By JP Ellison –

Virtually all of the mainstream and trade press outlets have covered the recent Abbott resolution with the U.S. Department of Justice regarding allegations of off-label promotion of Abbott’s drug Depakote.  Undoubtedly, the $1.5B price tag and that coverage have made most readers of this blog familiar with the basic facts of the global resolution which has civil, criminal, and administrative aspects.

Much of Abbott will sound familiar to those who follow off-label investigations, prosecutions, and settlements.  The government alleged — and in connection with a misdemeanor plea to misbranding under the FDC Act, Abbott admitted to — unlawful off-label promotion of its drug (see here and here).  In a civil settlement under the Federal False Claims Act, in which there was no admission of liability, Abbott resolved related claims that it caused false claims to be submitted to government healthcare programs.  As the traditional third leg of this global resolution, Abbott entered into a Corporate Integrity Agreement with the HHS OIG.

Beyond these basic facts, what broader questions or answers are presented by this resolution?  First, it is important to remember that this so-called “(C) plea,” represents an agreement with the government, but not necessarily the final word.  As we know from the Purdue agreement, another high profile case from the Western District of Virginia, the judge (in this case Judge Wilson) may have questions for the parties at the September 21, 2012 sentencing hearing.  As you may recall, in the Purdue case, the judge in that case (Chief Judge Jones) posed a series of written questions to the parties before accepting the plea. 

Second, unlike the Purdue case in which four high level individuals also pled guilty, in the present case, no individual pleas were announced in connection with the Abbott resolution, and the publicly available documents contain standard reservation/limitation language, so there is no indication whether additional charges may be brought.  Given the government’s recent statements regarding prosecuting responsible corporate officers (see here and here), one cannot rule out that possibility, however. 

Third, and in keeping with the issue of enforcement actions against individuals, as was the case with the Purdue case, the resolution of the exclusion issue appears limited to the entities, which raises the question of whether (regardless of any criminal prosecution), high level executives may be the subject of exclusion actions (see our previous post). 

Fourth, the first three questions may be addressed indirectly by the terms of probation imposed in the Abbott plea.  As part of the plea, The CEO of the relevant Abbott entity and the Board of Directors have annual certification obligations.  While it is certainly possible that the government could pursue additional sanctions against individuals in parallel with these obligations, it is also possible that these provisions represent the negotiated resolution of individual accountability in connection with this matter.

Fifth, the terms of the Abbott probation and related requirements for the Abbott “Responsible Entity” to ensure that certain policies and procedures are in place, is a reminder of broad authority of courts—and in connection with negotiated plea agreements — the Department of Justice, to impose terms as conditions of corporate probation.  The Organizational Probation provisions of the Sentencing Guidelines were controversial when first promulgated because they raised questions of whether probation offices could or should have the type of wide-ranging authority contemplated by the Guidelines.  In many resolutions similar to Abbott, forward-looking compliance provisions have largely been contained in corporate integrity agreements with the HHS OIG, not the DOJ plea agreements, although in some respects, the use of corporate monitors, particularly in connection with deferred and non-prosecution agreements, was an attempt to achieve probation-like oversight outside the probation office structure.  If nothing else, the Abbott resolution shows that there is significant flexibility within criminal sentencing framework to address a variety of potential compliance issues.

We will be following this case, both to see how the plea agreement is received by the court as well as to see whether its terms of probation become standard in future settlements.

By Riëtte van Laack –

On May 21, 2012, the FTC posted the 345-page Administrative Law Judge’s ("ALJ’s") Initial Decision in In the Matter of POM Wonderful LLC et al. ("POM") (FTC Docket No. 9344).  The ALJ upheld the FTC’s Complaint insofar as the FTC asserted that POM made deceptive claims in some (but not all) advertisements that its products (100% juice and POMs supplements) would treat, prevent, or reduce the risk of heart disease, prostate cancer, and erectile dysfunction because these claims were not supported by sufficient competent and reliable evidence.

However, the ALJ’s Order is a stunning rejection of the FTC’s theory that POM was legally required to have double-blind, randomized placebo-controlled clinical trials to make the claims that the FTC attacked.  The ALJ’s order would merely bar POM from making certain claims unless POM possesses competent and reliable scientific evidence to support the claim.  As clarified in the Initial Decision, however, this standard is not defined as double-blind, randomized, placebo-controlled clinical studies.  In fact, according to the ALJ:

[for health benefit] claims . . . made in connection with a food, or food-derived product that is safe, and that is not being offered as a substitute for medical treatment, double-blind, randomized, placebo-controlled clinical trials, such as those required by the Food and Drug Administration, are not required.  However, . . . claims that a food or food-derived product treats, prevents or reduces the risk of a disease, . . . competent and reliable evidence must include clinical studies, although not necessarily double-blind, randomized, placebo-controlled clinical trials, that are adequate to show that the product did treat, prevent, or reduce the risk of disease.

The ALJ also rejected the Commission’s attempt to require POM to get prior FDA approval for certain claims.  The ALJ held that the FTC’s proposed requirement that POM would be prohibited from making any disease claim in the future unless the claim had been approved or authorized by FDA “would constitute overreaching.”

Both the FTC Staff which prosecuted this case and POM can seek review of this decision by the five FTC Commissioners.  We expect that both parties will seek that review. We also expect that it will take many months before the FTC Commissioners rule on the appeals.

By Jennifer M. Thomas & John R. Fleder –

Last week, the Federal Trade Commission (“FTC”) announced a $40 million settlement with Skechers USA, Inc. (“Skechers” or “the Company”) to resolve charges that the Company made deceptive and unfounded claims that its Shape-up sneakers would help consumers lose weight, strengthen and tone their buttocks, legs, and abdominal muscles.  The FTC also claimed that Skechers made deceptive claims about its Resistance Runner, Toners, and Tone-ups shoes.  See Complaint 12- 16, Federal Trade Commission v. Skechers USA, Inc., No. 1:12-cv-01214 (N.D. Ohio May 16, 2012).

