By John A. Gilbert, Jr., Karla L. Palmer & Larry K. Houck –

The Government Accountability Office (“GAO”) recently issued a report analyzing the Drug Enforcement Administration’s (“DEA’s”) efforts to combat the diversion of legal controlled substances and listed chemicals.  As the title suggests, “DEA has Enhanced Efforts to Combat Diversion, But Could Better Assess and Report Program Results,” the report is critical of DEA’s ability to measure and report its anti-diversion efforts.  The report also concludes that DEA has adequate internal controls to ensure the quality of its criminal and regulatory investigations.

However, the GAO report fails to address a number of concerns and growing tensions about DEA’s industry guidance or lack thereof, its timeliness in responding to various issues raised by the regulated industry, and DEA’s consistency in its enforcement efforts.   

The GAO conducted the performance audit of DEA from May 2010 through August 2011.  The report responds to two questions:  (1) How DEA manages its investigation efforts to address the growing and evolving nature of prescription drug diversion; and (2) how DEA helps ensure that policies and procedures are followed for investigations, and to what extent DEA determines the results of its efforts on the diversion problem.

With respect to the first matter considered (DEA’s management of its investigation efforts), GAO reports favorably on DEA’s increased criminal and regulatory investigative efforts.  GAO reviewed DEA policies and procedures, and interviewed DEA personnel and state board of pharmacy and medicine officials at five of DEA’s twenty-one field divisions (selected on case volume and geographic diversity).  GAO also interviewed members of ten DEA Tactical Diversion Squads (“TDSs”).  Lastly, GAO interviewed officials of associations representing pharmacies and distributors, as well as certain pharmacies and distributors “to obtain regulated industry’s perspective on how DEA carries out its regulatory responsibilities and interacts with industry.”

GAO notes at the outset of the report that DEA has significantly expanded its resources  to respond to the increased rate of diversion and increased registrant population.  In particular, DEA increased the number of TDSs from five to forty.  TDSs are collaborative teams of DEA diversion investigators and special agents, and state and local law enforcement personnel, whose mission is to “detect, investigate, and refer for prosecution violators of federal and state statutes pertaining to diversion.”  DEA has significantly expanded its investigative efforts through use of the TDSs: DEA increased the number of criminal diversion investigations by 21 percent (from 1,571 in FY 2009 to 1,904 in FY 2010).  DEA plans to add sixteen TDSs over the next two years.  DEA officials told GAO that use of the TDSs has freed up DEA resources previously used to conduct criminal and regulatory investigations, resulting in the number of regulatory investigations more than tripling from 1,173 in FY 2009 to 3,731 in FY 2010.  DEA also stated that it focuses its regulatory investigation efforts on the wholesale registrants, where DEA mostly conducts unannounced investigations.  DEA believes these registrants are the “sources of supply to criminal schemes such as rogue pharmacies and pill mills.”  

The GAO report asserts that, “[i]n addition to conducting regulatory investigations, DEA has also actively engaged registrants and their industry associations to help the registrants understand current trends in diversion and the regulatory obligations they must demonstrate they have fulfilled during regulatory investigations.”  The report states, as an example of such active engagement, that DEA provides information to regulated industry on DEA’s website as well as through conferences, policy letters and correspondence.  Interestingly, the DEA Office of Diversion Control headquarters organizational and contact page on the Internet “has been temporarily removed until further notice” for many months.  The DEA also cancelled an industry conference that was scheduled to occur this fall. 

In contrast to the responsiveness that GAO noted in the report, we remain concerned about DEA’s responsiveness to the concerns and issues raised by the regulated industry.  For example, for a number of years, the regulated industry has been frustrated by the unreasonable amount of time it takes for DEA to process and issue annual manufacturing and procurement quotas.  The lack of clarity and transparency in this process continues to cause severe financial and resource allocation problems for the regulated industry.  That said, the report discusses the targeted outreach efforts that DEA conducted beginning in 2005 to inform wholesale distributors of their regulatory responsibilities to identify, monitor and report suspicious orders of controlled substances, and to assist registrants in the preparation of a DEA investigation.  Nevertheless, we believe that the regulated industry remains quite concerned that DEA’s outreach efforts still fail to provide meaningful clarification to unduly vague regulations addressing a registrant’s suspicious order monitoring, customer due diligence, or reporting suspicious orders, among other issues. 

