By William T. Koustas & Jessica A. Ritsick –

In light of California’s looming electronic pedigree requirement, still scheduled to become effective in 2015, we have been following Congress’s progress toward a national prescription drug track and trace system (see our previous post here).  The U.S. House and Senate have been considering track and trace legislation this session, and on June 3, 2013, the House came one step closer to making a national prescription drug pedigree system a reality by passing the Safeguarding America’s Pharmaceuticals Act of 2013 (H.R. 1919).  The House bill has several sponsors, led by Representatives Latta (R-OH) and Matheson (D-UT).  A detailed outline of the bill prepared by Hyman, Phelps & McNamara, P.C. can be found here.

The House bill would amend the Federal Food, Drug, and Cosmetic Act (“FDCA”) to incorporate national standards for a prescription drug track and trace system as well as national standards for prescription drug wholesale distributors (“wholesalers”) and third-party logistics providers (“3PLs”).  Both the track and trace system and national standards (e.g., storage, facility requirements, maintenance of records, etc.) for wholesalers and 3PLs set forth in this legislation would preempt state pedigree and certain other wholesaler and 3PL requirements. 

This legislation provides specific track and trace requirements for prescription drug manufacturers, wholesalers, repackagers, 3PLs, and dispensers (e.g., pharmacies).  Beginning on January 1, 2015, manufacturers would be required to pass the transaction history (i.e., “pedigree”) with any prescription drug product they distribute.  Within five years of enactment, manufacturers would also be required to include a product identifier number on each “homogeneous case” of prescription drug product they produce.  By April 1, 2015, wholesalers would be required to pass and receive a transaction history for any prescription drug products they receive or distribute and, within seven years of enactment, would be permitted to distribute only those drug products that bear a product identifier.  Similarly, repackagers would be required to pass a transaction history for any prescription drugs they distribute by April 1, 2015 (with respect to drugs received from wholesalers) or January 1, 2015 (with respect to drugs received from entities other than wholesalers).  Repackagers would also be required to include product identifiers on “each package and homogenous case” of prescription drug products they repackage within six years after enactment.  By July 1, 2015, dispensers would not be able to accept prescription drug products unless they are accompanied by a transaction history.  Interestingly, 3PLs are not required to receive or pass a transaction history themselves, presumably because they do not own the product and are not responsible for directing its distribution.

In addition to the transaction history requirements, the legislation requires manufacturers, wholesalers, repackagers, dispensers, and 3PLs to implement a system to verify that the prescription drug products under their control are legitimate (e.g., not counterfeit, diverted, stolen, or otherwise adulterated).  If a “suspect” prescription drug product is determined to be illegitimate, the entity must take the necessary steps to purge it from the supply chain. 

Perhaps one of the most significant omissions from the House bill is the lack of near term electronic pedigree requirement.  Transaction histories required by the legislation may be transmitted and maintained in either paper or electronic format.  The legislation eventually allows for the creation of a national electronic track and trace system, but it calls for a variety of studies to determine the feasibility of implementing such a system, and it prohibits FDA from introducing regulations until January 1, 2027 at the earliest.    

In addition to a prescription drug track and trace system, the House legislation also standardizes many of the requirements wholesalers and 3PLs must comply with under current state laws.  It also requires wholesalers to submit annual reports to FDA that include, among other things, a list of their wholesaler licenses and any disciplinary actions.  FDA would be required to post certain of that information on its website.  This legislation does not, however, create a national wholesaler license and specifically notes that states may continue to license wholesalers and collect licensing fees.  The legislation does create a national 3PL license in cases where a state does not license 3PLs.

The Senate is also considering a prescription drug track and trace bill, the Drug Supply Chain Security Act (S. 957).  This bill recently passed the Senate Committee on Health, Education, Labor, & Pensions, but it was combined with the Pharmaceutical Compounding Quality and Accountability Act (S. 959) before going to the floor.  The Senate bill is similar to the House legislation in many respects, but there are significant differences regarding the timing of the implementation of an electronic track and trace system and preemption of state wholesaler and 3PL requirements. 

Though the House bill requires FDA to begin exploring the implementation of an electronic track and trace system shortly after enactment, it prohibits FDA from issuing regulations before January 1, 2027.  By contrast, the Senate bill mandates that an interoperable electronic track and trace system become effective within ten years after the date of enactment.  The House legislation also preempts state requirements with respect to standards for wholesalers and 3PLs, while the Senate bill permits states to enact more stringent requirements.  As such, the House bill may be more agreeable to industry while agencies may be more amenable to the Senate bill.  Indeed, according to recent trade press, the California Board of Pharmacy has even expressed a preference for the Senate bill.   

It is unclear when the full Senate will pass its bill and how long a potential conference committee would take.  Nonetheless, the Chairman of the House Committee on Energy and Commerce has said he hopes to have a bill for the President to sign by the August recess. 

By Joseph W. Cormier –

FDA recently issued a draft guidance, titled “Contract Manufacturing Arrangements for Drugs: Quality Agreements” (“the Draft Guidance”), detailing its thoughts regarding appropriate quality agreements between product “owners”, which FDA defines as persons who introduce or cause the introduction of a drug into interstate commerce, and “contracted facilities”, which are non-owner entities performing manufacturing operations for the product owner. 

As FDA acknowledges in the Draft Guidance, there is no statutory or regulatory requirement that owners include a quality agreement between themselves and contracted facilities. 

Rather, the FDCA holds owners liable for introducing or causing the introduction into interstate commerce of adulterated or misbranded products.  Last year’s FDA Safety and Innovation Act further clarified that GMPs include a owner’s “implementation of oversight and controls over the manufacture of drugs to ensure quality, including managing the risk of and establishing the safety of raw materials, materials used in the manufacturing of drugs, and finished drug products.” 

As such, industry practice has been to include regulatory compliance and product quality assurance terms, if not in a separate agreement, into master services agreements or services agreements in order to identify the roles and responsibilities of the parties involved. 

Existing FDA guidance already detail how GMP quality management principles apply to contract manufacturing scenarios.  Examples include ICH Q7A, ICH Q9, and ICH Q10 documents.  The Draft Guidance, however, details FDA’s specific thoughts regarding translating these existing concepts into a legally-binding agreement between parties. 

FDA recommends that Quality Agreements should be separate or severable documents from other commercial agreements such as Master Services Agreements or Supply Agreements.  Further, FDA recommends that a Quality Agreement:

• Clearly document responsibility for GMP activities;  
• Include a section assigning responsibility for the Quality Unit and a communication plan between the parties and the Quality Unit;
• Ensure that the Quality Unit has sufficient resources to conduct required product testing and approval;
• Provide audit authority and responsibility that rests with the owner and indicate procedures for reviewing and approving documentation;
• Define responsibility for setting raw material specifications; auditing, qualifying, and monitoring suppliers; and conducting sampling and testing of raw materials;
• Detail procedures for notification and documentation of manufacturing process changes, including, among other things, raw materials, starting materials, establishment locations, testing procedures, manufacturing equipment, shipping methods, and key personnel; and
• Document the types of changes that require prior approval by the owner and those changes that require only notification. 

