By Riëtte van Laack –

Under the Organic Food Production Act (“OFPA”), the National Organic Program (“NOP”) of the USDA is authorized to establish the National List of Allowed and Prohibited Substances (“National List”).  This National List contains each synthetic substance that is permitted and each natural substance that is prohibited for organic production. 

When considering whether a substance may be used in “organic” or “made with organic . . .” processed foods, two determinations must be made.  First, the substance must be classified as agricultural or nonagricultural.  (Nonagricultural substances are nonorganic).  Second, nonagricultural substances are classified as natural (nonsynthetic) or synthetic to determine their placement in the National List in section 205.605(a) (natural) or 205.605(b) (synthetic). 

Thus, the definitions of terms “agricultural,” “nonagricultural,” “natural (non-synthetic)” and “synthetic” are critical to the determination whether a substance is allowed or prohibited in organic foods, whether it needs to be included on the National List, and where on the National List it should be placed. 

How to determine whether a substance is agricultural or nonagricultural and natural or synthetic for many years has been a topic of discussion for the NOP’s advisory board, the National Organic Standards Board (“NOSB”).  A recent draft guidance (here, here, and here) announced earlier this week in the Federal register is intended to implement and clarify previous recommendations and existing practices of the NOSB.  However, the guidance likely will have a much broader reach.  The determination of whether a substance is natural or synthetic is of importance to the food industry as a whole.  In litigation regarding “natural” claims, plaintiffs have referenced the National List to support allegations that foods did not qualify for a natural claim.  Thus, manufacturers of nonorganic foods with no direct interest in organic regulations or the National List would be well advised to carefully review the draft guidance and consider the potential ramifications of this guidance being finalized.

The existing regulations are complex and appear in some aspects internally inconsistent (e.g., certain gums and high methoxy pectin are listed as agricultural substances whereas the definition of “nonagricultural substances” specifically mentions these substances as examples of nonagricultural substances).  The guidance does not address these apparent inconsistencies or clarify why, for example, vitamins and minerals are listed as synthetic substances.  The guidance further does not acknowledge the existence of FDA’s or the Food Safety and Inspection Service’s (“FSIS’s”) natural policies and it is not clear to what extent, NOP has or will take these into account in its determinations.  

Comments are due June 3, 2013.

By Delia A. Stubbs –

As previously reported, Congress recently introduced the Stop Oxy Abuse Act that would restrict the labeled indications for use of any controlled release drug containing Oxycodone-Hydrochloride (HCl) to “severe-only” versus current labeling of “moderate-to-severe” pain.  The legislation is similar to a recent Citizen Petition filed by the Physicians for Responsible Opioid Prescribing (“PROP”) to FDA.  Id.  The PROP petition (Docket No. FDA-2012-P-0818), in addition to requesting that FDA restrict those drugs’ approved uses to “severe-only” pain, further requests that FDA impose day and quantity limits in their approved labeling.  Id.  Namely, it requests that FDA “add a maximum daily dose equivalent to 100 milligrams of morphine” and “add a maximum duration of 90-days for continuous daily” use.  Id.  Importantly, while the proposed legislation would apply to use by all patients the PROP petition would apply only to non-cancer patients.  Id.

In a rare move, DEA has endorsed the PROP petition.  On March 20, 2013, DEA filed a letter with the Division of Dockets Management at FDA.  See Letter from Joe Rannazzisi, Deputy Assistant Administrator, DEA to FDA (Mar. 20, 2013).  Therein, DEA explained that opioid analgesics have a long history of abuse, which has increased over the past decade, and that the primary source of the drug for abuse purposes is diverted pharmaceuticals.  Id.   DEA explained that it is concerned about the potential public health risks resulting from abuse of opioid drug products” and “additional regulatory measures are necessary for opioid formulations to adequately safeguard the American public.”  Id.  DEA also noted that the agency had “previously requested FDA to consider additional regulatory measures such as restrictions on prescribing, marketing practices, and clinical indications for these opioid products.”  Id. DEA did not provide any specific references to such prior action.  Id.

Of note, although the PROP petition was filed in July 2012, on January 17, 2013, FDA issued an interim response to the petition stating that “FDA has been unable to reach a decision on . . . [the] petition because  . . . [it] raises significant issues requiring extensive review and analysis by Agency officials.”  Therefore, DEA’s comment is likely intended to encourage FDA to take action, given its timing and DEA’s stated concerns about prescription drug abuse.    

By Kurt R. Karst –      

A recent Complaint filed in the U.S. District Court for the Southern District of Florida by Accord Healthcare, Inc. and Intas Pharmaceuticals, Ltd. (collectively, “Accord Healthcare”) against Acorda Therapeutics Inc. (“Acorda”) and H.D. Smith Wholesale Drug Co. (“H.D. Smith”) is the latest salvo in a bigger battle between generic drug and brand-name drug manufacturers over access to drug product for purposes of bioequivalence testing and ANDA submission.  This time the drug involved is AMPYRA (dalfampridine) Extended-release Tablets, which FDA approved on January 22, 2010 with 5-year New Chemical Entity (“NCE”) exclusivity and 7-year orphan drug exclusivity under NDA No. 022250 to improve walking in individuals with multiple sclerosis.  Although AMPYRA is approved with a Risk Evaluation and Mitigation Strategy (“REMS”), the REMS does not include Elements To Assure Safe Use (“ETASU”) that requires restricted distribution of the drug product.  Rather, the AMPYRA REMS, which is intended to address the risk of seizures, originally consisted of a Medication Guide, a communication plan, and a timetable for submission of assessments of the REMS.  The REMS was subsequently modified – here and here – and now includes only a communication plan.  Notwithstanding the absence of an FDA ETASU REMS for AMPYRA, the drug is available only through certain distributors, such as H.D. Smith, under a restricted distribution program adopted and implemented by Acorda. 

The controversy over restricted distribution products and generic competition has been heating up over the last several months.  As we previously reported, in 2012, Actelion Pharmaceuticals preemptively sued generic drug manufacturers seeking declaratory relief that Actelion is under no affirmative duty or obligation to supply prospective ANDA applicants with its brand-name drug product TRACLEER (bosentan) Tablets, which is under an ETASU REMS.  The generic defendants in the case, which added another drug that is under a restricted distribution program but not an ETASU REMS – ZAVESCA (miglustat) Capsules – filed counterclaims alleging that Actelion abused its monopoly power in violation of Sections 1 and 2 of the Sherman Act and the New Jersey Antitrust Act by refusing to provide sample of the drugs.  In March, the Federal Trade Commission filed an amicus brief (see our previous post here) saying that the allegations in the case “highlight a troubling phenomenon: the possibility that procedures intended to ensure the safe distribution of certain prescription drugs may be exploited by brand drug companies to thwart generic competition.”  More recently, Actelion filed a Reply Brief in the case saying, among other things, that the company’s restricted distribution programs are protected from antitrust attack under the First Amendment and the Noerr-Pennington doctrine, because they are submissions to FDA that constitute petitioning.  In addition, another company, Johnson Matthey, Inc., has entered the case as a defendant/counterclaim plaintiff (see the briefs here and here). 

