In 2015, FDA proposed revising the so-called intended use regulation (21 CFR 201.128; id. § 801.4) to remove the famous “knowledge” sentence: “But if a manufacturer knows, or has knowledge of facts that would give him notice, that a [drug or device] introduced into interstate commerce . . . is to be used for conditions, purposes, or uses other than the ones for which he offers it, he is required to provide adequate labeling for such a drug/device which accords with such other uses to which the article is to be put.”

In the proposed rule, FDA indicated that removing the sentence was nothing more than a clarification “to better reflect FDA’s interpretation and application of these regulations.” At the time, we blogged very favorably on this change, describing it as long overdue.

On January 9, 2017, FDA issued the final rule. Shockingly, it does not delete the “knowledge” sentence as expected. On the contrary, it “amends” the sentence to create an entirely new sentence that FDA had not mentioned in original proposal. Now the sentence incorporates a brand new “totality of the evidence” standard:

And if the totality of the evidence establishes that a manufacturer objectively intends that a device [or drug] introduced into interstate commerce by him is to be used for conditions, purposes, or uses other than ones for which it has been approved, cleared, granted marketing authorization, or is exempt from premarket notification requirements (if any), he is required, in accordance with section 502(f) of the Federal Food, Drug, and Cosmetic Act, or, as applicable, duly promulgated regulations exempting the device from the requirements of section 502(f)(1), to provide for such device [or drug] adequate labeling that accords with such other intended uses.

It appears that FDA has now written itself a blank check to find whatever intent it wishes to find, using an unconstrained calculus as to what the “totality of the evidence” shows. Worse, the manufacturer’s knowledge can be part of this evidentiary mix, thus negating the long overdue proposal to eliminate “knowledge” as an element of intended use.

On February 8 a trio of pharmaceutical industry groups filed a Petition to Stay and for Reconsideration (Petition), asking FDA not to move forward with this final rule. The Petition points out that when FDA veered off in an entirely new direction in the final rule, as compared to the original proposal, it violated the requirements of the Administrative Procedure Act (APA). The APA requires “fair notice” and an opportunity to comment on a regulatory proposal. In this case, no one has had a fair opportunity to comment on the new regulatory language. As the Petition puts it (quoting a court case), a federal agency may not use a rulemaking “to pull a surprise switcheroo” (p. 12, internal quotation marks and citation omitted). If anything qualifies as a “surprise switcheroo” it is this final rule.

The Petition has an extended discussion of the history and language of the intended use regulation, and shows convincingly that the new language is a departure from existing law. The Petition also explains why the new proposal is a bad idea that would negatively impact the public health by chilling valuable scientific speech, raising a First Amendment concern. The Petition argues that the totality of the evidence standard is so vague that it may even raise due process concerns under the Fifth Amendment per recent Supreme Court cases such as FCC v. Fox Television Stations, Inc., 132 S.Ct. 2307 (2012).

What is likely to happen? It is a safe bet that FDA will not grant this petition. If FDA persists, it may find itself in court defending the new final rule. The outcome of litigation is never a sure thing, but this new rule is definitely vulnerable, on APA grounds if nothing else.

One wildcard is the new Trump administration. It is not clear how new management will view the new rule or what they might do to stop it, especially if it goes into effect while the Obama holdovers continue to run FDA. (The final rule was supposed to become effective on February 8, but it was caught up in the regulatory freeze imposed by the Trump administration. The new implementation date is March 21.)

In our view, the intended use regulation is a root cause of FDA’s First Amendment problems. In the next few weeks, we will post additional commentary analyzing the adverse effects of this regulation. We will suggest how it can be revised to comport with the First Amendment without impeding FDA’s public health mission. Our proposed fix will go beyond just eliminating the knowledge sentence, but that would have been a good start. It is too bad that FDA’s final rule did not follow through fair and square on the proposed rule.

2017 is already shaping up to be a big year in court for Amgen and the Biologics Price Competition and Innovation Act (“BPCIA”). As regular readers know, Amgen’s challenge to Sandoz’s refusal to participate in the patent dance after filing of an aBLA relying on Amgen’s Neupogen is heading to the Supreme Court this term (see our previous coverage here, here, here, and here). In a twist, Amgen will be headed back to court to litigate the BPCIA, but this time as the aBLA sponsor.

On Wednesday February 15, Genentech brought an action for declaratory judgment against Amgen for failure to comply with the patent dance provisions of the BPCIA. In November 2016, Amgen submitted an aBLA to FDA relying on Genentech’s cancer drug Avastin as the reference product.  The aBLA was accepted for review on January 4, 2017, triggering the patent dance (should Amgen choose to participate).  In an interesting footnote, Genentech distinguished this case from the aforementioned Amgen Inc. v. Sandoz because Amgen did, indeed, choose to participate rather than attempt to opt out of the BPCIA patent dance altogether.

According to Genentech, Amgen started the patent dance and provided Genentech a copy of its aBLA within 20 days, but refused to provide any information on the manufacturing process as required under 42 U.S.C. § 262(l)(2)(A).  Additionally, Amgen allegedly insisted that Genentech’s patent counsel could evaluate proposed infringement and withheld consent to expert participation in violation of 42 U.S.C. § 262(l)(1)(C).

With only 60 days to deliver a list of patents that “could reasonably be asserted” against Amgen’s proposed aBLA, Genentech stresses in its complaint that it needs the “other information” under § 262(l)(2)(A) to preserve its applicable patent rights.  For this reason, Genentech requests a declaratory judgment as well as an order declaring that Amgen has failed to comply with its obligations under 42 U.S.C. § 262(l)(1)(C) and § 262(l)(2)(A), directing Amgen to comply, resetting the BPCIA deadlines for resolving patent disputes, and prohibiting Amgen from selling its proposed biosimilar until the statutory process is complete.

In a clever bit of lawyering, Genentech uses Amgen’s own words in a similar matter to make its points. In 2015, Amgen sued Hospira when Hospira pulled the same stunt in the Epogen case (the complaint is here, and our prior coverage is here). The case is still ongoing, but it looks like Amgen took a page from the Hospira playbook.

On January 18, 2017, the U.S. Department of Health and Human Services along with 15 other federal agencies issued the Final Rule to revise the Federal Policy for the Protection of Human Subjects, known as the “Common Rule.”  This 1991 set of regulations created a uniform set of human subject protections which are codified in each department or agency’s title or chapter of the Code of Federal Regulations (CFR) based on HHS’ regulations at 45 CFR part 45, subpart A.

This announcement comes just a little over a year since the public comment period ended for the proposed rule, which posed a number of questions to stakeholders and generated over 2,100 comments (see our coverage of the NPRM here).  As a result of these comments, HHS and the other federal agencies made a number of significant changes from the proposed rule.  This blog post will explore some of the most significant changes from the NRPM.

While FDA-regulated research is not subject to the Final Rule, the NPRM received a large number of comments about harmonization and had input from FDA, in addition to longstanding efforts between HHS and FDA to achieve harmonization. The preamble to the Final Rule discusses the link between the Common Rule and FDA regulations, noting that the 21st Century Cures Act (“Cures Act”), enacted December 2016, “requires that the Secretary of HHS, to the extent practicable and consistent with other statutory provisions, harmonize the differences between 45 CFR part 46, subpart A, and FDA’s human subject regulations.”  For example, it directs FDA to allow multisite and cooperative research projects to use single IRB review, which is consistent with HHS’s policy under the Final Rule.  In addition, another provision of the Cures Act amends the Federal Food, Drug, and Cosmetic Act to alter the informed consent requirements for both drugs and medical devices such that a waiver of informed consent may now be granted for “proposed clinical testing [that] poses no more than minimal risk to…human beings and includes appropriate safeguards…” so that it is more aligned with how minimal risk is handled under the Common Rule.  The consideration of public comments to the Common Rule NPRM, and changes made in the last year between the NPRM and the Final Rule, may reflect the direction of harmonization as we move toward a potential “reopening” of FDA’s regulations under the Cures Act.

Regulating Research Use of Biospecimens

The NPRM proposed to revise the definition of “human subject” to include research in which an investigator obtains, uses, studies or analyzes biospecimens, regardless of identifiability. This would have required informed consent for research involving biospecimens in most circumstances (e.g., unless an IRB determined strict waiver requirements were met).  Such consent would have been able to be obtained through “broad consent” for future unspecified research.  This proposal received intensive public comment about the need for obtaining consent before using such biospecimens for research, and the potential negative impacts of implementing that proposal on the ability to conduct research.  Therefore, the Final Rule does not include this proposal, maintaining the current practice with respect to oversight of these biospecimens.  Instead, the Final Rule includes added requirements to the informed consent process to increase transparency so that potential subjects will have more information about how their biospecimens or private information may be used (e.g., that identifiers might be removed and used for future research, that the biospecimens might be used for commercial profit).

For studies on stored identifiable data or identifiable biospecimens, researchers will have the option of relying on broad consent obtained for future research as an alternative to seeking IRB approval to waive the consent requirement. Researchers will still not have to obtain consent for studies on non-identified stored data or biospecimens.

Recalibrating the Review Process: Exemptions But Not Exclusions

The NPRM proposed creating an “exclusions” section and adding new “exemptions” that would specify activities that would be outside the scope of the Common Rule that would make the level of review more proportional to the seriousness of the harm or danger to be avoided, with some activities being not subject to any level or review.

