to receive feedback (i.e., meeting, teleconference, in writing). The guidance also said “please note that FDA will ultimately decide the means of communicating the feedback, but will consider the desired method requested in the Pre-Sub.”  This quoted language has been removed in the revised guidance.  While we are only aware of a couple of instances in which FDA did not provide the feedback in the manner requested by the sponsor, we are happy to see that this language has been removed.  The removal should mean that FDA will provide the type of feedback requested by the sponsor.

The final change relates to meeting minutes. The revised guidance indicates that at the beginning and end of a pre-submission meeting/teleconference, the sponsor must affirmatively state that it will draft minutes and provide meeting minutes to FDA within 15 calendar days of the meeting.  For those that have been to a pre-sub meeting recently, this is a statement that FDA typically makes at the start and end of the meeting.  Putting the responsibility on the sponsor may seem unusual; however, at the recent AMDM IVD Focus Meeting (October 5, 2017 in Los Gatos, CA), Elizabeth Hillebrenner, M.S.E., Associate Director for Programs and Performance at OIR indicated that FDA has had issues with pre-submission sponsors submitting meeting minutes.  Ms. Hillebrenner noted that issues generally include not submitting minutes at all, not submitting within 15 days, or submitting minutes that are inadequate to document the meeting (e.g., insufficient detail).  With this critique in mind, it makes sense that FDA would want manufacturers to acknowledge that they will draft and submit minutes within 15 days.  This procedural change should not be burdensome for sponsors.  Presumably, if a manufacturer forgets to make the requisite statement at the beginning and end, FDA will remind the company.

Ms. Hillebrenner’s comments should also remind all pre-submission sponsors of best practices when it comes to meeting minutes. Sponsors should ensure that at least one person at the meeting is solely responsible for taking minutes.  The minutes should not be a transcript of the meeting.  However, they should be sufficiently detailed to document the discussion that occurred.  Well drafted meeting minutes benefit both the sponsor and FDA ensuring that there is an adequate, detailed account of the meeting.

There is a long history and established precedent in Drug Enforcement Administration (“DEA”) administrative cases in the use of summary dispositions (i.e., determination without a hearing) related to the loss of state licensing authority (e.g., state medical or controlled substance license) (see our previous post here). In such cases, agency precedent dictates that revocation is required as a matter of law. See Serenity Café, 77 Fed. Reg. 35027, 35027-28 (June 12, 2012).  In other words, because DEA views state licensure of practitioners to be a condition precedent to holding a DEA registration, a registrant without state licensure cannot, as a matter of law, continue to hold a registration. See 21 U.S.C. §§ 802(21), 823(f).

We previously commented on the fact that DEA had recently granted summary disposition in a case, Richard J. Blackburn, D.O., 82 Fed. Reg. 18669 (Apr. 20, 2017), involving, in part, an alleged material falsification of a DEA application for registration (see our previous post here). In our opinion, this was a troubling decision to expand the use of summary dispositions based on a factual issue and not as a matter of law, thus denying the registrant the opportunity to present evidence on the circumstances related to the allegation.

A more recent case, however, extends this trend and includes the apparent establishment of an “egregiousness” standard that DEA may use to justify future summary dispositions and, in the process, deny registrants the due process contemplated under the Controlled Substances Act (“CSA”) and regulations promulgated by DEA.

On October 5, 2017, DEA published a final order by the (now former) Acting Administrator revoking a physician’s registration through summary disposition. In this case, William J. O’Brien, III, D.O., 82 Fed. Reg. 46527 (Oct. 5, 2017), a physician had been convicted of over one hundred felony counts related to controlled substances, including one for distribution of controlled substances resulting in death.  The practitioner was sentenced to a total term of imprisonment of 30 years.  Not surprisingly, the state licensing authority also suspended his medical license (i.e., lack of state authority).

The government sought—and was granted—summary disposition on the lack of state authority. As noted above, this is a well established precedent.  However, the Acting Administrator also upheld the ALJ’s ruling granting the government’s motion for summary disposition on the felony conviction grounds.  In granting summary disposition on the felony conviction grounds, the ALJ noted the recent Blackburn decision in which the Acting Administrator held that the Government was entitled to summary disposition on the grounds of material falsification.