Although industry organizations, such as the International Pharmaceutical Excipients Council ("IPEC") and the Active Pharmaceutical Ingredients Committee (APIC) of the European Chemical Industry Council ("CEFIC") have previously issued their own guidance documents on this topic (here and here), we note that FDA’s Draft Guidance is somewhat different in how it presents these concepts.  Whether and to what extent the Draft Guidance changes or merely reinforces industry practice is yet to be seen.

Although FDA likely did not intend to include distributors under the umbrella of “owner” in the Draft Guidance, the breadth of the definition would include such entities.  If FDA intended to include distributors, it is unclear what the Draft Guidance, if finalized in its current form, says about FDCA product guarantees under section 303(c) of the Act.  These guarantees, provided by drug manufacturers to distributors, exempt distributors from the responsibility for distributing adulterated or misbranded products they have received in good faith.  Would a distributor need to execute a quality agreement that would require their auditing of the drug manufacturer’s records and facilities?  This result seems to go too far, and will hopefully be corrected when the Draft Guidance is finalized. 

Comments on the Draft Guidance are due to FDA by mid-July.  

Environmental seals and certifications have received renewed attention recently.  The Federal Trade Commission (“FTC”), last week, submitted comments to a private group that is in the process of revising its certification program for “sustainable” seafood.  The FTC did not take a stance on the program, but reminded the group of the agency’s view of applicable law.  Also last week, two private groups, Green Peace and ForestEthics, filed joint comments with the FTC urging it to investigate another group’s certification system for “green” lumber and paper products. 

The FTC issued guidance last year specifically on Certifications and Seals of Approval used in marketing.  The spate of comments demonstrates that industry is still grappling with how to implement certification systems that are both effective and compliant.  This is perhaps not surprising given that certifying groups normally face the daunting tasks of not only distilling complex scientific data into certification standards that are manageable and realistic for industry, but also developing a seal or certification that is understandable and attractive to consumers. 

As seals and certifications remain in the regulatory crosshairs, we believe that two points are vital for certifying organizations and companies seeking to use seals to remember: (1) the Federal Trade Commission Act (“FTC Act”) does not demand absolute perfection; and (2) government certification programs already in existence may serve as helpful models. 

Interpreting the FTC Act, the FTC has concluded that the language of a seal used in marketing must be truthful and non-misleading to a reasonable consumer.  Every technical detail and nuance, however, need not be disclosed.  The underlying certification program, likewise, must be based on science that is reliable and generally acceptable to experts in the field, but it need not be exact or beyond any debate.  Popular government certification programs that may serve as useful guides include the U.S. Department of Agriculture’s National Organic Program; the U.S. Department of Transportation’s 5-Star Safety Ratings for motor vehicles; and the Environmental Protection Agency’s Energy Star certification program for home appliances, new homes, commercial buildings, and manufacturing plants. 

What may be heartening to industry is that government certification programs appear to recognize that standards that are too rigid or advertising language that is too technical can be the enemy of good.  For example, under the National Organic Program, the “USDA Organic” seal may be used even though agricultural products bearing the seal may not be entirely “organically” produced under a strict definition of the term.  The enabling law grants USDA the authority to allow exceptions for uses of materials that would not normally be allowed in organic farming.  According to the law, the excepted use must be, among other factors, “consistent with organic farming and handling.”  The USDA has, in turn, granted exceptions to allow the use of certain synthetic insecticides and rodenticides, and other synthetic substances, in limited situations.  Produce from farming operations that take advantage of the exceptions can still bear the seal, “USDA Organic.”  

By Jeffrey N. Gibbs, Jamie K. Wolszon & Jessica A. Ritsick –

For many years, FDA has wrestled with how to regulate Laboratory-Developed Tests (“LDTs”).  FDA Commissioner Margaret A. Hamburg is now renewing FDA’s call for more active FDA regulation of LDTs and touting the Agency’s risk-based framework for regulating LDTs that is “under development.”  LDTs are diagnostic tests developed and performed by a laboratory.  They are widely used; among other tests, this category includes genetic tests, tests for rare conditions, and companion diagnostics.  Thousands of different LDTs are currently available.

Dr. Hamburg discussed LDTs as a part of broader remarks at the American Society of Clinical Oncology (“ASCO”) meeting on June 2, 2013.  She noted that LDTs do not undergo premarket review, and asserted “that can be a problem.”

Dr. Hamburg commented that FDA historically exercised enforcement discretion for LDTs “because they were relatively simple, low-risk tests performed on a few patients being evaluated by physicians at the same facility as the lab.”  Today’s LDTs, by contrast, according to Dr. Hamburg, are “more sophisticated and complex.  Results from these tests are rapidly becoming a staple of medical decision-making, particularly for cancer.  And some people with a family history of cancer are using these tests to decide whether to take preventive action.” 

Echoing prior statements by FDA officials, she asserted that “the Agency is working to make sure that the accuracy and clinical validity of high-risk tests are established before they come to market.  The risk-based framework we have under development will ensure that diagnostics used in cancer treatment will provide medical professionals with a critical baseline for confidence in the tests they order for their patients.” 

Dr. Hamburg did not provide details as to what the risk-based framework would entail or when it would be issued.

FDA announced in June 2010 that it was revisiting its years-long policy of exercising enforcement discretion over LDTs and was holding a public workshop to discuss the issue in July 2010.  FDA officials subsequently indicated that it was developing a plan to more actively regulate LDTs under a risk-based framework, to be issued for comment as guidance.  Members of the laboratory community have expressed deep concerns about the particulars of such a framework.  We previously reported on the agency’s plans to adopt a risk-based framework for LDTs here, here, and here. 

The Food and Drug Administration Safety and Innovation Act (“FDASIA”), enacted last summer, requires FDA to notify Congress at least 60 days prior to issuing a draft or final guidance on the regulation of LDTs.  The notice must include anticipated details of the action.

FDA has, in the past, made similar comments to the ones Dr. Hamburg made in her June 2013 remarks about LDTs.  Many of Dr. Hamburg’s statements mirror prior statements by Center for Devices and Radiological Health ("CDRH") officials.  For instance, the June 2010 Federal Register notice announcing the July 2010 meeting contained virtually identical language characterizing the agency’s perception that LDTs have moved from simple tests to high-complexity, high-risk tests.  The Federal Register notice states: “Initially, laboratories manufactured LDTs that were generally relatively simple, well-understood pathology tests or that diagnosed rare diseases and conditions that were intended to be used by physicians and pathologists within a single institution in which both were actively part of patient care.”  In contrast to LDTs in the past, the notice stated, today’s LDTs “are often used to assess high-risk but relatively common diseases and conditions and to inform critical treatment decisions and are often performed in geographically distant commercial laboratories instead of within the patient's health care setting under the supervision of a patient's pathologist and treating physician, or may be marketed directly to consumers.”

Whether Dr. Hamburg’s comments indicate that FDA is about to unveil a new proposal for regulating LDTs remains to be seen. 

Only two days after Dr. Hamburg’s comments, the American Clinical Laboratory Association (“ACLA”) submitted a Citizen Petition expressly requesting that FDA refrain from issuing draft or final guidance, or a proposed or final rule, regarding the Agency’s regulation of LDTs, and also asks FDA to respond to its Citizen Petition by explicitly confirming that LDTs are not devices under the Federal Food, Drug, and Cosmetic Act (“FDCA”).