With respect DEA’s internal controls that help ensure the quality of investigations, GAO reports that DEA has in place internal control activities to ensure that diversion investigators and special agents are skilled enough to carry out their DEA responsibilities.  These activities include guidance and training through program policy and procedure manuals, and diversion investigation courses.  For example, the report notes, DEA provides a twelve-week basic training program and a one-week refresher program for diversion investigators.  However, our experience has been that there remains an inconsistency between DEA offices as to statutory and regulatory requirements, and we have observed a number of cases where DEA offices have provided conflicting advice on those requirements.  For example, we have been told that some DEA offices will advise registrants that List I chemical products are required to be kept in a DEA security cage.  While this may be good practice in certain cases, it is not required by either the CSA or its implementing regulations.  As another example, DEA offices have also provided inconsistent guidance on what constitutes a “significant loss” for reporting purposes pursuant to 21 C.F.R. § 1301.74(c).  Some DEA offices deem the loss of a single dosage unit to be “significant” and therefore reportable.  Other offices have chastised registrants for reporting such insignificant losses.

The report also states that DEA provides a one-week program on criminal diversion for special agents assigned to the Diversion Control Program.  Interestingly the GAO report does not question whether, based on this one week of training, special agents are actually competent to conduct investigations of DEA registrants, although it appears that special agents are increasingly involved in conducting or overseeing investigations of DEA registrants.  The report also notes that “Division management” reviews cases “being elevated for disciplinary action (civil or criminal)” but does not identify whether, by referring to “Division management,” it is referring to the current thirteen career diversion investigator Diversion Program Managers (“DPMs”) who took the twelve-week basic diversion control training course or the seven special agent DPMs who took the mere one-week training program on criminal diversion.

With respect to the second issue considered — GAO’s assessment of how DEA measures the results of its enforcement efforts — GAO sheds a decidedly negative view on DEA’s ability to measure and report on its diversion control efforts.  For example, GAO reported that, although DEA has the ability to track and report on criminal investigations, DEA does not adequately identify and report on its regulatory efforts.  Importantly, given DEA’s increased focus on regulatory and criminal investigations in response to the growing diversion problem in the United States, GAO states, “it is critical for DEA to determine and report on the extent to which these additional efforts are helping reduce diversion.”  While DEA has established five core ways to measure performance and assess outcomes, GAO found that DEA could enhance these measures to better capture and report investigative outcomes and their effect on diversion.  Better reporting would help DEA target its resources, and measure how well agency programs are achieving targeted goals.  In sum, GAO questioned how DEA targets its efforts, monitors and improves performance, or meets performance goals of decreasing diversion if DEA’s core performance matrices do not “clearly explain how they demonstrate progress towards … overall program goals of reducing diversion.” 

GAO recommends that DEA develop an “outcome measure” that directly demonstrates results of the diversion control program.  This would provide better information to DEA program managers and other decision makers including Congress.  The GAO similarly observes that, given that DEA more than tripled the number of regulatory investigations that it conducted between 2009 and 2010, it is important that DEA develop a way to assess and report on the increased number and type of regulatory investigations to determine what effect they are having on compliance and decreasing diversion.  It also notes that DEA management must track the results of its efforts.  For example, rather than individually reporting on the various types of potential sanctions (i.e., administrative recordkeeping, actual diversion, or criminal sanctions, to name a few) the agency currently tallies all administrative, civil and criminal sanctions together, making it difficult to determine whether the sanctions are a result of regulatory noncompliance issues or actual diversion.  The GAO notes that an increase in sanctions does not necessarily correlate with a decrease in diversion, or meeting other program targets, if one is not informed whether those sanctions are a result of criminal investigations or administrative investigations (which could actually indicate a rise in non-compliance among registrants).  

GAO concludes by stating that, whether DEA is making progress towards meeting its goals is unclear; DEA must track whether its efforts are having any impact on diversion so that it can determine what benefits are being realized and what, if any, adjustments need to be made to make programs more effective.  

The DEA disagrees with GAO’s findings and observations concerning the agency’s failure to measure and report on its enforcement efforts.  DEA asserts that further strengthening the current performance measures would not provide any additional benefit in assisting the agency in the allocation of resources or targeting diversion.  The DEA adds that the deterrent effect of regulatory investigations cannot be measured — it is impossible to quantify the “lack of diversion” that is occurring as a result of DEA’s efforts. 

DEA’s Office of Diversion Control has a budget of $292 million, is authorized for 1,300 full-time positions, and regulates more than 1.3 million registrants.  Registration fees fund DEA diversion control activities, and DEA published a Notice of Proposed Rulemaking in July 2011 proposing to significantly increase those fees (see our previous post here).

In conclusion, we believe the DEA should take greater steps to ensure that investigators are aware of the statutory and regulatory requirements, and thus can provide and promote accurate and meaningful guidance to the regulated industry.  While we understand there will always be an inherent tension between regulators and the regulated industry, the current tension between the DEA and the regulated industry needs to be resolved.  Both DEA and the regulated industry have the same goal in mind — ensuring that legitimate patients have access to their medicine while preventing diversion and abuse of controlled substances.

