By Susan J. Matthees –

The American Council of Independent Laboratories (“ACIL”), the Association of Food Industries, and the Cheese Importers Association of America, Inc. recently petitioned FDA to revoke or partially revoke its Federal Register notice announcing Food Safety Modernization Act (“FSMA”) user fees amounts because the fees were allegedly calculated in a manner contrary to the method specified in the FSMA, do not provide small business burden relief as required by the FSMA, and will be imposed on activities not authorized for fees under the FSMA.

Section 107 of the FSMA gives FDA the authority to collect user fees from, among others, the responsible party for each domestic facility and US agent for each foreign facility subject to reinspection to cover reinspection-related costs, the responsible party for a domestic facility and an importer that does not comply with a recall order, and importers subject to a reinspection to cover reinspection fees.  This summer, FDA announced fee rates that became effective on October 1 (FDA will not invoice until January 1, 2012).  FDA determined the fees by calculating an average hourly rate for an FDA employee.  This hourly rate would be used as the basis to calculate fees for all activities that trigger a fee.  

The petitioners argue that the FSMA requires FDA to calculate a unique amount for each activity that triggers a user fee.  For example, petitioners state that FDA failed to calculate the hourly cost of reinspection-related activities for a facility (including by type or level of reinspection), activities associated with failure to comply with a recall (including recall activities performed by FDA, technical assistance, follow-up effectiveness checks, and public notifications), administrative activities to support the voluntary qualified importer program, and reinspection-related activities associated with food imports.  In particular, the petitioners argue that FDA did not calculate the hourly cost of reinspection-related activities, activities associated with failure to comply with a recall order, administrative activities in support of the voluntary qualified importer program, and reinspection-related activities associated with food imports.  The petitioners ask that FDA revoke the notice in its entirety because of this method of calculating fees.

In the alternative, the petitioners ask that FDA revoke the portions of the notice that relate to the imposition of fees on small businesses.  The FSMA directed FDA to publish in the Federal Register a proposed set of guidelines in consideration of the burden of fee amounts on small businesses by July 4, 2011.  Instead, on August 1, 2011, FDA opened a docket for comments on what burden the fees impose on small businesses and whether and how these burdens should be alleviated.  The docket remains open until November 30, 2011.  The petitioners argue that the FSMA is clear that the FDA must develop guidelines, and FDA’s approach is contrary to the FSMA. 

Finally, the petitioners ask that FDA revoke the portions of the notice that would impose fees on activities related to food imports in the absence of prior identification of noncompliance materially related to a food safety requirement of the FDC Act.  FDC Act § 801 permits FDA to detain an imported food on the appearance of noncompliance.  The FSMA, however, states that with respect to food importers, reimportation fees can be assessed only after an examination “identified noncompliance materially related to a food safety requirement.”  The petitioner argues that as drafted, FDA could assess fees on an importer on the basis of a detention of the food for the appearance of noncompliance, but under the FSMA, the fees can only be assessed if the food is actually shown to be noncompliant. 

By Jennifer D. Newberger –

On October 31, 2011, FDA issued a report titled “Understanding Barriers to Medical Device Quality.”  The report results from an initiative launched by the Center for Devices and Radiological Health (“CDRH”) “to assess and understand gaps in medical device quality.”  The focus of this assessment was on marketed device quality assurance, not pre-market activities, and consisted of information gathered from interviews with internal and external quality experts, a set of blinded industry interviews, a scan of databases, including the Manufacturer and User Facility Device Experience (“MAUDE”) database and the recall database, relevant articles, and conferences, and an outside press search. 

The report states that its assessment “uncovered several key facts about marketed medical devices, as well as potential catalysts for quality improvement.”  In short, the “key facts” discovered by FDA about marketed devices appear to be: (1) the medical device industry has enjoyed “tremendous growth in both revenues and the technical complexity of the products that it produces over the past 10-20 years”; (2) “serious adverse event reports related to medical device use have outpaced industry growth by 8% per annum since 2001”; and (3) quality risk is not evenly distributed, with cardiovascular, IVD, and general hospital/surgical devices accounting for approximately 60% of adverse event reports.  The report states that recalls have also increased, but not as quickly as adverse events.

From the outset, FDA acknowledges some of the limitations in its analysis of MAUDE and recall reports.  Perhaps most importantly, FDA notes that some of the growth in adverse event reporting may be “due to growth in the number of medical devices in use.”  The report later states that FDA “should consider adjusting absolute numbers of adverse events and recalls for ‘device usage,’ or the number of devices on the market.”  Adjusting for the number of devices on the market seems to be an obvious first step in assessing whether there are real safety concerns associated with medical device use.  That the volume of adverse events will increase with the number of medical devices in use makes perfect sense; the question is whether the number of adverse events as a percentage of total device usage has increased.  FDA does not answer that question in its report.

FDA also notes other factors that could contribute to the growth in volume of adverse event reports, including “greater outreach by FDA emphasizing reporting requirements, along with greater manufacturer sensitivity to reporting requirements following notable recalls.”  Regarding the increase in recall reports, FDA states that the increase in recalls could be due to greater FDA “emphasis” on FDA recall reporting requirements.  Although not stated by FDA, this “emphasis” is often in the form of Warning Letters or other enforcement actions, which almost certainly has led to manufacturers erring on the side of reporting MDRs and recalls, even if they don’t believe the event in question meets the regulatory reporting requirements.

All of these factors certainly must be considered when reviewing the MAUDE and recall data, and must be accounted for before drawing any conclusions about the connection between these data and device quality.  Although FDA notes these considerations, it nevertheless implies that the increase in volume of both adverse event and recall reports can mean only one thing—it is reasonable to question the quality of currently marketed medical devices. 

Just as reporting the volume of adverse events and recalls without considering total devices on the market will lead to incorrect conclusions, FDA’s statement that cardiovascular, IVD, and general hospital/surgical devices make up the majority of adverse event reports does not account for the unique circumstances particular to those device types.  For instance, general hospital/surgical devices make up a significant percentage of medical devices on the market, and it therefore stands to reason that the number of adverse events will be higher in that group. 

FDA also states that cardiovascular devices “have increased as a share of total serious adverse event reports even faster than for adverse events overall.”  FDA fails to account for (or even mention) the most obvious aspect of cardiovascular devices that may contribute to this finding: the health condition(s) of patients likely to be using the devices.  Cardiovascular patients are likely to be older and in a more fragile state of health than the general population, and therefore more likely to experience an adverse event—whether or not related to the device itself.  FDA’s findings in this report are based on information obtained from MAUDE, and reports must be submitted to MAUDE if the device “may have caused or contributed” to the death or serious injury—there need not be a definitive determination that the device actually did so.  Given the likelihood that patients using cardiovascular devices may already be unhealthy, it is difficult to state with particularity that the adverse events suffered are reflective of poor quality of the medical devices in question.

In light of its apparent conclusion that the quality of medical devices is sub-par, FDA suggests “opportunities to improve quality assurance and reduce risk across the medical device industry,” including product/process design, supplier management, manufacturing, and post-production activities.  FDA also states that three themes emerged from its interviews with industry: (1) without greater transparency around competitive quality performance, the market rewards rapid product innovation and low cost but not better quality; (2) products and the environments in which they are used are becoming increasingly complex; and (3) there is a misalignment between quality outcomes and pure regulatory compliance.

