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  • Wait and then Hurry Up: After Long Delays, FDA Resumes Inspections with a Passion

    Things are getting hectic for those of us who advise clients on FDA inspections: FDA is busy addressing its backlog of foreign and domestic inspections.

    As COVID raged, FDA understandably postponed many GMP (Good Manufacturing Practice) and “Bi-Mo” (Bioresearch Monitoring, usually of sponsors of clinical trials or clinical trial sites) on-site inspections.  Less understandably, FDA performed very few remote inspections over the last two years (see prior blogposts here, here, and here).  FDA has avoided labeling these as “remote inspections”, preferring the terms “Remote Interactive Evaluation” for manufacturing sites and “Remote Regulatory Assessment” for Bi-Mo.  Indications are the agency is now shifting to just the “Remote Regulatory Assessment” term, but apart from some niceties associated with in-person inspections, the fact is that remote activities can and do lead to regulatory consequences just as inspections do.

    Anecdotally, though, FDA inspections have resumed.  We have several clients whose BLAs, NDAs or ANDAs have not been approved awaiting pre-approval inspections, and, months after their PDUFA dates, inspections are finally being scheduled, both within the United States and abroad.  Similarly, we are hearing both from clients and indirectly about companies that are not clients that several inspections relating to ongoing or completed clinical trials are finally being performed, even months after submission of documents that normally would have resulted in earlier inspections.

    This is good news for some and bad news for others.  The good news for those with pending applications that have passed all other regulatory requirements is that review of the applications may no longer be stalled by delayed pre-approval inspections, although it seems like inspections in China are still lagging due to the uptick in COVID restrictions there.  Some companies that have been placed on the Import Alert list pending reinspections may finally find relief.  The bad news for many sponsors of clinical trials, manufacturers, laboratories, or Clinical Research Organizations is that FDA may find serious regulatory violations (or, at least, regulatory violations FDA considers to be serious: we reserve the right to argue that the violations are not so serious) that can have disastrous enforcement consequences, including clinical holds, withholding approvals of New Drug Applications or Abbreviated New Drug Applications, import detentions, Warning Letters, and, worst of all, shutdown injunction[1] requests or criminal investigations.

    Time for a plug: two of your three bloggers (Dave and Doug) will be speaking at GMP by the Sea, a usually annual conference on hot topics of cGMP compliance that may result in FDA inspections, linked here.  GMP by the Sea was postponed twice because of COVID.  It looks like we will finally be able to resume being wined, dined, educated, crabbed, and networked this summer (conference is August 15 through 17, 2022, in Cambridge, Maryland, on the Eastern Shore of the Chesapeake Bay).

    [1] The term “consent decree” denotes a negotiated settlement of a civil action, usually an injunction.  This occurs when the defendants choose to negotiate rather than contest the action in court.  Consent decrees may also occur in connection with seizure actions, but most often they are associated with injunctions.

    FDA in the Multiverse of 180-Day Exclusivity Madness: Is an “Incursion” in the Cards for our “Exclusivity Earth-616”?

    Thanks to years of watching @eavoss of New Rockstars, we have a pretty good handle on the Marvel Cinematic Universe (“MCU”).  We know that Earth-199999, known in-universe as Earth-616, is the designated universe number for the main MCU; that there are a multitude of other universes (such as Earth-838 where the Illuminati reside . . . or resided at least); and that so-called “incursions” occur when two MCU universes collide with one another, resulting in the complete destruction of either one or both of them.

    The mind-bending Multiverse has been on this blogger’s mind as of late.  You see, we are fortunate enough to often get our hands on pieces of draft legislation thought up by folks – like FDA – who peddle ideas on how to change the law.  Some of those ideas are pretty interesting (even if not yet fully baked).  For example, there’s the draft legislation we saw (and understand FDA put together) that would create a 505(b)(2) NDA-type of submission and approval pathway for certain biological products under the Public Health Service Act).  But other ideas are . . . well . . . destructive.  They may exist on another Earth in the Multiverse, but bringing them into our “Exclusivity Earth-616” would result in an incursion.

    And that brings us to FDA’s draft legislation to make reality one of the Legislative Proposals the Agency included in its Fiscal Year 2023 Budget Justification.  As we noted in a previous post, FDA’s first (of fourteen) legislative proposal targets 180-day generic drug exclusivity, stating:

    Amend the 180-Day Exclusivity Provisions to Encourage Timely Marketing of First Generics

    In practice, 180-day patent challenge exclusivity is not operating as expected to encourage early generic entry, because this exclusivity is often “parked” by first applicants who either receive approval but do not begin marketing for extended periods of time following approval, or by first applicants who delay receiving final approval of their ANDAs for extended periods of time.  This proposal would substantially increase the likelihood that generic versions of patent-protected drugs will come into the market in a timely fashion, and that multiple versions of generic products will be approved quickly (leading to significant cost savings).  FDA is proposing to amend sections 505(j)(5)(B)(iv) and (D)(i)-(iii) of the FD&C Act, which govern the 180-day patent challenge exclusivity provisions, to specify that FDA can approve subsequent applications unless a first applicant begins commercial marketing of the drug, at which point approval of subsequent applications would be blocked by 180 days, ensuring that the exclusivity actually lasts 180 days (i.e., from the date of first commercial marketing by a first applicant until 180 days later) rather than for multiple years, as can occur under current law.

    We also commented at length about this proposal in our previous post stating:

    If the scent of this proposal smells vaguely familiar, it is.  It’s regime change!  It’s an effort to rework the current and longstanding ANDA Paragraph IV 180-day exclusivity incentive regime by replacing it with a new 180-day exclusivity regime modeled after the Competitive Generic Therapy (“CGT”) 180-day exclusivity regime created with the passage of the FDA Reauthorization Act of 2017 for drugs for which there is inadequate generic competition and for which there are no unexpired patents or exclusivities listed in the Orange Book at the time of original submission of an ANDA.

    And we went on to comment – without the benefit of any proposed legislative language – how such an exclusivity system would be disastrous:

    While the CGT 180-day exclusivity regime has operated quite well for drugs with inadequate generic competition and for which there are no unexpired patents or exclusivities listed in the Orange Book (as evidenced by the 130 CGT approvals thus far), using it as a blueprint for the approval of generic versions of brand-name drugs with dense patent thickets makes no sense.  What generic drug companies would be willing to invest millions of dollars in generic drug development and patent challenges for the potential of a hollow exclusivity incentive?  That is, because patent challenges often result in patent settlements that allow for generic competition (i.e., launch) prior to patent expiration, a CGT-like exclusivity regime that triggers the exclusivity only upon launch—which may occur years after ANDA approval—means that by the time launch occurs and exclusivity is triggered there will be no further approvals to which the exclusivity would apply.

    Now that we have our hands on FDA’s draft legislative language, also titled “Amend the 180-Day Exclusivity Provisions to Encourage Timely Marketing of First Generics,” we can say this: We were correct . . . and it’s perhaps even worse than we thought!  (Though, on the bright side – at least for FDA – it would make the Agency’s job of implementing 180-day exclusivity almost effortless . . . and maybe that’s the point!)

    The draft legislation would amend FDC Act § 505(j)(5)(B)(iv) as follows (with additions and deletions in red typeface):

    (iv) 180-day exclusivity period.-

    (I) Effectiveness of application.-Subject to subparagraph (D), if the application contains a certification described in paragraph (2)(A)(vii)(IV) and is for a drug for which a first applicant has submitted an application containing such a certification and has commenced commercial marketing, the application shall be made effective on the date that is 180 days after the earliest date of the-first commercial marketing of the drug (including the commercial marketing of the listed drug) by any first applicant.