Accord Healthcare alleges in its Complaint that both Acorda and H.D. Smith refused to provide sample of AMPYRA in violation of federal and state antitrust laws, and that such refusals have caused significant delay in Accord Healthcare’s efforts to prepare an ANDA for generic AMPYRA.  According to Accord Healthcare, in order to conduct the bioequivalence studies outlined by FDA in draft guidance on dalfampridine in time to submit an ANDA on the so-called “NCE-1” date of January 22, 2014 (i.e., when the first ANDA can be submitted to FDA containing a Paragraph IV certification to an Orange Book-listed patent covering AMPYRA) and, therefore, qualify for 180-day exclusivity, bioequivalence studies must begin in May 2013.  “If samples are not obtained in time to begin the necessary clinical trials the central commercial incentive for preparing and filing an ANDA, the ability of Accord Healthcare to file an ANDA for approval of its generic product will be eviscerated,” says Accord Healthcare.  The company continues, saying that “Ampyra® is therefore an essential facility.”  This is a reference to the “essential facilities doctrine,” which is an exception to the general rule that a company has no obligation to deal with its competitors.

Accord Healthcare alleges that Acorda violated Section 2 of the Sherman Act, the Florida Antitrust Act, and tortiously interfered with a prospective business relationship by refusing to sell the company sample of AMPYRA at market prices for ANDA submission purposes, and is seeking preliminary and permanent mandatory injunctive relief and declaratory relief.  Specifically, Accord Healthcare requests that the Florida district court compel Acorda to immediately sell Accord Healthcare sufficient quantities of AMPYRA at market prices so that the company can conduct bioequivalence testing, and declare that
Acorda is required to sell Accord Healthcare sufficient samples of the drug.

 By Ricardo Carvajal –

When FDA published its proposed rule on preventive controls as authorized by FSMA, we noted that FDA requested comment on a number of important issues that were not addressed in the text of the regulation itself, namely product testing, environmental monitoring, and supplier approval and verification.  These elements were extensively discussed in an appendix to the proposed rule.  FDA has since made clear that they could yet be integrated into the final rule pending further evaluation. 

Prior to its publication, the proposed rule was under review for a year by the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA).  The recent publication of documents showing changes made as a consequence of OMB’s review has prompted some surprise, as well as observations that OMB effectively watered down the regulation – in part by striking provisions that would have required product testing, environmental monitoring, and supplier approval and verification.

OMB review of significant regulatory actions has been a standard feature of agency rulemakings for over 30 years through both Republican and Democratic administrations, pursuant to Executive Order (EO) 12866 issued by President Clinton and its predecessor EO 12291 issued by President Reagan.  The purpose of that review has been explained by OMB as follows:

The OIRA review process under Executive Order 12866 seeks to ensure that agencies, to the extent permitted by law, comply with the regulatory principles stated in the Executive Order and that the President’s policies and priorities are reflected in agency rules. Such review also helps to promote adequate interagency review of draft proposed and final regulatory actions, so that such actions are coordinated with other agencies to avoid inconsistent, incompatible, or duplicative policies. OIRA review helps to ensure that agencies carefully consider the consequences of rules (including both benefits and costs) before they proceed.

Although the emphasis added to the above paragraph is ours, OIRA’s former administrator has noted that the current Administration places “a great deal of emphasis on careful analysis of costs and benefits.”  It should therefore come as no surprise that FDA’s proposed rule emerged from OMB review with some significant changes, and testing requirements were logical targets for scrutiny given their estimated costs (see the economic analysis of the preventive controls rule here).  The preventive controls proposed rule is certainly not the first FDA regulation to be subject to rigorous scrutiny and a bit of pruning during the course of OMB review, and the final rule will have to run the same gauntlet. 

We note also that the posting of the OMB review documents is entirely consistent with EO 12866, which states:

After the regulatory action has been published in the Federal Register or otherwise issued to the public, the agency shall… [i]dentify for the public, in a complete, clear, and simple manner, the substantive changes between the draft submitted to OIRA for review and the action subsequently announced; and… [i]dentify for the public those changes in the regulatory action that were made at the suggestion or recommendation of OIRA.

By Kurt R. Karst –      

Despite amendments to the statute, court decisions, and FDA interpretations, there has been one constant throughout the nearly 29-year history of the Hatch-Waxman Amendments: dates matter.  If a company – or FDA – misses a deadline by just one day, then opportunities provided by the statute can be lost.  (Well, except in one case, but that took a decade to resolve.)  Those opportunities may be on the brand side of the equation (e.g., timely filing a patent infringement lawsuit or timely submitting information to FDA for Orange Book listing a patent), or on the generic side of the equation (e.g., qualifying for and forfeiting 180-day exclusivity).  A recent split decision by FDA on 180-day generic drug exclusivity for generic LUVOX CR (fluvoxamine maleate) Extended-Release Capsules, 100 mg and 150 mg, nicely makes the point on how important dates are under the Hatch-Waxman Amendments.

Anchen Pharmaceuticals, Inc. (“Anchen”) submitted ANDA No. 091476 to FDA on April 13, 2009 seeking approval to market a generic version of only the 150 mg strength of LUVOX CR.  Just a week later, on April 20, 2009, Anchen amended its ANDA to seek approval of the 100 mg strength as well.  Both the original ANDA and the new strength amendment contained Paragraph IV certifications to patents listed in the Orange Book for LUVOX CR.  In both cases, Anchen’s Paragraph IV certifications qualified the company as a fist applicant eligible for 180-day exclusivity. 

Under the statute – at FDC Act § 505(j)(5)(D)(i)(IV) – 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 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 [FDA] 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 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).  Those changes are not relevant here.  (For a list of some of the circumstances excusing the failure to obtain timely tentative approval see here.)

The 30-month tentative approval dates for Anchen’s ANDA No. 091476 – October 13, 2011 for the 150 mg strength and October 20, 2011 for the 100 mg strength – came and went without any action on the ANDA.  Fast-forward to March 13, 2013 when FDA finally approved both strengths under ANDA No. 091476. . . .

FDA notes in the approval letter that Anchen failed to obtain timely tentative approval for both strengths under the ANDA, and, therefore, that eligibility for 180-day exclusivity could be forfeited.  But wait, wrote FDA, there was a change in or a review of the requirements for approval of the application imposed after the date on which the ANDA was considered received (i.e., filed).  “Specifically, there were revisions in the labeling of the RLD that necessitated changes in Anchen’s labeling that were not resolved until October 18, 2011 . . . .” (Emphasis added). 