The interviewees informed FDA that companies are often forced to prioritize compliance over quality, because any failure in compliance is more likely to result in issuance of a Form 483 at an inspection, receipt of a Warning Letter, or other enforcement action.  Industry representatives also told FDA that there is an inconsistent application and interpretation of compliance requirements across investigators and district offices, and “inadequate transparency into how investigators arrived at specific decisions and dealt with specific cases.” 

Not only does industry feel there is inconsistency in application of the regulations, but it believes there is in fact a disincentive for making safety-related quality improvements since FDA often requires an update to, or recall of, the existing device in light of the safety improvement.  This observation has particular relevance in light of FDA’s recent release of its draft guidance describing when changes to a device may necessitate a new 510(k) notification.  The draft guidance, discussed in our previous blog post, specifically stated that a modification to a device to respond to a known risk or failure mode will likely require a new 510(k) notification, and may require a recall.  Industry has now clearly made FDA aware that companies may elect not to make a safety modification to a device for fear FDA will require a recall of the marketed device.  How FDA chooses to respond to this knowledge remains to be seen.

FDA concludes the report on device quality by describing certain steps FDA may take to engage with industry, with a focus on increasing enforcement transparency and clarity.  Two areas of focus include “predictable and reliable benchmarks of quality system compliance and (particularly for smaller companies) guidance on how to reach them” and “updates to the company involved on the status of enforcement cases in process.”  These seem to be reasonable goals.  We can only hope that FDA will work to achieve them.

By Cassandra A. Soltis –

The Institute of Medicine (“IOM”) recently issued its Phase II report on consumer use and understanding of front-of-package (“FOP”) labeling systems for foods, recommending that both the Food and Drug Administration (“FDA”) and the United States Department of Agriculture (“USDA”) “consider a fundamental shift in strategy” by moving “beyond simply informing consumers about nutrition facts.”   What the IOM proposes is very different from the FOP systems currently in use by industry, which generally provide succinct nutrition information prominently on the front packages of foods.  The IOM explained that these nutrient content-based systems “implicitly assume[] that consumers are receiving appropriate nutrition information”; however, what consumers really need is an “interpretive” system that “quickly and easily provides guidance to encourage healthier food choices.”  IOM, Front-of-Package Nutrition Rating Systems and Symbols (2011) (hereinafter IOM Phase II Report), at S-1, 2.

The FOP system recommended by IOM includes the use of only one symbol appearing in a consistent location on all grocery products.  The symbol would display (1) calorie information, using common household measure serving sizes, and (2) zero to three nutritional “points,” with each point corresponding to a food containing a low level of sodium, saturated and trans fats, and added sugars.  IOM Phase II Report, at 7-3, 4.  For example, a food containing an acceptable level of sodium would receive one point but would not receive the other two points if its levels of saturated and trans fats and added sugars were not low enough to meet qualifying limits.

However, some foods may not even be eligible to earn FOP points if they contain saturated fats, sodium, or added sugars in amounts that are “too high” – that is, amounts “inconsistent” with 2010 Dietary Guidelines for Americans (hereinafter Dietary Guidelines).  IOM Phase II Report, at 7-12, 13.  For example, if a food contains added sugars and saturated or trans fats in amounts that qualify for FOP points but contains sodium in an amount that exceeds the Dietary Guidelines recommendation, the food would be excluded from bearing FOP points.  The food would still have to disclose calorie and serving size information.  IOM Phase II Report, at 9-4.

Although IOM’s Phase I report, which examined the use of FOP systems, did not recommend added sugars to be included in FOP systems, the Phase II report does, in part, because the Dietary Guidelines encourage a reduction in calorie intake from added sugars.  IOM Phase II Report, at 1-6.  The IOM also recommends that FOP symbols be integrated with the Nutrition Facts box by placing a check, star, or other indicator near the nutrition component earning the point.  IOM Phase II Report, at 7-4.  Finally, the report stresses that the criteria the IOM used to evaluate foods are not recommendations but are “starting points” for “extensive computer modeling” and that FDA and USDA develop, test, and implement a single standard FOP symbol system.  IOM Phase II Report, at 7-24, 25, 9-3.  Examples of IOM’s FOP symbols can be viewed here.

The apparent divergence between IOM’s recommendations and industry’s current approach could help set the stage for conflict down the road.  FDA has stated that “the agency will consider using its regulatory tools” if “voluntary action by the food industry does not result in a common, ‘gold standard’ approach” to FOP labeling. 

By Jennifer M. Thomas –

President Obama issued an Executive Order earlier this week to address the growing issue of critical drug shortages – the first Executive Order to directly affect FDA operations since 1985.   In a coordinated move, FDA also released its report: "A Review of FDA’s Approach to Medical Product Shortages."

According to FDA and the White House, the number of prescription drug shortages nearly tripled from 2005 to 2010, going from 61 reported shortages in 2005 to 178 shortages in 2010.  Some estimates put the number of drug shortages at 180 for the first ten months of 2011 alone—others suggest that number could be as high as 213.  Among the medicines that have been reported in short supply this year are drugs used to treat childhood leukemia, breast cancer, and colon cancer, as well as anesthetics, and antibiotics.  When a vital medicine is in short supply, doctors are forced to reserve supplies for only patients in the direst need, leaving others to go without or to use a less preferred option if one is available.  Moreover, drug shortages result in exponentially higher drug prices, and may force patients to switch medicines mid-regimen, potentially reducing the effectiveness of treatment. Finally, drug shortages can delay clinical trials for new, experimental treatments if the comparator or “control” group in the experiment is receiving an approved drug in short supply. 

While it is easy to recognize the public health concerns raised by drug shortages, identifying the various causes and solutions has proven to be more difficult.   FDA cites a major reason for drug shortages as “quality/manufacturing issues.”  However, the agency also lists production delays and discontinuation of older less-profitable drugs as reasons for shortages.  Some commenters argue that the increased number of products and raw materials coming from plants in China and India results in uncertain supply, particularly if FDA finds quality issues at such foreign facilities.  Others cite the simple operation of the free market as the cause of shortages—prices for older medications are low until they are in short supply.   But even higher prices triggered by a shortage may not cause manufacturers to make the investments necessary to overcome the practical and regulatory hurdles to increased production. 

The issue has caught Congress’ attention; legislators introduced a rare bipartisan bill in the Senate and House in February and June, 2011, respectively, to try to stymie the growing number of shortages (“Preserving Access to Life-Saving Medications Act of 2011,” S. 296, H.R. 2245).  Importantly, the bill would expand FDA’s authority to require advance notification of drug discontinuations under 21 U.S.C. § 356c to include all drug and biologic manufacturers, and to require those manufacturers to report circumstances that may result in a drug discontinuation or interruption of production—such as a merger, a change in the supply of one or more raw materials, etc.  Among other affirmative requirements, the proposed bill requires FDA to conduct an analysis of drugs that may be vulnerable to a shortage, and to publish the notifications it receives under § 356c online.

The “Preserving Access to Life-Saving Medications Act of 2011” remains pending in committee.  So the White House has attempted to move forward without Congressional action – using an Executive Order to direct FDA to do more to curb drug shortages under the agency’s current statutory authority.  Specifically, the Executive Order directs FDA to:

(1) Use its existing authority under 21 U.S.C. 356c, which requires sole-source drug manufacturers to notify FDA in advance of discontinuances that could lead to shortages of certain critical drugs;

(2) Expedite its regulatory reviews of new drug suppliers, manufacturing sites, and manufacturing changes where such expedited review would help to avoid or mitigate an existing or potential drug shortage; and

(3) Report drug stockpiling and over-charging for scarce drugs to the Department of Justice.

