By John A. Gilbert –

On March 16th, the U.S. House of Representatives passed by voice vote H.R. 639, the Improving Regulatory Transparency for New Medical Therapies Act, which would amend the Federal Food, Drug & Cosmetic Act (FD&C Act) and the Controlled Substances Act (CSA) to expedite scheduling of new chemical entities (“NCE”).  As reported in related blog postings (here, here, and here), this legislation is intended to address issues where the marketing of certain drugs approved by the Food and Drug Administration (FDA) have been delayed while waiting for Drug Enforcement Administration (DEA) scheduling action.  

The final version of H.R. 639 that passed is significantly different than the version introduced on February 2, 2015.  The final version amends not only the CSA, but also the FD&C Act and patent term extension laws.  In doing so, this legislation more directly addresses the crux of the issue, ensuring that companies do not lose patent or non-patent exclusivity on newly approved drugs because of drug scheduling delays.  If enacted, the bill would presumably moot pending litigation Eisai initiated against FDA concerning the triggering of NCE exclusivity for a controlled substance (see our previous post here).

H.R. 639 amends the FD&C Act in cases where HHS has recommended scheduling under the CSA by timing the effective date of FDA approval, conditional approval or indexing, as appropriate, for a drug, biological product, or animal drug to the DEA’s issuing of the interim final rule scheduling the product.  The bill also amends the CSA to require DEA to issue an interim final rule controlling a drug no later than 90 days after either: (1) when DEA has received the HHS scientific and medical evaluation and recommendation (commonly known as the “Eight Factor Analysis”) or (2) DEA is notified by HHS of the approval of the drug, biological product or animal drug.  The bill requires DEA to make the interim final rule effective immediately without having to show good cause. 

H.R. 639 also amends the patent term extension statute (35 U.S.C. § 156) by defining the “covered date” for products recommended for scheduling as the later of either approval by FDA or the issuing of the interim final rule scheduling the drug by DEA.

Finally, H.R. 639 promotes research and development of NCE’s or any drug by expediting registration for manufacturers of clinical trial material.   Generally, neither the CSA nor DEA regulations place a deadline on DEA to decide on any application for a DEA registration (e.g., manufacturer, distributor, pharmacy, etc.).  However, in the case of a Schedule I or II drug, this legislation would require DEA to publish a notice of application for such a manufacturer registration within 90 days of receipt and then issue the registration or a show cause to deny the registration, within 90 days of the close of the comment period.  In the case of manufacturer registration for use of a Schedule III-V drug in a clinical trial, the DEA must grant the registration or issue a show cause denying the application within 180 days after receipt of such application.  It is worth noting that the difference in these approval procedures is because the CSA otherwise requires that applications for bulk manufacturers of a Schedule I or II controlled substances must be published in the Federal Register.

By Kurt R. Karst –      

Nothing lasts forever in our mortal world, though some things try to come close: Wonka’s Everlasting Gobstoppers, The NeverEnding Story, Doctor Who, the Energizer Bunny . . . . and perhaps one day in the not too distant future, the Everlasting Patent will be added to the list.  What’s that you say?  A patent term is only 20 years from the filing date of the earliest U.S. application to which priority is claimed (excluding provisional applications).  While that’s generally true (minus any extensions, for example, a patent term extension under Title II of the Hatch-Waxman Amendments), there’s a provision buried in the nearly 400-page discussion draft of the 21st Century Cures Act that was released earlier this year (see our previous post here) that seems to create the possibility of essentially limitless term extensions for a patent (as a helpful reader pointed out to us). 

The provision at issue is in Section 1222 (titled “Capturing Lost Opportunities and Creating New Cures for Patients”) of Subtitle M (titled “Dormant Therapies”).  It states:

(C) EXTENSION OF PATENTS.—

    (i) IN GENERAL.—Unless the Director has notified the Secretary of a determination under subparagraph (B)(ii) [(concerning failure to provide documentation of waiver of patent rights)], for each patent identified in a submission pursuant to subparagraph (B)(i) [(concerning the listing of patents that may be reasonably construed to provide protection for the medicine)], and for each patent issuing based upon an application for patent so identified, the Director shall, within the 3-month period beginning on the date of the submission, extend the patent to expire at the end of the protection period for the dormant therapy, if the patent would otherwise expire before the end of the protection period.  If the Director has so notified the Secretary under subparagraph (B)(ii), the Director shall extend one such patent, selected by the sponsor, for the period that would have been applicable had an application for extension been filed under section 156 of title 35, United States Code, with respect to such patent.

    (ii) APPLICATION OF CERTAIN PROVISIONS.—During the period of an extension under clause (i)—

    (I) the rights under the patent shall be limited in the manner provided under section 156(b) of title 35, United States Code; and

    (II) the terms “product” and “approved product” in such section 156(b) shall be deemed to include forms of the active moiety of the dormant therapy and highly similar active moieties that might be approved or licensed by the Secretary based upon an application filed under section 505(b)(2) or 505(j) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)(2), (j)) or under section 351(k) of the Public Health Service Act (42 U.S.C. 262(k)) that references or otherwise relies upon the dormant therapy.

(D) INTERIM PATENT EXTENSIONS.—Notwithstanding any provision of title 35, United States Code, with respect to any patent listed (or patent issuing on an application listed) under subsection (b)(1) that would otherwise expire before the sponsor could make a submission under subparagraph (B), the Director, upon application of the patentee, shall grant to the patentee an interim extension of such patent, subject to the limitations in section 156(d)(5)(F) of such title 35, for such period as may be necessary to permit the sponsor to submit the listing under subparagraph (B) and, if the patent is therein listed, to extend the patent as provided under subparagraph (C).  The Director may require, for any patent extended under this subparagraph, that the sponsor of the dormant therapy to which the patent relates provide periodic certifications that development of the dormant therapy is continuing.  The Director may terminate any interim extension for which a required certification has not been made.

(E) NOTICE OF EXTENSION.—For each patent that is extended under this paragraph, the Director shall publish a notice of such extension and issue a certificate of extension described in section 156(e)(1) of title 35, United States Code.

(F) NOTICE OF WAIVER.—For each patent identified in a submission under subparagraph (B)(i), and each patent issuing based upon an application for patent so identified, that expires after the end of the protection period for the dormant therapy, the Director shall publish a notice that the patent is subject to the limited waiver of the right to enforce described in subsection (c)(1).

As we previously noted, Subtitle M is modeled after the Dormant Therapies Act of 2014 (S. 3004), which Senator Orrin Hatch (R-UT) introduced in December 2014.  A press release from Senator Hatch last year noted that the Dormant Therapies Act “will remove the ‘ticking patent clock’ conundrum that forces companies to prioritize research based on which compounds can be brought quickly to market.”  The Dormant Therapies Act is a redo of the Modernizing Our Drug & Diagnostics Evaluation and Regulatory Network Cures Act (“MODDERN Cures Act”), which was introduced in 2013 (H.R. 3116) and 2011 (H.R. 3497). 

Subtitle M would create a new guaranteed 15-year “protection period” for certain drug and biological products designated and approved as “dormant therapies” – that is, a “medicine [that] is being investigated or is intended to be investigated for an indication to address one or more unmet medical needs,” among other designation requirements.  Specifically, during the 15-year “protection period,” FDA would be prohibited from approving an ANDA, 505(b)(2) application, or 505(b)(1) NDA for a drug product containing the same active moiety as in the dormant therapy, and would be prohibited from licensing a Section 351(k) biosimilar or a Section 351(a) BLA for a biological product containing an “active moiety that is highly similar” to that of the dormant therapy, unless, in the case of a 505(b)(1) NDA or Section 351(a) BLA, “the information provided to support approval of such application is comparable in scope and extent . . . to the information provided to support approval of the application for the qualifying medicine . . . .”  That’s pretty significant protection; however, as part of the deal, companies must agree to waive certain patent rights.  But they get other patent rights as noted in the provisions quoted above. 