This use of summary disposition based on a felony conviction related to a controlled substance (21 U.S.C. § 824(a)(2))—in our experience— is unprecedented and a trend that could lead to the erosion of the due process rights of DEA registrants and applicants.

The Acting Administrator acknowledged that the use of summary disposition was out of the ordinary:

In contrast to a practitioner’s loss of his state authority, this finding does not mandate the revocation of his registration on this ground [(i.e., felony conviction related to controlled substances)] and the Agency has held that a conviction is not a per se bar to registration (as is the loss of state authority). . . . Here, however, Respondent’s criminal conduct, which involves 120 felony convictions for unlawful distribution, including for unlawful distribution resulting in death, is so obviously egregious that revocation is warranted.

Id. at 46529. The Acting Administrator also admitted that “ordinarily a respondent who has been convicted of a felony subject to section 824(a)(2) is entitled to present a case as to why his registration should not be revoked (or his application denied).” Id.

However, the Acting Administrator appears to have created a new standard in stating that a hearing was unnecessary because the conduct was so “egregious.” While he noted that the practitioner had not alleged “evidence to show why he can be entrusted with a registration nor raised any contention that he acknowledges his misconduct and has undertaken remedial measures,” the physician never had the opportunity to hear or question the government’s case or to present actual evidence in his defense. Id. The bottom line:  DEA (government counsel, ALJ, and Acting Administrator) all agreed that the physician’s criminal convictions were so egregious that a hearing was useless.  In the Agency’s view, there was nothing that the physician could raise in his defense that could persuade the Acting Administrator against revocation.

The problem is that the CSA, DEA regulations, and DEA’s own precedent allow a respondent to rebut the government’s prima facie case by a showing of (1) acceptance of responsibility and (2) remedial actions. See, e.g., Mireille Lalanne, M.D., 78 Fed. Reg. 47750, 47777 (Aug. 6, 2013).  The respondent may also attempt to mitigate the severity of the wrongdoing by providing context, such as ill health or other circumstances.  Most importantly, the CSA states that, prior to revoking a registration based on a violation of 21 U.S.C. 824(a) (including felony conviction related to controlled substances), the Administrator must provide the respondent with an opportunity for a hearing under the Administrative Procedure Act (“APA”). See 21 U.S.C. § 824(a)(c).

DEA’s failure to provide the physician in this case with an opportunity for a hearing to present testimony and/or documentary evidence on the felony conviction grounds (21 U.S.C. § 824(a)(2)) flies in the face of the due process protections afforded to respondents by the APA and CSA. It also deviates from other cases where DEA did afford the respondents the opportunity for a hearing even though they had been convicted of felonies related to controlled substances.  In some of these cases, DEA refused to revoke a registration (or deny an application) in light of the respondent’s remedial case, despite a finding that the respondent has been convicted of a felony related to controlled substances. See, e.g., Kimberly Maloney, N.P., 76 Fed. Reg. 60922, 60922-23 (Sept. 30, 2011) (granting application of physician with felony conviction for obtaining controlled substance by means of forged prescription); Michael S. Moore, M.D., 76 Fed. Reg. 45867, 45867-68 (Aug. 1, 2011) (suspending—not revoking—registration of doctor convicted of felony manufacturing of controlled substance); Mary Thomson, M.D., 65 Fed. Reg. 75969, 75971-52 (Dec. 5, 2000) (continuing registration with restrictions of physician with felony conviction for obtaining controlled substances by fraud); Edson W. Redard, M.D., 65 Fed. Reg. 30616, 30618-19 (May 12, 2000) (continuing registration with restrictions of physician with felony conviction for obtaining controlled substance by fraud).

DEA’s decisions in this case and the Blackburn case reveal a troubling trend.  The Agency has now provided some precedent for obtaining a revocation or application denial through summary disposition based on grounds other than loss of state authority (so far, material falsification and felony conviction)—grounds that are by statute to be reviewed (at the request of the respondent) through the hearing process.  21 U.S.C. § 824(c).  Now it appears DEA may decide that the alleged violations are so “egregious” that it need not provide the required due process rights.  So, for example, DEA could decide that a registrant’s recordkeeping is so deficient on its face and as a matter of law, that the registrant should not be given the opportunity to present evidence in his/her defense or to accept responsibility and demonstrate remedial action.

