By Alexander J. Varond –

FDA recently issued its final rule on permanent discontinuance or interruption in manufacturing of certain drug or biological products.  To those familiar with the proposed rule issued in 2013, a review of the final rule will not bring many surprises.  We discussed the proposed rule and FDA’s “Strategic Plan for Preventing and Mitigating Drug Shortages” here.

The final rule requires “all applicants of covered approved drugs or biological products—including certain applicants of blood or blood components for transfusion and all manufacturers of covered drugs marketed without an approved application—to notify FDA electronically of permanent discontinuance or an interruption in manufacturing of the product that is likely to lead to a meaningful disruption in supply (or a significant disruption in supply for blood or blood components) of the products in the United States.”

Ongoing Effort to Address Drug Shortages

The rule represents the latest step in an ongoing effort to address drug shortages in the United States.  Recall that President Obama, in 2011, issued an Executive Order to address the issue.  We blogged on that here.  That same year, the Government Accountability Office released a report finding that FDA needed increased authority to address the growing problem of drug shortages.  We blogged on that here.  Congress then amended the Federal Food, Drug, and Cosmetic Act (FDCA) (via FDASIA), in 2012, and further addressed the drug shortage issue.  Our summary of FDASIA can be found here.

FDASIA amended the FDCA to give FDA the authority to require all manufacturers of certain drugs to notify FDA six months in advance of a permanent discontinuance or interruption in manufacturing.  It also required FDA to maintain a list of drugs in shortage.  This is FDA’s shortage list in its current incarnation.  Finally, FDASIA gave FDA the authority to apply its drug shortage provisions to biological products.  FDA’s final rule implements FDASIA’s changes and substantively modifies 21 C.F.R. §§ 310.306, 314.81(b)(3)(iii), and 600.82.

Recent Statistics on Drug Shortages

FDA notes in its preamble to the final rule that although the number of drug and biological product shortages quadrupled from approximately 61 in 2005 to more than 250 shortages in 2011, the number of shortages has decreased in the last several years.  The preamble reports the following figures:

Table 1:  Drug Shortages

Thus, it appears that the increase in early notifications to FDA that began as a result of the 2011 Executive Order (Executive Order 13588) has enabled FDA to work with stakeholders to prevent shortages.  FDA reports the following statistics:

Table 2:  Drug Shortages Prevented

According to FDA, these shortages were prevented by using such tools as, working with manufacturers to resolve manufacturing and quality issues, expediting FDA inspections and review of submissions to prevent shortages, identifying and working with manufacturers willing to initiate or increase production to cover expected gaps in supply, and exercising regulatory flexibility and discretion under certain circumstances.

Final Rule

The final rule requires that a covered entity notify FDA in writing of a permanent discontinuance of manufacture or interruption in manufacturing that is likely to lead to a meaningful disruption in the supply of a product that is life supporting, life sustaining, or intended for use in the prevention or treatment of a debilitating disease or condition.  Radiopharmaceuticals are excluded from these requirements.  Notably, a meaningful disruption does not include interruptions such as routine maintenance “so long as the manufacturer expects to resume operations in a short period of time.”

The final rule defines “life support or life sustaining” as “essential to, or that yields information that is essential to, the restoration or continuation of a bodily function important to the continuation of human life.”  “Intended for use in the prevention or treatment of a debilitating disease or condition” is defined as “intended for use in the prevention or treatment of a disease or condition associated with mortality or morbidity that has a substantial impact on day-to-day functioning.”  In the preamble to the final rule, FDA notes that this definition is different than the Agency’s definition of “medically necessary,” which it uses in its Manual of Policies and Procedures on shortages.

The rule defines “product” in a way that significantly increases the frequency with which covered entities must notify FDA.  That is, a covered entity must notify FDA of a discontinuance or interruption for specific strengths, dosage forms, and routes of administration.  FDA provides an example:

[I]f Applicant X experiences an interruption in manufacturing of the 50-milligram (mg) strength of a drug product that would be subject to § 314.81(b)(3)(iii), but the 100-mg strength continues to be manufactured without delay, under the rule, Applicant X must notify FDA of the interruption in manufacturing of the 50-mg strength if the interruption is likely to lead to a meaningful disruption in the applicant’s supply of the 50-mg strength.

Thus, when determining whether an interruption in manufacturing is likely to lead to a meaningful disruption in supply, triggering the notification requirement, a manufacturer or applicant may only consider whether the manufacturing disruption will affect the manufacturer’s own ability to meet demand for its product – even if the manufacturer has such a small market share that its disruption is unlikely to affect the market as a whole.

The final rule applies to the following covered entities:

• All applicants with an approved NDA or ANDA for a covered drug product;
• All applicants with an approved BLA for a covered biological product, other than blood or blood components;
• Applicants with an approved BLA for blood or blood components, if the applicant is a manufacturer of a significant percentage of the U.S. blood supply; and
• All manufacturers of a covered drug product marketed without an approved NDA or ANDA in its entirety to covered drug products marketed without an approved NDA or ANDA).

With regard to timing, notifications must be submitted electronically to FDA:

• At least 6 months prior to the date of the permanent discontinuance or interruption in manufacturing; or
• If 6 months’ advance notice is not possible because the permanent discontinuance or interruption in manufacturing was not reasonably anticipated 6 months in advance, as soon as practicable thereafter, but in no case later than 5 business days after the permanent discontinuance or interruption.

Such notifications must include the name of the product and applicant, whether the notification relates to a permanent discontinuance or interruption, a description of the reason for the permanent discontinuance or interruption, and an estimated duration of the interruption.

Covered entities that fail to submit adequate notification will be issued a noncompliance letter from FDA informing the entity of its failure to adequately notify FDA.  The covered entity will then have an opportunity to respond.  If FDA does not find that the covered entity had a reasonable basis for failing to adequately notify FDA, the Agency will make the letter and the applicant’s response to the letter public.  As we noted when the proposed rule was issued, while the Agency’s ability to publicize violations is generally one of its most powerful and well-utilized enforcement tools, it may be comparatively weak in this context, where the unfavorable publicity seems unlikely to expose a violative company to private litigation in the absence of extenuating circumstances.

By Ricardo Carvajal –  

The White House Office of Science and Technology Policy (OSTP) directed the three federal agencies charged with ensuring the safety of biotechnology products (FDA, USDA, and EPA) to undertake a review intended to “improve the transparency, predictability, coordination, and, ultimately, efficiency of the biotechnology regulatory system.”  The review will consist of three elements: an update to the Coordinated Framework for the Regulation of Biotechnology to “help clarify which biotechnology product areas are within the authority and responsibility of each agency;” development of a “long-term strategy to ensure that the system is prepared for the future products of biotechnology;” and the conduct of “an expert analysis of the future landscape of biotechnology products” by the National Academies of Sciences, Engineering, and Medicine.   

As noted by OSTP, the Coordinated Framework was established in 1986 and hasn’t been updated since 1992.  In explaining the need for a review, OSTP pointed to changes in the biotechnology product landscape, a proliferation of regulations and guidance documents by FDA, USDA, and EPA, an apparent lack of public understanding with regard to safety evaluation of biotechnology products, and unnecessary burdens on small companies.  Among other things, OSTP directs the agencies to take measures to ensure that the Coordinated Framework is periodically reviewed and updated going forward.

OSTP’s directive can be expected to have an impact on regulation of bioengineered foods, but not on human drugs and medical devices because those products “are not the focus of the activities described” in the OSTP memorandum.  Given ongoing controversy over certain aspects of regulation of biotechnology, most notably in the area of labeling, there should be significant interest in the OSTP-directed review.  Public meetings are anticipated in the fall, and interested parties are encouraged to sign up to be notified of further developments. 

By Kurt R. Karst –      

One of the more memorable lines from the original Star Wars Trilogy is uttered in Return of the Jedi when Luke Skywalker surrenders himself to Darth Vader on the Forest Moon of Endor.  Luke tries to convince Vader to return to the Light Side of the Force, saying that he feels the “good” within Vader.  Vader, however, rebuffs the attempt at conversion, saying “You don’t know the power of the dark side!  I must obey my master.” 