The removal of the “ticking patent clock” for dormant therapies Sentaor Hatch referred to in a press release may be more than what some in industry were expecting, but exactly what it says, leading to a patent that could go on, and on, and on.  Here’s how that would work under one reading of the proposed statutory text . . . . 

The choice and nature of the patent selected for extension is not limited to a patent on a new dormant therapy use of the drug or biologic.  The proposed statutory text could allow for extension of any patent reasonably related to the drug or biologic that has not expired (or that is the subject of an interim patent term extension) selected from a list of all patents on the product by the applicant.  That patent, once selected, would run until the expiration of the “protection period.”  That’s just 15 years, right?  But hold on . . . .

What if a sponsor obtains multiple dormant therapy designations and approvals for the same drug or biologic or a related product to which the same patent is reasonably related?  It certainly seems possible that the sponsor could select the same patent over and over again for extension.  This would result in cascading protection periods for a single patent – as well as “for each patent issuing based upon an application for patent so identified” –  that extend for decades, thus creating the everlasting patent.  Of course, the “fix” to this issue is to prohibit the same patent from being selected more than once.  But such a limitation is not in the proposed text.  Perhaps that issue will be addressed in version 2.0 of the 21st Century Cures Act, which is rumored to be in the works. 

Update:

We received a comment from one blog reader we thought deserved posting and that provides an alternative view of the proposed statutory change.  Enjoy.

A post in this blog dated 13 March 2015 entitled The Everlasting Patent: Is it Hiding in Plain Sight in the 21st Century Cures Act? offers an opinion on the 21st Century Cures Act discussion draft that the provisions of Sections 1221-1223 of Subtitle L (titled “Dormant Therapies”) could lead to “evergreening” of patents.  Specifically, the blog opined that multiple extensions of the same patent under this Act could lead to multiple exclusivity extensions for the same dormant therapy.  In fact, under the Act a dormant therapy can benefit from one and only one protection period which is measured from the first day of the first approved indication for a therapy and cannot be further extended.  As a result of this and other limitations in the Act, any such “evergreening” is impossible.  Unlike the “everlasting gobstopper” to which these provisions were referred in the earlier post, an applicant looking for exclusivity beyond the protection period will be met with Gene Wilder’s famous line from the same movie, “you get nothing, you lose, good day sir!”

Two particular provisions in this Act that ensure this result are:

• Section 1221(6)(A) measures the “protection period” from the date that FDA “first approves” the dormant therapy (DT) for “any indication”.  Similar to the “first licensure” limitation in the exclusivity provisions of the BPCIA, the exclusivity and patent extension resulting from any subsequent dormant therapy designation that an applicant attempts to apply to a previously-designated dormant therapy – or a dormant therapy with the same active moiety – could not possibly extend the overall 15 year period, because subsequent extensions for the same therapy or moiety would always relate back to the first approval date for any indication.
• In the case the same patent were ever to be extended a second time because a second DT were approved based upon a different active moiety, the Hatch-Waxman limitations on the enforcement of the patent during each of the extended patent terms would apply.  This is set out in section 4(e)(2)(C)(ii) of Section 1222.  The most critical limitation on extended terms is in 35 U.S.C. § 156(b)(1)(B), which would operate to limit a second extension to the uses approved on or after the FDA approval of the second DT, “in the case of a patent which claims a product, [the extension is] limited to any use approved for the product … on or after the expiration of the regulatory review period upon which the extension of the patent was based.”  The second extension of the patent would not afford rights to enforce the patent against the earlier-approved DT. 

Thus, for multiple extensions of the same patent under this Act, each such extension is exclusively forward-looking never covering a previously approved use for a drug or biologic.

In a new Legal Backgrounder published by the Washington Legal Foundation, Hyman, Phelps & McNamara, P.C.’s James P. Ellison, Anne K. Walsh, and Andrew J. Hull* write a “Warning Letter” to FDA-regulated drug establishments regarding FDA’s inspection practices.  We have written on FDA’s inspection authority in the past (see here and here), and this article addresses FDA’s aggressive position on that inspection authority. 

FDA’s position was most recently set forth in FDA’s Guidance for Industry: Circumstances that Constitute Delaying, Denying, Limiting, or Refusing a Drug Inspection (2014), published to interpret section 707 of the 2012 Food and Drug Administration Safety and Innovation Act (“FDASIA”).  This section states that a drug stored in an FDA-regulated facility is deemed adulterated under the Federal Food, Drug, and Cosmetic Act (“FDCA”) when the facility “delays, denies, or limits an inspection, or refuses to permit entry or inspection.”  As such, FDA’s interpretation of its lawful inspection activities could have draconian effects on those who are unprepared for the positions that FDA may assert during an inspection.

For instance, the authors analyze the agency’s questionable position that facilities must allow FDA inspectors to take photographs as part of an inspection.  The authors argue that this and other FDA inspection practices may well fall outside the inspection authority granted to FDA by Congress.

The authors conclude the article by writing:

Because of unresolved questions regarding FDA’s inspection authority and aggressive inspection practices, a company must be aware of the agency’s expectations during an inspection.  Without forethought and internal policies in place specifically contemplating the issues discussed in [the article], a company runs the risk of being caught off-guard by an inspector’s requests and possibly providing FDA with evidence beyond FDA’s inspection authority.  A company could be handing FDA evidence and information to which it would not otherwise be entitled, absent a subpoena, warrant, or other lawful process. 

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

By Jay W. Cormier & Alan M. Kirschenbaum –

The stage is set for yet another court ruling in the battle between the Health Resources and Services Administration (HRSA) and the Pharmaceutical Research and Manufacturers of America (PhRMA) over HRSA’s implementation of the 340B Orphan Drug Rule.  As we have related in prior posts (the most recent being here), HRSA asserts that the statutory orphan drug exclusion from the 340B drug discount program, under which certain 340B covered entities are not eligible for 340B pricing for orphan drugs, only applies to orphan drugs when used for the orphan-designated indications but not when used for other indications.  This position was first incorporated into a regulation issued pursuant to notice-and-comment rulemaking.  PhRMA successfully sued in the U.S. District Court for the District of Columbia, obtaining a ruling that HRSA was not authorized by statute to issue regulations in this area.  So, HRSA promulgated a second rule, which was virtually identical to the first, except that HRSA labeled it an “interpretive” rule.  PhRMA challenged the latter rule in the same proceeding, but the  Court agreed with HRSA that the second rule was a separate matter that required a new lawsuit.  PhRMA brought the new lawsuit last October. 

Both sides have now filed motions for summary judgment.  HRSA has argued that the court lacks jurisdiction to review the interpretive because it is not a final agency action.  According to HRSA, the new rule does not confer any rights or obligations, nor do legal consequences result from it.  HRSA states that no enforcement action can be taken under the new rule.  Rather, any legal action against a manufacturer for charging excessive prices for orphan drugs prescribed for non-orphan indications will flow from the statutory provisions rather than the new regulation.  HRSA claims that voluntary compliance with the new HRSA rule by a large number of orphan drug manufacturers “does not transform the interpretive rule into a binding rule.”

In its Opposition filed on February 25, PhRMA argues that the new rule, like any executive regulation, confers legal obligations on orphan drug manufacturers, and plainly sets forth HRSA’s interpretation of the statutory orphan drug exclusion — an interpretation that will be the basis for enforcement actions.  PhRMA further points out that, lest there be any doubt with respect to HRSA’s intention to enforce the new rule, the agency has sent letters to over 50 manufacturers ordering them to comply with the new rule and threatening enforcement for non-compliance, and has posted on its website a list a list of manufacturers who are allegedly noncompliant.

Hopefully, the Court will be persuaded that the rule is reviewable, and the merits of HRSA’s interpretation of the orphan drug exclusion will finally be adjudicated.  If not, manufacturers of orphan drugs with additional non-orphan indications will be faced with the unusual prospect of an agency taking action to enforce an interpretation that it insists is not legally binding.

