By Jennifer M. Thomas & Anne K. Walsh –  

Yesterday, in a big win for industry, District Court Judge Rosemary Collyer granted French company PREVOR’s Motion for Summary Judgment in a case challenging FDA’s decision to regulate PREVOR’s Diphoterine® Skin Wash (“DSW”) product as a drug.  The original Complaint was discussed in an earlier blog post here, and the briefs for all parties are available here, here, here, and here.  PREVOR was represented by Hyman, Phelps & McNamara, P.C. (attorneys Jeffrey N. Gibbs, John R. Fleder, Jennifer M. Thomas, and Anne K. Walsh).  Kudos also to the amici curiae, including the Washington Legal Foundation, Alcoa, and Archer-Daniels-Midland Company.  The case has been closely followed by industry because it involves a new FDA interpretation of the laws concerning combination product classification, as set out in an FDA classification ruling specifically applicable to PREVOR’s product and in two hotly debated draft guidance documents, available here and here (Docket No. FDA-2011-D-0429).

DSW is a “first response” method to help prevent and minimize chemical burn injuries due to accidental chemical exposures, and has long been marketed as a medical device in Europe, Canada, Brazil, and Australia.  FDA’s Office of Combination Products (“OCP”), however, classified DSW as a drug-device combination product with a drug primary mode of action, and determined that it should be regulated by the Center for Drug Evaluation and Research.  The Agency’s Office of Special Medical Programs (“OSMP”) confirmed that classification.  The D.C. District Court disagreed, and determined that both OCP and OSMP employed a new standard (“at least in part” or “even in part”) in reaching its decision.

In her 18-page opinion, Judge Collyer concluded that FDA acted arbitrarily and capriciously.  Specifically, the Court found that FDA had failed to provide a reasoned basis for its classification decision, stating that its “ipse dixit cannot substitute for the ‘qualitative analysis’ or ‘scientific information’ on which FDA says it acted.”  Instead of scientific analysis, the Court opined, FDA substituted “extraordinarily expansive language” in making its classification decision.  And it did so, without offering “more than its say-so.” 

The Court rejected FDA’s contention that the standard it applied was not new, citing the June 2011 guidance documents as evidence, and noting that the agency “fails to cite a single prior instance in which it has applied an ‘even in part’ standard.”  The Court also adopted PREVOR’s comparison to similar products treated as devices, and characterized FDA’s attempt to distinguish those products as “a most ephemeral distinction.”  

The Court questioned “[w]hether FDA would come to the same conclusions without resort to its extra-statutory interpretations.”  It vacated FDA’s decision to designate DSW as a drug-device combination product with a drug primary mode of action, and remanded the case to FDA to make a determination in compliance with its Opinion.  

By Jennifer D. Newberger –

On Thursday, September 20, the Food and Drug Law Institute (“FDLI”) and the Drug Information Association (“DIA”) co-sponsored a program titled “Unwrapping FDA’s UFA Package:  What’s Inside the Statute – What’s Next?”  The program discussed many aspects of the recently passed Food and Drug Administration Safety and Innovation Act (“FDASIA”) (see our summary here), from user fees to substantive changes in the pre- and post-market regulation of drugs and devices.

Some highlights of the device sessions include the following:

Benefit-Risk Determinations.  Though FDASIA does not explicitly require FDA to make benefit-risk determinations in the premarket review of medical devices, CDRH representatives indicated that they intend to do so.  In fact, one representative stated that benefit-risk and increased user participation in the review process are two of the most exciting FDASIA provisions, and that it is important to look not only at clinical data, but also at patient data about the willingness to tolerate certain risks.  She stated that CDRH is already conducting a pilot study in which patients are being surveyed about the risks they are willing to accept for surgical procedures to address obesity.  She also noted that CDRH will be initiating a Patient Preference Project with a meeting in the spring about how best to gather the patient perspective in device reviews.

De Novo Process.  As expected, FDA and industry are both pleased with the changes FDASIA made to the de novo process.  One CDRH representative noted that, while the changes provide an opportunity to be more efficient with de novo devices, there are no user fees for de novo applications.  Thus, it will be important to CDRH to examine whether devices actually qualify for the de novo process and do not have predicates to which they could claim substantial equivalence.  Whether companies would actually seek de novo status to avoid a 510(k) user fee is somewhat doubtful.

Appeals.  FDASIA implemented timeframes for appealing “significant decisions” but did not specify what actions constitute significant decisions.  A CDRH representative at the meeting indicated that CDRH will be issuing a guidance document describing the activities that it considers to be “significant decisions.” CDRH indicated that NSE letters, not approvable decisions, and IDE denials will be among the significant decisions appealable within the FDASIA-specified timeframes.  CDRH stated that letters such as requests for additional information will likely not be considered “significant decisions.”  This means that, while an AI request could continue to be appealed under 21 C.F.R. § 10.75, the process will not have to abide by the timeframes in the new law.

Another issue discussed regarding appeals is when a requester would receive the summary of the decision as mandated by FDASIA.  Since FDASIA requires the sponsor to file an appeal within 30 days of the “significant decision,” it will be important to receive the summary information as soon as possible to incorporate into the appeal.  Based on statements at the meeting, CDRH has not yet determined when it will provide the summary information in response to a request.  It stated that it will “probably” be provided in time to use in the appeal, but appeals historically have been based on the letter itself, and CDRH would expect the same to be true moving forward.  Unfortunately, the denial letters often do not provide much useful information describing the reason for the denial, so sponsors will undoubtedly be looking to receive that summary information to support their appeal and better understand the grounds for the adverse decision.

CDRH stated a concern with the new timeframes, namely, that they will encourage sponsors to appeal decisions rather than working them out informally with the review division.  This concern is unlikely to materialize, since most sponsors would rather resolve issues informally than incur the delay and costs associated with an appeal. 

Device Modifications.  A moderator asked CDRH about the practical effect of the 2011 draft guidance on when to submit a new 510(k) for modifications to a cleared device.  He pointed out that, just because Congress told FDA to do away with that draft guidance and use the 1997 guidance, the 2011 draft gives insight into FDA’s thinking about these issues.  See our earlier blog post on the 2011 draft guidance here.   In response, CDRH said that, from an agency perspective, the 1997 guidance is still in effect, and that if FDA takes action, it will be based on the 1997 guidance.

Reclassification.  The reclassification provision in FDASIA required reclassification through order, rather than regulation; this change was intended to expedite reclassifications.  At the same time, FDASIA said all reclassifications need to go before a panel.  CDRH’s perspective is that, as a result, it could now take longer to downclassify certain devices.  The industry representative on the panel acknowledged that in urging Congress to require a panel prior to reclassification, industry was concerned about upclassification, and perhaps had not considered the impact on downclassifying devices. 

CDRH also seemed unsure about how the new law will affect the progress made to date on reclassifying some of the Class III devices for which FDA has not yet called for PMAs.  CDRH indicated that progress would likely be stalled, and panels would need to be called.  It is not clear whether the law was intended to have this type of retroactive effect.