ACLA’s Citizen Petition echoes and expands on the arguments made in HP&M’s 1992 Citizen Petition, advocating against FDA’s assertion of authority to regulate LDTs, as well as the Washington Legal Foundation’s ("WLF") 2006 Citizen Petition, also advocating against FDA regulation of LDTs.  FDA denied HPM’s Citizen Petition in 1998, stating that the “Commissioner of Food and Drugs may regulate assays developed by clinical reference laboratories strictly for in-house use as medical devices.”  FDA has yet to respond to WLF’s Petition.  In 2008, Genentech submitted its own Citizen Petition to FDA regarding the Agency’s authority to regulate LDTs, but unlike HPM, WLF, and ACLA, Genentech supports FDA’s assertion that it has authority to regulate LDTs.  Genentech requests that FDA “require all in vitro diagnostic tests intended for use in drug or biologic therapeutic decision making be held to the same scientific and regulatory standards,” regardless of whether the test is an LDT or a kit.  As with WLF, FDA has yet to respond to Genentech’s Petition.

ACLA’s Petition advances four main arguments:  (1) FDA lacks statutory authority and jurisdiction to regulate LDTs; (2) FDA’s regulation of LDTs would have an adverse impact on public health; (3) FDA’s regulation of LDTs would pose significant burdens on the laboratory industry; and (4) FDA’s regulation will complicate, rather than enhance, the existing regulatory framework, which Congress intended to be governed by one statute – the Clinical Laboratory Improvement Amendments of 1988 (“CLIA”).

In arguing against FDA’s authority and jurisdiction over LDTs, ACLA asserts that LDTs are services or know-how, not devices:  “LDTs are proprietary procedures for performing a diagnostic test using reagents and laboratory equipment.  They are essentially know-how, not articles” (emphasis added).  FDA rejected this argument in its 1998 denial of HPM’s Citizen Petition, and stated that “[a]ny in-house assay, test, or system which is a diagnostic test produced using an ASR [(Analyte Specific Reagent)] falls within the definition of device as delineated in the FDCA and its regulations.”  ACLA appears to have attempted to preemptively rebut FDA from making this argument again by citing the legislative history of the Medical Device Amendments.  ACLA asserts that “the legislative history clarifies that this amendment did not expand the device definition beyond its tie to tangible articles.”  Thus, ACLA argues, “[w]hen Congress added in vitro reagents to the device definition, [which FDA leans on for assertion of authority], the definition was still tied to an ‘article,’” and not a service, such as LDTs.

ACLA asserts two additional arguments against FDA’s assertion of jurisdiction over LDTs:  (1) Congress gave the Centers for Medicare and Medicaid Services, not FDA, authority to regulate LDTs under CLIA; and (2) LDTs are not commercially distributed, and commercial distribution is a prerequisite to FDA regulation.  As to number one, ACLA asserts that CLIA gave FDA “authority only over the laboratory equipment used in tests, not the tests themselves.”  As to number two, ACLA asserts that commercial distribution is a prerequisite to FDA enforcement jurisdiction.  See 21 U.S.C. §§ 360(k), 360c(f); 21 C.F.R. §§ 807.81(a), 814.1(c)(1).  In its 1998 denial of HPM’s Citizen Petition, FDA asserted jurisdiction to regulate LDTs under the Agency’s new (at that time) ASR rule.  FDA reasoned that because it had authority to regulate ASRs, and because LDTs contain ASRs, FDA could thus regulate LDTs “consistent with the [ASR] final rule.”  In denying the Petition, FDA, however, did not address HPM’s assertion (now echoed by ACLA) that commercial distribution is a prerequisite to FDA’s exercise of jurisdiction.  Rather, FDA asserted that if “ingredients of the ASR as well as the ASR itself” are transported in interstate commerce, there exists an “interstate commercial nexus,” supporting FDA’s regulatory jurisdiction.

ACLA also argues that FDA’s regulation of LDTs will impose unnecessary burdens on patients and industry alike.  Regulation of LDTs could increase costs on industry exponentially, according to ACLA, thus making development of LDTs cost prohibitive.  Further, if LDTs become too expensive and stop being developed, certain diseases and conditions for which the only testing available is an LDT may no longer have any testing available.  Or, if LDT manufacturers do not go out of business, FDA regulation may take these tests out of use until they are FDA approved or cleared, thus removing these tests from the market from some period of time, leaving a diagnostic gap.  Whether FDA would allow a grace period and, if so, for how long, is one of the many issues that FDA will need to address in any policy.  In responding to HP&M’s 1992 Citizen Petition addressing these issues, FDA cited its need to balance benefits and risks, and asserted that the risks of unpredictable test quality and results needed to be balanced against any benefits to patients from the use of such test.

So what does all of this mean?  FDA still wants to regulate LDTs, and the laboratory industry is still opposed.  How this will play out is uncertain.  One thing is for sure, however:  based on the recent statements by FDA and ACLA’s Petition, at least for the near future, the debate about how FDA should regulate LDTs—if at all—has flared up yet again.

By Kurt R. Karst –      

Earlier this week, Momenta Pharmaceuticals, Inc. and Sandoz Inc. (“Petitioners”) filed their reply to the brief filed late last month by Amphastar Pharmaceuticals, Inc. (“Amphastar”) opposing Petitioners’ petition the U.S. Supreme Court to review the August 3, 2012 judgment of the U.S. Court of Appeals for the Federal Circuit in Momenta Pharmaceuticals v. Amphastar Pharma., 686 F.3d 1348 (Fed. Cir. 2012).  In that case, a divided (2-1) Federal Circuit panel ruled that the scope of the Hatch-Waxman “safe harbor” provision at 35 U.S.C. § 271(e)(1) is broad and exempts from infringement any commercial activity where FDA requires that a record of that activity be maintained, even if no record is ever submitted to the Agency (see our previous post here).  Momenta contends that, unless the Supreme Court takes up the case, “[a]n intolerable state of confusion will persist . . . .”

As we previously reported, the case involves a generic version of LOVENOX (enoxaparin) and a method patent – U.S. Patent No. 7,575,866 (“the ‘866 patent”) – assigned to Momenta.  Momenta sued Amphastar in the U.S. District Court for the District of Massachusetts for patent infringement alleging that Amphastar infringed the ‘886 patent by manufacturing for commercial sale enoxaparin using the patented method.  Relying on the Federal Circuit’s decision in Classen Immunotherapies, Inc. v. Biogen IDEC, 659 F.3d 1057 (Fed. Cir. 2011), in which the Court held that 35 U.S.C. § 271(e)(1) “does not apply to information that may be routinely reported to the FDA, long after marketing approval has been obtained,” the District Court ruled that Amphastar’s activity fell outside of the “safe harbor” provision at 35 U.S.C. § 271(e)(1) and enjoined Amphastar from advertising, offering for sale, or selling its enoxaparin product.  (Classen was appealed to the Supreme Court, but the Court refused to hear the case after the U.S. Solicitor General filed an amicus brief urging the Court to deny certiorari.)

On appeal, the Federal Circuit disagreed with the District Court and vacated an injunction in the case.  The Federal Circuit explained in its August 2012 decision that it is not inconsistent with Classen “because the information submitted is necessary both to the continued approval of the ANDA and to the ability to market the generic drug,” and that in this case, “the submissions are not ‘routine submissions’ to the FDA, but instead are submissions that are required to maintain FDA approval. . . ,” thereby bringing them within the scope of the 271(e)(1) safe harbor.  In November 2012, the Federal Circuit denied a Petition for Rehearing en banc (see our previous post here), leading Momenta to petition the U.S. Supreme Court to review the case.  