Putting aside the light versus dark allegory, those lines sum up quite well the power of pediatric exclusivity (and its statutory master), particularly as it relates to Orange Book-listed patents.  And it’s a power that is often overlooked . . . at least initially, until the full force of pediatric exclusivity comes to bear on an ANDA or 505(b)(2) applicant.   Indeed, we’ve seen a few instances over the past year where pediatric exclusivity has crept up on an unsuspecting applicant to block final approval of an ANDA.  Consider, for example, the cascading periods of pediatric exclusivity applicable to various patents that were (and some that still are) listed in the Orange Book for NEXIUM (esomeprazole magnesium) Delayed-Release Capsules, 20 mg and 40 mg.  Although there is no 180-day exclusivity block on ANDA approval, only one ANDA sponsor, Ivax Pharmaceuticals, Inc., currently has approval of an application – ANDA 078003.  FDA approved that application after the sponsor obtained a waiver of pediatric exclusivity from the NDA sponsor, and which pediatric exclusivity became operative upon expiration of a patnet to which it attached (see our previous post here).   Other ANDA sponsor have apparently not been as fortunate. 

In light of this incident and others, we thought it would be a good time to review a couple of the ins and outs outs of pediatric exclusivity.  We also refer to several of our previous posts on some interesting pediatric exclusivity topics – here, here, and here. 

FDC Act § 505A provides an additional six months of patent and non-patent exclusivity to pharmaceutical manufacturers that conduct acceptable pediatric studies of new and currently-marketed drug products identified by FDA in a Written Request for which pediatric information would be beneficial.  Pediatric exclusivity extends all other types of Orange Book-listed patent and non-patent marketing exclusivity (e.g., five-year, three-year, and orphan drug exclusivity) an application holder may have under the FDC Act, provided that the exclusivity is granted with not less than nine months of term remaining.  Pediatric exclusivity does not extend the term of a patent itself, but only the period during which FDA cannot approve an ANDA or a 505(b)(2) application that includes a Paragraph II certification (patent has expired), a Paragraph III certification (date on which a patent will expire), or a Paragraph IV certification that concerns a patent that a court has determined is valid and would be infringed.
 
An important aspect of pediatric exclusivity is that it provides additional marketing exclusivity not just for the pediatric indications or formulations, but for all protected indications and formulations of that sponsor’s drug.  Thus, pediatric exclusivity attaches to the patent and non-patent marketing exclusivity for any of the sponsor’s approved drug products (including certain combination products) that contain the active moiety for which pediatric exclusivity was granted, and not to a specific drug product.  See National Pharmaceutical Alliance v. Henney, 47 F. Supp. 2d 37 (D.D.C. 1999) (here).

Where folks most often get tripped up with pediatric exclusivity is the applicability of the exclusivity after patent expiration (i.e., a Paragraph II certification).  A Paragraph II certification exists either because an applicant specifically certified as such, or because FDA has administratively converted a certification to a Paragraph II certification upon patent expiration.  FDA’s ability to make such conversion has been upheld in court.  See Mylan v. Thompson, 332 F. Supp. 2d 106 (D.D.C. 2004) (here), aff’d, 389 F.3d 1272 (D.C. Cir. 2004) (here); Ranbaxy Lab., Ltd. v. FDA, 307 F. Supp. 2d 15 (D.D.C. 2004) (here), aff’d 96 Fed. Appx. 1 (D.C. Cir. 2004).  Now add in 180-day exclusivity and things can really get complicated, particularly when 180-day exclusivity “overlaps” with patent expiration.  That is, when the period of 180-day exclusivity extends only to patent expiration (cutting that exclusivity short) and butts up against pediatric exclusivity applicable to a patent subject to a Paragraph II certification preventing subsequent ANDA applicants from obtaining final approval.  

FDA first encountered this fact pattern back in 2007 in the context of ANDA approval of generic versions of Pfizer’s NORVASC (amlodipine besylate) Tablets, and in light of pediatric exclusivity applicable to Orange Book-listed U.S. Patent No. 4,879,303 (“the ‘303 patent”).  It led to a flurry of activity, including litigation against FDA, citizen petitions, and more.  It was the first “big case” we covered on this blog (see our previous posts here, here, here, here, and here).  

In an April 18, 2007 Letter Decision (Docket No. FDA-2007-N-0090; Docket Legacy No. 2007N-0123), FDA laid out not only when a court decision becomes final in the context of a patent infringement action (i.e., upon issuance of the mandate), but what such a decision means in the context of the pediatric exclusivity statute.  In doing so, FDA explained how an ANDA applicant subject to pediatric exclusivity applicable to an expired patent can “beat” what is otherwise ironclad exclusivity.  You can read the opinion for greater context, but here’s the important part:

This is the first time that FDA has been called upon to determine whether an ANDA applicant is subject to the innovator’s pediatric exclusivity when the ANDA applicant has received a favorable court decision in its paragraph IV litigation but has not yet obtained final approval when the patent expires [(here, because of another applicant’s 180-day exclusivity)]. . . .

In considering [the Mylan and Ranbaxy decisions] regarding the switch to paragraph II certifications with today’s decision regarding the non-applicability of pediatric exclusivity to applicants who prevail in patent litigation, FDA determines as follows.  When the ‘303 patent expired on March 25, 2007, all of the unapproved ANDAs were required to change (or deemed to have changed) to paragraph II certifications and became subject to Pfizer’s pediatric exclusivity at that time.  That is their status during the period before the mandate issues.  However, FDA believes that the language of the statute manifests a clear Congressional intent that pediatric exclusivity not block the approval of an ANDA where the ANDA applicant has prevailed in the paragraph IV patent litigation and therefore creates an exception to the application of the Hatch-Waxman certification provisions.  Thus, if and when the mandate finalizing the panel’s March 22 decision issues in the Apotex case, Apotex’s ANDA will not be blocked by Pfizer’s pediatric exclusivity.

FDA followed up that initial Letter Decision with a couple of other letters (here and here) applying the Agency’s Letter Decision in light of developing facts.  Ultimately, the ‘303 patent was delisted from the Orange Book, thereby removing the pediatric exclusivity barrier to ANDA approval. 

So, at the end of the day, what are the options for an ANDA applicant to overcome pediatric exclusivity applicable to an expired patent that is blocking final approval?  There aren’t many options, and they can take some time to work through, but there are at least three: (1) obtain a wavier from the NDA sponsor; (2) obtain a final court decision of patent invalidity or non-infringement; or (3) successfully pursue Orange Book delisting of the blocking patent.

By Kurt R. Karst – 

The Orphan Drug Tax Credit (“ODTC”) is not an incentive you hear about all too often, but it’s been around for quite some time – since the enactment of the Orphan Drug Act of 1983 – and is a strong incentive for companies to develop products for rare (i.e., “orphan”) diseases and conditions.  So when Congress considered repeal of the ODTC last year (see here and here) in June 2015 by the Biotechnology Industry Organization (“BIO”) (soon to be renamed the Biotechnology Innovation Organization) and the National Organization for Rare Disorders (“NORD”), and titled “Impact of the Orphan Drug Tax Credit on treatments for rare diseases,” the industry groups quantify the benefits of the ODTC, which has amounted to $750 million in awarded tax credits between 1996 and 2011 (as illustrated below in Figure 7 from the report). 

By way of background, a tax credit for certain clinical testing expenses for an orphan drug incurred in that taxable year is permitted under the Internal Revenue Code and under the Internal Revenue Service’s implementing regulation at 26 C.F.R. § 1.28.  The tax credit permits a firm paying United States taxes to credit against its federal income tax 50% of “qualified clinical testing expenses” relating to orphan drug development.  To qualify for the credit, the clinical testing must, under 26 U.S.C. § 45C: (1) be conducted under an IND; (2) relate to a drug and indication that has received an orphan drug designation from FDA; (3) occur after FDA designation as an orphan drug and before FDA approval; and (4) be conducted by or on behalf of the taxpayer to whom the orphan drug designation applies. 

Expenses eligible for the credit include both in-house testing expenses, such as wages and non-depreciable supplies, and contract research expenses (i.e., amounts paid to persons other than employees to conduct the research).  Under 26 U.S.C. § 39(a), companies can carryback unused tax credits “to each of the 1 taxable years preceding the unused credit year,” and can carryforward unused tax credits “to each of the 20 taxable years following the unused credit year.”  Although the law sets a baseline that “[n]o tax credit shall be allowed . . . with respect to any clinical testing conducted outside the United States,” there’s an exception when “testing is conducted outside the United States because there is an insufficient testing population in the United States . . . .”  (A regulation – at 26 C.F.R. § 1.28-1(d)(3)(ii)(B) – defines “insufficient testing population” to mean “[t]he testing population in the United States is insufficient if there are not within the United States the number of available and appropriate human subjects needed to produce reliable data from the clinical investigation.”)