IDEs.  CDRH has already made certain changes to its IDE template to align with FDASIA’s requirement not to deny IDEs just because CDRH believes they may not support a clearance or approval.  CDRH stated that it wants to incentivize manufacturers to “design the right study,” but it has not yet decided what that incentive will be.  It is contemplating two separate paths, one for sponsors who want to start a study even if it is not ideal from FDA’s perspective, and one for sponsors who will work with FDA to design a study that FDA will “endorse.”  This may involve the creation of a pre-decisional IDE pathway, different from a pre-submission meeting because the pre-decisional meeting will look at data, whereas pre-submission meetings are intended to provide feedback on product development.  Presumably CDRH will be issuing guidance on its new approach to IDEs and clinical trials in the reasonably near future.

By Ricardo Carvajal –

A federal district court dismissed a class action that took issue with a number of allegedly false and misleading claims made on the label of Benecol, a butter/margarine alternative.  The claims at issue include “each serving contains .85g of plant stanol esters,” “proven to reduce cholesterol,” and “no trans fat.” 

Plaintiff contended that the amount of plant stanol esters in the product is insufficient, given that FDA’s health claim regulation for plant sterol/stanol esters and cholesterol requires that a food contain at least 1.7g of plant stanol esters to be eligible for the claim.  However, the court noted that FDA  issued a letter in 2003 permitting use of the claim in relation to products that contain lesser amounts of phytosterols (at least 400 mg per serving), and that FDA had engaged in rulemaking to amend the regulation.   The court observed that “Federal agency action short of formal notice and comment rulemaking can preempt state law.”  Based in part on the compliance of Benecol’s claim with FDA’s 2003 letter, the court found in favor of preemption.

Plaintiff also challenged defendant’s cholesterol-lowering claim on the ground that there were no studies supporting a conclusion that Benecol “as formulated” had the claimed effect.  The court noted that the health claim regulation does not require evidence that products have the claimed effect “as formulated.”  Rather, the regulation establishes “the minimum amount of plant stanol esters that a product must contain” to be eligible for the health claim.  Because plaintiff attempted to impose a requirement different from that imposed under federal law, the court again found in favor of preemption.

Finally, the court found plaintiff’s challenge to defendant’s “no trans fat” claim preempted because “FDA regulations explicitly define the term ‘0 Grams of Trans Fat’” to include levels of less than 0.5 g per serving.  The court concluded that drawing a distinction between “0 grams of trans fat” and “no trans fat” was unreasonable, that the terms were “functionally equivalent,” and that no consumer confusion would result from the use of both claims on the same package.

By Riëtte van Laack –

Earlier this month, FDA announced the publication of a draft level 1 Compliance Policy Guide (“CPG”) titled “Labeling and Marketing of Nutritional Products Intended for Use to Diagnose, Cure, Mitigate, Treat or Prevent Disease in Dogs and Cats.” 

The CPG in clear terms sets out FDA’s enforcement policy for cat and dog products that are intended for use as drug and to provide nutrients in support of a pet’s total daily nutrient requirements.  Unless (conditionally) approved or subject to an index listing, these products are unapproved new drugs.

FDA will give priority of enforcement to products that: (1) are marketed as alternatives to approved animal drugs; (2) contain unapproved food additives that do not conform to a definition by the Association of American Feed Control Officials (“AAFCO”); (3) include on the label claims or symbols that imply a disease claim; and (4) are available to the general public without any involvement of a licensed veterinarian.

To qualify as a product with a low likelihood of enforcement action by FDA, nine requirements concerning the manufacturer, the label, and the labeling and marketing of the product must be met.  Amongst others, the manufacturer must be registered as a food facility, the product label must not include indications for a disease claim (which includes obesity claims), the product be available only through a licensed veterinarian or under the supervision of a licensed veterinarian, and the dissemination of labeling and promotional materials must be limited so it will available to veterinary professionals only.

To ensure consideration by the Agency, comments should be submitted by November 9, 2012.

By Kurt R. Karst –      

Legislation allowing FDA to collect several user fees under the Generic Drug User Fee Amendments of 2012 (“GDUFA”) is expected to be introduced this week (and perhaps voted on by both the U.S. House of Representatives and the U.S. Senate).  A draft of the FDA User Fee Corrections Act of 2012 appeared on a website maintained by the Office of the Clerk of the House earlier this week and would amend the FDC Act to address certain issues raised by language included in GDUFA.

Over the past month or so, there has been growing concern that come October 1, 2012 when GDUFA goes into effect, FDA will be unable to collect several GDUFA user fees because of the failure by Congress to pass an FDA Appropriations Act for Fiscal Year (“FY”) 2013.  This concern was exacerbated when the Continuing Appropriations Resolution, 2013 (H.J. RES. 117) was passed by the House last week making continuing appropriations for FDA in FY 2013 at FY 2012 levels and without any provisions concerning the collection of user fees provided for under the FDA Safety and Innovation Act (“FDASIA”).  In addition to creating a generic human drug user fee program, FDASIA also created a user fee program for biosimilars – the Biosimilars User Fee Act of 2012 – and renewed other existing user fee programs for drugs and medical devices (i.e., PDUFA and MDUFA).  The FDA User Fee Corrections Act of 2012 is not intended to address other user fee statutes, which may be addressed in future legislation. 

GDUFA, which is codified at FDC Act § 744A and § 744B, includes several provisions stating that the Type II Drug Master File (“DMF”) fee (FDC Act § 744B(a)(2)(E)), the Original ANDA and Prior Approval Supplement fees (FDC Act § 744B(a)(3)(C)), and the Finished Dosage Form and Active Pharmaceutical Ingredient fees (FDC Act § 744B(a)(4)(D)) are due by the later of two dates, including 30 calendar days after the enactment of an appropriations act providing for the collection and obligation of GDUFA user fees.  (There are also other provisions concerning the crediting and availabilty of GDUFA user fees – i.e., FDC Act § 744B(i)(2)(C) – that mention an appropriations act).  Take, for example, the statutory language applicable to the Type II DMF user fee, which states:

(ii) Limitation. – No fee shall be due under subparagraph (A) for a fiscal year until the later of –

(I) 30 calendar days after publication of the notice provided for in clause (i) or (ii) of subparagraph (C), as applicable; or

(II) 30 calendar days after the date of enactment of an appropriations Act providing for the collection and obligation of fees under this section.

Of course, if an appropriations act (or a continuing resolution for appropriations) is not enacted providing for the collection and obligation of GDUFA user fees, then the “later of” date will remain open. 

The FDA User Fee Corrections Act of 2012 – acronymized as FDAUFCA and pronounced “fuh-doof-ka,” or perhaps more aptly “fuh-doh-f-ka” (with a Homer Simpson-esque emphasis on “doh”) – is intended to correct this problem by directing that the appropriations act language be disregarded.  For example, the bill says the following with respect to the provision concerning Type II DMF user fees: 

Notwithstanding section 744B(a)(2)(E)(ii) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 379j–42(a)(2)(E)(ii)), the fee authorized under section 744B(a)(2) of such Act for fiscal year 2013 shall be due 30 calendar days after publication of the notice provided for in section 744B(a)(2)(C)(i) of such Act.

The bill includes similar language for the application and facility fee provisions in GDUFA.  The one-time ANDA backlog fee does not appear to be affected by the lack of an FY 2013 appropriations act.  Under the statute (FDC Act § 744B(a)(1)(D)), that fee “shall be due no later than 30 calendar days” after FDA publishes a notice in the Federal Register announcing the fee amount.  The notice must be published by October 31, 2012.