Amphastar argued in its May 2013 opposition brief that Supreme Court review is neither necessary nor warranted.  Among other things, says Amphastar, Federal Circuit law is correct and consistent with precedent on the 271(e)(1) safe harbor, and the interlocutory posture and unique facts of the case make it a poor vehicle for Supreme Court review.  Not so fast, says Momenta:

The Federal Circuit’s legal ruling is both sweeping and wrong. . . . [T]he Federal Circuit has immunized post-approval, commercial activity this Court has never held protected by the Hatch-Waxman safe harbor. . . .  Taken to its logical conclusion, [the Federal Circuit’s decision] would immunize any commercial use of a patented invention for which a record must be kept documenting compliance with an already-approved manufacturing process. . . .  Nor would the majority’s interpretation necessarily be limited to immunizing manufacturing method patents.

Momenta goes on to explain how the Federal Circuit’s decision is unfaithful to the safe harbor statutory text and Supreme Court precedent in Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661 (1990) and Merck KGaA v. Integra Lifesciences, Ltd., 545 U.S. 193 (2005):

[T]he [FDC Act] expressly distinguishes between “submitting” information to the FDA and “maintaining” records for multiple purposes, including possible FDA inspection. . . .  Consistent with this statutory scheme, Section 271(e)(1) uses “submission,” not “maintain”—thereby exempting uses reasonably related to the development of information to obtain regulatory approval, while not immunizing post-approval infringing uses in the course of ordinary commercial activity.  Amphastar has no answer to this statutory distinction . . . .  If Congress had intended the remarkable departure from patent law created by the Federal Circuit’s immunization of post-approval, commercial use of patented inventions, the text of Section 271(e)(1) would have been much different.

The Supreme Court is expected to conference on the petition (Docket No. 12-1033) on June 20, 2013.

For years now, the American Conference Institute (“ACI”) has put on a series of excellent FDA-related conferences.  Those of us in the Hatch-Waxman world look forward to attending the popular annual Paragraph IV Disputes, Maximizing Pharmaceutical Patent Life Cycles, and Hatch-Waxman Boot Camp conferences.  They are a kind of “family reunion” – a “Cheers”-type atmosphere where everyone knows your name. 

The latest conference to be added to the ACI lineup is the Legal and Regulatory Summit on Generic Drugs, which will take place on Wednesday, July 17 to Thursday, July 18, 2013 in New York City.  Developed as a “state of the union” of the legal and regulatory – as well as political and global – changes affecting the generic pharmaceutical industry, the conference is sure to be the banner conference of the summer.

Hyman, Phelps & McNamara, P.C.’s Kurt R. Karst (author of the latest edition of Generic and Innovator Drugs: A Guide to FDA Approval Requirements) and Seyfarth Shaw LLP’s Shashank Upadhye (author of Generic Pharmaceutical Patent and FDA Law) are co-chairing the conference.  (And, yes, they’ll probably be hawking their books at the conference.)

Importantly, the Summit on Generic Drugs is not designed to be a rehash of issues and topics discussed at other Hatch-Waxman-related conferences.  Presenters will delve into generic drug politics, the Generic Drug User Fee Amendments (“GDUFA”), and much, much more.  Take, for example, the panel discussion on Insights From the Office of Generic Drugs.  The panelists – Gary Buehler, Gordon Johnston, and David Rosen – have more than 30 years of experience working at FDA in the Office of Generic Drugs.  Their perspectives on how the Office has changed over the years, how the Office operates, and future challenges with GDUFA and recent reorganizations are something folks cannot get in another venue. 

To obtain a copy of the conference brochure and to register for the event, please visit ACI's website.  FDA Law Blog is a conference media partner.  As such, we can offer FDA Law Blog readers a special $200 discount.  The discount code is: FLB200.  We look forward to seeing you at the conference.

By Kurt R. Karst –      

Fumble!!  For years now we have discussed and tracked various FDA decisions (or non-decisions as the case may be) on what have been referred to as “180-day exclusivity punts.”  These are instances in which a first applicant eligible for 180-day exclusivity gets ANDA approval, but FDA decides not to decide on whether or not to grant exclusivity.  The first instance of a “180-day exclusivity punt” occurred with the July 31, 2006 approval of ANDA No. 076969 for Sandoz Inc.’s Metoprolol Succinate Extended-Release Tablets USP, 25 mg (see our previous post here).  In the years since then, FDA has used the punt mechanism with impunity, and in various contexts (see our previous post here), including in one instance under the law in effect prior to the December 2003 enactment of the Medicare Modernization Act (“MMA”) (see our previous post here).  But FDA had never resolved a punt – whether in the form of a “punt return” where FDA affirms a first applicant’s eligibility for 180-day exclusivity, or in the form of a “fumble return” where FDA affirms a first applicant’s forfeiture of 180-day exclusivity eligibility.  That all changed with the May 30, 2013 approval of Banner Pharmacaps’s (“Banner’s”) ANDA No. ANDA No. 200899 for a generic version of GlaxoSmithKline’s AVODART (dutasteride) Capsules, 0.5 mg.

FDA’s decision on Dutasteride Capsules, 0.5 mg, 180-day exclusivity came about in the context of the most familiar type of punt: failure to obtain timely tentative ANDA approval.  Under FDC Act § 505(j)(5)(D)(i)(IV), one of the six 180-day exclusivity provisions added to the FDC Act by Title XI of the MMA, 180-day exclusivity eligibility is forfeited if:

The first applicant fails to obtain tentative approval of the application within 30 months after the date on which the application is filed, unless the failure is caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed.

The 2007 FDA Amendments Act (“FDAAA”) clarified FDC Act § 505(j)(5)(D)(i)(IV), such that if “approval of the [ANDA] was delayed because of a [citizen] petition, the 30-month period under such subsection is deemed to be extended by a period of time equal to the period beginning on the date on which the Secretary received the petition and ending on the date of final agency action on the petition (inclusive of such beginning and ending dates) . . . .” (FDC Act § 505(q)(1)(G)).  The 2012 FDA Safety and Innovation Act (“FDASIA”) made further changes with respect to the application of FDC Act § 505(j)(5)(D)(i)(IV) to certain ANDAs (see our previous post here).  Neither the FDAAA, nor the FDASIA provisions are at issue in the Dutasteride case. 

FDA’s application of FDC Act § 505(j)(5)(D)(i)(IV) has led to scores of forfeitures of 180-day exclusivity eligibility.  Several more forfeitures have been avoided as a result of FDA’s application of the exception provisions above (see our previous post here), including one decision that led to an unsuccessful lawsuit last year over a generic version of DIOVAN (valsartan) Tablets (see our previous post here).  Sometimes the 30-month date is missed by just a few days (see our previous post here), or even by a day because of a natural disaster (see our previous post here).  Sometimes 180-day exclusivity eligibility is forfeited upon patent certification because of an FDA interpretation that FDASIA remedies on a limited basis (see our previous post here).  In other instances, however, FDA is able to tease out a basis for determining that failure to obtain timely tentative approval was due to a change that led to, for example, an “irrecoverable delay” (akin to ripples in a pond when a stone is cast in) (see, e.g., ANDA No. 200156 for Armodafinil Tablets, 100 mg and 200 mg).
 
