After waiting with bated breath for more than a week since posting spicy Part 1 and Part 2 of our three-part series on recent U.S. Patent and Trademark Office (“PTO”) Patent Term Extension (“PTE”) decisions under 35 U.S.C. § 156 for certain FDA-regulated products, we know what you were thinking . . . .  Men in Black from the PTO’s PTE branch might have gotten to us.  Not yet!  (Though we keep looking over our shoulder.)

Part 1 focused on both the PTO’s historical and current (180-degree and unsupported change in position) on multiple PTEs.  Part 2 (“Part Deux”) investigated the PTO’s position and recent decisions on PTE applications for patents covering products approved—and then withdrawn years later—under the Federal Food, Drug, and Cosmetic Act’s Accelerated Approval provisions (and otherwise).  Today, we move on to Part 3 concerning a group of PTO decisions that left us floored!  And we even throw in Part 3½ in homage to the 1992 comedy “The Naked Gun 2½: The Smell of Fear” starring Leslie Nielson as bumbling Police Lt. Frank Drebin of Police Squad (who also starred in the 1980 movie “Airplane!” referenced in Part 1 of our series, and who made the “Hapsburg” quip in Part 2 of this series).

Part 3:  Who’s Buried in Grant’s Tomb? 

This blogger’s 11th grade math teacher, Mr. Neilitz, used to tell a riddle that he associated with an easy-to-answer math problem: “Who’s buried in Grant’s Tomb?”  The answer he was looking for was simply “Grant” (and not a numerical figure), although the full correct answer would be Ulysses S. Grant and his widow Julia Dent Grant.  (And, in truth, the Grants are not really “buried,” they’re “entombed” above ground in matching sarcophagi.)  The point here for our purposes, however, is that “Grant” includes both Ulysses S. Grant and his widow Julia Dent Grant.  Do you really have to identify both “Grants” to be correct?  How, pray tell, does this relate to PTEs you ask?

The PTE statute at 35 U.S.C. § 156(d)(l)(D) requires that a PTE application contain “a brief description of the activities undertaken by the applicant during the applicable regulatory review period with respect to the approved product and the significant dates applicable to such activities”  In addition, 35 U.S.C. § 156(d)(2)(B)(i) specifies the PTO must “determine if the applicant acted with due diligence during the applicable regulatory review period.”  The lack of due diligence by the applicant during the regulatory review period may be taken into account in calculating the PTE period.

Given these statutory requirements, the PTO has held that in order to be PTE-eligible, the patent owner or its agent must have undertaken the activities that led to the regulatory approval.  If a patent owner has not been involved in the regulatory process—directly or indirectly—then that patent owner has not lost any patent life.  After all, it never invested the time and resources necessary to obtain approval for commercial marketing or use. That was the case in the PTO’s April 3, 1995 decision denying a PTE as to U.S. Patent No. 4,631,286, where the PTO considered “whether Hoechst-Roussel is eligible to file an application for [PTE] based on a regulatory review conducted by its competitor, the marketing applicant Warner-Lambert, wherein Hoechst-Roussel was not associated with the regulatory review that led to FDA approval for commercial marketing of the approved product.”  The PTO said no: “the application does not set forth any activities undertaken by the ‘applicant’ — the patent owner or its agent, as required by the statute. . . .” (see also Hoechst-Roussel Pharms., Inc. v. Lehman, No. 95-650-A (E.D. Va. Oct. 27, 1995); aff’d, 109 F.3d 756, 759, 42 U.S.P.Q.2d 1220, 1223 (Fed. Cir. 1997).

Section 2752 of the PTO’s Manual of Patent Examining Procedure further clarifies 35 U.S.C. § 156(d) (and the PTO’s PTE regulations at 21 C.F.R. § 1.740), stating that:

If the applicant for patent term extension was not the marketing applicant before the regulatory agency, then there must be an agency relationship between the patent owner and the marketing applicant during the regulatory review period. To show that such an applicant is authorized to rely upon the activities of the marketing applicant before the Food and Drug Administration or the Department of Agriculture, it is advisable for the applicant for patent term extension to obtain a letter from the marketing applicant specifically authorizing such reliance. [(Emphasis in original)]

This brings us to a spate of recent letters from the PTO to PTE applicants we’ve seen titled “REQUIREMENT FOR INFORMATION PURSUANT TO 37 C.F.R. 1.750”.  They all as for the same type of information:

U.S. Patent No. 10,544,220 (October 24, 2023)

Pursuant to 37 C.F.R. 1.750, applicant is required to submit the following to the USPTO:

Evidence that Genmab A/S is expressly authorized to rely upon the regulatory review activities by Genmab US, Inc., the marketing applicant before the Food and Drug Administration to support the application for patent term extension of U.S. 10,544,220 (the ‘220 patent). . . .

The PTE application paragraph (C) on page 4 indicates that EPKINLY® (epcoritamab-bysp) received approval for commercial marketing or use on May 19, 2023. According to the PTE application, however, the “Marking Applicant for EPKINL Y® ( epcoritamab-bysp) is Genmab US, Inc., Exhibit 3. Genmab A/Sis thus relying upon the premarket activities ofGenmab US, Inc., PTE application paragraph A (page 4), to support application for patent term extension. The Office now requires Genmab A/S to provide evidence, as set forth above, of its eligibility to apply for extension of the term of the ‘220 patent under 35 U.S.C. § 156. Namely, Genmab A/S must demonstrate its agency relationship with the BLA holder (Genmab US, Inc.) as it relates to the approved product and provide evidence of its express authorization to rely upon the regulatory activities by Genmab US, Inc.

U.S. Patent No. 10,968,453 (November 29, 2023)

Pursuant to 37 C.F.R. § 1.750, applicant is required to submit the following to the USPTO:

Evidence that Biogen MA Inc. is expressly authorized to rely upon the regulatory review activities by Biogen, Inc., the marketing applicant before the Food and Drug Administration to support the application for patent term extension of U.S. 10,968,453 (the’ 453 patent). . . .

The PTE application paragraph (3) on page 5 indicates that QALSODY® (tofersen) received approval for commercial marketing or use on April 25, 2023. According to the PTE application, however, the “Marking Applicant for QALSODY® (tofersen) is Biogen, Inc., Appendix D. Biogen MA Inc. is thus relying upon the premarket activities of Biogen, Inc. to support application for patent term extension. The Office now requires Biogen MA Inc. to provide evidence, as set forth above, of its eligibility to apply for extension of the term of the ‘453 patent under 35 U.S.C. § 156. Namely, Biogen MA Inc. must demonstrate its agency relationship with the NDA holder (Biogen, Inc.) as it relates to the approved product and provide evidence of its express authorization to rely upon the regulatory activities by Biogen, Inc.

U.S. Patent No. 6,929,639 (December 6, 2023)

[Boston Scientific Scimed, Inc. (BSSI)] is required to provide evidence of authorization for its reliance on marketing applicant Boston Scientific Corporation’s activities before the FDA. . . .

The last sentence of the paragraph bridging pages 1-2 of the PTE application states, “BSSI is a whollyowned subsidiary of Boston Scientific Corporation.” Even if BSSI is a wholly-owned subsidiary of Boston Scientific Corporation as stated, it is not clear on the record of this PTE application that BSSI is entitled to rely on the activities of Boston Scientific Corporation before the FDA in connection with the filing of the PTE application for U.S. Patent No. 6,929,639.

PTE applicant BSSI is required, pursuant to 3 7 CFR 1. 7 5 0, to establish on the record of this PTE application that it is entitled to rely on marketing applicant Boston Scientific Corporation’s activities before the FDA. An authorization letter from an appropriate representative of Boston Scientific Corporation would satisfy this Requirement for Information.

U.S. Patent No. 7,553,941 (November 28, 2023)

Pursuant to 37 C.F.R. § 1.750, applicant is required to submit the following to the Office:

Evidence that Opko Biologics Ltd. is expressly authorized to rely upon the regulatory review activities by Pfizer Ireland Pharmaceuticals (Pfizer), the marketing applicant before the Food and Drug Administration to support the application for patent term extension of U.S. Patent No. 7,553,941. . . .

The PTE application states “[u]nder the terms of the AMENDED AND RESTATED DEVELOPMENT AND COMMERCIALIZATION LICENSE AGREEMENT between Pfizer Inc. and OPKO Ireland Ltd. (effective May 12, 2020), Patent Term Extension Applicant OPKO Biologics Ltd., through OPKO Ireland Ltd., exclusively licensed U.S. Patent No. 7,553,941 to Pfizer Inc. for purposes of obtaining marketing authorization for NGENLA™ (Somatrogonghla). Accordingly, OPKO Biologics Ltd. is authorized to rely upon the activities of Pfizer Inc. for the purposes of this application for patent term extension of U.S. Patent No. 7,553,941.” PTE Application at 5. However, an exclusive license is not an authorization to rely on the activities of the marketing applicant for a PTE application. Because Opko is relying on the premarket activities of Pfizer to support the application for patent term extension, the USPTO is requiring Opko to provide evidence, as set forth above, of its eligibility to apply for extension of the term of U.S. 7,553,941 under 35 U.S.C. § 156. In particular, Opko must demonstrate its agency relationship with the BLA holder (Pfizer) as it relates to the approved product and its receipt of express authorization to rely upon Pfizer’s regulatory activities.

Although there are several more examples, we’ll stop here (or here, actually).  But we hope you get our drift: the answer is “Grant; yes, both of them; isn’t that obvious?!”

Why is it necessary for the PTO to ask someone to confirm the obvious—to “triple stamp a double stamp!”, as Harry from “Dumb and Dumber” might say?  After all, if the registered practitioner submits a PTE application on behalf and alleges reliance on the a PTE regulatory review period of another and there is no conflicting PTE filed and the marketing applicant has not objected, then why can’t the PTO rely on the statements made under the practitioner’s ethical duty pursuant to 37 C.F.R. § 11.18(b).  That regulation is pretty clear.  It states, in part:

(b) By presenting to the Office or hearing officer in a disciplinary proceeding (whether by signing, filing, submitting, or later advocating) any paper, the party presenting such paper, whether a practitioner or non-practitioner, is certifying that—

(1) All statements made therein of the party’s own knowledge are true, all statements made therein on information and belief are believed to be true, and all statements made therein are made with the knowledge that whoever, in any matter within the jurisdiction of the Office, knowingly and willfully falsifies, conceals, or covers up by any trick, scheme, or device a material fact, or knowingly and willfully makes any false, fictitious, or fraudulent statements or representations, or knowingly and willfully makes or uses any false writing or document knowing the same to contain any false, fictitious, or fraudulent statement or entry, shall be subject to the penalties set forth under 18 U.S.C. 1001 and any other applicable criminal statute, and violations of the provisions of this section may jeopardize the probative value of the paper. . . .