By David B. Clissold & Ricardo Carvajal - 

FDA issued two draft guidance documents that set out the agency’s thinking with respect to new tobacco products and the requirement to either demonstrate substantial equivalence under FDC Act § 905(j) or secure premarket approval under § 910. 

The draft guidance titled Demonstrating the Substantial Equivalence of a New Tobacco Product: Responses to Frequently Asked Questions notes that changes to the label and packaging of a tobacco product make it a “new tobacco product” requiring either premarket approval or a demonstration of substantial equivalence.  Logically, FDA doesn’t intend to enforce those requirements with respect to labeling changes required by law, but the guidance discusses other circumstances under which demonstration of substantial equivalence would be needed.  For example, changes in the brand name of the product, tobacco blending changes that are intended to alter the chemical or perception properties of the new product, and changes in moisture content, ingredient composition, or harmful/potentially harmful constituents would all require a submission.  Even if "a supplier of a component (e.g., the filter) began using a new processing aid (e.g., an antimicrobial agent) for a sub-component (e.g., paper used for the filter's plug wrap) and the change is so minor that it is not even capable of being quantified in the finished product," that change would require a submission.  Notably, the submission of a substantial equivalence report under FDC Act § 905(j) must be accompanied by an environmental assessment ("EA") pursuant to the National Environmental Policy Act.  An EA is a public document that evaluates the potential risk for the product to cause significant environmental effects, focusing on environmental issues relating to the use and disposal of the product.  It discusses the need for the proposal and any alternatives, of the environmental impacts of the proposed action and alternatives, and a listing of agencies and persons consulted.  If potentially adverse environmental impacts are identified for an action, the EA must discuss reasonable alternative courses of action that offer less environmental risk or that are environmentally preferable to the proposed action.  Most actions regarding human drugs, devices, food, and food additives are exempt from the requirement to submit an EA.

If a new product is not found to be "substantially equivalent" to a product on the market as of February 15, 2007, then it is a "new tobacco product" subject to premarket review by FDA.  The draft guidance titled Applications for Premarket Review of New Tobacco Products explains the procedural and substantive requirements that apply to premarket tobacco product applications submitted under FDC Act § 910. Among other things, a PMTA must include:

• full reports of investigations of health risks posed by the tobacco product, which FDA interprets to mean both favorable and unfavorable studies regardless of whether the studies were conducted in the U.S. or abroad, and regardless of whether they complied with human subject protection guidelines;
• a “full statement of all components, ingredients, additives, and properties, and of the principle or principles of operation” of the product; and  
• a “full description of the methods used in, and the facilities and controls used for, the manufacture, processing, and, where relevant, packing and installation a full description” of the product.

A PMTA must also include “information sufficient to enable FDA to make a finding that the marketing of a new tobacco product is ‘appropriate for the protection of the public health’” within the meaning of FDC Act § 910(c)(4).  As this is a new standard in the FDC Act, FDA requests comment on what type of evidence should be required to satisfy the standard, as well as comment on “establishing a baseline for determining whether a new product affects the likelihood that tobacco users will quit or the likelihood that non-users will start using such products.”  However, the guidance makes clear that FDA expects rigorous “well-controlled scientific investigations” that address the product’s comparative health risks, the product’s effect on the likelihood of quitting tobacco use, and its effect on initiation.  In specific, FDA expects comprehensive information on product chemistry; nonclinical studies that address toxicity, abuse liability, and carcinogenicity; and human studies.

By Wes Siegner –

We recently reported that on September 19th, FDA announced the issuance of a revised version of the Agency’s June 2006 final guidance document/Compliance Policy Guide (“CPG”), titled “Marketed Unapproved Drugs – Compliance Policy Guide Sec. 440.100, Marketed New Drugs Without Approved NDAs or ANDAs.”  The revised CPGs says that FDA’s risk-based approach to taking enforcement action with respect to the manufacture and distribution of marketed unapproved drugs first articulated in the June 2006 CPG continues to apply today, but only to unapproved drug products on the market as of September 19, 2011.  Since FDA issued the revised CPG, at conferences we have attended and in phone calls we have received, companies marketing or planning to market prenatal vitamin products, some of which are marketed as unapproved drugs, have been asking whether the guidance was intended to prevent the marketing of new prenatal products as unapproved drugs.

We received an answer from FDA.  The following is a quote from an FDA CDER/Office of Compliance e-mail we received:

Any unapproved drug that enters the market on or after 9/19/11 is subject to immediate enforcement action without prior notice.  Any unapproved drug on the market prior to 9/19/11 is subject to the enforcement priorities in the CPG.
 