By Alexander J. Varond –

Evidence from recent approvals of breakthrough therapy-designated products suggests that, for some time now, FDA has been operating under accelerated review timelines for certain drugs with breakthrough therapy designation.  Recently, FDA confirmed this and stated that it has been informally instituting a policy to expedite the review of certain breakthrough therapy-designated applications for the past several months.  FDA’s informal policy has now found its way into a Manual of Policies and Procedures entitled “Good Review Practice: Review of Marketing Applications for Breakthrough Therapy-Designated Drugs and Biologics That Are Receiving an Expedited Review.” 

Put simply, FDA’s MAPP establishes an “expedited review” pathway for certain breakthrough therapy-designated drugs.  Under this pathway, FDA review teams are instructed to plan to act at least one month prior to the Prescription Drug User Fee Act (PDUFA) goal date. 

FDA’s MAPP states that breakthrough therapy-designated drugs eligible for “expedited review” should have the following characteristics:

• Preliminary review of results from clinical trials must indicate that the drug has demonstrated substantial improvement over existing therapies;
• The marketing application must be designated as a priority review; and
• The review team must have determined that a first cycle approval is likely.

As background, Section 902 of Food and Drug Administration Safety and Innovation Act (FDASIA) provides that

[FDA should] expedite the development and review of [a breakthrough therapy-designated] drug if the drug is intended, alone or in combination with 1 or more other drugs, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on 1 or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

While FDA’s May 2014 guidance entitled, “Expedited Programs for Serious Conditions – Drugs and Biologics,” which we blogged about here, provided several clues regarding how the development of breakthrough designated drugs might be expedited, the method by which FDA would expedite the “review” of applications was not clear.  FDA’s new MAPP, therefore, is intended to provide clarity on this topic.

FDA was careful to state that not all breakthrough therapy-designated drugs will receive expedited review.  Instead, decisions are made on a case-by-case basis.  The MAPP details examples of factors that FDA will weigh when considering whether to designate an application for expedited review:

• Resources to expedite the review are not available because of competing public health priorities (e.g., anthrax, Ebola, influenza);
• An advisory committee meeting is needed for reasons such as clinical trial results or safety issues;
• An unanticipated safety issue is identified that requires a risk evaluation and mitigation strategy (REMS) with elements to ensure safe use; or
• Manufacturing issues are identified.

The MAPP describes the timing and process for these expedited reviews and notes that expedited review does not change PDUFA review performance goals.  The MAPP also explains that CDER review teams can determine that an expedited review is no longer appropriate and change the review to the default priority review timeline.  If this happens, FDA will communicate its decision to the sponsor within three days.  Instances in which the CDER review team may determine that an expedited review is no longer appropriate include, if:

• Unexpected application deficiencies are found;
• The marketing application is of poor quality;
• The sponsor fails to engage in collaborative communications (e.g., failure to respond to information requests);
• There is a need to hold an advisory committee meeting;
• Unanticipated review issues arise; or
• The review team experiences an unexpected shift in work priorities or team staffing.

FDA has frequently exceeded its PDUFA goal dates for breakthrough therapy-designated applications.  One notable example came on December 22, 2014 when FDA approved Opdivo (nivolumab), a therapy for melanoma,‎ three months ahead of its PDUFA date. 

Additional examples show that even breakthrough therapy designations granted mid-review have helped to speed FDA’s review of those applications.  Roche’s idiopathic fibrosis (IPF) drug, Esbriet (pirfenidone), and Boehringer Ingelheim’s IPF drug, Ofev (nintedanib), are two examples:

• Esbriet’s resubmission was submitted on May 23, 2014, was granted breakthrough therapy designation on July 17, 2014, and was approved on October 15, 2014, ahead of its November 23, 2014 PDUFA goal date. 
• Ofev’s application was submitted on July 2, 2014, granted breakthrough therapy designation on July 15, 2014, and was approved on October 15, 2014, ahead of its January 2, 2015 PDUFA goal date.

Notably, FDA’s previously released MAPP entitled, “Good Review Practice: Management of Breakthrough Therapy-Designated Drugs and Biologics” is still applicable and covers FDA’s actions from time of designation until marketing application has been submitted.

By Josephine M. Torrente & James E. Valentine* – 

On March 9, 2015, FDA announced the availability of draft guidance which allows the use of electronic informed consent (“electronic IC”) in FDA-regulated clinical investigations of medical products (and the use of electronic assent in pediatric studies).  Electronic IC can employ one or more forms of electronic media, including “text, graphics, audio, video, podcasts and interactive Web sites, biological recognition devices, and card readers.”  In addition, electronic IC may use interactive computer-based technology, such as “diagrams, images, graphics, video technology and narration,” which may include questions at the end of each section to assess the subject’s understanding.  These electronic IC materials can be used either at the clinical investigator’s site or remotely.  This effort harmonizes FDA regulatory requirements with Health and Human Services’ Office of Human Research Protections (see, e.g., OHRP policy allowing electronic signatures to document informed consent).

This guidance comes in response to the clinical research community’s interest in using electronic media to provide information usually contained within the informed consent document, evaluating the subject’s comprehension of the information presented, and documenting the consent of the subject.  Research studies are growing in complexity and duration, which leads to informed consent documents that are increasingly long and more difficult to understand.  Electronic IC may be helpful in providing subjects with information about study procedures in a way that is easy to understand and is communicated in a standardized way—and could even better assess and document comprehension. 

Additionally, electronic IC may allow for rapid notification of amendments pertaining to the informed consent that may affect a subject’s willingness to continue to participate, as well as promote timely entry of documentation of informed consent. 

The draft guidance expands on FDA’s regulations that state “informed consent shall be documented by the use of a written consent form approved by the IRB and signed and dated by the subject…at the time of consent” (21 C.F.R. 50.27(a)). FDA explains that informed consent is “mistakenly viewed as synonymous with obtaining a hand-written signature” and explains that there can be electronic documentation of informed consent as well.   Still, electronic IC must comply with FDA requirements for electronic records/electronic signatures, informed consent, and institutional review boards (“IRBs”) which are set forth in 21 C.F.R. Parts 11, 50, and 56, respectively.  Many of these requirements are reiterated in the draft guidance (e.g., requisite elements of informed consent, providing the subject a copy of the informed consent, IRB review, recordkeeping). 

The draft guidance lays out a number of key considerations for utilizing electronic IC, including:

• ensuring interactive electronic IC programs are easy to navigate and appropriate for the intended audience, taking into account age, language, and comprehension level;
• if remote, obtaining documentation to ensure responses cannot be altered and ensuring the person signing the informed consent is the subject;
• if remote, providing an opportunity to ask questions and receive answers prior to signing the electronic IC, as well as throughout the trial (which can be done using electronic messaging, telephone calls, videoconferencing, or a live chat);
• ensuring the transmission of significant new findings to the subjects;
• considering whether to use a method of obtaining electronic signatures;
• providing a signed consent form with date stamp to subjects (e.g., by email)
• disclosing risks of electronic transmission (e.g., e-copy could be hacked from email or personal electronic device, e-copies delivered by email may not be able to be permanently deleted);
• protecting confidentiality through use of restricted access computerized systems; and
• including procedures to ensure archival of electronic documents and all versions of the electronic IC, as well as having an audit trail capability to capture details of changes.

The specifics of any individual electronic IC are left to the review by an IRB.  FDA recommends investigators discuss plans with the IRB prior to finalizing the development of the electronic IC to ensure the IRB agrees with providing informed consent in an electronic format.  

Comments on the FDA Draft Guidance can be submitted to FDA until May 7, 2015, here.