It is unclear whether the provisions of this Executive Order can have any significant independent effect on the frequency of drug shortages.  Currently, § 356c is limited to sole-source manufacturer discontinuations of medically necessary drugs, so FDA can not require advance notification of other manufacturers, in other circumstances besides discontinuation, or about other types of drug products.  Moreover, notification of an impending shortage does not necessarily help the manufacturer that is unable to increase production, sometimes for reasons outside of its control.  FDA would still have to approve new suppliers, manufacturing sites, or changes for drugs vulnerable to shortages, and those actions seem limited more by scarce review resources than by failure to allocate those resources appropriately.  Regardless of the Order’s direct effects, however, it may be the impetus Congress needs to finally take action.

By Kurt R. Karst –      

Earlier this week, the U.S. Senate passed, by a 69-30 vote, H.R. 2112, the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2012, as part of an omnibus package of three spending measures.  The House and Senate versions of the bill differ,  and those differences will need to be ironed out before FDA is funded for Fiscal Year 2012.  Several Senate amendments to H.R. 2112 were considered and rejected, including Sen. David Vitter’s (R-LA) Amendment No. 769 to permit individuals to reimport drugs from Canada, and Sen. Jim DeMint’s (R-SC) Amendment No. 763 to prevent FDA from using funding to phase out by 2012 OTC epinephrine metered dose inhalers that contain chlorofluorocarbons.  Other amendments were not considered or voted on, including Sen. Lisa Murkowski’s amendment to prevent FDA from using funds to approve genetically engineered fish, and Sen. Jeff Sessions’ amendment to prevent the U.S. Patent and Trademark Office from using funds to implement Section 37 of the Leahy-Smith America Invents Act concerning patent terms extensions (see our previous post here). 

One amendment that passed the Senate gauntlet and that caught our attention is Sen. Richard Burr’s (R-NC) Amendment No. 890, which is intended to “improve the transparency and accountability of the FDA in order to encourage regulatory certainty and innovation on behalf of America's patients.”  The text of the amendment states:

Provided further, That not later than 90 days after the date of enactment of this Act, the Secretary of Health and Human Services shall submit to Congress a report that discloses, with respect to all drugs, devices, and biological products approved, cleared, or licensed under the Federal Food, Drug, and Cosmetic Act or the Public Health Service Act during calendar year 2011, including such drugs, devices, and biological products so approved, cleared, or licensed using funds made available under this Act: (1) the average number of calendar days that elapsed from the date that drug applications (including any supplements) were submitted to such Secretary under section 505 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355) until the date that the drugs were approved under such section 505; (2) the average number of calendar days that elapsed from the date that applications for device clearance (including any supplements) under section 510(k) of such Act (21 U.S.C. 360(k)) or for premarket approval (including any supplements) under section 515 of such Act (21 U.S.C. 360e) were submitted to such Secretary until the date that the devices were cleared under such section 510(k) or approved under such section 515; and (3) the average number of calendar days that elapsed from the date that biological license applications (including any supplements) were submitted to such Secretary under section 351 of the Public Health Service Act (42 U.S.C. 262) until the date that the biological products were licensed under such section 351.  [(Emphasis added)]

Sen. Burr, along with Sen. Tom Coburn (R-OK), have long criticized FDA, saying that the Agency‘s “regulatory malaise” harms patients and manufacturers.  That was the message in a commentary piece that appeared in The Washington Times in February 2011, titled “Caution kills – FDA’s go-slow approval approach shortens lives.”  More recently, Sen. Burr criticized FDA for the Agency’s lack of speedy approvals during a July 2011 Health, Education, Labor and Pensions Committee hearing on user fees.   He also threatened to delay the passage of FDA reauthorization bills, like the Prescription Drug User Fee Act (“PDUFA”) and the Medical Device User Fee and Modernization Act (“MDUFMA”), unless the Agency speeds up approval times.  Referring to FDA-Industry PDUFA and MDUFMA negotiations, Sen. Burr commented “I‘m somewhat bewildered that both industries even sat down and talked about this process” given the delays in approval decisions.  Some in Congress have expressed their intent to reauthorize PDUFA and MDUFMA, and to pass a host of other FDA-related measures, such as the Generic Drug User Fee Act, well before the end of Fiscal Year 2012. 

The criticism of FDA’s review processes and approval times is not unique to Congress.  Last month, the National Venture Capital Association’s MedIC Coalition issued a report, titled “Vital Signs: The Threat to Investment in U.S. Medical Innovation and the Imperative of FDA Reform,” fingering FDA as the culprit for decreasing venture capitalist investments in U.S. drug and medical device companies. 

Provided Sen. Burr’s amendment is enacted as part of an FDA appropriations package, the information provided by FDA – within 90 days of enactment and perhaps right in the thick of user fee discussions on Capitol Hill – could provide the Senator with additional fodder to call for changes at FDA. 

The focus of Sen. Burr’s amendment is on the number of calendar days to approval, rather than on the FDA goal dates aspired to under the user fee statutes and performance goals.  For example, under PDUFA IV, FDA’s goal is to review and act on 90% of standard NDAs and BLA within 10 months of submission and within 6 months for a priority submission.  (Similar goals have been proposed for the fifth iteration of PDUFA.)  Once FDA acts on an application, for example, by issuing a complete response letter identifying certain issues that need to be addressed for the Agency to grant final approval, the PDUFA “clock” stops.  It could be months or years until those issues are fully addressed in a resubmission – which triggers a new resubmission goal date – and approval can be granted. 

There is no user fee “clock” for ANDAs – at least not yet.  Nevertheless, the Burr amendment requests information on all applications submitted under FDC Act § 505.  The numbers for ANDAs, once provided by FDA, may pale in comparison to the NDA/BLA numbers.  The current median approval time, which runs from application submission to approval (tentative or final), has been pegged at about 33 months.

Information on the number of calendar days that have elapsed between application submission and approval could give Sen. Burr and other Members of Congress a better sense of the efficiency of the FDA review process and whether it needs to be changed. 

By Kurt R. Karst –      

In a 53-page decision handed down earlier this week by the California Court of Appeal, Fourth Appellate District (Division I), the Court ruled that patent settlement agreements between Bayer AG and several generic drug manufacturers did not violate the Cartwright Act – California’s antitrust law and an analogue to Section 1 of the federal Sherman Act – when Bayer settled patent infringement litigation (concerning U.S. Patent No. 4,670,444, which expired in December 2003) with respect to generic versions of its antibiotic drug CIPRO (cirprofloxacin HCl).  The decision affirmed a 2009 judgment from Judge Richard E. L. Strauss of the Superior Court of California, County of San Diego, in which Judge Strauss granted motions for summary filed by Bayer and several generic drug defendants.  The Court’s decision, which came out within a week of the Federal Trade Commission’s (“FTC’s”) Fiscal Year 2011 report on patent settlement agreements (see our previous post here), is yet another decision in which courts – both state and federal – have struck down antitrust challenges to patent settlement agreements (or to use the FTC’s pejorative, “pay-for-delay” agreements).