Prenatal vitamins are not excepted from this CPG.  If firms intend their prenatal vitamins to be marketed as drugs without approval, they are subject to this enforcement policy.

The likely impact of this change of policy on prenatals will be to force new products to be marketed as dietary supplements, which for the most part appears to be a transition that can be made with appropriate label and claim changes, and possibly some formulation changes.

By Ricardo Carvajal - 

It almost escaped our notice – a blog posting by FDA asserting that “there is currently no evidence to suggest a public health risk from fruit juices, including apple juice” (emphasis added).  The posting went up the same day as the airing of an episode of the Dr. Oz Show that presented the results of independent laboratory testing conducted at the show’s behest, which purportedly showed high levels of arsenic in apple juice.

Evidently the producers of the show provided the test results to FDA prior to airing the episode, and FDA responded with a letter explaining the inadequacy of the test methodology relied on by the independent laboratory (the lab tested for total arsenic, which does not distinguish between the inorganic and potentially harmful forms of arsenic and the organic and essentially harmless forms).  The letter closed with a strong admonition: “The FDA believes that it would be irresponsible and misleading for The Dr. Oz Show to suggest that apple juice contains unsafe amounts of arsenic based solely on tests for total arsenic.”  The day before the show aired, FDA sent the producers an additional letter taking issue with the accuracy of the test results obtained by the show, and restating the agency’s admonition. 

Nonetheless, the show continues its “Arsenic in Apple Juice” campaign online, and is calling for FDA to set a standard for total arsenic in apple juice.  It won’t happen – but we hazard a guess the flap was good for the show’s ratings.

By Cassandra A. Soltis –

Last week, the Federal Trade Commission (“FTC”) announced a settlement with Reebok International Ltd. (“Reebok” or “the Company”) for charges that the Company disseminated false and misleading advertisements for its EasyTone and RunTone shoes.  The FTC’s Complaint alleged, among other things, that Reebok falsely claimed the EasyTone and RunTone shoes “will tone and strengthen the legs and the butt more than” walking and running in typical walking and running shoes.  Complaint at 9-10, Federal Trade Commission v. Reebok Int’l Ltd., No. 1:11-cv-02046-DCN (N.D. Ohio Sept. 28, 2011).  The Complaint also alleged that Reebok falsely advertised that laboratory tests showed that EasyTone shoes “improve muscle tone and strength by 28% in the gluteus maximus, 11% in the hamstrings, and 11% in the calves.”  Id. at 9.

The Judgment provides, in pertinent part, that Reebok may not advertise or otherwise represent through “use of a product name, endorsement, depiction, or illustration” footwear and apparel purporting to improve muscle tone and strength “unless the representation is non-misleading and, at the time of making such representation, [Reebok] possesses and relies upon competent and reliable scientific evidence that substantiates that the representation is true.”  Judgment at 5 (emphasis added).  The Judgment explains that “competent and reliable scientific evidence shall consist of at least one Adequate and Well-Controlled Human Clinical Study . . . that conforms to acceptable designs and protocols, the result of which, when considered in light of the entire body of relevant and reliable scientific evidence, is sufficient to substantiate that the representation is true.”  Id. at 5-6.  The Judgment includes what appears to be a new definition of “Adequate and Well-Controlled Human Clinical Study,” defining it as “a clinical study that is randomized, controlled, blinded to the maximum extent practicable, of at least six weeks duration, 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.”  Id. at 4.  We will have to wait and see whether this language will be used in future cases.       

Although the Judgment applies only to Reebok, it contains, as the FTC indicated, “compliance nuggets” that may be relevant to other advertisers.  Of note is the Complaint’s description of the women in the television and Internet advertisements:  “[t]hese advertisements frequently display women who are very toned, scantily-clad, and sometimes nude,” and “on screen . . . [was a] toned woman wearing a tank top and very short shorts.”  Complaint at 5 (emphases added).  In addition, the Complaint explains that after the model claims the shoes will “help make your legs and butt look great,” the camera “zooms to [the] woman’s backside” multiple times.  Id. at 5-6.  These notations, along with the Judgment enjoining misrepresentations made through “depiction” or “illustration,” suggest that advertisers should be careful to not implicitly overpromise product results by using models demonstrating results that most consumers will never achieve.  See also FTC, “How’s That Workout Working Out?  Tips on Buying Fitness Gear” (cautioning consumers to question whether the ”six-pack[s]” of the “chiseled models in the ads” are a “result of the product they’re peddling – or months in the gym and years of healthy habits”). 