FDA is moving full steam ahead with GDUFA implementation.  In August, FDA published draft guidances on myriad GDUFA topics and that are primarily intended to notify industry of certain obligations that need to be timely completed (see our previous post here).  On September 21, 2012, FDA will hold a public meeting to discuss GDUFA implementation.

UPDATE:

• H.R. 6433 (The FDA User Fee Corrections Act of 2012) was introduced in and passed by the House without objection on September 19, 2012.

By Kurt R. Karst & JP Ellison –     

The U.S. Solicitor General filed a brief last week urging the U.S. Supreme Court not to grant a Petition for Writ of Certiorari filed earlier this year by a group of ear candle advocates after the U.S. Court of Appeals for the District of Columbia Circuit affirmed in a January 2012 decision the U.S. District Court for the District of Columbia’s March 2011 decision granting FDA’s Motion to Dismiss an April 2010 lawsuit brought by the ear candlers (see our previous posts here, here, and here).  The case, Holistic Candlers and Consumers Association v. FDA, is assigned Supreme Court Docket No. 11-1454.  According to Petitioners, a decision by the Supreme Court to grant the Petition for Writ of Certiorari “will clarify how far an agency can pressure citizens before its position becomes unequivocal or final.”

The case stems from FDA’s decision to issue about 15 Warning Letters to companies marketing ear candles, an alternative medicine practice that advocates claim improves general health and well-being (see more here).  FDA stated in the February 2010 Warning Letters – see, e.g., here and here – that ear candles are unapproved medical devices and requested that the companies cease marketing and distributing their products.  (At about the same time, FDA also warned consumers and otolaryngological healthcare professionals not to use ear candles “because they can cause serious injuries.”)  Several ear candle advocates objected to FDA’s statement that holistic candles are medical devices and sued the Agency alleging violations of their First, Ninth, Tenth, and Fourteenth Amendment rights, and seeking injunctive relief staying FDA’s determination that their ear candles are unapproved medical devices, as well as declaratory relief voiding FDA’s determination.  FDA moved to dismiss the case on several grounds, including lack of standing, lack of ripeness, and failure to exhaust administrative remedies. 

The D.C. District Court granted FDA’s Motion to Dismiss on various grounds, including that the Warning Letters are not final agency action subject to judicial review under the Administrative Procedure Act (“APA”), and that the holistic candlers’ efforts to obtain injunctive and declaratory relief “is nothing more than a pre-enforcement challenge foreclosed by” the U.S. Supreme Court’s decision in Ewing v. Mytinger & Casselberry, Inc., 339 U.S. 594 (1950), and is therefore not ripe.  The D.C. Circuit affirmed the district court decision, explaining that the Warning Letters are not final agency action because “they neither mark the consummation of the agency’s decisionmaking process nor determine the [Petitioners’] legal rights or obligations.”  Citing FDA’s Regulatory Procedures Manual, the Court noted that FDA Warning Letters are merely “informal and advisory” and that FDA did not commit to take action in the Warning Letters, but rather, “would await [Petitioners’] responses before taking any final regulatory action.”

Both the holistic candler advocates and FDA present similar, but noticeably different, versions of the question posed to the Supreme Court.  Compare Petitioners’ “[w]hether the U.S. Court of Appeals erred in ruling that the [Petitioners’] claim is unripe for review” and “[w]hether an agency’s warning letters, subsequent statements, and previous enforcement actions constitute ‘final agency action’ subject to judicial review under the [APA]” to the Government’s “[w]hether warning letters sent by the [FDA]—which identify possible violations of federal law and ask for corrective action from the recipients, but have no legal consequences—constitute ‘final agency action’ subject to judicial review under the [APA].”  According to Petitioners, the D.C. Circuit’s decision rules against the Supreme Court’s decisions in Sackett v. EPA, 132 S.Ct. 1367 (2012), Bennett v. Spear, 520 U.S. 154 (1997), and Abbott Labs v. Gardner, 387 U.S. 136 (1967), and, “if allowed to stand, allows federal agencies to inform citizens that they are acting in violation of the law and subject to enforcement should the agency initiate the action while ignoring citizens’ requests to challenge the factual findings of that agency and be protected from postponed judicial review.”   FDA, in its opposition brief, says that the D.C. Circuit correctly decided that the Agency’s Warning Letters do not satisy either of the Bennett finality criteria, that Abbott Labs is only relevant where there is final agency action, and that this case it not at all similar to Sackett, in which the Supreme Court, in a unanimous decision, ruled that an EPA compliance order was final agency action reviewable in federal court under the APA. 

Petitioners’ reliance on Sackett caught our attention.  As we noted in a post just days after the Supreme Court ruled in Sackett, “[w]e don’t think it will take long for an FDA regulated entity to cite Sackett as the basis of challenging an FDA Warning Letter, or other agency enforcement action that the agency claims is not final.”  And it did not take long at all for our prediction to become reality.  According to FDA, however:

FDA warning letters do not manifest the same “hallmarks of APA finality” as the EPA compliance order in Sackett.  Unlike that order, FDA warning letters trigger no legal consequences and are subject to further agency “evaluat[ion]” based on the recipient’s response.  Such letters do not trigger any enlarged exposure to penalties for noncompliance with the FDCA, nor does their issuance preclude further agency consideration or review.  Rather, the letters state FDA’s position on the facts available to it, encourage voluntary compliance with the FDCA, and alert the recipient of possible enforcement action by the FDA.  If and when an enforcement action is brought, the agency’s claim is not that the recipient has “violated” the warning letter, but rather that it has violated the underlying requirements of the FDCA. [(Internal citations omitted)]

Although FDA’s Warning Letters to the ear candlers do not include language about real-world consequences, many Warning Letters do.  For example, there have been Warning Letters stating: “Federal agencies may be advised of the issuance of warning letters pertaining to devices so they may take this information into account when considering the award of contracts,” “PMA applications for Class III devices to which the Quality System regulation violations are reasonably related will not be approved until the violations have been corrected, and “Requests for Certificates to Foreign Governments will not be granted until the violations related to the subject devices have been corrected.”  Whether such Warning Letters can be sufficiently final to allow judicial review under Sackett remains to be seen.  In a case in which a Warning Letter contains language akin to that in the previous sentence (especially where FDA uses “will” instead of “may”), the government could have a more difficult time arguing that the Warning Letter is not “final” for some purposes and that it has no effect.

REMINDER:  You can follow us on Twitter @fdalawblog

By Kurt R. Karst –      

In our recent post, “Hot Ticket Item – Patent Settlement Agreement Challenges,” we provided a round-up of the latest and greatest from ongoing litigation concerning patent settlement agreements (or “pay-for-delay” agreements if you prefer that term – we don’t).  It’s only been about three weeks since that post, but a lot more has already happened to warrant another update.  And it all relates back – in some way, shape, or form – to the July 16, 2012 decision by the U.S. Court of Appeals for the Third Circuit in In Re: K-DUR Antitrust Litigation.  In that case, the Court rejected the so-called “scope of the patent test” when considering whether patent settlement agreements violate the antitrust laws, and instead applied a “quick look rule of reason” analysis under which “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.”