The October 18th date, however, falls in between the October 13th 30-month date for the 150 mg strength and the October 20th 30-month date for the 100 mg strength.  The October 18th date resulted in FDA issuing a split decision.  For the 150 mg strength, FDA determined that 180-day exclusivity eligibility was not forfeited, because “there were revisions in the labeling of the RLD that necessitated changes in Anchen’s labeling that were not resolved until October 18, 2011, which is after the 30-month forfeiture date for the 150 mg strength.”  For the 100 mg strength, however, 180-day exclusivity eligibility was forfeited, because “the changes in the requirements for approval related to the RLD labeling revisions were not a cause of Anchen’s failure to obtain tentative approval of the 100 mg strength within the 30-month period . . . because those issues were resolved prior to October 20, 2012.”

Timing truly is everything in the Hatch-Waxman world.  The Anchen/generic LUVOX CR case illustrates this fact.  But it also serves as a gentle reminder for companies to communicate to FDA important dates to try and avoid forfeitures of 180-day exclusivity eligibility.

By Kurt R. Karst –      

A recent per curiam decision from the U.S. Court of Appeals for the District of Columbia Circuit may be the last word in litigation Hill Dermaceuticals, Inc. (“Hill”) initiated in November 2011 against FDA, as Hill filed a petition for rehearing last week that was denied earlier this week.  Hill filed the lawsuit after FDA approved three ANDAs submitted by Identi Pharmaceuticals Inc. (“Identi”) for generic versions of Hill’s peanut-oil containing fluocinolone acetonide drug products Derma-Smoothe/FS Topical Oil, 0.01% (Scalp Oil and Body Oil) and Derm-Otic Oil Ear Drops, 0.01%, based on waivers of the in vivo bioequivalence testing requirement.  As we previously reported, Hill filed a Complaint and Motion for a Preliminary Injunction in the D.C. District Court alleging that FDA’s approval of the Identi ANDAs violates various provisions of the FDC Act concerning ANDA labeling “sameness”  to Derma-Smoothe,  product misbranding, and bioequivalence requirements, and the Administrative Procedure Act (“APA”).  In December 2011, the district court denied Hill’s preliminary injunction motion, and, in May 2012, the court granted FDA’s Motion to Dismiss the case (and denied Hill’s cross-motion for summary judgment).  A lengthy appeal to the D.C. Circuit followed. 

In addition to alleging that FDA violated the FDC Act and the APA in approving Identi’s ANDAs, Hill argued on appeal that the district court abused its discretion in refusing to consider several extra-record declarations that Hill alleged would advance its case.  The Court first dispensed with that allegation in its March decision, saying that it is “black-letter administrative law that in an APA case, a reviewing court should have before it neither more nor less information than did the agency when it made its decision” (internal quote omitted). 

On to the meat of the case – the claims concerning the FDC Act and the APA – the D.C. Circuit ruled in a 6-page opinion that FDA reasonably determined that a waiver of the in vivo bioequivalence testing requirements for generic Derma-Smoothe was appropriate and proper, notwithstanding the fact that Identi’s products omit two fragrances in Derma-Smoothe.  “The FDA reasonably concluded — after examining the makeup of Identi’s drugs and consulting with multiple divisions within the agency — that the omission of the fragrances would have no expected effect on efficacy or safety,” wrote the Court deferring to FDA’s expertise in such scientific matters.  The Court was similarly unconvinced that alleged errors in the Identi ANDAs renedered FDA’s approval decisions arbitrary and capricious.  “[M]ost of these alleged errors are minor technical mistakes . . . and Hill develops no argument suggesting that the alleged errors resulted in prejudicial treatment or that the agency’s ultimate decision would have been any different but for these inaccuracies,” said the Court. 

Hill’s final argument – that FDA should not have approved Identi’s ANDAs because the drugs’ labeling omits reference to an amino acid analysis test for peanut proteins and, therefore, violates the same labeling requirement at FDC Act § 505(j)(2)(A)(v) – was also unavailing, wrote the Court:

The key phrase in the statute is “labeling approved for the listed drug.”  The FDA has concluded that Hill’s amino-acid testing method has not been validated and has thus instructed to Hill to remove this line from its labels. . . .  Hill’s label is not “approved” for the listed drug, so Identi need not copy Hill’s statement about a non-validated method.  Moreover, 21 C.F.R. § 314.94(a)(8)(iv), the regulation implementing this labeling requirement, specifically states that the different-manufacturers exception “may include . . . labeling revisions made to comply with current FDA labeling guidelines or other guidance.”

The Court, in affirming the D.C. District Court decision, found that FDA’s ANDA approvals were not arbitrary and capricious, and commented that various “hyperbolic references” by Hill in its briefs to the “immutable laws of science” do not trump “the  basic tenets of administrative law,” which “have greater impact on our decisions.”  Last week, Hill filed a Petition for Panel Rehearing of the per curiam decision alleging that the Circuit panel overlooked and misapprehended facts and law with respect to FDA’s ANDA approvals.  On March 27th, the Court denied the petition.

By Delia A. Stubbs & Alan M. Kirschenbaum –

Yesterday the OIG issued a Special Fraud Alert on physician owned distributorships, or PODs.  The OIG describes these entities as “physician owned entities that derive revenue from selling, or arranging for the sale of, implantable medical devices ordered by their physician owners in procedures the physician owners perform on their own patients at hospitals or ambulatory surgery centers.”  Although the Fraud Alert primarily addresses PODs of implantable medical devices, the OIG clarified that the principles set forth in the Fraud Alert “would apply when evaluating arrangements involving other types of physician-owned entities.”

Mincing no words, the Fraud Alert twice describes PODs as “inherently suspect under the antikickback statute.”  That law makes it a crime to willfully offer, pay, solicit, or receive any remuneration to induce, or in return for, referrals of items or services reimbursable by a Federal health care program.  42 U.S.C. § 1320a-7b(b).  The OIG explains that “financial incentives PODs offer to their physician-owners may induce physicians both to perform more procedures (or more extensive procedures) than are medically necessary and to use the device the PODs sell in lieu of other, potentially more clinically appropriate, devices.”  This is especially true for implantable medical devices, the OIG states, because the choice of brand and type of the device may be made or strongly influenced by the physician.  The Fraud Alert describes certain attributes of suspect PODS, such as distributions based on the actual or expected volume of devices used by a physician owner, or physician owners conditioning referrals to hospitals on the latter’s purchase of the POD’s devices.  Heightened scrutiny is triggered by disproportionately high rates of return, or physicians’ changing their medical practices (e.g., performing more surgeries) after investing in a POD. 