Due to public comments expressing concerns with an added layer of unnecessary complexity (e.g., the overlapping categories of exclusions and exemptions) and the lack of requirements on who would decide whether an activity met the criteria for an exclusion, the Final Rule did not adopt the NPRM’s general approach that would have added an “exclusions” section. Instead, the Final Rule reverts to the general structure of the pre-2018 rule and integrates some categories proposed for exclusion in the NPRM into that structure.  Certain categories of activities (that were proposed as exclusions in the NPRM) were removed from the definition of research in the Final Rule: (a) scholarly and journalistic activities, (b) public health surveillance activities, (c) criminal justice activities, and (d) authorized operational activities in support of national security missions.  In addition, four categories of activities that were determined to be low-risk and already subject to independent controls were incorporated into the Final Rule.

The addition of new “exemptions” of research based on the level of risk they pose to participants was retained in the Final Rule, largely for categories of social and behavioral research. For example, to reduce unnecessary regulatory burden and allow IRBs to focus their attention on higher risk studies, there is a new exemption for secondary research involving identifiable private information if the research is regulated by and participants protected under the HIPAA rules.

Changes to IRB Operational Requirements

The NPRM proposed a number of changes to the criteria for IRB approval of research, as well as IRB operations, functions, and membership, that were retained in the Final Rule, including:

• To have IRBs consider the equitable selection of subjects focus on issues related to coercion or undue influence in research with vulnerable populations;
• Inclusion of special considerations related to the involvement of vulnerable populations;
• Removal of the requirement to conduct continuing review of ongoing research studies in certain instances where such review does little to protect subjects.

Mandating Single IRBs

The Final Rule adopts the NPRM proposal of mandating that all institutions located in the United States engaged in cooperative research rely on a single IRB for that study, with some exceptions (e.g., where more than single IRB review is required by law, such as FDA-regulated medical devices). However, public comments recommended a greater role should be provided for grantee input on choosing the IRB of record, so the Final Rule includes modified language that allows lead institutions to propose the reviewing IRB.

Reforming the Informed Consent Process

Although the regulatory language is structured differently in the Final Rule, it largely contains the major revisions to the requirements for informed consent proposed in the NPRM, including:

• All the proposals to improve and clarify the general requirements of informed consent;
• That prospective subjects and legally authorized representatives must be provided with key information that is most likely to assist a prospective subject or legally authorized representative in making a decision about participating in research, and to provide an opportunity to discuss that information;
• The proposal to inform potential subjects about the possible use of their identifiable private information and the potential for commercial profit (as described above);
• Additional elements of consent: (a) a statement regarding whether clinically relevant research results, including individual research results, will be disclosed to subjects and, if so, under what conditions; and (b) which was not in the NPRM: when appropriate for research involving biospecimens, subjects be informed of whether the research will (if known) or might include whole genome sequencing;
• An option to obtain broad consent for storage, maintenance, and secondary research use of identifiable private information or identifiable biospecimens (although such consent is not required for non-identifiable secondary research use as it was under the NPRM as discussed above), however the Final Rule does not include broad consent templates to be established by HHS;
• The language proposed providing that if an individual was asked to consent to the storage or maintenance for secondary research use of identifiable private information or identifiable biospecimens in accordance with the broad consent provisions and such individual refused to consent, the IRB would be prohibited from waiving consent of such biospecimens or information;
• Waiver criterion mandating that for research involving access to or use of identifiable private information or identifiable biospecimens, the requirements of of informed can be waived or altered only if the research could not be practicably carried out without using such information or biospecimens in an identifiable format;
• The provision that would authorize an IRB to approve a research proposal in which investigators obtain identifiable private information without individuals’ informed consent for the purpose of screening, recruiting, or determining the eligibility of prospective human subjects of research (but without a requirement that investigators adhere to the NPRM’s proposed privacy safeguards, since they were not included in the Final Rule); and
• The provision that would require that a copy of the final version of the consent form (absent any signatures) for each clinical trial conducted or supported by a Common Rule department or agency be posted on a publicly available Federal website that will be established a repository for such consent forms.

Diverging from the NRPM, the Final Rule includes an approach that emphasizes efforts to foster understanding overall rather than imposing specific length limitations on the entire consent forms. In addition, the Final Rule does not adopt a requirement that certain information be included only in appendices; will the same goal of facilitating comprehension, the Final Rule instead establishes a “beginning section” to the informed consent document.

The Scope of the Regulations Not Extended

The Final Rule does not extend the Common Rule to cover clinical trials that are not federally funded, as was proposed in the NPRM.

Effective Date and General Compliance Date

The Final Rule adopts an effective date and general compliance date of 1 year from the publication of the Final Rule, which would be on January 19, 2018. As such, ongoing research studies that were initially approved by an IRB, waived, or determined to be exempt before this date will not be required to comply with the changes in the Final Rule.  However, the Final Rule allows institutions to voluntarily comply with the Final Rule on a study-by-study basis.  The single IRB requirement for cooperative research (discussed above) adopts a separate 3-year compliance date for this requirement to allow institutions sufficient time to develop institutional policies and procedures to implement this requirement.

DEA’s administrative docket is off to a quiet start this year. Since January, the Administrator has issued five final orders, all of which are so-called “loss of state authority” cases. In these cases, the Administrator adjudicates, as a matter of law, that a practitioner’s DEA registration must be revoked on the basis that the practitioner has lost his or her state authority to prescribe controlled substances. These cases are simple, requiring only that the DEA prove that a state agency has revoked or suspended a practitioner’s state license to prescribe controlled substances or that such license has expired without renewal. DEA’s current thinking and practices on this matter, however, are not without concern.

Under agency precedent, the Administrator must revoke a practitioner’s registration as a matter of law if a practitioner has lost state authority to prescribe controlled substances. Accordingly, when a practitioner requests an administrative hearing before a DEA administrative law judge (ALJ) upon receipt of an Order to Show Cause (OSC) seeking to revoke the practitioner’s registration and alleging a loss of state authority, the ALJ will typically decide the matter on summary disposition (similar to summary judgment). The ALJ will recommend that the practitioner’s DEA registration be revoked based on undisputed evidence that a state has suspended or revoked the practitioner’s authority to prescribe controlled substances in that state.

Each of DEA’s 2017 cases to date involves a loss of state authority:

• Gentry Reeves Dunlop, M.D., 82 Fed. Reg. 8432 (Jan. 25, 2017)
• Donald W. Lamoreaux, M.D., 82 Fed. Reg. 8434 (Jan. 25, 2017)
• Richard W. Walker, Jr., M.D., 82 Fed. Reg. 9223 (Feb. 3, 2017)
• Janet Carol Dean, M.D., 82 Fed. Reg. 9224 (Feb. 3, 2017)
• John P. Moore, III, M.D., 82 Fed. Reg. 10398 (Feb. 10, 2017)

All but the Moore case were decided solely on the issue of loss of state authority. In terms of their difficulty, loss of state authority cases are DEA’s “low-hanging fruit.” They require almost no investigative effort on behalf of DEA. Rather, DEA can rely on state agencies to investigate and adjudicate a practitioner’s state license. When DEA learns that a state agency has suspended or revoked a practitioner’s state license, DEA can bring an OSC against the practitioner alleging loss of state authority and seek summary disposition if the practitioner requests a hearing. The only evidence DEA needs to gather is a copy of the state agency’s suspension or revocation order or some other proof that the practitioner can no longer prescribe controlled substances in that state. Because the practitioner no longer meets the state license criteria necessary to hold a DEA registration, the cases require presentation of no other evidence.

In 2016, DEA issued final orders in twenty-eight cases. Over half (fifteen) of these cases were decided solely on the issue of loss of state authority, and the majority of those cases were decided by an ALJ on summary disposition (the other cases lacked a request for hearing, and were decided by the Administrator). At a time when DEA is coming under heavy scrutiny and criticism for its diversion enforcement efforts (see here and here), the fact that the Administrator only issued final orders in thirteen cases last year on grounds other than loss of state authority is surprising.

But DEA’s reasoning in these cases, especially when these cases are decided on summary disposition—almost always over the protest of the practitioner—is also troubling.

Under agency precedent, the Administrator must revoke a practitioner’s DEA registration upon a loss of state authority. This rule is derived from two provisions of the Controlled Substances Act (CSA). First, the CSA defines a practitioner as:

a physician, dentist, veterinarian, . . . or other person licensed, registered, or otherwise permitted, by the United States or the jurisdiction in which he practices . . . to distribute, dispense, [or] administer . . . a controlled substance in the course of professional practice.

21 U.S.C. § 802(21) (emphasis added).

Second, the agency points to 21 U.S.C. § 823(f), which provides that the Administrator shall “register practitioners . . . if the applicant is authorized to dispense . . . controlled substances under the laws of the State in which he practices.” Id. § 823(f) (emphasis added).

According to agency precedent, these two provisions support the position that a practitioner’s DEA registration must be revoked as a matter of law upon a loss of state authority:

Because Congress has clearly mandated that a practitioner possess state authority in order to be deemed a practitioner under the [CSA], DEA has held repeatedly that revocation of a practitioner’s registration is the appropriate sanction whenever he is no longer authorized to dispense controlled substances under the laws of the State in which he practices medicine.

Dunlop, 82 Fed. Reg. at 8433.

While DEA’s interpretation of the CSA that every practitioner applicant it registers must hold state authority to prescribe controlled substances may be correct, its conclusion that these provisions require that the Administrator suspend or revoke a practitioner’s registration upon loss of state authority as a matter of law seems to be contradicted by the CSA itself.