    (II) Definitions.-In this paragraph:

    (aa) 180-day exclusivity period.-The term “180-day exclusivity period” means the 180-day period starting on the earliest date of first commercial marketing of the drug (including the commercial marketing of the listed drug) by any first applicant. During the 180-day exclusivity period, an application submitted by an applicant other than a first applicant may not be made effective. The 180-day exclusivity period does not affect an application submitted by an applicant other than a first applicant that received effective approval before the period started. ending on the day before the date on which an application that was submitted by an applicant other than a first applicant and that did not receive effective approval before a first applicant commenced commercial marketing could become effective under this clause.

    The draft legislation would also amend FDC Act § 505(j)(5)(D)(i) to remove two of the six current 180-day exclusivity forfeiture provisions – the “failure-to-market” (FDC Act § 505(j)(5)(D)(i)(I)) and “failure-to-obtain-timely-tentative-approval” (FDC Act § 505(j)(5)(D)(i)(IV)) forfeiture provisions – while maintaining the remaining four forfeiture provisions (though renumbering them).  Coincidentally (yeah, right!), both of the forfeiture provisions that would be removed are the two most difficult and controversial provisions for FDA to administer.

    Turning back to the amendments that would be made to FDC Act § 505(j)(5)(B)(iv), FDA’s proposal would put a first applicant’s 180-day exclusivity into effect to prevent approval of a subsequent Paragraph IV ANDA only once commercial marketing by a first Paragraph IV applicant has commenced.  Before the time 180-day exclusivity is triggered, a first applicant’s eligibility for 180-day exclusivity would have . . . you got it . . . zero benefit.  That point is explicit in the proposed statutory change: “During the 180-day exclusivity period, an application submitted by an applicant other than a first applicant may not be made effective.  The 180-day exclusivity period does not affect an application submitted by an applicant other than a first applicant that received effective approval before the period started.”

    FDA’s proposal sets up the scenario where not only would eligibility for 180-day exclusivity have zero benefit, but the exclusivity, once triggered, could also have zero benefit, as any subsequent Paragraph IV ANDAs may already have been approved by the time a first applicant is able to commercially launch.  That’s ridiculous!  It makes all the more relevant our prior commentary that such an exclusivity regime for Paragraph IV ANDAs means “fewer ANDA approvals and launches,” which “ultimately means fewer choices for consumers and higher costs to the U.S. healthcare system.”  In other words . . . an incursion for “Exclusivity Earth-616.”

    A New Report Takes an Evidence-Based Approach to Analyzing the BLOCKING Act

    Over the past few years, this blogger – in prior blog posts (here, herehere, and here) and in Congressional testimony – has been pretty critical of efforts to significantly revise and weaken the 180-day generic drug exclusivity incentive and framework first established with the passage of the 1984 Hatch-Waxman Amendments and amended with the passage of the 2003 Medicare Modernization Act.  That effort, which has most recently emerged in the forms of the “Bringing Low-cost Options and Competition while Keeping Incentives for New Generics Act of 2021” (H.R. 2853, or “BLOCKING Act”), the “Expanding Access to Low-Cost Generics Act of 2021” (S. 2910), and in President Biden’s Fiscal Year 2023 Budget Request, is antithetical to a primary goal of the Hatch-Waxman Amendments: getting high quality, low-cost generic drugs into the hands of consumers—fast.  And now there’s a report and analysis to back up that claim!

    In a new report, titled “An Evidence-Based Assessment Of The BLOCKING Act,” co-authors William B. Schultz and Margaret M. Dotzel assess whether the stated goal of the BLOCKING Act – i.e., accelerating generic drug market entry – would actually be achieved.  And their conclusion is:

    The BLOCKING Act, if passed, will not accelerate generic drug entry. Instead, it will upend the critical 180-day exclusivity incentive by making it far less predictable and therefore far less valuable.  As a result, fewer generic drug manufacturers are likely to make the significant investment needed to challenge patent estates on expensive brand-name drugs, even when those challenges could have been successful or resulted in favorable settlements.  The net effect will be that brand-name prices will remain higher for longer, and there will be fewer generic drugs available to patients.

    We couldn’t have said it any better than Mr. Schultz, who previously served as the General Counsel at the U.S. Department of Health and Human Services and the Deputy Commissioner for Policy at FDA, and Ms. Dotzel, who previously served as the Acting General Counsel and Deputy General Counsel at the U.S. Department of Health and Human Services and the Associate Commissioner for Policy at FDA.  And although the BLOCKING Act was not the topic at hand – though definitely an undercurrent – we note that the conclusion that “there will be fewer generic drugs available to patients” was the topic of a segment on 60 Minutes earlier this week, titled “Life-saving generic drugs with low profit margins getting harder to procure.”  After all, 180-day exclusivity has helped some companies stay in the market for unprofitable – but important – drugs.  But as the 180-day exclusivity incentive has become diluted, and if it is even more unpredictable as a result of the BLOCKING Act, more companies will leave the market or discontinue manufacture of products, exacerbating the drug shortage problem.

    The new action-packed and data-driven report has three primary sections.  Section I provides data demonstrating the importance of the 180-day exclusivity incentive to generic competition.  Section II picks apart the issues that BLOCKING Act proponents claim justify the legislation (and why those claims are often overstated).  Section III explains the BLOCKING Act’s mechanics and why the legislation will not work to achieve its goal of accelerating generic competition.  In particular, Mr. Schultz and Ms. Dotzel imagine a world in which BLOCKING is the law (gulp!) and apply the legislation’s mechanics to five cases alleged to be instances that the BLOCKING Act is intended to address:

    • Case Study 1: Xifaxan® (rifaximin) Tablets, 550 mg
    • Case Study 2: Revlimid® (lenalidomide) Capsules
    • Case Study 3: Cialis® (tadalafil) Tablets
    • Case Study 4: Rytary® (carpidopa/levodopa) Extended-release Capsules
    • Case Study 5: Belbuca® (buprenorphine) Buccal Film

    In each case study, Mr. Schultz and Ms. Dotzel methodically show that application of the BLOCKING Act would have resulted in the same outcome: generic drug entry and patient access would not accelerate!  That’s pretty powerful and compelling stuff!  And hopefully something that Congress will take note of as it considers what pieces of legislation should ultimately be included in the 2022 User Fee Amendments legislation currently being worked on.

    As things stand right now, neither H.R. 7667, the “Food and Drug Amendments of 2022,” nor the Senate’s “FDASLA” (i.e., the “FDA Safety and Landmark Advancements Act of 2022”) include the BLOCKING Act.  But there’s still quite a ways to go to get to the finish line for the UFA legislation.  This is no time for the generic drug industry to let down its guard.  And don’t forget about FDA’s proposed 180-day exclusivity rework included in the Agency’s Fiscal Year 2023 Budget Justification Legislative Proposals.  We most definitely haven’t forgotten about that as you’ll soon read. . . .