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

By Kurt R. Karst –      

That’s right folks, another Golden Ticket has been awarded!  On March 10, 2015, FDA approved BLA 125516 for United Therapeutics Corporation’s (“UTC’s”) Unituxin (dinutuximab) in combination with granulocyte-macrophage colony-stimulating factor, interleukin-2 and 13-cis-retinoic acid, for the treatment of pediatric patients with high-risk neuroblastoma who achieve at least a partial response to prior first-line multiagent, multimodality therapy.  With that approval, FDA granted UTC a Rare Pediatric Disease Priority Review Voucher (“Pediatric PRV”), which entitles the voucher holder to priority review (instead of a longer standard review) of a single NDA or BLA after the date of approval of the rare pediatric disease product application.  (A copy of UTC’s press release is available here.)

As we noted when FDA granted the first Pediatric PRV back in February 2014 – to BioMarin Pharmaceutical Inc. for VIMIZIM (elosulfase alfa) Injection – the Pediatric PRV was created by Section 908 of the 2012 FDA Safety and Innovation Act (“FDASIA”) (codified at FDC Act § 529), and is intended to encourage the development of treatments for rare pediatric diseases.  The program was inspired by the existing Tropical Disease PRV (“TD-PRV”) program set forth at FDC Act § 524, as added by the 2007 FDA Amendments Act of 2007; however, the TD-PRV differs from the Pediatric PRV program in several respects.  Last November, FDA issued draft guidance explaining the Agency’s implementation of the statutory Pediatric PRV provisions (see our previous post here). 

Significantly, the Pediatric PRV program has a sunset clause.  Under the statute (FDC Act § 52(b)(5)), no further vouchers can be awarded “after the last day of the one-year period that begins on the date” that the third voucher is granted.  So the next Golden Ticket granted by FDA will trigger the sunset provision.   But Congress may renew the Pediatric PRV program after this trial run as a part of the next omnibus FDA bill.    

For now, the big question is what will will UTC do with the Pediatric PRV.  PRVs are, after all, transferable and may be sold.  In July 2014, Sanofi and Regeneron paid BioMarin $67.5 million for its Pediatric PRV.  Late in 2014, Gilead Sciences, Inc. nearly doubled that figure when it paid Knight Therapeutics Inc. $125 million for its Tropical Disease PRV.  Another Tropical Disease PRV FDA granted with the 2012 approval of SIRTURO (bedaquiline) for tuberculosis has reportedly gone unused. 

By Karla L. Palmer –

On March 4, 2015, the U.S. General Accountability Office (GAO) released a lengthy and detailed report, titled “Better Management of the Quota Process for Controlled Substances Needed; Coordination between DEA and FDA Should Be Improved,” addressing controlled substance shortages potentially resulting from DEA and FDA’s management and coordination of the quota process.  

The Report stems from a 2012 request from Senate Judiciary Committee members Charles Grassley (R-IA) and Sheldon Whitehouse (D-RI).  The Senators raised questions about shortages of controlled substances and asked GAO to examine the effect of such shortages on patients.  They also tasked GAO with a review of DEA’s administration of the quota process to understand its potential effects on shortages of drugs containing controlled substances, particularly those used by the emergency medical system.  

To prevent diversion of controlled substances, as established by the Controlled Substances Act (CSA) and its implementing regulations, DEA sets quotas that limit the amount of certain substances that are available in the United States.  However, the Report notes that shortages of controlled substances increased significantly in recent years; specifically, of the 168 shortages reported from January 2001 through June 2013, nearly 70 percent began after 2007, and lasted for about a year.   Many shortages involved generic pain relievers and drugs where there was only one manufacturer.

The Report reviews data from 2001-2013, and examines the following: (1) shortage trends; (2) effect on patients and providers; (3) DEA’s administration of the quota process; and, (4) coordination between DEA and FDA to prevent and mitigate shortages.  To prepare the Report, GAO reviewed relevant documents; the statutory and regulatory scheme; and interviewed officials from DEA, FDA, organizations representing patients and providers, and drug manufacturers.

GAO makes the several recommendations for executive action including the following: (1) DEA should take five actions to improve its management of the quota process; (2) DEA and FDA should quickly update their existing Memorandum of Understanding (MOU) that has not been revised since the 1970s; and, (3) DEA and FDA should better coordinate on steps moving forward.  

The Report generally concludes that DEA is not well prepared to “expeditiously respond to future shortages.”  After describing in detail the regulatory timelines that DEA must meet to issue quotas (see 9-14), the Report states DEA has “not met its required time frames for establishing quotas for more than a decade.”  (47)  DEA also lacks “sufficient internal controls to ensure the reliability of the data it uses to establish quotas,” which GAO found “led to errors in its data system.”  (47)  Moreover, the Report notes that DEA does not monitor the data it collects and has no established performance measures related to either setting quotas in a timely manner or ensuring an adequate and uninterrupted supply of controlled substances for legitimate medical use.  And, DEA’s “lack of written policies and procedures for a complex process poses a risk to the continuity of its future operations.” (42)  Below is a brief description of GAO’s seven recommendations. 

1.  The DEA Administrator should establish controls, including periodic data checks, to ensure that the Year End Reporting and Quota Management System (YERS/QMS) data, which is the official record of the quota process, accurately reflects both manufacturers' quota submissions and DEA's decisions.  For example, in a review of YERS data from 2011 and 2012, GAO estimates that “44 percent of the records in 2011 and 10 percent of the records in 2012, each of which corresponds to one quota application and DEA decision letter, contained at least one data field with incorrect data, such as incorrect dates or amounts of quota requested or authorized.”  (30-38)  In particular, DEA does not have adequate controls to ensure the reliability of the YERS/QMS system used to track manufacturers’ quota applications and record its decisions. DEA officials told GAO, “there are no systematic quality checks to ensure that the data in YERS/QMS are accurate, such as electronic checks for data outliers or manual comparisons of YERS/QMS data to source documents (i.e., manufacturers’ quota applications and corresponding DEA decision letters) to identify inconsistent information.”  (36)  The GAO found that DEA’s lacking systematic data checks is “inconsistent with federal standards for internal control, which calls for agencies to have appropriate control activities in place, such as periodic data checks, to ensure that the data used by the agency for decision making are accurate.”  (36) 

2.  The DEA Administrator should establish performance measures for DEA related to quotas and ensuring an adequate and uninterrupted supply of controlled substances for legitimate medical use.  In the absence of such performance measures, DEA does not have key information for program managers to make decisions about program resources, and the agency cannot effectively demonstrate program results.  Federal standards state that performance measures are “an important management tool and that such measures provide critical information to managers about agency performance and program outcomes.”  (40)   DEA officials counter that performance measures related to establishing quotas or ensuring an adequate and uninterrupted supply of controlled substances would be “inappropriate because of the complexity of individual quota applications and the difficulty of projecting the number of quota applications for future years.  (39)  Nonetheless, GAO notes that performance measures related to quotas, including percentage of applications that require follow-up by DEA, are a critical internal control, “without which DEA cannot determine if its process for establishing quotas is having the desired outcome.”  (39)  Without such measures, the agency cannot make decisions about resources or demonstrate results.

3.  The DEA Administrator should monitor and analyze YERS/QMS data to assess administration of the quota process.  DEA told GAO that it does not monitor or analyze available data from YERS/QMS to assess its administration of the quota process, “which federal standards for internal control state is an important component of managing a program.”  DEA officials said that the agency does not monitor or analyze these data; DEA does not use YERS/QMS to produce aggregate information “on timeliness or other performance metrics and the agency has no plans to do so as of October 2014.”  (Emphasis added; 40.)  The Report notes, however, that absent such analysis, DEA cannot evaluate its responses to manufacturers’ quota applications or understand the nature of its workload.

4.  The DEA Administrator should establish internal policies for processing quota applications and setting aggregate, annual, and supplemental quotas to ensure that staff conduct these activities consistently and in accordance with the CSA and the agency's regulations.  The Report points out that DEA has not met its required time frames provided in regulations for establishing aggregate production quotas (APQ), or annual bulk manufacturing or procurement quotas for Schedule II substances  for 14 years (i.e., since at least 2001)  (30-33).  Manufacturers claim DEA’s untimeliness has contributed to drug shortages.  DEA officials acknowledged that the agency has failed to meet regulatory time frames for proposing and establishing quotas.  DEA officials cite “inadequate staffing” in the Quota Unit as the reason, and that its quota workload has increased in complexity since the CSA’s enactment. 