21 U.S.C. § 823(f) (one of the two provisions relied on by DEA) governs whether the Administrator should grant a registration upon an application by a practitioner. 21 U.S.C. § 824(a) lists the discretionary factors that the Administrator “may” consider when determining whether to suspend or revoke an existing registration. Under this provision, the Administrator “may . . . suspend[] or revoke[]” a practitioner’s registration upon a finding that the registrant has:

had his State license or registration suspended, revoked, or denied by competent State authority and is no longer authorized by State law to engage in the . . . dispensing of controlled substances . . . .”

21 U.S.C. § 824(a)(3).

The plain reading of this provision appears to say that a loss of state authority is only one of several factors that may result in suspension or revocation of a practitioner’s DEA registration—not an automatic basis as a matter of law. But DEA’s interpretation contradicts this plain reading of the CSA. A reasonable interpretation of the provisions in question would be that § 802(21) and § 823(f) require state authority in order for the Administrator to grant an application for registration, but that § 824(a)(3) only renders a loss of state authority a discretionary factor in determining whether to suspend or revoke an existing registration. To hold otherwise would violate one of the canons of statutory interpretation by making the language of § 824(a)(3) of absolutely no “effect.” Gade v. Nat’l Solid Wastes Mgmt. Ass’n, 505 U.S. 88, 100 (1992) (holding that it is the Court’s “duty to give effect, if possible, to every clause and word of a statute” (quoting United States v. Menasche, 348 U.S. 528, 538-39 (1955))).

While the Administrator can certainly suspend or revoke a practitioner’s registration due to loss of state authority as one of the discretionary factors of § 824(a), and DEA’s website guidance plainly states that state authority is required to maintain a registration, the Agency’s interpretation permitting a summary disposition on this issue is arguably inconsistent with the CSA. One could argue that DEA’s practice of deciding these cases on summary disposition without giving a practitioner the opportunity to present other evidence supporting continued registration may violate the CSA and the practitioner’s due process rights spelled out in the Administrative Procedure Act.

Notwithstanding, in support of its position that these practitioner summary dispositions are appropriate, DEA often points to two unpublished federal appeals decisions, Hooper v. Holder, 481 Fed. App’x 826 (4th Cir. 2012), and Maynard v. DEA, 117 Fed. App’x 941 (5th Cir. 2004), that deny petitions for review and discuss the issue of loss of state authority. While both cases appear to support the agency’s position, neither addresses the statutory interpretation concerns or the potential constitutional implications of summary disposition.

What does any of this mean, in reality? The ALJ and the Administrator have significant discretion in determining the weight of the factors they must consider when determining to suspend or revoke a registration. Even if the Administrator determines not to suspend or revoke a practitioner’s registration as a matter of law on summary disposition based solely on loss of state authority, it is likely that the Administrator could easily find, on his own, this factor to be a discretionary basis for suspension or revocation. Is it also highly likely that a practitioner that has lost state authority to handle controlled substances will lose his or her DEA registration as well? Of course. Nonetheless, in order to protect the due process rights of practitioners facing an OSC, DEA could consider observing the nuances of the CSA and giving meaningful effect to each of its provisions by evaluating loss of state authority as just one of several factors that the ALJ and Administrator may consider when determining whether suspension or revocation is appropriate under 21 U.S.C. § 824(a).

FDA’s Field Alert Report (or FARs) reporting requirements are authorized under 505(k) of the Federal Food, Drug, and Cosmetic Act. The requirements have been in effect since the agency promulgated the regulatory provision at 21 CFR 314.81(b)(i) in 1985. The regulatory provision states, in part, that:

The applicant shall submit information of the following kinds about distributed drug products and articles to the FDA district office that is responsible for the facility involved within 3 working days of receipt by the applicant. The information may be provided by telephone or other rapid communication means, with prompt written followup. The report and its mailing cover should be plainly marked: “NDA – Field Alert Report.”

(i) Information concerning any incident that causes the drug product or its labeling to be mistaken for, or applied to, another article.

(ii) Information concerning any bacteriological contamination, or any significant chemical, physical, or other change or deterioration in the distributed product, or any failure of one or more distributed batches of the drug product to meet specifications established for it in the application.

The purpose of the FAR is to quickly identify drug products in the field that pose a potential health hazard to the public. All drug manufacturers with approved NDAs and ANDAs are required to submit a FAR to the FDA if they find any significant problems with an approved drug. In the preamble to the final rule in 1985, the agency stated that “…because these reports can lead to preventing potential safety hazards from products already in distribution, the agency emphasizes that the reports are required for both confirmed and unconfirmed problems.”

Manufacturers are to submit their FARs via Form 3331. Also, in contrast to postmarket adverse drug experience reporting under 21 CFR 314.80, FARs potentially involve one of a variety of drug quality issues that could be of interest or concern to both the field office and CDER.

According to the Compliance Program Guidance Manual 7356.021 (CPG), which was updated within the past year and upon which much of the information below is based, the three working days begins when the applicant becomes aware of a problem either through a complaint or internal testing, such as during stability testing or testing of reserve samples. It does not begin the day that the applicant confirms or invalidates a problem. The CPG further states that dissolution failures, impurity level problems, mislabeling issues (including possibly obscured labels, missing labels and incorrect labels) and sub-potency and super-potency issues concerning distributed products all fall within the ambit of 314.80(b)(ii).

FDA has previously stated that the following situations also meet the reporting threshold under 314.80(b)(ii): problems with appearance or particulates, dissolution failures, broken, or split tablets, unknown spots on tablets, as well as lyophilization problems such as finding moisture in the vialed product. Even if the product is at its expiration date, FDA still expects the firm to report these problems.

However, if the manufacturer can invalidate the problem (such as a problem that ends up being due to a lab error) within the three working days allotted under the regulation, then a FAR is not required. If further investigation is required and goes beyond the three working days, then a FAR must be submitted to FDA. FDA recommends reviewing the Guidance on Investigating Out-of-Specification Test Results for Pharmaceutical Production for assistance with investigating out-of-specification (OOS) test results.

Not surprisingly, foreign holders of NDAs or ANDAs must follow these FARs requirements as well, however, the foreign application holders’ U.S. agents are responsible for reporting the FARs to FDA, and the foreign agent is required to submit the FARs to the district office where they are located. What is interesting, and indeed somewhat suspect, is the statement in the CPG that drugs “distributed in foreign markets” must also follow these requirements. It is unclear what statutory authority FDA would cite for requiring firms with drugs distributed in foreign markets to file field alerts, since these products, by definition, are not under an NDA/ANDA.

For FARs that affect more than one product, firms should submit one FAR per NDA/ANDA of distributed product. Multiple lots of the same product may be submitted in one form.

Most district offices have a Drug Quality Reporting System/FARs email box dedicated to receiving FARs from the firms in their districts. Firms are generally instructed to send all FARs to this one mailbox. Usually the district coordinator serves as the district’s contact point to facilitate communication with the drug manufacturer on matters pertaining to the status of a FAR.

The district office performs assessments on all FARs (whether initial, follow-up or final) and provides them to CDER. It is the district office’s responsibility to determine whether the firm’s root cause analysis and CAPAs are adequate to mitigate the risk and to comply with FDA regulations, as well as to request a timeline for the firm’s completion of their investigation.

The district office that is the recipient of a FAR is supposed to send its report on the FAR (this includes the initial, follow-up and final FAR) to CDER’s Drug Quality Reporting System (DQRS) within five working days after receipt from the firm.

As part of the district’s preparation for inspections, they are expected to review any FAR to be covered while on inspection. The district is expected to request from CDER DQRS the FAR history associated for a specified firm and drug product. So, whatever the firm has done internally to close out the issues related to their FARs since the last inspection, these are likely to be reviewed on a subsequent FDA inspection.

Indeed, when reviewing firm SOPs during an inspection, the investigators are to note the firm’s handling and reporting of NDA FARs to ensure their compliance with FDA regulations. The failure of a firm to submit a FAR for a distributed and violative product is reportable as an FDA-483 observation.

The CPG further recommends that significant violations related to a FAR, as well as under-reporting or lack of FAR reporting, should be included in recommendations for advisory actions (i.e., the issuance of an untitled or warning letter, among other possibilities).

Therefore, this serves as a reminder to firms that even when you have closed out your FARs with the district, and even if you have not received any comments or concerns regarding your filing, FDA investigators will be reviewing the firms’ internal documents to all FARs on the subsequent inspection. Forewarned is forearmed, as the proverb goes.

Just a few days before the presidential inauguration, FDA published a revised draft guidance on control of Listeria monocytogenes (Lm) in ready-to-eat (RTE) foods.  The significance of the guidance to the food sector is difficult to overstate.  Since FDA published the original draft guidance in February 2008, the modernized CGMP and preventive controls regulation issued under the authority of FSMA has come into effect (see 21 CFR Part 117).  The revised draft guidance is intended to help manufacturers of RTE foods comply with the requirements of that regulation, and takes into account recommendations made by FDA’s Food Advisory Committee in December 2015 (see here and here).

Lm contamination accounts for a significant percentage of Reportable Food Registry incidents (@17% in the most recent year for which data are available), and has been at the heart of a number of notable Class I recalls, not to mention a few criminal investigations and prosecutions.  That, together with the advent of FDA “swabathons” during inspections and the agency’s increasing use of whole genome sequencing, has aroused consternation about the appropriate implementation of sanitation and environmental monitoring programs to control environmental pathogens such as Lm.  The revised draft guidance addresses that topic (among many others) in considerable detail, and should be read in its entirety by any producer of RTE foods.  Although the guidance is in draft form, it would be prudent to assume that it reflects FDA’s current thinking – something to bear in mind as FDA begins carrying out inspections for compliance with Part 117.  Comments on the guidance are due by July 26, 2017.