Of course, PTE applicants respond to the PTO’s information requests, but it takes time and money to do so.  And the PTO is not alone in putting form over function; FDA is increasingly doing so as well!  Take, for example, a recent instance this blogger faced when submitting generic drug Controlled Correspondence to FDA on behalf of a prospective generic drug applicant.  The Letter of Authorization that needed to be submitted was on company letterhead identifying “COMPANY NAME, INC.”, and the signature block identified the signatory as coming from “COMPANY NAME USA, INC.”  That Controlled Correspondence—actually, five of them, because a separate Control needs to be submitted for each approved strength—was bounced and needed to be resubmitted, resulting in a waste of time snd resources.

That segues us nicely into a bonus piece . . .

Part 3½:  Seriously? 

On April 29, 2022, FDA approved Tap Pharmaceuticals, AG’s (“Tap’s”) NDA 215809 for EMERZA (levothyroxine sodium) Oral Solution.  A PTE application (Docket No. FDA-2023-E-2391) was subsequently submitted to the PTO seeking an extension of U.S. Patent No. 9,345,772.

On November 4, 2022, the PTO sent a REQUIREMENT FOR INFORMATION PURSUANT TO 37 CFR 1.750 stating, among other things, the following:

There is a discrepancy in the patent term extension (PTE) application regarding the name of the approved product. The FDA approval letter attached to the PTE application as Exhibit A indicates that the approved product of NDA 215809, referenced in the PTE application, is ERMEZA® (levothyroxine sodium). Thus, our letter to the FDA dated the same day as this Requirement for Information presumes that the PTE application concerns ERMEZA® (levothyroxine sodium).

However, the second full paragraph of the PTE application is as follows:

The approved product of NDA 215809 is ERMEZA® (levothyroxine sodium) oral solution (EMERZA® or the Approved Product). EMERZA® was approved for commercial marketing under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act (FDCA). (See pages 1 and 35 of the NDA APPROVAL Letter from the FDA, provided as Exhibit A) And the ‘772 patent contains claims that cover EMERZA®.

We note that the paragraph reproduced above includes one reference to “ERMEZA®” and three references to “EMERZA®.” It would appear that “ERMEZA®” was intended, because that tradename is associated with NDA 215809. Nevertheless, for the sake of clarity, Tap is required to confirm the tradename of the approved product.

The PTO letter further requests that “Tap is required to provide evidence of authorization for its reliance on marketing applicant Mylan’s activities before the FDA,” and that “Tap is required to provide support for the submission and approval dates of NDA 215809.”

It appears that Tap never responded to the PTO.  As such, on August 7, 2023—nearly two months after the response deadline—the PTO sent a letter saying that the PTE application for EMERZA had been withdrawn.  Wow!  That’s pretty draconian for a typo (as well as the other issues noted).  And I’ll bet you didn’t even notice that we used “EMERZA” above twice instead of “ERMEZA”!

***

Well, there you have it folks.  We hope that it has been an informative—and hopefully an entertaining—ride.  But you may be asking yourself: “Kurt, why invest so much time and effort in calling out all of these PTO actions?”  It’s a fair question.

First, as folks know, this blogger loves this stuff.  Anything Hatch-Waxman is of interest to me, and is something that I believe deserves the light of day.  The continued integrity of the Hatch-Waxman Amendments—and FDA and PTO interpretations of it—is something in which I am personally invested.

Second, while I realize there are pressures on PTO (and FDA) to “do something” about drug procing and patent concerns, there’s a right way to go about doing that and a wrong way.  Unjustified position reversals, new interpretations, elevating form over function, and denying patent term because of a spelling error is probably not the best way to go about change.  The controversies and battles they often lead to are expensive—in both private and government time and resources.  Those resources might be better used to explore substantive and meaningful changes to the law that—consistent with the intent of Congress in passing the Hatch-Waxman Amendments—“help ensure the intended balance between encouraging innovation in drug development and accelerating the availability to the public of lower cost alternatives to innovator drugs is maintained.”

After years of silence from FDA on whether certain patents could be listed in the Orange Book, some manufacturers of drug and device combination products have had a rude awakening lately.  As we explained in September 2023, then again in November 2023, the FTC has intervened in the matter and asked 10 drug companies (really 8 given common ownerships of some of the relevant companies) to delist about 100 patents from the Orange Book that mainly cover the device constituent of a drug/device combination product.  On the heels of those FTC letters, Senator Warren and Representative Jayapal sent letters to the CEOs of those 8 companies urging them to remove the “sham patent claims improperly included” in the Orange Book, claiming that these companies have been “taking advantage of a loophole that delays generic competition.”

These companies have clapped back.  In their responses, each company emphasized that none of the patents listed were “sham patents” and that FTC never challenged the legitimacy of the patents.  While the letter from Congress suggested nefarious motives for listing these patents, each company pointed out that it was required to list all relevant patents and that FDA repeatedly had refused respond to questions about the proper listing of these types of patents. As Abbvie wrote: “While your letter refers to ‘sham’ patents and concerns about ‘abusing the patent system,’ the FTC’s letter makes no assertions that these patents were ill-gotten or are otherwise illegitimate.  Rather, the FTC questioned whether these patents meet the statutory and regulatory criteria for listing in the Orange Book.  In fact, federal law and regulation appear to require AbbVie to list these patents.”  No matter how Congress and FTC frame it, it is FDA that’s to blame for the listing confusion when it has had more than 20 years to respond to questions about whether these types of patents should have been listable in the first place.  And FDA still hasn’t said a thing!

Despite the continued lack of clarity about the propriety of listing device component patents in the Orange Book, 3 companies agreed to remove the patents cited by FTC while 5 others refused to delist.   Amneal delisted the requested patents, as well as two other patents, but pointed out that all of these patents were listed “[i]n a good faith effort to comply with the statutory requirement [to list relevant patents] given the regulatory guidance at the time . . . .”  Kaleo also delisted, but not without noting that “the decision to list each of these patents was proper, consistent, and required by the applicable statutes, regulations, and FDA’s guidance available at the time of listing.”  GSK and Glaxo Group, while defending their decision to list the relevant patents, delisted, citing to the “recent shift in policy, and the existence of potentially applicable case law in recent years, regarding the application of Orange Book listing criteria to patents covering drug-device combinations.”

Taking the opposite approach, AstraZeneca, Boehringer Ingelheim, Abbvie, Mylan/Viatris, and Teva all refused to delist the patents referenced by FTC and Congress.  Each made similar points as the 3 that did delist: patents that claim the finished dosage form must be listed in the Orange Book, and the referenced patents claim the finished dosage form.  Several even try to rewrite the anticompetitive narrative that Congress is painting by reminding Congress that the Orange Book listing of patents is intended to benefit both the brand and the generic by providing notice of such patents and providing an opportunity to address the patents prior to launch (at which point treble damages could be awarded).  Failing to list the patents, as AstraZeneca points out, “may expose the reference drug sponsor to legal risks,” as “at least one generic applicant has argued that a failure to do so constitutes a violation of the antitrust laws by depriving the applicant of information that would have affected its decision whether to develop a generic product.”

Both Congress and FTC seem to have spun this tale that the named drug companies have been intentionally abusing the Orange Book patent listing requirements by including device patents in the Orange Book, but it’s really important to note that until FTC took the unusual step of requesting delisting in Fall 2023, FDA not only had provided no guidance on whether device patents are listable but also refused to address the question when asked by industry on several occasions.  And, in fact, FDA muddied the waters itself when it stated in the 2003 implementing regulation preamble that “patents claiming devices or containers that are ‘integral’ to a drug product or require prior FDA approval should be submitted and listed” and noting that patents claiming a finished dosage form of a product, which include “metered aerosols, capsules, metered sprays, gels, and pre-filled drug delivery systems,” should be listed.  It’s difficult to conclude from these statements, as FTC and Congress appear to have, that device patents categorically shouldn’t be listed in the Orange Book.

FTC’s and Congress’s activities seem to have triggered litigation.  On March 6, 2024, the first antitrust suit arising from these letters was filed by the Massachusetts Laborers’ Health and Welfare Fund in the District Court of Massachusetts against Boehringer Ingelheim.  That Complaint alleges that “Boehringer improperly submitted 23 device patents to the Orange Book as claiming Combivent Respimat” and another 16 “as claiming Spiriva Respimat” citing specifically to FTC’s and Congress’s inquiries.  We expect that this is just the first of many antitrust cases to come—with AstraZeneca, Abbvie, Mylan/Viatris, and Teva all likely to be on the front lines.

On February 20, 2024, FDA issued a letter to the medical device industry (link) warning medical device firms of recent FDA concerns related to fraudulent and unreliable laboratory testing data in premarket submissions.  Unfortunately, the letter provides little new information to guide industry conduct.  While the title of the letter refers to “fraudulent” data, the rest of the letter provides no explanation of the nature of the allegedly fraudulent activities that could assist industry in identifying bad labs.

It is challenging for device firms of all sizes to maintain the facilities, equipment, and deep subject matter expertise necessary to perform in-house testing necessary to satisfy all requirements for their device type, which may include testing related to sterility, microbiology, biocompatibility, electrical safety, electromagnetic compatibility, software, cybersecurity, human factors, and performance (which includes bench, animal, and clinical tests).  Given this, it is common for firms to contract with independent labs (“third-party test labs”) to generate data for premarket submissions.

For many firms, these third-party test labs are qualified according to the firms’ procedures for purchasing controls (21 C.F.R. § 820.50) prior to the start of testing.  These procedures often define a process to review the qualifications of the lab based on experience, accreditations, policies, and procedures.  For firms developing their first device, these purchasing procedures may not yet be established at the time selection of labs is being performed.  Even so, firms typically evaluate a prospective lab based on its experience, in addition to business considerations such as availability, turnaround time, and cost.

The letter to industry states that FDA has observed testing data from third-party labs that are “fabricated, duplicated from other device submissions, or otherwise unreliable,” that such unreliable data has been generated by “numerous such facilities based in China and India,” and that submission of unreliable data “calls into question the data integrity of the entire file.”  While we suspect that we know why FDA is not naming names—presumably because of ongoing investigation and enforcement activities—the lack of transparency is unfortunate on several levels.  First, it raises the specter of guilt by association for reputable labs in China and India.  While we imagine that FDA is providing specific labs an opportunity to respond to specific allegations, announcements such as this have real world consequences for reliable labs that happen to be based in those countries.  Second, while not dispositive, it likely would be relevant to regulated industry for FDA to identify those labs it believes are generating fraudulent and unreliable data.

In addition to providing limited notice of these issues, the letter also provides general recommendations to the device industry, noting that it is “incumbent on device firms to take proactive steps to qualify third-party test labs and to closely scrutinize all testing data that a firm does not perform itself, especially relating to biocompatibility and other performance testing.”  FDA acknowledges that it may be difficult to detect if data have been copied but expects “device firms to identify testing results that are improbable or impossible on their face or do not seem consistent with known information about the device.”  FDA’s letter further notes that even if the lab is accredited under FDA’s own Accreditation Scheme for Conformity Assessment, that such accreditation “does not substitute for conducting an independent assessment of all third-party data.”