The case, styled as In re Cipro Cases I & II, was initiated in late 2000 and is a proceeding of nine coordinated cases brought by indirect CIPRO purchasers.  The Plaintiffs alleged three causes of action (1) per se violation of the Cartwright Act (Bus. & Prof. Code, § 16720 et seq.); (2) unfair competition in violation of the Unfair Competition Law (“UCL”) (Bus. & Prof. Code, § 17200 et seq.); and (3) the common law tort of monopolization.  We previously reported on Judge Strauss’ opinion and the appeal (see our previous posts here and here) and refer our readers to those posts for background on the case.   

Among other things in their appeal, the indirect CIPRO purchasers argued that Judge Strauss adopted a flawed and highly criticized line of federal authority; namely, the U.S. Court of Appeals for the Second Circuit’s analysis in In re Tamoxifen Citrate Antitrust Litigation, 466 F.3d 187 (2d Cir. 2006), in which the Court supported the proposition “that a reverse-payment settlement between a patent holder and alleged infringer in Hatch-Waxman litigation is legal as long as the settlement does not restrain competition beyond the exclusionary scope of the patent, and there is no showing that the patent was procured by fraud or that the suit for its infringement was objectively baseless.”  Instead, the indirect CIPRO purchasers contended that the CIPRO patent settlement agreements are illegal per se, and that Judge Strauss would have found them so had he not followed the Tamoxifen line of reasoning.  And even if the CIPRO patent settlement agreements  are not unlawful per se, “there is a triable issue of fact as to whether they violate the Cartwright Act under the ‘rule of reason applied in antitrust cases,’” according to the indirect CIPRO purchasers.  The FTC has recently favored the rule of reason in an amicus brief filed with the U.S. Court of Appeals for the Third Circuit in In re K-Dur Antitrust Litigation.

Agreeing with the reasoning of the Tamoxifen Court, as well as other federal courts that have evaluated patent settlement agreements under federal antitrust laws, the California Court of Appeal concluded that such reasoning “applies equally to antitrust claims under the Cartwright Act,” under which the “illegal per se” designation “is reserved for agreements or practices that have a pernicious effect on competition and lack any redeeming virtue” (emphasis in original). 

Considering the important public policies underlying patent law . . . and favoring the settlement of patent litigation . . . and the fact that the Cipro agreements did not restrain competition outside the exclusionary zone of the '444 patent, we cannot view the Cipro agreements as lacking any redeeming virtue.  Accordingly, we conclude they are not unlawful per se.

Moreover, the California Court of Appeal concluded that “the Cipro agreements do not violate the Cartwright Act under [a] rule-of-reason analysis or the analysis the Eleventh Circuit Court of Appeals held to be applicable to settlements of Hatch-Waxman litigation in [Valley Drug Co. v. Geneva Pharms., Inc., 344 F.3d 1294 (11th Cir. 2003) and Schering-Plough Corp. v. FTC, 402 F.3d 1056 (11th Cir. 2005)],” where both the per se and rule of reason analyses were found to be “ill-suited for an antitrust analysis of patent cases because they seek to determine whether the challenged conduct had an anticompetitive effect on the market.”  Instead, the Eleventh Circuit said that “the proper analysis of antitrust liability requires and examination of: (1) the scope of the exclusionary potential of the patent; (2) the extent to which the agreements exceed that scope; and (3) the resulting anticompetitive effects.”  Regardless, the California Court of Appeal found the reasoning of the various federal patent settlement Hatch-Waxman antitrust cases “to be sound and applicable to plaintiffs' cause of action under the Cartwright Act.”  “[U]nless a patent was procured by fraud, or a suit for its enforcement was objectively baseless, a settlement of the enforcement suit does not violate the Cartwright Act if the settlement restrains competition only within the scope of the patent,” according to the Court. 

The California Court of Appeal’s conclusion that Bayer and the generic defendants are not liable under the Cartwright Act for entering into the CIPRO patent settlement “is also dispositive of plaintiffs' causes of action for violation of the UCL and common law monopolization,” because it is based on the same alleged misconduct under the Cartwright Act.  “Conduct that has been determined not to unreasonably restrain competition under statutory antitrust law cannot logically be deemed to unreasonably restrain competition under a common law monopolization theory.”

By Kurt R. Karst – 

The U.S. Patent and Trademark Office (“PTO”) recently indicated in a letter to FDA that U.S. Patent No. RE 41,571 (“the ‘571 patent”), a method-of-use patent listed in the Orange Book covering BUTRANS (buprenorphine) Transdermal System is not eligible for a Patent Term Extension (“PTE”) because the product does not meet the first permitted commercial marketing prong of the PTE statute at 35 U.S.C. § 156(a)(5)(A).  The PTO letter brings this case one step closer to what could ultimately be a showdown in court. 

As we previously reported, the ‘571 patent PTE application was submitted to the PTO in August 2010, following the June 30, 2010 approval of BUTRANS under NDA No. 021306, and just a few months after the U.S. Court of Appeals for the Federal Circuit’s May 10, 2010 decision in Photocure v. Kappos, 603 F.3d 1372 (Fed. Cir. 2010). 

In Photocure, the Federal Circuit interpreted the term “product” in the PTE statute at 35 U.S.C. § 156(a)(5)(A) to mean “active ingredient” rather than “active moiety.”  In reaching its decision in Photocure, the Federal Circuit relied on its 1990 decision in Glaxo Operations UK Ltd. v. Quigg, 894 F.2d 392 (Fed. Cir. 1990) (“Glaxo II”) (which affirmed a 1989 district court decision in Glaxo v. Quigg, 706 F. Supp 1224 (E.D. Va. 1989) (“Glaxo I”)) where the Court construed the term “product” in 35 U.S.C. § 156(a)(5)(A) to mean “active ingredient.”  The Federal Circuit also pointed out that according to the Court’s 1997 decision in Hoechst-Roussel Pharms. Inc. v. Lehman, 109 F.3d 756 (Fed. Cir. 1997), “[f]or purposes of patent term extension, [the] active ingredient must be present in the drug product when administered.”  Photocure also contains dicta to the effect that a patent – in that case, U.S. Patent No. 6,034,267 covering the drug product METVIXIA (methyl aminoevulinate HCl) – is eligible for a PTE not only because methyl aminoevulinate HCL is a different chemical compound from previously approved aminolevulinic acid, but because “it is not disputed that they differ in their biological properties, warranting separate patenting and separate regulatory approval, although their chemical structure is similar.”

FDA has approved several applications for drug products containing buprenorphine, and specifically buprenorphine HCl, a salt of buprenorphine, including BUPRENEX (NDA No. 018401), SUBUTEX (NDA No. 020732), and SUBOXONE (NDA No. 020733).  Nevertheless, the ‘571 patent PTE applicant claims eligibility for a PTE because “[i]n contrast to these three products, the active ingredient for Butrans™ is buprenorphine base, which has never before been approved by the FDA.”  Moreover, says the PTE applicant citing to Photocure, “buprenorphine base was required to undergo full FDA review, and has pharmacological properties that set it apart from buprenorphine hydrochloride.  Accordingly, the ‘571 patent that covers Butrans™ remains eligible for a patent term extension under 35 U.S.C. § 156.”

The PTO initially says in its October 12th letter that “based on a plain reading of the statute, the approval of BUTRANS® does not comply with §156(a)(5)(A).”  “Here, a salt of the active ingredient, buprenorphine hydrochloride, was the first permitted commercial marketing or use of the ‘product’ as that term is defined in § 156(f).”  The PTO then delves into the Photocure decision and the related Hoechst and Glaxo decisions.