Like the FTC’s similar settlement with Reebok in 2011, reported here, the Skechers settlement provides “compliance nuggets” that can help all advertisers better understand the FTC’s current policies and priorities.  Importantly, the settlement contains a definition of “adequate and well-controlled human clinical study” that likely represents the FTC’s current understanding of that phrase as applied to weight-loss studies:

a clinical study that is randomized, controlled (including but not limited to controlled for dietary intake if testing for weight loss or a reduction in body fat), blinded to the maximum extent practicable, uses an appropriate measurement tool or tools, and is conducted by persons qualified by training and experience to conduct and measure compliance with such a study.

Stipulated Final Judgment and Order for Permanent Injunction and Other Equitable Relief 3-4, No. 1:12-cv-01214 (N.D. Ohio May 16, 2012).

Further, the settlement reinforces the FTC’s prior view that even multiple clinical studies may not satisfy the substantiation standard unless (1) the study results correlate to claims; (2) the study design and data are reliable; and (3) the individual or entity conducting the study is independent of the advertiser.  The FTC claimed that Skechers characterized two of its Shape-ups studies as “independent case studies,” when in fact they were not independent because they were conducted by a chiropractor — Dr. Gautreau — who was a compensated endorser for Shape-ups, and was married to a Skechers senior vice president of marketing.  Complaint at 7.  The FTC’s complaint called into question the reliability of the studies conducted by Dr. Gautreau, alleging that of the four studies Skechers sponsored in support of its Shape-up claims, one lacked a control group, and data from a second were altered or incomplete such that some participants were falsely reported as having lost weight and/or reduced their body fat percentage when in fact they had gained weight and/or increased their body fat percentage.  Id. at 7-8.  The FTC also alleged that some of the second study’s participants were personally connected to the researchers.  Id.

Finally, with this settlement the FTC continues a pattern of focusing on weight-loss claims and imposing a high standard for substantiation on marketers who make such claims.  Under the terms of its FTC settlement, if Skechers chooses to make weight-loss claims in the future the Company will need two adequate and well-controlled human clinical studies, conducted by different researchers independently of each other, to substantiate those claims.  Stipulated Final Judgment at 5-6.  Only one adequate and controlled human clinical study is required for strengthening claims, but it must be at least six weeks in duration.  Id.

By Michelle L. Butler –

Abbott Laboratories (“Abbott”) recently submitted a citizen petition to FDA regarding biosimilars under the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).  Specifically, the citizen petition requests that FDA not accept for filing, file, approve, or discuss with any company any application or any investigational new drug application (“IND”) for any biosimilar that cites as its reference product any product for which the biologics license application (“BLA”) was submitted to FDA prior to the date on which the BPCIA was enacted.  The citizen petition focuses on Abbott’s approved BLA for Humira® (adalimumab), but it requests the same treatment for all BLAs submitted to FDA prior to the March 23, 2010 enactment date of the BPCIA as part of the Affordable Care Act.

The grounds for the citizen petition are that approving a biosimilar that relies on a reference product approved under a BLA pursuant to section 351(a) of the Public Health Service Act (“PHS Act”) would constitute a taking under the Fifth Amendment to the U.S. Constitution that requires just compensation.  The citizen petition argues that the Constitutional issue raised is timely and urgent given the fact FDA has already received numerous requests for pre-IND meetings for proposed biosimilar products.  Petition at 7.

Abbott’s argument in the citizen petition is as follows:

• The information contained in a BLA is trade secret information under both federal and state law.

• Abbott has invested significant resources in developing Humira and obtaining approval of the Humira BLA and has taken care to protect the trade secret information contained in the Humira BLA.

• Until the passage of the BPCIA, the PHS Act and FDA’s implementing regulations, as well as repeated statements by FDA and FDA’s practice, made it clear that information contained in a BLA could not be used for the benefit of competitors and that FDA lacked authority to approve a follow-on product that relied on an approved BLA. 

• Given the considerable investment Abbott made in its BLA and the statutory scheme as implemented by FDA, Abbott has a reasonable, investment-backed expectation that its trade secret information would be protected.

• By its nature, the abbreviated pathway for approval of a biosimilar would use the trade secret information contained in a BLA.  This is the case despite FDA’s statements in the 505(b)(2) context that it relies on the “findings” of safety and effectiveness and does not directly use the trade secret information. 

• Use of the information in the Humira BLA to approve a biosimilar would upset Abbott’s reasonable, investment-backed expectation and therefore effect a taking.

• A taking without just compensation violates the Fifth Amendment. 

• FDA should not interpret the statute in a way that would result in the imposition of large liabilities on the United States and should therefore apply the BPCIA prospectively only.

The citizen petition discusses in some detail the jurisprudence under the takings clause of the Fifth Amendment, describing Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984), as holding that “when an applicant submits trade secret data as part of a license application, at a time when the government has provided assurances through law, regulation and/or agency guidance that the data will not be used by the agency to benefit a competitor of that applicant, later ‘consider[ation of] those data [by the agency] in evaluating the application of a subsequent applicant’ would frustrate the applicant’s ‘reasonable investment-backed expectation’ that the data would, instead, remain inviolate.”  Petition at 11 (quoting Monsanto, 467 U.S. at 1011).  The citizen petition further states that “[t]he principles set out in Monsanto establish that FDA would take property, and the government would be required to pay just compensation, were FDA to use trade secrets, submitted in a reference product BLA before the BPCIA’s enactment, in the course of evaluating and approving a biosimilar application.”  Petition at 12.  In order to avoid the Constitutional issue, FDA should grant the relief requested by Abbott and not accept for filing, file, approve, discuss, or otherwise take any action with regard to any IND or BLA for a product for which the reference product BLA was submitted prior to March 23, 2010.

One thing the citizen petition does not address is whether the statutory scheme provided in the BPCIA, including 12-year exclusivity for reference products, provides the requisite just compensation to keep the bargain from running afoul of the takings clause.  Interestingly, the citizen petition incorporates arguments raised by Constitutional law scholar Richard A. Epstein in a paper published last year.  Abbott supported Mr. Epstein's research on the project.

By Riëtte van Laack –

Last week, the Food Safety and Inspection Service (“FSIS”) issued a proposal to lift the general prohibition against the use of sodium benzoate, benzoic acid, and sodium propionate in meat and poultry.  Historically, the use of these substances in meat and poultry has been prohibited because they might conceal damage or inferiority or make a meat or poultry product appear better or of greater value.  See 9 C.F.R. § 424.23.  Notwithstanding the general prohibition, FSIS can allow specific uses of the substances in meat and poultry, but the agency must do so through rulemaking.