The key findings from the BIO/NORD report are that:

• Without the ODTC, it is estimated that investment in orphan drugs would have been smaller by a third both historically and in the future;
• In the absence of the ODTC, 67 orphan drugs, or 33%, would likely not have been developed over the past 30 years; and
• Going forward, if the ODTC were repealed, it is estimated that 57, or 33%, fewer new orphan drugs would be approved over the next 10 years.

These findings and others are illustrated throughout the report, and, in particular, in Figures 9, 10, and 11 (reproduced below). 

Things appear to be quiet thus far in 2015 insofar as efforts to repeal the ODTC are concerned.  But if there is a renewed effort, the BIO/NORD report may be an important advocacy piece to sustain the tax credit.

The American Conference Institute (“ACI”) will hold its 26th FDA Boot Camp conference in Boston, Massachusetts from September 30 to October 1, 2015.  A copy of the conference program can be obtained here.  Hyman, Phelps & McNamara, P.C.’s Kurt R. Karst will co-chair the event with Kleinfeld, Kaplan & Becker, LLP’s Scott M. Lassman.  The conference will include presentations from a virtual “who’s who list” of FDA regulatory experts on myriad topics, including the approval process, pre-approval concerns, product labeling, clinical trials, adverse events reporting, and patent and non-patent marketing exclusivity issues.

ACI will also hold its 3rd annual Paragraph IV Disputes Master Symposium in Chicago, Illinois from September 30 to October 1, 2015, with a post-conference workshop on October 2nd.  A copy of the conference program can be obtained here.  The conference features presentations from preeminent patent litigators representing brand-name and generic drug manufacturers, leading in-house counsel, and esteemed jurists and government representatives who will discuss, analyze, and interpret the latest controversies affecting Paragraph IV litigation.  Hyman, Phelps & McNamara, P.C.’s James C. Shehan will be speaking at the conference. 

FDA Law Blog is a media partner for both conferences.  As such, we can offer FDA Law Blog readers a special $200 discount off the current price tier.  The discount code is: FDA200.  We look forward to seeing you at the conferences.

By James E. Valentine* –

The enactment of FDASIA, including the fifth reauthorization of PDUFA, really put patient engagement on the radar beyond some of the traditionally active disease communities (e.g., HIV/AIDS, cancer, neurological diseases).  FDASIA’s section 1137, the provision on Patient Participation in Medical Product Discussions, led FDA to seek input on “strategies to solicit the views of patients during the . . . development process and consider the perspectives of patients during regulatory discussions” (see our prior coverage here).  Meanwhile, CDER and CBER have been busy fulfilling their commitment to host at least 20 Patient-Focused Drug Development (PFDD) meetings on specific disease areas during fiscal years 2013-2017.

On July 2, 2015, CDER/CBER will announce the selection of the final set of disease areas to cover as part of the PFDD initiative under PDUFA V:

• Alopecia areata
• Autism
• Hereditary angioedema
• Non-tuberculous mycobacterial infections
• Patients who have received an organ transplant
• Psoriasis
• Neuropathic pain associated with peripheral neuropathy
• Sarcopenia

With the addition of these eight meetings, FDA is on target to have held 24 in total—four more than the minimum of 20 that the Agency committed to under PDUFA V. 

The PFDD meetings have helped advance a systematic approach to gather patients’ input on their condition and treatment options, and provide what FDA has deemed “the therapeutic context” for weighing benefits and risks of investigational products for the given disease.  This is accomplished through the inclusion of information synthesized from the PFDD meetings in the first two rows of the structured benefit-risk framework (sB/R) (see below).  The framework was rolled out in March 2015 in CDER’s review of NME NDAs and Original BLAs.   

However, it appears one industry trade group sees this sB/R framework as a platform with greater utility.  In a white paper released in June 2015 by the Biotechnology Industry Organization (BIO) (soon to be renamed the Biotechnology Innovation Organization), the industry group recommends that the perspectives of patients be a standard component of decisions that are made during discussions behind closed doors between sponsors and FDA.  As BIO sees it, the sB/R framework holds the potential to serve as the bridge between patient input and regulatory decisions.  But in order for this to work, patient input should begin when initiating a development program, and the sB/R framework needs to be used early and often in considerations by both sponsors and FDA.

The BIO white paper provides a comprehensive set of recommendations for incorporating patient feedback into the sB/R framework and using the framework during key points of a product’s lifecycle to ensure transparency on the key areas of judgement for regulatory decision-making.  Here are a few recommendations this blogger found noteworthy that bring the patient perspective earlier in the development lifecycle:

Early Stage Development (Pre-IND to Phase 1)

In the early stages of development, a sponsor has the ability to describe the development rationale for a new medicine in the context of the benefit-risk framework and use this information to screen compounds.  To obtain input from patients, BIO recommends that sponsors consider organizing meetings with a representative group of patients and caregivers, including patient advocacy groups (PAGs), to engage in a dialogue around the burden of the condition and the current armamentarium of treatment options.  This information would be summarized in the first to lines of the sB/R framework.  This early stage, qualitative activity appears similar in scope to the discussions at FDA-hosted PFDD meetings.

In addition, BIO recommends that sponsors employ methods to gather robust and representative data that could be used in regulatory decision-making, such as patient surveys and stated choice studies, to assess patient preferences and perspectives on benefit-risk considerations and integrate this information into the framework summary.

To date, this quantitative approach to incorporating the patient perspective has been endorsed by FDA only for the review of medical devices (see our coverage on Patient Preference Information draft guidance here).  However, patient advocacy groups have taken their own initiative to collect patient preference information for use in drug review (e.g., Parent Project Muscular Dystrophy’s risk tolerance survey) and CDER officials have suggested that “more systematic collection of patients’ experience” would be considered in future iterations of PFDD. 

BIO postulates that, in sum, incorporating these patient perspectives in submissions to FDA (e.g., briefing materials for milestone meetings) will assist the sponsor and FDA in developing an aligned sense of the status quo.  It may also provide an opportunity to identify and discuss potential differences in opinion between the two parties early in development.

Mid-to-Late Stage Clinical Development (Phase 2 to Pre-NDA/BLA)

Here, the targeted benefit-risk profile of an investigational drug continues to be investigated and refined so the focus shifts to designing registration trials that ideally reflect an alignment between the sponsor’s and FDA’s perspectives on the clinical context.  BIO sees a role for the sB/R framework to facilitate this evolving dialogue.

In preparation for the end-of-phase 2 meeting, BIO recommends that sponsors obtain further patient preference input from patient organizations in the context of data emerging over the course of development.  This would allow sponsors to gain insight into evolving views of the drug candidate.  BIO suggests measures such as non-disclosure agreements to protect any confidential commercial information.  This qualitative and quantitative patient feedback would be summarized in the bottom three rows of the sB/R framework, as well as the summary assessment.  This recommendation is novel in that it expands the inclusion of patient input beyond the contextual information contained in the first two rows of the framework, now including product-specific input. 

BIO suggests including the updated sB/R framework in the end-of-phase 2 meeting document to serve as an early opportunity for FDA to hear the voice of the patient as it relates to the specific drug candidate benefit and risk attributes, as well as Phase 3 clinical trial development considerations (e.g., size and complexity, recruitment and enrollment strategies, use of endpoints, the clinical outcome measure).

Other opportunities to share the patient perspective, as well as to concisely summarize available data and other factors considered by the sponsor, through the sB/R framework include at pre-NDA/BLA and other late stage meetings and at advisory committee meetings.  BIO also requests that FDA integrate the sB/R framework in the decision memo at the time of approval to communicate the reasoning behind the Agency’s decisions, such as which benefits, risks, or other factors were considered and how they were weighed.  In the event of a Complete Response Letter, BIO requests that FDA provide the sponsor with the framework as documentation of those same factors, but not to release that information to the public.

Shifting to PDUFA VI

While BIO’s recommendations could be implemented at any time, to establish buy-in by FDA, there is an opportunity to present and discuss such proposals during the negotiations for the next reauthorization of PDUFA.  FDA is hosting a public meeting on July 15 to initiate the reauthorization process.  Once under way, there will be opportunities for industry and other stakeholders, including patient advocacy groups, to participate in the process.  A second iteration of PFDD is bound to be a hot topic.

*Admitted only in Maryland. Work supervised by the Firm while D.C. application pending.