    FDA Issues Safety Warning Regarding Non-Invasive Prenatal Testing Raising Questions About the Future of FDA Regulation of LDTs

    On April 19, FDA issued a safety communication regarding genetic non-invasive prenatal screening, commonly referred to as non-invasive prenatal tests or NIPT (here).  NIPT are intended to screen for genetic abnormalities in a fetus.  The tests are not intended to diagnose any genetic conditions – that must be done through subsequent invasive testing.  The safety communication acknowledges that the tests “may provide useful information to assess the risk that a fetus has (or does not have) a genetic abnormality.”  Indeed, the communication identifies several medical societies (the American College of Obstetricians and Gynecologists (ACOG), the Society for Maternal-Fetal Medicine (SMFM), and the American College of Medical Genetics and Genomics (ACMG)) that recommend use of these types of tests as part of standard prenatal care.

    The communication, however, warns patients and healthcare providers of the potential of NIPT to produce erroneous results, particularly false positive results (“these tests can give false results, such as reporting a genetic abnormality when the fetus does not actually have one”).  While scientific literature reports high negative predictive value of NIPT, the positive predictive value varies across conditions.  According to FDA, the positive predictive value of Down Syndrome is about 90% while the positive predictive value (PPV) of microdeletion is significantly lower, “ranging from about 2% to 30%, depending on the condition.”  It is not uncommon for some in vitro diagnostic tests to suffer from poor positive predictive value, in part due to the rarity of the disease.  Even a highly accurate test can have a low positive predictive value if the condition is very uncommon.  However, even with a low PPV, a test can provide clinically useful information to providers and patients.

    The safety communication states that FDA is aware of reports of pregnant women making medical decisions based on the results of NIPT without confirmatory testing by the physician.  This is – of course – not the intended use of these tests.  The value of a test cannot be fairly judged by focusing on physicians who choose to make medical decisions that are inconsistent with the intended use.

    Furthermore, although FDA’s safety communication refers broadly to published literature and media reports supporting its assertions, it provides no specific evidence for these claims.  Unfortunately, this is not the first time FDA has issued a safety alert regarding LDTs without citing evidence of the alleged harm; in 2018, FDA issued a safety communication regarding pharmacogenomic tests, alleging that these tests put patients at risk.  FDA ultimately walked back its threats of enforcement action against labs offering these tests, admitting that pharmacogenomic information could be clinically useful to physicians and patients.

    Nor is this the first time that FDA has raised concerns with NIPT.  In fact, NIPT were one of 20 “bad tests” that Dr. Shuren identified in the Agency’s November 2015 “Public Health Evidence for FDA Oversight of Laboratory Developed Tests” (here).  Our readers will recall that this report was issued shortly after FDA’s release of its draft guidance documents seeking to regulate laboratory developed tests.  The report was intended to make the case that FDA’s oversight of LDTs was necessary because there were rampant unvalidated and inaccurate tests on the market.  Many critics were singularly unimpressed with this list (see our prior post here).

    Notably, this safety communication follows a January article published by The New York Times which highlights similar concerns regarding the performance of NIPT (article here).  It is not clear why FDA waited three months after the NY Times published the study to issue its own alert.  Perhaps not so coincidentally, FDA issued the communication just as Congress began consideration of the VALID Act (see our prior post on the VALID Act here).

    FDA appears to be making another run at gaining express regulatory oversight of LDTs.  Earlier this week, the Senate HELP Committee released a discussion draft of the Food and Drug Administration Safety and Landmark Advancements Act of 2022 (or FDASLA) (available here).  FDASLA incorporates a modified version of the VALID Act.  The VALID Act would give FDA authority to regulate laboratory developed tests and fundamentally change the regulatory paradigm for all in vitro diagnostic tests.  (As of this writing, the Senate version of the user fee legislation contains the VALID Act; the House version does not.)

    This recent development along with the lack of new evidence cited in the safety communication leaves us wondering about FDA’s true motivation for releasing it now.  To be sure, the communication can be expected to raise patient anxiety and leave physicians uncertain about whether to order these tests.  If safety were the real driver, it seems to us there would be more recent and detailed information, in the safety communication, to give providers and patients about the true risks of these tests.  The failure to provide specific evidence to support the Agency’s claims is irresponsible; if there are data to support the risks of these tests this information should be disclosed to providers and patients so that they make informed decisions.  In the absence of such evidence, the safety communication raises alarm without context, conveying the impression that the product is unduly risky, and sowing doubt about the accuracy and reliability of LDTs more generally.

    Categories: Medical Devices

    FDA Issues Flurry of Warning Letters Regarding Adulterated Dietary Supplements

    On Monday May 9, 2022, FDA issued an “update”  announcing that it had sent 11 Warning Letters to companies that distributed dietary supplements alleged to be adulterated because one or more ingredients in the companies’ products contained an illegal dietary ingredient. (Two days later, one of the Warning Letters was withdrawn because of a clerical error.)

    The main ingredients at issue are 5-alpha-hydroxy-laxogenin, higenamine, higenamine-HCl, hardenine,  hardenine HCl, and octopamine.   According to FDA, higenamine HCl and hordenine HCl do not qualify as dietary ingredients and, because they are neither approved as food additives nor generally recognized as safe for use, they are unapproved food additives.  Although FDA acknowledges that the other ingredients at issue, higenamine, hordenine, 5-alpha-hydroxy- laxogenin, and octopamine are dietary ingredients (because they are present in botanical products), the agency asserts that they are new dietary ingredients subject to the requirement for pre-market, new dietary ingredient (NDI) notification.  FDA has not received NDI notifications for any of these four ingredients.    Moreover, even if NDI notifications had been submitted for the dietary supplements containing these new dietary ingredients, the products would still be adulterated because (according to FDA) there is no history of use or other evidence that these ingredients will reasonably be expected to be safe when used as dietary ingredients.

    Several of these substances have been on FDA’s Dietary Supplement Ingredient Advisory List (“Advisory List”) for several years.  After issuing and announcing the Warning Letters, FDA removed those substances from the Advisory List.  The Advisory List dates from 2019 and, according to FDA’s constituent update was intended “to quickly alert the public when the FDA identifies ingredients that do not appear to be lawfully included in products marketed as dietary supplements.”  FDA includes ingredients in the Advisory List based on a preliminary evaluation by the agency. Because FDA now has completed its evaluation of the substances in the Warning Letters and is not “aware of any evidence that would call into question its current conclusion[s] about these ingredients,” they no longer meet the criteria for inclusion in the Advisory List.

    As readers of our blog may know, a Warning Letter is an advisory action.  Companies are generally given 15 working days to respond.  The recipient of a letter may present FDA with any evidence bearing on the legal status and safety of an ingredient.

    Whether the flurry of Warning Letters foreshadows an increase in FDA action related to dietary supplements with ingredients on the Advisory List remains to be seen.

    HP&M’s Sara Koblitz to Present at DC Bar’s FDA for IP Lawyers Webinar

    Hyman, Phelps, and McNamara’s Sara Koblitz will be presenting at the DC Bar’s annual webinar, “FDA for IP Lawyers” on May 25, 2022 with Brian Malkin of McDermott, Will, and Emery.