In conclusion, as required by law and agency precedent, DEA should limit summary dispositions to matters of law with no factual dispute. Otherwise, despite potentially  “egregious” actions, registrants should be provided the due process required under the law, regulations, and agency precedent.

On October 9, 2017, California Governor Jerry Brown signed into law a bill (SB 17), which imposes new notification and reporting requirements on pharmaceutical companies, health care service plans, and health insurers. Among the many reporting obligations under SB 17, we describe below only those obligations associated with drug pricing. Other state legislatures have undertaken similar efforts intended to promote transparency in drug pricing (see our posts on a Nevada bill, here, and a Vermont law, here). Maryland enacted a law that prohibits an “unconscionable increase” in the price of a generic drug, which is the subject of ongoing litigation (see our posts here and here).

Manufacturer Reporting: WAC Increases of 16% or More

Pharmaceutical manufacturers with prescription drugs purchased or reimbursed by a state purchaser, licensed health care service plan, health insurer, or pharmacy benefit manager (PBM) have reporting requirements under SB 17. It is important to note that, under California law, manufacturers include not only those entities that produce prescription drugs, but also those that repackage prescription drugs as well as certain types of entities that distribute those drugs. See Cal. Bus. & Prof. Code § 4033. A manufacturer with any prescription drugs that have a wholesale acquisition cost (WAC) of more than $40.00 for a course of therapy must notify each purchaser if it will increase the WAC more than 16%. The 16% increase threshold includes the current increase and the cumulative increases that occurred within the previous two calendar years prior to the current year. Notice must be given to the purchaser at least 60 days prior to the planned effective date of the increase. PBMs receiving notice of WAC increases greater than 16% must notify their contracted large public and private purchasers (covering >500 lives) of such increases as well. California’s Office of Statewide Health Planning and Development (OSHPD) Legislative Affairs office indicated that the effective date for these notification requirements and other requirements which do not specify a delayed implementation date is January 1, 2018.

Starting in January 2019, prescription drug manufacturers must report to the OSHPD on a quarterly basis the following information for each drug with an increase in WAC of over 16%:

• A description of the financial and nonfinancial factors used to make the decision;
• A schedule of WAC increases for the drug for the previous five years;
• If the drug was acquired by the manufacturer in the last five years, other information about the WAC history, purchase price, and the previous owner;
• Patent expiration information;
• Whether the drug meets the definition of multiple source drug, innovator multiple source drug, noninnovator multiple source drug, or single source drug under the Medicaid Drug Rebate Program (42 U.S.C. § 1396r-8(k)(7)(A));
• A description of the “change or improvement in the drug, if any, that necessitates the price increase”; and
• The volume of U.S. sales for that drug in the previous year.

Manufacturer Reporting: New Drugs

If a prescription drug manufacturer plans to introduce a new prescription drug to market at a WAC that exceeds the threshold set for a specialty drug under the Medicare Part D program, it must notify OSHPD in writing within three days after release of the drug in the commercial market. The specialty tier threshold for Calendar Year (CY) 2017 (and CY 2018) is $670 per month. CMS, Announcement of CY 2018 Medicare Advantage Capitation Rates and Medicare Advantage and Part D Payment Policies and Final Call Letter and Request for Information, 152-153 (Apr. 3, 2017).

The notification must include the following information:

• A description of the marketing and pricing plans used in the launch of the new drug in the United States and internationally;
• The estimated volume of patients who may be prescribed the drug;
• Whether the drug was granted breakthrough therapy designation or priority review by FDA prior to final approval; and
• The date and price of acquisition if the drug was not developed by the manufacturer.

Additional Manufacturer Reporting Provisions

OSHPD will publish the information obtained under the two sections above on its website at least quarterly. SB 17 states that the “information shall be published in a manner that identifies the information that is disclosed on a per-drug basis and shall not be aggregated in a manner that would not allow identification of the drug.”

Manufacturers may limit the information reported under the two sections described above to information that is otherwise in the public domain or that has been made publicly available.

Finally, manufacturers may incur civil penalties of $1,000 per day following the notification period for noncompliance.