In 2007, Kraft Foods petitioned FSIS to amend the regulations and allow the use of certain combinations of sodium benzoate and sodium propionate, and other already permitted substances as antimicrobials in certain ready-to-eat (“RTE”) meat and poultry products.  Subsequently, in 2010, Kemin Food Technologies petitioned FSIS to permit the use of the same substances (but in different combinations) in various RTE meat and poultry products.  Both Petitions included data regarding the suitability of the formulations as antimicrobial (specifically as anti-listerial) agents and data regarding the effect of the substances on the shelf life and other quality parameters.  In support of safety, the Petitions referred to FDA’s GRAS affirmation regulations, 21 C.F.R. §§ 184.1021, 184.1733, and 184.1784.  However, those GRAS affirmation regulations were promulgated in 1973 and 1979, a time period during which use of these substances was generally prohibited in meat and poultry.

FSIS states that it concluded, based on data included in the Petitions, that the proposed uses of sodium benzoate, benzoic acid, and sodium propionate are suitable, i.e., do not mask or conceal damage or inferiority and do not extend shelf life of the RTE meat and poultry products.  However, instead of engaging in rulemaking to allow the specific uses that are the subject of the Petitions, FSIS proposes to lift the general prohibition on the use of these substances altogether.  By lifting the general prohibition rather than amending the regulations to allow specific uses, FSIS avoids future rulemaking regarding additional uses of these substances.  As explained in the proposal, under a 2000 Memorandum of Understanding (“MOU”), FSIS and FDA collaborate on the review of submissions each agency receives regarding the use of food ingredients used in the production of meat or poultry products.  Under this MOU, FDA evaluates safety of the intended use and FSIS evaluates suitability of the intended use.  When FSIS concludes that an ingredient is safe and suitable for its intended use, FSIS includes the ingredient in FSIS Directive 7120.1. This determination does not involve FSIS rule making. 

Comments are due by July 6, 2012.

REMINDER: HP&M is hosting a webinar, Garbage Runs, Fake Identities, and Surprise Home Visits; Strategies to Deal With FDA's Nontraditional Investigative Tools, on Wednesday, June 20, 2012 from 12:30 – 2:00 p.m. ET.  Click here to register.

By Kurt R. Karst –      

A lot has happened since we last updated our Generic Drug Labeling Carve-Out Citizen Petition Scorecard in October 2011.  At that time, AstraZeneca had only recently submitted two citizen petitions concerning quetiapine fumarate (SEROQUEL and SEROQUEL XR).  Petitions, FDA decisions, lawsuits, and court decisions have abounded since.  So we thought it was high time for us to update our popular scorecard and add a few more bells and whistles, such as FDC Act § 505(j)(10) Citizen Petitions and Approval Precedents (see our previous post here for background), and, given the increasing frequency with which FDA issues petition decisions without comment, a section on Non-Response Denials of Labeling Carve-Out Citizen Petitions.  But before you jump down this post to our updated scorecard, let’s take a minute to take stock of the last 7+ months . . . .

FDA has responded to a several labeling carve-out petitions over the last few months.  Some of the responses have been no comment denials, including responses to petitions on generic SEROQUEL and SEROQUEL XR concerning the scope and applicability of 3-year exclusivity.  (In that case, FDA ultimately issued a letter decision explaining how the Agency handled the exclusivity vis-à-vis generics.)  And just last week, FDA denied without comment another petition concerning generic CRESTOR (rosuvastatin calcium) Tablets.  In that response, FDA said that given the status of patent infringement litigation “it is unnecessary for FDA to analyze the precise contours of AstraZeneca’s 3-year exclusivity and its consequences, if any, for the labeling of proposed [ANDA and 505(b)(2) products] at this time.” 

FDA has also issued petition decisions providing the Agency’s initial interpretations of two relatively new provisions of the FDC Act.  First, in denying a petition concerning generic DORYX (doxycycline hyclate) Delayed-Release Tablets, FDA interpreted FDC Act § 505(j)(10), which was added to the statute by Sec. 10609 of the Affordable Care Act (the so-called “generic loophole” provision).  Second, in denying a petition concerning generic VANCOCIN (Vancomycin HCl) Capsules, FDA interpreted the availability of 3-year exclusivity for an “old antibiotic” under FDC Act § 505(v) as added by the 2008 QI Act (see our previous post here). 

FDA’s petition decisions have also ended up in court.  Both before and after approving generic versions of SEROQUEL, AstraZeneca sued FDA (see our previous posts here and here).  The U.S. District Court for the District of Columbia denied AstraZeneca’s Motion for Temporary Restraining Order seeking to vacate FDA’s ANDA approval decisions and to enjoin the future approvals.  On April 11, 2012, FDA filed a Motion to Dismiss the case.  FDA was also sued after approving generic VANCOCIN and denying ViroPharma’s citizen petition.  The D.C. District Court promptly denied ViroPharma’s Motion for a Temporary Restraining Order and/or Preliminary Injunction, and in doing so deferred to FDA’s interpretation of the QI Act (among other things).