For starters, we forgot to mention in our last post that just two days after the Third Circuit issued its K-Dur decision, and one day after the Federal Trade Commission (“FTC”) filed the decision as a supplemental authority in litigation before the U.S. Court of Appeals for the Eleventh Circuit involving ANDROGEL (testosterone gel), the Eleventh Circuit denied the FTC’s Petition for Rehearing en banc.  The petition requested en banc review of an April 2012 decision in which a panel of judges from the Eleventh Circuit affirmed a February 2010 decision by the U.S. District Court for the Northern District of Georgia largely dismissing multidistrict litigation brought by the FTC (and others not involved in the appeal) challenging certain patent settlement agreements in which Solvay Pharmaceuticals, Inc. allegedly paid some generic drug companies to delay generic competition to ANDROGEL (see our previous post here).  The FTC had argued that the April 2012 panel decision “puts the law of this Circuit into conflict with principles underlying antitrust law that prohibit a potential competitor from agreeing not to enter a market,” and therefore merits rehearing en banc.

Of course, the big news since our last post is a second Petition for Writ of Certiorari asking the U.S. Supreme Court to take up the Third Circuit’s K-Dur decision.  Both  Merck & Co., Inc. (“Merck”) and Upsher-Smith Laboratories (“Upsher-Smith”) are Appellants in the Third Circuit case.  Curiously, Merck filed the first Petition for Writ of Certiorari (Supreme Court Docket No. 12-245) without a simultaneous Petition from Upsher-Smith.  Upsher-Smith’s Petition (Supreme Court Docket No. 12-265) was filed several days later and presents the Court with the following question: “Whether the Third Circuit erred by holding, contrary to the Second, Eleventh, and Federal Circuits, that an agreement settling patent litigation that does not restrict competition outside the scope of the exclusionary right granted by the patent itself may presumptively violate the antitrust laws.”  Upsher-Smith argues for the Court to take up the case, saying that the Third Circuit’s decision creates a clear circuit split and “guts the exclusionary right conferred by the patent laws . . . .”  Moreover, writes Upsher-Smith, the Third Circuit’s decision fails to understand that patent settlement agreements like the one at issue in the case “are a natural by-product” of Hatch-Waxman. 

As a result of the possibility that the Supreme Court might grant the Merck and Upsher-Smith Petitions for Writ of Certiorari and finally take up Hatch-Waxman patent settlement agreements, one court has already stayed litigation.  The U.S. District Court for the Eastern District of Pennsylvania recently issued an Order staying litigation over generic PROVIGIL (modafinil) agreements.  The U.S. District Court for the District of New Jersey is still considering a Motion to Stay litigation over EFFEXOR XR (venlafaxine HCl) Extended-release Tablets and a “No AG” (i.e., no authorized generic) agreement.  The FTC filed an amicus brief in that case stating that a No-AG agreement is a “convenient method” for brand-name drug companies to pay generic patent challengers to delay their entry into the market, and that the Third Circuit’s K-Dur decision should not be limited to overt cash payments.

Moving over to the scholarship front, Michael A. Carrier, a professor at the Rutgers University School of Law – Camden, has written an article for the Stanford Technology Law Review, titled “Why the ‘Scope of the Patent’ Test Cannot Solve the Drug Patent Settlement Problem.”  According to Professor Carrier, there are three primary problems with the “scope of the patent” test: “First, the version used today has shed any potential nuance in morphing into a test granting automatic legality.  Second, the test is based on the crucial assumption that the relevant patent is valid.  Third, it cannot address the issue of infringement.”  As the title of his piece suggests, Professor Carrier does not believe the “scope of the patent” test is appropriate for analyzing complex issues presented by Hatch-Waxman patent settlement agreements:

The scope test applied by courts today cannot resolve the issue of whether drug patent settlements violate the antitrust laws.  The test has ventured far beyond its initial version employed for the narrow purpose of punishing conduct reaching products clearly outside the scope of the patent.

The simplistic version used today is employed to give automatic immunity to conduct that might – or might not – be justified.  The test assumes issues of validity and infringement that cannot possibly be determined from the mere issuance of the patent.  With all potential nuance stripped out of the scope test, courts today are relegated to the role of traffic cops shooing agreements through an antitrust light always flashing green.

All of the litigation over and interest in Hatch-Waxman patent settlement agreements is not unexpected.  As a recent 2012 Patent Litigation Study from PricewaterhouseCoopers LLP shows, in recent years the chances at winning a patent infringement lawsuit are not much greater than 50%.  Perhaps that’s why “the majority of ANDA litigations continue to end in settlement.”  

By Ricardo Carvajal –

A federal court has ruled that the express preemption provisions added to the Federal Food, Drug, and Cosmetic Act (“the Act”) by the Nutrition Labeling and Education Act (“NLEA”) do not preempt Florida’s standard of identity for honey.  Plaintiffs in the case, Guerrero v. Target Corp., Case No. 1:12-cv-21115-JIC, alleged that defendant misled consumers by selling honey from which “all traces of naturally occurring pollen” have been removed.  Florida’s standard of identity for honey provides that “no pollen… may be removed except where unavoidable in the removal of foreign matter.”  Plaintiffs claim that pollen in honey provides certain health benefits, and facilitates identifying the honey’s geographic origin.

Defendant moved for dismissal of the complaint in part on the ground that section 403A of the Act expressly preempts plaintffs’ claim.  Defendant contended that its product was properly labeled with “honey” as its common or usual name, as required by section 403(i)(1) of the Act.  Because section 403A preempts any requirement for the labeling of food that is not identical to the requirement of section 403(i)(1), defendant argued that plaintiffs’ claim was preempted. 

The court disagreed, noting that Congress has “only expressly preempted standards of identity which conflict with established federal standards,” and that there is no federal standard of identity for honey.  The court further concluded that, “if a state has prescribed a standard of identity for a food product, the provisions of [section 403(i)(1)] are not triggered.”

Because plaintiffs failed to provide specific details to support their claim that defendant’s honey does not contain pollen, the complaint was dismissed.  However, plaintiffs have leave to amend their complaint to state the factual basis for their claim. 

By Riëtte van Laack –

Earlier this week, the Federal Trade Commission (“FTC”) announced the settlement of a $3.7 million civil penalty case against Jason Pharmaceuticals (“Jason”), a subsidiary of Medifast Inc., for allegedly violating a 1992 FTC Order regarding weight loss claims.  According to the complaint, filed in the United States District Court for the District of Columbia this week by the Department of Justice, the government claims that since at least November 2009, Jason violated the FTC’s 1992 Order by making unsubstantiated weight loss claims, primarily through consumer endorsements. 

According to the FTC, the defendant’s testimonials conveyed the unsubstantiated message that the Medifast program resulted in a weight loss of 2 to 5 pounds per week with an overall loss of 30 lbs.  According to the FTC, the disproportionate general disclaimer, “results will vary,” was insufficient to change the net impression to consumers that the testimonials were representative of what a consumer would achieve.

Interestingly, the settlement agreement, in the form of a court-issued Consent Decree, specifies that the company must have at least one (not two) adequate well-controlled clinical study of a “low calorie meal replacement program . . . designed to lower the user’s total caloric intake” that follows “acceptable designs and protocols” or a protocol “satisfying all of the criteria” specified in Appendix A to the Consent Decree.  Appendix A describes in detail the protocol development and the execution of the study.  For representations regarding weight loss, the clinical study must cover a period of at least 16 weeks, whereas studies to support any claims related to weight maintenance must cover a period of 52 weeks or more.  For other health and safety claims, the standard is “competent and reliable scientific evidence.”  