FDA has discussed its application of FDC Act § 505(j)(5)(D)(i)(IV) on several occasions, including in Citizen Petition responses – see, e.g., Docket No.  FDA-2011-P-0486 and Docket No. FDA-2010-P-0632 – and in court briefs.  For example, FDA has explained:

This provision [(i.e., FDC Act § 505(j)(5)(D)(i)(IV))] establishes a bright-line rule: If within 30 months of submission, an ANDA has been determined by the agency to meet the statutory standards for approval and it is only patent and/or exclusivity protection that prevents full approval, then an applicant will be given a tentative approval and will maintain its eligibility for 180-day exclusivity.  If tentative approval is not obtained within 30 months, eligibility for 180-day exclusivity is generally forfeited unless “the failure (to obtain an approval) is caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed” (emphasis added).  Under this provision it is not sufficient to show that FDA changed or reviewed the requirements for approval while the application was under review.  The applicant must also show that its failure to obtain a tentative approval at the 30 month date is caused by this change in or review of approval requirements – that is, the issues holding up approval at the 30 month date must be causally connected to the approval requirements that FDA reviewed or changed.

A less known fact is that FDA has considered and rejected as too draconian “but for” causation in its application of FDC Act § 505(j)(5)(D)(i)(IV).  Thus, FDA has determined that even if one of the causes of failure to get tentative approval by the 30-month forfeiture date was a change in or a review of the requirements for approval imposed after the application was submitted, a first applicant will not forfeit eligibility notwithstanding that there may have been other causes for failure to obtain tentative approval by the 30-month forfeiture date that were not caused by a change in or review of the requirements for approval.  That is, to avoid forfeiture, an applicant need only show that acceptability of one aspect of its ANDA (e.g., chemistry, labeling, or bioequivalence) was delayed due, at least in part, to a change in or review of the requirements for approval, irrespective of what other elements may also have been outstanding at the 30-month date.  In other words, “but-for” causation is not required in order to qualify for the exception under FDC Act § 505(j)(5)(D)(i)(IV).  FDA has apparently determined that this interpretation best effectuates the policy embodied in the exception, insofar as it does not penalize first applicants for reviews of or changes in approval requirements imposed after their ANDAs are submitted that cause the failure to obtain approvals or tentative approvals within 30 months, and continues to incentivize applicants to challenge patents by preserving (in many instances) the opportunity to obtain 180-day exclusivity.

In the case of Dutasteride Capsules, 0.5 mg, Barr Laboratories, Inc. (“Barr”) was the first company to submit an ANDA with a Paragraph IV certification challenging an Orange Book-listed patent for the reference listed drug, AVODART.  Specifically, ANDA No. 090095 was considered received by FDA as of October 29, 2007 with Paragraph IV certifications to the three listed patents on AVODART.  Patent infringement litigation was initiated, but was ultimately dismissed by agreement of the parties on May 10, 2010.  FDA approved ANDA No. 090095 on December 21, 2010 with the now all too familiar 180-day exclusivity punt language:

The agency notes that Barr failed to obtain tentative approval of this ANDA within 30 months after the date on which the ANDA was filed.  See section 505(j)(5)(D)(i)(IV) (forfeiture of exclusivity for failure to obtain tentative approval).  The agency is not, however, making a formal determination at this time of Barr’s eligibility for 180-day generic drug exclusivity.  It will do so only if another paragraph IV applicant becomes eligible for full approval (a) within 180 days after Barr begins commercial marketing of Dutasteride Capsules, 0.5 mg, or (b) at any time prior to the expiration of the last listed patent if Barr has not begun commercial marketing.

Barr never commercially marketed its drug product, presumably as a result of the settlement of patent infringement litigation, nor did Barr, to our knowledge, market an authorized generic version of the drug.  Thus, Barr’s 180-day exclusivity was never triggered.  Meanwhile, FDA’s review of Banner’s ANDA progressed, and a tentative approval was granted on March 25, 2013.  This likely placed FDA in the position of having to decide on 180-day exclusivity for Dutasteride Capsules, 0.5 mg.  A further review of Barr’s ANDA file presumably did not show that forfeiture of exclusivity eligibility could be avoided, and FDA approved ANDA No. 200899 on May 30, 2013.  Thus, we now have the first instance in which FDA has resolved a 180-day exclusivity punt.

By Jeffrey K. Shapiro –

The Medical Device Amendments  of 1976 (“MDA”), Pub. L. No. 94-295, 90 Stat. 539 (1976), are commonly described as the beginning of the modern era of device regulation.  In one sense, this description is absolutely correct.  The MDA established for the first time a comprehensive scheme for the premarket and postmarket regulation of devices.  But, there has been less recognition of how little of the MDA actually survived contact with reality.  Many of the most prominent features of the statutory scheme did not function as expected and many proved to be dead letters almost from the beginning.  At the same time, one of the features that came to be most central – the 510(k) procedure – was expected to play a minor and transitory role.  The system we know today really has to be seen as originating in the MDA but not emerging with its present day contours until the Safe Medical Devices Act of 1990 (“SMDA”), Pub. L. No. 101 629, 104 Stat. 4511 (1990).  However, our story for today is about the fate of the major provisions of the MDA as originally enacted.

The MDA decreed that FDA would review all types of medical devices existing in 1976 and by regulation place them in Class I, II or III.  See 90 Stat. 540-41.  Class I devices would be subject to various general postmarket controls (e.g., establishment registration, device listing, good manufacturing practice, or GMP).  Class II devices would be subject to FDA established performance standards and general postmarket controls.  See 90 Stat. 546 552.  Class III would need premarket application (“PMA”) approval or a completed product development protocol (“PDP”) and would adhere to general postmarket controls.  See 90 Stat. 553 59.

After the existing device types were classified, all new device types developed after 1976 were to be placed in Class III, unless FDA could be persuaded to reclassify them to Class I or II.  Flexible reclassification of device types would occur as new information emerged with experience.  See 90 Stat. 544 45, 547, 553, 572.  FDA was granted broad authority to issue regulations restricting the sale, distribution and use of specific device types as appropriate.  See 90 Stat. 567.  FDA also could ban unsafe devices and/or require mandatory recalls and repair, refund, and notification remedies when needed.  See 90 Stat. 560, 562-63.  In short, FDA was to have ample statutory authority to conduct flexible, risk based regulation of the three classes of devices from cradle to grave.

Almost nothing went according to the statutory plan.  The mere classification of existing device types into Class I, II or III, took 14 years to complete, far longer than envisioned.  FDA struggled to develop performance standards, which had been mandated as the centerpiece of regulatory control over Class II devices, issuing not a single performance standard prior to the SMDA, in which Congress mercifully downgraded performance standards to one of several optional “special controls” for Class II devices.  All of the device types placed in Class III were supposed to be subject to a prompt call for PMAs, but that process went so slowly that even today (i.e., 37 years later) it is not complete.  Thus, for many years, “preamendment” Class III devices have reached the market via 510(k) clearance rather than PMA review, and that is still true for about two dozen of them. 