Applying the Hoeschet [sic] and Glaxo I analyses here, the active ingredient of BUTRANS® is buprenorphine.  The question to ask is what substance is physically present in the product; here, it is burprenorphine.  The next step is to ask whether any salt or ester of buprenorphine has been previously approved by FDA.  Because a salt of buprenorphine, buprenorphine hydrochloride, has been approved first, before the approval of BUTRANS®, the grant of permission to commercially market or use BUTRANS® is NOT the first permitted commercial marketing or use of the product/active ingredient as required by section 156(a)(5)(A) in light of the approvals of Buprenex, Subutex and Suboxone.  Accordingly, the ‘571 patent is ineligible for extension under the provisions of section 156.

The PTO also addresses the dicta in Photocure that the METVIXIA patent was eligible for a PTE because of different “biological properties, warranting separate patenting and separate regulatory approval.”  According to the PTO, “[w]hile true that the Photocure court discussed different biological properties, nothing in section 156 requires analyzing biological properties to determine eligibility.  Additionally, any 'new drug,' as defined in 21 U.S.C. § 321(P), must undergo separate regulatory approval as per 21 U.S.C. § 355.”  Thus, says the PTO, “[s]ince the additional circumstances discussed by the Photocure court in finding that the approval of Metvixia could support an extension of Photocure’s patent are not statutory requirements, alleging similar circumstances fails to confer eligibility here.” 

The next step is for FDA to respond to the PTO’s letter.  Once that happens and the PTO issues a final determination, the stage will be set for a face-off.

By Ricardo Carvajal – 

NIH and USDA announced a joint workshop on Using Nanotechnology To Improve Nutrition Through Enhanced Bioavailability and Efficacy.  Among the goals of the workshop are to “identify knowledge gaps in the use of nutrients (and bioactive food components) for disease prevention,” and to “catalyze collaborations and stimulate ideas for diet and disease prevention research.”  Note to would-be workshop participants: beware of FDC Act section 201 (g), which defines “drug” to include articles intended to prevent disease, and section 301(ll), which prohibits the addition of a “drug” to food.

The European Commission adopted a recommendation to define “nanomaterials” as “a natural, incidental or manufactured material containing particles, in an unbound state or as an aggregate or as an agglomerate and where, for 50% or more of the particles in the number size distribution, one or more external dimensions is in the size range 1 nm – 100 nm."  According to a press release issued by the EC, “Industry needs a clear coherent regulatory framework in this important economic sector, and consumers deserve accurate information about these substances.”   Thus, the definition is intended to be used “for all regulatory purposes.”  However, the use of other “nano” terms for specific sectors, such as pharmaceuticals, is not precluded.  As we noted in a prior posting, FDA has tentatively adopted a working definition of nanotechnology.  That definition is broader than the EC’s definition, in that it is not as firmly anchored to the 1-100nm criterion.

The National Nanotechnology Initiative updated its Environmental, Health, and Safety ("EHS") Research Strategy, which is intended to help Federal agencies “develop nanotechnology risk assessments that inform risk management and regulatory decisions.”  As an example of EHS research, the document cites research conducted in part by FDA which determined that intact skin serves as a barrier to sunscreens that contain nanomaterials.  FDA reportedly allocated 7.3 million dollars for EHS research in FY 2010, the second year for which FDA has allocated EHS funding.  While FDA continues to develop its nanotechnology-related infrastructure and expertise, the agency is also said to be “leading an effort to inventory regulatory frameworks for nanotechnology in food and medical products.”

By Ricardo Carvajal –
 
FDA updated its guidance on administrative detention of food to reflect the expansion of the agency’s authority under the Food Safety Modernization Act ("FSMA").   As we noted in a prior blog posting, the FSMA made it easier for FDA to administratively detain food; FDA now needs only a reason to believe that a food is adulterated or misbranded.  The agency recently announced its first seizure of a food that was administratively detained under the new standard.

The guidance makes clear that the administrative detention authority extends to dietary supplements.  The guidance further states that the authority extends to food solely in intrastate commerce.  The guidance is effective immediately.

By Kurt R. Karst –      

Like the character Michael Keaton plays in the 1988 film “Beetlejuice,” in which spirit (a “bio-exorcist”) comes back from the afterlife (after having his name said three times) to wreak havoc and to try and scare away the new inhabitants of a home, the so-called Reference Listed Drug (“RLD”) theory of liability is being used by plaintiffs’ attorneys in an attempt to exorcize the U.S. Supreme Court’s June 23, 2011, 5-4 landmark decision in PLIVA Inc. v. Mensing from generic drug product liability litigation.  In Mensing, the Supreme Court ruled that generic drug manufacturers are not permitted to change their labeling except to mirror the label of the brand, RLD manufacturer whose drug product is approved under an NDA.  The RLD theory posits that FDA’s regulations impose new or additional responsibilities on an ANDA sponsor whose drug product is unilaterally designated by FDA as an RLD once the brand-name RLD NDA drug product is discontinued and withdrawn from the market, and that the Court’s Mensing decision is inapplicable under such circumstances. 

By way of background, FDA’s practice has been to designate a single RLD – the market leader at a given point in time as determined by the Agency on the basis of unconfirmed commercial data and other information – when the brand-name drug product and former RLD is no longer marketed and is moved to the Discontinued Drug Product List section of the Orange Book.  Specifically, FDA has stated that the Agency “will designate [RLDs].  Generally, the [RLD] will be the NDA drug product for a single source drug product.  For . . . multiple source drug products without an NDA, the [RLD] generally will be the market leader as determined by FDA on the basis of commercial data.”  FDA, Final Rule, ANDA Regulations, 57 Fed. Reg. 17,950, 17,958 (Apr. 28, 1992).  That RLD designation does not change, “even if the drug is later replaced as the market leader.”  Id.  FDA has stated time and time again that when an NDA designated as the RLD is discontinued for reasons other than safety or effectiveness, approved ANDAs that refer to the NDAs “are unaffected by the discontinued marketing of the products subject to those NDAs,” and that “[i]f FDA determines that labeling for these drug products should be revised to meet current standards, the agency will advise ANDA applicants to submit such labeling.” 

We’ve seen the RLD theory raised before.  First, Nevada State Court Judge Jerry Wiese II alluded to it in his recent decision in three propofol hepatitis infection cases (see our previous post here).  Second, Public Citizen alluded to it in its recent Citizen petition (Docket No. FDA-2011-P-0675), in which the organization states its understanding “that under current regulations, a generic manufacturer is designated by the FDA to maintain the label of a drug when the name-brand manufacturer of that drug withdraws from the market,” and says that “[t]his procedure manifests the FDA’s confidence in the ability of generic manufacturers to perform ongoing pharmacovigilance duties – which makes sense, given their substantial scientific and financial resources, as well as the effort they must already invest to comply with post-approval safety regulations” (see our previous post here).  Now, the RLD theory has taken center stage in the Court of Common Pleas of Philadelphia County in In re: Reglan/Metoclopramide Litigation. 