An obvious question is to what extent the Jason standard of one study will apply to claims for other weight loss products that are not based on reduced calorie intake.  The answer to this question remains to be seen.  Without more information, it is impossible to know if the Consent Decree reflects FTC’s new substantiation standard for weight loss claims.

Also of interest is the Decree’s definition of what constitutes “advertising,” particularly in light of the recent dispute between the FTC and POM Wonderful about whether statements by POM executives during unpaid appearances in TV talk shows qualifies as advertisements.  It will also be interesting to see if the FTC decides the POM Wonderful case by requiring one, rather than two, study, and whether the FTC in that case will specify the details of the requirements of a clinical study, as the FTC did in the Jason case. 

By Kurt R. Karst –      

While Congress and The White House debate whether user fees paid pursuant to various UFAs – User Fee Acts – will be sequestered under the terms of the Budget Control Act (see here), FDA continues to move forward with planning for Fiscal Year (“FY”) 2013.  In a notice that will be published in the Federal Register on Thursday, September 13th, FDA announces the FY 2013 user fee rate for redeeming a tropical disease Priority Review Voucher (“PRV”).  And the rate established by FDA might be a surprise to some, given the tendendcy of user fee rates to increase each FY.  Using a new formula, FDA has come up with a fee of just $3,559,000.  That’s a pretty big change from both FYs 2011 and 2012 when the redemption fee was set at $4,582,000 and $5,280,000, respectively, even when factoring in the additional required application fee payment of $1,958,800 in FY 2013, $1,841,500 in FY 2012, and $1,542,000 in FY 2011.  

As we’ve previously reported (here and here), PRVs were established by § 1102 of the 2007 FDA Amendments Act, which created  FDC Act § 524.  Under the statute, sponsors of certain new drugs and biologics for “tropical diseases” that have received priority review may receive a PRV entitling the holder to a 6-month priority FDA review of another application that would otherwise be reviewed under FDA’s standard 10-month review clock.  There are, however, some restrictions.  FDC Act § 524 allows for only a single actual transfer of a PRV from the original recipient to another sponsor.  In addition, there is a one-year advance notice period that must be provided to FDA before using a PRV (see FDA’s Draft PRV guidance here).  Legislation is pending in Congress (i.e., the Creating Hope Act of 2011) that would remove some PRV restrictions, but it seems unlikely that Congress will act on the bill this year.  (Congress did create, as part of the 2012 FDA Safety and Innovation Act, a new rare pediatric disease PRV program under FDC act § 529.  That PRV program was inspired by the tropical disease PRV program, but the two programs differ in several respects – see our summary here at pages 54-56.)

FDA has granted only a single tropical disease PRV – in connection with the April 2009 approval of Novartis’ NDA No. 022268 for COARTEM (artemether; lumefantrine) for the treatment of acute, uncomplicated malaria infections in adults and children weighing at least five kilograms (see our previous post here).  Novartis redeemed the PRV in connection with the submission of an application for ILARIS (canakinumab) for the treatment of gouty arthritis attacks in certain patients (see our previous post here). 

The fact that a tropical disease PRV is transferable has led to speculation that a market can be created for them.  But that market has not yet formed.  This may be due to the fact that only a single voucher has been granted and it was used by the grantee, but there are also other reasons.  There are the restrictions noted above, as well as a high user fee redemption rate set in past years.  These factors may have dampened interest in the PRV program.  Indeed, an article published last month, titled “The Impact of the US Priority Review Voucher on Private-Sector Investment in Global Health Research and Development,” says that while “there is some recognized value of the PRV . . . the industry perception of the voucher has not normalized and is still clouded by significant uncertainty.”  One reason, according to the article, is that companies view the PRV redemption fee “as demonstrating a lack of support from the FDA for the voucher program.”

With that in mind, we go back to FDA’s notice of the FY 2013 tropical disease PRV redemtion fee.  According to FDA’s notice:

The priority review voucher fee is intended to cover the incremental costs for FDA to do a priority review on a product that would otherwise get a standard review.  The formula used in past years to calculate the priority review user fee was based on the full average cost of a priority review.  After reviewing more recent data and experience with the program, FDA has revised the formula to better approximate the current and ongoing incremental FDA resource costs for a priority review.  The new formula will provide the Agency with the added resources to conduct a priority review while still ensuring a robust priority review voucher program that is consistent with the Agency’s public health goal of encouraging the development of new drug and biological products.

With that preface, FDA jumps into the new formula for calculating the tropical disease PRV redemption rate for FY 2013.  FDA uses FY 2011 standard costs of $5,092,000 for a new molecular entity NDA and $11,203,000 for a BLA for a total of $295,342,000 in FY 2011 (10 BLAs and 36 NDAs).  (A table of FDA’s standard costs for previous FYs is available here).  FDA then uses a formula to separate the costs of a priority and standard review application, which results in the incremental cost of conducting a priority review rather than a standard review of $3,489,000.  After some adjustments for certain costs, the tropical disease PRV redemption user fee figure ends up being $3,559,000 (rounded to the nearest thousand dollars). 

Whether this significant reduction in the tropical disease PRV redemption user fee rate compared to previous years will result in greater interest in the PRV program remains to be seen.  Some may certainly view it as a step in the right direction.  

By Jennifer D. Newberger –

On September 6, FDA released a white paper titled “Strengthening Our National System for Medical Device Postmarket Surveillance.”  This paper stems at least in part from the recommendation by the Institute of Medicine for FDA to “develop and implement a comprehensive medical device postmarket surveillance strategy to collect, analyze, and act on medical device postmarket performance information.” 

The paper proposes the following four actions to strengthen the medical device postmarket surveillance system:

1. Establish a unique device identification ("UDI") system and promote its incorporation into electronic health information;
2. Promote the development of national and international device registries for selected products;
3. Modernize adverse event reporting and analysis; and
4. Develop and use new methods for evidence generation, synthesis and appraisal.

UDI.  In July 2012, FDA issued a proposed rule for implementing a UDI system (see our previous post here).  UDIs are intended to enhance postmarket surveillance “by providing a standard and unambiguous way to document device use in [electronic health records], clinical information systems, and claims data sources.”  This information may then be used to assess the benefits and risks of medical devices, and will allow FDA and industry to report and analyze device-related adverse events by ensuring that necessary information is included in the adverse event reports.  The UDIs will also help healthcare professionals track devices through the supply chain to point of care in the event of a recall or medical error.

Development of national and international registries.  The paper states that FDA is not seeking to develop a centralized repository of registry data, but rather is encouraging the development of registries that “contain sufficiently detailed patient, device and procedural data” that are “linked to meaningful clinical outcomes.” 

FDA acknowledges that it is not feasible to have a registry addressing every medical device problem or issue.  It therefore suggests that, rather than designing registries for a particular manufacturer or product, it would be “more cost-effective to pursue nationwide medical device registries focused on certain product areas of high importance.”  This would be determined by issues of public health need, patient exposure, real-world performance, or societal cost.  The paper states that for device areas “where the benefit-risk profiles are well-understood, registries may not be needed.”  To determine the areas for which registries should be developed, FDA will convene registry experts and key stakeholders to discuss how registries might best contribute to postmarket surveillance efforts.