As noted above, while it is typical for device firms to do some level of vetting of third-party test labs, one reason such firms often use a third-party lab in the first place is because they do not have in-house expertise.  Catching obvious errors may be possible during review by a non-subject matter expert, but it is highly unlikely that these reviewers will be able to detect results that are “improbable or impossible.”  Engaging another third-party subject matter expert to review data provided by a third-party lab would significantly increase the burden to device firms.  And if bad actors intend to provide fraudulent data in their reports, these data may appear realistic for the type of device and near impossible to detect, making any efforts to scrutinize data an added burden that provides no value.  Thus, at the end of the day, with no detail from FDA as to which labs to avoid, industry is left with no actionable information.

The letter also provides no information as to how FDA will handle the identification of unreliable data in a premarket submission that is currently pending.  Will the Agency notify the applicant of the issue so that it can seek to have new testing conducted?

Further, this issue is not just affecting new submissions.  FDA appears to be reviewing at least some previously cleared 510(k) submissions if there is a suspicion of fraudulent data.  FDA has gone so far as to rescinded at least one 510(k) based on its determination that allegedly unreliable data have been submitted, even in the case where discrepancies in the data were obvious and not caught during FDA’s own review of the submission and subsequently explained as a simple mistake (Stay of Action Petition from Hyman, Phelps & McNamara, P.C. On behalf of Nautilus Gloves LLC (Nautilus), link).

The Agency’s action to rescind this 510(k) is based on questionable legal authority.  See our prior post of the Agency’s ability to rescind a 510(k) submission here.  FDA has the regulatory authority to withdraw a clearance if unreliable clinical data are submitted in a 510(k).  21 C.F.R. § 812.119(e).  The labs that FDA is referring to in this letter, however, are not conducting clinical studies.  They are conducting non‑clinical testing, including, for example, biocompatibility testing.  FDA does not have the same regulatory or legal authority to rescind a 510(k) for unreliable non-clinical data unless such data is the result of misconduct.  FDA’s letter provides information on what FDA would view as misconduct in the case of a lab deceiving the sponsor by submitting fraudulent/fabricated data.

FDA’s letter to industry is an important step in communicating this issue, but putting the resolution of the issue all back on individual firms to address is not the best solution.  While FDA has guidance related to data integrity for the drug industry (link), such guidance has not been established for the device industry itself.  Given FDA awareness of the issue, practical guidance to help firms establish and maintain data integrity across the total product lifecycle would be more valuable as a long-term solution.  It is also critical for FDA to be transparent with industry as to how this issue will be handled for pending and cleared submissions. The sponsors are almost always victims that had no intention to deceive the Agency.  Unless or until FDA can provide actionable guidance on how to avoid being deceived and/or how to manage the issue, if it is uncovered, we urge FDA to give sponsors the benefit of the doubt and work with them to resolve the issue.

In 2009—15 years ago— the National Organization for Rare Disorders (NORD) announced the first U.S. recognition of Rare Disease Day.  NORD’s announcement followed in the footsteps of European rare disease patient organization, Eurodis, who had celebrated the first Rare Disease Day the year before.  Time flies when your goal is to support the thirty million Americans with rare diseases.  The global rare disease community did not just celebrate Rare Disease Day, but Rare Disease Week, the entire last week of February!

In 2009 I served as Chair of NORD and through the hard work of countless colleagues we inaugurated the first Rare Disease Day.  The idea that year was simple and straightforward—every four years there is a rare day, February 29, so what better day to choose to honor those with rare conditions.  In non-leap years we celebrate on February 28 or March 1.

What started as a day has—due to its popularity and the persistent efforts of patients and industry—evolved into a week-long event.  I was honored to be invited to speak at the plenary session of FDA’s inaugural Rare Disease Day gathering several years ago.  And my support and pride continue since we now see a host of programs and events the last week of February playing out around the world.

This year the Everylife Foundation for Rare Diseases held a week of activities in which more than 800 rare disease patients—from all 50 states, DC, and the Cherokee Nation—advocated in Washington DC.  I currently serve as Vice Chair of the Board of the Everylife Foundation.  I’m proud to share with you that Everylife’s “patient army” held more than 330 meetings with members of Congress last week.  Led by Annie Kennedy, Everylife’s VP of Government Affairs and Policy, we worked the halls of Congress to educate lawmakers on the pressing needs of the rare disease community.

On February 28th, the White House hosted its first ever rare disease event.  It’s astounding that it took this long for any administration—Republican or Democrat—to recognize the thirty million strong rare disease community in our country.  Annie Kennedy chaired a panel discussion and the NIH Director and the NCATS Director spoke passionately of the ways in which the federal government is supporting and planning to expand its work on rare diseases.

Among the forty or so individuals invited to this White House event were long-time rare disease advocates like recently retired FDA Principal Deputy Commissioner Janet Woodcock, Christina Hochul of Alexion and Paul Melmeyer of Muscular Dystrophy Association.  It was a highlight of my career to also be invited to this historic event.

Given the energy and progress accomplished each year at this special time, anyone want to second a motion that the entire month of February become dedicated to the support of rare diseases?  Onward!

Photo from February 28, 2024, White House Rare Disease event (from left to right: Frank Sasinowski, Christina Hochul, Paul Melmeyer)

Last August the Food and Drug Administration (“FDA”)/Health and Human Services (“HHS”) recommended that the Drug Enforcement Administration (“DEA”) reschedule cannabis from schedule I under the federal Controlled Substances Act (“CSA”) to schedule III.  By doing so, FDA/HHS believe that cannabis no longer meets schedule I criteria but does not meet schedule II criteria either.

Hyman, Phelps & McNamara Director Larry Houck will participate as a panelist focusing on this timely topic at the Food and Drug Law Institute’s (“FDLI’s”) Legal and Practical Issues in Cannabis Regulation Conference next month.  Mr. Houck will participate in a session entitled “Marijuana Rescheduling: Exploring FDA’s Recommendation, Stakeholder Impact, and Broader Implications.”  Likely discussion topics during the session will address what has changed since 2016 when FDA/HHS and DEA concluded that cannabis remain in schedule I, why DEA may be required under U.S. treaty obligations to reschedule cannabis in schedule II, and rescheduling implications on federal CSA requirements and in the states that authorize cannabis for medical and recreational use.

Additional sessions planned for FDLI’s conference include: “Surveying the State of Cannabis Research,” “Navigating the Evolving Cannabis and Cannabis-Derived Products Marketplace,” “Notable Decisions and Emerging Trends in Cannabis Litigation,” and “Global Perspectives on Cannabis Regulation.”

The conference, held in Washington, D.C., April 4th and 5th, is an in-person and virtual event.  Additional information, including a preliminary agenda, is available at the conference webpage here.

Our last post on small business certification requests described how small medical device manufacturers, defined as those with gross receipts of less than $100 million in gross receipts and sales for the most recent tax year, are eligible for a reduced fee on those medical device submissions that require a user fee. Now, FDA is granting a waiver of annual registration fees, per the draft guidance for Select Updates for the Medical Device User Fee Small Business Qualification and Certification Guidance.  The catch: the company has to be small and bankrupt.

Section 3309 of the Food and Drug Omnibus Reform Act (FDORA), signed into law on December 29, 2022, amended section 738(a)(3)(B) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) by adding clause (ii) “Small business fee waiver.” This gives FDA discretion “to waive the establishment registration fee for device establishments that are small businesses, if FDA determines that paying such fee represents a financial hardship,” starting on October 1, 2024. FDA considers a “clear and objective standard” of financial hardship to be when a small business is in active bankruptcy. While this standard has the benefit of being “clear and objective,” it also essentially guts the waiver provision.

Applying for a Small Business Registration Fee Waiver

Per the draft guidance, FDA proposes to combine forms FDA-3602 and FDA-3602A into a single form. The forms are currently used for businesses headquartered in the US and OUS, respectively, to request a small business certification. FDA also proposes to add to the new combined form, a “Registration & Listing Fee Waiver” section, which asks if businesses have registered in the past.

To be considered for the registration fee waiver, a small business in the US or OUS has to demonstrate “financial hardship”. If a business is applying for a small business registration fee waiver, it is recommended that the following be provided to FDA:

1. Income tax return(s) showing $1 million or less in gross receipts or sales (including affiliates);
2. Evidence that the establishment for which a waiver is being sought has previously registered and paid the associated fees under the owner/operator ID with FDA; and
3. Evidence that the establishment if in the US, filed a petition for bankruptcy or if OUS, filed the jurisdiction’s equivalent of a US bankruptcy action.

For those without a National Taxing Authority (NTA), requests for a small business registration fee waiver are considered on a case-by-case basis pending review of gross sales and receipts that demonstrate the establishment falls below the $1 million threshold to qualify. FDA does not squarely address whether those who operate in jurisdictions without an NTA must also have filed the equivalent of a US bankruptcy action through their jurisdiction’s court systems. FDA explains that it chose bankruptcy as a criterion because it satisfies “a clear, objective standard, the meeting of which is a matter of public record.” FDA does not explain why it chose the extremely low sales threshold of $1 million.

Considerations

A sponsor is granted a small business designation for each fiscal year it submits a request and is able to provide evidence that its gross receipts and sales are less than $100 million for the most recent tax year. While FDA does not address an annual expectation for a request for a registration fee waiver in the draft guidance, we expect FDA to be consistent with the Small Business Certification and require an annual application for the registration fee waiver, if applicable.

Sections 738(d)(2)(A) and (e)(2)(A) of the FD&C Act define a “small business” as an entity that reported $100 million or less of gross receipts or sales in its most recent income tax return. FDA uses that definition to designate small businesses eligible for a reduced user fee. FDA goes 100 times further to designate those businesses eligible for a registration fee waiver. Specifically, any business that reported $1 million or less in gross receipts in its most recent tax filing can be considered small.  We consider it micro. Nevertheless, FDA does not offer any insight on why they chose $1 million as the threshold for businesses to obtain a registration fee waiver. This limit – combined with the requirement that the company has filed for bankruptcy — makes it such that very few businesses would benefit.

The draft guidance does not change the existing policy of no reduced fees for registration. That is, a small business either qualifies for the registration fee waiver or does not.

Newly established businesses are unlikely to qualify for the registration fee waiver because they will not be able to meet the second criterion above.

There is no transferability provision that allows one small business to transfer the fee waiver or user fee reduction to another entity. As an example, FDA points to a device establishment certified by FDA as a small business that is then acquired by another entity. The entity is responsible for the full fees unless it obtains its own small business determination. This is consistent with current FDA expectations.