It has become almost commonplace to see a weekly announcement of a False Claims Act settlement by a major pharmaceutical or medical device manufacturer. Perhaps that is why last month’s settlement by Baxter Healthcare Corporation flew under the radar of the FCA bar.  Or perhaps it was because the civil settlement amount was small ($2.158 million) in comparison to the multi-million dollar figures paid by other healthcare companies.  Or maybe the civil settlement escaped notice because the criminal component was more interesting.  Although not the subject of this blog post, the criminal resolution involved a Deferred Prosecution Agreement (DPA), enhanced compliance measures, and a $16 million payment, despite no adverse events reported, no harm to patients, and no impact on the products by the alleged conduct.

But a close look at the False Claims Act settlement reveals something unusual. The covered conduct is not the off-label promotion or kickback activity we usually see in these resolutions.  Instead the Baxter case was based on an allegation that Baxter manufactured products in violation of current good manufacturing practices (cGMP), which violates the Federal Food, Drug, and Cosmetic Act (FDC Act).  Because Baxter sold these products to the Department of Veterans Affairs (VA) under contracts that required compliance with the FDC Act, the government alleged that Baxter submitted false claims to the government and violated the FCA.

The products at issue are large-volume sterile intravenous (IV) solutions. Baxter manufactured these IV solutions in clean rooms that were installed with high-efficiency particulate absorption (HEPA) filters. Baxter regularly scheduled inspection and testing of the HEPA filters, and was required by company procedure to replace any that failed testing.  It appears the entire case hinged on whether the company addressed an employee’s complaints about whether 5 of 120 of these filters needed replacement; the employee ultimately became the whistleblower and recovered over $400,000.  The company conducted testing throughout the time period on how much mold was present in the air and on surfaces in the clean room.  There were no “out of limits” results.  Nor did testing of the products themselves identify any “out of limits” mold in the IV solutions before sterilization; because the products all were sterilized before release, there was no mold contained in products distributed from the company.  Indeed the Statement of Facts attached to the DPA includes what likely was a highly negotiated final sentence: “There was no evidence of impact on the IV solutions manufactured at North Cove from the mold found on the HEPA filters above the Line 11 clean room.”

A basic cornerstone of FDA’s authority is to ensure that the drugs it regulates are manufactured in accordance with cGMP. Under the FDC Act, a drug is adulterated if “the methods used in, or the facilities or controls used for, its manufacture, processing, packing, or holding do not conform to or are not operated or administered in conformity with current good manufacturing practice to assure that such drug meets the requirements of this chapter as to safety and has the identity and strength, and meets the quality and purity characteristics, which it purports or is represented to possess.”  21 U.S.C. 351(a)(1)(B).  The focus is not on an actual deviation from the product’s quality and purity, but simply that the methods used to make the product are not cGMP compliant.  Every year, FDA inspects hundreds of facilities and cites them for failing to follow cGMP in manufacturing FDA-regulated products.  FDA has the authority to issue Warning Letters, ban products from importation, or enjoin companies from making product until FDA is satisfied with the company’s cGMP compliance.

Thus it is disturbing to see another governmental agency reviewing and enforcing the same conduct. We can only recall two other FCA settlements that involved cGMP violations, and both involved product that was negatively impacted by the company’s failure to follow cGMP. The settlement by GlaxoSmithKline in 2010 involved product that had no active ingredient or no controlled release mechanism, higher or lower amounts of the active ingredient, non-sterile product, or product that contained microorganisms.  Similarly, the FCA settlement with Ranbaxy involved the manufacture of drugs “the strength of which materially differed from, or the purity or quality of which materially fell below, the strength, purity, or quality which they purported or were represented to possess.”  Yet in this most recent settlement with Baxter, there was “no evidence of impact” on the products and no harm to patients.

We hope FCA cases based on cGMP compliance remain a rarity. At any given time, a company can be cited for not satisfying the requirements of cGMP; by its very nature, “current” practices are constantly evolving.  This is FDA’s statutory purview under the FDC Act, not the FCA.

Questions about the scope of 3-year exclusivity granted by FDA for an abuse-deterrent opioid have been on the rise over the past few years. Initially, FDA was able to punt on some decisions, either because companies exchanged waivers of 3-year exclusivity (e.g., single-entity, extended-release hydrocodone drug products – see here), or because another obstacle, such as a 30-month litigation stay, provided FDA with an excuse for having to address exclusivity.  (Here, we would have included a link to the tentative approval letter for NDA 208090 for XTAMPZA ER (oxycodone) Extended-release Capsules, where FDA states in a footnote that the Agency doesn’t need to address the scope of another sponsor’s 3-year exclusivity because of a 30-month litigation stay; however, as we recently reported, some drug approval information is disappearing from FDA’s website.)  But with the passage of time (and NDA approvals), FDA is being forced to address 3-year exclusivity issues head-on.  And with those decisions, we are learning more about FDA’s interpretation of the scope of 3-year exclusivity in the context of abuse-deterrent opioid drug products, and the development of what we’ll call a “route of abuse exclusivity approach.”

First, there was a March 3, 2015 Memorandum from the CDER Exclusivity Board explaining FDA’s decision to grant a period of 3-year exclusivity with respect to the April 16, 2013 approval of NDA 022272/S014 for OXYCONTIN (oxycodone HCl) Controlled-release Tablets (see our previous post here).  That exclusivity was coded in the Orange Book as “M-153,” which is defined as: “ADDITION OF INFORMATION REGARDING THE INTRANASAL ABUSE POTENTIAL OF OXYCONTIN.”  With the assignment of this exclusivity code, the CDER Exclusivity Board noted that “the scope of 3-year exclusivity in this instance is limited to the addition of information to the [OXYCONTIN] labeling regarding the reduction of abuse via the intranasal route.”

Then there was an October 1, 2015 Exclusivity Letter Decision from the CDER Exclusivity Board examining whether or not a period of 3-year exclusivity the Agency granted after approving a Supplemental NDA (S-016) for AlPharma Pharmaceuticals, LLC’s EMBEDA (morphine sulfate and naltrexone HCl) Extended-release Capsules (NDA 022321) should block the approval of Inspirion Delivery Technologies, LLC’s MORPHABOND (morphine sulfate) Extended-release Tablets (NDA 206544) (see our previous post here).  FDA explained that “the change approved in the [EMBEDA] supplement only bars approval of other 505(b)(2) NDAs for drugs containing the combination of active moieties approved in Embeda and that otherwise seek approval for the same exclusivity-protected conditions of approval as Embeda,” and that “[b]ecause MorphaBond does not contain the combination of active moieties approved in Embeda, any approval of MorphaBond is not an approval for the “change approved in the supplement” (i.e., S-016) for which Embeda currently has exclusivity and no additional inquiry is required.”  As such, the CDER Exclusivity Board recommended “that the exclusivity awarded to Embeda for S-016 should not block approval of MorphaBond.”  (Curiously, FDA still has not updated the Orange Book to show a period of 3-year exclusivity granted in connection with the October 17, 2014 approval of S-016 for EMBEDA.)

After approving NDA 206544 for MORPHABOND, FDA updated (eventually) the Orange Book to reflect the grant of a period of 3-year exclusivity expiring on October 2, 2018 and coded as “M-189.” That M-189 code is defined in an Orange Bood addendum as: “LABELING DESCRIBING THE EXPECTED REDUCTION OF ABUSE OF SINGLE-ENTITY EXTENDED-RELEASE MORPHINE BY THE INTRANASAL ROUTE OF ADMINISTRATION DUE TO PHYSICOCHEMICAL PROPERTIES.”  We’ll return to this shortly . . . .

The next exclusivity challenge FDA (i.e., the CDER Exclusivity Board) faced was whether a period of 3-year exclusivity coded in the Orange Book as “NC” (New Combination) for TARGINIQ (oxycodone HCl and naloxone HCl) Extended-release Tablets (NDA  205777) blocked the approval of the 505(b)(2) NDA for TROXYCA (oxycodouc HCl and naltrexone HCl) Extended-release Capsules (NDA 207621).  In an August 19, 2016 Memorandum, the CDER Exclusivity Board concluded as one might expect: “Targiniq’s 3-year exclusivity for the conditions of approval of NDA 205777 is ticd to its specific combination of active moieties, oxycodone and naloxone.  The Board thus recommends that any 3-year exclusivity for Targiniq should not block the approval of Troxyca because Troxyca has a different combination of active moieties, oxycodone and naltrexone.”  Thus, FDA approved NDA 207621 for TROXYCA and granted the sponsor, Pfizer Inc., its own period of 3-year exclusivity (also coded in the Orange Book as “NC”).

As an interesting side note, during FDA’s review of the TROXYCA NDA, several Citizen Petitions were submitted to to the Agency concerning either the approval of TROXYCA (specifically, 505(b)(2) NDA “listed drug” issues) – see Docket No. FDA-2015-P-5108 – or FDA’s approval of abuse-deterrent drug products – see Docket No. FDA-2016-P-1946.  FDA denied both Citizen Petitions – one without comment (here), and another because of the Agency’s inability to resolve “complex scientific issues” (here) – in Letter Decisions included in the relevant petition dockets.  But those denials aren’t the last words from FDA on each petition.  In other memoranda FDA prepared in connection with the approval of TROXYCA, the Agency provides a more fulsome response to the two Citizen Petitions.  Copies of those memos are available here and here.  FDA’s memo concerning Docket No. FDA-2015-P-5108 in particular is worth a read.  There, FDA expands on and clarifies previous Agency statements and decisions concerning a 505(b)(2) applicant’s choice of listed drug.  We’ve discussed some of those previous decisions in posts here and here.