Interestingly, although DEA acknowledges it failed to adhere to required quota time frames for over a decade, it disagrees that quotas can cause shortages.  DEA authorizes quotas at the basic class level for a substance–such as amphetamine or morphine–not for specific drug products.  And, DEA has “no control over what specific drug products manufacturers actually produce with the quota authorized.”  (35)  For example, if DEA authorized 10,000 grams of morphine to a manufacturer, the manufacturer—and not DEA— decides how to authorize the quota among its products that contain different formulations, dosage forms, and concentrations.  (35)  

GAO concluded that it cannot confirm whether DEA’s lack of timeliness in establishing annual and supplemental quotas has caused or exacerbated shortages.  But, by not responding to annual applications in accordance with the time frames required by its regulations or the CSA, and by not acting promptly on supplemental applications, “DEA may hinder manufacturers’ ability to manufacture drugs that contain schedule II controlled substances that may help prevent or resolve a shortage.”  (35)

DEA responded, among other things, that it has already established procurement policies and procedures.  However, GAO notes that DEA “did not provide documentation of such policies and procedures despite repeated requests.”  (57)

5.  The DEA Administrator should expeditiously establish formal policies and procedures to facilitate coordination with FDA as directed by the Food and Drug Administration Safety and Innovation Act (FDASIA), including a specific time frame in which DEA will be expected to respond to FDA requests to expedite shortage-related quota applications.  FDASIA requires DEA and FDA to coordinate where additional quota may be needed to address a shortage of a drug containing controlled substances, but the Report notes several barriers to effective collaboration between the agencies, including DEA’s lack of trust concerning whether FDA’s website accurately reports and reflects shortages, whether certain controlled substances are interchangeable (such as extended and immediate release formulations of ADHD medications), and significant disagreement on what constitutes a shortage of controlled substances.  The agencies also lack compatible “policies, procedures, and other means to operate across agency boundaries, including mutually agreed upon time frames for DEA to respond if FDA notifies DEA of a shortage caused by quota.”  (44-45)  

6.  FDA and DEA should promptly update the MOU between the two agencies to address sharing of information between the agencies.  DEA and FDA have had MOUs in place since the 1970s, but they do not address drug shortages.  The agencies have been working for two years on a new MOU.  The new MOU is expected to establish procedures for sharing of certain proprietary information that they are currently prohibited from sharing.   

7.  Related to No. 6, either in an MOU or separate document, DEA and FDA should outline types of information they will share and the time frames for doing so in response to a potential or existing drug shortage.  Although FDA/HHS agreed with GAO’s applicable recommendations, DEA neither agreed nor disagreed; instead, and not surprisingly, DEA “raised multiple objections” to the Report.  Those objections may be found at pages 49-58, and at Appendix V (December 29, 2014 response from Joseph Rannazzisi, Deputy Assistant Administrator, Office of Diversion Control, DEA).

Also of note: Senators Chuck Grassley and Dianne Feinstein (leaders of the Caucus on International Narcotics Control) have announced a hearing on the quota system used to manage controlled substances in light the Report.  

By Karla L. Palmer –
 
On Monday, March 9th FDA published a notice in the Federal Register establishing a public docket to receive information, recommendations, and comments on matters related to the regulation of compounding of human drug products under FDCA sections 503A and 503B.  The docket is intended for “general comments related to human drug compounding” that are “not specific to documents or issues that are the subject of other dockets.”  To the extent that a comment relates a matter for which there is a specific docket – such as nominations for FDA’s so called positive and negative lists of bulk substances to be used in compounding, FDA’s draft standard MOU for interstate shipping of compounds under Section 503A, or comments on FDA’s several compounding draft guidance documents – FDA instructs interested parties to submit comments to that specific docket.   A complete list of the human drug compounding policy documents issued by the Agency for public comment can be found here.

FDA will continue to seek public comment on specific guidance documents and issues as they arise; nevertheless, the Agency believes it would be “useful to have a docket available for submissions of any information related to human drug compounding that may be unrelated to the specific issues and documents published for public comment.”  FDA states that interested parties have expressed interest in providing comments and information to FDA on a variety of issues that are not related to the specific regulations, guidance documents or other Federal Register notices that FDA has published on compounding to date. FDA established the general docket so stakeholders can share information, research, and ideas on any matters not specific to the documents or issues on which FDA has already sought public comment in other dockets.

FDA notes that comments should not be submitted to the general docket if they have already been submitted to specific dockets.   Specifically, “such submissions are duplicative and not helpful to the Agency.”  If comments on particular documents or issues are submitted to the general docket rather than the docket for the particular document or issue, FDA states that the comment might not be considered as the specific documents are being considered and finalized.  In addition, FDA will not respond to questions or requests submitted to the general docket but will “consider any information submitted in its work to implement the law.” 

The general public docket does not have a date by which comments must be received; FDA instead states that comments may be submitted at any time.  Comments should be identified by Docket No. [FDA-2015-N-0030], and may be submitted electronically at http://www.regulations.gov, or in hard copy to:  Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD 20852.

By Ricardo Carvajal - 

That’s the question raised by a recently issued Government Accountability Office (GAO) report that takes FDA to task not just for lagging behind the foreign inspection targets established by FSMA, but also for not conducting “an analysis to determine whether the number of inspections in the FSMA mandate or the lower number of inspections it is conducting is sufficient to ensure comparable safety of imported and domestic food.”  It’s a curious fault to find, given that the foreign inspection targets in FSMA were understood to be an arbitrary, unfunded mandate from the moment the ink dried on the President’s signature of the bill into law.  The chart below (drawn from the GAO report) says it all:

FSMA called for a doubling of foreign inspections every year, starting from a baseline of 600 in the first year following enactment.  FDA is already well behind those targets, having completed just 28% of the number of inspections mandated for 2014.  The reason?  In a word, money.  Meeting the 2014 target would have required FDA to divert to foreign inspections nearly all of the FSMA implementation funding it received for that year.  The divergence between what the law directs FDA to do and what the agency has funding to accomplish will only grow more pronounced in the next two years.

For its part, FDA sees value in maintaining foreign offices and conducting foreign inspections.  However, it’s clear from FDA’s comments on the GAO report that the agency knows where its real leverage lies – with full implementation of the Foreign Supplier Verification Program (FSVP), Voluntary Qualified Importer Program (VQIP), and third-party audit provisions of FSMA.  Properly implemented, those provisions could act as a force multiplier that would dwarf even the lofty targets built into FSMA.  Small wonder that the agency offers a tepid acceptance of GAO’s inscrutable recommendation:

FDA concurs with this recommendation, pending the necessary resources to conduct the analysis, as part of a larger post-FSMA strategy to improve the safety of imported food.

(Emphasis ours.)  In other words, let’s implement FSMA first, and then revisit the issue – by which point it may well be moot. 

By Kurt R. Karst –      

Every once in a while FDA gets asked a question along the lines of: “Can my company submit two ANDAs to FDA – from two different subsidiaries – each containing the same bioequivalence data?” . . . or “Can my company sell its bioequivalence data to different companies for ANDA submission purposes?”  In each case the answer from FDA has been a flat-out “No.”  But why?  It all has to do with FDA’s so-called “anti-franchising policy,” which provides that each ANDA for a particular drug product must have its own independent basis for approval.  That is, even if a drug product is manufactured using the same formula, same equipment, and at the same facility as an already-approved product, FDA has required the new applicant to perform some level of bioequivalence testing, at a minimum, to support approval.

Although companies have requested FDA to permit them to reference already-approved bioequivalence data, FDA has for decades rejected such requests on the basis of 21 C.F.R. § 314.101(d)(8).  This regulation states that FDA will refuse to receive an application if:

The drug product that is the subject of the submission is already covered by an approved application or abbreviated application and the applicant of the submission:

(i) Has an approved application or abbreviated application for the same drug product; or

(ii) Is merely a distributor and/or repackager of the already approved drug product.