By John R. Fleder –

Although there are many areas where practitioners and others disagree regarding the FDC Act, there is at least one subject that seems to generate universal agreement: FDA has the authority to issue a Form 482 to a companies subject to inspection under 21 U.S.C. § 374, and those companies have no right to refuse FDA’s entry to a facility.  FDA has publicly articulated this principle many times and acted accordingly when questioned at the front door by a company that questions FDA’s right to inspection without a warrant and without the firm’s consent.  Indeed, this author clearly publicly advocated that position in 1989 when employed by the Department of Justice.  Administrative Inspections by the Food and Drug Administration:  The Role of the Department of Justice, 44 Food Cosmetic Law Journal 297 (July 1989).

That article cited many district court and courts of appeals rulings involving FDA supporting that principle.  Those courts generally concluded that FDA-regulated industries are “closely regulated,” thereby exempting FDA from needing a warrant to conduct an inspection.  Id. at 298-99.   However, the article also cited to two FDA cases that concluded that FDA could not ordinarily compel an inspection of a regulated company without a warrant unless FDA obtained the consent of the establishment to be inspected.  Id. at 299 (U.S. v. Kramer Grocery Co., 418 F.2d 987 (8th Cir. 1969) (here) and U.S. v. Stanack Sales Co., 387 F.2d 849 (3d Cir. 1968) (here)).  The article noted that these two rulings preceded two Supreme Court cases that had ruled that other federal agencies had the right to conduct administrative inspections without the consent of the regulated entity and without a warrant:  U.S. v. Biswell, 406 U.S. 311 (1972) (the firearms industry) (here) and Colonnade Catering Corp. v. U.S., 397 U.S. 72 (1970) (the liquor industry) (here).  The article also cited to the legislative history of FDC Act for the proposition that warrantless and compelled inspections by FDA were appropriate and would not violate the Fourth Amendment.   Administrative Inspections by the Food and Drug Administration:  The Role of the Department of Justice at 299.

In the intervening period of more than 25 years, the law in this area has not materially changed.  FDA has continued to proceed on the assumption that it has the statutory right to enter regulated companies’ premises by the mere act of issuing a Form 482, and that FDA does not need the actual consent of the establishment or a judicial warrant to enforce that right.  Few companies have challenged FDA’s position.  However, FDA has from time to time obtained “administrative warrants” from U.S. Magistrate Judges when companies have refused or limited an FDA inspection.

A very recent Supreme Court case indicates that the law in this area may be evolving in a direction that could provide FDA-regulated industries with an argument that most thought was unavailable, namely that perhaps FDA cannot insist that a company “allow” an FDA inspection based on issuance of a Form 482.   We do believe that the recent decision from the U.S. Supreme Court is at least worthy of discussion.

On June 22, 2015, the Court by a 5-4 vote decided City of Los Angeles v. Patel.  A group of motel operators and a lodging association had commenced a suit seeking declaratory and injunctive relief by making a facial challenge to a Los Angeles ordinance that requires hotel operators to make their registries concerning their guests available on demand to the police.  The ordinance provides for a criminal fine for a hotel operator’s failure to make guest records available to a police officer demanding the records.  Justice Alito’s dissent noted that the requirement to make those records available on demand had been in effect for 116 years.  Similarly, as noted above, FDA has enforced 21 U.S.C. § 374 by “compelling” inspections merely by issuance of a Form 482.  Similar to the Los Angeles ordinance, failure to “permit” an FDA inspection is a crime.  21 U.S.C. §§ 331(f) and 333.

First, the Supreme Court ruled that the plaintiffs could mount a facial challenge to the Los Angeles ordinance even though the plaintiffs had not been fined or had refused to comply with a police demand for hotel registry documents.  Next, the Court examined whether there was merit to plaintiffs’ argument that hotel operators could mount a challenge if and when the police demanded records pursuant to the ordinance.  The Supreme Court ruled that the ordinance’s requirement that hotel operators make their registries available to the police on demand was unconstitutional “because it penalizes them for declining to turn over their records without affording them any opportunity for precompliance review.”  Slip Op. at 1.

In examining whether the police needed a warrant to force operators to provide records, the Court rejected the argument that no warrant was required even though the police had “special needs” independent of conducting a criminal investigation, namely to ensure compliance and deter criminals from operating on a hotel’s premises.  However, the Court then noted that absent consent, exigent circumstances or the like, the subject of an administrative search “must be afforded an opportunity to obtain precompliance review before a neutral decision maker.”  Slip Op. at 10.  The Court concluded that absent an opportunity for a hotel operator to get precompliance review, the ordinance posed a risk that an administrative search would exceed statutory limits or be used as a pretext to harass hotel operators and their guests.

The Court noted that the police could issue an administrative subpoena seeking records “without probable cause that a regulation is being infringed.”  Slip Op. at 11.  FDA would certainly argue that a Form 482 is at least analogous to an administrative subpoena and that even if this case applies to FDA, FDA investigators need do nothing more than what they are doing today, namely issuing Form 482s.  However, the plaintiffs in Patel suggested to the Court that even when a subpoena is issued, the hotel operators need to be able to move to quash the subpoena before any search of records takes place.  The Court adopted this argument.

Los Angeles argued that these procedures should not be applied to the ordinance because it “is facially valid under the more relaxed standard that applies to searches of this category of businesses,” namely “closely regulated” industries.  Slip Op. at 14.   The Court addressed this argument by noting that in the past 45 years, it had only identified four industries, liquor sales, auto junkyards, firearms dealings, and mining as having had “such a history of government oversight that no reasonable expectation of privacy … could exist for the proprietor over the stock of such an enterprise.”  Slip Op. at 14.  Notably absent from the cited list are industries regulated by FDA.  Perhaps the reason is that in those 45 years no case involving FDA on that issue has come up to the Supreme Court.

The Court discussion of those four industries cites to Colonnade Catering and Biswell, the two Supreme Court decision that lower courts have relied on for the proposition that FDA can conduct warrantless inspections.  The Court noted, however, that defining an industry as being “closely regulated” is the exception and that classifying hotels as being pervasively regulated “would permit what has always been a narrow exception to swallow the rule.”  Slip Op. at 14.  Los Angeles unsuccessfully argued that hotels have been subject to warrantless searches for decades.

The Court then concluded that even if hotels are pervasively regulated, the ordinance at issue would be reasonable under the Fourth Amendment only if it passed three other tests: (1) there is a substantial government interest in the regulatory inspection scheme; (2) warrantless inspections are necessary; and (3) the statute’s inspection program in terms of certainty and regularity of its application provides a constitutional substitute for a warrant.  Slip Op. at 16.  The Court concluded that the ordinance failed the second and third requirements.  The Court suggested that even assuming the need for the element of surprise, it was not apparent that the police could not obtain an ex parte warrant after being refused entry.

Finally, the Court stated that while it has upheld inspections of closely regulated industries that call for searches at least four times a year or on a regular basis, the ordinance at issue imposed no comparable standard.  Slip Op. at 17.  In contrast, FDA inspects very few companies on what anyone could argue is a “regular basis.”

It is here that the Patel case raises the most interesting issues.  Until now, most commentators looked at whether an industry is closely regulated according to the length and scope of the agency’s regulation of that industry.  On that basis, three justices dissenting in the case concluded that the hotel industry is indeed “closely regulated.”  However, Patel arguably changes that analysis by focusing on whether a police officer is given too much discretion as to which hotels to “search” and whether the industry in question is subject to frequent inspections as opposed to occasional and sporadic inspections.   If these are the criteria for determining whether an industry is closely regulated, an interesting challenge could be mounted to FDA’s status as “closely regulating” the industries it regulates.

So where does that leave us?  We suspect that few companies regulated by FDA should want to risk the ire of FDA and the possibility of facing severe sanctions by refusing to “permit” an FDA inspection.  FDA will surely continue to argue that FDA industries are closely regulated and fit within the line of Supreme Court cases that allow for warrantless inspections and no opportunity for a company to obtain judicial review before FDA enters premises pursuant to a Form 482.  It is certainly not the point of this posting to provide anyone with legal advice and to advocate that companies should incur the risk and expense of challenging FDA on this topic.

However, the law in this area seems murkier than most commentators would have thought before Patel was decided.  Can companies legally tell FDA that they can refuse entry by an FDA inspector until the company gets “preenforcement review”?  Will someone file the same type of preenforcement judicial challenge to FDA’s warrantless scheme, the way the hotel operators did in Patel?  Must FDA get a warrant before it can legally “force” a company to “permit” an inspection?  Will courts rule that FDA inspections do not require warrants and that preenforcement judicial review is not available?  We may or may not see answers in the foreseeable future.  Who knows when and even whether someone will make these arguments to challenge FDA’s authority.

