By Riëtte van Laack –

Does the same standard that applies when regulators require label statements that “correct a deception,” such as false advertising, also apply when they require label statements for other purposes based on the interests of the government?  This issue will be before the United States Court of Appeals for the District of Columbia Circuit (“D.C. Circuit”) en banc in the rehearing of the appeal by American Meat Institute and others (“AMI”) challenging the U.S. Department of Agriculture’s (“USDA’s”) regulations requiring mandatory country of origin labeling (“COOL”) statements.  (See our previous posts here, here, and here.) 

AMI had argued that the government does not have a good enough reason to override the industry’s free speech rights and force them to make statements against their will.  According to AMI, the more demanding test of Central Hudson Gas & Electric v. PSC of New York, 447 U.S.56 (1980) ought to apply rather than the lesser standard of Zauderer v. Office of Disciplinary Counsel, 471 U.S. 626, 651 (1985), because the COOL regulation was not an anti-deception regulation.  Under Zauderer, a commercial speaker has only a minimal First Amendment interest in not providing purely factual information with which it does not disagree, as long as the mandatory disclosure is reasonably related to the state’s interest in preventing or correcting deception.  The three judge panel of the D.C. Circuit, in a unanimous decision decided to follow other circuits that held that the Zauderer standard applies to more than disclosures that correct deception.  For example, in reaching its decision, the panel noted that the Second Circuit had extended it to “government interests in telling buyers that mercury-containing light bulbs do contain mercury and may not be disposed of until steps have been taken to ‘ensure that [the mercury] does not become part of solid waste or wastewater.’” The Court determined that previous D.C. Circuit decisions that AMI cited in its favor did not apply because those cases did not involve purely factual and uncontroversial information.  However, in a footnote it suggested that the full court hear the case en banc to provide a clear ruling on the issue.

Rehearings en banc are relatively rare.  The D.C. Circuit’s Handbook of Practice and Internal Procedures notes “Federal Rule of Appellate Procedure 35(a) expressly states that en banc hearings are not favored and ordinarily will not be ordered except to secure or maintain uniformity of decisions among the panels of the Court, or to decide questions of exceptional importance.”  Under the Circuit procedures, “[t]he Court sitting en banc consists of all active judges, plus any senior judges of the Court who were members of the original panel and wish to participate.”  Of the court’s senior Judges, only Judge Williams was a member of the original panel. 

On April 4, 2014, the D.C. Circuit issued an order setting the case for rehearing en banc.  Parties are to file supplemental briefs by April 21, 2014 addressing “[w]hether, under the First Amendment, judicial review of mandatory disclosure of ‘purely factual and uncontroversial’ commercial information, compelled for reasons other than preventing deception, can properly proceed under Zauderer . . . or whether such compelled disclosure is subject to review under Central Hudson.”  Oral argument before the en banc court is scheduled for 9:30 a.m. on Monday, May 19, 2014.

By Kurt R. Karst –    

Shortly after Massachusetts Governor Deval Patrick issued a press release on March 27, 2014 announcing a Declaration of Emergency and that the Governor had directed the Massachusetts Department of Public Health (“DPH”) and its Commissioner, Cheryl Bartlett, RN, to take several actions to combat opioid overdose, including granting DPH “emergency powers” to, among other things, ban the prescribing and dispensing of ZOHYDRO ER (hydrocodone bitartrate) Extended-release Capsules, rumors began to swirl that the manufacturer of the drug, Zogenix, Inc. (“Zogenix”), would take legal action.  Those rumors intensified when later on March 27, 2014 the DPH Commissioner Bartlett and the Public Health Council approved an Emergency Order stating: “No registered individual practitioner shall prescribe or order, and no one shall dispense or administer any hydrocodone bitartrate product in hydrocodone-only extended-release formulation until the Commissioner has determined that adequate measures are in place to safeguard against the potential for diversion, overdose and abuse.” 

Less than two weeks after Governor Patrick’s announcement, and now that other states are considering (or taking) similar action (e.g., Vermont recently issued an emergency rule that will reportedly make it more difficult for physicians to prescribe the drug within state limits), Zogenix is taking a stand.  Earlier this week, Zogenix filed a Complaint and a Motion for Temporary Restraining Order and Preliminary Injunction in the U.S. District Court for the District of Massachusetts alleging that the Commonwealth’s ban on ZOHYDRO ER is unconstitutional because the ban violates the Supremacy Clause, the dormant Commerce Clause, and the federal Contracts Clause of the U.S. Constitution:

To put it in plain terms: the Order banning Zohydro™ ER is unconstitutional.

To begin with, it is preempted by federal law.  FDA, not Governor Patrick and not the State DPH, has the authority to approve new drugs, to determine the formulations that are safe and effective for use, and to authorize their introduction into the interstate market.  And after extensive consideration, FDA approved Zohydro™ ER in its current formulation, finding it safe and effective for use in treating patients with chronic pain for whom their physicians conclude Zohydro™ ER is indicated.  Neither Governor Patrick nor the state DPH has the authority or the ability to countermand that determination and declare Zohydro™ ER unsafe in its current formulation.  The Order also runs afoul of the dormant Commerce Clause, which prohibits a state from taking a regulatory action that has impact outside its borders, or if which replicated would result in the effective dismantlement of a national regulatory scheme.  And it violates the federal Contracts Clause, because the Order undoes private contracts between Zogenix and other contracting parties for services in Massachusetts, all without sufficient justification. 