Finally, in the Federal Register notice, FDA estimates 4,500 requests for a Small Business Certification. Our review of the 4^th Quarter 2023 MDUFA V Performance Report shows that just 2,283 applications were eligible for a reduced user fee.  While it is possible that each application is tied directly to a single small business request, suggesting that 2,283 applicants benefitted from a small business designation, this is unlikely to be the case as some businesses may submit multiple submissions within the fiscal year.

We expect few, if any, businesses will meet all three elements for an exemption:  sales under $1 million, previously paid and registered with FDA, and bankrupt. On top of that, the need to provide evidence of bankruptcy and micro sales to FDA at a time when a business is already under financial duress may prove too much for a small device manufacturer to tack on their to-do list.   In essence, FDA has taken the exception created by Congress and made it available only to device companies that are already in extremis.

Comments to the draft guidance must be submitted by April 22, 2024.

The trio of CDER, CBER, and CDRH released a new draft guidance titled “Use of Data Monitoring Committees in Clinical Trials” that revises the 2006 guidance “Establishment and Operation of Clinical Trial Data Monitoring Committees” and, when final, will replace the 2006 guidance.  The new draft guidance was published in recognition by FDA that Data Monitoring Committees (DMC) (aka Data and Safety Monitoring Boards (DSMB), Data and Safety Monitoring Committees (DSMC), or Independent Data Monitoring Committees (IDMC)) are increasingly being utilized by sponsors to implement adaptive trial designs, to review aggregate data for safety reporting, and to oversee an entire clinical development program rather than a single trial.  Moreover, DMCs are being used in trials of modest size and in the context of increased globalization of medical product development.  DMC charters have also grown longer and more detailed.  The new draft guidance is generally reflective of these developments, and we wanted to highlight several of the changes in this blog post.

One notable change in the new draft guidance is the language regarding when a DMC is recommended, reflecting the much broader adoption of DMCs since 2006.  In 2006, FDA stated that DMCs were not recommended “for most clinical studies,” particularly those in early product development, short-term studies, or studies addressing less severe outcomes.  Instead, FDA recommended that sponsors “limit the use of a DMC” to clinical studies in which safety concerns may be unusually high, such as studies that compare rates of mortality or major morbidity or involving a potentially fragile or high-risk population, or large, multi-center studies of long duration.  The new draft guidance maintains some of these recommendations (that is, a DMC is warranted when subjects in the study are at risk of serious morbidity or mortality, the study enrolls vulnerable populations, and for longer-term studies), but also highlights factors that might suggest the value of DMCs in new roles, such as where causation of adverse events may be difficult to assess without a review of unblinded data or where there is limited experience in a therapeutic area.  Along those lines, the new draft guidance does not contain any language regarding DMCs not being appropriate for early phase studies.

Other Oversight Groups

Both documents described the role of other oversight groups, in addition to DMCs, that may be involved in a clinical trial in similar, sometimes overlapping, roles such as IRBs, trial steering committees, and site monitors.  In another update, the recent draft guidance added “entities reviewing safety data” and adaptation committees.  FDA notes that the distinctions between responsibilities for these groups and DMCs should be clearly defined, particularly with respect to access to unblinded information.  For example, an entity reviewing safety data may need to review unblinded safety data to recommend whether or not the sponsor should submit a report to FDA.  However, in contrast to DMCs, such an entity should remain blinded to efficacy data.  FDA acknowledges that the threshold for a DMC to recommend termination or significant modification based on safety concerns may be higher than the threshold for reporting potential serious risks to FDA; this is reflective of the fact that there may be situations where oversight groups observe a serious risk and recommend that the sponsor report it to FDA, but the DMC may still recommend the trial continue based on its overall assessment of unblinded safety and efficacy data.  In such cases, the draft guidance illustrates how employing a DMC may allow a sponsor to proceed with a trial where it might otherwise have been terminated.

Both guidances note that the most common purpose of a DMC is to monitor clinical trials for safety, usually by conducting unblinded interim analysis of data from an ongoing clinical trial.  The new draft guidance acknowledges that an interim analysis may be appropriate in other circumstances, particularly when “[i]mplementing a predefined adaptive feature” in a study, such as to increase trial size or to introduce prognostic enrichment.  Adaptive study designs are becoming increasingly prevalent, and sponsors often use adaptation committees to perform such interim analyses. If the adaptations are to be done on the basis of unblinded data, the new draft guidance emphasizes the importance of prespecification and preservation of trial integrity.  The new draft guidance states that while a DMC could be assigned the role of recommending to the sponsor that a specific adaptive design element be implemented (if specified in the DMC charter), that might best be reserved for relatively straightforward adaptive designs with simple adaptation algorithms.  Use of a separate adaptation committee might enable the inclusion of more relevant expertise and allow the DMC to focus on its primary responsibilities – subject safety and trial integrity.

DMC Composition

Regarding the membership of the DMC, the new draft guidance is largely similar, but substantially less specific on its recommendations.  Both documents discuss how membership should include individuals without conflicts of interest and with expertise in trial conduct, relevant clinical specialties, a qualified biostatistician, and a medical ethicist (in studies with greater risk).  They also both stressed the value of previous DMC experience.  However, notably absent from the new draft guidance are some specific recommendations from the 2006 guidance regarding number of members, types of scientists, and representatives of the relevant patient population and from different gender and ethnic groups.  Another update in the new draft guidance is a recommendation that for the DMC chair, in addition to previous DMC experience (which was in the 2006 guidance), familiarity with FDA regulatory requirements is “typically critical.”

Increased Connections Between a DMC and FDA?

Both documents note that FDA may request that the sponsor submit the DMC charter to FDA for review before the performance of any interim analyses, and ideally before the initiation of the trial. Both documents also note that FDA may request copies of the DMC meeting records when the study is completed, and access to the electronic data sets used for each set of interim analysis.

However, the new guidance suggests that FDA may be recommending, or perhaps acknowledging, a greater degree of its involvement with DMCs.  For example, the new draft guidance recommends that the DMC should have “procedures for adding or removing members when appropriate or for disbanding the DMC, including procedures for informing FDA and disclosing to FDA the rationale for these changes.”  As another example, both documents note the possibility that if FDA has safety information relevant to an ongoing study, it may request that the sponsor confirm that the DMC is aware of that safety data and is taking it into consideration, or “request that the sponsor arrange for FDA to communicate with, or even meet with, the DMC.”  The 2006 guidance noted that these would be “rare cases” limited to “specific issues of urgent concern.”  FDA has dropped such restrictive language in the new draft guidance, and instead intends to refer “relevant and important” information.  As a final example, current regulations require a sponsor of an investigational medical device to report to FDA (and others) “unanticipated” adverse events, which are defined in part as “serious,” and sponsors of investigational drugs to report to FDA serious and unexpected suspected adverse reactions.  The new draft guidance maintains a recommendation from the 2006 guidance that “sponsors inform FDA about all DMC recommendations related to the safety of the investigational product, whether or not the adverse events that led to the recommendation meet the definition of serious.”  The draft guidance therefore continues to “recommend” sponsors go beyond what is required in its regulations in its communications to FDA based on DMC recommendations, highlighting the tension between what FDA needs and what it wants.  Taken together, such changes suggest that FDA may intend to play a larger role in its interactions with the DMC, either directly, or through the study sponsor.

Safety Monitoring

Regarding DMC responsibilities, the two guidance documents are fairly similar on safety monitoring.  In addition to any identified adverse events of particular concern, the 2006 guidance stated that the DMC should be provided with interim summaries of adverse events by treatment arm; the new draft guidance limits this to interim summaries of serious adverse events.  Similarly, the 2006 guidance stated that DMCs will not usually review in detail every adverse event reported, or even every serious adverse event; the new draft guidance is more agnostic on whether all serious adverse events should be reviewed (“the committee may elect to review all or just certain serious adverse events”).  The new draft guidance notes the practicalities of a DMC for short-term trials are not as well established as those for long-term trials.  It cautions that sponsors who consider DMCs for safety monitoring of short-term trials should ensure processes are in place to allow for timely DMC evaluations or oversight on data and safety.  Sponsors of short-term trials, such as those where enrollment is expected to be completed quickly or with short follow up, may find that establishing DMCs to review interim data/analysis may be “impractical and of little value.”

Effectiveness

Both guidances acknowledge that DMCs should have access to unblinded interim data and analyses, including analyses of effectiveness, and emphasize procedures to ensure that the sponsor and investigators in the study remain blinded.  The new guidance specifically recommends that the independent statistician performing those analyses for the DMC should be “clearly firewalled and have no role in modifications of the trial conduct.”  The 2006 guidance also contained an admonition that prematurely terminating studies of less serious outcomes based on effectiveness is “rarely appropriate;” this is absent in the new draft guidance.  Although the sponsor must keep in mind the impact of an early termination, this change appears to be reflective of an acknowledgement that it is perhaps more than just “rarely appropriate” for DMCs to recommend early termination for effectiveness when data are compelling and a false positive risk is acceptably low, even where outcomes are less serious.

***

Sponsors considering the use of DMCs (or DSMBs, DSMCs, IDMCs) should carefully consider the recommendations and advice provided in this draft guidance, even prior to its finalization. As reflected in the changes from the 2006 guidance, the new draft guidance describes how DMCs are increasingly used for a variety of critical functions as an independent body with access to unblinded data from the ongoing trial.  It is also reflective of evolving FDA perspectives, in addition to evolving regulatory science.  In addition to adjusting its recommendations in acknowledgement of expanding DMC roles, the new draft guidance is also more focused on the potential utility of DMCs, with most of the language removed describing where they should not be employed (early phase trials, etc.).  This blog post focuses on a few of the specific changes from the 2006 guidance to highlight some changing perspectives, but sponsors should review the new draft in detail to fully understand FDA’s recommendations.

The American Conference Institute (“ACI”) will be hosting a series of go-to forums on critical topics including novel therapeutics, cosmetics/personal care products and Paragraph IV disputes. HP&M is proud to have our professionals participating in these important events.

• On March 20-21, Counsel John W.M. Claud will be featured at the Legal, Regulatory, and Compliance Forum on Cosmetics & Personal Care Products in New York, NY. His presentation will focus on “MoCRA is Here – Now What? Adapting to the New Regulatory Framework and Addressing Implementation Challenges.”  John counsels FDA-regulated entities on litigation, enforcement, and compliance matters including FDA inspections, Form 483s, Warning and Untitled Letters and Consent Decrees, internal investigations, and data privacy concerns.  Prior to HP&M, John served 15 years at the Department of Justice, serving most recently as the Assistant Director of the Consumer Protection Branch, where he led the Corporate Compliance and Policy Unit.  More information about the conference can be found here.  FDA Law Blog readers can use discount code S10-866-866L24.S for reduced registration fees.