Health Insurer and Health Plan Reporting Related to Prescription Drugs

With regard to health insurers and health care service plans that must, under California law, report rate information to either the state Department of Managed Health Care (DMHC) or Department of Insurance (DOI), SB 17 requires reporting to DMHC or DOI the following cost information for all covered prescription drugs no later than October 1 of each year, starting in 2018:

• The 25 most frequently prescribed drugs;
• The 25 most costly drugs by total annual plan spending; and
• The 25 drugs with the highest year-over-year increase in total annual plan spending.

DMHC and DOI must compile this information into a public report “that demonstrates the overall impact of drug costs on health care premiums.” The report must be published on their websites by January 1 of each year.

SB 17 also requires health plans with large group health care service plan contracts and health insurers with large group health insurance policies to disclose the following information for covered generic, brand, and specialty drugs dispensed at a plan, network, or mail order pharmacy for outpatient use:

• The percentage of the premium attributable to prescription drug costs for the prior year for each prescription drug category;
• The year-over-year percentage increase in per-member, per-month total health plan spending for each prescription drug category;
• The year-over-year increase in per-member, per-month costs for drugs, compared to other components of the health care premium;
• The specialty tier formulary list;
• The percentage of the health care premium attributable to prescription drugs covered under the medical benefit;
• Information on the use of a PBM, if any, along with information on which components of prescription drug coverage are managed by the PBM; and
• The PBM or other manager name(s).

We will continue to track implementation of SB 17 and similar legislation regarding drug pricing transparency in other states.

* Law Clerk

Today (October 12, 2017) FDA’s Cellular, Tissue, and Gene Therapies Advisory Committee unanimously recommended approval of Spark Therapeutics, Inc.’s Biologics License Application (BLA 125610) for Voretigene Neparvovec (also called LUXTURNA), a gene therapy for the treatment of patients with vision loss due to confirmed biallelic RPE65 mutation-associated retinal dystrophy (i.e., an inherited retinal dystrophy that always progresses to blindness). This is the first true gene therapy to come before an FDA advisory committee.  Today’s action boosts not only the hopes of those with this specific genetic disorder, but also sparks hope among all those with incurable genetic diseases.

“Lessons Learned” include:

• A single pivotal efficacy study of modest scope (n=31) may be sufficient.
• Dose optimization and drug safety assessments, even for highly innovative gene therapy, need not be necessarily more extensive than those for other similarly rare diseases.
• Videographic evidence of subjects negotiating a dimly-lit maze shows sponsor and FDA commitments to preference for a patient-centric primary endpoint measure.
• This measurement of a critical daily patient function is even more noteworthy here in this clinical area that has very well established quantitative measures (e.g., visual acuity and visual field which were secondary endpoints).

Global Observation:

The Office of Tissues and Advanced Therapies within the Center for Biologics Evaluation and Research at FDA exhibits reasonable and appropriate “flexibility” in its review of this first true gene therapy seeking FDA registration.

Today’s action may be the Spark that illuminates the way forward for all those with incurable genetic disease.

Sponsors commonly receive a request for additional information (AI) during Food and Drug Administration (FDA) review of a 510(k) submission, de novo classification request, or premarket approval application. In some cases, a sponsor may conclude that one or more AI requests calls for information that is not relevant or necessary to fulfill the statutory criteria for clearance or approval. Such requests do not comply with the requirement in the Federal Food, Drug, and Cosmetic Act for FDA to require the “least burdensome” scientific evidence necessary to support clearance or approval.

In these situations, a useful first step is to turn to FDA’s guidance, Developing and Responding to Deficiencies in Accordance with the Least Burdensome Provisions – Guidance for Industry and Food and Drug Administration Staff. An updated version of this guidance was issued on September 29, 2017, in fulfillment of a Medical Device User Fee Amendments of 2017 (MDUFA IV) Commitment Letter. It aims to help FDA review staff and supervisors request additional information that represents the “minimum required” to make their regulatory decisions. See FD&C Act, Sections 513(i)(1)(D)(ii), 513(a)(3)(D)(iii), and 515(c)(5)(B).