Numerous other provisions failed to function as intended.  The PDP option, intended to be on par with PMA approval, was a complete flop, although the detailed PDP provisions remain on the books even today.  A procedural regulation for banning devices was issued, but the authority was invoked once in 1983 (banning prosthetic hair fibers), and never again.  See 21 C.F.R. Part 895 (1979).  The refund authority has never been used.  FDA has only issued two restricted device regulations – one for hearing aids and the other for analyte specific reagents.  See 21 C.F.R. § 801.421 (1990); 21 C.F.R. § 809.30 (1997).  The reclassification procedures proved burdensome and slow, and have been rarely used.  (A recent statutory reform attempts to make this process less burdensome.  Food and Drug Administration Safety and Innovation Act ("FDASIA"), Pub. L. No. 112-144, § 608(a) (2012) (modifying section 513(e) of the FDCA).)  There is also a rarely invoked and rather mischievous procedure allowing any person to seek FDA review and potential withdrawal of another person’s PMA approval.  See 90 Stat. 558 (section 513(g)).

At the same time, the section 510(k) provision in the MDA unexpectedly emerged as the dominant premarket pathway.  It provided that if a new device were “substantially equivalent” to a preamendment device, it could proceed to market with the same classification and controls (or, if the device type were not yet classified, it would proceed to market subject to whatever classification and controls were later applied).  The concern was that those already in the market in 1976 not gain a competitive advantage during the transition to the final regulatory scheme envisioned in the MDA.  By 1984, however, a noted commentator could write that 510(k) provisions had “in many ways eclipsed detailed statutory [PMA] provisions so painstakingly drafted” as the route to market for most medical devices.  J. Kahan, Premarket Approval Versus Premarket Notification:  Different Routes to the Same Market, 39 Food Drug Cosm. L.J. 510, 510 (1984). 

If there is a pattern to the failures of the original MDA, it was over confidence by Congress in the capabilities of centralized agency regulation.  Congress seems to have imagined that FDA would orchestrate the device industry from Washington D.C. with a degree of mastery and subtlety that proved impossible.  In particular, the idea that FDA would promulgate performance standards for hundreds of Class II devices proved impossible to carry out.  The establishment of a viable PMA process for many Class III devices was somewhat more successful, but it took decades to complete most of it, and some Class III devices still utilize the 510(k) pathway.  It also was impractical to have supposed, as Congress apparently did in 1976, that the resource intensive PMA process could be widely applied.  (Annually, about 2% of devices requiring premarket review reach the market via PMA approval.)  Fortunately, FDA developed the 510(k) program from an ill defined transitional measure to a robust pathway to market, and Congress had the good sense to ratify it in the SMDA.  If that had not happened, the inventive and vibrant device industry we have today might have been strangled in the crib.

By Ricardo Carvajal –

DHHS and USDA announced the inaugural meeting of the 2015 Dietary Guidelines Advisory Committee (DGAC), scheduled for June 13-14.  At the inaugural meeting, the DGAC will be provided with an orientation to the process for revising the Dietary Guidelines (revisions take place every five years) and will begin its deliberations.  The agenda for the meeting is available here.  Summary descriptions of the members of the DGAC are available here.  The meeting announcement describes the DGAC’s task as follows:

The work of the DGAC will be solely advisory in nature and time-limited. The Committee will develop recommendations based on the preponderance of current scientific and medical knowledge using a systematic review approach. The DGAC will examine the current Dietary Guidelines for Americans, take into consideration new scientific evidence and current resource documents, and develop a report to the Secretaries of HHS and USDA that outlines its science-based recommendations and rationale which will serve as the basis for developing the eighth edition of the Dietary Guidelines for Americans.

It is difficult to overstate the importance of the DGAC’s deliberations, given the influence of the Dietary Guidelines on food formulation and marketing.  The DGAC will hold several meetings into next year, with the goal of issuing a report to DHHS and USDA in late 2014.  The agencies will consider the DGAC’s report in developing the next iteration of the Dietary Guidelines policy document, which is expected to publish in Fall 2015.

By JP Ellison –

You may not recall our prior April 2009 blog post about the FTC’s settlement with Kellogg over its marketing campaign for Frosted Mini-Wheats.  To briefly recap, Kellogg had claimed that “its cereal was “clinically shown to improve kids’ attentiveness by nearly 20%.”  The FTC disagreed, and claimed that “[i]n fact, the study showed that the children who ate the cereal for breakfast averaged just under 11 percent better in attentiveness.”   The 2009 FTC settlement prohibited Kellogg from making comparable claims unless they were substantiated.  The FTC settlement did not include any consumer redress.

A few weeks after the FTC settlement was announced, plaintiff class action attorneys sent a proposed complaint to Kellogg and shortly thereafter the class action case was filed.  The class action case involved the same advertising, and at least with respect to equitable/injunctive relief regarding advertising claims, sought nothing that was not already covered by the FTC settlement   A proposed settlement of the Mini-Wheats class action was recently announced.  The more than four years between the FTC resolution and the class action settlement can be explained, at least in part, by challenges to the original Frosted Mini-Wheats class action settlement.

In the years between the FTC Frosted Mini-Wheats settlement and the class action Mini Wheats settlement, the FTC again investigated Kellogg over health benefit claims for a cereal – specifically, antioxidant and immune support claims for Rice Krispies.  In that case the FTC seems to have followed in the footsteps of state and local authorities who first challenged the same claims.   The Rice Krispies FTC settlement expanded the existing (Frosted Mini-Wheats) FTC order against Kellogg to cover a wider scope of claims, but again, did not include monetary relief.  As with the earlier FTC settlement, there was a follow-on class action that the company settled in 2011.

The Kellogg experience is not unusual.  FTC investigations and settlements are often followed by class action suits, and state attorney general inquiries can result in federal enforcement actions.  In other instances, private litigation leads to governmental enforcement actions, and sometimes, governmental and private actions proceed simultaneously.  It is not uncommon for these plaintiffs to coordinate with one another. 

Given the myriad of potential investigations and litigations that can arise when advertising claims are challenged, companies facing actual or potential litigation over such claims must be mindful of the effects that one investigation or litigation may have on another.

By Kurt R. Karst –      

For the third time this year, FDA has been asked to recognize 5-year New Chemical Entity (“NCE”) exclusivity for a fixed-dose combination drug product containing both a never-before-approved active moiety and a previously approved active moiety.  In a Citizen Petition (Docket No. FDA-2013-P-0471) submitted to FDA last month on behalf of Bayer HealthCare Pharmaceuticals Inc. (“Bayer”), the company asks the Agency to effectively erase the award of 3-year new clinical investigation exclusivity for the oral contraceptive NATAZIA (estradiol valerate and estradiol valerate/dienogest) Tablets and instead award a period of NCE exclusivity.  Similar requests for NCE exclusivity recognition were made in petitions submitted to FDA earlier this year concerning STRIBILD (elvitegravir, cobicistat, emtricitabine, tenofovir disoproxil fumarate) Tablets (Docket No. FDA-2013-P-0058) and PREPOPIK (sodium picosulfate, magnesium oxide and citric acid) for Oral Solution (Docket No. FDA-2013-P-0119).  Indeed, the STRIBILD petition called out NATAZIA as one example for which NCE exclusivity would be ongoing if FDA had awarded such exclusivity in the first place. 