• Just up the road in Boston on March 20-21, HP&M Associate Charles G. Raver will be a panelist at the Forum on IP, Funding and Tech Strategies for Novel Therapeutic Modalities. He’ll be speaking on “Bridging the Gap: From Pre-Commercialization Research to Regulatory Approval for Novel Therapeutics and Regenerative Medicines.”  Charles assists clients across a range of FDA-related regulatory matters by providing timely strategic advice on new drug and biologic development and helping them tackle complex regulatory issues.  His practice supports clients throughout the life sciences from biotech startups and multinational pharmaceutical companies to CROs and academic researchers to patient advocacy organizations.  Charles joined HP&M after more than a decade in biomedical research spent studying the neurobiological mechanisms of chronic pain and sensory processing.  Use the discount code S10-676-676L24.S to save on your registration fee.  For complete information on the conference, click here.

• Featuring speakers from the USPTO, FTC, FDA, distinguished members of the Judiciary, and in-house and outside counsel, HP&M Director Kurt Karst will be a presenter at the 20th Annual Paragraph IV Disputes Conference, April 25 – 26 in New York, NY. Kurt – with fellow presenters Mary Alice Hiatt, Division Director, Division of Legal and Regulatory Support, Office of Generic Drug Policy, FDA and Maryll Toufanian, Senior Vice President, Regulatory Strategy and Government Affairs, Amneal Pharmaceuticals – will be presenting “Brand and Generic Insights on FDA Programs Impacting Pharmaceutical Patents — Regulatory Initiatives and Recent FDA Litigation Every PIV Practitioner Needs to Know.”  Kurt provides regulatory counsel to pharmaceutical manufacturers on Hatch-Waxman patent and exclusivity, drug development, pediatric testing, and orphan drugs. He helps clients develop strategies for product lifecycle management, obtaining approval, managing post-marketing issues, and defining periods of exclusivity. As the co-founder of HP&M’s FDA Law Blog, Kurt often leads the response to new rules and regulations, sharing his interpretation with the broader legal community.  We can offer our readers a special discount for the event.  The discount code is S10-896-896L24.S.  Details on the conference can be found here.

As readers of this blog know, there is a lot of contention about the naming of alternative protein products (APPs), including both plant-based and cell-cultured alternatives for (traditional) animal products.  The animal product industry, particularly the beef industry and the dairy industry, has challenged naming of APPs using what they consider to be traditional meat terminology.

Many individual states have pursued some type of legislation to restrict the use of traditional meat terminology for the labeling of APPs.  Last November, Florida went further by introducing a bill to prohibit the manufacture, sale, and distribution of cell-cultured meat entirely.  Arizona’s House of Representatives passed a similar bill on February 22 of this year, which is now pending review by the State Senate. Many states have proposed but failed to enact legislation regulating the labeling of APPs, in some cases due to concerns of potential legal challenges based on federal preemption claims.  Language in both the Federal Meat Inspection Act (FMIA) and the Poultry Products Inspection Act (PPIA) explicitly states that requirements for marking, labeling, and ingredients in addition to or different from those required under the Acts may not be imposed by any state or territory.  Federal legislation that amends the FMIA and PPIA could sidestep many of the issues hampering state-level efforts in this arena.  On January 30, the U.S. Senate and House of Representatives introduced the Fair and Accurate Ingredient Representation (FAIR) on Labels Act of 2024, a bipartisan bill that would establish new labeling requirements for alternative meat and protein products and prohibit the use of certain meat-related terminology and imagery for such products.  For the traditional meat industry, APP industry, and consumers, one of the few points of agreement may perhaps be a preference to avoid a messy patchwork of potentially inconsistent state laws.  This particular federal legislative effort, however, continues the debate.

If enacted, the legislation would amend the FMIA and PPIA to establish definitions for “imitation” and “cell-cultured” meat and poultry products, and revise the definitions of “meat” and “poultry” to exclude such products.  We’ve previously blogged about this ongoing battle here, here, here, and here.  Spoiler alert: the FAIR on Labels Act brings the traditional and alternative protein industries no closer to “meating” in the middle.

Imitation Meat and Poultry

More specifically, the bill would define “imitation meat” and “imitation poultry” as any food that does not contain meat, meat food product, or meat byproduct ingredients (or poultry or poultry product), and:

1. uses a market name, descriptors, or iconography for, or is otherwise represented as, meat or meat food product (or poultry or poultry product);
2. is manufactured to appear as a meat or meat food product (or poultry or poultry product); or
3. approximates the aesthetic qualities (primarily texture, flavor, and appearance) or chemical characteristics of specific types of meat or meat food product (or poultry or poultry product).

The bill would require the labeling of any “imitation meat” or “imitation poultry” to (1) include “a disclaimer that clearly indicates that the imitation meat [or poultry] product is not derived from, or does not contain” meat or poultry, as applicable, and (2) display, in a prominent and conspicuous manner, in the same size and prominence as and immediately adjacent to the market name:

1. the word “imitation”; and
2. a statement that “the imitation meat [or poultry] is derived from sources other than meat [or poultry].”

The bill also includes a provision that bars the Secretary of Health and Human Services, the agency overseeing USDA and FDA, from providing for any exceptions to these requirements.

Cell-Cultured Meat and Poultry Products

The FAIR on Labels Act would define “cell-cultured meat product” and “cell-cultured poultry product” as “any product capable of use as human food that:

1. is made wholly or in part from any cell culture or the DNA of an amenable species [or live bird]; and
2. is grown or cultivated outside of the live animal [or live bird] from which the cell culture or DNA was acquired.”

The labeling of any cell-cultured meat and poultry products would be required to display the words “cell-cultured” or “lab-grown” in uniform type size and prominence as, and immediately adjacent to, the name of the food.

Who Gets to Bring Home the Bacon (and Other Terms)?

What’s in a name?  According to some, the terminology used to describe a product—particularly a novel product like cell-cultured meat—is critical to framing consumers’ perceptions of the product and, in turn, its success in the market.   It’s not surprising, then, that the FAIR on Labels Act has been most strongly supported by the traditional meat industry, from the National Cattlemen’s Beef Association—which petitioned USDA to restrict the use of meat and meat-related terminology to that which has been “harvested in the traditional manner”—to the National Chicken Council, the National Pork Producers Council, the American Sheep Industry, and other livestock trade groups.

Preventing consumer confusion is one of the chief arguments that the animal product industry uses in support of the bill.  We’ve certainly heard this line of reasoning before in litigation over APP labeling, but the relatively few examples of consumer litigation on the basis of deceptive or misleading labeling have rarely been successful.  Instead, the majority of such litigation have involved First Amendment challenges to state laws that restrict APPs’ access to traditional meat nomenclature.  In these cases, plaintiffs claimed, with varying degrees of success, that the use of traditional meat nomenclature (e.g., tofu burger) was not misleading.  Some plaintiffs also have successfully argued that the challenged state laws created confusion where none existed before.  APP proponents’ other arguments are captured in the Good Food Institute’s 2017 Citizen Petition to FDA, which requested regulations to clarify how foods may be named by reference to the names of other “traditional” foods (we previously blogged about this).

We will continue to monitor this bill and the legislative, administrative, and judicial developments with respect to this rapidly evolving issue.

Last Friday, the Delaware District Court rejected AstraZeneca’s lawsuit against the Medicare Drug Price Negotiation Program enacted under the Inflation Reduction Act (IRA) and CMS’s guidance implementing it. AstraZeneca, whose drug Farxiga was selected last September for negotiations for price applicability year 2026, claimed that the IRA violated AstraZeneca’s Fifth Amendment right to due process because it deprived the company of its investment-backed patent rights and common-law right to sell its products at market prices free from governmental constraints. AstraZeneca also claimed that CMS’s revised guidance on the Negotiation Program for Price Applicability Year 2026 (“Guidance”) interpreted the IRA in two very faulty ways, which violated the Administrative Procedure Act (APA) and harmed and will continue to harm the company.

In granting the Government’s summary judgment motion, the court held that AstraZeneca did not have the requisite standing for the APA arguments because it failed to identify a cognizable injury-in-fact that could be redressed by vacatur of the Guidance. The court also found that the company could not win on its Fifth Amendment argument because it did not have a protected property interest.

AstraZeneca’s APA Arguments on CMS’s Guidance

The majority of the court’s analysis revolved around AstraZeneca’s two APA claims. First, AstraZeneca alleged that CMS improperly defined a “qualifying single source drug” to include all dosage forms and strengths of the drug marketed by the manufacturer with the same active moiety or ingredient—even if those different forms and strengths were approved under different NDAs. Opinion at 17. According to AstraZeneca, the statute defines a qualifying single source drug by reference to its individual “approval,” and “any other reading . . . contradicts the plain text of the statute and therefore must be set aside.” Id.; see also 42 U.S.C. § 1320f-1(e)(1)(A). Second, AstraZeneca alleged that CMS’s requirement that a generic drug must be marketed in a bona fide way to be “marketed” under § 1320f-1(e)(1)(A)(iii) “impermissibly expanded the requirements” for a drug to be deemed to have generic competition in order to avoid selection and negotiation. Id. at 17-18. According to AstraZeneca, “the ordinary and accepted meaning of ‘marketing’ is ‘exposure for sale in a market,’ and if a generic drug is exposed for sale in any way or quantity, the reference brand drug cannot be a selected drug for negotiation under the Program.” Id. at 18.

But AstraZeneca did not, and could not, allege harm due to CMS’s selection of Farxiga: indeed, neither argument related to Farxiga, which is approved only under one NDA and has no generic versions marketed in any manner or quantity. Id. at 19-20. Instead, AstraZeneca alleged harm in four other ways. The court reviewed each argument in turn and in each case, found AstraZeneca unable to allege cognizable injury that could be redressed by vacatur of the Guidance. As a result, the court found that AstraZeneca did not have standing to assert its APA claims.

First, AstraZeneca claimed that CMS’s interpretation of a qualifying single source drug will decrease the company’s incentives to investigate additional uses of Farxiga’s single-ingredient active moiety. The court dismissed this argument holding that a loss or diminishment of an incentive to do something is not a concrete injury, and even if it was a sufficiently concrete injury, it was not “actual or imminent,” but only an allegation of possible future injury. Id. at 21-23. Moreover, the court found that the record showed a very low likelihood that AstraZeneca could get approval for a new indication with the same active moiety or ingredient and that it was not actively investigating drugs with only that active moiety. Even if the company did obtain approval, such approval would likely be after generic competition for Farxiga enters the market, in which case the definition of a qualifying single source drug would no longer apply to Farxiga.