Generic Drug Labeling Carve-Out Citizen Petition Scorecard

FDA Citizen Petition Responses Permitting a Labeling Carve-Out

• FDA Response, Docket Nos. 2001P-0495, 2002P-0191, FDA-2002-P-0003 (June 11, 2002) – ULTRAM (tramadol HCl)
• FDA Response, Docket Nos. 2001P-0495/PRC, 2002P-0191/PRC, FDA-2002-P-0003/PRC (Mar. 31, 2003) – ULTRAM (tramadol HCl)
• FDA Response, Docket No. FDA-2003-P-0074 (Apr. 6, 2004) – REBETOL (ribavirin)
• FDA Response, Docket No. FDA-2005-P-0368 (Dec. 1, 2006) – OXANDRIN (oxandrolone)
• FDA Response, Docket No. FDA-2006-P-0274 (Mar. 13, 2008) – ETHYOL (amifostine)
• FDA Response, Docket No. FDA-2007-P-0169 (Apr. 25, 2008) – MARINOL (dronabinol)
• FDA Response, Docket No. FDA-2008-P-0304 (June 18, 2008) – ALTACE (ramipril)
• FDA Response, Docket No. FDA-2008-P-0069 (July 28, 2008) – CAMPTOSAR (irinotecan HCl)
• FDA Response, Docket No. FDA-2006-P-0073 (Nov. 18, 2008) – PULMICORT Respules (budesonide inhalation suspension)
• FDA Response, Docket Nos. FDA-2008-P-0343 & FDA-2008-P-0411 (Dec. 4, 2008) – PRANDIN (repaglinide)
• FDA Response, Docket No. FDA-2008-P-0343/PRC and PSA & FDA-2008-P-0411 (June 16, 2009) – PRANDIN (repaglinide)
• FDA Response, Docket No. FDA-2009-P-0411 – ACTOS (pioglitazone HCl) & ACTOPLUS MET (March 15, 2010) (pioglitazone HCl; metformin HCl)
• FDA Response, Docket No. FDA-2009-P-0601 (June 17, 2010) – NAROPIN (ropivacaine HCl monohydrate)
• FDA Response, Docket No. FDA-2010-P-0087 (July 30, 2010) – LYRICA (pregabalin) 
• FDA Response, Docket No. FDA-2010-P-0545 (Feb. 24, 2011) – XYZAL (levocetirizine dihydrochloride)
• FDA Response, Docket No. FDA-2011-P-0128 (May 11, 2011) – XIBROM/BROMDAY (bromfenac)
• FDA Response, Docket No. FDA-2011-P-0702 (Feb. 8, 2012) – DORYX (doxycycline hyclate)
• FDA Letter Decision, Related to Docket Nos. FDA-2011-P-0662 & FDA-2011-P-0663 (Mar. 27, 2012) – SEROQUEL (quetiapine fumarate)
• FDA Response, Docket No. FDA-2006-P-0007 (Apr. 9, 2012) – VANCOCIN (Vancomycin HCl) Capsules

FDA Citizen Petition Responses Not Permitting a Labeling Carve-Out

• FDA Response, Docket No. FDA-2003-P-0002 (Sept. 20, 2004) – RAPAMUNE (sirolimus)
• FDA Response, Docket No. FDA-2010-P-0614 (May 25, 2011) – COLCRYS (colchicine)

Pending Labeling Carve-Out Citizen Petitions

• Docket No. FDA-2007-P-0294 – ACTOS (pioglitazone)
• Docket No. FDA-2007-P-0113 – THALOMID (thalidomide)
• Docket No. FDA-2009-P-0581 – BAYTRIL (enrofloxacin) (Animal Drug)
• Docket No. FDA-2009-P-0597 – Fluticasone Propionate and/or Salmeterol Xinafoate Products
• Docket No. FDA-2010-P-0403 – VAGIFEM (estradiol)
• Docket No. FDA-2011-P-0482 – VAGIFEM (estradiol)  

Non-Response Denials of Labeling Carve-Out Citizen Petitions

• FDA Response, Docket No. FDA-2011-P-0662 (Mar. 7, 2012) – SEROQUEL (quetiapine fumarate)
• FDA Response, Docket No. FDA-2011-P-0663 (Mar. 7, 2012) – SEROQUEL XR (quetiapine fumarate) 
• FDA Response, Docket No. FDA-2011-P-0823 (May 11, 2012) – CRESTOR (rosuvastatin calcium)

BPCA Section 11 Pediatric Labeling Citizen Petitions

• FDA Response, Docket No. FDA-2001-P-0053 (January 24, 2002) – BPCA Implementation
• FDA Response, Docket No. FDA-2002-P-0289 (May 21, 2003) – ALPHAGAN (brimonidine)
• FDA Response, Docket No. FDA-2010-P-0545 (February 24, 2011) – XYZAL (levocetirizine dihydrochloride) 

FDC Act § 505(j)(10) Citizen Petitions and Approval Precedents

• FDA Response, Docket No. FDA-2011-P-0702 (Feb. 8, 2012) – DORYX (doxycycline hyclate) Delayed-Release Tablets
• ANDA No. 076786, Donepezil Hydrochloride Tablets, 5 mg and 10 mg
• ANDA No. 078388, Donepezil Hydrochloride Orally-Disintegrating Tablets, 5 mg, and 10 mg
• ANDA No. 077431, Exemestane Tablets, 25 mg
• ANDA No. 076361, Levofloxacin Tablets, 250 mg, 500 mg, and 750 mg
• ANDA No. 077179, Amlodipine besylate and Benazepril HCl Capsules, 5 mg (base)/40 mg and 10 mg (base)/40 mg

Moot/Withdrawn/“Dead” Labeling Carve-Out Citizen Petitions

• Docket Nos. FDA-2004-P-0426 & FDA-2003-P-0081; FDA Letter Decision – SKELAXIN (metaxalone) (see our previous post here)
• Docket No. FDA-2001-P-0445 – NEURONTIN (gabapentin) Capsules
• Docket No. FDA-2005-P-0368 (Petition for Reconsideration; Dec. 5, 2006) – OXANDRIN (oxandrolone)
• Docket No. 1997P-0178 – TORADOL (ketorolac tromethamine)

By Riëtte van Laack –

On May 8, 2012, the Food Safety and Inspection Service (“FSIS”) published three sets of regulations mandated by the 2008 Farm Bill: (1) regulations requiring that meat and poultry plants promptly (within 24 hrs) notify FSIS that a contaminated or misbranded product has been released into commerce; (2) regulations requiring that meat and poultry plants prepare written recall procedures; and (3) regulations that require that plants document the mandatory annual reassessment of their HACCP plans, and the reason for actions taken pursuant to that reassessment.  The final regulations are similar to the proposed regulations published in 2010 (see our previous post here). 

Although the requirement to notify FSIS of the release into commerce of a contaminated product resembles the reporting duty under the Reportable Food Registry for foods under FDA jurisdiction, FSIS’s regulation is broader.  The reporting duty applies to any violation, including misbranding, and is not limited to only those instances that involve a reasonable probability of serious adverse health consequences or death.  Reporting, however, can be done by a phone call, e-mail, fax or other communication method.

Under the new regulations, any new meat or poultry plant must develop written recall procedures in order to receive a Federal Grant of Inspection.  The compliance date for already existing facilities depends on the size of the plant.  Plants with 500 or more employees have six months to develop their written recall procedures and plants with less than 500 employees have 12 months to develop such procedures.  FSIS intends to make model recall procedures available.