Moving on (and with reference back to our placeholder comment on the exclusivity FDA granted for MORPHABOND), FDA provided further clarification and insight into the Agency’s view of the scope of 3-year exclusivity granted in the context of abuse-deterrent drug products when the Agency approved NDA 208603 on January 9, 2017 for Egalet US, Inc.’s ARYMO ER (morphine sulfate) Extended-release Tablets for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate.

With that ARYMO ER NDA approval, FDA issued a statement, titled “Impact of Exclusivity on Approval of Arymo ER.” For the sake of posterity (and because we don’t know what information will eventually be scrubbed from FDA’s website), we provide below the text of that FDA statement:

Today, the FDA approved Arymo ER (morphine sulfate extended-release tablets), a new extended-release opioid with abuse-deterrent properties. Arymo ER is approved to treat pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate.  Arymo ER is formulated to give it physicochemical properties expected to make abuse by injection difficult. However, abuse by the intravenous, intranasal, and oral routes is still possible.

Expanding access to abuse-deterrent opioids to discourage misuse and abuse is part of the FDA’s Opioid Action Plan, and the pharmaceutical industry has shown significant interest in the development of abuse-deterrent products. Technology is progressing rapidly, and these medications hold promise as their abuse-deterrent qualities continue to improve and as they become more widely available.

As the FDA reviews new drug applications, the agency works through various issues that may arise, including exclusivity. Another product, MorphaBond (morphine sulfate extended-release tablets), has marketing exclusivity for labeling describing the expected reduction of abuse of single-entity extended-release morphine by the intranasal route due to physicochemical properties.  Due to MorphaBond’s marketing exclusivity, no other single-entity extended-release morphine product submitted in an abbreviated new drug application or 505(b)(2) application can be approved for that use at this time.

Because the science of abuse deterrence is still evolving and the agency does not yet know which technologies will ultimately prove most effective in deterring opioid abuse, the agency believes that it is in the interest of public health to encourage development of multiple abuse-deterrent alternatives while continuing to promote and protect innovation.

The details of the FDA’s scientific review of the clinical evidence that supported the approval of Arymo ER are available in the FDA Review Summary, which will be posted to Drugs@FDA following approval. Additional information about Arymo ER is available in the briefing materials from the August 4, 2016, joint meeting of the Anesthetic and Analgesic Drug Products Advisory Committee and the Drug Safety and Risk Management Advisory Committee.

What FDA explains above is the Agency’s “route of abuse exclusivity approach.” Although intranasal route of abuse clinical studies were conducted with ARYMO ER (as well as intranasal route of abuse clinical studies), FDA determined that MORPHABOND’s 3-year exclusivity – applicable to “LABELING DESCRIBING THE EXPECTED REDUCTION OF ABUSE OF SINGLE-ENTITY EXTENDED-RELEASE MORPHINE BY THE INTRANASAL ROUTE OF ADMINISTRATION DUE TO PHYSICOCHEMICAL PROPERTIES” (M-189) – prevented the Agency from approving ARYMO ER with labeling describing abuse-deterrence via the intranasal route of abuse.  We’re pretty certain that FDA (and the CDER Exclusivity Board) put together a Letter Decision on the ARYMO ER-MORPHABOND exclusivity issue, but we’re still waiting to get a copy of that determination.  We’ll post it once we get it.

Finally, we note FDA’s January 17, 2017 approval of Teva Branded Pharmaceutical Products R & D, Inc.’s NDA 207975 for VANTRELA ER (hydrocodone bitartrate) Extended-release Tablets. FDA approved VANTRELA ER for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate.  That’s the same indication for which other single-entity hydrocodone bitartrate drug products are approved, and, in particular, HYSINGLA ER (hydrocodone bitartrate) Extended-release Tablets (NDA 206627) and ZOHYDRO ER (hydrocodone bitartrate) Extended-release Capsules (NDA 202880).  FDA granted a period of 3-year exclusivity – coded as “NP” (New Product) – with the October 25, 2013 approval of ZOHYDRO ER.  FDA approved HYSINGLA ER on November 20, 2014, prior to the expiration of exclusivity for ZOHYDRO on October 25, 2016, by virture of a waiver of exclusivity agreed to by the two NDA sponsors (see here).

But what about 3-year exclusivity for HYSINGLA ER? And wouldn’t such exclusivity serve to block the approval of NDA 207975 for VANTRELA ER? After all, FDA’s Exclusivity Summary for NDA 206627 indicates that the Agency should grant a period of 3-year exclusivity based on three clinical studies, including two abuse potential studies (HYD1013 and HYD1014), Purdue conducted to obtain approval of HYSINGLA ER.

Well, FDA has not yet updated the Orange Book to reflect any award of 3-year exclusivity for HYSINGLA ER. The issue is probably still under review at the Agency.  And it could  remain under review until (or if) another single-entity hydrocodone bitartrate drug product comes up for an FDA approval decision.  You see, FDA did not have to make an exclusivity decision when approving  VANTRELA ER because the approval of NDA 207975 was not affected by any exclusivity applicable to HYSINGLA ER.  VANTRELA ER is a 505(b)(1) NDA by virture of a right of reference obtained to certain carcinogenicity data generated for the approval of ZOHYDRO ER.  Because 3-year exclusivity applies with respect to second-in-time 505(b)(2) NDAs (as well as ANDAs), but not 505(b)(1) NDAs, any 3-year exclusivity applicable to HYSINGLA ER could not serve as an obstacle to the approval of NDA 207975 for VANTRELA ER.

Representative Morgan Griffith (R-VA) has introduced two bills that would remove federal roadblocks to marihuana and cannabidiol (“CBD”) access by patients for legitimate medical purposes in states that allow such access. (We use the spelling of “marihuana” that appears in the federal Controlled Substances Act (“CSA”) and the bills). Congressman Griffith sponsored the “Legitimate Use of Medicinal Marihuana Act,” H.R. 714, and reaching across the aisle, co-sponsored the “Compassionate Access Act,” H.R. 715, with Earl Blumenauer (D-OR). The Oregon representative has advocated to remove marihuana from control under the CSA. An accompanying press release notes that the current bills “would alleviate” CSA blockage of measures that permit the use of marihuana for treating cancer and glaucoma passed by Virginia, Congressman Griffith’s state, in 1979.

The Compassionate Access Act (“CAA”) and the Legitimate Use of Medicinal Marihuana Act (“LUMMA”) are the latest proposals to change Federal law and authorize the medical use of marihuana. We note that most recently in November, voters in Arkansas, Florida and North Dakota approved marihuana for medical use, joining a growing majority of states that authorize the use of marihuana or low-THC oil (“CBD”) for medical purposes. These bills are also a response to the Drug Enforcement Administration’s (“DEA’s”) August 2016 denial of two petitions to reschedule marihuana wherein DEA and the Department of Health and Human Services (“HHS”) have maintained the status quo, that is, that marihuana lacks a currently accepted medical use in treatment in the United States. We posted a blog on the petition denials on August 24, 2016.

In short, both bills as drafted appear to conflict with existing administrative and statutory requirements, particularly, the requirement that marihuana (or any other controlled substance) cannot be rescheduled from Schedule I without a finding of currently accepted medical use.

A drug can be scheduled, rescheduled or de-scheduled through administrative rulemaking or Congress can take such action by legislation. The CAA appears to mandate that HHS and DEA administratively reschedule the drug, and the LUMMA, would reschedule the drug by legislation. However, both approaches as drafted, have some serious faults. First, the CAA would require that HHS and DEA conduct administrative rescheduling but arrive at a specific result whether or not supported by the scientific and medical evaluation that is required under such action. Second, the LUMMA would reschedule marihuana by legislation but does not specifically find that Congress has determined that marihuana has a currently accepted medical use in the United States. Thus, the LUMMA would run afoul of the existing statutory criteria for placing drug in Schedule II-V. Congress has legislatively scheduled drugs in the past, e.g., anabolic steroids, however we are unaware of any case where Congress has rescheduled a drug from Schedule I into another schedule which would authorize its legitimate medical use.

The following is a brief summary of the proposed bills:

The Compassionate Access Act

The CAA would require HHS within 180 days, in consultation with the Institute of Medicine of the National Academy of Sciences, to recommend that DEA reschedule marihuana from Schedule I to another schedule. And DEA, “taking into consideration” HHS’ recommendation, would have one year to issue a final rule rescheduling marihuana. The CAA would also remove CBD from the CSA’s definition of marihuana and separately define it as a derivative from marihuana or synthetically formulated with 0.3 percent delta-9-tetrahydrocannabinol (“THC”). DEA considers all extracts of marihuana including CBD to be Schedule I substances.

The CAA mandate that HHS recommend rescheduling, and that DEA reschedule it, appears to disregard the existing CSA requirement that HHS and DEA conduct a medical and scientific evaluation, the “eight factor analysis.” The CAA’s removal of CBD containing trace amounts of THC from the definition marihuana seems more reasonable considering that consumption of CBD reportedly does not produce psychoactive effects and thus lacks potential for abuse, a key criteria for placement in any schedule.