Morton Grove Pharmaceuticals, Inc. (“MGP”), a U.S. affiliate of Wockhardt USA LLC (“Wockhardt”), recently filed a brief with the Court of Common Pleas of Philadelphia County in the metoclopramide litigation refuting Plaintiff’s RLD theory of liability.  MGP also recently submitted comments to FDA requesting that the Agency deny the Public Citizen petition and “affirmatively state that the holder of an approved ANDA does not bear any additional responsibility for the content of product labeling if and when FDA unilaterally designates that ANDA drug product as the RLD.”  MGP/Wockhardt clearly has a significant interest in the issue, given that FDA unilaterally designated Wockhardt’s ANDA No. 074703 for Metoclopramide HCl Oral Solution as the RLD in 2006.  The “+” sign in the Orange Book indicating RLD status has transformed into crosshairs, making MGP/Wockhardt (or any other ANDA RLD) a target for Plaintiffs’ attorneys.  

MGP states in its comment to FDA on the Public Citizen petition that “[a]ny argument that FDA’s unilateral RLD designation imports responsibility to an ANDA sponsor for the content of the label has no legal, or regulatory, mooring.  This premise directly and irresponsibly contradicts the current regulatory framework, well-established responsibilities of generic drug manufacturers, and the Supreme Court’s decision in Mensing.”  MGP goes on to state that “FDA’s unilateral designation of an ANDA drug product as the RLD does not in any way alter the well-established regulatory framework established for brand and generic drug manufacturers with regard to labeling.  It does not transform an ANDA into an NDA or somehow create new responsibilities for the ANDA holder.”  Among other things, MGP cites various FDA guidance documents and Federal Register notices to support its position, including FDA’s April 2011 “Draft Guidance for Industry – Safety Labeling Changes – Implementation of Section 505(o)(4) of the Federal Food, Drug, and Cosmetic Act,” in which FDA outlines its notification procedures for required safety labeling changes once FDA has determined that new safety information is available and should be included in labeling.  “In identifying the categories of manufacturers to whom notice will be given,” says MGP, “FDA clearly delineates between the holder of an NDA, on the one hand, and an ANDA without a marketed NDA RLD, on the other hand.”  The bottom line for MGP is that:

to avoid future instances in which an ANDA sponsor is unfairly targeted – e.g., in product liability litigation – merely because FDA has identified its drug product as the RLD, FDA should include in its response to Public Citizen’s petition (and in the preface to the Orange Book) further confirmation that a RLD designation of an ANDA when the brand-name reference drug is withdrawn does not confer any additional or special responsibilities or obligations on an ANDA RLD sponsor.

Several of the points MGP makes in its comments to FDA are reiterated in the MGP/Wockhardt brief recently filed with the Court of Common Pleas of Philadelphia County in In re: Reglan/Metoclopramide Litigation.  According to MGP/Wockhardt:

Plaintiffs here are improperly, and without the support of any legal authority, attempting to impose “brand” or “NDA” status, and the responsibilities that come with such status, on ANDA holder Morton Grove where no such responsibilities exist.  An ANDA holder cannot step into the shoes of an NDA holder.  Plaintiffs have not cited to a single statutory or regulatory authority that imposes any additional responsibilities upon a generic manufacturer who is subsequently and unilaterally designated an RLD by FDA. . . .

FDA unilaterally designated Morton Grove as the RLD so that subsequent ANDA applicants have a drug to reference for purposes of application submission and approval. See 314.94(a)(7).  However, this unilateral designation does not alter the well-established regulatory framework for brand and generic drug manufacturers with regard to labeling by transforming Morton Grove, and ANDA holder, to an NDA holder.  Such a position directly contradicts the current regulatory framework, well-established responsibilities of generic drug manufacturers and the [Supreme Court's] decision in Mensing.

The Plaintiffs in the case recently fired back with their response to the MGP/Wockhardt brief, stating that “[t]he Mensing Court did not address and, therefore, did not preempt any claims arising against a generic manufacturer that has become the RDL holder, the issue central to the RLD holder preliminary objection here” (emphasis in original).  According to them, “[t]his distinction is critical because neither the Court nor FDA even considers an RLD a generic drug for regulatory purposes.”  This is quite a shocking statement, as it seems to indicate the Plaintiffs’ position that a drug product approved under an ANDA is somehow magically transformed into an NDA when the brand-name RLD NDA drug product is discontinued.  But it fits hand-in-glove with the Plaintiffs’ endgame: that “a court should apply the impossibility preemption analysis utilized in [Wyeth v. Levine] for name-brand drugs and require that the manufacturer show by clear evidence that FDA would have rejected the label change thus made.”

By Wiliam T. Koustas & John R. Fleder –

We recently reported on FDA’s attempt to assert its authority over intrastate commerce through a novel interpretation of “interstate commerce” under the Federal Food, Drug, and Cosmetic Act (“FDCA”).  Regenerative Sciences, Inc. (“Regenerative”) is challenging FDA’s claim that the company’s stem cell procedure, Regenexx, is subject to FDA jurisdiction and regulation under the FDCA and/or the Public Health Service Act (“PHSA”) as an unapproved drug and/or biologic.

The FDCA states that adulterated and misbranded products may not be introduced or delivered for introduction into interstate commerce.  FDCA § 301(a).  In addition, FDA has statutory jurisdiction over products that have been shipped in interstate commerce and thereafter become adulterated.  FDCA § 301(k).  There is absolutely no language in the statute to suggest that FDA has general authority over misbranded or adulterated products that do not move in interstate commerce but where the sale of those products merely “affects” interstate commerce.

Congress has explicitly permitted FDA to assert jurisdiction over certain products that do not move in interstate commerce in very limited circumstances.  Adulterated and misbranded products are subject to FDA’s jurisdiction if they are manufactured in any Territory.  FDCA § 301(g).  “Territory” is defined to include the District of Columbia and any territory or possession of the United States.  FDCA § 201(a)(2).  It is noteworthy that Congress explicitly chose to exclude states from these provisions.

The Supreme Court has noted that the Constitution permits the federal government to assert jurisdiction over products that either travel in, or affect, interstate commerce.  However, these constitutional powers are surely constrained by the relevant statutory language that establishes an agency’s jurisdiction.  In one of its court filings, the Government argues that the Regenexx Procedure is subject to regulation by FDA because it involves interstate commerce, in that Regenerative obtained components from out of state.  That in and of itself is not an unusual argument, but one of the Government’s two arguments involving interstate commerce was unusual, and indeed without any cited legal support.  The Government argues that interstate commerce is substantially affected because individuals traveling to Colorado to have the Regenexx Procedure would “depress the market for out-of-state drugs that are approved by FDA.”

Initially, we thought that this interpretation of interstate commerce was new ground for the FDA.  The Government even fails to cite any judicial precedent for their argument in the brief.  However, additional research revealed that FDA has previously argued that it can regulate products based on their effect on interstate commerce.

In the preamble to the Establishment and Maintenance of Records Under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002 rule, 69 Fed. Reg. 71,562 (Dec. 9, 2004), FDA asserts that it has the authority to require food manufacturers to keep certain records even if their food does not enter interstate commerce.  Citing Wickard v. Filburn, 317 U.S. 111 (1942), FDA argues that “given the collective impact on commerce of intrastate manufacturing, processing, packaging, transporting, distributing, receiving, or holding of food in the United States, FDA has concluded that the requirement to establish and maintain records should apply regardless of whether the food enters interstate commerce.”  69 Fed. Reg. at 71572.  This statement indicates that FDA believes that it has the authority to regulate a product that is never introduced or delivered into interstate commerce as long as it has a “collective impact” on interstate commerce.