Current regulations require that meat and poultry plants reassess their HACCP plans at least once a year.  The new requirement to prepare written documentation about this reassessment is added to aid FSIS verification that plants comply with the regulations.  Moreover, FSIS anticipates that this documentation will aid in identifying emerging issues and provide assurance that plants address emerging hazards that the Agency identifies during the year.

The requirements for prompt notification and written recall procedures are expected to help facilitate the prompt removal of unsafe meat and poultry products from commerce.  

By Ricardo Carvajal –

April was a busy month for nanotechnology at FDA.  The agency issued two draft guidance documents worthy of close examination for those with an interest in the use of emerging technologies, including nanotechnology, in the cosmetic and food industries.  Further, FDA denied a citizen petition asking the agency to stop the marketing of sunscreen drug products that contain engineered nanoparticles of zinc oxide and titanium dioxide.

The first draft guidance document, Safety of Nanomaterials in Cosmetic Products, begins by emphasizing manufacturers’ responsibility to substantiate the safety of their products prior to marketing.  It then notes that different properties of materials might emerge at the nanoscale such that standard safety tests “may not be fully applicable,” and that such tests “may need to be modified or new methods developed” to address effects on toxicity and functionality.  The remainder of the guidance discusses nanomaterial characterization and toxicology considerations in some detail, and encourages manufacturers who wish to use nanomaterials in cosmetics to consult with FDA.

The second draft guidance document, Assessing the Effects of Significant Manufacturing Process Changes, Including Emerging Technologies, on the Safety and Regulatory Status of Food Ingredients and Food Contact Substances, Including Food Ingredients that are Color Additives, is not strictly limited to nanotechnology.  However, it is clear that changes in manufacturing processes that arise as the result of the use of nanotechnology are a principal concern.  As with the cosmetics guidance discussed above, the food guidance begins by emphasizing manufacturers’ responsibility to ensure that their products are safe and lawful.  It then discusses the legal framework for food and color additives, as well as FDA’s approach to assessing the safety of food substances.  Finally, it presents considerations and recommendations for assessing the potential impacts of significant manufacturing changes (e.g., changes in starting materials, catalysts, or manufacturing technologies) on safety and regulatory status.

FDA cites both of the above guidance documents in its partial denial of a citizen petition submitted by the International Center for Technology Assessment ("ICTA") in May 2006.  That petition, which preceded the creation of FDA’s Nanotechnology Task Force, asked the agency to create a new regulatory framework specific to nanoscale particles, and for product recalls and a development moratorium for sunscreen drug products that contain engineered nanoparticles of zinc oxide and titanium dioxide.  FDA’s response to the citizen petition lays out a thorough defense of the agency’s current approach to nanotechnology – including the agency’s position that adoption of a nanotechnology-specific regulatory framework currently is not appropriate “as a matter of science and policy.”

Although FDA cites progress in its response to the challenges posed by nanotechnology, the latest report on the National Nanotechnology Initiative ("NNI") by the President’s Council of Advisors on Science and Technology ("PCAST") concludes that “individual agency contributions” to the NNI strategic plan “lack the cohesion of an overarching framework.”  Currently, FDA is one of only a few agencies that have a strategic research plan for nanotechnology.  According to PCAST, “[t]he process for producing the strategic plan is still agency-driven, which could limit the broader NNI vision to those objectives that agency officials feel are sufficiently within reach.  Also lacking is a clear connection between the goals and objectives of the NNI strategic plan and those of individual agencies.”  PCAST makes numerous recommendations in relation to strategic planning, program management, metrics to track progress, and efforts to address environment, health, and safety risks.  As noted in the PCAST report, research and development in nanotechnology continue to be of great interest to governments and industries worldwide.

By Jennifer D. Newberger –

On May 7, 2012, Representative Lois Capps introduced the “Sentinel Assurance for Effective Devices Act of 2012” (H.R. 5341), many elements of which were also included in the House of Representatives Energy and Commerce Health Subcommittee user fee bill (see here).  The primary purpose of the bill seems intended to allow FDA to more regularly collect, review, and trend adverse event data for medical devices.  The bill accomplishes this in two ways:  First, it would amend the Federal Food, Drug, and Cosmetic Act (“FDC Act”) to include medical devices in the postmarket risk analysis and identification system currently applicable only to drugs.  Second, it would require FDA to issue a final rule regarding a unique device identification (“UDI”) system by December 31, 2012.

With regard to the first purpose, the bill would amend section 505(k)(3)(C) of the FDC Act to expand the postmarket risk identification and analysis system established under that section to include and apply to devices.  This would require FDA to establish and maintain procedures for risk identification and analysis based on electronic health data, and to provide for “active adverse event surveillance” using federal health-related electronic data and private sector health-related electronic data, such as medical device utilization data, health insurance claims data, and procedure and device registries.  It would also require FDA to identify trends and patterns regarding the data accessed by the system, and to create reports concerning adverse event trends, patterns, incidence, and prevalence.  The bill states that FDA should give priority to postmarket risk identification and analysis with respect to class II and class III devices.

The second part of the rule is to encourage FDA to finally issue in final form the UDI rule it was mandated to promulgate in the Food and Drug Administration Amendments Act of 2007.  When implemented, (1) the label of a device will bear a unique identifier, unless an alternative location is specified by FDA or unless an exception is made for a particular device or group of devices; (2) the unique identifier will be able to identify the device through distribution and use; and (3) the unique identifier will include the lot or serial number if specified by FDA.  These features are intended to make devices easier to track for purposes of adverse event and recall tacking.  The Sentinel Assurance Act would require FDA to implement the UDI system for class III devices within one year after the date final regulations are issued; within three years for implantable, life-sustaining, and life-supporting devices; and within five years for all other devices.

This bill is undoubtedly one more attempt to obtain information about the safety (or risk) of medical devices.  Notably absent, however, is what FDA would do with the data obtained.  Simply gathering data without clear plans for how to use the information may impose resource burdens without commensurate benefits. Presumably it would be up to FDA to determine how best to use this information.  Hopefully, this determination will include input from stakeholders to assure it is appropriately and meaningfully used.