    The webinar will provide practical tips for integrating FDA regulatory law into IP law practices for FDA-regulated products and hopes that this program will be the springboard for future more in-depth FDA legal topics relevant to IP lawyers.  The event has been revamped with new commentary on recent cases and legislative topics, including:

    • GSK v. Teva and follow-up on skinny labeling
    • FDA letter to USPTO / GW Roundtable  (patent listings, patent prosecution, patent thickets/evergreening, and more)
    • Catalyst and orphan drug exclusivity
    • 180-day exclusivity and potential BLOCKING Act
    • Biologics transferred from NDAs to BLAs and impact
    • Interchangeable biosimilars and impact going forward

    For registration information, please see the DC Bar’s website here

    Through Enforcement Discretion, FDA Facilitates Market Entry for New Infant Formulas (For Now); President Invokes Defense Production Act

    As one of several means to alleviate the ongoing shortage of infant formula in the U.S., earlier this week FDA issued a guidance document that outlines the factors FDA will consider in deciding whether to allow the distribution of an infant formula that does not meet all applicable statutory and regulatory requirements. Those requirements are extensive, as infant formula is the most tightly regulated of all human food products. In addition to having to meet the requirements that are generally applicable to all foods, an infant formula must also meet specific requirements with respect to its formulation, manufacture, and what are referred to as “quality factors” – namely a demonstration of sufficient biological quality of the protein in the formula, and the ability of the formula to support normal physical growth. Meeting these quality factors can require specific animal and human studies, such that bringing a formula to market can be an expensive endeavor with a long lead time.

    Ordinarily, a “new” infant formula cannot be marketed without prior notification to FDA. (In this context, “new” is a term of art that encompasses previously marketed infant formulas in which there is a “major change,” as well as infant formulas that have not previously been notified to FDA. In turn, the definition of “major change” encompasses a variety of scenarios – including first entry to the U.S. market.) The premarket notification submitted to FDA must demonstrate that the formula meets applicable requirements. If FDA concludes otherwise, proceeding to market with the formula could leave the manufacturer vulnerable to regulatory action. Over the years, this notification requirement has served as an effective gatekeeper, notwithstanding the fact that it does not strictly constitute  premarket approval.

    FDA’s new guidance invites any manufacturer of an infant formula “that is safe and nutritionally adequate but may not comply with all FDA statutory and regulatory requirements” to submit information in support of a request for enforcement discretion. The guidance lists the information elements that should be included in the request – essentially a compendium of information that will enable FDA to assess whether the formula is indeed safe and nutritionally adequate. The guidance offers an opportunity that could be of special interest to foreign manufacturers who already market infant formula in other countries and have considered entering the U.S. market. However, by its terms, the guidance will remain in effect only until November 14, 2022, at which time FDA will decide whether to extend it. It remains to be seen whether the uncertainty associated with that potentially limited window of opportunity dampens foreign manufacturers’ interest. FDA announced a webinar to be held on May 20th that will provide an overview of the guidance and give manufacturers an opportunity to ask questions.

    In late-breaking news, President Biden invoked the Defense Production Act to help bolster production of infant formula. The President delegated authority to the Secretary of Health and Human Services to determine “the proper nationwide priorities and allocation of all ingredients necessary to manufacture infant formula, including controlling the distribution of such materials (including applicable services) in the civilian market, for responding to the shortage of infant formula within the United States.” We will be tracking implementation of that authority.

    Court Strikes Down CMS’s Accumulator Adjustment Rule That Threatened Manufacturer Patient Savings Programs

    Last June, we blogged about a lawsuit brought by the Pharmaceutical Research and Manufacturers of America (PhRMA) challenging CMS’s ill-conceived Accumulator Adjustment Rule (“final rule”), which amended the Medicaid Rebate best price regulation. The final rule, which was set to go into effect on January 1, 2023, would have significantly narrowed the exclusions from best price for patient savings programs such as co-pay coupons, vouchers, consumer rebates, and free drug programs, which would, in turn, have discouraged manufacturers from offering such programs.

    On Tuesday, May 17, 2022, the D.C. District Court granted PhRMA’s motion for summary judgment and struck down the final rule, holding that it exceeded CMS’s statutory authority. The court also denied the government’s cross-motion and refused to find that Chevron deference applied.

    Since 2007, the best price regulation has contained exclusions for patient saving programs so long as the savings are passed on to the consumer, and do not represent a price concession to the pharmacy or other entity involved in the redemption or administration.  See 42 C.F.R. §§ 447.505(c)(8)-(12).  Insurers argue that the savings programs cause patients and their physicians to favor brand drugs over generics or cheaper formulary alternatives.  In order to discourage such programs, commercial insurance plans and their pharmacy benefit managers (PBMs) have, in recent years, implemented “accumulator adjustment programs,” whereby the insurers refuse to count the manufacturer assistance dollars towards the patient deductibles or out-of-pocket maximums.  The effect of this is to eliminate the benefit of the savings to the patient, who must ultimately pay those amounts to plans in order to meet their deductibles or copay maximums.

    The CMS final rule was ostensibly designed to decrease the impact of accumulator programs siphoning off the benefit of manufacturer assistance.  But instead of restricting accumulator programs, the final rule would have required a manufacturer to “ensure” that the full value of the assistance or benefit is passed on to the consumer or patient.  Thus, CMS imposed upon manufacturers the onus of somehow determining whether a particular patient’s insurance plan has an accumulator program and then negating it.

    PhRMA argued that manufacturers cannot structure their patient assistance programs to avoid accumulator programs because they do not know whether a particular patient’s health plan operates an accumulator program; even most patients are unaware of them.  PhRMA argued that manufacturers will either be forced to conduct extensive investigations of health plans or claim adjudications for each transaction, somehow gain the cooperation of health plans, or withdraw their assistance programs altogether to avoid significantly higher Medicaid rebates.

    In its decision, the court first addressed PhRMA’s standing to sue. CMS argued that the harm PhRMA members allege cannot be traced to this rule, but rather to CMS’s 2007 and 2016 rules that included an obligation to account for accumulator programs in BP calculations. The court disagreed, holding that the final rule would add significantly greater obligations for PhRMA members because of its requirement to “ensure” that patients receive the full benefit of savings programs. The court noted that the government recognized this additional burden on manufacturers when it delayed the effective date of implementing the final rule by two years.

    On the merits, the court decided that the statute does not give CMS the authority to adopt the final rule. According to the court, the statute defines “best price” as the lowest price available to certain specified types of entities.  See 42 U.S.C. § 1396r-8(c)(1)(C).  As CMS acknowledged, patients do not qualify as best-price-eligible entities.  See 85 Fed. Reg. 87000, 87052 (Dec. 31, 2020). Therefore, “[a] manufacturer’s financial assistance to a patient does not count as the lowest price available from a manufacturer to a best-price-eligible purchaser.”  As a result, the court found that HHS lacks the statutory authority to adopt the accumulator adjustment rule.  See Opinion at 10.

    The court also agreed with PhRMA that it was infeasible for manufacturer to “ensure” that the patient’s health plan does not have an accumulator program, because that information is in the sole possession and control of commercial health insurers.  Manufacturers would have to conduct transaction-by-transaction investigations into programs over which they have no control and about which they have no information.

    It is uncertain whether the government will appeal the District Court’s decision.  If not, or if the court’s decision is upheld on appeal, the opinion would represent another defeat of Trump-era drug pricing and payment regulations, most of which have been struck down by the courts (see here and here) or delayed or withdrawn by the Biden administration or Congress (see here and here).  The Biden administration’s own drug pricing agenda has so far focused on legislation, with little success. It remains to be seen whether the current administration pivots to regulatory strategies of its own.