Second, AstraZeneca claimed that the Guidance’s bona fide marketing test will cause it imminent injury in the form of simultaneous generic competition and mandatory pricing “for months” after generic versions of Farxiga enter the market. AstraZeneca argued that CMS’s bona fide marketing test, which is based on claims data, moves “at glacial pace” and can be delayed by numerous months. The court found numerous flaws with this argument. First, the Act has no requirement for CMS to “release” a selected drug from negotiations from the 2026 price simply because a generic is approved and marketed before or during 2026, so CMS’s bona fide marketing requirement could not have created an injury. Rather, the IRA requires a selected drug to remain selected for “each subsequent year beginning before the first year that begins at least 9 months after the date on which . . . at least one drug” has been approved and marketed. See id. at 28. Also, the IRA would subject Farxiga to the negotiated maximum fair price for the entirety of 2026 if no generic version entered the market before August 1, 2024, even if a generic drug later enters the market before or during 2026. Id. at 28-29. Because the alleged harm arises from the Act, not from the Guidance, the court found that AstraZeneca did not meet the causation or redressability elements of standing under this argument. To the extent that AstraZeneca alleged that CMS would cause it this type of harm in 2027, the court found that allegation to be too speculative. In any case, AstraZeneca did not address whether CMS’s “totality-of-the-circumstances” test (which involves more than just the claims data) would suffer from the same delays, and whether those delays will be greater than those under AstraZeneca’s proposed definition of “marketed.”

Third, AstraZeneca argued that its current decision-making about other drugs has been and will continue to be negatively affected by CMS’s Guidance. AstraZeneca argued it would very likely have products in future lists of drugs selected for negotiations. The court dismissed this alleged harm as too vague to establish a cognizable injury, and the argument as irrelevant given the fact that the allegedly violative Guidance only applies to the 2026 price applicability year.

Fourth, AstraZeneca argued that CMS’s erroneous interpretation of the statute has made it very difficult for the company to understand the real value of their product under CMS’s guidance and impaired its ability to make a counteroffer to the Government’s price offer. The court disagreed: AstraZeneca clearly understood how CMS’s guidance impacted the value of its product because it based its entire complaint on that impact. The court agreed that AstraZeneca faced uncertainty due to the instant lawsuit, but explained that the lawsuit cannot, by itself, be used to create standing.

Constitutional Challenge

AstraZeneca also alleged that the Negotiation Program violated the Constitution’s Fifth Amendment prohibition against depriving a person of property without due process of law. AstraZeneca claimed that the IRA deprived it of its “common law right to sell its products at market prices free from arbitrary and inadequately disclosed governmental constraints” by “directing [CMS] to fix prices at the ‘lowest’ level, without affording adequate procedural safeguards.” Id. at 42. AstraZeneca also alleged that the Program deprived the company of its property interest in “undefined ‘patent rights’ . . . and the revenue it derives therefrom . . . by compelling sales of its products at well-below market prices.” Id. at 42-43.

The court found that AstraZeneca did not have any protected property interest of which the IRA allegedly deprived it. According to the court, AstraZeneca’s “desire” or even “expectation” to sell its drugs to the Government at the higher prices it once enjoyed does not create a protected property interest.” Id. at 45. The court reasoned that no one is entitled to sell to the Government at prices the Government will not agree to pay. According to the court, because AstraZeneca has no legitimate claim of entitlement to sell its drugs to the Government at any price other than what the Government is willing to pay, the due process claim must fail as a matter of law. Id. The court also reiterated that neither the IRA nor any federal law requires AstraZeneca to sell its drugs to Medicare beneficiaries. “On the contrary, participation in the Medicare program is a voluntary undertaking.” Id. at 44.

The Road Ahead for the Negotiation

AstraZeneca is the first case to be decided among at least nine federal lawsuits brought by the pharmaceutical industry against the Negotiation Program (a tenth lawsuit brought by Astellas was withdrawn last fall; see list of cases in the chart below). In another case, the Southern District Court of Ohio denied a motion for preliminary injunction, but a decision on the merits is still pending. We expect decisions in the remaining cases in the upcoming weeks, and certainly before the maximum fair prices are published in September 2024.

On February 6, 2024, FDA issued a draft guidance titled Notifying FDA of a Discontinuance or Interruption in Manufacturing of Finished Products or Active Pharmaceutical Ingredients Under Section 506C of the FD&C Act. The draft guidance provides recommendations for applicants and manufacturers about the requirements for notifications about production changes of certain finished drugs and biological products and certain active pharmaceutical ingredients (API), and outlines information FDA would like to receive in addition to the requirements.

Why?

Given the disruptions in supply that have continued to occur even beyond the end of the pandemic crisis, it is not surprising that FDA has issued a draft guidance on this subject. Early notification can play a role in decreasing the impact and duration of such supply disruptions and product shortages. Since the enactment of the Food and Drug Administration Safety and Innovation Act (FDASIA) in 2012, manufacturers have been required to notify FDA of product changes affecting certain finished drugs and biological products. In 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) expanded the notification requirement to include reasons contributing to the discontinuance or interruption (e.g., API and its source and any alternative sources; associated medical devices), and expected duration of the interruption.

Who?

The notification requirements under section 506C apply to:

• Applicants with approved new drug applications (NDAs) or approved abbreviated new drug applications (ANDAs) for certain finished drug products (see below for description of covered products);
• Applicants with approved biologics license applications (BLAs) for certain finished biological products other than blood or blood components;
• Applicants with approved BLAs for blood or blood components for transfusion that manufacture a significant percentage of the U.S. blood supply; and,
• Manufacturers of certain finished drug products marketed without an approved NDA or ANDA.

Others involved in the drug supply chain, such as third-party API manufacturers and suppliers, are not required to submit such notifications.

The notification requirements apply to each individual manufacturer regardless of market share, the number of competitors making therapeutically equivalent products, or the amount of product in distribution. FDA stresses, however, that the relevant analysis is whether a change in production is likely to lead to reduction in supply of a product by that manufacturer. The assessment is to be based solely on the reporting manufacturer’s capacity and supply without regard to other manufacturers’ capacity or market demand.

For purposes of these notification requirements, finished products are prescription drugs and biological products that are (1) life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition, and (2) not radiopharmaceutical drug products or any other products specifically designated by FDA.

FDA considers a permanent discontinuance to be a manufacturer’s decision to stop manufacturing and distributing its product indefinitely. Interruptions are those where a production change is likely to lead to a meaningful disruption in the supply of the product or API such that it impacts the manufacturer’s ability to fill orders or meet demand.

When?

Applicants and manufacturers are required to notify FDA at least six months in advance of a permanent discontinuance of certain finished drugs or API for such products or an interruption in manufacturing that may cause a disruption in the supply of the drug or API.  If it is not possible to provide advanced notice, notification must be provided as soon as practicable.

For a permanent discontinuance or interruption in manufacturing of a covered finished product, the notification must be submitted no later than five business days after such production change in manufacturing occurs.

In all cases, FDA should be notified by manufacturers before their own supply of a finished product or API for those products is meaningfully disrupted (e.g., interrupted).

Manufacturers are urged to notify FDA even if the manufacturer is unsure whether manufacturing interruption could lead to a meaningful disruption in order to allow FDA to monitor the market and help or prevent any resulting shortage.

FDA stresses in the draft guidance that other notifications to the agency such as a field alert report or report of marketing status do not substitute for notifications of discontinuance or disruption.

It is worth noting that although not a requirement, FDA requests that manufacturers contact the Agency in instances when supply cannot meet demand for covered finished products. Doing so creates a signal to FDA about a potential shortage and allows the Agency to mitigate against the potential shortage.

A separate notification for each permanent discontinuance or interruption in manufacturing is expected. The initial notification may include a list of all affected covered finished products or API. Subsequent updates should not include a newly affected product (e.g., a new strength). A separate notification should be submitted to ensure that the newly affected product is tracked appropriately.

What?

Covered Finished Products

At a minimum, a notification for a permanent discontinuance or interruption in the manufacturing of a covered finished product must identify:

• Product name;
• Applicant name;
• Whether it is a permanent discontinuance of the product or an interruption in the manufacturing;
• Reason for the discontinuation or interruption;
• Estimated duration of the interruption;
• Whether an API is a reason for, or risk factor in, the discontinuation or interruption, and, if so, the API source and any alternatives; and,
• Whether a device used for preparation or administration is a reason for, or risk factor in, the discontinuation or interruption.

APIs

At a minimum, a notification for a permanent discontinuance or interruption in the manufacturing of an API must identify the reason for the discontinuation or interruption, API source and alternatives, and expected duration of the interruption.

For both covered finished products and APIs, FDA recommends including a laundry list of additional information, most of which many manufacturers will not object to sharing with FDA.

What if?

Failure to provide notification of a discontinuance or interruption to FDA potentially could, among other things, land a manufacturer on the Drug Shortages: Non-Compliance With Notification Requirement website.

FDA will send a letter to the manufacturer noting that the applicable notification requirement was not met (a noncompliance letter). The draft guidance states that if FDA determines that an applicant could not have reasonably expected a reportable interruption six months in advance but failed to notify FDA “as soon as practicable,” a noncompliance letter will be issued. The manufacturer has an opportunity to respond, and both the noncompliance letter and response letter(s) will be posted on the website unless FDA determines it was issued in error or determines the manufacturer had a reasonable basis for not meeting the notification requirement.

We note there have been seven instances where FDA has posted the noncompliance letter and response letter over the last eight years, suggesting that manufacturers have mostly self-reported any production changes in manufacturing of finished products or APIs, or this was not a priority for FDA.

Where to look

FDA communicates shortage information about drugs and biological products through public, daily updated lists (e.g., CDER shortages and CBER shortages).

A product is added to a list only after FDA has determined it to be in shortage. Conversely, if a shortage is resolved based on FDA’s market assessment, which considers whether all backorders have been filled and supply is either meeting or exceeding demand, affected market share, alternative manufacturers to cover demand, and confirmed market stabilization, the affected product is removed from the list.

FDA informs the public of both shortages and extended use dates to assist with drug shortages. By actively updating the information related to shortages, FDA intends to allow the public and prescribers to develop alternative treatment plans before learning a prescription cannot be filled at the pharmacy when there is a supply issue.

Hyman, Phelps & McNamara, P.C. (HP&M), is pleased to announce that Director Anne Walsh will be speaking at the DIA Advertising and Promotion Regulatory Affairs Conference. This essential event for regulatory professionals in the biopharmaceutical and medical device industries will take place March 12-13, 2024, in Arlington, VA. Ms. Walsh will contribute her extensive expertise in FDA regulatory matters to a session titled “Global Ad Promo and Enforcement Insights,” addressing the complex landscape of advertising and promotion compliance on a global scale.

Ms. Walsh, with over 26 years of experience in providing counsel to the pharmaceutical and medical device industries, will provide invaluable insights into global advertising and promotion regulations. Her deep understanding of FDA administrative actions alongside her proactive approach in helping companies prevent or respond to government investigations, makes her a pivotal voice in discussions on regulatory compliance. Before joining HP&M, Ms. Walsh served as an Associate Chief Counsel with the FDA’s Office of Chief Counsel, where she was recognized with several awards for her significant contributions.