Hyman, Phelps & McNamara P.C. invites you to register for our webinar, “Garbage Runs, Fake Identities, and Surprise Home Visits: Strategies to Deal With FDA's Nontraditional Investigative Tools,” which is scheduled to take place on Wednesday, June 20, 2012 from 12:30 – 2:00 p.m. ET. 

From routine on-site inspection to rummaging through trash bins outside your facility, FDA and other government agents have shown increasing willingness to obtain information outside of just conducting regulatory inspections of company facilities.  This webinar will provide an overview of popular, and not so well-known, tactics that the government uses, followed by a discussion of strategies to help your company to prepare for, and if necessary, respond to them.  Participants will gain an understanding of how to deal with the government's demands for information, directed to the company, its current employees, and even former employees, while protecting the company's interests.

The webinar will feature HP&M attorneys Doug Farquhar, John Fleder, and Anne Walsh, who bring the full perspective of experience in government enforcement, including a former Assistant U.S. Attorney, the former Director of DOJ's Office of Consumer Litigation, and a former Associate Chief Counsel at FDA.  They will:

• Share insights from their experiences in the government; 
• Describe trends on government enforcement efforts using these investigative techniques; 
• Analyze publicly disclosed cases; 
• Provide strategies for preparing your company before the government even begins its scrutiny, and responding when the government arrives; and
• Answer participants' questions during the webinar

You can register for this free webinar here.  Please contact Lisa Harrington (lharrington@hpm.com) with any questions.

By Kurt R. Karst –      

Two new reports were published this week analyzing FDA’s performance under the Prescription Drug User Fee Act (“PDUFA”).  The reports – one from the California Health Institute (“CHI”) and The Boston Consulting Group (“BCG’), and another from the Tufts Center for the Study of Drug Development (“CSDD”) – come on the heels of a report from the Government Accountability Office saying that FDA has met most of the Agency’s PDUFA performance goals for priority and standard original NDA and BLA submissions and for priority and standard original efficacy supplements to approved NDAs and BLAs.  The reports also surfaced just a day before the House Energy and Commerce Committee takes up consideration of legislation (H.R. 5651) to ensure the continuation of existing FDA user fee programs for drugs and devices, to create new user free prograns for biosimilars and generic drugs, and that includes a host of other provisions including drug and device regulatory reforms (see here).  (The U.S. Senate’s version of the bill is S. 2516 – the FDA Safety and Innovation Act.) 

The CHI/BCG report, titled “Managing Priorities: Therapeutic Area Variation in FDA Drug Regulation,” updates a February 2011 CHI/BCG report, titled “Competitiveness and Regulation: The FDA and the Future of America’s Biomedical Industry,” that examined FDA’s drug and biologic approval performance over the past several years.  The new report also presents new data on FDA performance differences based on therapeutic area.

According to the CHI/BCG analysis, “[i]n 2009, the average drug approval time marginally improved from the PDUFA III period (by 1.3 percent) to 14.5 months.”  Although a review of submissions through Fiscal Year 2011 “suggests improvement in approval times,” according to the report, “[l]ooking at new drugs submitted to the Agency in 2008 . . . shows approval timelines getting longer; 45 percent of those submissions remained in process more than a year before the Agency took regulatory action.”

Moving on to therapeutic area variations in FDA performance, the CHI/BCG report says that while oncology, infectious disease, and orphan diseases are “bright spots,” there are significant review time deviations depending on a product’s therapeutic area.  For example, “between 2000 and 2011, oncology and antiinfective drugs . . . experienced the fastest reviews, on the order of 10-15 months,” while “[f]or other categories – cardiovascular, central nervous system, gastro-intestinal, respiratory, etc. – average review times stretched from 20 to 30 months” (see the figure below from the report). 

“No single factor explains differences in performance among therapeutic areas,” says the report, but rather, a confluence of factors.  “Some fields may be scientifically more complicated, with fewer biomarkers or with poorly understood mechanisms of action for novel drugs.”  In addition, regulatory pathways in the areas of diabetes, obesity, and cardiovascular disease, which “exert enormous, and growing damage on health, . . . are fraught with uncertainty.”  This leads the report authors to recognize that “PDUFA V is essential to provide the Agency the core resources it needs to regulate drugs,” but that more work is needed to “[bring] drug approvals into better alignment with public health needs [with] continuous improvements in management, infused with science and common sense.”

The CSDD report, titled “User fee era in U.S. currently poses mixed regulatory burden for sponsors,” shows the results of a top-tier industry working group that was asked to consider two questions in light of the various regulatory enhancements that were made as part of the 2007 FDA Amendments Act (“FDAAA”):  “1) Has there been a detectable increase in the regulatory burden pre-FDAAA vs. post-FDAAA? and 2) What specific requirements/actions in the approval process are particularly problematic?”  According to the Tufts CSDD Impact Report, among other things:

• The regulatory burden from the pre- to post-FDAAA period largely decreased for New Molecular entity (“NME”) NDA and new BLA approvals in the number of Complete Response letters, share of multi-cycle approvals, average number of FDA-sponsor meetings, number of countries in which product was launched, and increase in annual regulatory budget.
• The regulatory burden from the pre- to post-FDAAA period increased for supplemental NDA and BLA approvals in the number of Complete Response letters and regulatory outsourcing. 
• The difference between optimal and sub-optimal sponsor experiences with the FDA review process was less for NME NDAs and new BLAs than for NDA and BLA supplements.  FDA information requests and first cycle actions were shown to have the most consistent impact on a sponsor’s regulatory experience. 

Christopher-Paul Milne, an associate director at Tufts CSDD and who conducted the assessment, commented in a press release that “[w]hile user fees have helped to streamline and speed up the drug review and approval process in the Untied States over the last two decades, certain requirements on developers remain especially problematic . . . PDUFA V provides an opportunity to resolve some of these issues and concerns.”

UPDATE:

• On May 10th, the House Energy and Commerce Committee passed H.R. 5651 by a roll call vote of 46-0.  An amendment submitted by Rep. Joe Barton (R-TX) to reduce the amount of PDUFA, MDUFA, GDUFA, and BSUFA fees by 20% if FDA does not make “adequate progress” toward achieving the agreed upon application review goals was withdrawn.