In addition, the Judgment’s definition of “Adequate and Well-Controlled Human Clinical Study” is a reminder that there is no “one size fits all” study design to support product claims.  The Judgment indicates that to substantiate the types of claims Reebok made for its shoes, the duration of a clinical study must be “at least six weeks” and use “appropriate measurement tool[s].”  Judgment at 4.  Accordingly, advertisers should be sure to use appropriate experts – that is, persons “qualified by training and experience to conduct and measure” the effectiveness of the product at issue – to design studies having a proper duration and using suitable measuring tools to yield reliable results.  Id. at 4. 

Reebok has agreed to pay $25 million in consumer refunds to settle the FTC’s charges.  The court approved the Judgment on September 29, 2011.

By Kurt R. Karst –      

Since we last updated our popular Generic Drug Labeling Carve-Out Citizen Petition Scorecard in February 2011, there have been several new citizen petitions submitted to FDA raising questions about FDA approval of ANDAs with labeling that omits information protected by periods of patent or non-patent market exclusivity, or with labeling that is otherwise not the “same as” that of the Reference Listed Drug (e.g., tablet scoring).  Two recent citizen petitions of interest (here and here) concern AstraZeneca’s (“AZ’s”) quetiapine fumarate, approved as SEROQUEL (quetiapine fumarate) Tablets (NDA No. 020639) and SEROQUEL XR (quetiapine fumarate) Extended-Release Tablets (NDA No. 022047). 

SEROQUEL is listed in the Orange Book with a single patent – U.S. Patent No. 4,879,288 (“the ‘288 patent”) – the pediatric exclusivity for which expires on March 26, 2012.  The Orange Book also lists three periods of 3-year new clinical investigation exclusivity: “I-560” exclusivity (“MAINTENANCE TREATMENT FOR BIPOLAR I DISORDER, AS ADJUNCTIVE THERAPY TO LITHIUM OR DIVALPROEX”) the pediatric exclusivity for which expires on November 13, 2011, and two periods of “NPP” (New Patient Population) exclusivity from NDA supplement approvals for the treatment of schizophrenia in adolescents 13 to 17 years of age and the treatment of bipolar mania in children and adolescents 10 to 17 years of age.  The pediatric exclusivity applicable to the two periods of exclusivity coded as NPP expire on June 2, 2013. 

SEROQUEL XR is listed in the Orange Book with two patents – the ‘288 patent and U.S. Patent No. 5,948,437 (“the ‘437 patent”).  The ‘437 patent expires on May 28, 2017, but is subject to a period of pediatric exclusivity that expires on November 28, 2017.  The Orange Book also lists several periods of 3-year new clinical investigation exclusivity, four of which have expired but are subject to unexpired periods of pediatric exclusivity: (1) “I-618” (“ADJUNCTIVE THERAPY IN THE TREATMENT OF MAJOR DEPRESSIVE DISORDER (MDD)”) which expires on December 2, 2012; (2) “I-576” (“ADJUNCTIVE THERAPY IN THE TREATMENT OF BIPOLAR MANIA”) the pediatric exclusivity for which expires on April 8, 2012; (3) “I-574” (“MONOTHERAPY IN THE TREATMENT OF BIPOLAR DEPRESSION”) the pediatric exclusivity for which expires on April 8, 2012; (4) “D-117” (“50 MG TABLET FOR INITIATION OF DOSE TITRATION FOR BIPOLAR DISORDER”) the pediatric exclusivity for which expires on April 8, 2012; and (5) “I-575” (“MONOTHERAPY IN THE TREATMENT OF BIPOLAR MANIA”) the pediatric exclusivity for which expires on April 8, 2012.   

AZ’s two quetiapine fumarate petitions, which cite FDA’s February 2011 petition response concerning labeling carve-outs for generic versions of XYZAL (levocetirizine dihydrochloride) to support their position, are presumably intended to fit hand-in-glove with one another.  Both petitions raise issues with the omission of information in Table 2 of the products’ labeling concerning glucose-related data and information, and with the omission of information on suicide (contained in both the black box warnings and the “Warnings and Precautions” labeling sections for each product).  In each case, AZ argues that the omission of specific, protected information in generic drug labeling would make the generic product less safe or effective for the remaining non-protected conditions of use of SEROQUEL or SEROQUEL XR.

Of particular interest is the SEROQUEL petition, in which AZ argues against the omission of certain information protected by exclusivity FDA granted with respect to SEROQUEL XR approvals – specifically, by the periods of 3-year exclusivity concerning the treatment of bipolar disorder and MDD.  According to AZ:

FDA has periodically required AstraZeneca to revise its label to include new information concerning the use of Seroquel.  Some of this new information in the Seroquel label is based on Seroquel XR protected data that cannot be included in a generic drug’s labeling until the associated data exclusivity periods have expired.  If FDA were to permit a generic to omit such information from its labeling – after requiring its inclusion in the labeling for Seroquel – the agency would run afoul of the Administrative Procedure Act's prohibition on arbitrary and capricious agency action.