Although this regulation does not explicitly state the anti-franchising policy, FDA has interpreted the regulation as such.  (By the by, this regulation has also been used as the basis for two subsidiary companies to submit different applications.  FDA’s policy has been that the Agency “does not look under the corporate tent.”  Thus, the two policies that stem from 21 C.F.R. § 314.101(d)(8) – anti-franchising and corporate tent – have formed the basis for two subsidiary companies to submit different applications, each with its own independent data to support approval.)

FDA’s “anti-franchising policy,” as reflected in the Agency’s interpretation of 21 C.F.R. § 314.101(d)(8), has deep roots.  From what we understand, a version of the “anti-franchising policy” policy was discussed in a speech by former FDAer Dr. Peter Rheinstein in Fall 1987.  Dr. Rheinstein reportedly explained that one company approached FDA and proposed getting approval for a drug product made in its manufacturing facility and then letting other companies cite its data.  FDA rejected this concept. 

Not satisfied with a press report about a speech, however, we dug a little deeper and uncovered a letter FDA sent to one company on July 15, 1987.  That letter, which we believe informed Dr. Rheinstein’s speech, may be the genesis of FDA’s “anti-franchising policy.”  The letter is reproduced below (for posterity and with the company name redacted) and states:

This letter is in response to your April 21, 1987 letter suggesting a different approach for satisfying Agency bioequivalence requirements for abbreviated new drug applications (ANDAs).  Your proposed approach involves reference to a drug master file (DMF) for bioequivalence and dissolution studies.  I apologize for not responding more promptly but I wanted to give your proposal careful and complete consideration.

I have discussed your letter at length within the Agency and have concluded that each specific drug product must stand on its own, that is, each ANDA must contain information to show that the product is bioequivalent to the listed drug product.  In vivo and in vitro tests that you conduct on your own tablets would not satisfy the in vivo bioequivalence requirements for tablets manufactured by someone else.  Therefore, reference to your DMF by ANDA applicants would not satisfy the in vivo bioequivalence requirements for the referring ANDA applicant.  This is so even though all the tablets involved were made from the same pre-granulated bulk material.  A discussion follows.

Discussion

As you know, the purpose of the Federal Food, Drug, and Cosmetic Act (Act) is to protect the public against danger to human life arising from the use of unsafe and ineffective drug products by assuring that, before any drug product is marketed, it will have been carefully reviewed by FDA experts.  With the passage of the 1984 Amendments to the Act and the provisions to allow many additional drug products to be reviewed under abbreviated new drug applications (ANDAs), Congress wanted to assure the continued protection of the public.  Congress, therefore, required that to be approved under the amended Act each ANDA must contain information to show that the proposed new drug product is bioequivalent to the drug product it seeks to copy – the listed drug.  See 21 USC 355(j)(2)(A)(iv).

In enacting the 1984 Amendments, Congress was cognizant of the FDA regulations then in effect.  The term “drug product” as defined it the regulations at 21 CFR 314.3(b) means “a finished dosage form, for example, tablet . . .that contains a drug substance, generally, but not necessarily, in association with one or more other ingredients.”  Also, under 21 CFR 314.50 and 314.55 each ANDA is required to contain a description of the manufacturing and packaging procedures and in-process controls for the drug product to ensure, among other things, the bioavailability of the drug product.  These sections of the regulations also require the ANDA to contain a full description of the specifications and analytical methods as are necessary to assure the identity, strength, quality and purity of the drug substance and the bioavailability of the drug product made from the drug substance.

As this discussion discloses, a drug product and drug substance are not the same.  Assurances about quality or bioavailability, for example, made about the latter cannot automatically or consistently be extrapolated to the former.  (In other words, you cannot necessarily extrapolate from the bioavailability or quality of one drug product containing a drug substance to the bioavailability or quality of a second drug product containing the sane drug substance.)  The possibility of variations in the manufacturing process (e.g., tableting process) used by each individual drug producer requires, therefore, certain testing on each separate and specific drug product to assure protection of the public.  For example, even in those cases where the same ANDA holder (or applicant) changes its manufacturing site and seeks to perform comparative dissolution, studies in lieu of in vivo studies to demonstrate bioequivalence for the products made at different sites, an in vivo test on the finished drug product may be required unless the formulation is virtually identical at both sites and the manufacturing process (including manufacturing procedure and equipment, among others) is identical.

Your proposal would involve reliance on your bioequivalence testing by not just one applicant but by many different ANDA applicants.  And, under your proposal, rot only could a different formulation be possible from each applicant, (an ANDA applicant would not be required to add the ingredients you recommend for the proproxyphene/APAP combination, for example), but it is highly unlikely that the tablets you make would be made under the sane conditions and on the identical equipment as those made by each of your customers.  It is also likely that each manufacturer might have to modify the formulation of the product to accommodate the manufacturing procedures, equipment and environment at their respective facilities.  Thus in time, we could expect “drift” from a once correct formulation to potentially different formulations for each manufacturer.

CONCLUSION

I have concluded therefore that, where in vivo bioequivalence data arc deemed necessary by the Agency, reference to your DMF by ANDA applicants would not satisfy the bioequivalence requirements for these applicants.  Each ANDA applicant is required to include in its own ANDA information to show that its drug product (in its finished dosage form) is bioequivalent to the listed drug.  For these reasons, a showing by you that your drug product is bioequivalent to a listed drug cannot satisfy the statutory requirement that other drug products are also bioequivalent to the same listed drug.  Each ANDA must stand on its own in this regard to assure the protection of the public health.

Sincerely yours,

Shrikant V. Dighe, Ph.D.
Director, Division of Bioequivalence
Office of Drug Standards

There have been other examples since the one above.  For example, from what we understand, FDA required a Syntex generic subsidiary to submit a new bioequivalence study to obtain ANDA approval for Naproxen, even though both the Syntex and the subsidiary products were made at the same plant, by the same personnel, and on the same equipment using the same formula and process.  FDA also reportedly required a Merck generic subsidiary to submit a new bioequivalence study to obtain ANDA approval for its generic version of Merck’s DOLOBID (diflunisal) product even though both products were also made identically.  In some instances, companies decided to conduct the study and seek ANDA approval.  In other instances, companies chose not to proceed with conducting the study and decided to act as a distributor of the brand-name drug product.

By Allyson B. Mullen –

In 2012, CDRH initiated an action plan to strengthen the medical device surveillance system (we previously reported on this plan here).  As part of this initiative, a multi-stakeholder Planning Board was created with the purpose of “envisioning an MDS with the capability of accurately and systematically evaluating potential medical device safety signals in near real-time, measuring the benefit-risk profile of devices throughout their life cycle, and developing meaningful information to support pre-and postmarket regulatory decision making.” 

The Engelberg Center for Health Care Reform at the Brookings Institution (Brookings) brought this board together in 2014.  On February 24, 2015, Brookings issues a report documenting the board’s recommendations for a National Medical Device Postmarket Surveillance System (MDS) (the report can be found here).  The report sets forth the board’s recommendations on the “mission, principles, and key functions for the MDS.”

The MDS is intended to aggregate significant amounts of both pre-and postmarket information into a single system, including information from claims and administrative systems, patient-generated data, EHRs, and device-specific and clinical care registries.  This information is intended to be useful to a wide variety of stakeholders, including CDRH.  According to the report, the information in the new MDS should have a focus on patients and clinicians.  The information should also be collected with minimal burdens being placed on those required to submit and collect the information.  The report indicates that information should be collected once, but for multiple purposes.  While achieving these lofty goals, the MDS should be adaptable to the future and continuously evolving.