In addition, the CAA would prohibit the CSA and the Federal Food, Drug and Cosmetic Act (“FDCA”) from restricting activities in states that have authorized marihuana and CBD activities for medical use, including:

• “[T]he prescription of marihuana;”
• “[A]uthorized patients” to obtain, possess, transport and use marihuana;
• Caregivers to obtain, possess and transport marihuana for authorized patients;
• Parents or guardians to obtain, possess and transport marihuana for minors;
• Production, processing, manufacturing and distributing marihuana;
• Pharmacies and health care providers dispensing marihuana; and
• Laboratories testing safety, quality and efficacy of marihuana.

However, the CAA does not specifically amend the CSA nor create a statutory scheme to resolve the internal conflicts with existing provisions of the CSA. So, unless, marihuana was rescheduled, these requirements would be inconsistent with the law and regulations.   The CAA would lift the same CSA prohibitions that apply to CBD activities in those states where authorized.

Lastly, the CAA mandates that the Attorney General “delegate responsibility . . . for control over access to marihuana for research into its potential medicinal uses to an agency of the executive branch that is not focused on researching the addictive properties of substances.” The goal is for the agency assuming such responsibility is to ensure the availability of an adequate supply of marihuana for medicinal research.

We are unsure how the Attorney General would delegate authority provided by the CSA to ensure access to marihuana for research to another agency outside the Department of Justice. However, that said, this provision may not be as necessary as intended given that DEA has now abrogated its long-held policy of limiting marihuana cultivation for research to a single grower. DEA recognizes the need to increase the number of marihuana cultivators for product development, explaining that the prior monopoly was for federally-funded and academic research. DEA’s decision to issue additional marihuana manufacturer registrations for supplying researchers may make the provision requiring delegation of responsibility over access to marihuana for research unnecessary.

The Legitimate Use of Medicinal Marihuana Act

The LUMMA mirrors the CAA in certain respects, but there are some notable differences. For example, while the CAA would require administrative rescheduling of marihuana to any schedule other than Schedule I, the LUMMA would move marihuana specifically to Schedule II.

While it is necessary to resolve the current myriad of conflicting state marihuana and CBD approvals with federal restrictions, these bills are not the vehicles to do it.

The CAA was introduced and referred to the House Committee on Energy and Commerce and the House Judiciary Committee on January 27th. The LUMMA was introduced on the same day and referred to the House Committee on Energy and Commerce.

The American Conference Institute (“ACI”), in collaboration with the Independent Cosmetic Manufacturers and Distributors (“ICMAD”), is holding the 4th Annual Legal, Regulatory, and Compliance Forum on Cosmetics & Personal Care Products on March 6-8, 2017 at the Millennium Broadway Hotel in New York City.  Join distinguished counsel and regulatory experts representing the cosmetics and personal care industry together with prominent government officials (from FDA and the Federal Trade Commission) as they share insights on myriad topics, including:

• Recent developments impacting the Safe Cosmetics Modernization Act and the Personal Care Products Safety Act
• FDA and FTC enforcement activity
• Status of the terms “natural” and “organic”
• Technological dilemmas presented by social media and cyber security
• Legal and regulatory concerns unique to small to mid-size cosmetics companies and retailers
• Regulatory differentials for cosmetics and OTC drugs
• International laws and regulations

Hyman, Phelps & McNamara, P.C.'s Paul M. Hyman will be speaking at the conference in a session titled “OTC Drugs vs. Cosmetics: Understanding the Differences, Examining the Subtleties, and Clarifying the Rules to Promote Product Innovation.” 

You can register for the conference here.  FDA Law Blog readers receive a discount off the tuition fee (code P10-999-FDAB17).

It is often said that companies have an absolute right to petition the government to take or not take action without fearing exposure to an antitrust suit.  This “right” is thought to be based on a series of Supreme Court decisions that are collectively commonly referred to as the “Noerr-Pennington doctrine.”  In fact, this “right” is not an absolute right, particularly in the context of Citizen Petitions filed with FDA.  A lawsuit filed and announced on February 7, 2017 demonstrates that the government can, and in appropriate cases will, take enforcement actions against companies that file what the government believes are sham Citizen Petitions.  This lawsuit thus serves as a warning that the government is concerned about the misuse of FDA’s Citizen Petition process.

The lawsuit in question was filed by the Federal Trade Commission (“FTC”) in the U.S. District Court for the District of Delaware and is styled as a Complaint for Injunctive and Other Equitable Relief.  The FTC alleges that ViroPharma Inc. (“ViroPharma”), before it was acquired by another company, abused FDA’s Citizen Petition process in violation of Section 5(a) of the FTC Act (15 U.S.C. § 45(a)) when ViroPharma used that process to petition FDA not to approve ANDAs for generic versions of VANCOCIN (vancomycin HCl) Capsules (approved under NDA No. 050606). The FTC had been investigating ViroPharma’s VANCOCIN petitioning activities for quite some time (see here and here).

“Facing the threat of generic competition to its lucrative franchise, ViroPharma inundated the FDA with regulatory and court filings—forty-six in all—to delay the FDA’s approval of generic Vancocin Capsules. That number is, by far, the most filings that any firm has ever made to the FDA concerning a single drug product,” writes the FTC in its Complaint.  “These repetitive, serial, and meritless filings lacked any supporting clinical data, which ViroPharma understood it needed to have any chance of persuading the FDA of its positions.  Even after a panel of sixteen independent experts unanimously rejected its unsupported claims in August 2009, ViroPharma continued its petitioning campaign to obstruct and delay the FDA’s generic approval review process.”  Although “FDA disposed of ViroPharma’s challenges as being ‘unsupported’ and ‘lack[ing] merit,’” in a Citizen Petition Response, “by that point, ViroPharma’s campaign had succeeded in delaying generic entry at a cost of hundreds of millions of dollars to patients and other purchasers,” says the FTC.

As readers of this blog might recall, ViroPharma’s petitioning activity resulted in what might be the longest Citizen Petition response of all-time: a monster 87-page response from FDA in April 2012 (see our previous post here).  A ViroPharma lawsuit against FDA followed (see our previous posts here and here), where the company was ultimately unsuccessful in challenging FDA’s bioequivalence requirements for generic VANCOCIN, as well as FDA’s denial of 3-year exclusivity for a VANCOCIN Supplement NDA the Agency approved on December 14, 2011. (Our firm represented ANDA applicant and intervenor Akorn in that lawsuit.) (We also note that ViroPharma found itself embroiled in years-long class action securities litigation after making certain statements about the prospect of FDA granting a period of 3-year exclusivity.)

Although there’s a lot that’s interesting in FDA’s Citizen Petition Response (Docket No. FDA-2006-P-0007), what’s particularly interesting for our purposes here is FDA’s admonition of ViroPharma’s petitioning activity. FDA comments as follows on pages 74-75 of the response:

FDA notes that you have petitioned FDA in a fashion analogous to interrogatories in civil discovery, demanding answers to more than 170 individual factual questions related to the Agency’s development of the vancomycin bioequivalence recommendation. This is an improper use of the citizen petition process.  The petition procedure enables parties to “petition the Commissioner to issue, amend, or revoke a regulation or order, or to take or refrain from taking any other form of administrative action.”  “Administrative action” is defined in relevant part as “every act, including the refusal or failure to act, involved in the administration of any law by the Commissioner.”  The “action” you request the Agency to take here – to respond directly to factual questions regarding certain Agency decisions – is secondary to your underlying challenge of those decisions.  In the interest of a thorough evaluation of the many issues you raise, however, FDA has incorporated these questions and the events referenced therein in its consideration of your petition.

Since then, we’ve seen other (and bolder) admonitions from FDA over a company’s petitioning activity, and even referrals to the FTC to investigate a company’s petitioning activity. For example, in a February 2013 denial of a September 2012 505(q) Citizen Petition (Docket No. FDA-2012-P-1028) concerning the approval of generic Buprenorphine drug products, FDA said that the Agency “referred this matter to the Federal Trade Commission, which has the administrative tools and the expertise to investigate and address anticompetitive business practices.”  Also, in an August 2013 denial of a March 2013 Citizen Petition (Docket No. FDA-2013-P-0247) concerning the approval of generic Zoledronic Acid Injection, in a section titled “Misuse of Petition Process,” FDA comments: “This Petition represents a particularly egregious misuse of the FDA citizen petition process for what appears to be the purpose of delaying generic competition.”  Most recently, in a January 2017 denial of a December 2016 505(q) Citizen Petition (Docket No. FDA-2016-P-4585) concerning FDA’s approval of generic versions of AMPYRA (dalfampridine) Extended-release Tablets, FDA comments, in part, in a section titled “Timing of the Petition” that:

As stated in FDA’s annual report to Congress required under section 505(q)(3) of the FD&C Act, FDA continues to be concerned that section 505(q) is not discouraging the submission of petitions that are intended primarily to delay the approval of competing drug products. This Petition was submitted on December 26, 2016, seventeen business days before the expiration of orphan-drug exclusivity associated with Ampyra, on January 22, 2017 (i.e., the earliest date on which ANDAs referencing Ampyra could be approved, provided that all other applicable requirements for approval are met). . . .  In short, under these circumstances, this Petition was submitted inappropriately close to the date of expiry of Ampyra’s orphan-drug exclusivity and the date on which ANDAs referencing Ampyra would become eligible for approval.