This is not the first time the OIG has focused on PODS.  In a 2006 public letter, the OIG noted “an apparent proliferation of physician investments in medical device and distribution entities, including group purchasing organizations,” and stated that OIG guidance on joint ventures (which includes a safe harbor regulation on investment interests) would apply to such entities. 

In June 2011, the minority staff of the Senate Finance Committee issued a report on PODS, followed the same month by a letter to the OIG from the Committee expressing concern about potential federal health care program abuse by PODs and requesting the OIG to conduct an inquiry into these organizations.  The OIG’s FY 2012 and 2013 Work Plans refer to such a report in preparation, but none has been forthcoming yet.

It bears mention that, under a recent rule issued by the Centers for Medicare & Medicaid Services (CMS) to implement the physician payment transparency (“sunshine”) provisions of the Affordable Care Act, “applicable group purchasing organizations” (GPOs) will be required to report their physician ownership and investment interests, as well as the payments they distribute to their physician owners and investors.  PODs that meet the rule’s definition of applicable GPOs will have to meet these reporting requirements.  Moreover, CMS takes the questionable position in the preamble that distributors who take title to federally reimbursable medical products are “applicable manufacturers” subject to sunshine reporting requirements.  See 78 Fed. Reg. 9458, 9461 (Feb. 8, 2013).  (Our memorandum summarizing this regulation is available here.)  Under this interpretation, even PODs that are not GPOs will be required to report their physician ownership and investment interests as well as the payments they distribute to their physician owners and investors.  With this new transparency, public and government focus on PODs is unlikely to wane.

Somewhat later than anticipated, the Federal Trade Commission (“FTC”) has published a revised version of its guide, .Com Disclosures.  The FTC released the original guide 13 years ago, when mobile phones had not yet met the internet and social media barely existed.  In the new version of the guide, updated recommendations and new examples focus on how to craft disclosures given the smaller screen sizes of smartphones as compared to computers and the character and space limitations of most social media (e.g., the 140-character limit for Twitter tweets).

Clear & Conspicuous Requirement.  Under the FTC Act, if a disclosure is necessary to prevent a claim from being deceptive, then the disclosure must be “clear and conspicuous.”  The revised guide, like the 2000 version, continues to emphasize that advertisers should consider the following factors in determining whether an online disclosure is clear and conspicuous:

• Placement of the disclosure and how proximate it is to the claim being qualified;
• Prominence of the disclosure (e.g., the size of the disclosure in a visual ad; the volume of the disclosure in an audio ad);
• Whether the disclosure is unavoidable;
• Whether other elements in the ad distract from the disclosure;
• Whether the disclosure needs to be repeated; and
• Whether the language of the disclosure is understandable.

Scrolling.  The revised guide spends a considerable amount of time discussing the situation where reading a disclosure on a computer, smartphone, or other device may require scrolling.  The revised guide states, “When advertisers are putting disclosures in a place where consumers might have to scroll in order to view them, they should use text or visual cues to encourage consumers to scroll and avoid formats that discourage scrolling.” 

The guide provides a laundry list of what the FTC considers to be inadequate cues to scroll.  The guide, for instance, recommends against using “vague statements, such as ‘details below’”; using only scroll bars on the edge of the screen to indicate that scrolling is required; and leaving large swaths of blank space above a disclosure. 

The FTC, in general, recommends either “[o]ptimizing websites for mobile devices” or placing website disclosures in vertical alignment with the claim being qualified.  The FTC’s rationale is that consumers “who have to zoom in to read a claim on a small screen” may be unlikely to scroll right or left in order to view a disclosure.

Hyperlinking. Regardless of where a hyperlink might appear – for instance, on an advertiser’s website or in an endorser’s social media post – the revised guide recommends considering the following factors:

• The placement and prominence of the hyperlink; 
• Whether the label of the hyperlink is appropriately descriptive and “give[s] consumers a reason to click on it”;
• Whether the actual disclosure provided via hyperlink is understandable; and
• Whether hyperlinks throughout a website (or other piece of online advertising) are consistent in style and presentation.

The FTC cautions that some disclosures, such as “cost information” and “certain health information,” should not normally be provided through a hyperlink.  The guide allows for some wiggle room, however, and states that if details are “too complex” to describe on the same page, a hyperlink might be appropriate if it clearly conveys the nature of the disclosure. 

A new example seeks to demonstrate an appropriate hyperlinked disclosure.  A one-page online ad for the “Frost-A-Tron” electric cooler includes a “Satisfaction Guaranteed” claim.  Directly below that claim, there is a hyperlink labeled, “Restocking fee applies to all returns.”  The hyperlink then leads to a fee schedule providing different dollar amounts that will apply depending on how soon after purchase a consumer returns the Frost-A-Tron.

Pop-Ups.  Regarding pop-ups or other “high tech” interstitial methods of delivering information, the revised guides recommend considering:

• Whether the various browsers or devices that a consumer might use will support the pop-up or other method of delivery;
• Whether blocking software will prevent proper display; and
• Whether consumers might be inclined to ignore the disclosure given the particular delivery method.

The FTC suggests that advertisers might overcome the problem of consumers ignoring a disclosure if the consumer is forced to actively choose and click “yes” or “no” in order to proceed.

No Exceptions.  A common theme throughout the revised guide is that if limited space or technology constraints prevent a disclosure from being clear and conspicuous, then the particular claim, advertisement, or medium should not be used.  The guide states, “If a disclosure is necessary to prevent an advertisement from being deceptive, unfair, or otherwise violative of a Commission rule, and if it is not possible to make the disclosure clear and conspicuous, then either the claim [that is being qualified] should be modified so that the disclosure is not necessary or the ad should not be disseminated.”

Where space is especially limited, such as in tweets or banner ads, the FTC recommends closely considering factors such as whether a disclosure will be retained with republishing (e.g., re-tweeting) and whether abbreviated disclosures will be understood by consumers.  A new example indicates that the FTC believes that “Ad” at the beginning of a tweet will usually be adequate to indicate that a message is sponsored, but that the abbreviated disclosure, “#spon,” will not.

What’s Next.  Although not legally binding, the new version of .Com Disclosures represents a snap shot of how FTC Staff will likely apply the law moving forward in reviewing online disclosures and pursuing enforcement action.  As it typically does after releasing new guidance, the FTC will likely seek to test its interpretations.  The FTC may target low-hanging fruit or it may seek to make its point with big fish.  In recent years, the FTC has actively and deliberately targeted a greater number of well-known, national brands.  All advertisers under FTC jurisdiction are well-advised to review their use of online disclosures sooner rather than later. 

Even though the new guide is not binding on the Food and Drug Administration (“FDA”), it is instructive to FDA-regulated entities considering the use of social media and other new media in structuring their digital advertisements.   