While this report is lengthy (75 pages), it contains very few specifics, including, who will be responsible for/required to submit data to the MDS, what specific information will be submitted, where/how the information will be stored, how FDA will use the data to assess marketed devices.  The report recommends that the MDS be developed, implemented and managed by a joint public-private partnership, not solely by CDRH like current systems.  The report lays out the high-level organizational and governing principles for the partnership.  As one of the overriding goals, the report indicates that the public-private partnership should collaborate with those individuals who will be submitting data to the MDS to develop an effective infrastructure and policies.  Specifically, the board believes that the new MDS should promote use of UDIs and common data standards in all data sources, including those that protect patient privacy.

Perhaps most interesting, the report acknowledges that government funding alone may be insufficient to develop such a new and novel system.  The report suggests charging membership fees for those entities participating in the system, including, “manufacturers, nonprofits, CROs, academic institutions, and others who support MDS’s objectives.”  Although it is not addressed in the report, our view is that manufacturers who would be asked to pay a membership fee would be those wishing to access and utilize the data for its own purposes, and manufacturers would not be charged a “membership fee” in order to submit adverse event information.

Finally, the report sets out a timeline for implementation.  In years 1 and 2, the board proposes that FDA perform fact-finding activities and pilot programs to develop and 5-year implementation plan for MDS.  Then in years 3 through 7, the public-private partnership should be created and it should implement the MDS that is developed through the pilot program.  As we noted in our earlier post on this topic, the information provided on the new MDS has left several key questions unanswered, such as how FDA will use the information in the new MDS, how it will affect premarket requirements, and how would it be used in regulating products that are on the market.  Unfortunately, this new report continues to leave these important questions unanswered.

By Kurt R. Karst –      

Amidst concern that the 2013 sequester could make a repeat appearance and reduce both FDA’s budget from Congress and industry-financed user fees to the Agency, Representatives Anna Eshoo (D-CA) and Leonard Lance (R-NJ) have introduced legislation to exempt FDA user fees from the ravages of sequestration.   Sequestration refers to automatic spending cuts to the U.S. federal budget that went into effect as a result of the Budget Control Act of 2011.  The Congressional Budget Office recently opined that sequestration will not be required for 2015; however, that is by no means certain and depends on several factors (see here). 

The FDA Safety Over Sequestration Act of 2015, or FDA SOS Act (H.R. 1078), would amend the Balanced Budget and Emergency Deficit Control Act of 1985 – the law first establishing sequestration procedures – to exempt user fees collected pursuant to FDC Act Sections 736 (Prescription Drug User Fee Act), 738 (Medical Device User Fee and Modernization Act), 740 (Animal Drug User Fee Act), 741 (Animal Generic Drug User Fee Act), 744B (Generic Drug User Fee Amendments), and 744H (Biosimilar User Fee Act).  “The FDA’s user fees are 100 percent private sector dollars,” wrote Rep. Eshoo in a press release.  “If the intent of sequestration is to limit public spending, withholding private monies is counterintuitive.  Whether one agrees or disagrees with sequestration, private dollars should not be held hostage by the policy.  It discourages investment in medical innovation and denies patients access to timely and potentially lifesaving therapies.”  The FDA SOS Act is supported by several organizations and companies, including PhRMA, BIO, AdvaMed, the Medical Device Manufacturers Association, the California Healthcare Institute, the Leukemia Lymphoma Society, Gilead, Genentech, Patient Services Inc., and the National Health Council.

H.R. 1078 is the second legislative go-around at saving industry user fees from sequestration.  As we previously reported, Reps. Eshoo and Lance introduced a nearly identical bill in July 2013 (H.R. 2725), which was later introduced in the Senate as the FDA User Fee Protection Act (S. 1413).  Neither bill was passed; however, the Consolidated Appropriations Act of 2014 (Pub. L. No. 113-76) permitted FDA in 2014 to use fees that were withheld because of the 2013 sequester.  Enactment of the FDA SOS Act would avoid Congress having to go through that procedure again with respect to FDA. 

By Kurt R. Karst –      

There’s been a lot of activity in the budding biosimilars world this year, and it’s only February.  On the FDA front, the Agency reportedly has 5 Section 351(k) biosimilars applications under review: (1) Sandoz’s version of Amgen’s NEUPOGEN (filgrastim); (2) Celltrion’s version of Johnson & Johnson’s REMICADE (infliximab); (3) Apotex’s version of Amgen’s NEULASTA (pegfilgrastim); (4) Apotex’s version Amgen’s NEUPOGEN; and (5) Hospira’s biosimilar version of Amgen’s EPOGEN (epoetin alfa) (also marketed by Johnson & Johnson as PROCRIT).  Earlier this year, FDA held the first advisory committee meeting for a biosimilar – for Sandoz’s filgrastim (see our previous post here).  A second advisory committee meeting for Celltrion’s infliximab was scheduled for March 17, 2015, but has been postponed “due to information requests pending with the sponsor of the application.”  FDA action on Sandoz’s Section 351(k) application for filgrastim is expected within the coming weeks; however, even if FDA approves the application, it appears that the launch of the product will be delayed.  In a recent court filing, Sandoz agreed that the company “will not launch its biosimilar filgrastim product in the United States until the earlier of April 10, 2015, or a ruling in Sandoz’s favor on Amgen’s Motion.”  And that’s our segue to the litigation front of the biosimilars world, where things remain hot. 

As we previously reported (here and here), last October, Amgen filed a Complaint in the U.S. District Court for the Northern District of California alleging that Sandoz has unlawfully refused to follow certain procedures created by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).  In particular, Amgen alleges that Sandoz opted out of the information exchanges at PHS Act § 351 (l)(2)(A)-(l)(5), but that such option does not exist; and that despite Sandoz’s assertions that the company already provided 180-day notice of commercial marketing to Amgen required under PHS Act § 351(l)(8)(A), such notice cannot be provided until at least FDA approval of a Section 351(k) application.  In making these allegations, Amgen asserts three causes of action: (1) unfair competition under Cal. Bus. & Prof. Code § 17200 et seq.; (2) conversion; and (3) infringement of U.S. Patent No. 6,162,427 covering a method of using NEUPOGEN to treat a disease requiring peripheral stem cell transplantation in a patient in need of such treatment.

Earlier this year, Amgen filed a Motion for Judgment on the Pleadings or, in the Alternative, Motion for Partial Summary Judgment.  That triggered Sandoz to file a Cross-Motion for Judgment on the Pleadings and Opposition to Amgen’s Motion for Judgment on the Pleadings (Amgen’s opposition brief and Sandoz’a reply brief are available here and here).  But as the days went by and the date by which FDA is scheduled to act on Sandoz’s Section 351(k) application crept closer (in early March), Amgen finally decided that the company needed to seek emergency relief. 

On February 5th, Amgen filed a Motion for a Preliminary Injunction in a bid to restrain Sandoz from engaging in the commercial manufacture, use, offer to sell, sale within or importation into the U.S. of its biosimilar filgrastim product until the California District Court decides the parties’ Motions for Judgment on the Pleadings (and, if the court resolves those motions in Amgen’s favor, until, the parties have been placed in the position they would be in had Sandoz complied with the BPCIA).  “Sandoz has sandbagged Amgen,” says Amgen in its court filing. “It has refused to provide its BLA and manufacturing information, frustrating Amgen’s ability to determine which of its many patents it can assert against Sandoz.  And Sandoz intends to launch its product immediately upon FDA licensure, rather than waiting the 180 days required by the law. That is why Amgen brings this motion for a preliminary injunction.”  Among other things, Amgen says that “[i]f Sandoz is permitted to launch its product without having provided the information and time to Amgen as the statute provides, Amgen will be irreparably harmed by losing the opportunity afforded it under the BPCIA to exercise its exclusionary patent rights and seek a preliminary injunction before Amgen is injured by the entry of Sandoz’s biosimilar product.”  That irreparable harm will, according to Amgen, come in the form of harm to research and development, harm to new products in their infancy, price erosion for NEUPOGEN (and Amgen’s NEULASTA), and damage to customer relationships and loss of goodwill.