The FTC, in its Complaint against ViroPharma, paints quite the picture of alleged obstructionism, with a litany of actions and lawsuits that the FTC says “harmed competition and consumer welfare”:

Between March 2006 and April 2012, ViroPharma made at least forty-three submissions to the FDA and initiated three more proceedings in federal court to obstruct and delay the FDA’s approval of generic Vancocin Capsules, including:

• Twenty-four citizen petition filings submitted to the FDA;
• Seventeen public comments submitted to the FDA regarding the FDA’s in vitro dissolution guidance for generic Vancocin Capsules;
• A public comment submitted to the FDA regarding the FDA’s process related to publishing bioequivalence guidances;
• An sNDA for Vancocin Capsules claiming a three-year marketing exclusivity;
• A lawsuit challenging the FDA’s document production in response to ViroPharma’s Freedom of Information Act document requests;
• A lawsuit challenging the FDA’s in vitro dissolution guidance for another generic drug; and
• A lawsuit challenging the FDA’s response to ViroPharma’s Citizen Petition and related amendments and supplements, and the FDA’s approval of generic Vancocin Capsules.

The FTC is seeking declaratory and injunctive relief, including “a court order permanently prohibiting ViroPharma from submitting repetitive and baseless filings with FDA and the courts, and from similar and related conduct as well as any other necessary equitable relief, including restitution and disgorgement.”

The FTC’s action against ViroPharma is not the first to challenge a company’s petitioning activity as anticompetitive.  Over the years we’ve seen several lawsuits (usually from direct or indirect purchasers).  You can read up on some of those lawsuits in articles here and here, as well as in our previous posts here and here.

Just before President Trump took office, FDA issued a series of documents detailing how it would regulate the products of gene editing. Specifically, FDA issued policy statements in the form of an announcement on its website and an article in the FDA Voice, FDA’s official blog.  FDA also issued two draft guidance documents and accompanying documents.  Those draft guidance documents cover FDA regulation of animals whose genomic DNA have been intentionally altered (the draft guidance can be found here, as well as a Q&A document) and the scope of FDA’s authority over mosquito-related products (the draft guidance can be found here).

These documents continue the series of recent efforts to clarify how the Federal government intends to regulate 21st-century biotechnology.  The documents fall in line with the September release of the National Strategy for Modernizing the Regulatory System for Biotechnology Products (a copy of which can be found here) as well as the more recently released update to the Coordinated Framework for the Regulation of Biotechnology (a copy of which can be found here on our website now that the Trump Administration has, at least for now, removed it from the White House website where it used to be found).

Although the series of documents were highly anticipated and some had hoped for a change to the regulatory approaches that have been in place for over a decade, we find that little is changed from how FDA has approached these products in the recent past. So, while it is helpful to have greater clarity around these issues, one word sums up our overall impression: meh.

Regulation of Genetically Engineered Animals

It has been eight years when FDA’s Center for Veterinary Medicine (“CVM”) issued its final guidance regarding the regulation of animals that have been genetically engineered via recombinant DNA (“rDNA”) technology. For those who live or work in the Washington area, it should come as no surprise that the final of the original guidance was issued on the last working day of the George W. Bush administration and that this update should be issued, if only in draft form, on the last working day of the Obama administration.  The issue of genetically engineered (“GE”) animals has been highly controversial both inside and outside of The Beltway (see our prior post discussing Congressional activity on the subject, here, as well as lawsuits challenging FDA’s authority in this area, here).

The most significant substantive change to the draft guidance from the prior final version of the guidance is that the draft guidance explicitly includes all animals whose genomes have been intentionally altered, no matter how the alternation occurred. The prior version, on its face, was limited to animals genetically engineered by rDNA technology.  Newer biotechnologies, such as the CRISPR/Cas system (see discussion of these technologies here), do not necessarily use rDNA technology, and some companies and academics have argued that these “genome editing” technologies fall outside the scope of FDA guidance and FDA’s authority.  Since at least 2015, however, CVM has been publicly stated that all genome editing techniques met the statutory definition of a new animal drug and, therefore, were under FDA’s statutory authority (see, for example, CVM’s presentation to the National Academy of Sciences’ Roundtable on Science and Welfare in Laboratory Animal Use, here).  So, objections regarding FDA’s revisions in the draft guidance are a bit late to the party.  Setting aside potential issues of podium policymaking, the draft guidance merely clarifies and properly issues a statement of FDA’s pre-existing policies.

When issuing the draft guidance, FDA asked in its Notice of Availability for public comment not only on the document itself, but specifically with respect to two questions:

1. How to refer to the animals subject to the draft gudiance. In the past, FDA has used the term “genetically engineered” to refer to animals containing recombinant DNA constructs intended to alter the structure or function of the body of the animal. In the draft guidance, CVM uses the phrase “animals whose genomes have been altered intentionally.” In the opinion of your author, this term is clunky, and unnecessarily confusing. From a scientific perspective, all such animals are genetically engineered – after all, there genetics have been changed by design, which seems to be the very definition of genetic engineering.  CVM asks the public to weigh in on this definitional issue.
2. Whether there is any existing empirical evidence demonstrating that certain types of genome editing may pose minimal risk, and not require the type of regulatory oversight contemplated by the draft guidance. This could include categories of animals or types of genetic changes that are likely to pose minimal risks to the animal, to food safety concerns, or to the human environment.

Comments on the draft guidance should be submitted by April 19th.

Regulation of Mosquito-Related Products

The other draft guidance that FDA issued discussed when mosquito-related products would be regulated by FDA under the FDCA and when products would be regulated by EPA under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”). The draft guidance does not change the existing regulatory jurisdiction of either agency, but rather clarifies for companies which agency will take jurisdiction under which circumstances.

In brief, CVM does not consider mosquito-related products as new animal drugs when those products are intended to function as pesticides by preventing, destroying, repelling, or mitigating mosquitoes for population control purposes. Accordingly, such products would be regulated by EPA under FIFRA.  All mosquito-related products that are intended to prevent, treat, mitigate, or cure disease in animals or man that do not function as pesticides will be regulated by FDA as drugs.

Comments on this mosquito-related products draft guidance should be submitted by February 21st.

With all the uncertainty that exists with any new Administration, one thing in the area of genome editing is certain – the federal government will continue to seek to regulate this technology. All parties, even if they agree with the draft guidance documents, are encouraged to submit comments to FDA expressing their views.

Earlier this month, FDA published much-needed draft guidance on 180-day exclusivity, titled “180-Day Exclusivity: Questions and Answers.”  We perused the document and promptly posted on it the next day, noting, among other things, that the draft guidance doesn’t reveal anything revolutionary, but rather,  provides a one-stop shop reference on 180-day exclusivity insofar as it consolidates court cases and documents released in litigation, letter decisions, citizen petition responses, and other correspondence to provide answers to commonly asked questions.  Since then, we’ve had some time to dig into the draft guidance, and we found two points in particular worth noting.  The points aren’t new insofar as they reflect newfound FDA interpretations; however, it later occurred to us that these points reflect decisions previously made by FDA of which we’ve had some awareness, but that haven’t yet been made public in an FDA letter or approval decision.

Both points concern the so-called failure-to-market forfeiture provision at FDC Act § 505(j)(5)(D)(i)(I) – and the “(bb) bookend event” in particular – and both points are embedded in FDA’s response to Question 24 in the draft guidance (on pages 15-17): “Q24. How does FDA determine whether a first applicant has forfeited exclusivity under the “failure to market” provision?”  The first point is made in four short words in line 585 of the draft guidance: “the same other applicant.”  The second point is made in a hypothetical forfeiture analysis on page 16 of the draft guidance where the key words are “received tentative approval at some point.”

By way of background, the FDC Act provides that a first applicant’s eligibility for 180-day exclusivity may be forfeited if the first applicant fails to market the drug by the later of two “bookend” dates. The first date is the earlier of 75 days after final approval of the first applicant’s ANDA and 30 months after the date of submission of the first applicant’s ANDA.  The second date is calculated 75 days after a final court decision.  Specifically, the statute provides:

(bb) with respect to the first applicant or any other applicant (which other applicant has received tentative approval), the date that is 75 days after the date as of which, as to each of the patents with respect to which the first applicant submitted and lawfully maintained a certification qualifying the first applicant for the 180-day exclusivity period under subparagraph (B)(iv), at least 1 of the following has occurred:

(AA) In an infringement action brought against that applicant with respect to the patent or in a declaratory judgment action brought by that applicant with respect to the patent, a court enters a final decision from which no appeal (other than a petition to the Supreme Court for a writ of certiorari) has been or can be taken that the patent is invalid or not infringed.

(BB) In an infringement action or a declaratory judgment action described in [FDC Act § 505(j)(5)(D)(i)(I)(bb)(AA)], a court signs a settlement order or consent decree that enters a final judgment that includes a finding that the patent is invalid or not infringed.

(CC) The patent information submitted under [FDC Act § 505(b) or (c)] is withdrawn by the holder of the application approved under subsection (b).

With that, let’s turn to point 1: whether FDC Act § 505(j)(5)(D)(i)(I)(bb) permits a “mix-and-match” approach in addition to an “all-in-one” approach. Under the “all-in-one” approach, the parenthetical “(which other applicant has received tentative approval)” provides that the 75-day period is triggered when the same subsequent applicant has both tentative approval and a final court decision that the relevant patent is invalid or not infringed.  Under the “mix-and-match” approach, the parenthetical allows different subsequent ANDA applicants to have tentative approval and a final court decision.