FDA approved ZOHYDRO ER on October 25, 2013 under NDA No. 202880 after an extended review cycle for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment and for which alternative treatment options are inadequate.  ZOHYDRO ER is manufactured without an abuse-deterrent formulation, and that fact has made the approval controversial.  Indeed, several members of Congress have sent letters to FDA protesting the approval, and legislation has been introduced to withdraw the NDA approval (S. 2134 and H.R. 4241).  Nevertheless, ZOHYDRO ER remains an approved medication.  And as Zogenix points out in its lawsuit:

In rendering a considered decision that the benefits of Zohydro™ ER outweighed the drug’s potential risks, the FDA satisfied Congress’s dual mandate of promoting and protecting public health by classifying Zohydro™ ER as “safe and effective,” consistent with its obligations under 21 U.S.C. § 393(b)(2)(B).  That determination reflects the FDA’s expert conclusion that public access to the drug “promote[s]” the public health.

Thus, Zogenix argues that the Commonwealth’s ban on ZOHYDRO ER:

stands as an impermissible obstacle, in two ways, to the FDA’s mandate to make particularized drug approvals for the protection and promotion of the public health.  First, . . . state drug prohibition decisions contrary to those of the FDA – such as the Massachusetts ban here – would harmfully undermine the authoritative character of federal safety decisions designed to have national effect. . . .  Second, the Massachusetts order plainly conflicts with the scientific predicates supporting the FDA’s approval of the same drug Massachusetts wants banned – and thus with Congress’ objective to promote public health by facilitating access to important treatments.

Zogenix is seeking, among other things, declaratory and injunctive relief.  Specifically, Zogenix seeks a declaration that Governor Patrick’s and DPH Commissioner Bartlett’s conduct in effectuating a ban on ZOHYDRO ER violates the U.S. Constitution, and final order enjoining Massachusetts from implementing or enforcing the Declaration of Emergency, the Emergency Order (or any other action banning the prescription, ordering, dispensing, and administration of ZOHYDRO ER), or an order vacating those actions.  A hearing was held on April 8th regarding Zogenix's Motion for Temporary Restraining Order and Preliminary Injunction.  Judge Rya W. Zobel granted a continuance to allow the parties some additional time.  A hearing is now scheduled for April 14th at 9:00 AM.

Massachusetts’ action banning ZOHYDRO ER, and Zogenix’s response to that action, seems to be a case of first impression.  We’re not aware of another lawsuit like it.  A decision in favor of the Commonwealth could set the stage for future state action against particular drug products, and could undermine FDA’s drug approval authority.  During the April 8th hearing, however, Judge Zobel reportedly indicated that she will likely strike down the ban, presumably on preemption grounds. 

By Jennifer M. Thomas & James P. Ellison –

Hyman, Phelps & McNamara, P.C. (HP&M) filed comments on April 7 concerning FDA’s Guidance document, Investigational New Drug Applications (INDs) — Determining Whether Human Research Studies Can Be Conducted Without an IND (the “Guidance”).  HP&M has previously blogged on this Guidance (here, here, here, and here).

HP&M’s comments on the Guidance focus on the legal issues that the Guidance raises.  Most important, through the Guidance FDA seeks to impose on food, medical food, dietary supplement and cosmetics the same pre-study requirements that the law properly authorizes for drug studies.  However, FDA has no legal authority to impose these requirements on non-drug studies, as HP&M’s comments make clear.  The negative public health impacts of FDA’s unauthorized Guidance, while not the primary focus of these comments, would be profound.  HP&M’s comments point out that the only appropriate solution is for FDA to remove references to foods and cosmetics from the Guidance and to revise the Guidance to make it consistent with the authority granted to FDA under the Federal Food, Drug, and Cosmetic Act.

Spring is here!  How do we know?  Is it the cherry blossoms in peak bloom in Washington, DC?  Is it the daffodils emerging from hibernation?  No – we know it’s Spring because the annual American Conference Institute (“ACI”) “Paragraph IV Disputes” conference is right around the corner. 

That’s right, ACI will be holding its 8th annual “Paragraph IV Disputes” conference from April 28-29, 2014 at the Conrad New York in New York City.  The 2014 conference is a special one with the 30th Anniversary of the Hatch-Waxman Amendments later this year (September 24, 2014).  Attendees will get to hear from a virtual “who’s who” of Hatch-Waxman litigators and industry decision makers.  Hyman, Phelps & McNamara, P.C.’s Kurt R. Karst will be speaking at a session assessing implementation of the Generic Drug User Fee Amendments and other recent developments that affect Paragraph IV litigation.

FDA Law Blog is a conference media partner.  As such, we can offer our readers a special $200 discount off the current price tier.  The discount code is: FDA200.  You can access the conference brochure and sign up for the event here.  We look forward to seeing you at the conference.  

The American Bar Association’s Section of Ligation (specifically the Food and Supplements Subcommittee of the Products Liability Committee) just announced its Fourth Annual Food & Supplements Workshop, scheduled for June 5 in the Minneapolis area.  Among the topics to be addressed:

• Emerging Issues: Surveying the Regulatory and Litigation Horizon
• Ethical Issues Arising from Governmental Investigations and Potential Criminal Charges Under the Park Doctrine
• FSMA New Developments
• Consumer Fraud Class Actions—Litigation and Settlement Strategy
• Anatomy of a Recall
• Litigation Risks: How In-House and Outside Counsel Can Work Together to Identify and Preemptively Address Potential Lawsuits Targeting Food and Supplement Products

Hyman, Phelps & McNamara, P.C.’s Ricardo Carvajal will participate in discussion of key issues raised by the latest proposed regulations issued under the authority of the Food Safety Modernization Act.  Additional information and a link to registration are available here.  

By Karla L. Palmer –

The Energy and Commerce Committee’s Subcommittee on Health (chaired by Representative Joe Pitts (R-PA)), has scheduled a hearing for Monday, April 7, 2014, at 3:00 p.m. in room 2123 of the Rayburn House Office Building.