As we previously reported, FDA’s long-standing position has been that in order for a fixed-dose combination drug to be eligible for 5-year NCE exclusivity, each of the active moieties in the drug product must be new (i.e., not previously approved).  This interpretation is based on FDA’s reading of the statutory language at FDC Act § 505(j)(5)(F)(ii) (concerning ANDAs) and FDC Act § 505(c)(3)(E)(ii) (concerning 505(b)(2) applications) and application of the Agency’s implementing regulation at 21 C.F.R. § 314.108(b)(2), which precludes FDA from accepting ANDAs and 505(b)(2) applications for drugs that contain the same active moiety as in a previously approved NCE for five years (absent a Paragraph IV certification).

FDA approved NATAZIA on May 6, 2010 under NDA No. 022252 and awarded a period of 3-year exclusivity that expired earlier this month.  NATAZIA contains both the previously approved drug estradiol valerate and the new molecular entity dienogest.  Because of the award of 3-year exclusivity instead of NCE exclusivity, FDA was free to accept ANDAs seeking aproval for generic NATAZIA as of the date of approval of the drug.  Indeed, according to FDA’s ANDA Paragraph IV Certification List, the Agency received an ANDA as of October 22, 2010.  FDA has not yet approved or tentatively approved any ANDA for generic NATAZIA, and at least one generic applcant is involved in patent infringement litigation with Bayer over a patent on NATAZIA (see here).

Like the STRIBILD and PREPOPIK petitions, Bayer argues in its NATAZIA petition that FDA’s historical approach of denying NCE exclusivity for a fixed-dose combination drug containing a new and previously approved moiety is contrary to the statute, congressional intent and FDA’s exclusivity regulations, and produces arbitrary outcomes that disfavor fixed-dose combinations.  Thus, Bayer fully endorses the arguments set forth in the STRIBILD and PREPOPIK petitions.  According to Bayer:

There is no plausible reason why FDA should incentivize sponsors to obtain approval for a drug product that contains a single new active moiety prior to obtaining approval for an [fixed-dose combination] that incorporates that active moiety in combination with other active moieties.  There is also no reason why FDA should encourage sponsors to seek separate approvals for each active ingredient of a combination product rather than to seek approval of a [fixed-dose combination].  But these outcomes are precisely what FDA’s interpretation of the 5-year exclusivity provision with respect to FDCs promotes. . . . .  Regardless of whether the [NCE] is first approved as part of a [fixed-dose combination] with a previously approved chemical entity, significant time and effort was undoubtedly invested in developing that [NCE].  Due to the substantial investment required, a 5-year exclusivity period is appropriate.

The NATAZIA petition, like the STRIBILD petition, also argues that FDA need not undergo notice-and-comment rulemaking prior to adopting a new interpretaion resulting in an award of NCE exclusivity for fixed-dose combination containing a new moiety.  “FDA has not given its relevant regulation a ‘definitive interpretation,’” says Bayer.  “Furthermore, even if FDA’s interpretation were considered definitive, there has not been substantial or justifiable reliance on that interpretation.  Accordingly, notice and comment rulemaking is not required prior to FDA’s adoption of the interpretation of 5-year exclusivity proposed in this petition.”

Given the age of the NATAZIA approval and the status of pending ANDAs relative to the STRIBILD and PREPOPIK approvals, FDA may be forced to address the NCE exclusivity issue raised by Bayer and others sooner than the Agency might want to.  A denial of any of the petitions could very well lead to a lawsuit against FDA.  In the meantime, it is possile that other manufacturers may join the petitioning club.  A quick look at products in the drug development pipeline and in the NDA review queue at FDA shows that there are other membership candidates.

By Paul M. Hyman – 

As we have discussed previously, the Park doctrine allows the government to seek a misdemeanor conviction against a company official for alleged violations of the Federal Food, Drug, and Cosmetic Act ("FDCA") without having to prove that the official participated in or was even aware of the violations.  The government need only demonstrate that the official was in a position of authority to prevent or correct the alleged violation.  The Park doctrine, in effect, renders FDCA violations strict liability crimes for corporate officials in positions of responsibility or authority. 

Several FDA Warning Letters, issued last month and this month, appear to be the first letters in recent memory in which FDA has cited United States v. Park and its predecessor, United States v. Dotterweich.  On closer reading, however, the recent letters do not cite the Park doctrine for the usual theory of strict liability for company officials or even as a clear threat to prosecute individuals.  The letters, instead, appear to cite Park and Dotterweich to make a point about vicarious liability. 

Each letter was addressed to a dietary supplement distributor.  The letters cite Park and Dotterweich to support the legal theory that a distributor that uses contract manufacturers or labelers may be liable (or convictable) for Current Good Manufacturing Practice ("CGMP") violations by its contractors.  The letters state as follows:

Although your firm may contract out certain dietary supplement manufacturing operations, it cannot . . . contract out its ultimate responsibility to ensure that the dietary supplement it places into commerce (or causes to be placed into commerce) is not adulterated for failure to comply with dietary supplement CGMP requirements (see United States v. Dotterweich, 320 U.S. 277, 284 (1943) (explaining that an offense can be committed under the Act by anyone who has “a responsible share in the furtherance of the transaction which the statute outlaws”); United States v. Park, 421 U.S. 658, 672 (1975) (holding that criminal liability under the Act does not turn on awareness of wrongdoing, and that “agents vested with the responsibility, and power commensurate with that responsibility, to devise whatever measures are necessary to ensure compliance with the Act” can be held accountable for violations of the Act)[)]. . . .The Act prohibits a person from introducing or delivering for introduction, or causing the delivery or introduction, into interstate commerce a dietary supplement that is adulterated under section 402(g) for failure to comply with dietary supplement CGMP requirements. . . . Thus, a firm that contracts with other firms to conduct certain dietary supplement manufacturing, packaging, and labeling operations for it is responsible for ensuring that the product is not adulterated for failure to comply with dietary supplement CGMP requirements, regardless of who actually performs the dietary supplement CGMP operations.

The idea that a distributor might be responsible for CGMP violations by its contract manufacturers or labelers is, of course, nothing new.  The letters include, almost verbatim, statements about distributor liability from the 2007 FDA notice announcing the final dietary supplement CGMPs.  The citations to the Park doctrine simply appear to add teeth to the prior guidance and possibly suggest (or hint) – without any overt discussion – that a distributor and its officers might be held liable. 

That a company official could be convicted of a misdemeanor based on the acts of a third party contractor appears possible under the Park doctrine.  While Park involved an officer’s vicarious liability for his own company’s acts, Dotterweich involved an officer’s vicarious liability for the acts of third party manufacturers.  Despite the facts of the 70 year-old Dotterweich decision, however, the conviction of an officer for third party acts is not a foregone conclusion – especially at this point. 

Both Park and Dotterweich were split decisions with strong dissents.  Moreover, as we have pointed out previously, what is a misdemeanor now is much more serious than what it was even 20 years ago in terms of potential monetary penalties and prison sentences.  If the penalty sought against a corporate official appears particularly severe – or the alleged FDCA violation appears more technical than dangerous – juries and courts may be wary of finding guilt based on strict liability.  By the same token, the more tenuous the connection appears between an official and those who actually violated the FDCA, the more juries and courts may be willing to cut off vicarious liability.