FDA has already faced this scenario in a couple of instances, and has determined that the “all-in-one” approach is the way to go. FDA conveys this in the draft guidance in a sentence stating: “For an event to occur under item (bb) by any other applicant, the same other applicant must receive both tentative approval and a final court decision described in subitem (AA) or (BB)” (emphasis added).

Moving on to point two – whether the order in which an other applicant obtains a court decision and tentative approval counts – FDA answers this question in the following hypothetical:

A hypothetical example illustrates how FDA determines whether forfeiture has occurred under the “failure to market” provision. For the purposes of evaluating item (aa), presume that on June 1, 2009, the applicant for ANDA A submitted its substantially complete application containing a paragraph IV certification, which it lawfully maintained.  FDA approved the ANDA on December 20, 2012, and the 75-day period identified in subitem (AA) of this forfeiture provision ended on March 4, 2013.  Thirty months after the date the ANDA is submitted was December 1, 2011 (the date identified in subitem (BB)).  The relevant date for item (aa) of the forfeiture analysis is December 1, 2011, the earlier of these two dates.

For the second part of the analysis under item (bb), presume that on January 1, 2013, a court entered a final decision (from which no appeal (other than a petition to the Supreme Court for a writ of certiorari) has been or can be taken) that the relevant patent is invalid and not infringed in an infringement action against a subsequent applicant for this RLD whose ANDA received tentative approval at some point before FDA makes the forfeiture determination.  The relevant forfeiture date for ANDA A pursuant to subitem (AA) is March 17, 2013, 75 days after the date on which the court issued its decision.  Notably, this date applies even though ANDA A in this example was not the subject of the litigation.

In this scenario, the failure to market forfeiture provision requires the first applicant to market by March 17, 2013, the later of the dates applicable under item (aa) (December 1, 2011) and item (bb) (March 17, 2013). In this example, if ANDA A applicant did not begin commercial marketing until after March 17, 2013, it would forfeit its exclusivity.  [(Emphasis added)]

In this hypothetical, FDA not only repeats (inherently) the “all-in-one” approach, but also clarifies, in the highlighted language above, that a relevant court decision triggers the 75-day period once tentative approval is obtained, even if that tentative approval is later obtained by the same applicant. Thus, it is not the completion of the two events – tentative approval and a court decision – that triggers the 75-day countdown (unless the tentative approval comes before the court decision), but the court decision that is solely relevant.  So, a later-obtained tentative approval makes a previously-obtained court decision (by the same applicant) operative, such that if tentative approval is obtained one year after the court decision, 180-day exclusivity is forfeited retroactively (absent any commercial marketing by the first applicant).

We imagine there was more language concerning the points above – as well as other forfeiture-related items/provisions – in FDA’s internal draft versions of the guidance document, and that a lot of text was left on the cutting room floor.

One item we hoped the draft guidance would cover explicitly but doesn’t appear to is whether the so-called “change-based exception” under the failure-to-obtain-timely-tentative-approval forfeiture provision at FDC Act § 505(j)(5)(D)(i)(IV), when it is invoked, means that there is no deadline to obtain tentative approval or else forfeit exclusivity. This blogger thinks most folks would agree that the change-based exception is truly that: a provision that, when it applies, means that FDC Act § 505(j)(5)(D)(i)(IV) is no longer relevant to a forfeiture determination. But at least one court, in an antitrust action, has determined otherwise, stating: “It makes sense to read the Change-Based Exception as an extension, not an obliteration, of the 30-month deadline” (see here, here, and here).

As previously reported, on May 1, 2015, FDA issued a proposal to amend the 1994 Tentative Final Monograph (TFM) for the over-the counter (OTC) health care antiseptic drug products, including health care personnel hand washes, health care personnel hand rubs, surgical hand scrubs, surgical hand rubs, and patient preoperative skin preparations.  FDA proposed to classify all active ingredients as category III because of missing information on all ingredients. In light of scientific developments since 1994, FDA proposed to require additional safety data to support the safety of antiseptic active ingredients. FDA further proposed to require that all health care antiseptic active ingredients have in vitro data characterizing the ingredients’ antimicrobial properties and in vivo clinical simulation studies.  The proposed rule identified data gaps for 11 of the 28 active ingredients that had been considered in the rulemaking for health care antiseptics.

FDA acknowledged that the proposed rule was complex. Moreover, the Agency indicated that it would consider requests to defer further rulemaking for specific active ingredients to allow time for studies to address the data gaps.

True to its word, on January 19, 2017, FDA posted letters in the docket deferring rulemaking on a number of active ingredients, namely

• Povidone-Iodine
• Isopropyl Alcohol
• Benzalkonium Chloride
• Benzethonium Chloride
• Chloroxylenol
• Ethyl Alcohol

For each of these ingredients, FDA has agreed to defer rulemaking initially for one year, with the possibility of an extension/renewal. The deferrals are conditioned on the parties’ initiation of studies. If FDA determines that no studies have been commenced or that the studies are not productive, it will proceed to rulemaking after the initial deferral. Parties that have been granted the deferrals are required to submit “clear statements of [their] intent to conduct all necessary studies with proposed timelines, as described in [their] letter, and submit full study reports to the public docket.” Each letter specifies the studies that FDA requires for the active ingredient. Further, all letters provide a timeline for the parties (e.g., parties must acknowledge receipt of the letter and submit a statement of intent within 60 days of receipt of the letter; they must submit a study plan within six months of receipt of the letter, submit reports at a specific time etc., etc.).

No deferrals were granted for the other five active ingredients discussed in the proposed rule, hexylresorcinol, iodine tincture, iodine topical solution USP, triclosan, and tricarbon. Presumably, FDA will complete rule making for these ingredients in accordance with the timeline mandated by the consent decree (requiring publication of a final rule by January 15, 2018).

Earlier this week, Representatives Gus Bilirakis (R-FL) and Kurt Schrader (D-OR) announced the introduction of H.R. 749, the Lower Drug Costs Through Competition Act.  The bill, which appears to be nearly identical to H.R. 4784 introduced in March 2016, is intended “to lower the cost of prescription drugs by increasing competition in the market,” according to a press release.

Specifically, Title I of H.R. 749 would amend the FDC Act to add Section 505(j)(11), stating:

(A) The Secretary shall prioritize the review, and act not later than 180 calendar days after the date of the submission of an application, on an application that has been submitted and accepted for review under this subsection, or on a supplement to such an application, that is for a drug that—

(i) has been introduced into interstate commerce by not more than one manufacturer or sponsor, as applicable, in the last 3 months and with respect to which tentative approval under paragraph (5) has been granted for not more than 2 applications; or

(ii) has been included on the [drug shortage] list under section 506E.

(B) The Secretary may expedite an inspection or reinspection under section 704 of an establishment that proposes to manufacture a drug described in subparagraph (A).

The 6-month (180-day) FDA review period provided for above is not much different than the 8-month review and action goal for certain Priority Original ANDAs identified in the GDUFA II Proposed Commitment Letter, and is even longer than the 4-month review and action goal proposed under GDUFA II for certain Priority PASs.

Title II – “Incentivizing Competition” – of the “Lower Drug Costs” is interesting. It would create a Priority Review Voucher (“PRV”) for ANDAs – a “Generic PRV” – allowing for review and action on an ANDA “not later than 180 calendar days after such application has been submitted and accepted for review” (emphasis added).  Of course, if the 180 days does not begin until after both submission and acceptance of an ANDA (which acceptance could be 30 days, 60 days, or more after initial submission of an ANDA), then there doesn’t really seem to be much of a benefit to obtaining and using a Generic PRV, particularly given the proposed GDUFA II goals.  In any case, like other PRVs, a Generic PRV would be transferable, would require pre-use notice to FDA, and would be subject to a special priority review user fee set by FDA each fiscal year.

Although another version of the bill was introduced in Spring 2016, H.R. 749 appears, in one sense, to build on legislation introduced in the U.S. Senate at the tail end of the 114th Congress – S. 3387, the Safely Advancing Valuable and Inexpensive New Generic Solutions Act, or “SAVINGS Act” – which sought the creation of a statutory expedited review mechanism for ANDAs for certain drug products without generic competition and in shortage.  But, as noted above, the Lower Drug Costs bill goes further.  The bill continues a recent trend that seems to generally favor the creation of PRVs (as well as new tax credits) over new or extended periods of marketing exclusivity (see our previous posts here, here, and here).  (Although we note that Section 5001 of a Discussion Draft of the 21st Century Cures Act would have extended 180-day generic drug exclusivity and interchangeable biosimilar exclusivity by an undefined amount of time for “American-manufactured” products – see our previous post here.)

There are two additional noteworthy provisions in H.R. 749. First, the bill would amend the Tropical Disease PRV provisions at FDC Act § 524(a)(4)(A) concerning what constitutes a “tropical disease product application.”  The bill would add the requirement that such application contain “reports of new clinical investigations (other than bioavailability studies) essential to the approval of the application and conducted or sponsored by the applicant.”  This could limit the number of Tropical Disease PRVs handed out by FDA, as NDA sponsors would need to conduct or sponsor studies, instead of, for example, relying on published literature reports of studies.

Second, H.R. 749 requires, in Title III, that the Comptroller General conduct a study on Risk Evaluation and Mitigation Strategies (“REMS”). Among other things, the study would examine “[t]he effect of REMS programs and additional risk mitigation strategies, including non-REMS restricted distribution systems, on generic entry into the marketplace” and on drug prices.