The hearing is titled “Improving Predictability and Transparency in DEA and FDA Regulation.” Industry and government witnesses include, among others, Janet Woodcock, M.D. (Director CDER, FDA), Mr. Joseph T. Rannazzisi (Deputy Assistant Administrator, Office of Diversion Control, DEA);  Dr. Nathan B. Fountain (Chair, Medical Advisory Board, Epilepsy Foundation), and Mr. John M. Gray (President and CEO, HDMA).

Subcommittee members will review three bills described below: H.R. 4299, “Improving Regulatory Transparency for New Medical Therapies Act,”; H.R. 4069, “Ensuring Patient Access and Effective Drug Enforcement Act;” and H.R. 4250, the “Sunscreen Innovation Act”.

H.R. 4299, blogged about here, would amend the CSA to improve efficiency of the DEA’s process for scheduling new drugs approved by the FDA. Introduced by Representative Pitts (R-PA) and Ranking Subcommittee Member Frank Pallone (D-NJ), the bill would require DEA to make a final determination within 45 days after receiving FDA’s scheduling recommendation for a new drug.  Additionally, it would generate more transparency in the drug application process for clinical trials by requiring that DEA make a final determination within 180 days or provide the applicant with details about what outstanding issues remain unresolved.

H.R. 4069, introduced by Vice Chairman Marsha Blackburn (R-TN), Rep. Tom Marino (R-PA), would improve enforcement efforts regarding controlled substance drug diversion and abuse.  The legislation would help prevent controlled substance abuse and diversion, yet ensure patient access to necessary medications by creating a collaborative partnership between drug manufacturers, wholesalers, retail pharmacies and federal enforcement and oversight agencies.  

The bill also seeks to better define standards set forth in the CSA including the definition of “consistent with the public health and safety” as having a “substantial relationship” to the CSA’s “purpose of preventing diversion and abuse of controlled substances.”  In addition, the legislation would further define “imminent danger” as meaning “a significant and present risk of death or serious bodily harm that is more likely than not to occur in the absence of an immediate suspension order.” (Emphasis added.)   This enhanced definition of “imminent danger” may be a fallout from DEA decisions to issue immediate suspension orders against at least two drug distributors and at least one nationwide retail pharmacy in the past few years where the subject of those immediate suspension orders involved conduct that occurred — and typically had resolved – well prior to DEA’s serving of the immediate suspension orders, causing the parties to challenge the DEA’s definition and interpretation of what constitutes “imminent danger.” 

The legislation would also require employers (specifically distributors and manufacturers of schedule I though V drugs)  to obtain as a condition of the registration criminal background checks and drug testing for employees with access to controlled substances. The employee background checks must be obtained periodically (not more frequently than every two years) and at the time of hiring (if hired after the date of the enactment of the legislation). Those that fail to comply with the background check provision would be subject to civil penalties. 

The legislation would also permit registrants the opportunity to submit a corrective action plan prior to revocation or suspension of a registration under 21 U.S.C. § 824(c).  Specifically the amendment would require the DEA to provide notice to the registrant of the grounds for revocation or suspension including the citation to specific violations, and give the registrant an opportunity to submit a corrective plan within a reasonable period of time to demonstrate how the registrant plans to correct the grounds for revocation or suspension.  The DEA would then make a determination whether in light of the plan, revocation or suspension proceedings should be discontinued or deferred or additional changes need to be made to the corrective plan. 

Finally, the legislation would also establish the “Combat Prescription Drug Abuse Working Group” to include not more than 20 members (pharmacy, patient groups, manufactures, distributors, hospitals and health care providers, law enforcement, DEA representatives, states attorneys general representatives, and public policy experts, among others).  The (non-paid) Working Group members would, among other things, review and report to Congress on efforts to reduce prescription drug abuse and diversion, examine recommendations for transfer of controlled substances between schedules, and make specific recommendations to reduce diversion and abuse of prescription drugs.  The Working Group would also be responsible for various reports and recommendations for FDA, DEA and various other federal and state agencies on several topics identified in the legislation. 

H.R. 4205, introduced by Representative Ed Whitfield (R-KY) and Rep. John Dingell (D-MI), would expedite the FDA’s approval process for new sunscreen ingredients while maintaining strict safety standards. The FDA has not approved a new sunscreen ingredient in almost two decades. As we previously reported, the legislation would attempt to streamline the drug approval process for sunscreens and provide transparency – through regular reports to Congress. The legislation would require that pending applications are completed within eight months and that new applications reviewed within 11 months.

By John A. Gilbert, Jr. – 

A new bill introduced in Congress, H.R. 4299 (titled “Improving Regulatory Transparency for New Medical Therapies Act”), would significantly streamline the drug scheduling process for new medical therapies and reduce the potential for unnecessary delays in the availability of these needed medicines.  The bill would also require the Drug Enforcement Administration (“DEA” or “Agency”) to make a decision on new registration applications for the manufacturing and distribution of drugs and substances used in clinical trials.  A hearing on the bill is scheduled before the House Energy and Commerce Committee on April 7, 2014.   

As reported here and here, the recent example of the long delay in DEA’s scheduling of Eisai’s FYCOMPA (perampanel) – more than a year after it was approved for marketing by the FDA – highlights the need for a change in the process.  The bill would amend the Controlled Substances Act (“CSA”) to require DEA to issue an interim final scheduling rule within 45 days of receiving a recommendation from the Department of Health and Human Services (“HHS”) to schedule a new drug or substance not previously marketed or scheduled in the United States.  The bill would require DEA to take such action pursuant to the “good cause” exception to issuing a notice of proposed rulemaking under the Administrative Procedures Act (5 U.S.C. § 553(b)(3)(B)).  The interim final rule would be made immediately effective pursuant to 5 U.S.C. § 553(d)(3).