The “Global Ad Promo and Enforcement Insights” session promises to highlight Ms. Walsh’s unique perspectives on navigating the challenges and opportunities presented by advertising and promotion regulations worldwide. Attendees can expect to gain practical strategies for compliance and enforcement, drawn from Ms. Walsh’s varied experience with global entities operating in this space and her proactive approach to regulatory affairs.

The DIA Advertising and Promotion Regulatory Affairs Conference is an unparalleled platform for professionals at all career stages, offering insights into regulatory policies, professional development strategies, and the latest trends in medical product advertising. Participants also will have the opportunity to network with key thought leaders from the FDA, industry, and other regulatory agencies, fostering a deeper understanding of the advertising and promotion regulatory framework.

FDA Law Blog readers can use the discount code 24SPKR150 for reduced registration fees.  For complete information on the conference, click here.

FDA’s proposed rule to regulate laboratory developed tests (LDTs) as devices took one more step towards publication as a final rule – and to a likely judicial showdown.  On March 1, the Office of Management and Budget (OMB) received the draft final LDT rule for review (here).

The LDT rule has moved forward with astonishing speed, advancing from the release of the proposed rule on October 3, 2023 to OMB in less than five months.  This stands in marked contrast to FDA’s prior efforts to regulate LDTs (see posts here, here, and here), and to the agency’s more typical, deliberate pace for rulemaking.  For comparison, it took FDA nearly two years from issuance to finalization of the proposed rule to harmonize the Quality System Regulation with international standards.

This extreme rapidity has been attributed to FDA’s desire to avoid having the rule being overturned by Congress under the Congressional Review Act.  Of course, if a new administration takes over next year, the rule’s future would be questionable, even without congressional action.

The speed of the LDT rule is even more astonishing in light of the nearly 7,000 comments that were submitted in response to the proposed rule. Under the Administrative Procedure Act (APA), the FDA is obligated to address all major substantive comments.  While some comments were duplicative or brief, others pointed out major flaws.  See for example our firm’s comments on the proposed rule (here). For  FDA to review and respond in a matter of months to comments that raised substantial issues about a major rule that would transform the laboratory industry is nothing short of breathtaking.  It seems unlikely that FDA would have made significant revisions and meaningfully addressed these concerns..  It remains to be seen whether FDA’s hasty review of these comments will provide additional fodder under the Administrative Procedure Act for failing to have adequately addressed major substantive comments.

With the release of the final rule by the Department of Health and Human Services to OMB, litigation is now virtually inevitable.  There had been some speculation that the release of the proposed rule would spur Congress to take action.  That hasn’t happened yet.  Given that Congress struggles to keep the government funded, it is far-fetched now to expect Congress to enact this complex legislation – especially since it has repeatedly failed to do so.  Congress has engaged in multiple attempts to pass the VALID Act (see posts here and here).

Barring unexpected action by OMB, we would expect the final rule to be published in the next few months.  And at that point, given the large number of laboratories and clinicians that will be adversely affected, it would be very surprising if FDA were not sued by one or more plaintiffs.  As we have previously noted, there are plenty of grounds for challenging any final rule that is released.  See our prior post here.

For years, lawyers have debated what the courts would do if FDA sought to regulate LDTs via a regulation.  It now appears that we will not have long to wait to find out.

The most recent version of  the BIOSECURE Act (the “Act”) was introduced in the U.S. House of Representatives (H.B. 7085) and Senate (S.B. 3558) on January 25, 2024. This proposed legislation should be of interest to any biotechnology companies that want to do business with the federal government in the future.

Background

Section 2 of the House Bill outlines some of the historical background that spurred Congressional action here, including national security risks highlighted by U.S. Departments of Defense (DoD) and Commerce actions against several specific Chinese biotechnology companies. An earlier version of the BIOSECURE Act was included in the House version of the FY24 National Defense Authorization Act (NDAA) but did not become law. Instead, the final NDAA directed the DoD to determine whether Chinese biotechnology companies should be identified as Chinese military companies operating in the United States.

On January 31, the DoD issued an updated list of Chinese military companies operating in the U.S., which did not include some of the Chinese companies specifically identified by Congress in prior and current versions of the BIOSECURE Act. On February 12, a bipartisan group of Senators and Representatives sent a letter to the Secretaries of Commerce, Defense, and Treasury, asking the Secretaries to consider adding WuXi-affiliates to various national security lists maintained by each of the agencies, including the DoD’s Chinese military list.  The Act is intended to address national security concerns by prohibiting certain conduct by regulated industry.

The Act

The Act would prohibit federal agencies from

(a) procuring or obtaining (or loaning or granting funds to procure or obtain) “biotechnology equipment or services” from any “biotechnology company of concern”;

(b) entering into a contract or extending or renewing a contract (or loaning or granting funds to do the same) with any entity that either

(i) uses biotechnology equipment or services from a biotechnology company of concern acquired after the effective date of the Act to perform the federal contract, or

(ii) enters into a contract with a third party that will require the direct use of biotechnology equipment or services from a biotechnology company of concern acquired after the effective date of the Act to perform the federal contract.

To state the inverse, the Act does not apply in cases where federal contractors do not use “biotechnology equipment or services” acquired from a “biotechnology company of concern” to perform the services under the contract—as each term is defined in the Act.

Biotechnology equipment includes genetic sequencers, mass spectrometers, polymerase chain reaction machines or any other equipment, components or accessories designed for the research, development, product, or analysis of biological materials as well as any software, firmware, or other digital components.

Biotechnology services include advising or consulting services related to the use of the above equipment, disease detection, or genealogical information, or any other service for the research, development production, analysis, detection, or provision of information including data storage and transmission related to biological materials.

The U.S. Office of Management and Budget (OMB) can also specify other equipment or services to be subject to the Act’s prohibitions.

Biotechnology companies of concern include BGI (formerly Beijing Genomics Institute), MGI, Complete Genomics, WuXi Apptec, and any subsidiary, parent, affiliate, or successor of such entities. Additionally, the OMB is directed to publish a list of additional biotechnology companies of concern within 120 days of enactment, which may include companies from “foreign adversaries” (i.e., China, Russia, Iran or North Korea).

Although the Act only applies to such equipment or services if they were acquired by the contracting entity after the “effective date” of the Act, which can differ depending on the source company of those equipment and services, it’s worth taking note of these potential provisions now. The planned prohibitions are effective for biotechnology equipment or services acquired from BGI, MGI, Complete Genomics, WuXi Apptec, and related entities 60 days after OMB issues guidance required under the Act (itself within 120 days of enactment of the Act). The prohibitions are effective for biotechnology equipment or services acquired from entities later added by OMB, 180 days after issuance of the above OMB guidance.

This guidance will be critical because the Act leaves open a number of key questions that would be important to compliance and changes to the FAR are not required until a year after the guidance—and therefore after the effective date.  The legislation may be revised, and the below is not an exhaustive list of our questions and concerns, but at present we have several observations and questions about how the Act may be implemented and potential consequences.

1. Scope Part 1—though the Act’s restrictions are seemingly limited to equipment and services that perform activities in relation to “biological materials”—a term that is not defined in the Act—the restrictions may still impact manufacturers of small molecule drugs or API that contract with third-parties using covered products or services as part of, e.g., various non-clinical testing in the development or manufacturing process.
2. Effect on FDA approvals—In cases where a biological product or drug needs to change aspects of its manufacturing processes to avoid using a covered equipment or service, will it need to file supplements with FDA for the CMC update?
3. Scope Part 2—Is reimbursement under Medicaid a grant of funds by the federal government, such that they are governed by the Act? In this regard we note that Medicaid is described in federal regulations as “Federal grants to States for medical assistance.”  See, e.g., 42 CFR § 430.0.

Conclusion

Although the BIOSECURE Act has not been passed by Congress (or signed by the President), its sponsors are expected to push for its inclusion in the FY25 NDAA or as part of other omnibus legislative packages that arise this year. Given the bipartisan attention that Chinese national security risks have garnered in recent years, biotech companies would be well advised to consider the potential impact this legislation could have on existing and future federal contracts. HPM will continue to monitor developments related to the Act.

Earlier this week, we posted Part 1 of our three-part series on U.S. Patent and Trademark Office (“PTO”) Patent Term Extension (“PTE”) decisions under 35 U.S.C. § 156, as added by the 1984 Hatch-Waxman Amendments, for certain FDA-regulated products.  Part 1 focused on both the PTO’s historical and current (180-degree and unsupported change in position) on multiple PTEs.

Today, we move on to Part 2 (or “Part Deux” in homage to the 1993 comedy “Hot Shots! Part Deux,” which starred Lloyd Bridges, who also starred in the 1980 movie “Airplane!” referenced in Part 1 of our series) concerning the PTO’s position and recent decisions on PTE applications for patents covering products approved—and then withdrawn years later—under the Federal Food, Drug, and Cosmetic Act’s (“FDC Act’s”) Accelerated Approval provisions (as well as the Agency’s corresponding regulations, which actually preceded the statutory provisions).  As FDA explains on its website (which includes lists—here and here—of the more than 300 Accelerated Approvals (and withdrawals)):

The FDA instituted its Accelerated Approval Program to allow for earlier approval of drugs that treat serious conditions, and fill an unmet medical need based on a surrogate endpoint.  A surrogate endpoint is a marker, such as a laboratory measurement, radiographic image, physical sign or other measure that is thought to predict clinical benefit but is not itself a measure of clinical benefit. The use of a surrogate endpoint can considerably shorten the time required prior to receiving FDA approval.

Drug companies are still required to conduct studies to confirm the anticipated clinical benefit. If the confirmatory trial shows that the drug actually provides a clinical benefit, then the FDA grants traditional approval for the drug.  If the confirmatory trial does not show that the drug provides clinical benefit, FDA has regulatory procedures in place that could lead to removing the drug from the market.

The statutory Accelerated Approval provisions were amended in 2023 as part of the Food and Drug Omnibus Reform Act of 2022 (“FDORA”) to, among other things, give FDA greater authority to expedite the withdrawal of approval of an Accelerated Approval product if clinical benefit is not confirmed post-NDA or -BLA approval.  For more on those amended provisions, see our FDORA Summary here.

Part 2:  Accelerated Approval Withdrawals and the End of the PTE Road

Last week, FDA announced that, for the first time, the Agency flexed its new FDORA-enhanced Accelerated Approval muscle when issuing a final decision to withdraw the approval of Oncopeptides AB’s  (“Oncopeptides’s”) PEPAXTO (melphalan flufenamide) for Injection.  FDA approved PEPAXTO on February 26, 2021 under NDA 214383 for use in combination with dexamethasone for the treatment of adult patients with relapsed or refractory multiple myeloma who have received at least four prior lines of therapy and whose disease is refractory to at least one proteasome inhibitor, one immunomodulatory agent, and one CD-38 directed monoclonal antibody.