We also note a second addition under the subheading “FDA Citizen Petition Responses Not Permitting a Labeling Carve-Out.”  In May, FDA granted in part and denied in part a Citizen Petition concerning generic COLCRYS (colchicine) Tablets, which is approved under three NDAs (the parent application of which is NDA No. 022352) for the prophylaxis and treatment of gout flares in adults, and for the treatment of familial mediterranean fever in adults and children 4 years or older.  The 27-page petition response is interesting for a variety of reasons (and is a must-read for FDA’s interpretation of FDC Act § 505(b)(2) and policies concerning the granting of exclusivity), but for our purposes here, FDA appears to have determined (page 24) that certain labeling information concerning acute gout flares protected by a period of 3-year new clinical investigation exclusivity cannot be omitted from generic drug labeling.  According to FDA:

It is well-recognized that recent colchicine use (i.e., for prophylaxis of gout flares) increases the susceptibility to toxicity related to additional doses of colchicine.  To the extent that a healthcare provider determines it is necessary to use colchicine for treatment of an acute gout flare in a patient receiving colchicine for prophylaxis, adequate information about potential toxicity of colchicine dosing would be important to minimize the risk of cumulative toxicity.  Accordingly, the labeling for a single-ingredient colchicine product seeking approval for prophylaxis of gout flares should inform healthcare providers that the lower dose colchicine regimen evaluated in the AGREE trial is adequate to treat an acute gout flare that may occur during chronic colchicine use.  In addition, a Medication Guide for any subsequent colchicine product would be expected to contain information similar to the Medication Guide for Colcrys.

Below is our updated scorecard.

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 (February 24, 2011) – XYZAL (levocetirizine dihydrochloride)
• FDA Response, Docket No. FDA-2011-P-0128 (May 11, 2011) – XIBROM/BROMDAY (bromfenac)

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)
• Docket No. FDA-2011-P-0662 – SEROQUEL (quetiapine fumarate)
• Docket No. FDA-2011-P-0663 – SEROQUEL XR (quetiapine fumarate)
• Docket No. FDA-2011-P-0702 – DORYX (doxycycline hyclate)

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) 

Withdrawn or “Dead” Labeling Carve-Out Citizen Petitions

• Docket Nos. FDA-2004-P-0426 & FDA-2003-P-0081; FDA Letter – SKELAXIN (metaxalone) (see our previous post here)
• Docket No. FDA-2001-P-0445 – NEURONTIN (gabapentin) Capsules

By Jennifer D. Newberger –

On September 30, 2011, FDA announced the issuance of a Draft Guidance, De Novo Classification Process (Evaluation of Automatic Class III Designation), intended to update and streamline the de novo review process.

The de novo review process, formally known as Evaluation of Automatic Class III Designation, is established by section 513(f)(2) of the Federal Food, Drug, and Cosmetic Act ("FDC Act"), as amended.  This process is a compromise between the 510(k) clearance process by which over 95% of medical devices come to market in the U.S., and the more rigorous premarket application ("PMA") approval process, generally reserved for higher risk devices.  It was added to the FDC Act by the Food and Drug Administration Modernization Act of 1997 ("FDAMA") to address novel devices that lack a predicate device but pose only a low to moderate risk, making them ill suited to the PMA process.

Both FDA and industry agree that the de novo classification process has not been implemented very well, especially in recent years.  We have blogged on the ballooning review times.  It also has been difficult to get FDA to make timely decisions on whether a device is suitable for de novo review and what data requirements apply. 

The Draft Guidance appears intended to address these failings.  It states:

FDA believes that the process could be improved and greater clarity could be provided regarding suitability and data needed so that the de novo process may be a more viable pathway for novel low to moderate risk devices. Accordingly, FDA is issuing this draft guidance to provide updated recommendations for more efficient interactions with FDA, including what information to submit when seeking a path to market via the de novo process. This guidance describes a mechanism to provide (1) greater clarity about the suitability of a device for the de novo process, and (2) timely input on the type of data necessary to support de novo classification of a suitable device.

Under the statute, before a manufacturer may utilize the de novo process, it must submit a 510(k) notification to the agency, even if it knows no marketed predicate device exists.  It then must wait for FDA to issue an NSE determination before it can file a petition for de novo classification.  This requirement to submit a 510(k) notification and wait for an NSE determination, knowing that no valid predicate exists, significantly delays the process of classifying low- to moderate-risk devices through the de novo classification process.