As we discussed previously, scheduling based on the HHS recommendation is reasonable and rational for a new medicine where the drug has not been marketed in the United States and thus there is no actual abuse data available.  Under such circumstances, the HHS and FDA scientific and medical review of the drug is the best source of abuse potential, so scheduling a new drug on this basis is consistent with the public interest.  It also avoids the issue previously reported where Eiasi faced losing a significant period of its patent exclusivity solely because it had to await DEA’s scheduling notice for the newly approved drug.

The bill would also amend the CSA to put a time limit on DEA’s review of an application for a DEA registration to be used only for the manufacture or distribution of a controlled substance for clinical trials.  The DEA would be required to make a decision within 180 days of receiving the application.  If the Agency does not make a decision on the application within this time, the Agency would have to give written notice to the applicant as to any outstanding issues that must be resolved in order to make a final decision on the application and the estimated date on which a decision would be made. 

Neither the CSA nor DEA regulations currently impose any time limits on DEA to decide on whether to grant or deny new applications for any DEA registration.  Imposing such time limits could be beneficial to all applicants – not just manufacturers or distributors for use in clinical trials.  We would like to see such limits imposed on all DEA applications for registration; not just in the narrow context expressed in the bill.  There are some obstacles where the 180-day time limit may be difficult, e.g., where DEA is required to publish a notice in the Federal Register for applications for bulk manufacturing of narcotic drugs; however, in most cases requiring DEA to act on an application within, for example, six months would not likely be an unreasonable burden on the Agency.

By Kurt R. Karst –      

In a 17-count, 84-page Complaint filed earlier this week in the U.S. District Court for the District of New Jersey, Mylan Pharmaceuticals Inc. (“Mylan”) alleges that Celgene Corporation (“Celgene”) has violated federal and state antitrust laws by preventing generic competition for Celgene’s drug products, THALOMID (thalidomide) Capsules and REVLIMID (lenalidomide) Capsules.  Both drug products are the subject of a Risk Evaluation and Mitigation Strategies (“REMS”) – here and here – providing for restricted distribution of the products because of safety concerns – a so-called ETASU (Elements To Assure Safe Use) REMS.  

According to Mylan:

Celgene, a branded drug manufacturer, has used REMS as a pretext to prevent Mylan from acquiring the necessary samples to conduct bioequivalence studies, even after the FDA determined that Mylan’s safety protocols were acceptable to conduct those studies.  In furtherance of its scheme to monopolize and restrain trade, Celgene implemented certain distribution restrictions that significantly limit drug product availability.  Indeed, Mylan had contacted known wholesale distributors throughout the years, in an effort to obtain Thalomid and Revlimid samples, however, those efforts were unsuccessful.  Throughout this entire period, Celgene has engaged in a scheme . . . to continuously prevent and/or stall all of Mylan’s efforts to obtain samples of Thalomid and Revlimid.  In so doing, Celgene prevented Mylan from obtaining any of the drug products necessary to conduct required bioequivalence testing.

Among other things, Mylan is seeking preliminary and permanent mandatory injunctive relief to compel Celgene to sell Mylan sufficient quantities of THALOMID and REVLIMID at market prices for purposes of bioequivalence testing and ANDA submission, and compensatory damages for Mylan’s lost sales of generic THALOMID and REVLIMID (and profits on those sales) determined to be caused by the delay in Mylan’s ability to submit an ANDA to FDA.

Issues concerning ETASU REMS, restricted distribution programs, and generic competition have previously been debated in court.  As we previously reported, in September 2012, Actelion Pharmaceuticals Ltd. and Actelion Clinical Research, Inc. preemptively sued prospective ANDA applicants Apotex Corp. and Roxane Laboratories, Inc. in a Complaint filed in the U.S. District Court for the District of New Jersey seeking declaratory relief that Actelion is under no duty or obligation to supply ANDA applicants with TRACLEER (bosentan) Tablets, approved with an ETASU REMS, for purposes of bioequivalence testing and ANDA submission.  That lawsuit was ultimately dismissed after a settlement between the parties, but not before the Federal Trade Commission filed an amicus brief in the case (see our previous post here) asking the court to “carefully consider the unique regulatory framework governing the pharmaceutical industry and the potential ramifications for consumers of prescription drugs.”

Another lawsuit going back to early 2008 brought by Lannett Company, Inc. against Celgene involving THALOMID, restricted distribution, and generic competition issues was also dismissed after a settlement between the parties.  (See our previous post here.)

By William T. Koustas –

FDA has begun its efforts to implement the Drug Supply Chain Security Act (“DSCSA”), also known as Title II of the Drug Quality and Security Act.  As we have reported in prior posts (here and here), the DSCSA requires FDA to issue a series of guidance documents and hold public meetings with respect to the exchange of transaction information, transaction history, and transaction statements (“TI/TH/TS”), the serialization of prescription drug products, and the handling of suspect or illegitimate prescription drugs.  FDA took a first step in that direction in February, when it issued a call to pharmaceutical supply chain stakeholders for their comments with respect to these issues.  In a Federal Register notice, 79 Fed. Reg. 9745 (Feb. 20, 2014), FDA asked stakeholders and interested parties to provide comments on: (1) their current practices and ideas for the interoperable exchange of TI/TH/TS in paper and electronic format; (2) the feasibility of establishing standardized documents to facilitate the exchange of TI/TH/TS; and (3) current practices and ideas on the exchange of information between supply chain members and FDA with respect to verification requests and notifications for suspect or illegitimate drug products.  The federal register notice includes several questions in these areas to which stakeholders can respond or they can submit general comments with respect to these topics.  Comments are due by April 21, 2014.