    FDA, in a RARE Act, Takes To Lobbying for a Change to the Orphan Drug Act

    We’re in the midst of UFA (User Fee Act) season!  It’s the quinquennial event when many of the UFAs are up for reauthorization.  And with “must-pass” FDA legislation, comes a host of riders—pieces of FDA-related legislation not specific to UFA reauthorization, but that folks seek to get added to the UFA bill to address various issues and topics.  Often, it is industry that lobbies Congress to get the law amended to address some issue where FDA is being difficult or non-responsive; but don’t be fooled, FDA is also walking the halls of Congress looking for advocates for its own causes.  Usually FDA’s lobbying activities are done rather quietly.  Every once in a while, however, FDA is a bit bolder in its actions.  And that brings us to a May 12, 2022 FDA statement, titled “FDA’s Overview of Catalyst Pharms., Inc. v. Becerra.”  But before we go too far, some background is in order . . .

    As we previously posted (here, here, and here), in Catalyst v. Becerra, Catalyst Pharmaceuticals, Inc. (“Catalyst”) sued FDA for approving the “same drug for the same disease or condition” as its orphan drug-designated product, FIRDAPSE (amifampridine) Tablets (NDA 208078), during its seven-year orphan drug exclusivity period.  FDA approved FIRDAPSE in November 2018, with a period of orphan drug exclusivity, for the treatment of Lambert-Eaton Myasthenic Syndrome (“LEMS”) in adult patients.  But in May 2019, FDA approved a second amifampridine drug product, Jacobus Pharmaceutical Company, Inc.’s (“Jacobus”) now-tentatively approved RUZURGI (amifampridine) Tablets (NDA 209321), for the treatment of pediatric patients with LEMS—a population generally acknowledged to be fewer than 30 in the U.S. and more likely 15-20.  FDA granted the approval despite Jacobus’ failure to conduct any of the routine studies expected for a pediatric approval, and all of RUZURGI’s efficacy data being for adult LEMS patients, the population within FIRDAPSE’s indication, rather than the FDA-approved indication.  FDA even described the process it followed to approve RUZURGI as “unprecedented” in in the Agency’s Catalyst court filings.  In any case, Catalyst sued FDA in June 2019 alleging that the plain language of the Orphan Drug Act precluded the Agency’s approval of RUZURGI in any LEMS patients until the expiration of the orphan drug exclusivity period covering FIRDAPSE.  Jacobus intervened, and the case made its way to the U.S. Court of Appeals for the Eleventh Circuit.

    In September 2021, the Eleventh Circuit held that FDA’s interpretation of the Orphan Drug Act such that exclusivity was limited to the indication for which the drug was approved—rather than the disease or condition for which the drug was designated—is foreclosed by the plain language of the statute.  Consequently, the Court held that FDA’s approval of RUZURGI contravened the plain language of the Orphan Drug Act in violation of the Administrative Procedures Act and ordered FDA to rescind RUZURGI approval. . . which FDA ultimately did, converting the NDA approval to a tentative approval.  On April 7, 2022, Jacobus appealed the Eleventh Circuit’s decision to the U.S. Supreme Court in a Petition for Writ of Certiorari.

    We’re all still waiting to hear whether or not the Supreme Court will take up the case.  But in the meantime, FDA has apparently been busy trying to get a legislative “fix” passed that would undo the Eleventh Circuit’s decision.  And UFA reauthorization provides the perfect vehicle for the Agency to try and get this accomplished.  A provision has already been included in H.R. 7667, the “Food and Drug Amendments of 2022,” which will be considered by the House Energy and Commerce Committee at a markup session on May 18, 2022, and that the Subcommittee on Health marked up and passed at a May 11, 2022 session (here and here).   Specifically, Section 811 of the bill, titled “Clarifying application of exclusive approval, certification, or licensure for drugs designated for rare diseases or conditions,” would amend the statute to replace the phrase “same disease or condition” (and similar phrases) with “same approved indication or use within such rare disease or condition” (and similar phrases).

    But even before the House Energy and Commerce Committee acts, the Senate Health, Education, Labor and Pensions Committee held a April 26, 2022 hearing on UFA reauthorization.  During that hearing, FDA’s Patrizia Cavazzoni, M.D. and Peter Marks, M.D., Ph.D., in response to questions posed by Senators Tammy Baldwin (D-WI) and Bill Cassidy, M.D. (R-LA), spoke out about the Agency’s need for a legislative fix.   Dr. Cavazzoni commented that the Eleventh Circuit’s decision “will send a chill through the development of rare diseases and it will disproportionately affect children with rare diseases.”  Similarly, Dr. Marks commented that FDA sees the Eleventh Circuit decision “as a potential problem for the development of drugs for rare diseases,” and for pediatric indications in particular.

    On May 11, 2022, Senators Baldwin and Cassidy introduced S. 4185, the “Retaining Access and Restoring Exclusivity Act” (“RARE Act”).  In a press release and in a backgrounder accompanying the introduction of the bill, which differs somewhat in language (but not intent) compared to the House bill, the Senators laid out their concerns with the Eleventh Circuit’s decision:

    The court’s decision in Catalyst has far-reaching, adverse impacts, especially for children with rare diseases.  Without a fix, drug companies are incentivized to seek the broadest orphan drug designation as possible and then focus clinical studies only on the narrowest patient populations that would support approval.  In so doing, companies could then rely on the broader designated orphan disease and block approval for any different uses or other patient populations.

    On May 12, 2022, just one day after the introduction of the RARE Act in the U.S. Senate, FDA took the highly unusual setp of issuing a statement—and essentially a press piece—titled “FDA’s Overview of Catalyst Pharms., Inc. v. Becerra.”  In it, FDA provides a brief overview of the Eleventh Circuit’s decision . .  and then lays out what the Agency terms “Key Impacts”:

    • The Catalyst decision adversely resolves a statutory issue about the scope of ODE. The Catalyst decision interpreted the Orphan Drug Act to unambiguously tie ODE to the disease or condition for which the drug was designated, which would leave the FDA with no discretion to address the issue differently. In the coming months, the FDA will need to consider how the decision affects drugs with active terms of orphan drug exclusivity as well as currently marketed drugs, including generics. Going forward, the FDA expects that some drugs that are in late-stage development, or that have already been submitted for marketing application review, would be blocked from approval under the Catalyst decision’s interpretation of the Act.
    • The Catalyst decision implicates approval of drugs for rare diseases. Because the FDA generally grants orphan-drug designation for the entire rare disease or condition—to incentivize sponsors early in drug development to study all persons with the rare disease or condition—and because FDA can only approve a drug for the specific indications for which there is adequate data in the marketing application, the designated disease or condition can represent a much broader population than the approved indication.

    Sponsors could seek approval and exclusivity for their drugs by focusing on the smallest, easiest-to-study populations. Under the interpretation in the Catalyst decision, such an approval would result in exclusivity for their drug for the entire disease, even though the sponsors did not invest in studying and developing their drug for all individuals with the disease.

    • The FDA expects that the Catalyst decision’s interpretation could adversely affect children—particularly the youngest pediatric populations—and other populations that are typically studied later in drug development. Because clinical studies in certain populations including children can be more challenging to conduct, sponsors often focus first on the populations who are easiest to study: adults with the fewest co-morbidities and complications. Except for certain oncology products, FDA cannot require pediatric studies of orphan-designated products. These barriers to development could mean that children (and other later-studied populations such as elderly individuals) would not have formulations, or dosing and safety information, appropriate for their needs for years after the product’s original approval.