The Draft Guidance proposes to transcend the statutory obstacle with a new administrative process, referred to as a “pre de novo submission,” or PDS.  This voluntary process allows for early interaction between industry and FDA regarding whether a device is likely to be suitable for de novo classification.  If FDA determines the device is likely to be suitable, the sponsor may then follow the initial review with concurrent submission of a 510(k) notification and de novo classification petition.  As described in the Draft Guidance:

The purpose of the PDS is for us to analyze whether a new device appears to be suitable for the de novo process, and, if so, to provide an opportunity to advise you on the documentation needed in the subsequent 510(k) and de novo petition. The primary advantage of the PDS process is that it provides an early opportunity to obtain our assessment of the suitability of a new device for the de novo process, our preliminary perspective on the likely classification, as well as feedback on the evidence, including performance and/or clinical data, that will likely be necessary to support the de novo petition. By obtaining this early feedback, you are more likely to optimize your resources in collecting the necessary safety and effectiveness evidence needed to support a de novo petition, without the need to perform additional tests.  This should also facilitate the review of a subsequent de novo petition.

After a PDS is submitted, FDA may request, within 60 days, any additional information it feels is needed.  The sponsor also may submit a meeting request to discuss the PDS.  FDA intends to issue a suitability determination within 60 days, after which the sponsor may submit a concurrent 510(k) notification and de novo petition.  FDA will then review the 510(k) notification, issue the NSE (unless a predicate device has been classified through the de novo process in the interim), and then proceed directly to reviewing the classification petition.  

The proposed PDS process has the potential to make the de novo pathway a more realistic option.  It will presumably allow an early assessment of whether the product is likely suitable for the de novo pathway, and could shorten the overall review time currently associated with de novo classification. 

A key question left unanswered by the Draft Guidance is whether FDA will be willing to designate a wider variety of devices as eligible for the de novo pathway.  In the past, FDA has been quite limited in this regard.  If the PDS process makes the de novo pathway more viable, we would urge FDA to allow more devices to take advantage of it than has been the case in the past.  Interestingly, increased use of the de novo pathway also would move the FDA away from the 510(k) process and review for substantial equivalence, as critics have urged.  One wonders whether FDA’s implementation of this Draft Guidance might be a baby step toward a new review process that ultimately could replace 510(k) clearance.

By Ricardo Carvajal –

FDA released an ambitious Draft Strategic Plan for 2012-2016 to guide the activities of its Foods and Veterinary Medicine ("FVM") Program (meaning the activities of CFSAN and CVM, as well as ORA’s food-related activities).  The Plan articulates priorities organized around the following eight goals:

• “Improve effectiveness and efficiency across all levels of the FVM Programs” – among other things, FDA plans to address the thorny problem of developing public health metrics.
• “Establish science-based preventive control standards across the farm-to-table continuum,” largely through regulations and guidance issued under the authorities granted under the FSMA.
• “Achieve high rates of compliance with preventive control standards domestically and internationally” through inspections, enforcement, and increased collaboration with state officials.
• “Strengthen scientific leadership, capacity, and partnership to support public health and animal health decision making,” with a focus on “mission-critical science capabilities.”
• “Provide accurate and useful information so consumers can choose a healthier diet and reduce the risk of chronic disease and obesity” – menu/vending machine labeling and an update of the nutrition facts panel are on the agenda.
• “Encourage food product reformulation and safe production of dietary supplements” – sodium and trans fat are targeted for reduction.  As for dietary supplements, FDA intends to enhance post-market surveillance and to finalize and implement the new dietary ingredient guidance.
  “Improve detection of and response to foodborne outbreaks and contamination incidents.”
• “Advance animal drug safety and effectiveness,” with attention to encouraging the “judicious use of medically important antibiotics.”

Comments on the plan should be submitted by November 1, 2011.

By Kurt R. Karst –      

Last week, Representative Michael McCaul (R-TX), along with Reps. G.K. Butterfield (D-NC), Sue Myrick (R-NC), and Chris Van Hollen (D-MD), introduced H.R. 3059, the Creating Hope Act of 2011.  The bill is a companion bill to S. 606, which was introduced in the Senate earlier this year by Senator Robert Casey (D-PA), along with co-sponsors Sens. Scott Brown (R-MA), Sherrod Brown (D-OH), Al Franken (D-MN), and Johnny Isakson (R-GA).  Both the House and Senate versions of the Creating Hope Act of 2011, which are almost identical, are substantially similar to the 2010 version of the bill, S. 3697, which was introduced by now-retired Sen. Sam Brownback (R-KS).  The Creating Hope Act would amend FDC Act § 524 to change the transferable Priority Review Voucher (“PRV”) program created by the 2007 FDA Amendments Act (the so-called “treat and trade” program), and would amend the PRV program to extend it to applications for a “rare pediatric disease.”  Under the PRV program, sponsors of certain new drugs and biologics for “tropical diseases” that have received priority review may receive a PRV entitling the holder to a 6-month priority FDA review of another application that would otherwise be reviewed under FDA’s standard 10-month review clock. 