By Kurt R. Karst –      

Following the recent decision by the U.S. Court of Appeals for the First Circuit in Bartlett v. Mutual Pharmaceutical Co., which our friends over at the Drug and Device Law Blog commented on as making no sense (“while a simple warning claim involving a generic drug is indisputably preempted under PLIVA, Inc. v. Mensing, 131 S. Ct. 2567 (2011), a claim much more fundamentally in conflict with FDA approval of generic drugs – that state tort law can impose liability for not removing an FDA-approved product off the market entirely – supposedly is not”), we’re happy to report on another decision – a state court decision – that turned out the other way and that provides yet another rebuke of the so-called Reference Listed Drug (“RLD”) theory of liability. 

As we’ve previously discussed (here, here, and here), the RLD theory of liability goes something like this: because FDA’s regulations impose new or additional responsibilities on an ANDA sponsor whose drug product is unilaterally designated by FDA as an RLD in the Orange Book when the brand-name NDA RLD is no longer marketed, the U.S. Supreme Court’s pro-preemption Mensing decision is inapplicable and a court should instead employ the preemption analysis utilized in the Court’s decision in Wyeth v. Levine, 555 U.S. 555 (2009), concerning NDA’d drug products.  Every court (federal and state) that has thus far been asked to accept the RLD theory of liability has refused to do so (see here).  Invariably, the courts have said that RLD status of an ANDA’d drug product (even in the case of a drug product approved under an ANDA pursuant to an approved suitability petition) does not convert a generic drug manufacturer into a brand-name drug manufacturer with the right to use FDA’s Changes Being Effected (“CBE”) process to change drug labeling.

The most recent rejection of the RLD theory of liability comes out of the Superior Court of New Jersey in In re Reglan Litigation, Case No. 289 (N.J. Super. Ct. May 4, 2011), and involes the familiar drug metoclopramide (in tablet, syrup, and injectable dosage forms).  Plaintiffs sued several generic drug manufacturers, including Morton Grove Pharmaceuticals, Inc. (“MGP”) whose ANDA’d metoclopramide syrup drug product is identified in FDA’s Orange Book as an RLD. 

Plaintiffs’ Second Master Long Form Complaint pled several causes of action (e.g., defective design, failure to warn, negligence, negligence per se, fraud, misrepresentation and suppression, constructive fraud, breach of express and implied warranties, unfair and deceptive trade practices, and unjust enrichment) that the court (Judge Carol E. Higbee) said in its decision granting Defendants’ Motion to Dismiss are “all based on generic manufacturers’ alleged failure to provide adequate information or warnings, and thus are preempted under Mensing.”  Only to the extent that any generic drug manufacturer failed to update its drug product labeling to be the same as the brand-name label would such manufacturer be excluded from preemption, as such “absense of ‘sameness’ runs afoul of the preemption ruling in Mensing.” 

Plaintiffs attempted to argue around Mensing with various theories, including that the FDA Amendments Act of 2007 (“FDAAA”) altered the preemption analysis, that federal law permits generic drug manufacturers to disseminate “Dear Doctor Letters” or otherwise communicate warnings to the medical community thereby making compliance with both state and federal laws possible, and that the generic drug manufacturers could have simultaneously complied with federal and state law duties by suspending product sales.  Judge Higbee rejected each theory, stating, for example, that:

While it is true that the Supreme Court in Mensing considered federal statutes and regulations that were in place before [FDAAA] took effect, it is clear that the amendments do not change or eliminate any ofthose laws or regulations which control this decision.  The “sameness” requirement remains in full effect.  The generic manufacturers’ inability to use the CBE process to unilaterally change their warnings also continues. . . .  The new changes in FDAAA do not eliminate or alter the conflict the Supreme Court described in Mensing.  As a result, claims based on any such duty are preempted post-FDAAA to the same extent as they were pre-FDAAA. . . . 

Plaintiffs’ “failure to suspend sales” argument is a solution that goes beyond the duties and remedies that have ever been applied in state courts.  The duty has always been to prove that the product was defective, not that it should have been withdrawn from the market.  Tort law remedies allow compensation but never an order to stop selling the product.

In a separate decision directed to Plaintiffs’ RLD theory of liability arguments against MGP, Judge Higbee said that there is insufficient authority for Plaintiffs’ argument that FDA’s unilateral designation of an ANDA’d drug product as an RLD means that the generic drug manufacturer can strengthen its label independently through the CBE process: 

Plaintiffs fail to cite to any case, statute, or regulation that supports the argument that the product labeling can be unilaterally altered without FDA’s prior approval simply because the generic manufacturer has been designated as an RLD.  It is very difficult to conclude that the FDA’s unilateral designation is sufficient to automatically transform [MGP], an ANDA holder, into an NDA holder.  In fact, the FDA regulations are clear in putting the agency in charge when no NDA holder is in the market. . . .  At this point in time, this court refrains from imposing additional obligations over and above what the regulations have indicated.  The court concludes that Mensing’s preemptive impact on plaintiffs’ claims against [MGP] is not diminished by the fact that [MGP] has been designated as an RLD, because this designation does not turn it into a brandname manufacturer. 

Accordingly, the court granted MGP’s Motion to Dismiss. 

By Kurt R. Karst –     

On Tuesday, May 8th, the House Energy and Commerce Committee, Subcommittee on Health is scheduled to hold a markup session to consider draft legislation to ensure the continuation of existing FDA user fee programs (i.e., PDUFA and MDUFA) and the creation of new ones (i.e., GDUFA and BsUFA).  In addition to the UFAs (user fee acts), the draft legislation includes a host other provisions, including provisions on FDA administrative reforms, drug shortages, medical device regulatory reforms, and drug regulatory reforms.  (A background memo on the nearly 300-page bill, which includes a section-by-section overview, is available here.)  While all of the provisions in the draft bill are of interest, two sections concerning citizen petitions caught our attention.

Section 863 of the draft Energy and Commerce UFA bill would amend FDC Act § 505(q) to shorten the timeframe FDA has to respond to certain citizen petitions.  FDC Act § 505(q), which was added to the law as part of the FDA amendments Act of 2007, provides that FDA shall not delay approval of a pending ANDA or 505(b)(2) application as a result of a citizen petition submitted to the Agency pursuant to 21 C.F.R. § 10.30 (citizen petition) or § 10.35 (petition for stay of action), unless FDA “determines, upon reviewing the petition, that a delay is necessary to protect the public health.”  Under current FDC Act § 505(q), “[FDA] shall take final agency action on a petition not later than 180 days after the date on which the petition is submitted.”  FDA may not extend the 180-day period “for any reason,” including consent of the petitioner, and may summarily deny a petition submitted with the primary purpose of delaying ANDA or 505(b)(2) application approval. 