    While the FDA piece does not mention the RARE Act by name, the May 12, 2022 publication on FDA’s website—just one day after the introduction of the RARE Act—is more than coincidence.  It appears to be part of a concerted effort by FDA to lobby—and very publicly—for a change in the law.  That’s pretty unusual.  Just as curious is FDA’s messaging on the alleged effects on pediatric drug development.  Children are a perennial soft spot on Capitol Hill, and thus provide a good “in” for lobbying efforts.  But it’s unclear from FDA exactly how the Eleventh Circuit’s decision will affect pediatric drug development, particularly with the continued availability of other programs specifically designed to incentivize the research to support pediatric approvals and whether or not the the “race to approval” that occurred in the amifampridine situation will ever repeat itself in the next 40 years of the Orphan Drug Act.

    To be clear, we’re not taking any particular position for or against the RARE Act in this post.  But FDA’s intense lobbying effort to legislatively reverse the Catalyst decision, and the arguments that the Agency is using to support that effort, deserve some mention and attention.

    Categories: Orphan Drugs

    HP&M Seeks Junior to Mid-Level Associate: Litigation/Internal Investigations

    Hyman, Phelps & McNamara, P.C. (HP&M) seeks to add a 2nd to 5th year associate to its enforcement and litigation team.  Our team investigates and defends against threatened enforcement actions by government prosecutors and regulators, including the FDA and DEA.  Types of matters include:

    • Representing clients in False Claims Act investigations or in criminal investigations by the U.S. Department of Justice;
    • Assisting clients in investigations by U.S. Attorney’s Offices, DEA, or Main Justice, including responding to administrative and criminal subpoenas;
    • Conducting internal investigations;
    • Representing FDA-regulated entities and DEA registrants in administrative hearings and federal courts; and
    • Litigating affirmative and defensive civil litigation matters.

    The boutique, collaborative nature of this firm provides junior attorneys unique opportunities to work directly with clients and to contribute in substantive ways to sophisticated, high-end matters.  Strong verbal and writing skills are required.  The ideal candidate will have experience working at FDA, DOJ, or DEA, prior big firm experience, including litigation experience, and a federal judicial clerkship.  E-discovery expertise is a bonus.

    Compensation is competitive and commensurate with experience.  HP&M is an equal opportunity employer.  Please send your curriculum vitae, transcript, and a writing sample to Deborah Livornese (dlivornese@hpm.com).  Candidates must be members of the DC Bar or eligible to waive in.

    Categories: Jobs

    HP&M’s Sophia Gaulkin to Present on Drug Pricing at Advanced Summit on Life Sciences Patents

    Hyman, Phelps & McNamara, P.C. is pleased to announce that Sophia Gaulkin will be speaking on an expert panel at the 20th Advanced Summit on Life Sciences Patents, which is being held virtually and in-person in New York City on June 2-3, 2022.

    Ms. Gaulkin will join speakers from the biopharmaceutical industry and academia to discuss the impact of drug pricing on patent prosecution in the session, Drug Price Regulation: What’s Patent Law Got to Do With It?  She will set the stage for the discussion by tracing the landscape of drug pricing legislation and other reform efforts at the state, federal, and international level and identify drug pricing considerations that patent prosecutors should consider in their practices. The panel will also cover the status of U.S. and global responses to escalating drug costs and access issues, including price controls, compulsory licensing, and the TRIPS waiver.

    This hybrid event brings together thought leaders working in or with the life sciences patents industry to share best practices and discuss how recent cases and policy changes will impact fundamental patent law concepts.

    FDA Law Blog readers are offered a discount of 10% off the registration price.  The discount code is S10-762-762L22.S.  You can access conference information and register for the event here.

    Is It News? Is It Promotion? OPDP’s Latest Letter Shines a Light on Native Advertising

    A few weeks back, OPDP issued its second Untitled Letter of 2022 (third letter in 2022 overall) to Bausch Healthcare alleging violative DTC and HCP promotional communications for Duobrii (halobetasol priopionate and tazarotene) lotion.  Of interest (to me) is the DTC communication cited where OPDP, again, focuses on a video and alleges false or misleading representations regarding risks and efficacy.  This, however, is not just any video.  This was a segment from Lifetime Television’s “The Balancing Act” and signals FDA’s continuing interest in native advertising.

    Although overall enforcement against prescription drug ads has been relatively low, the OPDP Warning and Untitled Letters issued over the past year reflect OPDP’s interest in not only the substance of the communications, but in the audience processing of information based on the platform used.  We discussed this with regard to OPDP’s recent Untitled Letter to Eli Lilly that raised issues with adequate communication of information (despite the fact that the relevant information was included within the ad).  And we’ve previously seen FDA take issue with content appearing as news (see Warning Letters to CytoDyn, and Cooper Surgical).

    In a recent CDER Conversation with Kit Aikin, senior social science analyst and research team lead in OPDP, Dr. Aikin discusses OPDP’s social science research program and a November 2021 workshop with Duke Margolis that identified growing trends in advertising including social media influencers (“people with credibility in a specific industry, access to a large audience, and the power of persuasion”) and native advertising (“advertising embedded in a media source, so that consumers don’t necessarily know it’s advertising”).   The slide deck posted on Duke’s page includes a presentation entitled “DTC Rx Promotion in the Digital Space:  Native Advertising, TikTok & Gen Z as a Vulnerable Audience”  and highlights a prescription drug case study of advertising done in conjunction with the Dr. Phil show.  While OPDP’s research agenda does not specifically call out native advertising, there has long been an interest in consumer perceptions of DTC TV advertising, and OPDP in-progress research is evaluating endorsers and whether disclosure of payment influences participant reactions.

    Although not a topic taken on directly by FDA,  native advertising has been overtly addressed by FTC, and sponsorship identification has been an ongoing FCC issue.  Outside of regulators (and, if I do say so, in a much more entertaining way), John Oliver has taken on the spon-con topic several times, including a 2021 episode highlighting issues with local news spon-con and “dicey medical claims.” (During the episode, Oliver provides examples of medical devices featured as part of spon-con on local news stations, and demonstrates how his team was able to buy local news time to promote “the world’s first sexual health blanket.”)

    With regard to OPDP’s most recent letter, we note that Lifetime Television’s “The Balancing Act” is no stranger to FDA.  A Brandstar Original, the show leverages its platform to deliver branded “storytelling” content to its Lifetime TV audience.  Companies and their brands pay for segments and may further disseminate the segments through product/corporate websites and through social media platforms.  In the case of prescription drug segments (and in the case of the Duobrii segment), companies typically submit storyboards and scripts to FDA on Form 2253.  FDA has issued Untitled Letters for segments on the Balancing Act ranging from a flu vaccine, to a treatment for iron deficiency anemia, as well as one for multiple sclerosis.

    In this most recent letter, the video segment tells the story of Katie, a plaque psoriasis patient and mother of 2 children.  Katie describes getting psoriasis when pregnant with her first child and, over the years, using creams on her psoriasis that did not work.   Katie discusses using Duobrii when she has a flare up and seeing results within days.

    OPDP cited Bausch for misleading risk presentations as well as misleading efficacy.  Duobrii is indicated for the topical treatment of plaque psoriasis in adults and is contraindicated in pregnancy.  The Duobrii prescribing information carries warnings and precautions regarding embryofetal risk, hypothalamic-pituitary-adrenal axis suppression and other unwanted systemic glucocorticoid effects, photosensitivity and risk for sunburn.