Hogwash!, says Sandoz in it opposition brief filed earlier this week.  Amgen hasn’t established any of the four factors necessary to support a preliminary injunction: (1) whether Amgen will be irreparably harmed in the absence of an injunction; (2) Amgen’s likelihood of success; (3) the balance between the harm to Amgen and the harm to Sandoz; and (4) the public interest.  It’s a chair without any legs – meaning that it’s either held up by magic, or that it must come crashing down to the ground. 

Sandoz argues that Amgen’s Motion for a Preliminary Injunction fails for myriad reasons:

First, Amgen cannot show it is likely to succeed on the merits.  Amgen seeks to convert a “notice” provision for resolving patent disputes into an “exclusivity” provision.  Adopting Amgen’s interpretation would defy Congress’s intent (as expressed in the statute’s plain language) by extending the exclusivity period from 12 years to 12.5 years. . . .

Second, Amgen cannot show irreparable harm for multiple reasons . . . . Amgen claims that it has been harmed because it did not receive Sandoz’s filgrastim application in July 2014, and so it allegedly could not determine what patents it might potentially be able to assert against Sandoz.  But that alleged harm is of Amgen’s own making.  The BPCIA contemplates a maximum of 60 days for a Sponsor to identify any applicable patents after receiving a 42 U.S.C. § 262(k) application.  Amgen cannot deny (and therefore ignores) that Sandoz offered to produce its Application seven months ago in July 2014, and multiple times since then, subject only to reasonable confidentiality protections.  Amgen chose to decline all of those offers. . . .  Amgen’s alleged harms are not only self-inflicted, they run afoul of two other black-letter rules governing preliminary injunctions: neither speculative injuries nor compensable monetary losses qualify as irreparable harm.

Third, the balance of equities heavily favors Sandoz.  Sandoz is poised to launch the first biosimilar filgrastim in the United States, and an injunction would jeopardize the first-to-market advantage in which it has invested years of effort and tens of millions of dollars.  By contrast, denial of the requested injunction would not impose any undue hardship on Amgen. . . .

Fourth, the public interest factor forecloses Amgen’s request.  The BPCIA expressly seeks to balance two key public purposes: innovation and consumer interests.  Amgen has been amply rewarded for its innovation, enjoying 24 years of exclusivity although Congress concluded in the BPCIA that 12 years meets the public’s interest in innovation.

A hearing on the outstanding Motion for Preliminary Injunction and Motions for Judgment on the Pleadings is scheduled for March 13, 2015 at 10:00 AM.

By Kurt R. Karst –      

In a 19-page decision handed down earlier this week by Judge Nancy Torresen of the U.S. District Court for the District of Maine, the court ruled that Maine’s 2013 law, titled “An Act To Facilitate the Personal Importation of Prescription Drugs from International Mail Order Prescription Pharmacies,”  2013 Me. Legis. Serv. Ch. 373 (S.P. 60) (L.D. 171) (West) (the “Maine Pharmacy Act Amendments” or “MPA Amendments”) permitting (as its title suggests) importation of drug products into the U.S. from licensed retail pharmacies located in certain foreign countries (i.e., Canada, Australia, New Zealand, and the United Kingdom), is unconstitutional under the theory of field preemption.  In doing so, Judge Torresen granted a Motion for Judgment on the Pleadings filed by two Maine pharmacists and three Maine trade associations (the Maine Pharmacy Association, Maine Society of Health-System Pharmacists, and Retail Association of Maine), and denied a Motion for Judgment on the Pleadings filed by Maine’s Attorney General (Janet T. Mills) and Commissioner of Administrative & Financial Services (formerly H. Sawin Millett, Jr., and now Richard Rosen). 

The February 23rd decision stems from a September 2013 Complaint filed by the Plaintiffs, as well as then-Plaintiff the Pharmaceutical Research and Manufacturers of America (“PhRMA”), challenging the MPA under several theories (see our previous posts here and here).  PhRMA was tossed out of the lawsuit last May after the district court ruled that the trade organization lacked Article III standing (see our previous post here). 

The State Defendants argue that the MPA Amendments “simply reduce the reach of the MPA,” “that it is within [the State’s] authority as a sovereign to choose not to regulate certain conduct,” and that to hold otherwise “would violate the Tenth Amendment principle that states may not be compelled to administer federal regulatory programs.”  On the other side, the Maine pharmacist and trade association Plaintiffs argue that the FDC Act “creates a comprehensive and ‘closed’ regulatory scheme, which strictly limits the introduction of prescription drugs into interstate commerce,” and that preempts the MPA Amendments under three theories of preemption: (1) field preemption (i.e., when  “[t]he intent to displace state law altogether can be inferred from a framework of regulation ‘so pervasive . . . that Congress left no room for the States to supplement it’ or where there is a ‘federal interest . . . so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject.’” Arizona v. United States, 132 S. Ct. 2492, 2501 (2012) (quoting Rice v. Santa Fe Elevator Corp., 331 U.S. 218, 230 (1947)); (2) direct conflict preemption (i.e., a form of implied preemption that occurs when there is an inescapable contradiction between state and federal law); and (3) obstacle preemption (i.e., when “the challenged state law ‘stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.’” Arizona, 132 S. Ct. at 2501 (quoting Hines v. Davidowitz, 312 U.S. 52, 67 (1941)).

Focusing on the Plaintiffs’ contention that the MPA Amendments violate the Supremacy Clause, U.S. Const. art. VI, cl. 2, and 42 U.S.C. § 1983, under the theory of field preemption, Judge Torresen first defined the “field” at issue:

The FDCA does not regulate the licensure of pharmacists; it instead leaves that area to individual states.  If the MPA Amendments were truly limited to the regulation of pharmacy licensure, then evidence of “a congressional decision to foreclose any state regulation in the area” would be lacking.

But by its plain language, the MPA Amendments extend beyond the regulation and licensure of pharmacies and pharmacists within Maine.  The MPA Amendments do not, as the State asserts, simply repeal state licensure regulations; the MPA Amendments select five countries whose licensed retail pharmacies “may export” prescription drugs to Maine residents. . . .  [T]he MPA Amendments extend beyond the traditionally local arena of public health and safety and into the traditionally federal spheres of foreign commerce and affairs.  [(Internal citations omitted)]

As such, the properly defined “field” for preemption purposes in the case, said Judge Torresen, is “the importation of foreign pharmaceuticals.”  From there, it was all downhill for the State Defendants, because the relevant question for the court to address was then whether the FDC Act forecloses Maine’s encroachment into the realm of pharmaceutical importation.

Citing the complex new drug approval process Congress created as part of the FDC Act, as well as provisions included as part of the 2003 Medicare Modernization Act concerning the importation of drugs from Canada, Judge Torresen was compelled to conclude that there’s a clear “Congressional intent to tightly control prescription drug importation,” and that the FDC Act “occupies the field of importation of pharmaceuticals from foreign countries” rather than state law.

No matter how they are applied, the MPA Amendments regulate within the field of pharmaceutical importation.  The State has not suggested any limiting construction which would allow a portion of the law to stand, and the parties have not briefed the issue of severability.  It is apparent that removing the portion of the statute that touches on foreign commerce would defeat the purpose of the law. Because they are contrary to clear Congressional intent to occupy the field of pharmaceutical importation, the MPA Amendments violate the Supremacy Clause and are therefore preempted.

It is unclear at this time whether or not an appeal will be made to the U.S. Court of Appeals for the First Circuit.  According to press reports (here), the sponsor of the bill that was enacted as the MPS Amendments, State Senator Troy Jackson, thinks an appeal is in order. 

Moving down the Eastern Seaboard to Capitol Hill, earlier this year Senators John McCain (R-AZ) and Amy Klobuchar (D-MN) introduced S. 122, the Safe and Affordable Drugs from Canada Act of 2015, which would amend the FDC Act to require the Department of Health and Human Services to promulgate regulations within 180 days permitting individuals to import a prescription drug purchased from an approved Canadian pharmacy under certain specified conditions.