On April 2, 2014, FDA issued a notice for a public workshop titled, “Standards for the Interoperable Exchange of Information for Tracing of Human, Finished Prescription Drugs, in Paper or Electronic Format,” 79 Fed. Reg. 18562 (April 2, 2014).  The purpose of this workshop, which will be held May 8th and 9th at FDA’s White Oak Campus, is to provide an opportunity for interested parties to share information on current practices, research, and ideas regarding the feasibility of creating standardized TI/TH/TS documents.  FDA notes that it is particularly interested in using the workshop to learn about current practices, processes, and systems stakeholders use to exchange information as well as how trading partners could respond to verification requests and notifications as required by the DSCSA.  People interested in attending this workshop must register by April 24, 2014.  FDA is also accepting comments regarding the workshop until June 9, 2014.     

FDA has also created a website that summarizes the implementation timeframes created by the DSCSA.  These timeframes are currently based on statutory deadlines, but FDA indicated that it will “update” this website as appropriate. 

By Kurt R. Karst –       

Earlier this week, Celltrion Healthcare Co., Ltd. and Celltrion, Inc. (collectively “Celltrion”) filed a Complaint for Declaratory Judgment in the U.S. District Court for the District of Massachusetts seeking a judgment with respect to certain patents allegedly covering Janssen Biotech, Inc.’s (“Janssen’s”) biological product REMICADE.  The Complaint marks the beginning of the second lawsuit that will undoubetedly bring into play the complex patent resolution provisions added to the PHS Act by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).  The BPCIA created a pathway for the submission and approval of biosimilar versions of brand-name reference products under a so-called Section 351(k) application. 

In November 2013, in Sandoz, Inc. v. Amgen, Inc. and Hoffman-La Roche, Inc., the U.S. District Court for the Northern District of California granted Amgen Inc.’s and Hoffmann-La Roche Inc.’s Motion to Dismiss a June 2013 Complaint for Declaratory Judgment and Patent Invalidity and Non-infringement concerning two patents Roche licensed to Amgen that purportedly cover Amgen’s biological product ENBREL (etanercept).  According to the district court, “Sandoz does not contend, and cannot contend, it has complied with its obligations under [PHS Act §§ 351(l)(2)-(6)], because . . . it has not, to date, filed an application with the FDA.”  The reference to PHS Act §§ 351(l)(2)-(6) is to the BPCIA’s multi-step “patent dance” procedures: Step 1 – Transmission of Biosimilar Application; Step 2 – Reference Product Sponsor’s Paragraph 3(A) Patent List; Step 3 – Biosimilar Applicant’s Paragraph 3(B) Patent List; Step 4 – Reference Product Sponsor’s Response; Step 5 – Patent Resolution Negotiations; Step 6 – Patent Resolution If No Agreement; and Step 7 – Filing of the Patent Infringement Action. 

As we previously reported, Sandoz appealed the district court decision to the U.S. Court of Appeals for the Federal Circuit (Docket No. 14-1693).  In March, Sandoz filed its Opening Brief in the appeal.  According to Sandoz, the district court’s decision “completely deprives federal courts of jurisdiction over any declaratory judgment action implicating a biosimilar product until after the FDA had already approved the product—a serious error that undermines the BPCIA’s stated purpose of advancing competition for biologic drugs.”  Moreover, says Sandoz, the court’s belief that it lacked jurisdiction because Amgen did not specifically threaten to sue Sandoz for patent infringement is directly contrary to the U.S. Supreme Court’s holding in MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), which the district court did not cite in its decision.  Sandoz continues in its brief with some interesting arguments and thoughts:

The district court’s contrary ruling defies both the plain text and very purpose of the BPCIA.  The BPCIA contains no provision depriving courts of jurisdiction to resolve patent disputes where jurisdiction already existed, as here, before an FDA filing.  While the BPCIA does contain certain limitations on declaratory judgment actions after a biosimilar application is submitted, those limitations do not apply to Sandoz’s complaint, which was filed before any FDA application.  The district court was not at liberty to impose a jurisdictional bar that does not exist in the statute’s text, and its decision to create such a bar—without briefing on the issue, no less—was pure error.

The district court compounded this error by misinterpreting the BPCIA’s provisions.  According to the district court, “neither a reference product sponsor, such as Amgen, nor an applicant, such as Sandoz, may file a lawsuit unless and until they have engaged in a series of statutorily-mandated exchanges of information.”  But those patent exchanges serve only as a prelude for an action for a patent owner’s infringement lawsuit under § 271(e)(2)(C), not a declaratory judgment.  The statute allows either party to file for declaratory judgment once a biosimilar applicant gives notice of its intention to market its product.  Thus, even if the BPCIA applied, as the district court found, its provisions would expressly permit Sandoz’s action here because Sandoz provided Amgen notice of its intention to commercially market its product before bringing this case. . . . 

The district court’s judgment also seriously disrupts the exclusivity structure of the BPCIA.  According to the statute, the biosimilar applicant must give at least six months’ notice before launching its product.  If a biosimilar applicant is forbidden from providing this notice before its approval—as the district court now holds—then applicants will be forbidden from launching biosimilar products until six months after obtaining final FDA authority to do so, in all cases, and regardless of any existing patent coverage or the expiry of the 12-year data exclusivity period.  The court’s erroneous construction thereby guarantees every biosimilar product must uselessly wait to launch for six months after the FDA provides formal approval to launch, creating an extra-statutory period of product exclusivity that Congress never intended in drafting the BPCIA. [(Emphasis in original; internal citation omitted.)]