Modernize adverse event reporting and analysis.  The paper states that FDA will be seeking ways to automate adverse event reporting to “facilitate the submission of device-related adverse events and minimize the effort required by the reporter.”  CDRH is currently piloting an automated system, the Adverse Spontaneous Triggered Events Reporting (ASTER) system, to “detect and automatically report select device associated adverse events” to FDA.  FDA hopes that automated reporting will increase the number and quality of adverse events reported.

FDA also plans to take the following steps to improve adverse event reporting:

• Increase the amount of MDRs reported electronically; 
• Develop a mobile application for adverse event reporting; 
• Develop a new system, the FDA Adverse Event Reporting System (FAERS), with “expanded capacity and modern analytic capability for identifying and extracting relevant information in automated fashion”; and
• Explore use of safety signals to systematically prioritize MDRs for evaluation and review.

Develop methods for evidence generation.  The final step identified by FDA for improving postmarket surveillance is the “development of new tools and methods to generate, synthesize, and interpret postmarket information” to “improve the efficiency and quality of decision-making.”  To do so, FDA proposes the following:

• Use of quantitative decision analysis to help evaluate benefits and risks of medical devices;
• Combine medical device performance and clinical outcome data from diverse sources;
• Increase use of automated signal detection; and
• Use safety signals to identify unwanted or unexpected effects associated with a product.

The paper leaves unanswered several important questions, such as how FDA will use the extensive information gained from the expanded postmarket surveillance program, how it will affect premarket requirements, and how would it be used in regulating products that are on the market.

By Kurt R. Karst –   

In the world of Hatch-Waxman, disputes over 180-day generic drug exclusivity have been commonplace for well over a decade now.  Indeed, in 2012 alone there have already been a few lawsuits filed against FDA concerning generic ACTOS and generic PROVIGIL (see, e.g., here and here, and also here for FDA’s recent Motion to Dismiss/Motion for Summary Judgment in the ACTOS litigation), and some citizen petitions of interest . . . and there are still a little less than four months left in the year.  Disputes over brand-name drug exclusivity, such as 5-year New Chemical Entity (“NCE”) and 3-year new clinical investigation exclusivity, were more common in the first decade or so following the 1984 enactment of the Hatch-Waxman Amendments (see, e.g., Glaxo, Inc. v. Heckler, 623 F. Supp. 69 (E.D.N.C. 1985); Abbott Labs, Inc. v. Young, 920 F.2d 984 (D.C. Cir. 1990); Mead Johnson Pharm. Group v. Bowen, 838 F.2d 1332 (D.C. Cir. 1988); Upjohn Co. v. Kessler, 938 F. Supp. 439 (W.D. Mich. 1996); Bristol-Myers Squibb Co. v. Shalala, 91 F.3d 1493 (D.C. Cir. 1996); Zeneca, Inc. v. Shalala, 1999 U.S. Dist. LEXIS 12327 (D. Md. Aug. 11, 1999), aff’d, 213 F.3d 161 (4th Cir. 2000)), but then tailed off . . . . until the relatively recent flurry of lawsuits and FDA exclusivity decisions.  (Disputes over 7-year orphan drug exclusivity have been uncommon since the 1983 Orphan Drug Act, but also seem to be on the rise as well as companies increasingly focus on orphan drug development – see, e.g., here, here, and here).

Although NCE exclusivity disputes have cropped up on and off over the past decade – for example in the context of hyaluronidase and pancreatic enzyme products (see our previous post here) – the recent spate of disputes over NCE exclusivity seems to have started in earnest with the February 2009 lawsuit against FDA over the Agency’s decision to grant NCE exclusivity for VYVANSE (lisdexamfetamine dimesylate) Capsules.  That lawsuit was stalled while FDA considered the exclusivity granted for VYVANSE.  FDA ultimately issued a letter decision affirming the grant of NCE exclusivity.  In that letter decision, FDA articulated a structure-centric interpretation of “active moiety” (rather than an activity-based interpretation) under which a drug is classified as an NCE regardless of which portions of the active ingredient contribute to the overall therapeutic effect of the drug.  The lawsuit against FDA progressed after the Agency issued its VYVANSE letter decision, and both the DC District Court and the DC Circuit Court ruled in FDA’s favor – see Actavis Elizabeth L.L.C. v. FDA, 689 F.Supp. 2d 174 (D.D.C. 2010) and Actavis Elizabeth L.L.C. v. FDA, 625 F.3d 760 (D.C. Cir. 2010).

In connection with FDA’s evaluation of the grant of NCE exclusivity for VYVANSE, the Agency also took a closer look at a previous decision to grant 3-year exclusivity for EMEND (fosaprepitant dimeglumine) for Injection, which is a pro-drug of the previously-approved active ingredient, aprepitant (see our previous post here).  Relying on the structure-centric interpretation of active moiety discussed in the VYVANSE letter decision, the Agency determined in a separate letter decision that fosaprepitant dimeglumine should have been classified at the time of approval as an NCE and awarded 5-year exclusivity instead of 3-year exclusivity.

Also wrapped up in the VYVANSE NCE exclusivity dispute was an issue we posted on in July 2009 concerning GlaxoSmithKline’s (“GSK’s”) corticosteroid drug VERAMYST (fluticasone furoate) Nasal Spray, which FDA approved on April 27, 2007 (NDA No. 022051).  According to documents contained in the VERAMYST Summary Basis of Approval, GSK requested that FDA grant NCE exclusivity for the drug notwithstanding the Agency’s previous approval of drug products containing fluticasone propionate, bececause fluticasone furoate “is a unique molecular entity that exhibits distinctive functional characteristics of clinical significance that are directly attributable to the continuing presence of the furoate ester group at the local site of drug action,” and that “the furoate group remains an integral part of this [NCE] while exerting therapeutic activity at the site of action, and reviewers should appreciate that neither fluticasone furoate nor fluticasone pripionate is ever metabolized to fluticasone.”  In other words, GSK contended that VERAMYST contains a “stable ester” eligible for NCE exclusivity.

Years ago, prior to FDA promulgating regulations implementing the Hatch-Waxman exclusivity provisions, the Agency had on at least one occasion determined that a “stable ester” – i.e., an ester that is stable, both in vitro and in vivo – is an NCE eligible for 5-year exclusivity because the “stable ester” is considered to be the active moiety.  FDA applied this policy in the context of organic nitrates.  Specifically, FDA approved ISMO (isosorbide mononitrate) on December 30, 1991 (NDA No. 019091) and granted NCE exclusivity despite the previous approval of products containing isosorbide dinitrate. 

The exclusivity entry in the Orange Book for the VERAMYST NDA remained blank as FDA mulled over the exclusivity issue.  In a recent letter decision issued more than 5 years after the approval of VERAMYST, however, FDA finally determined that fluticasone furoate is not an NCE and is not entitled to 5-year exclusivity.  In explaining its decision, FDA once again relied on the structure-based interpretation of active moiety discussed in the VYVANSE letter decision.  FDA also rejected GSK’s “stable ester” argument, stating in the May 29, 2012 letter decision:

We also reject the contention that the fact that FDA granted NCE exclusivity to a stable ester in 1991 constitutes “precedent.”  First, that approval occurred before FDA finalized the applicable regulation. Second, as the Agency’s response to the Vyvanse matter demonstrates, FDA has since adhered to its structure-based approach that does not evaluate the activity of a molecule.