By Andrew J. Hull* –

Only one day before the product-tracing provisions of the Drug Supply Chain Security Act (“DSCSA”) were set to take effect for dispensers, FDA issued a Guidance Document for immediate implementation that signals FDA’s intention to delay any use of enforcement for failure to comply with the DSCSA’s two major product-tracing requirements for dispensers until November 1, 2015.  These provisions, which take effect on July 1, 2015, require that a dispenser (1) not accept ownership of a product without receiving the necessary product-tracing information (i.e., transaction history, transaction information, and transaction statement), and (2) capture and maintain such information for at least 6 years.  See FDCA § 582(d)(1)(A)(i), (iii).  The Guidance Document comes just over a week after pharmacist associations wrote a letter to FDA asking for an extension of time for compliance with these requirements (see our previous post here).

Noting that many dispensers intend to use an electronic system to capture and maintain product-tracing information, FDA recognized “that some dispensers may need additional time beyond July 1, 2015, to work with trading partners to ensure that the product tracing information required by section 582 [of the FDCA] is captured and maintained by dispensers.”  Guidance Document at 3.  While FDA does not intend to take action against dispensers who fail to receive product-tracing information upon acceptance of ownership or who fail to capture and maintain such information, it does recommend that dispensers “work with the previous owner[s] to receive this information” in order to fulfill their additional obligations under the DSCSA to identify and investigate suspect and illegitimate product.  Id. 

The Guidance Document reminds prescribers, however, that they are not completely off the hook until November 1, including when it comes to their product-tracing responsibilities.  Prescribers must still only engage in transactions with authorized trading partners, and they must ensure proper handling of suspect and illegitimate product.  Additionally, under the product-tracing requirements in section 582(d) of the FDCA, dispensers engaged in transactions with subsequent owners must still pass along the appropriate product-tracing information, effective July 1.  Guidance Document at 3; see FDCA § 582(d)(1)(A)(ii).

* Admitted only in Virginia.  Work supervised by the Firm while D.C. application pending.

By Ricardo Carvajal –

As directed under FSMA, FDA issued draft guidance on its approach to implementation of the Voluntary Qualified Importer Program (VQIP).  In exchange for voluntarily subjecting themselves to an initial round of heightened scrutiny, importers who are approved for participation in the program can expect a range of benefits that could have a significant commercial impact.  The Q&A section of the draft guidance begins with a focus on those benefits, to include:

• Expedited entry for all foods included in an approved VQIP application – in essence, immediate release of shipments “unless examination and sampling are necessary for public health reasons”;
• Examination and sampling limited to “’for cause’ situations (i.e., when the food is or may be associated with a risk to the public health), to obtain statistically necessary risk-based microbiological samples, and to audit VQIP”;
• Examination and sampling at the location preferred by the importer;
• Expedited laboratory analysis of “for cause” or audit samples “to the extent possible in accordance with public health priorities”; and
• Access to a VQIP Importers Help Desk.

The benefits described above have obvious appeal to any importer that has experienced a disruption of its operations as a result of an FDA hold on an imported food shipment.  However, as the remainder of the draft guidance makes clear, those benefits won’t come cheap.  There are numerous eligibility criteria that must be satisfied, but the ones that we believe merit greatest attention are these: 

• Neither the importer nor any non-applicant entities associated with the food can be “subject to an ongoing FDA administrative or judicial action…, or have a history of significant noncompliances relating to food safety” (“non-applicant entities” are defined as “those entities associated with a VQIP food that conduct activities throughout the supply chain necessary for ensuring that the eligibility requirements of VQIP are met,” and include the FSVP or HACCP importer, the foreign supplier, and the filer/broker);
• Demonstration of compliance with supplier verification “and other importer responsibilities under the applicable FSVP, juice HACCP, or seafood HACCP regulations”; and
• Development and implementation of a VQIP Quality Assurance Program (QAP).

The first criterion described above suggests that a fair amount of due diligence will be expected on the part of any importer that hopes to gain approval.  The second criterion essentially summarizes what will be required under the Foreign Supplier Verification Program.  But the third criterion is where the rubber really meets the road.  The QAP is described as “a compilation of the written policies and procedures you will use to ensure adequate control over the safety and security of the foods you import,” and must include the following “as applicable”:

• Corporate quality policy statement that relates to “food safety and security throughout the supply chain,” and an explanation of how it is communicated to and understood by all non-applicant entities involved in implementation;
• Organizational structure and functional responsibilities for the importer, and functional responsibilities for non-applicant entities;
• Food safety policies and procedures implemented to ensure food safety “from source to entry”;
• Food defense policies and procedures, including “procedures for controlling the safety and security of each VQIP food throughout the transportation supply chain”;
• Experience and training for responsible employees;
• Procedures for ensuring QAP implementation, and auditing and updating as needed;
• Records “relating to the structure, processes, procedures, and implementation of the QAP,” which must be made available to FDA upon request; and
• References relied on in development and implementation of the QAP.

It seems clear that development and implementation of a QAP that will pass muster with FDA will be a resource-intensive endeavor.  It may be impossible to anticipate how many importers will be willing to take on that burden (and also bear the other costs, including the estimated annual fee of @ $16k) in exchange for the benefits promised by FDA.  In any case, FDA plans to limit the number of applications in the first year of operation to approximately 200, depending on the agency’s resources.  Whether that limit is reached could prove to be a good indicator of whether FDA has struck the right balance between benefits and costs of participation.

Comments on the draft guidance are due by August 19.

By Jennifer D. Newberger – 

Devices intended to be reprocessed and used on more than one patient are required to be directly marked with a unique device identifier (UDI).  21 C.F.R. § 801.45.  If, however, the direct marking “would interfere with the safety or effectiveness of the device,” the regulation provides an exception from the requirement.  21 C.F.R. § 801.45(d)(1).

The exception in the regulation does not depend on which type of premarket review the device underwent, i.e., de novo classification, 510(k) notification, premarket approval (PMA) or biologics license application (BLA) approval.  FDA recently issued a draft guidance, however, that—intentionally or unintentionally— appears to make just this distinction.

In Unique Device Identification: Direct Marking of Devices (June 26, 2015), FDA states that when a device has been cleared through the 510(k) or de novo process, the sponsor should “conduct analysis and/or testing to determine whether direct marking could significantly affect the safety or effectiveness of the device” and document the decision in the design history file (DHF).  Draft Guidance, at 7.  The draft guidance then states that, if the direct marking would interfere with the safety or effectiveness of the device, the exception would apply.  If the company nevertheless chooses to directly mark the device, then a new 510(k) would be required.

The process described above is how the decision-making process ideally should proceed for all devices, regardless of classification or regulatory pathway.  First, the manufacturer decides whether directly marking the device will affect safety or effectiveness.  If so, that decision is documented in the DHF, and the company can take advantage of the exception and not directly mark the device.  If the company still chooses to directly mark the device, doing so will require a new 510(k), or PMA or BLA supplement.  If the manufacturer determines that directly marking the device will not affect safety or effectiveness, then the device must be directly marked, and no premarket submission is required, e.g., no new 510(k) or PMA or BLA supplement.

The draft guidance, however, is ambiguous as to whether this decision making process is the same for all devices.  As an initial matter, to address whether directly marking a device would require a new 510(k), PMA supplement, or BLA supplement, FDA split the answer in two, depending on the regulatory pathway of the device subject to the direct marking requirement.  As discussed above, it first addressed the process with respect to products cleared through the de novo or 510(k) process.

The draft guidance then specifically addresses devices approved in a PMA or BLA.  This additional discussion is ambiguous, and seems to be saying that devices approved through a PMA or BLA cannot take advantage of the exception. 

For instance, in the discussion of 510(k) or de novo devices, the draft guidance explicitly says that if the manufacturer determines the direct marking would affect the safety or effectiveness, the manufacturer can “make use” of the exception that would permit the manufacturer not to directly mark the device.  But there is no such language in the discussion of devices that are PMA or BLA approved.  Instead, the draft guidance states that if adding a UDI direct marking would affect the safety or effectiveness of the device, the addition of the direct marking “will” require a supplemental PMA or BLA.  Unlike the paragraph discussing devices cleared through the 510(k) or de novo process, the draft guidance does not state that the manufacturer may make use of the exception. 