FDA has only missed the 180-day timeframe twice between FYs 2008 and 2010, according to the Agency’s most recent annual report (see here) and our popular FDC Act § 505(q) Citizen Petition Tracker.  The draft Energy and Commerce UFA bill would shave 30 days off of FDA’s response timeframe, from 180 days to 150 days.  Is FDA a victim of its own success?

A second provision in the draft UFA bill concerning citizen petitions would establish a timeframe for FDA to respond to requests for an Agency determination of the reasons for a voluntary withdrawal of a listed drug. 

Under FDC Act § 505(j)(4)(I), FDA may refuse to approve an ANDA if the Agency determines that the Reference Listed Drug (“RLD”) was withdrawn from sale for reasons of safety or effectiveness.  In addition, FDA can withdraw (or suspend) approval of an ANDA if the RLD is withdrawn from sale for reasons of safety or effectiveness (FDC Act § 505(j)(6)).  In that case, the RLD is removed from the Orange Book (FDC Act § 505(j)(7)(C)).

As FDA acknowledged in the preamble to the Agency’s July 1989 proposed regulations implementing the 1984 Hatch-Waxman Amendments, the law does not “specify procedures to be followed in determining whether a drug that is voluntarily withdrawn from sale by its manufacturer is withdrawn for safety or effectiveness reasons” (54 Fed. Reg. 28,872, 28,907 (July 10, 1989)).  As such, FDA took it upon itself to create such a procedure.

FDA’s interpretation of the Hatch-Waxman Amendments is embodied in the Agency’s  regulations at 21 C.F.R. § 314.161, which state, in relevant part:

(a) A determination whether a listed drug that has been voluntarily withdrawn from sale was withdrawn for safety or effectiveness reasons may be made by the agency at any time after the drug has been voluntarily withdrawn from sale, but must be made:

(1) Prior to approving an abbreviated new drug application that refers to the listed drug;

(2) Whenever a listed drug is voluntarily withdrawn from sale and abbreviated new drug applications that referred to the listed drug have been approved; and

(3) When a person petitions for such a determination under 10.25(a) and 10.30 of this chapter.

(b) Any person may petition under 10.25(a) and 10.30 of this chapter for a determination whether a listed drug has been voluntarily withdrawn for safety or effectiveness reasons.  Any such petition must contain all evidence available to the petitioner concerning the reason that the drug is withdrawn from sale.

FDA’s timeframe for responding to withdrawal petitions has been all over the board.  In some cases FDA has responded within months (e.g., Docket No. FDA-2011-P-0128), while in other cases it has taken FDA more than three years to respond (e.g., Docket No. FDA-2008-P-0527).  One likely explanation for FDA’s different response timeframes is that FDA only responds to such a petition when it becomes necessary to do so; that is, when the Agency is poised to make an approval decision. 

Section 364 of the draft Energy and Commerce UFA bill would amend the FDC Act to add new § 505(w) (“Deadline For Determination On Certain Petitions”), which would state: “The Secretary shall issue a final, substantive determination on a petition submitted pursuant to [21 C.F.R. § 314.161(b)] (or any successor regulations), no later than 270 days after the date the petition is submitted” (emphasis added).  The amendment would apply to any withdrawal petition submitted to FDA on or after the date of enactment of the UFA bill. 

Both of the citizen petition provisions in the draft Energy and Commerce UFA bill seem to have come out of the blue.  The section-by-section backgrounder to the draft bill says that proposed FDC Act § 505(w) “should result in the quicker approval of generic drugs.”  That raises the possibility that inclusion of at least that section may be intended as an offset for other provisions in the bill. 

By Ricardo Carvajal –

The Washington Post recently reported on the delay in getting clearance from the Office of Management and Budget (OMB) for the regulations that would implement the key provisions of the Food Safety Modernization Act.  Industry groups and consumer advocates purportedly are baffled, but there is a recent precedent for similar delays in the issuance of a regulation backed by industry and consumer groups – the dietary supplement good manufacturing practice ("GMP") regulation. 

If memory serves, the dietary supplement GMP regulation was parked at OMB for over a year.  A quick perusal of the economic analysis section of that regulation reveals the complexity of the required analyses of costs and benefits, and offers a reminder of some unpleasant truths.  An example of the latter is that the GMP regulation was estimated to place over 170 small and very small manufacturers at risk of going out of business, resulting in the potential loss of @2,250 jobs.  Further, it was estimated that the costs of compliance would discourage new small businesses from entering the industry (the annual costs of that regulation for each business were estimated to range from $46k to $184k, depending on the size of the business).  Moreover, the total quantifiable costs of the regulation handily exceeded the total quantifiable benefits. 

We’re not privy to the precise sticking points in the review of the FSMA regulations, but we bet that the economic analysis sections will make for interesting reading.

By Alan M. Kirschenbaum –

On May 3, 2012, CMS posted on its website a notice announcing that manufacturers will not be required to collect data under the physician payment sunshine provisions of the Patient Protection and Affordable Care Act before January 1, 2013.  As we have reported in earlier posts, the sunshine provisions, among other things, require manufacturers of drugs, devices, biologicals, and medical supplies that are covered under Medicare, Medicaid, or the Children’s Health Insurance Program ("CHIP") to report annually to CMS certain payments or other transfers of value to physicians and teaching hospitals.  Although the statute requires the first report to be submitted by March 31, 2013 for payments made in calendar year 2012, CMS has long exceeded its statutory deadline of October 1, 2011 for issuing implementing procedures.  CMS published a proposed rule last December (see our summary here), and will not be issuing a final rule until “later this year.”  According to the notice, the postponement of required data collection will give CMS an opportunity to address over 300 comments submitted on the proposed rule, and will give applicable manufacturers additional time to prepare for transparency report submission.  In view of the postponement of data collection, it appears likely that the March 31, 2013 deadline for the first transparency reports will also be extended.