By Riëtte van Laack –

On March 18, 2013, the Government Accountability Office ("GAO") released a report addressing FDA’s use of Adverse Event Reports ("AERs") in overseeing dietary supplements.  Specifically, GAO examined (1) the  number and source and the types of dietary supplements identified in adverse event reports (AERs) to FDA; (2) actions FDA has taken to help ensure that firms are complying with the AER requirements of the 2006 Dietary Supplement and Nonprescription Drug Consumer Protection Act; (3) the extent to which FDA is using AERs to initiate and support its consumer protection actions; and (4) the extent to which FDA has implemented GAO’s 2009 recommendations for enhancing FDA oversight of dietary supplements.

Since 2008, the supplement industry has submitted mandatory AERs pursuant to the 2006 Act.  From 2008 through 2011, FDA received more than 6,307 AERs related to dietary supplements.  The majority (71%) of these AERs were submitted by the dietary supplement industry.  The number of voluntary AERs stayed constant at about 461 per year.  However, the number of mandatory reports, i.e., serious AERs submitted by the industry, increased over time.  This increase likely is the result of increased compliance with the 2006 Act.

In addition to AERs submitted to FDA, GAO reviewed data collected by poison centers.  GAO’s analysis suggests that, from 2008 to 2010, poison centers received more AERs linked to dietary supplements than did FDA for that same period.  Based on these data, GAO suggests that FDA explore possibilities to obtain access to poison center data. 

GAO also recommends that FDA facilitate submission of AERS by providing industry with the means to electronically submit AERs and to provide public access to the AERs (currently, AERs for dietary supplements are not publicly available and require a FOIA request). 

GAO identified a limited number of enforcement actions, including three warning letters, 15 import refusals and one injunction involving compliance with the 2006 Act.  These actions concerned a failure to comply with the requirement to provide a domestic address or phone number to report AERs or a failure by the company to submit AERs it received.  

FDA generally agreed with GAO’s recommendations.  In its response to the report, FDA indicated that a final guidance clarifying when liquid products may be marketed as dietary supplement or conventional foods is currently undergoing Agency review.  In addition, FDA plans to develop a second draft NDI guidance (the first draft guidance yielded more than 7000 comments).  FDA did not provide a time frame for completion of this revised draft NDI guidance.

In response to GAO’s suggestion that FDA may be able to expand use of AERs in enforcement, FDA clarifies that most AERs do not result in enforcement because FDA receives a relatively small number of AERs, and it is difficult to determine causality between the product and the health problem based on the limited information in these AERs. 

In response to the report, Sen. Durbin (D-Ill.) stated that he plans to reintroduce his Dietary Supplement Labeling Act, which he previously introduced in 2011 (see our previous post here).

By Delia A. Stubbs –

On Thursday, March 21, 2013, Representatives Harold “Hal” Rogers (R. Ky.), who is the co-founder and co-chairman of the Congressional Caucus on Prescription Drug Abuse, and Stephen Lynch (D. Mass) introduced the Stop Oxy Act of 2013 (H.R. 1366).   The legislation seeks to direct the Commissioner of the FDA to modify the existing and future approval of any drug containing controlled-release oxycodone hydrochloride under section 505 of the FDCA (21 U.S.C. § 355) to limit such approval to the relief of “severe-only” instead of “moderate-to-severe” pain. 

The Stop Oxy Act arrives on the heels of a recent citizen petition (Docket No. FDA-2012-P-0818) filed by the Physicians for Responsible Opioid Prescribing (“PROP”) urging FDA to modify the labeling for opioid analgesics.  Specifically, similar to the legislation, the PROP petition requests that FDA “strike the term ‘moderate’ from the indication for non-cancer pain.”  It further requests that FDA “add a maximum daily dose equivalent to 100 milligrams of morphine for non-cancer pain;” and “add a maximum duration of 90-days for continuous daily” use for non-cancer pain.  While some states do place quantity or duration limits on prescriptions for certain controlled substances, currently there are no similar federal limits.  The PROP petition asserts that such changes are necessary because, among other reasons, long-term safety and effectiveness of managing chronic non-cancer pain with opioids “has not been established.”  Furthermore, the petition notes that recent surveys found high rates of addiction in chronic non-cancer pain patients receiving chronic opioid treatment; and chronic opioid treatment “at high doses is associated with increased risk of overdose death, emergency room visits, and fractures in the elderly.”  Interestingly, the House bill excludes the PROP petition’s “non-cancer” limitation, and, thus, seeks to restrict the approved use of controlled release oxycodone hydrochloride to “severe-only pain” in all patient populations.

By Jeffrey K. Shapiro –

The U.S. Court of Appeals for the D.C. Circuit (appeal no. 11-1268) issued a decision last Friday backing up FDA’s denial of 510(k) clearance to two of Cytori’s products, the Celution 700 and the StemSource 900, which are intended to harvest cells from adipose (fat) tissue.  Cytori argued that the “not substantially equivalent” (NSE) determination was arbitrary and capricious under the Administrative Procedure Act (APA).  The appeals court rejected this argument.

We discussed the Cytori case in detail when it was argued almost eight months ago – see here. 

The first issue the appeals court decided was whether an NSE determination is the type of decision that can obtain direct review in the Court of Appeals without first going through the trial court.  The court answered “yes” because it is an “order” under the APA’s definition, and there is a provision in the Food, Drug, and Cosmetic Act (FDCA) allowing direct review by an appellate court of FDA’s orders.

The second issue decided was whether FDA’s NSE determination was arbitrary and capricious.  Cytori argued its devices are substantially equivalent to devices already cleared for harvesting cells from blood and bone marrow.  FDA concluded that these two intended uses (harvesting cells from fat versus blood) are different, precluding a finding of substantial equivalence.  In addition, FDA also concluded that the enzyme used to separate cells out of fat tissue posed new safety questions, again defeating substantial equivalence.  Cytori had provided data from 12 donors to show equivalence.  FDA found that this study was too small.

The appeals court did not do much heavy lifting.  It simply deferred to FDA’s “scientific” determination that removing cells from fat is too different from blood, that the enzyme raises new safety questions, and that the 12 donor study was insufficient to establish equivalent safety.  QED.

Said the court (p. 10):  “A court is ill equipped to second guess that kind of agency scientific judgment under the guise of the APA’s arbitrary and capricious standard.” 

Hence, the court expends very little effort in even describing the scientific analysis and reasoning underlying FDA’s judgment.  The court seemed to have essentially reviewed the administrative record to ensure that FDA had provided a reasonable sounding explanation.

This decision is a reminder why there have been so few challenges to FDA’s NSE determinations.  The courts are so deferential under the arbitrary and capricious standard that is very hard to win a case like this one.