If this reading is correct, the draft guidance appears to say that a manufacturer of a PMA or BLA cannot take advantage of the exception, as it could if the device were cleared through the 510(k) or de novo process.  As noted, this language is not very clear, and this outcome may not have been intended.  If that is the case, any final guidance issued should clarify that the exception to the direct marking requirement applies equally to all devices, regardless of classification or regulatory pathway. 

By Andrew J. Hull* - 

On June 22, three major pharmacists associations signed a letter to FDA asking the agency to use its enforcement discretion as pharmacies struggle to create appropriate product-tracing policies and practices before the July 1 compliance deadline under the Drug Supply Chain Security Act (“DSCSA”).  See FDCA § 582(d)(1)(A) (necessitating dispensers to comply with the DSCSA’s product-tracing requirements by July 1, 2015).  In the letter, representatives from the National Community Pharmacists Association (“NCPA”), the American Pharmacists Association (“APhA”), and the National Alliance of State Pharmacy Associations (“NASPA”) claimed that, while their organizations are striving to educate their members on the new law and to help them implement proper policies ahead of the deadline, many pharmacies are still inadequately prepared to comply with the product-tracing requirements.

Specifically, the organizations state that according to a survey of NCPA members, only half of the survey respondents have even been in contact with their wholesale distributors regarding how transaction information would be provided, and many were unaware of services provided by wholesale distributors to maintain and store information.  Additionally, less than 20 percent of respondents were aware of services provided by secondary wholesalers to maintain and store transaction information.

The organizations also expressed concern that the DSCSA does not require secondary wholesalers to provide dispensers with the necessary lot number information in a single document.  Because several secondary distributors have noted their intention to only provide this information on the individual bottles of medication, the organizations claim that pharmacies may be unable to comply with the DSCSA’s record retention requirements.

Referencing FDA’s December 24, 2014 guidance document stating that the agency would not enforce the DSCSA’s product-tracing requirements as they apply to manufacturers, distributors, and repackagers (set to take effect on January 1, 2015) prior to May 1, 2015 (see our previous post here), the organizations request FDA to use similar enforcement discretion by delaying the July 1 deadline for dispensers.  Arguing that such a delay in enforcement is necessary “to forestall potential disruptions in the pharmaceutical supply chain,” the organizations state that their members would continue to make “intense, concerted efforts toward full compliance.”

It will be interesting to see if FDA responds to these concerns even at this late date.  It did so before: FDA’s notification of enforcement discretion of the January 1, 2015 compliance deadline came only 8 days prior on December 24, 2014, right in the middle of the holiday season.  We suspect this decision will be based on whether FDA agrees that the industry still needs more time to implement these standards.  The efforts of these organizations to educate and inform their members should, however, provide FDA with assurance that the industry is taking the DSCSA’s product-tracing requirements seriously.

We will be closely watching to see if FDA releases any notification or guidance as the July 1 deadline approaches.

*Admitted only in Virginia. Work supervised by the Firm while D.C. application pending.

By Kurt R. Karst –      

We try our best to stay on top of the latest lawsuits against FDA, but every once in a while one gets past us without us quickly noticing.  That recently happened when Prometheus Laboratories Inc. (“Prometheus”) filed a Complaint and a Motion for Temporary Restraining Order and/or Preliminary Injunction in the U.S. District Court for the District of Columbia alleging that FDA violated the Administrative Procedure Act (“APA”), the FDC Act, and applicable regulations when the Agency largely denied a May 2013 Citizen Petition (Docket No. FDA-2013-P-0572) submitted by Prometheus concerning a single, shared Risk Evaluation and Mitigation Strategy (“REMS”) for irritable bowel syndrome drug Alosetron Hydrochloride Tablets (see our previous post here), and approved a generic version of the drug with its own REMS.  To our knowledge, it’s the first lawsuit against FDA challenging the Agency’s REMS authority. 

Approved under NDA 021107, Alosetron Hydrochloride Tablets is marketed by Prometheus as LOTRONEX only for women with severe diarrhea-predominant irritable bowel syndrome.  LOTRONEX is approved with a REMS with Elements To Assure Safe Use (“ETASU”) that restricts distribution of the drug.  Under the FDC Act, if a brand-name reference listed drug under an NDA is approved with an ETASU REMS, then a generic version of that drug that is the subject of an ANDA must also have an ETASU REMS.  (For a list of products subject to a REMS, see FDA’s database and our REMS Tracker.)  

Generally, NDA and ANDA sponsors share a single REMS system; however, the statute allows for a deviation from that single, shared system under certain circumstances.  Specifically, FDC Act § 505-1(i)(1)(B) states:

A drug that is the subject of an [ANDA] and the listed drug shall use a single, shared system under [FDC Act § 505-1(f)].  [FDA] may waive the requirement under the preceding sentence for a drug that is the subject of an [ANDA], and permit the applicant to use a different, comparable aspect of the elements to assure safe use, if [FDA] determines that—

(i) the burden of creating a single, shared system outweighs the benefit of a single, system, taking into consideration the impact on health care providers, patients, the applicant for the [ANDA], and the holder of the [RLD]; or

(ii) an aspect of the [ETASU] for the applicable listed drug is claimed by a patent that has not expired or is a method or process that, as a trade secret, is entitled to protection, and the applicant for the [ANDA] certifies that it has sought a license for use of an aspect of the [ETASU] for the applicable listed drug and that it was unable to obtain a license.

Prior to FDA’s consideration of a REMS for Alosetron Hydrochloride Tablets, the Agency granted a waiver from the singe, shared system requirement in only one instance – for Buprenorphine Transmucosal Products for Opioid Dependence.  That changed when FDA approved Roxane Laboratories, Inc.’s (“Roxane’s”) ANDA 200652 on May 4, 2015 for a generic version of LOTRONEX.  Roxane had previously requested a waiver from the single, shared REMS requirement, and FDA granted that waiver request when approving ANDA 200652, but with two conditions:

1.  Your waiver-granted REMS system shall be open to all current and future sponsors of ANDAs or NDAs for alosetron hydrochloride products.

2.  FDA is limiting the grant of the waiver to a term of three years.  If, at the end of the three-year period, Roxane seeks to continue marketing pursuant to the waiver, the Agency will evaluate whether an extension of the waiver is appropriate at that time.

A copy of the ETASU REMS FDA approved with respect to Roxane is available here. 

Prometheus alleged in the company’s lawsuit against FDA that the Agency’s decision to grant a waiver from the single, shared REMS system approved for LOTRONEX violated the law and puts patients as risk.  According to Prometheus:

The statute does not contemplate the attachment of any qualifications or conditions upon the waiver: either a generic drug qualifies for a waiver or it does not. 21 U.S.C. § 355-1(i)(1)(B).  In approving Roxane’s generic version of LOTRONEX®, however, FDA granted a waiver of the statutorily required single, shared REMS that was subject to Roxane meeting two conditions.  Because the statute does not contemplate attaching qualifications or conditions to the waiver, FDA’s conduct is unlawful, arbitrary and capricious and otherwise violates the [APA].  In addition, FDA’s grant of a waiver also was unlawful, arbitrary and capricious because it failed to meet the statutory requirements for a waiver. . . .

By creating two distinct REMS programs, FDA has increased and complicated the compliance obligations imposed on prescribers and pharmacists, which almost certainly will increase the occurrence of prescribing and dispensing errors and undermine the clarity and quality of the communications from prescribers and pharmacists that FDA has determined patients need to assure the safe use of alosetron hydrocholoride. . . .  By approving a separate REMS for the Roxane product, FDA has created a risk of confusion or error that can result in the wrong patient taking alosetron hydrochloride, in patients not taking the drug correctly, and in patients not appropriately responding to the symptoms that can signal a serious adverse event.

FDA and Intervenor-Defendant Roxane alleged in their opposition papers (here and here) that the lawsuit was merely a last-ditch effort by Prometheus to delay generic LOTRONEX competition.  Thus, for example, FDA alleges that:

after dragging its feet for more than three years rather than collaborate with Roxane, Prometheus asks this Court to take immediate and extraordinary action to require FDA to rescind or stay its approval of Roxane’s application, arguing that FDA has acted unlawfully by approving Roxane despite the absence of the single, shared system whose very development Prometheus itself blocked. . . .  Prometheus will face generic competition inevitably, and its pretextual appeals to safety as a means to delay that competition fall flat.  The fact that Prometheus does not like FDA’s decision does not render that decision invalid.  And no amount of gamesmanship by Prometheus can change the fact that the public interest is best served where, as here, the twin goals of increasing availability of lower-cost alternatives and ensuring the safety of marketed drugs are both advanced.