We won’t be surprised if we see some of these same arguments made in the new Celltrion case, which we assume also involves a product that will be the subject of a Section 351(k) biosimilar application. 

Celltrion’s product REMSIMA, which is reportedly approved in 47 countries and is pending approval in another 23 countries, is intended as a biosimilar version of REMICADE.  REMICADE is a blockbuster product that FDA first approved in August 1998 under BLA No. 103772.  It is currently approved for treating myriad diseases and conditions: rheumatoid arthritis, ulcerative colitis, Crohn’s disease, ankylosing spondylitis, psoriatic arthritis, and plaque psoriasis. 

According to Celltrion, the company “intends to apply for marketing approval of Remsima® in the United States during the first half of 2014,” and expects FDA approval “by early 2015 (assuming the approval process is not hindered by interference from Janssen or its affiliates).”  That means Celltrion is very close to submiting a Section 351(k) biosimilar application to FDA.  Indeed, the company says that it has “scheduled a final meeting with the FDA to discuss the format and content of Celltrion’s regulatory application.”

To clear the patent thicket and a path to marketing its biosimilar version of REMICADE, Celltrion says that it is necessary to obtain a declaratory judgment that certain patents applicable to REMICADE – U.S. Patent Nos. 5,919,452, 6,284,471, and 7,223,396 – are invalid and unenforceable.  According to Celltrion:

Janssen and its predecessors originally applied for patents relating to Remicade® in 1991, and obtained its first patent in 1997.  Under U.S. law, Janssen’s period of permissible patent protection should have already ended.  However, Janssen and its predecessors are trying to improperly extend its monopoly after its initial patents expired.  Janssen holds at least three U.S. patents. . . that will purportedly cover Remicade® beyond 2014. . . .  Celltrion is informed and believes that Janssen and its predecessors and affiliates have engaged in manipulative and deceptive practices before the U.S. Patent & Trademark Office to improperly extend the length of its patent monopoly for Remicade®, and to obtain patents the Patent Office never would have issued had it known all material facts.

Why initiate litigation now instead of after the filing of a Section 351(k) biosimilar application?  According to Celltrion:

Because Celltrion expects to face patent infringement allegations from Janssen, Celltrion wants to start the adjudicative process regarding the invalidity and unenforceability of Janssen’s patents.  This will enable Celltrion to immediately avail itself of the processes available in the federal judiciary to discover information relating to Janssen’s patents, to learn Janssen’s claim constructions and infringement contentions, and to present issues speedily for adjudication and test the validity and enforceability of Janssen’s patents.

And if Celltrion is unable to challenge the patents now, what then?  According to the company, it “would delay Celltrion’s access to the judicial system for about 10‐12 months (and perhaps even longer),” which “could force Celltrion into a difficult choice between (a) launching Remsima® without the benefit of discoverable information regarding Janssen’s patents and legal positions, or (b) not launching Remsima® at the earliest opportunity and waiting for a delayed legal process to play out.”  

We’re keeping a close eye on both the Sandoz and Celltrion cases because the decisions in these cases will undoubetedly set the stage for the implementation (and success or failure) of the BPCIA for years to come.

By Riëtte van Laack –

The U.S. Court of Appeals for the District of Columbia Circuit recently declined to stop USDA/AMS implementation of the amended Country of Origin Labeling ("COOL") regulations for beef, pork, and poultry products requiring identification of the country where the animals are born, raised and slaughtered and preventing commingling. The amended COOL regulations were issued in May 2013 (see our previous post here).   USDA gave industry until November 2013 to comply.  The American Meat Institute ("AMI") and others filed a complaint and request for preliminary injunction, which was denied by the district court. On appeal, AMI claimed that USDA’s amended regulations were outside the Agency’s authority under the COOL statute and violated the First Amendment.  They further claimed that the rule merely satisfied consumers’ curiosity.  The Court of Appeals affirmed the district court's decision that “AMI [was] unlikely to succeed on the merits of its claims.”

Even if there is no appeal, the appellate decision is not the end of the road for controversy over COOL.  The World Trade Organization ("WTO") already found that an earlier version of COOL was a trade barrier.  The new COOL requirements allegedly are more onerous than the first, and Canada and Mexico are back at the WTO (see here).  A WTO decision is expected in summer 2014.

By Ricardo Carvajal –

A putative class action targeting certain food products that declare “evaporated cane juice” (ECJ) as an ingredient was recently stayed based on the doctrine of primary jurisdiction.  As noted by the Court, prior decisions have gone both ways on the question of whether deferral under the primary jurisdiction doctrine is appropriate in cases alleging that the use of “evaporated cane juice” as an ingredient name is false and misleading.  What makes this decision noteworthy is its reliance on the fact that FDA recently reopened the comment period on its 2009 Draft Guidance, titled Ingredients Declared as Evaporated Cane Juice. The Court explained:

Leaving aside the question of whether the Court can properly determine, in the first instance, if ECJ is or is not the “common or usual name” of this ingredient, the FDA’s action clearly indicates that the agency is exercising its authority in this area. In light of the fact that FDA has revived its review of the ECJ issue, the Court finds that the FDA’s position on the lawfulness of the use of that term is not only. . . “not settled,” it is also under active consideration by the FDA. Any final pronouncement by the FDA in connection with that process almost certainly would have an effect on the issues in litigation here.

The Court stayed the action until August 1, at which time it expects an update from the parties on the status of FDA’s action.  It remains to be seen whether other courts presiding over similar lawsuits will follow the Court’s lead.