By Kurt R. Karst –      

Excitement is running high in the pharmacetical world with just hours to go before the U.S. Supreme Court hears oral argument on Monday, March 25, 2013 in Federal Trade Commission v. Actavis (Docket No. 12-416) concerning whether drug patent settlement agreements (aka “reverse payment agreements” or “pay-for-delay agreements”) to resolve litigation brought pursuant to the Hatch-Waxman Amendments are generally per se lawful, or presumptively anticompetitive and unlawful under federal competition laws.  The Court finally agreed to hear a case concerning drug patent settlement agreements after years of refusing to do so.  Congress will also be closely watching the case, with two bills already pending that would severely dampen interest in in such agreements – S. 214, the Preserve Access to Affordable Generics Act (see our previous post here), and S. 504, the FAIR Generics Act (see our previous post on the same bill introduced in 2011) – and a March 22nd amendment (SA 628) to the continuing budget resolution that would discourage settlements.  Oral argument in Actavis comes less than a week after the Supreme Court heard Mutual Pharmaceutical Co. v. Bartlett (Docket No. 12-142) (see our previous post here), which is another case raising issues under the Hatch-Waxman Amendments and concerns generic drug labeling and whether federal law preempts state-law product liability claims against generic drug manufacturers.  (A copy of the oral argument transcript in Bartlett is available here.) 

The Supreme Court agreed to hear the case after the U.S. Court of Appeals for the Eleventh Circuit affirmed a decision by the U.S. District Court for the Northern District of Georgia largely dismissing multidistrict litigation brought by the FTC (and certain private plaintiffs) challenging certain drug patent settlement agreements in which Solvay Pharmaceuticals, Inc. allegedly paid some generic drug companies to delay generic competition to Solvay’s drug product ANDROGEL (testosterone gel).  The Eleventh Circuit, following the Court’s previous holdings in several cases, held that “absent sham litigation or fraud in obtaining the patent, a reverse payment settlement is immune from antitrust attack so long as its anticompetitive effects fall within the scope of the exclusionary potential of the patent.” 

Respondents in the case argue in their briefs (here, here, and here) that the so-called “scope of the patent test” used by Eleventh Circuit correctly reflects patent and antitrust precedent.  That test is different from the so-called “quick look rule of reason” analysis advocated by the FTC.  As the U.S. Court of Appeals for the Third Circuit explained in In Re: K-DUR Antitrust Litigation (which is also on appeal to the Supreme Court – Docket Nos. 12-245 and 12-265) when it rejected the “scope of the patent test” and applied the “quick look” rule, under the “quick look” rule “the finder of fact must treat any payment from a patent holder to a generic patent challenger who agrees to delay entry into the market as prima facie evidence of an unreasonable restraint of trade, which could be rebutted by showing that the payment (1) was for a purpose other than delayed entry or (2) offers some pro-competitive benefit.” 

A few weeks ago we did a run-down of the amicus briefs submitted in support of the FTC (see here).  An even greater number of amici have come out in support of Respondents in the case:

• National Association of Manufacturers
• Generic Manufacturers Upsher-Smith Laboratories, Inc., et al. 
• Enavail, LLC 
• Generic Pharmaceutical Association
• Bayer AG and Bayer Corp.
• Shire PLC
• New York Intellectual Property Law Association
• Merck & Co., Inc.
• Pharmaceutical Research and Manufacturers of America
• Antitrust Economists
• Law Professors Gregory Dolin, Kent Bernard, et al.
• American Intellectual Property Law Association 
• Mediation and Negotiation Professionals
• David W. Opderbeck and Erik Lillquist
• Health and Economics Professors
• Washington Legal Foundation
• Intellectual Property Owners Association

Although the various amici address the case from different perspectives and have related, albeit different, interests, they all agree that Supreme Court precedent supports the scope of the patent test, and that the “quick look” rule would reduce patent challenges, decrease competition, and harm consumers.

The FTC, in its reply brief filed last week, got in the last word on the case, saying that the “quick look” rule best identifies and condems collusive behavior that eviscerates the brand-generic competitive relationship, and best respects the balance between innovation and competition Congress envisioned when it passed the Hatch-Waxman Amendments.  Conversely, says the FTC, the scope of the patent test would immunize and encourage collusive behavior.

There is already speculation circulating as to how the Supreme Court might rule in the case (see here).  The Court is expected to come to a decision in the coming months.  Until then, Supreme Court tea leave readers will scritinize every word uttered on March 25th for a clue as to the outcome. 

By Karla L. Palmer –

Senators Joe Manchin (D-W.Va.) and Mark Kirk (R-IL), along with Representatives Vern Buchanan (R-FL) and Edward Markey (D-MA) introduced on March 20, 2012 bipartisan, bicameral legislation to combat prescription drug abuse by attempting to tighten restrictions on what they characterize as some of the most powerful, addictive narcotics on the market.  Titled the “Safe Prescribing Act of 2013,” the legislation will reschedule hydrocodone combination product painkillers, such as Vicodin and Lortab, from Schedule III to Schedule II controlled substances.  The press release, listing all 44 co-sponsors of the bill (29 Republicans, 15 Democrats), claims that this rescheduling will accurately reflect the drugs’ high potential for addiction and abuse. Quoting Dr. Andrew Kolodny, President of Physicians for Responsible Opioid Prescribing, the press release further states, “[t]his legislation will correct an error made over 40 years ago when the Controlled Substances Act (“CSA”) incorrectly classified hydrocodone combination products. There is clear and convincing medical evidence that hydrocodone has the same abuse liability as the Schedule II opioids.”

Although there have been grumblings of potential rescheduling since as long ago as 1999, rescheduling hydrocodone products has gained momentum in the past year or so on several fronts due to increased reports of abuse and diversion, FDASIA’s requirement of a public hearing on the issue, and FDA’s 363-page briefing memorandum setting forth its scientific and medical evaluation of hydrocodone products, which report was requested by DEA.  The latest legislative push also comes on the heels of Senator Manchin’s bi-partisan letter to FDA’s Commissioner Margaret Hamburg urging the Agency immediately to reschedule hydrocodone products to Schedule II.  At the end January of this year, the FDA also held a Drug Safety and Risk Management (“DSaRM”) Advisory Committee meeting where, after two days of discussion and deliberation, the Committee voted 19-10 in favor of rescheduling combination hydrocodone products from their current placement in Schedule III to Schedule II.  (See our prior posts addressing these subjects here, here, and here.)  As stated in these prior blogposts, rescheduling hydrocodone products from Schedule III to Schedule II would affect popular hydrocodone combination products such as Vicodin, Lortab, Lorcet, Norco, Hycodan and Vicoprofen.  (However, bulk and single entity hydrocodone products have been classified in schedule II since the passage of the CSA in 1970).
Rescheduling hydrocodone products would also impact every legitimate controlled substance handler including patients who rely on the products for pain relief.  Rescheduling would subject manufacturers, distributors, dispensers such as pharmacies and physicians, importers and exporters to more stringent regulatory requirements.  For example, among other restrictions, Schedule II substances can only be transferred between registrants via a triplicate, sequentially-numbered DEA Form 222 Official Order Form or its electronic equivalent while registrants need only document transfers of schedule III-V drugs with invoices, packing slips or other records.  Prescriptions for Schedule II substances, with limited exceptions, must be written, and pharmacies must have the original prescriptions in-hand before dispensing.  Prescriptions for Schedule III-V may be in a written, oral or faxed format.  Pharmacists cannot refill Schedule II prescriptions; but they can, if authorized to do so, refill Schedule III-V prescriptions up to five times within a six month period.  Manufacturers and distributors must secure Schedule II substances in a safe, steel cabinet or vault while schedule III-V substances may be stored in a less secure controlled substance cage or other enclosure.