As part of the Accelerated Approval, Oncopeptides was required to conduct “further adequate and well-controlled clinical trials to verify and describe clinical benefit.”  That did not happen.  FDA’s February 23, 2024 decision says that “the grounds for withdrawing approval have been met because: (1) the confirmatory study conducted as a condition of accelerated approval did not confirm Pepaxto’s clinical benefit and (2) the available evidence demonstrates that Pepaxto is not shown to be safe or effective under its conditions of use.

We note all of this FDA law in the context of a patent-related PTE post because FDA’s withdrawal decision has ramifications beyond the FDA world.  You see, Oncopeptides has has pending at the PTO since March 2021 a PTE application for U.S. Patent No. 6,992,207 covering PEPAXTO (Docket No. FDA-2022-E-3124).  And given recent PTO PTE decisions, it may be the end of the road for this PTE application.

Although we don’t know for sure how far back this apparently new effort goes (the precedents we know of are all from 2023), the PTO has—as quiet as a mouse peeing on cotton, as my mother might say—taken the position that once FDA withdraws approval of an NDA or BLA under the Accelerated Approval program (or otherwise!), that action nullifies any pending PTE application.  (Whether withdrawal also nullifies any already-granted PTE is a separate question folks can ponder.)  Consider, for example, the following four PTO decisions we unearthed.

On April 14, 2023, the PTO issued an ORDER TO SHOW CAUSE to Eli Lilly and Company (“Lilly”) “based on the apparent ineligibility of U.S. Patent No. 8,128,929 [] for [PTE] request under 35 U.S.C. § 156.”  The PTE application for U.S. Patent No. 8,128,929 was submitted on December 8, 2016 (Docket No. FDA-2017-E-5106), and concerns FDA’s October 19, 2016 Accelerated Approval of BLA 761038 for LARTRUVO (olaratumab).  The PTO’s ORDER TO SHOW CAUSE points out that:

According to the published Federal Register Notice of July 17, 2020, Lilly requested withdrawal “(revocation)” of its BLA for the human biological product LARTRUVO® (olaratumab).  The Notice, in part, provided that the required clinical data did not meet the required threshold to receive final approval and Lilly waived its opportunity for a hearing.

From there, the PTO notes that a PTE “determination is made based on the representations contained in the PTE application,” and that “35 U.S.C. § 156(c) provides ‘[t]he term of a patent eligible for extension under subsection (a) shall be extended by the time equal to the regulatory review period for the approved product which period occurs after the date the patent is issued.’” (Emphasis in original).  Then comes the PTO’s requirement to show cause:

Since there is no longer an approved product, Lilly is required to show cause with regard to its PTE application for LAR TRUVO® ( olaratumab) and establish: (1) why the USPTO should not terminate the PTE application based on the plain language of 35 U.S.C. § 156(c); and (2) why the PTE application for the ‘929 patent should remain under consideration despite Lilly’s express written request of withdrawal (revocation) of BLA-761038 and waiver of the opportunity for a hearing.  In responding to the show cause request, Lilly should identify statutory language in 35 U.S.C. § 156 or case law that would support extension of the ‘929 patent that claims the product despite revocation of the biologics license application. Moreover, Lilly should explain how a PTE application for a withdrawn “revoked” biologics license application is in compliance with requirements of 37 C.F.R. § 1.740.

According to documents in the PTO’s Patent Center, Lilly has not yet filed a response.

Our second example follows the same pattern as the first example above.  On April 20, 2023, the PTO issued an ORDER TO SHOW CAUSE to Glaxo Group Limited (“Glaxo”) “based on the apparent ineligibility of U.S. Patent No. 9,273,141 [] for [PTE] request under 35 U.S.C. § 156.”  The PTE application for U.S. Patent No. 9,273,141 was submitted on September 18, 2020 (Docket No. FDA-2020-E-2275), and concerns FDA’s August 5, 2020 Accelerated Approval of BLA 761158 for BLENREP (belantamab mafodotin-blmf).  The PTO’s ORDER TO SHOW CAUSE points out that:

According to the published Federal Register Notice of March 30, 2023, Glaxo requested withdrawal “(revocation)” of its BLA for the human biological product BLENREP® (belantamab mafodotin-blmf).  The Notice, in part, provided that the required clinical data did not meet the required threshold to receive final approval and Glaxo waived its opportunity for a hearing.

From there, the PTO conveys the same message to Glaxo as it did with Lilly above.  But in this case, there’s a response on file from Glaxo pushing back on the PTO’s position and taking the position that a PTE in this case “is mandatory and not discretionary.”

Our third example also follows the same pattern as the first two examples above.  In addition, it’s playing double duty for us because it’s also one of the pending multiple PTE cases we identified in Part 1 of this series.  On June 27, 2023, the PTO issued two ORDER TO SHOW CAUSE letters (here and here) to Gilead Sciences Inc.  (“Gilead”) “based on the apparent ineligibility of U.S. Patent No. RE 44,599 [and U.S. Patent No. RE 44,638] for [PTE] request under 35 U.S.C. § 156.”  The four PTE applications for U.S. Patent Nos. RE 44,599 and RE 44,638 were submitted nearly ten years ago (a point not lost on Gilead as noted below), on September 17, 2014 (Docket Nos. FDA-2015-E-2602, FDA-2015-E-2604, FDA-2015-E-2619, and FDA-2015-E-2615), and concern FDA’s July 23, 2014 Accelerated Approval of NDA 205858 and NDA 206545 for ZYDELIG (idelalisib) Tablets for different uses.  The PTO’s ORDER TO SHOW CAUSE letters point out that:

According to the published Federal Register Notice of May 26, 2022, Gilead requested withdrawal “(revocation)” of its active ingredient ZYDELIG® (idelalisib).  The Notice, in part, provided that the required clinical data did not meet the required threshold to receive final approval and Gilead waived its opportunity for a hearing.

From there, the PTO conveys the same message to Gilead as it did to Glaxo and Lilly above.  But in this case, as with Lilly, there are responses (here and here) on file from Gilead with respect to each ORDER TO SHOW CAUSE letter.  And Gilead takes the PTO to town(!):

As described below, Applicant believes that the Order rests on a basic factual error regarding the approval status of ZYDELIG (idelalisib) oral tablets (100 and 150 mg). In particular, the Order incorrectly states that [FDA] withdrew approval of ZYDELIG (idelalisib) in May 2022.  In fact, FDA withdrew approval of two of the three indications for which ZYDELIG (idelalisib) had initially been approved. ZYDELIG (idelalisib) remains approved for use “in combination with rituximab, for the treatment of patients with relapsed chronic lymphocytic leukemia (CLL) for whom rituximab alone would be considered appropriate therapy due to other co-morbidities.”  On this basis, the pending applications for [PTE] should not be terminated, and Applicant respectfully requests that the USPTO promptly issue a final determination on the pending applications.

In addition, Applicant would like to take this opportunity to address several issues raised by the Order.  First, the Order repeatedly characterizes the Accelerated Approval pathway as “conditional” or otherwise short of final approval.  This characterization represents an incorrect interpretation of the eligibility requirements for patent term extension under 35 USC 156.

Finally, Applicant respectfully requests that the USPTO promptly issue a final determination on the pending PTE applications related to ZYDELIG (idelalisib).  These applications have been pending for more than nine years. There is no apparent justification for such delay, particularly where the USPTO has granted dozens of patent term extensions based on products approved – and PTE applications submitted- more recently than ZYDELIG (idelalisib).

Ouch!  Since then, there’s no record of the PTO responding.  As Lt. Frank Drebin of Police Squad once said: “The truth hurts, doesn’t it, Hapsburg?  Oh sure, maybe not as much as landing on a bicycle with the seat missing, but it hurts!”

Our fourth example ties in our Part 1 post and the references to BELVIQ (lorcaserin HCl) Tablets (NDA 022529; approved on June 27, 2012) and the Improving Regulatory Transparency for New Medical Therapies Act (“IRTNMTA”), with the PTO’s December 21, 2023 ORDER TO SHOW CAUSE “based on the apparent ineligibility of U.S. Patent No. 6,953,787 [] for [PTE] request under 35 U.S.C. § 156.”  That PTE application was submitted to the PTO on July 26, 2012.  While that’s quite a while ago, the file was complicated by a fight over the IRTNMTA (see our previous post here).

In any case, the PTO’s December 21, 2023 ORDER TO SHOW CAUSE, unlike the two cases above, goes outside of the Accelerated Approval withdrawal context.  It follows a February 13, 2020 request from the sponsor of BELVIQ that FDA withdraw approval of BELVIQ, a September 17, 2020 FDA Federal Register Notice withdrawing approval of BELVIQ (effective September 17, 2020), and a March 4, 2021 Federal Register Notice in which FDA determined that BELVIQ was withdrawn from sale for safety or effectiveness reasons.  According to the PTO:

Since there is no longer an approved product, Eisai as authorized entity acting on behalf of the PTE Applicant, Arena, is required to show cause with regard to its PTE application for BELVIQ® (lorcaserin hydrochloride) and establish: (1) why the USPTO should not terminate the PTE application based on the plain language of 35 U.S.C. § 156(c); and (2) why the PTE application for the ’787 patent should remain under consideration despite the express written request of withdrawal (revocation) of the active ingredient BELVIQ® (lorcaserin hydrochloride) and waiver of the opportunity for a hearing. In responding to the show cause request, Eisai should identify statutory language in 35 U.S.C. § 156 or case law that would support extension of the ’787 patent that claims the product despite revocation of the active ingredient. Moreover, Eisai should explain how PTE application for a withdrawn “revoked” of active ingredient BELVIQ® (lorcaserin hydrochloride) is in compliance with requirements of 37 C.F.R. § 1.740.

In a February 16, 2024 response to the PTO’s ORDER TO SHOW CAUSE, “Applicant submits that the PTE statute (35 U.S.C. § 156) does not condition the right to an extension on the continued approval of a drug product during pendency of a PTE application,” and that the “patent should remain under consideration for PTE, and Applicant’s second interim extension request should be granted, despite the fact that FDA’s approval for BELVIQ has been withdrawn.”

Based on the above documents, the PTO is in for a fight on negating PTE for products withdrawn under the Accelerated Approval withdrawal procedures, and where FDA determines that a product is withdrawn for safety or effectiveness reasons.  But one must wonder whether or not the PTO—absent failing in its current efforts—will go one step farther and seek to negate PTE applications when approval of a product is withdrawn outside of the Accelerated Approval or safety/effective circumstances above.  That is, when the application holder voluntarily requests withdrawal of approval for no particular reason.  After all, as Mama Karst is fond of saying: “Why do a job half-assed when you can do it whole-assed?”  To that end, one can almost picture someone at the PTO sitting back in his/her office poring over FDA Federal Register notices withdrawing application approvals and comparing them to long-pending PTE application files.  And with the unbelievable lag-time from PTE application submission to PTE grant, there may be a lot of candidates to choose from.