In a May 21, 2015 Minute Order, Judge James E. Boasberg denied Prometheus’ Motion for Temporary Restraining Order (the company’s Motion for a Preliminary Injunction was withdrawn), and set a schedule for Prometheus’ Motion for Summary Judgment, which was expected on June 17, 2015.  But that didn’t happen.   On June 11, 2015, Prometheus filed a Notice of Voluntary Dismissal Without Prejudice dismissing all claims in the action.  And so the case ended before it really began. 

By Jennifer D. Newberger –

To further its efforts to balance risks and benefits with respect to approving medical devices through the premarket approval (PMA) pathway or utilizing the de novo classification process, FDA has now issued a draft guidance, "Factors to Consider When Making Benefit-Risk Determinations for Medical Device Investigational Device Exemptions (IDEs)" (Draft Guidance).  FDA states that a primary purpose of the draft guidance is “to clarify the factors that FDA considers when assessing risks and anticipated benefits for approving IDE studies, and how uncertainty may be offset by a variety of risk mitigation measures which can assure appropriate patient and research participant protections in investigational research settings.”  Draft Guidance, at 5 (emphasis in original).

The draft guidance states three considerations made by FDA in assessing the benefit-risk of an IDE:  1) the stage of development of the device, 2) the maturity of the proposed technology, and 3) the availability of non-clinical testing to complement or replace the need for clinical testing.

FDA acknowledges that “device investigations during different stages of development are generally associated with different types of risk, and different levels of uncertainty.”  Draft Guidance, at 12.  For example, “a greater degree of uncertainty is expected for novel technologies, and at earlier stages of device development, such as first in human or early feasibility trials, while relatively more certainty is expected in traditional feasibility and pivotal trials.”  Id.  The benefit-risk assessment “should focus on whether a proposed study is well-designed to meet its stated objectives as appropriate to the stage of development for the investigated device.”  Id.

FDA also recognized the importance of non-clinical data in potentially obviating or reducing the need for additional clinical testing “to evaluate certain aspects of device design or performance.”  Id.

As with its guidance on benefit-risk determinations for PMAs and de novo submission, the IDE draft guidance addresses the role of patient preference in weighing risks and benefits.  The Draft Guidance notes that patients may consider various risks and benefits in a manner different from their family or physician, and also that some patients may be willing to take on higher risks to achieve a small benefit, while others are risk averse.  FDA says it intends to evaluate these different factors in its review of IDE submissions. 

An important part of assessing the benefits and risks are the mitigations put in place to manage the risks.  Such measures may include building safety features into the device, use of protective measures, and communication of safety information.  The Draft Guidance notes that “the preferred hierarchy of risk mitigation is to first attempt to eliminate the risk, then if this is not possible, to design and implement protective measures, and communicate the residual risk to patients and operators such as by labeling.”  Draft Guidance, at 20.

The Draft Guidance describes FDA’s assessment of the benefits to the study subjects as well as to others.  Key elements include the type of benefit, magnitude of the benefit, probability of the participant experiencing one or more benefits, and duration of the effect.  FDA will also consider the extent to which the “study will yield generalizable knowledge about the disorder or condition being studied.”  Draft Guidance, at 22.

Similar to the benefit-risk considerations for PMAs and de novo classifications, FDA also says it will consider the following:  characterization of the disease, availability of alternatives, subject tolerance for risk and perspective on benefit, uncertainty, and least burdensome study design.

The Draft Guidance concludes with an appendix that describes the benefit-risk information that an IDE sponsor should include in its submission. A second appendix provides hypothetical examples of summary benefit-risk assessments.  It is encouraging that FDA continues to focus on the balance between benefits and risks, recognizes that pre-clinical data can reduce clinical requirements, and recognizes that there may be different considerations for different patient populations. 

By Kurt R. Karst & Josephine M. Torrente – 

An article recently published in The BMJ (formerly known as the British Medical Journal), titled “Comparison of content of FDA letters not approving applications for new drugs and associated public announcements from sponsors: cross sectional study,” and co-authored by several FDAers, drew a lot press (see, e.g., here, here, and here).  The article describes the results of an internal FDA review of 61 Complete Response Letters (“CRLs”) issued between August 11, 2008 and June 27, 2013 (48 for NDAs and 13 for BLAs) attempting to compare the reasons identified in those CRLs for not approving a product with the respective applicants’ public statements regarding the CRL.  The article includes a lot of statistics and little context; for example: 

• NDAs were less likely than BLAs to have a press release associated with a CRL, with a relative risk of 0.79 (95% confidence interval 0.66 to 0.95);  however no information was provided on whether the CRL was a material event to the applicant in more of the BLA cases than the NDA cases.
• Of the 33 CRLs mentioned in both press releases and U.S. Securities and Exchange Commission filings, 7 of the filings (21%) included a statement with more information from the CRL than the press release; however, no information was provided on how many of the CRL applicants were subject to SEC reporting requirements.
• Of 32 CRLs calling for a new clinical trial (for safety or effectiveness), 19 (59%) had “matching” press release statements; “matching” was defined as “[a]ny press release statements that covered the same issues as statements in corresponding [CRLs]”;
• Press releases were not issued for 11 of 61 CRLs (18%) sent between August 2008 and June 2013; however, again, no information was provided on whether the CRL was a material event to the applicant in more of the BLA cases than the NDA cases;
• Press releases did not match CRL statements in 13 instances; and
• Press releases matched 93 of the 687 reasons (14%) FDA stated in a CRL for not approving a product; however, no information was provided on how many of the FDA’s stated reasons were material.

Such a lack of context renders these statistics largely uninformative – but perhaps the article is more focused on advancing FDA’s years-long push to circumvent applicable FOIA exemptions by pressuring industry to make CRLs public.  The authors acknowledge as much near the end of the paper in a section titled “Policy considerations.”  There, the authors state:

Our analysis of the content of press releases indicates that they are incomplete substitutes for the detailed information contained in [CRLs].  Disclosure of [CRLs] would allow the FDA to increase the overall transparency of its regulatory processes, providing greater awareness of the agency’s role in protecting health and combating misperceptions regarding the basis for non-approval of a drug.  It would also allow for broader and more informed public discussion by relevant stakeholders (such as patients, clinicians, researchers, and public health advocates) of the scientific and regulatory reasons for the FDA’s actions.  The need for increased transparency, however, must take into consideration the legal requirement to protect sponsors’ trade secrets and confidential business information.

FDA’s campaign to obtain public release of CRLs spans at least 5 years but appears to be growing in intensity.  Back on May 19, 2010, FDA’s Transparency Task Force, chaired by then-Principal Deputy Commissioner Joshua Sharfstein, issued a report with 21 proposals that would allegedly improve transparency across a variety of FDA activities.  Proposals 13 states:

FDA should disclose the fact that the Agency has issued a refuse-to-file or [CRL] in response to an original NDA, BLA, or an efficacy supplement for an NDA or BLA at the time the refuse-to-file or [CRL] is issued, and should, at the same time, disclose the refuse-to-file or [CRL], which contains the reasons for issuing the letter.

As legal experts noted after the May 2010 release of FDA’s Transparency Task Force report, the Agency’s “application and data disclosure proposals in particular raise serious concerns for many regulated companies which consider product application information to constitute commercially sensitive trade secret information, the disclosure of which could give competitors significant advantages.”  They continued, stating that “[t]he Task Force largely dismisses such concerns by concluding that such information is not competitively useful, and stating that even though FDA regulations have historically shielded application-related information from disclosure, ‘a substantial amount of [such] information…does not fall under FDA’s definition of trade secrets as confidential commercial information.’”   Not competitively useful?  We beg to differ.  We seem to recall a similar position during discussions as to whether or not certain bioequivalence studies intended to support ANDA approval should be reported on ClinicalTrials.gov (see our previous post here).  Some bioequivalence studies are currently reported and their listing and status are regularly monitored for competitive purposes.  CRLs, if they’re made public, would also be used to gain a competitive advantage.

Since May 2010, FDA has made clear its continued interest in the topic of releasing CRLs.  In 2011, FDA released, with the sponsor’s permission, parts of a CRL ahead of an advisory committee meeting, causing a feeding frenzy among some in the press (see here).  The issue popped up again in February 2013 when then-FDA Commissioner Margaret Hamburg briefly indicated during a congressional briefing sponsored by Faster Cures and the Friends of Cancer Research that FDA is working with industry to find a way for it to make CRLs public (see here and here).  