    OPDP expressed concerns that the video fails to include material facts regarding the warning and precaution for embryofetal risk, including the suggestion that “a female of reproductive potential can initiate Duobrii or use it whenever she has a psoriasis flare up without regard to the measures needed to mitigate the risk of birth defects associated with Duobrii . . .”  OPDP also expressed concerns about representations that the patient would not need to wear three quarter length sleeves when it was warm out because of the warning to use sunscreen and protective clothing when using Duobrii.  Bausch was cited for presenting information in text-only format while benefit claims were presented on screen in large print and announced verbally.  This citation is not new – we have seen it in several recent letters and is specifically addressed as part of 21 C.F.R. §202.1(e)(1) which provides that broadcast advertisements include information relating to the major side effects in the audio or audio and visual parts of the presentation.

    On the efficacy side, OPDP cited Bausch for suggesting Duobrii is superior to other products intended for plaque psoriasis.  Of interest (again, to me) was OPDP’s recognition that the spokesperson’s own experiences may be TRUE, but are otherwise misleading because, “the personal experience of this patient does not support the suggestion that Duobrii is superior to other plaque psoriasis drugs on the market.”  With regard to disclaimers, OPDP states, “We acknowledge that the video includes the SUPER, ‘People with psoriasis may respond to treatments differently and at different times. Individual results may vary.’ However, this does not mitigate the misleading impression.”

    While only time will tell, given the success of “The Balancing Act,” the sponsorship opportunities on both national and local TV show levels, as well as the rise in the use of social media influencers, it’s safe to say that these “storytelling” forms of promotion for medical products will not be going away anytime soonWhen appropriately utilized, that’s not a bad thing – elevating awareness of disease states and potential treatments helps improve patient understanding and may ultimately impact access.  Sponsors should responsibly communicate medical product information and be mindful that given FDA’s recognition of these promotional trends, we will likely see additional enforcement in these areas as well.

    Attorney General Garland: Marijuana Enforcement Remains Low DOJ Enforcement Priority in States Where Activity Is Legal

    Last week, Attorney General Merrick Garland reiterated the position expressed during his confirmation hearing that enforcement of marijuana cases in states where activities are legal is an inefficient use of Department of Justice (“DOJ”) resources.  Responding to Senator Brian Schatz (D-Hawaii) during a Senate Appropriations subcommittee hearing on whether Garland intended to reinstate guidance to U.S. Attorneys on not prosecuting marijuana cases in states that have legalized activities, the Attorney General replied that the position taken during his February 2021 confirmation hearing had not changed.  Merrick Garland, Testimony Before the Senate Subcommittee on Appropriations, Apr. 26, 2022, (01:06:35).  Garland had opined during his confirmation that “I do not think it the best use of the Department’s limited resources to pursue prosecutions of those who are complying with the laws in states that have legalized and are effectively regulating marijuana.  I do think we need to be sure, for example, that there are no end runs around the state laws by criminal enterprises, and that access is prohibited to minors.”  Merrick Garland, Responses to Questions for the Record to Judge Merrick Garland, Nominee to be United States Attorney General, 24.

    Marijuana is legal for medical use in 37 states, and for recreational use by adults in 18 states, but the drug remains a federal schedule I substance.  21 U.S.C. § 812(c)(10).  Under the federal Controlled Substances Act, schedule I substances by definition have a high potential for abuse, lack currently accepted medical use in treatment in the United States and lack accepted safety for use under medical supervision.  21 U.S.C. § 812(b)(1).  They are the most stringently regulated substances of abuse and it is unlawful to manufacture and distribute them.

    It is important to understand the lead up to Garland’s stance.  In response to states authorizing and legalizing marijuana while it remained a schedule I substance federally, Deputy Attorney General James Cole provided guidance in a memorandum to U.S. Attorneys in August 2013 that DOJ was unlikely to take enforcement action against marijuana-related businesses operating in compliance with state law unless the businesses implicated any one of eight enforcement priorities.  The “Cole Memo” guidance rested on DOJ’s expectation that states legalizing marijuana would implement strong and effective regulatory and enforcement systems to control cultivation, distribution, sale and possession of marijuana.  James M. Cole, Memorandum for All United States Attorneys, Aug. 29, 2013, 3.

    Attorney General Jeff Sessions rescinded prior DOJ guidance on marijuana enforcement, including the Cole Memo, in January 2018.  Session directed federal prosecutors to weigh all relevant considerations, including enforcement priorities set by the Attorney General, seriousness of the crime, deterrent effect of criminal prosecution and cumulative impact of particular crimes on the community.  Jefferson B. Sessions, Memorandum for All United States Attorneys, Jan. 4, 2018.  A year later, William Barr, Sessions’ successor, stated during his nomination that while he disagreed with efforts by states to legalize marijuana, he would not as Attorney General, “go after” marijuana businesses relying on the Cole Memo in states where the activity is legal.  Confirmation Hearing on the Nomination of Hon. William Pelham Barr to Be Attorney General of the United States, S. Hearing 116-65, at 70 (Jan. 15 and 16, 2019).

    Although Attorney General Garland did not indicate whether or not he would formally reissue the Cole Memo, it seems that without additional guidance businesses located in states where marijuana activity is legal cannot dismiss the now almost nine year-old Cole Memo.  Marijuana businesses should continue to be mindful of the Cole Memo’s enforcement priorities which seek to prevent:

    • Distribution of marijuana to minors;
    • Revenue from the sale of marijuana to criminal enterprises, gangs and cartels;
    • Diversion of marijuana from states where it is legal under state law in some
      form to other states;
    • State-authorized marijuana activity from being used as cover or pretext for trafficking illegal drugs or other illegal activity;
    • Violence and use of firearms in marijuana cultivation;
    • Drugged driving and exacerbation of other adverse health consequences associated with marijuana use;
    • Growing of marijuana on public lands and attendant public safety and environmental dangers posed by marijuana production on public lands; and
    • Marijuana possession or use on federal property. Cole, Memorandum for All United States Attorneys, 2013, at 1-2.

    Garland could not have been clearer in identifying DOJ’s other priorities, opining last week that marijuana prosecutions are “not an efficient use of the resources given the opioid and methamphetamine epidemic.”  Garland, Testimony, Apr. 26, 2022, (1:07:26).

    Higher and Higher (Into the Fire): Jacobus Appeals Orphan Drug Case to SCOTUS

    Our last post on the Eleventh Circuit’s September 2021 decision in Catalyst v. Becerra got a lot of attention.  We’d like to think that this is because the scope of orphan drug exclusivity is as fascinating to everyone as it is to us, but if we’re honest with ourselves, it’s probably because it was an ode to Ms. Britney Jean Spears.  Well, Catalyst v. Becerra is back with Intervenor Jacobus Pharmaceuticals, Inc. submitting a Petition for Writ of Certiorari to the Supreme Court.  Aren’t we Lucky?  Ok, ok, we’ll stop.