GMA Science Forum 2014 kicks off on April 6 in Washington, DC.  The Forum will feature numerous sessions addressing scientific and regulatory issues of interest to the packaged food industry.  A complete agenda is available here.  HPM attorneys will help present a half-day introduction to food law using a case-study approach that will cover (1) evaluating the regulatory status of ingredients and products, (2) securing supply chains and adhering to manufacturing requirements, (3) developing product labeling and advertising, (4) anticipating and responding to crises, and (5) managing relationships with regulators.  We’re also participating in a half-day session on administration of the GRAS exception.  Registration is available here.

By Allyson B. Mullen –

On March 25, 2014, FDA issued a proposed rule amending the regulations for classification and reclassification to conform to the changes to the Federal Food, Drug, and Cosmetic Act (the Act) made by the Food and Drug Administrative Safety and Innovation Act (FDASIA).  79 Fed. Reg. 16252 (Mar. 25, 2014).  Under Section 513(e)(1)(A)(i) of the Act, FDA may, based on new information, reclassify a device by administrative order (as opposed to the pre-FDASIA requirement of reclassification by regulation) and revoke any related regulation or requirement in effect under a PMA approval order.  FDA may undertake such reclassification on its own initiative or upon request from an interested person.  21 U.S.C. § 360c(e)(1)(A)(i).  The post-FDASIA statutory procedures have made it easier to reclassify medical devices (see our prior post here).  

The proposed rule seeks to implement the statutory changes from FDASIA in the regulations and to bring clarity to the classification and reclassification process for devices.  The changes that FDA proposes making to Part 860 include removing repetitive language from the regulations, using definitions that are consistent with the statute, and clarifying the class III device definition.  By modifying the class III device definition, FDA intends to make it clearer which devices that are currently classified as class III are not suitable for down-classification.

Specifically, FDA has proposed making the following material changes to the 21 C.F.R. Part 860:

• In 21 C.F.R. § 860.3
• Changing the term “life-supporting or life-sustaining device” to “supporting or sustaining human life.”
• Making minor clarifying changes and removing repetitive language from the definitions of class I and class II devices.
• Clarifying the definition of “generic type of device” to address the inter-relationship between a device product code, generic type and classification regulation.
• Removing definitions for “classification questionnaire” and “supplemental data sheet” because FDA has proposed removing the use of these forms.
• Adding definitions of “general controls” and “special controls.”  The definition of general controls is consistent with the definition in Section 513(a)(1)(A) of the Act.  The definition of special controls identifying such controls as necessary to provide a reasonable assurance of safety and effectiveness for a class II device.
• Changing the defined term “implant” to “implantable device.”  This change has been incorporated throughout Part 860.
• Adding a definition of a “special controls guideline” as a means for providing reasonable assurance of safety and effectiveness pursuant to Section 513(a) of the Act.
• In 21 C.F.R. § 860.3, substantially rewriting the definition of class III.  The proposed rule defines a class III device as one that is classified as such under section 513(f)(1) or 520(l)(1) of the Act, or a device for which there is insufficient information to determine if general or special controls are sufficient to provide a reasonable assurance of safety and effectiveness and the device (1) is intended for use in supporting or sustaining life; (2) is intended for “a use that is of substantial importance in preventing impairment of human health;” or (3) presents a potential unreasonable risk of illness or injury.  The proposed definition seeks to clarify when the Commissioner can find that there is insufficient information to determine if general or special controls are sufficient to provide a reasonable assurance of safety and effectiveness by listing five examples:
• Devices that have a favorable risk-benefit profile, but present “significant risks that cannot be adequately controlled through general or special controls.”
• Devices that have an unknown or unfavorable risk-benefit profile.
• Devices that have a favorable risk-benefit profile but require more stringent controls, including a full review of manufacturing information.
• Devices that require premarket review of any changes that may affect safety or effectiveness of the device.
• Combination products with a device primary mode of action, which include a drug or biologic constituent part that require a finding of safety and effectiveness, and such a finding has not been made.
• In 21 C.F.R. § 860.7, updating the class II classification or reclassification requirements for safety and effectiveness.  The proposed changes include establishment of special controls for class II devices, thereby replacing the term “performance standard” because special controls include performance standards.  This change has been adopted through the remainder of Part 860 as well.
• In 21 C.F.R. §§ 860.84 and 860.123, removing the requirement to utilize classification questionnaire and supplemental data sheet as part of the classification process.  FDA now requests that practitioners focus on providing information regarding “review of available valid scientific evidence, appropriate regulatory controls give the risks presented by the device, and regulatory standards to understand whether general controls are sufficient to provide [reasonable assurance of safety and effectiveness] or whether general controls and special controls are sufficient to provide [reasonable assurance of safety and effectiveness].”
• Adding new 21 C.F.R. § 860.90 and amending 21 C.F.R. § 860.125 to explain how and when FDA will consult with panels regarding classification of preamendment devices.
• In 21 C.F.R. § 860.93, adding a provision requiring that any panel recommendation for classification or reclassification into class II for any implantable device or any device intended for use in sustaining or supporting human life must describe the special controls necessary for providing reasonable assurance of safety and effectiveness. 
• In 21 C.F.R. § 860.120, clarifying that a reclassification can pertain to all of the devices within a classification or only one generic type, and that the Commissioner can reclassify class I, II or III devices into any of the other classes and under what conditions a reclassification may be initiated.
• In 21 C.F.R. § 860.130, amending the language to reflect the new reclassification procedures from FDASIA and requiring that a proposed reclassification order must include “(1) A substantive summary of valid scientific evidence, including the public health benefits and risks of the device; (2) when reclassifying from class II to class III, an explanation that general and special controls are insufficient to reasonably assure safety and effectiveness; and (3) when reclassifying from class III to class II an explanation that general and special controls are sufficient to reasonably assure safety and effectiveness.”
• In 21 C.F.R. § 860.132, making the process to initiate reclassification of a device after FDA has initiated the establishment of a performance standard or requirement for a PMA consistent with FDASIA.
• In 21 C.F.R. § 860.133, revising the procedures for requiring the filing of a PMA for a class III preamendment device to be consistent with FDASIA, including issuance of the final rule in the Federal Register and holding a classification panel meeting.  A proposed order must include the same information discussed above in 21 C.F.R. § 860.130.  Given the dwindling number of class III preamendment devices, this will affect only a few devices.
• In 21 C.F.R. § 860.134, clarifying the process for reclassifying postamendment devices and including a reference to the de novo classification process.  Also, the proposed rule adds the process for reclassification of a postamendment device when such reclassification is initiated by FDA.
• In 21 C.F.R. § 860.136, revising the procedures for reclassification of a transitional device when initiated by FDA or by the manufacturer or importer. 