The guidance was originally issued 17 years ago (on November 2, 2000). It applies to FDA’s requests for additional information, which they refer to as deficiencies, needed to complete reviews of premarket approval (PMA), humanitarian device exemption (HDE), premarket notification [510(k)] and De Novo premarket submissions. As in the original, the guidance sets forth principles for FDA in writing deficiency letters and provides a suggested format for industry responses to FDA deficiencies. A sponsor can use these principles when explaining to FDA why a particular AI request is not “least burdensome.”

New to the guidance are a set of six guiding principles for FDA review staff:

1. Information unrelated to the regulatory decision should not be part of the decision-making process.
2. Alternative approaches to resolving regulatory issues should be considered to optimize the necessary time, effort, and resources involved in developing a response.
3. Deficiencies should request the minimum (i.e., least burdensome) amount of information necessary to adequately address the identified issue in the most efficient manner at the right time. The balance between premarket and postmarket should be considered to determine when information should be provided to address the identified issue.
4. Major deficiencies are those based on least burdensome principles that, if not resolved, will preclude a favorable decision on the marketing application. Major deficiencies should only be included if their resolution is necessary in order to reach a final decision regarding the marketing authorization.
5. If the Agency is including minor deficiencies identified during the review in the deficiency letter, the Agency should identify these requests separately from major issues, and whenever possible, attempt to resolve minor questions/issues interactively. Minor deficiencies are FDA requests that can be resolved in a straightforward manner, but that need to be addressed to meet regulatory requirements or to prevent potential misbranding or adulteration. In general, the Agency should not issue a formal deficiency letter if only minor deficiencies remain, but instead should attempt to resolve them interactively.
6. FDA may also include additional considerations that are suggestions, recommendations, or requests that are not expected to preclude a favorable decision on the marketing application. Because additional considerations are not expected to preclude a favorable decision, they do not require an applicant response.

Also new is the requirement from the MDUFA IV Commitment Letter for all deficiency letters to undergo supervisory review prior to issuance. Additionally, the recommendation for FDA staff now includes the following: “where appropriate, reference to an applicable section of a final rule, final guidance, and/or an FDA recognized standard (unless the entire or most of the document is applicable). When the deficiency cannot be traced in the manner above and relates to a scientific or regulatory issue pertinent to the determination, FDA will cite the specific scientific issue and the information to support its position.”

Like the original guidance, the updated guidance provides a recommended format for responding to deficiencies. These recommendations include:

1. 1. Restate the identified Agency issue; and
2. Provide one of the following:
3. the information or data requested;
4. an explanation why the issue is not relevant to the marketing authorization decision; or
5. alternative information and an explanation describing why the information adequately addresses the issue.

One of the biggest challenges in responding to an FDA deficiency letter is persuading FDA to actually accept to accept either alternative information or a sponsor’s explanation as to why additional information is not necessary. These are areas where sponsors and reviewers often struggle to reach agreement. Although some examples are provided, the new guidance provides no new insights on how best to approach this perennial problem. In our experience, the most persuasive case will be based on a deep understanding of the technology and careful attention to the concern FDA is raising. Simply reiterating the “least burdensome” mantra back to FDA reviewers is unlikely to yield positive results.

All in all, while the “least burdensome” requirement has never had a lot of teeth in it, we are hopeful that the new guiding principles, specific references and supervisory review will help keep FDA’s deficiency letters focused on the minimum information necessary to reach a regulatory decision.

In early 2016, CMS issued a proposed rule to test new models for the payment of drugs and biologics under Medicare Part B (see our previous post here). The current statutory payment methodology for most drugs under Medicare Part B is the Average Sales Price (ASP) plus six percent. The proposed five-year pilot program would have tested an alternative payment methodology of ASP + 2.5% plus a flat fee of $16.80 (Phase I) and the effect of four different value-based pricing methods (Phase II). The pilot was to have been conducted under the authority of Section 1115A of the Social Security Act, which authorizes CMS’s Center for Medicare and Medicaid Innovation (CMMI) to test innovative payment models to reduce program expenditures.

On October 4, CMS announced, in a short Federal Register notice, that it has withdrawn the proposed rule. The notice states that the Agency received 1,350 public comments and that “a number of commenters expressed concerns about the proposed model.” Because of the “complexity of the issues related to the proposed model design and the desire to increase stakeholder input,” CMS decided to abandon the proposed pilot. The notice concludes with a statement about how the Agency wants to “ensure agency flexibility” in re-examining these issues.