    In Catalyst v. Becerra, innovator-drug sponsor Catalyst sued FDA for approving the “same drug for the same disease or condition” as its orphan drug-designated product, Firdapse (amifampridine), during its seven-year orphan drug exclusivity period.  FDA approved Firdapse for the treatment of Lambert-Eaton Myasthenic Syndrome (LEMS) in adult patients in November 2018 with orphan drug exclusivity and subsequently approved a second amifampridine product, Ruzurgi, in May 2019 for the treatment of pediatric patients with LEMS.  Catalyst sued FDA in June 2019 alleging that the plain language of the Orphan Drug Act precluded FDA’s approval of Ruzrugi in any LEMS patients until the expiration of the orphan drug exclusivity period covering Firdapse.  Jacobus intervened, and the case made its way to the Eleventh Circuit.  In September 2021, the Eleventh Circuit held that FDA’s interpretation of the Orphan Drug Act such that exclusivity was limited to the indication for which the drug was approved—rather than the disease or condition for which the drug was designated—is foreclosed by the plain language of the Orphan Drug Act.  Consequently, the Court held, FDA’s approval of Ruzurgi contravened the plain language of the Orphan Drug Act in violation of the Administrative Procedures Act and ordered FDA to rescind Ruzurgi approval.

    On April 7, 2022, Jacobus appealed the Eleventh Circuit’s decision to the Supreme Court.  In urging the Court to review the Eleventh Circuit’s decision, Jacobus argues that the Eleventh Circuit’s extension of exclusivity from the specific indication for which the drug was approved to the entire disease or condition for which the drug was designated “eviscerated FDA’s long-standing practice and created a circuit split” with the Fourth and D.C. Circuits “over whether the [Orphan Drug Act] unambiguously forecloses FDA’s use-based approach.”  With some dramatic flair, Jacobus further states “If allowed to stand, the results of the Eleventh Circuit’s decision would be catastrophic.”  This is because the decision would lead to uncertainty for orphan designated drug sponsors while leaving patients with fewer options.

    Jacobus makes two main arguments to convince the Supreme Court to hear its case.  First, Jacobus explains that the Eleventh Circuit’s decision creates a circuit split between the Fourth and the D.C. Circuit “both of which upheld FDA’s use-based approach.”  Citing Sigma-Tau Pharms., Inc. v. Schwetz, 288 F.3d 141 (4th Cir. 2002), Jacobus states that the Fourth Circuit determined that a use-based approach to exclusivity was consistent with the plain language of the Orphan Drug Act.  Orphan drug exclusivity, in other words, “protects uses, not drugs for any and all uses” and is “disease-specific, not drug-specific.”  Jacobus also cites to Spectrum Pharms., Inc. v. Burwell, 824 F.3d 1062 (D.C. Cir. 2016) to explain the circuit split, as the D.C. Circuit there deferred to the Agency’s interpretation of the Orphan Drug Act because the language does not “unambiguously foreclose FDA’s interpretation.”

    Second, Jacobus points to the “catastrophic consequences” of the Eleventh Circuit’s refusal to defer to FDA’s interpretation of the scope of orphan exclusivity.  Jacobus states that the “end-result” of the decision “was to leave the pediatric population out in the cold because the drug had already been approved (only) for an adult population.”  (This is somewhat hyperbolic given that the Eleventh Circuit noted that only there are only “dozens” of pediatric LEMS patients.)  Jacobus also cites to the policy arguments that will be familiar to our Britney blog post fans: that narrow uses can now cut off competition for an entire disease or condition, and that this policy raises a significant threat of serial exclusivity.  But most of this section is dedicated to dismantling the Eleventh Circuit’s plain language discussion.  There, Jacobus argues that the term “same disease or condition” must be read in the context of the new drug approval provisions of the FDC Act.  Jacobus explains that the exclusivity provisions in the Orphan Drug Act (21 U.S.C. § 360cc(a)) states that FDA “may not approve another application under [new drug provisions at 21 U.S.C.] section 355.”  Because the new drug provisions (21 U.S.C. § 355) are approved for “uses” or “indications” rather than diseases or conditions, Jacobus argues that orphan drug exclusivity must be limited to the “use” approved in the application and not to the entire condition designated.

    The Petition for Writ of Certiorari was filed by Intervenor Jacobus, so we have not yet seen how FDA will respond.  Given that FDA likely wants to preserve its existing interpretation of the scope of orphan drug exclusivity, we’d expect that a Government Petition would be firmly in favor of Certiorari.  The Agency’s and Catalyst’s briefs are due on May 11, 2022.  Nevertheless, we suspect that FDA, as it did the last time it was challenged on its interpretation of the Orphan Drug Act, may be working on a legislative fix for the issues at hand.

    “It’s In the Mail” Will Soon No Longer Apply to DEA Registration Applications

    Effective May 11, 2022, the Drug Enforcement Administration (“DEA”) will require all applications and renewals for registration to be submitted electronically.  DEA issued a final rule on April 11, 2022, eliminating the “mail-in” option, believing that initial and renewal applications submitted online will be more effective for the agency and registrants.  Requiring Online Submission of Applications for and Renewals of DEA Registration, 87 Fed. Reg. 21,019, 21,020 (Apr. 11, 2022).  Applicants will be required to submit all applications through DEA’s secure online portal.  The agency has determined that “[r]egulatory changes are needed to modernize DEA’s approach to registration and renewal applications” and requiring online submission will eliminate “inefficient paper applications” whose typographical errors and incomplete information have “routinely resulted in delayed or rejected applications.”  Id.

    DEA had proposed this change in its January 7, 2021, notice of proposed rulemaking. Amending Regulations To Require Online Submission of Applications for and Renewals of DEA Registration, 86 Fed. Reg. 1,030 (Jan. 7, 2021).  DEA noted that the National Association of Chain Drug Stores (“NACDS”) and three other individuals commented on the proposed rule.  NACDS observed that DEA did not propose to modify nor address “batch” renewals for multiple locations holding multiple registrations, and expressed its desire for the agency to continue allowing registrants to submit batch renewals.  Id. at 21,020- 21,021.  DEA confirmed that the batch renewal process would not be affected, opining that batch renewals streamline the process for both registrants and the agency, and that the online portal would continue to accept batch applications and single payments.  Id. at 21,020- 21,021.

    NACDS also commented that the proposed rule was unclear on whether DEA’s rejection of a single, deficient application within a batch would cause rejection of the entire batch.  DEA countered that the existing process already ensures that only completed applications are processed while incomplete applications are rejected, thereby precluding the possibility of rejecting an entire batch due to a defective application.  Id. at 21,021.

    Lastly, DEA addressed NACDS’ final observation that the proposed rule listed credit cards as the only payment option, noting that some batch renewal payments exceed $1,000,000, and payment by credit card would run afoul of corporate policies requiring large transaction payment via certified bank check.  Id.  In response, DEA amended the proposed rule to allow online payment by Automated Clearing House (“ACH”) fund transfer, credit card or other means that may be available at submission using the secure application portal.  DEA will not accept bank checks for the foreseeable future.  Id.

    It is worth noting that in June 2020, DEA had stopped mailing renewal notifications to registrants and instead stated that it would send out electronic reminders to renew at 60, 45, 30, 15, and 5 days prior to the expiration date of the registration to the associated email address.  Renewal Applications are available here.  DEA’s policy has been to allow a registrant to continue operations if a renewal has been submitted in a timely manner.  However, registrants will now need to be very careful to meet the online deadline and will no longer be able to argue that “it’s in the mail.”

    There is no doubt that this change will significantly reduce the administrative burden on DEA in processing the applications and renewals.  We would hope that this will also mean that registrants will receive their renewal or new registration certificates on a more-timely basis.  Delays in issuing these certificates have caused issues for registrants when asked to verify their renewals to suppliers or customers.