On the same day FDA issued its VERAMYST exclusivity letter decision, the Agency made another determination concerning NCE exclusivity.  This time, the drug at issue was Pfizer, Inc.’s (“Pfizer’s”) TORISEL (temsirolimus) Injection, which FDA approved on May 30, 2007 (NDA No. 022088).  As opposed to VERAMYST, where FDA did not make an exclusivity decision and post it in the Orange Book, FDA had previously determined that temsirolimus is an NCE eligible for 5-year exclusivity.  Generic drug manufacturer Sandoz (represented by HP&M) asserted that TORISEL contains a previously approved active moiety because it is an ester of sirolimus, a previously approved active moiety, and argued that FDA erroneously granted NCE exclusivity when the Agency approved TORISEL.  Pfizer disagreed and argued, among other things, that TORISEL is a “stable ester.” 

Ultimately, FDA determined in a May 29, 2012 letter decision that the Agency incorrectly granted NCE exclusivity and rescinded it.  In doing so, FDA once again relied on its VYVANSE decision, and stated:

Pfizer’s focus on Torisel’s alleged unique properties is irrelevant to the Agency’s categorical exclusion of esters from the types of modifications that are considered to result in a different active moiety.  Actavis demanded the same activity-based consideration from FDA with respect to Vyvanse, but the Agency declined, noting that the parties made conflicting claims about the scientific data. After a full and reasoned discussion, FDA affirmed its chemical-structure based interpretation of the applicable statutory and regulatory provisions.  The same considerations that resulted in the rejection of Actavis’s arguments regarding Vyvanse apply with full force here.

On first blush, both the VERAMYST and TORISEL exclusivity decisions, because they were issued after or almost after 5 years from the date of NDA approval, may seem irrelevant.  But on closer examination, there are benefits that accrue to some affected parties from FDA’s decisions.  For example, the FDC Act provides that in the context of an ANDA or 505(b)(2) application submitted to FDA during the so-called “NCE-1” period containing a Paragraph IV certification to a patent listed in the Orange Book for an NCE, and if there is a patent infringement lawsuit, the 30-month litigation stay is extended to 7.5 years after the NCE NDA approval.  A drug product not granted 5-year exclusivity does not get the 30-month stay extension. 

Turning to 3-year exclusivity, 2012 has already seen its share of controversy.  FDA is currently embroiled in lawsuits involving two drugs – SEROQUEL (quetiapine fumarate) Tablets and VANCOCIN (vancomycin HCl) Capsules.

In July, after a court battle with FDA that started around mid-March when AstraZeneca Pharmaceuticals LP (“AstraZeneca”) sought to enjoin FDA from granting final ANDA approvals for generic SEROQUEL following FDA’s denial (without comment) of two citizen petitions AstraZeneca submitted to FDA last year concerning labeling carve-out issues, the U.S. District Court for the District of Columbia granted FDA’s Motion for Summary Judgment and denied AstraZeneca’s Cross-Motion for Summary Judgment (see our previous post here).  At the heart of the case is a dispute over the applicability and scope of 3-year exclusivity based on FDA’s simultaneous approval of supplemental NDAs that contained information on pediatric uses of quetiapine and that made changes to the drug’s labeling to add information regarding “general safety information that is not indication-specific.”  AstraZeneca has appealed the DC District Court’s decision to the DC Circuit (Court of Appeals Docket No. 12-5227).

One particularly enlightening document that has come out of the SEROQUEL litigation is FDA March 27, 2012 letter decision, which lays out FDA’s approach to 3-year exclusivity.  The letter decision discusses the scope of 3-year exclusivity as it relates to the scope of new clinical investigations conducted by the NDA sponsor.  According to FDA, the FDC Act sets up a “logical relationship between the change in the product for which the new clinical investigations were essential to approval of the supplement, and the scope of any resulting three-year exclusivity.” 

Litigation between FDA and ViroPharma Incorporated (“ViroPharma”), the holder of the NDA for VANCOCIN, has been going on for years.  But it was not until the past year that the issue of 3-year exclusivity came into play.  As we’ve previously discussed (here, here, and here), ViroPharma sued FDA after the Agency denied a March 17, 2006 petition for stay of action and approved ANDAs for generic VANCOCIN.  Among other thing, ViroPharma alleged that FDA impermissibly interpreted the FDC Act when the Agency denied the company 3-year exclusivity for an NDA supplement approved in December 2011.  FDA’s rationale for denying exclusivity is discussed in the Agency’s 87-page petition response, as well as in a memorandum prepared by FDA’s newly established CDER Exclusivity Board.

In April, the DC District Court denied ViroPharma’s Motion for Preliminary Injunction on the basis that the company had not demonstrated a likelihood of success on the merits of the exclusivity claim (as well as another claim concerning bioequivalence).  In July, ViroPharma filed a Motion for Summary Judgment urging the court to “depart from the preliminary view of the merits expressed in its earlier order and hold invalid” FDA’s action.  Last week, FDA and the generic drug manufacturer intervenors (one of which is represented by HP&M) filed briefs (here and here) opposing ViroPharma’s motion and requesting that the court dismiss the case (or grant summary judgment). 

By Carmelina G. Allis –

If you are a mobile app developer, be sure to review the FTC’s newly published guidelines on truth-in-advertising and privacy principles, “Marketing Your Mobile App, Get it Right from the Start.”  They apply to you, whether you are a start-up app developer or an established business.

The FTC wants you to tell the truth about anything that your app can do, whether it relates to implied or express statements, or whether these are claims that you make on a website, in an app store, or within the app itself.  The guidelines suggest that app developers follow these “truth-in-advertising” practices:

• Objective claims made in or about your app must be supported by “competent and reliable evidence.”  For example, if you say your app provides a health benefit, you may need competent and reliable “scientific” evidence to support that benefit claim.  The FTC reminds us about the agency’s enforcement action against a developer claiming that its app could treat acne.  The FTC found that the app developer lacked the proper scientific evidence to back up its acne treatment claim (see here).  Of course, applying this standard to specific facts can be tricky.
• Information disclosures must be “clear and conspicuous.”  That is, any disclosure must be stated clearly enough so that users can notice and understand them.  The FTC suggests that app developers not bury important terms and conditions in long licensing agreements or legalistic statements, or behind vague hyperlinks.

Privacy Protection Principles.  The FTC also reminds mobile app developers that they should incorporate into their app privacy protections, which include limiting the information collected, securely storing information, and safely disposing of information.  And the FTC recommends that these practices be implemented from the start of the app development process.

For example, the guidelines suggest that you:

• Design your app such that users are not “unwittingly disclosing information” that they did not mean to share with you.  Get the user’s express agreement on the collection or sharing of personal information.
• Disclose what type of information your app collects from users or their devices and what you will do with that data.
• Offer privacy settings, opt-outs, and other ways that can be used to control the type of personal information collected and how it is used.
• Honor your privacy promises – think about what your privacy policy and settings offer, and live up to those promises!
• Protect kids’ privacy if your app is designed for children.  You may be subject to the requirements under the Children’s Online Privacy Protection Act (COPPA) and the FTC’s COPPA Rule – see here.
• Collect users’ medical, financial, or sensitive information only with their consent – obtain an “affirmative OK” before you collect it.
• Keep sensitive data and information secure.  For example, take reasonable precautions against well-known security risks, limit access to that information, and safely dispose of it when no longer needed.