We will continue to track this and any new initiatives concerning drug payment methodology proposed under CMMI.

* Law Clerk

On September 28, 2017, the Department of Health & Human Services’ Office of Inspector General (OIG) released its internal report on FDA’s domestic food facility inspections.  The “key takeaway”: “FDA should do more to ensure that the food supply is safe by taking swift and effective action to ensure the prompt correction of problems identified at domestic food facilities.”

In the previous (2010) review, OIG found that FDA inspected less than a quarter of domestic food facilities each year, and that many facilities had not been inspected in 5 years or more. OIG also found that FDA did not always take action against facilities with significant inspection violations or take steps to ensure the violations were corrected. According to the 2017 OIG report, two key recommendations from OIG’s 2010 review remain outstanding, i.e., (1) take appropriate action against facilities with significant inspection violations and (2) ensure that those facilities correct the violations.

FSMA requires FDA to increase the frequency of its inspections of domestic food facilities. Specifically, FSMA mandates that FDA inspect high-risk facilities at least once during the initial 5-year inspection cycle and then at least once every 3 years for subsequent cycles. (A facility would be high risk based on a number of factors including association with outbreaks, recalls or prior food safety related violations.) For the remaining facilities, the non-high risk facilities, FSMA requires that FDA inspect them at least once during the 7-year initial inspection cycle and at least once every five years for subsequent cycles. Prior to FSMA, there were generally no timeframes for food facility inspections.

While executing its inspection plan, FDA discovered that information about food establishments was not always up-to-date or sufficient. For a not-insignificant percentage (more than 25%) of the facilities, FDA’s inspection failed because the facility was either out of business or otherwise not in operation at the time of the visit. These failed inspections were counted as completed inspections. OIG determined that FDA has no policy to assure that such inspections do occur.

OIG determined that FDA is on track to meet the requirements for the first round of inspections (for the high risk facility inspections, FDA is in fact ahead of the schedule as it completed inspections for almost all those facilities within three years). FDA likely can meet the requirement for the second round of inspections of the high-risk facilities (to be completed within three years). However, OIG questions the Agency’s ability to meet the second (5-year) inspection cycle for the non-high-risk facilities.

OIG further determined that FDA uncovered significant (official action indicated or OAI) violations in one to two percent of the inspected facilities. In 22% of those instances, FDA allegedly did not take any action. Moreover, in the instances that FDA did take action, FDA “commonly relied on facilities to voluntarily correct [the] . . . violations” in response to a Warning Letter, Untitled Letter or similar action by FDA. According to OIG, FDA actions were “not always timely.” In the period from 2011 to 2015, FDA took 1,113 “advisory actions” consisting of 903 warning letters, 136 regulatory meetings, and 74 “untitled letters.” Those actions were taken (on average) 4.4 (warning letters and meetings) to 6.1 months (untitled letters) after an inspection.

OIG further determined that in the five-year period, FDA ordered a suspension of a food facility twice (0.8 months after the inspection) and five administrative detention orders (0.2 months after the inspection). FDA sought judicial action 58 times, and won seizure orders in 21 instances. OIG noted that FDA did not use its mandatory recall authority. Of course mandatory recall is not needed if companies recall products when asked by FDA.

For almost 50% of the OAI inspections, FDA did not conduct a follow-up inspection within 1 year and for 17% of the OAI inspections, FDA did not conduct a follow-up inspection of the facility at all. In cases that FDA did a reinspection, one in five facilities received a second OAI classification. Three quarters of these second OAI classifications involved the same problem that caused the first OAI classification.

OIG recommend that FDA:

1. improve how it handles attempted inspections to ensure better use of resources;
2. take appropriate action against all facilities with significant inspection violations;
3. improve the timeliness of actions, including warning letters; and
4. conduct timely follow-up inspections to ensure that significant inspection violations are corrected.

FDA’s written responses and explanations are in the OIG report. FDA generally concurs with the OIG recommendations.

A major goal of FSMA is to be preventive rather than reactive. During the five-year period studied by OIG, the majority of food facilities were not yet subject to the preventive control regulations. It will be interesting to see how the implementation of these requirements affects FDA inspections and compliance.