The most interesting of the proposed changes is the new definition of class III.  The portion of the definition defining a class III device is relatively unchanged, although we find the proposed definition easier to read.  The addition of the five categories of devices for which there is insufficient information to determine if general or special controls are sufficient to provide a reasonable assurance of safety and effectiveness are likely to elicit the most comments from industry.  While the amendments to the reclassification procedures in FDASIA have made it easier for FDA to reclassify devices, the proposed substantive changes to the class III definition shows that FDA wants industry to know which devices the Agency believes are class III.  This change not only affects requests for reclassification of current class III devices to class I or II, but will also likely impact new devices seeking classification through the de novo pathway.  Thus, the change to the class III definition could result in a great number of new devices requiring approval of a PMA rather than clearance through a de novo petition. 

Comments to the proposed rule may be submitted through now and June 23, 2014. 

Earlier this week we gave a “Coming Soon” announcement about a forthcoming posting of an FDA-related crossword puzzle written by Jeffrey N. Gibbs and Etan J. Yeshua as part of a celebration of Hyman, Phelps & McNamara, P.C.’s 34th anniversary earlier this month.  Well, it’s here – game on folks!

Below is the crossword puzzle, followed by the clues to completing it.  You can also download a PDF copy of the puzzle here (see the Note below).  We’re posting this at Noon (Eastern Time) on Wednesday, March 26th.  Contestants have 48 hours to complete the crossword puzzle – until Noon (Eastern Time) on Friday, March 28th – and submit their results to us.  Completed puzzles can be emailed to Mr. Gibbs at jgibbs@hpm.com.  Good luck!  And have fun!

We’ll update this post later on Friday with the crossword puzzle answers.  Everyone who submits a correct set of answers will be congratulated with a coveted HP&M Crossword Puzzle certificate.  The first one to submit a correct set of answers will receive a special HP&M Crossword Puzzle certificate commemorating the accomplishment.

 Across
1. Cartoon explorer
5. Beat handily
9. Tally at the end of an Advisory Committee
14. _____ Pharmaceuticals (recently acquired Dublin-based company)
15. Year: Lat. (NOTE: Mea culpa. This clue was changed from "Years: Lat." to "Year: Lat.")
16. What a 19-Across does with photons
17. Sought-after agency designation
19. A Part 1040 product
20. Sought-after agency designation
21. Animal regulated as a medical device
23. More festive, as apparel
24. Invokes section 302
28. Some preclinical subjects
30. ___ Mack (long-serving manager)
31. Sec. 502(g) compendium
34. Boy band started in 1995
37. Popular OTC IVDs
38. Confirmed Agency official?
42. Attorney William who signed the Articles of Confederation in 1778
43. Like some dealings or figures
44. Also
45. Demand
48. Hoppers down under
50. Atlanta and Boston District Offices, e.g.
53. _____ Harbor
57. First line of a letter from President McKinley, maybe
58. Former Director of DDMAC and FDLI Chair ________ Baylor Henry
59. Offer before “Buckle up.”
62. Like an FDA-approved drug
64. Blender setting
65. Reviewer of an academic paper
66. With 63-Down, ever-increasing Agency cost
67. Hon. title of honor for some priests
68. Arbor Day honoree
69. Destinations of individuals under section 333?

Down
1. Remove condensation, as on a windshield
2. Ugandan attorney and political leader Otunnu
3. Hoarse
4. National_____
5. Sew
6. Chemical consisting of A, C, G and U
7. “Let me go!”
8. Some Sec. 890.5370 devices
9. Sphygmomanometer feature, often
10. FDA regional office located on John Galt Blvd.
11. “___ healthy to be sick sometimes.” – Henry David Thoreau
12. Summer in Paris
13. Ukr., formerly
18.  Designer Tarantino
22. List ender
24. Syndrome on a bottle of aspirin
25. Comment, as to a proposal
26. FDA-approved angina treatment, for short
27. Directive to a top FDA official to depart?
29. Sponsor’s post-trial document: Abbr.
31. 1921 Fritz Lang film, “Vier ___ Frau”
32. Steam room
33. The Gray Sheet and FDA News, for example, with “the”
35. High degree
36. Organization ______
39. Containing more particulate matter
40. Hoopla
41. Like some people treated by 19 across
46. Scottish treats
47. FDA summary of physical/functional result, e.g., QOL
49. Parodied
51. Expert
52. Like a drug with fewer side effects
54. Plant listed in Part 182
55. In two
56. Gawks naughtily
58. Just
59. Largest FDA specialty firm
60. Sold in the UK and Aus., e.g.
61. Czech dest.
63. See 66-Across

Friday, March 28, 2014

Thank you to all of our contestants.  We received many entries – several with the puzzle solution.  The first person to submit a correct puzzle solution, and the recipient of the special HP&M Crossword Puzzle certificate, is: Steven Lawrie, MS, MA.  The puzzle solkution is below.