As to controlled substance manufacturers and distributors of hydrocodone products,  unlike the prior Manchin bill introduced in April 2012, the proposed legislation calls for the amendment of 21 C.F.R § 1301.72 (relating to the physical security controls for non-practitioners, narcotic treatment programs and compounders for narcotic treatment programs, and storage areas for controlled substances), to allow, for a three-year period following enactment, manufacturers and distributors to store hydrocodone combination products in accordance with the physical security requirements for schedule III, IV and V controlled substances.  The proposed legislation is silent on whether other controlled substance handlers (such as pharmacies) would have to comply with more restrictive handling, storage and security requirements if hydrocodone is rescheduled to schedule II. 

The proposed legislation also requires that, within eighteen months after enactment the Comptroller General shall submit to Congress a GAO report addressing the reclassification of hydrocodone products under the Act.  The report must include an assessment of the degree to which the reclassification  of hydrocodone products “impacts the ability of patients with legitimate medical needs, particularly those in rural areas and nursing home facilities, to access adequate pain management;” and recommendations necessary to address issues, if any relating to patient access to adequate pain management.” 

Notably, legislative scheduling hydrocodone is typically a less cumbersome and quicker process than DEA’s rescheduling via the administrative rulemaking procedures set forth in 21 U.S.C. §§  811, 812.  That administrative process requires a notice and comment period and requires DEA to engage in an eight factor analysis in making a determination on whether to control or reschedule a drug.  These factors include:  (1) the drug’s actual or relative potential for abuse; (2) scientific evidence of its pharmacological effect, if known; (3) the state of current scientific knowledge regarding the drug or other substance; (4) its history or current pattern of abuse; (5) the scope, duration, and significance of abuse; (6) what, if any, risk there is to the public health; (7) its psychic or physiological dependence liability; and (8) whether the substance is an immediate precursor of a substance already controlled under this title.  21 U.S.C. § 811.

By Etan J. Yeshua –

New York City's portion cap rule will have its day in court (again) in early June.  The rule, which would have fined food service establishments for each sugary drink sold in a container larger than 16 ounces, was challenged and struck down last week by a New York State Supreme Court judge who concluded that the rule was invalid and ordered the City not to enforce it.  Within 24 hours of the decision, the City filed a notice of its intent to appeal, and the next day the Appellate Division, a mid-level court, agreed to hear the case.  (In New York State, the Supreme Court is a trial-level court; the highest court is the Court of Appeals.)

Judge Milton A. Tingling, who published his decision only a day before the rule was scheduled to take effect, held that the City Board of Health overstepped the bounds of its authority by passing the so-called "soda ban" and that the rule itself was arbitrary and capricious.  In doing so, Judge Tingling reached a number of conclusions about the rule's purpose, its potential effects, the responsibilities of New York City's Board of Health, and the extent to which obesity is a threat to the City.  Some of these conclusions are perhaps more vulnerable on appeal than others, but the City's quick move to appeal the decision suggests that the Mayor's camp believes there is a real possibility that the ruling will be overturned.

Separation of Powers

First, Judge Tingling found that the Board of Health violated the separation of powers doctrine of the New York State Constitution.  Citing Boreali v. Axelrod, 71 N.Y. 2d 1 (1987), in which a smoking ban passed by the Public Health Council (an executive body) was deemed an inappropriate exercise of legislative power, Judge Tingling applied the four-factor Boreali balancing test to determine whether the portion cap rule: 1) was based on concerns "not related to the stated purpose of the regulation,"; 2) was created on a "clean slate" without the benefit of legislative guidance; 3) intruded upon "ongoing legislative debate," and; 4) required the expertise of the body passing the rule.  Only the last of these was weighed in favor of the City, and without much discussion.  The others, however, are sure to be hotly contested by the City on appeal. 

For example, in reaching the conclusion that the rule was based on concerns not related to curbing obesity and chronic disease, Judge Tingling relied on a statement in the City's memorandum of law that acknowledged the economic toll of obesity, including health expenditures such as Medicare and Medicaid funding.  Judge Tingling concluded that "[t]he statement of the financial costs related to the chronic epidemic further evidences a balancing being struck between safeguarding the public's health and economic considerations."  Although he did not fully explain how the interests in curbing obesity and in reducing health care expenditures are at odds, Judge Tingling concluded that "[t]his is impermissible and the court therefore holds the regulation violates the first prong of Boreali."
 
In finding that the rule was created on a "clean slate," as opposed to merely "fill[ing] in the details of a broad legislation," Judge Tingling traced the history of the New York City Charter from 1686 through 2012.  Although he concluded that the Board of Health "has very broad powers under the City Charter dating all the way back to its conception" and that major amendments expanding the Board's power "all occurred under times of increased disease," Judge Tingling was not convinced that, currently, "the City is facing eminent [sic] danger due to disease."  Whether the responsibilities of the Board of Health are limited to acutely communicable diseases, and the extent to which obesity and related chronic diseases pose imminent danger to the City of New York, are issues that will almost certainly be reargued in June before the State Supreme Court.

Arbitrary and Capricious

Even if the City does demonstrate on appeal that promulgating the rule was within the authority of the Board of Health, it would still have to convince the State Supreme Court that, contrary to Judge Tingling's conclusion, the rule is not arbitrary and capricious.  For example, although the City argued that exemptions for certain types of milk and juices were based on the redeeming health benefits of those drinks, Judge Tingling considered these to be "suspect grounds."  Whereas the City argued that the rule was intended to address consumers' "overwhelming [tendency to] gravitate towards the default option" of larger drinks, and to ensure that consumers who are "intent upon consuming more than 16 ounces… make [a] conscious decision to do so," Judge Tingling argued that the lack of any limitations on refills was a loophole that could "defeat, and/or serve to gut the purpose of the Rule." 