More recently, in the preamble to the Current Good Manufacturing Practice in Manufacturing, Packaging, Labeling, or Holding Operations for Dietary Supplements rule, 72 Fed. Reg. 34,751 (June 25, 2007), FDA asserts that it may impose certain cGMP requirements on entities involved with the manufacture of dietary supplements, regardless of whether the process is entirely intrastate, as the collective impact of such entities on interstate commerce is “far from trivial.”  FDA cites both United States v. Lopez, 514 U.S. 549 (1995) and Wickard v. Filburn to try to support its argument.

FDA seems to confuse Congress’ constitutional authority to regulate interstate commerce with FDA’s authority under the FDCA.  While Congress can regulate economic activity that has a substantial effect on interstate commerce, the FDCA generally only permits the FDA to regulate products that travel in interstate commerce.

Congress has shown that it understands this distinction.  Where Congress has wanted agencies to have jurisdiction over matters that “affect” interstate commerce, it has done so explicitly. For example, the Federal Trade Commission Act provides the FTC with the authority to regulate unfair methods of competition and unfair or deceptive acts and practices “in or affecting” interstate commerce.  15 U.S.C. § 45(a)(1) (emphasis added).  The current language was enacted in 1975 after Congress determined that the previous statutory language of “in commerce” unduly restrained the FTC’s authority.  Similarly, Congress could amend the FDCA to provide FDA with jurisdiction over products that merely affect interstate commerce.  Until Congress does so, FDA is restrained by the language in the FDCA.  It cannot expand that authority by administrative fiat, and regulated entities should be vigilant against attempts to persuade courts to the contrary.

By Kurt R. Karst –      

On October 25, 2011, the Federal Trade Commission (“FTC”) announced the release of its annual summary of agreements filed with the Commission during the last fiscal year (Fiscal Year 2011)  – “Agreements Filed with the Federal Trade Commission under the Medicare Prescription Drug, Improvement, and Modernization Act of 2003” – saying that “pharmaceutical companies continued a recent anticompetitive trend of paying potential generic rivals to delay the introduction of lower-cost prescription drug alternatives for American consumers.”  We had an idea the report was coming out soon when we read an editorial in the Washington Post supporting the FTC’s crusade against what they call “pay-for-delay settlements.”  (Contrast the Washington Post’s editorial with one from the Wall Street Journal last year – here.) 
 
According to the FTC, the Commission received 156 final resolutions of patent disputes between a brand and a generic in Fiscal Year 2011.  This is an increase of 43 settlements over the Fiscal Year 2010 figures.  A total of 28 final settlements involving 25 different branded pharmaceutical products “contain both compensation to the generic manufacturer and a restriction on the generic manufacturer’s ability to market its product,” says the FTC.  In addition, 54 of the settlements reportedly involve generics eligible for 180-day exclusivity, and 18 of them “contain both compensation to the generic manufacturer and a restriction on the generic manufacturer’s ability to market its product,” according to the FTC.  Both of the groups of 28 and 18 settlement agreements are tagged by the FTC as “potential pay-for-delay” deals in the handy-dandy table included in the report (below).
Based on the figures provided by the FTC, the Commission concludes that “FY 2011 witnessed the continued trends of (a) record numbers of brands and generics resolving patent litigation prior to a final court decision on the merits and (b) significant numbers of such settlements potentially involving pay-for-delay.” 

Of course, the FTC’s numbers only tell one side of the statistics story.  If, instead of comparing the fiscal year-over-fiscal year “potential pay-for-delay” deal numbers, you compare the “potential pay-for-delay” deals as a percentage of the overall final settlement agreements for each fiscal year, then there is no recent upward trend.  Our friends over at PatentDocs did that last year and here’s what they found – see here.  The Fiscal Year 2011 numbers are the lowest percentages in their respective categories since the FTC began issuing its reports – at 18% in the “Potential Pay-for-Delay” category, and at 11.5% in the “Potential Pay-for-Delay Involving First Filers” category.

The FTC uses its announcement of the latest report to once again express its support for S. 27, the Preserve Access to Affordable Generics Act, which would amend the FTC Act to enact what some have commented would be an effective ban on patent settlement agreements.  The FTC, the Obama Administration (see here, page 42), and the sponsors of S. 27 have urged the Joint Select Committee on Deficit Reduction (i.e., the “Super Committee”) to include the legislation in its deficit reduction plan.

The Generic Pharmaceutical Association (“GPhA”) responded to the FTC report, saying that “the FTC continues to miss the fundamental point: Patent settlements speed up the availability of less costly generic drugs and save money for everyone; banning settlements and forcing drugs makers to continue lengthy litigation with uncertain outcomes will be costly.”

By Carmelina G. Allis –

A billhas been introduced in the U.S. Senate, the “Medical Device Regulatory Improvement Act” (S. 1700) to amend the least burdensome and conflicts of interest provisions in Sections 513 and 712 of the Federal Food, Drug, and Cosmetic Act (the Act), respectively, in order to improve the premarket review process and foster innovation.  These amendments would be a step in the right direction, but are unlikely to achieve the wholesale reform of CDRH that is needed.

The proposed amendments to the least burdensome provisions in Section 513 are intended to lessen the scientific burden imposed upon manufacturers during the PMA approval process.  The amended provision would require the agency to find alternatives to reduce review times, and also consider alternative scientific approaches to evaluate the safety and effectiveness of a device for purposes of approval.  For example, the agency would be required to accept, whenever practicable, alternatives to randomized, controlled clinical trials in support of PMA approval.

It would also require FDA to consider alternative approaches during the review of both 510(k)s and PMAs in order to reduce the “time, effort, and cost of reaching proper resolution” of scientific/regulatory issues.  If the term “cost” refers to monetary cost to the manufacturer, and this proposed bill becomes law, it would be interesting to see how FDA handles this issue.  CDRH does not consider a manufacturer’s product development costs during the device review process (it is not authorized to do so by the Act or its implementing regulations).  And, thus, countless agency’s requests for data are burdensome and costly, and the agency generally overlooks a manufacturer’s request for a more reasonable approach.  This proposed amendment looks promising in that it would require CDRH to take into consideration alternatives in its quest for additional data and weigh in cost before requiring a manufacturer to pursue a particular path.

The proposed bill would also require that the agency not request or accept information that is not relevant to a 510(k) substantial equivalence (SE) determination.  Because this proposed amendment appears to only clarify the scope of the least burdensome provisions, rather than add new meaning to them, we doubt that this amendment will have much practical impact on the 510(k) review process.  FDA’s 510(k) correspondence has carried the “least burdensome” boilerplate since 1997 but it never seems to pose much of a constraint for the agency.

The proposed bill also includes an amendment to Section 712 of the FDC Act, which would require the agency to enter into a contract with an entity experienced in evaluating the management and operating structure of large organizations.  The entity would review the management and regulatory processes at CDRH “to ensure any actions carried out by such Center take into consideration the potential impacts on innovation with respect to medical devices and other products regulated by such Center.”  The entity would be required to submit a report to Congress on its findings and recommendations within a year after the effective date of the contract.

This management consulting review provision might be helpful in bringing about necessary reform at CDRH.  Still, this entity would not be the first one to criticize the management and regulatory processes at CDRH.  In fact, several GAO reports and the most recent IOM report on the 510(k) process have done just that, but there has been no improvement within the Center.  Given this track record, we remain skeptical that this particular provision would improve the status quo in CDRH.