By Jessica A. Ritsick –

The Fifth Circuit earlier this month, in Elgin Nursing and Rehab Ctr. v. U.S. Dep’t of Health and Human Servs., No. 12-60086, 2013 WL 2149873 (5th Cir. May 17, 2013), struck down a decision by the Department of Health and Human Services (“HHS”) relating to the Centers for Medicare & Medicaid Services’ (“CMS”) interpretation of a regulation concerning serving food safely in a nursing facility.  As a result, the court vacated a fine issued to the nursing facility.

The case arose out of purported violations of sanitary food regulations by Elgin Nursing and Rehabilitation Center in Texas.  The Texas Department of Aging and Disability inspected Elgin, and found smeared egg yolk on some patients’ breakfast plates.  The inspectors concluded that the smeared egg yolks, from unpasteurized shell eggs, were “unsanitary,” and that the nursing home had violated the law.

HHS regulates nursing facilities under 42 U.S.C. § 1320a-7j.  HHS regulations require long-term care facilities to “[s]tore, prepare, distribute, and serve food under sanitary conditions.”  42 C.F.R. § 483.35(i)(2).  “Sanitary conditions” is an ambiguous term, and CMS sought to clarify that term in CMS’ State Operations Manual (“SOM”) Appendix PP, which specifies sanitary cooking conditions for food.  Under CMS’ SOM, unpasteurized shell eggs are required to be cooked to “-145 degrees F for 15 seconds; until the white is completely set and the yolk is congealed.”  CMS argued that this interpretation was conjunctive, and that both the time and temperature, and the consistency requirement, must be met to avoid violation of the regulations.  CMS averred that its conjunctive interpretation of the SOM was entitled to “great deference” by the court.  The court disagreed.

The Fifth Circuit stated that not only would adopting such a policy encourage agencies to write ambiguous requirements, as well as to create and enforce ambiguous interpretations of those requirements, but also that such policy would foreclose agency interpretations from judicial review.  Perhaps most importantly, though, the court stated that such policy would allow agencies to “punish ‘wrongdoers’ without first giving fair notice of the wrong to be avoided.”  Elgin, 2013 WL 2149873, at *4.

“Allowing an agency to apply its own interpretation to an otherwise vague regulation in the context of an enforcement proceeding would unfairly surprise the sanctioned party and ‘seriously undermine the principle that agencies should provide regulated parties ‘fair warning of the conduct [a regulation] prohibits or requires.’”  Id. at *5 (citations omitted) (alteration in original).  Thus, Elgin serves as a cautionary tale to agencies:  where agencies “issue ambiguous interpretive documents and then interpret those in enforcement actions,” id. at *7, courts may not grant the interpretation of the interpretation any deference, and will vacate sanctions that the agency imposes based on such ambiguous interpretive documents.

The court ultimately found that the SOM was disjunctive, that CMS had not adduced any evidence that the eggs served to residents were not cooked to the proper temperature for the proper period of time, and set aside HHS’ decision that Elgin had violated safety requirements related to the cooking of eggs.  As a result, the court vacated the penalty HHS had imposed on Elgin.

By Ricardo Carvajal –

A fight that started as a citizen petition asking FDA to permit the interstate sale of raw milk under limited circumstances is now being waged in federal court.  In 2008, raw milk advocates and the Organic Pastures Dairy Company ("OPDC") petitioned FDA to amend the regulatory ban on interstate sale of raw milk to incorporate the following exception:

Raw milk that is tested, state inspected, state regulated, carries a “government warning statement” and labeled for retail sale in one state may be transported to another state if that other state allows the sale of raw un-pasteurized milk and or dairy products.

Last December, OPDC sued FDA to compel a response to the citizen petition.  On February 26, 2013, FDA denied the citizen petition in emphatic terms, and subsequently filed a motion for judgment on the pleadings based on a number of affirmative defenses (lack of standing, ripeness, and failure to state a claim upon which relief can be granted).  OPDC responded by filing a motion to amend its complaint to address those issues.  The court granted that motion, and dismissed FDA’s motion for judgment on the pleadings as moot.  OPDC recently filed an amended complaint alleging that FDA’s denial of its citizen petition is arbitrary and capricious in part because FDA has taken no action to ban the interstate sale of other foods, including pasteurized milk and produce, associated with outbreaks that have sickened or killed many consumers. 

In the interim, FDA has deployed other tools to advocate its position, including a consumer advisory on the dangers of raw milk.  FDA’s campaign received support from the CDC, which issued its own consumer advisory.  CDC staff also partnered with state health agency staff to publish a report on a recent outbreak of foodborne illness linked to raw milk produced by a dairy with a state-issued unpasteurized milk permit and “minimal deficiencies identified during inspection” – illustrating, in the words of the authors, “the ongoing hazards of unpasteurized dairy products.”  Some states have been clamping down on efforts to circumvent their restrictions on the sale of raw milk (see here).  Not surprisingly, outbreaks linked to raw milk have also drawn the interest of the plaintiffs’ bar (see here).

By Carmelina G. Allis –

FDA has issued an “It Has Come to Our Attention Letter” to Biosense Technologies Private Limited for failure to have a 510(k) clearance for its mobile app, the uChek Urine Analyzer.  The app can be downloaded for 99 cents through the iTunes Apps Store, and uses the phone’s camera to read urine dipsticks.  The app is intended for use with the 510(k)-cleared Siemens and Bayer reagent strips for the qualitative and semi-quantitative determination of urine analytes, including glucose, urobilinogen, pH, ketone, blood, protein, bilirubin, nitrite, leukocyte, and specific gravity.

FDA’s letter explains that because the app allows a mobile phone to analyze the dipsticks, “the phone and device as a whole functions as an automated strip reader” that require clearance as a “urinalysis test system.”

The company is being asked to either identify an FDA clearance for the app, or provide an explanation for why Biosense does not believe that the company needs to obtain 510(k) clearance.

This letter is very unusual.  Although the FTC has publicly stated that it believes that there is a need for more aggressive enforcement action against medical apps (see here), enforcement actions against mobile medical app developers have not been at the top of FDA’s agenda.  In fact, according to press reports, FDA has recently said that the agency is being cautious about which kind of enforcement action it takes because there is no clear agency guidance on the regulation of mobile apps.

As we previously blogged, FDA has proposed to exert regulatory authority over select mobile medical apps that meet the “device” definition in the Federal Food, Drug, and Cosmetic Act, and that are either used as an accessory to a regulated medical device, or transform a mobile platform into a regulated medical device.  In this case, it appears that the Biosense app falls in the category of apps for which FDA will apply regulatory oversight.  The Biosense app appears to transform the mobile platform into a medical device by including functionalities similar to those of currently regulated medical devices, such as Acon Laboratories, Inc.’s Mission U500 Urine Analyzer, K111221, which has the same intended use as Biosense’s app.

It is unclear whether this unusual letter is an indicator of a coming increase in FDA’s enforcement action against medical apps.  FDA may have felt the need to issue this letter because of the intense media coverage that the app and the company have received in the past few weeks.

The letter shows that there will continue to be  case-by-case enforcement even as FDA mulls general guidance for mobile apps.  The letter suggests that mobile apps are particularly at risk of enforcement if their functionality is similar to those of currently regulated devices already subject to FDA regulatory oversight.