The interest, however, may stem more from Agency frustration at having to remain moot in the face of some applicants’ statements regarding overly conservative or apparently arbitrary Agency action rather than from a public-health-driven concern about transparency, as is apparent both in CDER presentations (see here) and remarkable recent FDA statements skirting the lines established by FOIA (see, e.g., here). While FDA’s frustration is palpable, and maybe even justified in some situations, it’s certainly not sufficient reason to undercut one of the basic tenets of drug development – that interactions with the Agency on an unapproved product (including the very submission of an NDA) are not disclosable by the Agency.

The BMJ authors suggest 3 possible approaches to greater parity between CRLs and press releases:  (1) sponsors could release CRLs themselves; (2) sponsors could issue “more complete press releases; or (3) FDA could release CRLs” – but note that option 3, they note, “would likely require a change in FDA’s regulations.”  Indeed. 

The easier path then would be for FDA to exert pressure on applicants (or their trade groups) to arrive at option 1 – voluntary release of CRLs.  And perhaps The BMJ paper, rather than being an unbiased review of all applicable considerations by experts in FDA matters, SEC disclosures, fiduciary duties and competitive harm, is more of a directed advocacy piece by a hardly unbiased agency.

Beware of caving into the pressure readers!  CDER has already signaled that it will not stop at CRLs but that it wants authority to release meeting minutes next. 

By Jeffrey K. Shapiro –

Last week, Senators Richard Burr and Al Franken introduced legislation aimed at easing the burdens of the Food and Drug Administration’s (FDA) review of devices.  The bill is called “The FDA Device Accountability Act” (FDAA).   A copy of the press release announcing the bill is available here, and a one-page summary of the bill is available here.

The FDAA: (i) extends application of the “least burdensome” requirement to premarket application (PMA) reviews and to all significant decisions, and adds training, review and auditing of FDA’s application of the requirement; (ii) explicitly permits non‑local or centralized IRBs for device clinical trials; and (iii) requires FDA to update its existing regulatory guidance to clarify the criteria for waiving CLIA requirements, specifically certain considerations for in vitro diagnostics.

These reforms are all worthy; however, as discussed below, the first reform relating to the “least burdensome” requirements is unlikely to achieve the hoped‑for results. 

What are the “least burdensome” requirements?  In 1997, the Food and Drug Administration Modernization Act (FDAMA) added two provisions to the Federal Food, Drug, and Cosmetic Act (FDCA).  One provision, relating to 510(k) reviews, was section 513(i)(1)(D).  It states:

Whenever [FDA] requests information to demonstrate that devices with differing technological characteristics are substantially equivalent, [FDA] shall only request information that is necessary to making substantial equivalence determinations.  In making such a request, [FDA] shall consider the least burdensome means of demonstrating substantial equivalence and request information accordingly.

The other related to clinical data.  In connection with “determination meetings” to obtain a written statement of the clinical data required to obtain PMA approval, section 513(a)(3)(D)(ii) states:

Any clinical data, including one or more well-controlled investigations, specified in writing by [FDA] for demonstrating a reasonable assurance of device effectiveness shall be specified as a result of a determination by [FDA] that such data are necessary to establish device effectiveness. [FDA] shall consider, in consultation with the applicant, the least burdensome appropriate means of evaluating device effectiveness that would have a reasonable likelihood of resulting in approval.

After FDAMA was enacted, it turned out that “determination meetings” were rarely held, which means the occasions for FDA to follow the foregoing mandate have also been rare.

FDA’s guidance on “least burdensome” summarizes the agency’s view of these provisions:

A central purpose of the Food and Drug Administration Modernization Act of 1997 (FDAMA) is ‘to ensure the timely availability of safe and effective new products that will benefit the public and to ensure that our Nation continues to lead the world in new product innovation and development.’  [Citation omitted.]  As can be seen in this statement, Congress’ goal was to streamline the regulatory process (i.e., reduce burden) to improve patient access to breakthrough technologies.

But FDA notes a caveat:  

While Congress wanted to reduce unnecessary burdens associated with the premarket clearance and approval processes, Congress did not lower the statutory criteria for demonstrating substantial equivalence or reasonable assurance of safety and effectiveness assurance of safety and effectiveness.

The FDAA bill summary asserts that implementation of the “least burdensome” over the years as been unsatisfactory:  “Unfortunately, these principles have not been consistently applied.”  Section 2 of the FDAA bill would reform the “least burdensome” requirement with the following directions to FDA.

• FDA must train all premarket review staff and supervisors in the “meaning and implementation” of the requirement. 
• FDA’s device ombudsman must conduct an audit of FDA’s implementation of the requirement within six months of the bill’s enactment and the report must be provided to Congress and posted on FDA’s web site.
• FDA must periodically assess the implementation of the requirement, including training.

In addition, the FDAA bill would explicitly extend the “least burdensome” requirement to requests for information during review of a PMA.  It also would require FDA’s summary of a “significant decision” during a premarket review to state how FDA applied the “least burdensome” requirement in reaching the decision.  (The “significant decision” documentation requirement was imposed on FDA in 2012 under the Food and Drug Administration Safety and Innovation Act (FDASIA), § 602.)

We do not disagree with Senators Burr and Franken that the “least burdensome” requirement since 1997 has been applied inconsistently.  Actually, we would go further and say that it has proven toothless.  FDA’s correspondence concerning data requirements typically has boilerplate language stating that the “least burdensome” requirement was “carefully” considered.  Yet, the burdens of device review still seem excessive in many cases, and there is no transparency as to how FDA actually applies the principle in any individual case.

But is the problem really one of “consistency” and “transparency”?  The FDAA bill proposes reforms on that premise.  In our view, these issues do not get to the root cause, which is that the “least burdensome” requirement is inherently subjective.  The fact is, FDA must make safety and effectiveness determinations according to statutory requirements.  The “least burdensome” requirement does not lower the safety and effectiveness requirements.  When FDA requires specific data, it is almost always because premarket review officials within the Office of Device Evaluation (ODE) have concluded that doing so is necessary for the product sponsor to meet the statutory requirements.

The true problem is not a misunderstanding on their part as to how to consistently apply a “least burdensome” requirement.  Rather, in most cases, the dispute is a disagreement between ODE officials and the applicant about how safety or effectiveness should be demonstrated.  So as long as there is no independent check on the judgment of ODE officials, they will generally decide these disputes in their own favor.  And that is what has generally happened since the “least burdensome” requirement was imposed in 1997.

At present, the applicant’s only slim hope is to seek supervisory review within FDA (21 C.F.R. § 10.75) and perhaps convince a supervisor that a less burdensome data requirement is adequate.  Unfortunately, it is only to practical to file such appeals a small percentage of the time, and the odds of success are low.  There is also an inherent conflict of interest in having the supervisor review the employee’s decision, as discussed here.  

Hence, the FDAA bill is correct in recognizing that the “least burdensome” requirement has not achieved its original intent.  However, it is questionable whether this package of reforms will have a meaningful impact.  On the plus side, the FDAA bill does seem likely to provide greater transparency about the rationale for FDA’s decisions when applying the “least burdensome” requirement.  The increased documentation will facilitate the additional requirement for FDA to periodically conduct internal assessments as to how it is doing in implementing the “least burdensome” requirement.  The training requirement will also help teach and remind reviewers about the requirement.  Thus, the FDAA bill should be successful as a consciousness‑raising exercise for the agency.

Nonetheless, at the end of the day, under this bill, FDA will continue to be the judge of its own “least burdensome” decisions.  It would be preferable for an independent entity to adjudicate these disputes, if an entity could be established with the expertise and resources to allow it master the details of each regulatory dispute, similar to what judges are expected to do in court cases.  The entity would also need to have the authority to overturn or reshape ODE’s data requirement determinations.  Otherwise, it seems unlikely that the general tenor of ODE’s decisions will change.

If it is not realistic to establish an independent entity such as this one outside of FDA, perhaps in the judicial or legislative branch, a next‑best alternative would to create a specific office within Device Center with the bureaucratic mission of handling appeals from ODE in an impartial manner.  For example, we put forward an idea long these lines a few years ago, which was basically to create a specialized Office of Appeals for Premarket Submissions (OAPS) (see our previous post here).  This independent entity could handle, among other things, disputes over the application of the “least burdensome” requirement.

The Burr and Franken bill is a worthy reform effort.  It might prove even more effective if it were broadened to attack the root cause of the disappointing results achieved so far with the “least burdensome” requirement.