Finally, Judge Tingling cited "uneven enforcement even within a particular City block" as evidence of the rule's "arbitrary and capricious consequences."  The City argued that it did not seek to exclude any food establishments and that it would enforce the rule against grocery stores, bodegas, and markets, like 7-Eleven, if the court found that such establishments – which are regulated pursuant to a Memorandum of Understanding with the State – could be subject to the rule.  Judge Tingling, however, cited the lack of "evidence of any prior attempts to coordinate with the [State] on the Portion Cap Rule" and concluded that the rule "is arbitrary and capricious because it applies to some but not all food establishments."  The City similarly argued that preemption by State laws regarding alcohol barred it from applying the rule to alcoholic drinks.

There is not yet any indication that the City is redrafting the rule and/or attempting to get it passed by the City Council, the City's legislative body.  If left to the courts, a final decision from the State Court of Appeals may not come down until after the rule's staunchest advocate, New York City Mayor Michael Bloomberg, has left office.

Meanwhile, in Mississippi…
 
Governor Phil Bryant of Mississippi signed into law yesterday a measure that some state legislators are calling the “anti-Bloomberg bill.”  Senate Bill 2687, now officially law in Mississippi, prohibits local governments from restricting soda size, requiring calorie counts on menus, and banning toys in kids’ meals.  The law prohibits Mississippi towns, cities, and counties from restricting the sale of food “based upon the food’s nutrition information,” thus proscribing not only laws about soda size, but also any restrictions on sugar, salt, or fat content, like the ban on artificial trans fats enacted by the New York City Board of Health in 2006.  Mississippi lawmakers defended the measure saying that it would protect personal choice and prevent a patchwork of inconsistent regulations throughout the state.

In response, Mayor Bloomberg described the Mississippi law as “inconceivable,” remarking that “in the state with the highest rate of obesity, they passed a law that says you can’t do anything about it.”  At a press conference last week, the mayor cited his prior public health initiatives, including the ban on trans fats, and expressed confidence that Judge Tingling’s decision would be overturned: “There are many, many instances where a lower court decision has gone against us and then been reversed.”

By Kurt R. Karst –      

Earlier this week, the U.S. Court of Appeals for the Second Circuit issued a decision that paves the way for the Natural Resources Defense Council (“NRDC”) to pursue its action to compel FDA to finalize the Agency’s review and regulation of topical antimicrobial drug products (e.g., hand soaps) containing triclosan, but not triclocarban, under the Over-the-Counter (“OTC”) Drug Review.  In vacating a January 2011 decision from the U.S. District Court for the Southern District of New York granting FDA’s Motion to Dismiss for lack of standing, the Second Circuit gave new life to some of the merits arguments raised in the NRDC’s Motion for Summary Judgment filed in the district court.  Interestingly, the district court granted FDA’s Motion to Dismiss orally after an 8-minute hearing on the basis that the NRDC lacked standing because its members could avoid their workplace exposure to triclosan by purchasing antimicrobial-free soap for use at work.

As we previously reported, the NRDC alleges in its lawsuit that FDA has unreasonably delayed the publication of a final OTC drug monograph with respect to triclosan and triclocarban in violation of the Administrative Procedure Act.  According to the NRDC, “both recent and older studies associat[e] triclosan and triclocarban with significant health risks,” and as such, immediate action by FDA is needed.  In support of its standing to bring the lawsuit, the NDRC submitted, among other things, the declarations of two members – Ms. Diana Owens, a veterinary technician, and Dr. Megan Schwarzman, a physician – “both of whom fear health harms from their repeated workplace exposure to triclosan and from the development of antibiotic-resistant bacteria through ubiquitous use of both triclosan and triclocarban.”

In tentative final monographs in the OTC Drug Review in 1978 and 1994, FDA designated both triclosan and triclocarban as “Category III” ingredients.  (“Category III” ingredients are excluded from a monograph on the basis that there are insufficient data for FDA to determine their status as generally recognized as safe and effective.)  In May 2003, FDA reopened the administrative record to accept comments and data on OTC healthcare antiseptic drug products, but the Agency has not taken further action on triclosan and triclocarban under the OTC Drug Review to date.  (For the latest FDA update, see here.)  Frustrated with FDA’s glacial pace at completing the OTC Drug review for these ingredients, the NRDC decided to sue FDA to compel Agency action.

FDA challenged the NRDC’s standing to sue in this matter, citing the Second Circuit’s decision in Baur v. Veneman, 352 F.3d 625 (2d Cir. 2003).  FDA argued in its brief that the Court should affirm the district court’s decision because the NRDC failed to establish injury-in-fact (i.e., that there is an actual and sufficiently serious risk of harm to human health from exposure to topical antimicrobial drug products containing triclosan and triclocarban).  Moreover, argued FDA, even if the NRDC did make such a showing, it failed to show involuntary exposure to such products by its members, or that they they suffered a cognizable harm in their efforts to avoid such exposure.

The NDRC argued in its briefs (here and here) that the organization has a clear case for associational standing to bring the lawsuit against FDA, because reasonable apprehension of harm from direct exposure to a chemical, such as triclosan or triclocarban, is a cognizable injury in fact sufficient for standing under Article III of the U.S. Constitution.  The NDRC’s efforts were also supported by several public interest organizations in an amicus brief.  The amici expressed a common concern that “unduly restrictive decisions concerning standing to sue . . . impair the protection of the public against unlawful action by both public officials and private entities.”

After reviewing the New York district court’s grant of summary judgment and its determination of standing de novo, the Second Circuit vacated the district court decision and remanded it for further proceedings.  According to the Court, the NRDC’s evidence is sufficient to satisfy the injury-in-fact requirement to establish standing with respect to triclosan, even though there is scientific uncertainty as to the harmfulness of the ingredient to humans.  Moreover, the injury of triclosan exposure is “fairly traceable” to the alleged delay in FDA’s finalizing its regulation of topical antiseptic antimicrobial ingredients under the OTC Drug Review, and “neither the availability of triclosan-free soap for purchase nor the possibility that NRDC members’ employers might be willing to supply triclosan-free soap prevents NRDC from establishing that the triclosan exposure is fairly traceable to FDA’s alleged unreasonable delay in regulating triclosan.”

Moving on the triclocarban, however, the Court found that the injury-in-fact requirement to establish standing was not met.  The “NRDC provided no evidence that its members were directly exposed to triclocarban. . . . [Rather, the] NRDC argues that its members suffer injury in fact due to FDA’s alleged delay in finalizing its regulation of triclocarban because the proliferation of triclocarban, together with other antimicrobial antiseptic chemicals, may lead to the development of antibiotic-resistant bacteria.”  This, said the Court, is more of a contingent and far-off threatened injury rather than an iminent injury, and does not support standing. 

The Court’s decision could increase congressional interest in the outcome of the case.  Over the past couple of years, Representatives Ed Markey (D-MA) and Louise Slaughter (D-NY) have doggedly pursued an FDA ban on the use of triclosan in consumer products (see here and here).