By Kurt R. Karst –      

In a decision handed down late in the day on Thursday, September 6th, Judge Amy Berman Jackson of the U.S. District Court for the District of Columbia dealt a blow to K-V Pharmaceutical Company’s (“KV’s”) efforts to “restore” orphan drug exclusivity for the pre-term birth drug MAKENA (hydroxyprogesterone caproate) Injection, 250 mg/mL, by granting FDA’s Motion to Dismiss a case filed by KV back in early July. 

As we previously reported, KV filed a Complaint and a Motion for Temporary Restraining Order and Preliminary Injunction alleging that FDA and the Department of Health and Human Services violated myriad provisions of the FDC Act, the Administrative Procedure Act (“APA”) § 706(2), and the Due Process Clause of the Fifth Amendment to the U.S. Constitution by failing to take sufficient enforcement action to stop the unlawful competition with Makena by pharmacies that compound hydroxyprogesterone caproate injection, also known as “17P.”  (In a July 5th Minute Order, the court consolidated the Motion for Temporary Restraining Order and Motion for Preliminary Injunction with the merits, and later denied both motions as moot.)  Specifically, KV alleged that the non-enforcement policy FDA adopted with respect to compounded 17P:

• Violates FDC Act § 527(a) “by effectively nullifying Makena’s statutory seven-year period of market exclusivity by giving de facto approval to compounded versions of 17P that are intended for use to treat the same indication for which Makena is designated as an orphan drug and is approved, and that are not customized to meet the medical needs of individual patients who have the condition for which Makena is indicated but for whom Makena is not medically appropriate” (Count I); 

• Is contrary to the express limitations on compounding set forth in FDC Act § 503ª (Count II); 

• Violates FDC Act §§ 505(a) and 301(d), which prohibit the marketing of a new drug without an effective approval, by approving, authorizing, inviting, encouraging, and permitting “the introduction, and delivery for introduction, into interstate commerce of unapproved new drugs” (Count III); and

• Violates FDC Act § 801(a), which requires FDA to refuse importation of any drug that appears to be unapproved in violation of the new drug approval requirements at FDC Act § 505 (Count IV).

(KV also raised a Fifth Amendment Due Process claim as part of Count I; however, it was not raised in KV's Temporary Restraining Order and Preliminary Injunction papers, so Judge Jackson treated it as conceded.)

KV sought “a comprehensive regime of temporary, preliminary, and permanent declaratory and injunctive relief,” including that the court order FDA to withdraw certain public statements made by the Agency concerning the exercise of enforcement discretion action against 17p compounders (and in particular, a pair of March 2011 statements by FDA and the Centers for Medicare & Medicaid Services – here and here), to take enforcement action against 17p compounders, and “to bar entry into the United States, and release into domestic commerce, of any future shipments of foreign-manufactured API for use in compounding non-customized 17P except in certain specified instances.” 

FDA argued that the Complaint should be dismissed, because, among other things, KV’s claims are not justiciable for lack of standing.  And even if KV can establish standing, argued FDA, “FDA’s March 2011 statement is not subject to judicial review under the [APA] because FDA’s decisions not to take enforcement action are committed to the agency’s discretion under Heckler v. Chaney, 470 U.S. 821 (1985).”  In Chaney, the U.S. Supreme Court held that “an agency’s decision not to prosecute or enforce, whether through civil or criminal process, is a decision generally committed to an agency’s absolute discretion,” and as such, is presumed to be unreviewable under the APA.

KV argued in its Opposition to FDA’s Motion to Dismiss that the Agency failed to understand what the case is about.  “It is not about a mere failure to enforce . . . .  This case is about a pair of coordinated public announcements by Defendants, which were intended to, and did, call forth into the market large amounts of unlawful, uncustomized, compounded versions of 17P, which would not have been distributed but for Defendants’ announcements.”  KV also argued that Chaney was not at issue in the case, because the March 2011 statements are a “policy” and the FDC Act provides “law to apply.”  FDA, in the Agency’s Reply Brief, pressed its case that the March 2011 statements fall “squarely within the Chaney presumption against
review.”

After finding that KV alleged sufficient facts to support standing, Judge Jackson addressed the first three counts of KV’s Complaint.  She found them unreviewable, because APA § 701 “precludes judicial review of final agency action, including refusals to act, when review is precluded by statute or ‘committed to agency discretion by law,” and because Chaney is controlling:

Here plaintiffs’ claims in Counts I through III fall squarely within the Chaney presumption of unreviewability.  Just as in Chaney, plaintiffs allege ongoing violations of substantive provisions of the FDCA, and they request that the Court order FDA to take investigatory and enforcement action to stop them.  A review of the extensive prayer for relief demonstrates that this case is fundamentally an effort to get the Court to direct and oversee the FDA’s enforcement activities, and that it cannot do. [(Citation omitted)]

Moreover, wrote Judge Jackson, “[t]he language in the March Statement that animates the plaintiffs – that ‘FDA does not intend to take enforcement action against pharmacies’ – does not constitute an announcement of policy that would differentiate this case from Chaney.”

Addressing Count IV of KV’s Compliant alleging that FDA violated FDC Act § 801(a) by permitting foreign-manufactured active pharmaceutical ingredient to be imported into the United States for compounding into 17P, Judge Jackson found that the Count failed to state a claim:

At the outset, the Court notes that plaintiffs do not point to any reviewable FDA statement of policy that explicitly or implicitly permits unlawful imports, and the complaint contains no non-conclusory allegation that such a policy exists. . . .  [E]ven if the Court were to accept the conclusory assertions in the complaint as supporting the existence of a reviewable policy, Count IV fails to state a claim under [FDC Act § 801(a)] because the complaint does not allege that the policy is illegal. . . .  [T]he complaint is devoid of the factual allegations needed to support the conclusory assertion in Count IV that the shipments contain a substance that “appears” to violate [FDC Act § 505].  Thus, it fails to state a claim that FDA ever violated [FDC Act § 801(a)].

In early August, KV announced that the company filed for Chapter 11 bankruptcy protection.  Accordng to KV, the company “has been unable to realize the full value of [MAKENA] because of a lack of enforcement of the orphan drug marketing exclusivity . . . .”  KV has also sued state Medicaid agencies in Illinois, Georgia, and South Carolina to cover MAKENA.  In early August, KV won the Georgia case (see here).

By Ricardo Carvajal –

A consumer group, Citizens for Health, submitted a citizen petition (Docket No. FDA-2012-P-0904) to FDA asking the agency to “take action to protect the public from the illegal, mislabeled use of high fructose corn syrup (‘HFCS’) that is above 55 percent fructose” and to require disclosure of the amount of fructose in HFCS.  The petition contends that FDA’s GRAS affirmation regulation for HFCS extends only to HFCS that contains 42% or 55% fructose, and that food producers are unlawfully using HFCS with other fructose concentrations (e.g., 90%).  According to the petition, “it is well recognized that fructose in particular has been epidemiologically and clinically linked with obesity and metabolic syndrome.”