By Ricardo Carvajal –

The 7th Circuit Court of Appeals affirmed a district court’s dismissal of an action alleging consumer fraud in food labeling claims for fiber.  As we noted in a prior posting, Plaintiff alleged that Defendants violated state consumer fraud laws by failing to disclose that their products contain purportedly “non-natural” fibers that provide fewer health benefits than “natural” fibers. 

In its preemption analysis, the court noted that FDC Act § 403A(a)(5) prohibits a state from imposing any food labeling requirement that is not identical to the requirement of section 403(r).  In pertinent part, that section imposes restrictions on nutrient content claims for nutrients required to be included in nutrition labeling under section 403(q), one of which is fiber.  The court found that the labeling of the products challenged by Plaintiff complied with these statutory provisions and with FDA’s implementing regulations.  The court held that the disclaimers demanded by Plaintiff “are not identical to the labeling requirements imposed on such products by federal law, and so they are barred.”

In an added twist that defense counsel may wish to take note of, the court held that Plaintiff failed to state a claim under the Illinois Consumer Fraud and Deceptive Business Practices Act because that law does not apply to “actions or transactions specifically authorized by laws administered by any regulatory body or officer acting under statutory authority of this State or the United States.”

By Kurt R. Karst –      

A recent decision out of the U.S. District Court for the Eastern District of Virginia that Teva Pharmaceuticals USA, Inc.’s (“Teva’s”) generic version of Pfizer Inc.’s (“Pfizer’s”) VIAGRA (sildenafil citrate) Tablets would infringe Orange Book-listed U.S. Patent No. 6,469,012 (“the ‘012” patent), which expires on October 22, 2019, and that the ‘012 patent is valid and enforceable, spawned an interesting Hatch-Waxman dispute between the companies.  Teva is reportedly a first applicant eligible for a period of 180-day exclusivity. 

The court’s August 16, 2011 judgment stated:

IT IS ORDERED AND ADJUDGED that Teva Pharmaceuticals USA, Inc.'s Motion to Dismiss for Lack of Standing is GRANTED IN PART, and Pfizer Ireland Pharmaceuticals Co. is DISMISSED from this litigation; that judgment is entered for Pfizer Inc. and Pfizer Ltd. on the Amended Complaint and Amended Counterclaim, in accordance with the Court’s Opinion and Final Order which found that Pfizer Inc. and Pfizer Ltd. did not commit inequitable conduct in the prosecution of United States Patent No. 6,469,012; that Teva Pharmaceuticals USA, Inc.’s proposed generic equivalent of Viagra would INFRINGE United States Patent No. 6,469,012, and that United States Patent No. 6,469,012 is VALID and ENFORCEABLE.

Shortly after the court entered its judgment, Pfizer filed a motion to amend the judgment to add that the effective date of the approval of Teva’s tentatively approved ANDA No. 077342 shall be no earlier than October 22, 2019 when the ‘012 patent expires.  According to Pfizer, “[t]o give effect to the Opinion and Final Order,” the court should, consistent with 35 U.S.C. § 271(e)(4)(A), amend its judgment to add that the effective date of approval of ANDA No. 77-342 shall be no earlier than the date of the expiration of the ‘012 patent on October 22, 2019.

Under the patent statute at 35 U.S.C. § 271(e)(4), certain remedies are available for “acts of infringement” based on the submission of an ANDA containing a Paragraph IV certification.  Specifically, 35 U.S.C. § 271(e)(4)(A) states that for such acts of infringement, “the court shall order the effective date of any approval of the drug . . . product involved in the infringement to be a date which is not earlier than the date of the expiration of the patent which has been infringed.” 

Teva, which did not consent to Pfizer’s motion, and which has since appealed the court’s decision to the U.S. Court of Appeals for the Federal Circuit, argued in its opposition brief, that the court’s judgment should be amended to include the following provision:

the effective date of the final approval of Teva Pharmaceuticals USA, Inc.’s Abbreviated New Drug Application No. 77-342 shall be no earlier than the date of the expiration of United States Patent No. 6,469,012, or the date of a decision by the United States Court of Appeals for the Federal Circuit that Claims 25 and 26 of United States Patent No. 6,469,012 are invalid or unenforceable, whichever date is earlier.

According to Teva, FDC Act § 505(j)(5)(B)(iii)(II)(aa), which states that “if the judgment of the district court is appealed, the approval shall be made effective on – (AA) the date on which the court of appeals decides that the patent is invalid or not infringed (including any substantive determination that there is no cause of action for patent infringement or invalidity),” contemplates approval in accordance with Teva’s proposed provision. 

Moreover, Teva states that the company is “entitled to final approval of its ANDA if the [Federal Circuit] decides that Claims 25 and 26 of the ‘012 patent are invalid or cannot be enforced,” and that “[i]f the Federal Circuit invalidates or holds Claims 25 and 26 unenforceable in some other case, there is no reason why Teva should have to delay marketing its proposed sildenafil ANDA product to persuade this Court that the Federal Circuit’s decision should be given effect.” 

Why is Teva concerned?  Because of the failure-to-market 180-day exclusivity forfeiture provision at FDC Act § 505(j)(5)(D)(i)(I), and specifically the “later of” subitem (bb) event.  Under FDC Act § 505(j)(5)(D)(i)(I)(bb)(AA), 180-day exclusivity eligibility can be forfeited on the date that is 75 days after “a court enters a final decision from which no appeal (other than a petition to the Supreme Court for a writ of certiorari) has been or can be taken that the patent is invalid or not infringed” in a patent infringement lawsuit involving the exclusivity-qualifying patent(s) and either a first applicant or any subsequent applicant that has a tentatively approved ANDA for the drug.  “If for any reason, including lack of FDA approval, Teva fails to begin marketing its ANDA product within 75 days of such a Federal Circuit ruling, Teva would forfeit its 180-day period of generic exclusivity,” says the company in its brief.  Pfizer, for its part, says in its reply brief that Teva failed to justify any departure from the court using the language at 35 U.S.C. § 271(e)(4)(A) in an amended judgment.

The court, in its decision granting Pfizer’s motion and denying Teva’s request, says that it was not persuaded that a departure from the statutory language at 35 U.S.C. § 271(e)(4)(A) is warranted. 

Teva points to 21 U.S.C. § 355(j)(5)(B)(iii)(II)(aa) as contemplating an earlier effective date for approval of an ANDA, specifically the date of a subsequent Federal Circuit decision in its favor.  However, 21 U.S.C. § 355(j)(5)(B)(iii)(II) does not seem to be in conflict with 35 U.S.C. § 271(e)(4)(A); indeed, the section goes on to expressly cite 35 U.S.C. § 271(e)(4)(A), stating ‘if the judgment of the district court is not appealed or affirmed, the approval shall be made effective on the date specified by the district court in a court order under [35 U.S.C. § 271(e)(4)(A)].’ . . .  The two statutes seem to be sufficiently harmonized and turn on the outcome of the appeal of the present case.  But 21 U.S.C. § 355(j)(5)(B)(iii)(II) cannot be read to instruct that the court can, let alone should, prospectively impose any effective date for an ANDA under 35 U.S.C. § 271(e)(4)(A) earlier than the one expressly proscribed by statute. [(Emphasis in original)]

While the court notes Teva’s concern about 180-day exclusivity forfeiture, that concern does not, according to the court, provide sufficient reason for the court to depart from the statutory language of 35 U.S.C. § 271(e)(4)(A) – even if the court has discretion to authorize an effective date for ANDA No. 077342 earlier than October 22, 2019.