We previously reported on the Creating Hope Act of 2010 here, and we refer you to that post for a summary of the bill.  The 2011 version of the bill, which we reported on here, makes some revisions to the 2010 version.  The most significant change appears to be the conditions under which FDA may refuse to issue a PRV upon the approval of a rare pediatric disease product application – the so-called “good faith intent to market determination.”  Under both the 2010 and 2011 bills, FDA may consider several factors in determining whether to refuse to issue a PRV, including “the history of such sponsor of producing rare pediatric disease products for which such sponsor received a [PRV], orphan drugs for which the sponsor received exclusivity under [FDC Act § 527], or pediatric drugs for which the sponsor received an additional 6 months of exclusivity under [FDC act § 505A].”  Added to the 2011 version of the bill is the requirement that FDA issue guidance before making a good faith intent to market determination. 

Rep. McCaul, who co-chairs the House Childhood Cancer Caucus with Rep. Van Hollen, introduced H.R. 3059 on the day of the 2nd annual Childhood Cancer Summit.  (The caucus website includes links to several stories on the Creating Hope Act and an endorsement video from actor Dennis Quaid.)  In a Dear Colleague Letter signed by Rep. McCaul and the bill co-sponsors, they urge support for the bill, stating that it “would expand and strengthen the cost-neutral FDA [PRV] program, giving pharmaceutical companies an incentive to develop treatments for rare diseases that are often less profitable than treatments for more common medical conditions.”  In addition, the letter notes that the possibility of a shortened review time offered by a PRV “is estimated to be worth hundreds of millions of dollars.”

The true value of a PRV is debatable.  BIO Ventures for Global Health has estimated that, based on certain assumptions, a PRV could be worth a few hundred million dollars.  The group cautions, however, that “[o]ne factor that may reduce the market value of priority review vouchers is risk tolerance.  For example, companies may not be willing to invest as much in obtaining a priority review voucher if there are any doubts as to whether or not their product will be approved.”

To date, FDA has issued only a single PRV – with the approval of Novartis’ COARTEM (artemether; lumefantrine) for the treatment of acute, uncomplicated malaria infections in adults and children weighing at least five kilograms (see our previous post here).  Novartis traded in the PRV (instead of selling it) to obtain priority review for a supplemental Biologics License Application for ILARIS (canakinumab) for the treatment of gouty arthritis attacks in certain patients, but an expedited review did not pan out for the company (see our previous post here).  Thus, to date, the PRV market is untested.  Adding further uncertainty to PRV value is the high PRV redemption user fee FDA has set.  FDA recently set the Fiscal Year 2012 PRV redemption fee at $5,280,000 – and that amount is in addition to the Fiscal Year 2012 full application fee of $1,841,500. 

By Cassandra A. Soltis –

There is yet another lawsuit to add to the growing list of class actions against companies marketing foods bearing “natural” claims.  On September 21, 2011, a class action complaint was filed in California against Bear Naked, Inc. (“Bear Naked” or “the Company”), alleging that several of the Company’s products labeled as “100% Pure & Natural” contained synthetic ingredients.  Complaint at 1, Thurston v. Bear Naked, Inc., No. 11-cv-04678-LB (N.D. Cal. Sept. 21, 2011).  The Complaint seeks damages and injunctive and declaratory relief for alleged common law fraud and unjust enrichment, as well as for violations of several California laws regarding unfair, unlawful, deceptive, misleading, and fraudulent practices.  Id. at 12-19.

According to the Complaint, several Bear Naked products contain ingredients, such as lecithin, which are “recognized to be . . . synthetic additive[s] by federal regulation.”  Id. at 8.  The federal regulation referred to is a United States Department of Agriculture (“USDA”) National Organic Program (“NOP”) regulation that lists those nonagricultural substances – both nonsynthetic and synthetic – that are “allowed as ingredients in or on processed products labeled as ‘organic’ or ‘made with organic’” ingredients.  7 C.F.R. § 205.605.  The Complaint asserts, among other things, that the Bear Naked products’ labels are false and misleading because the claim “100% Pure & Natural” suggests to “a reasonably prudent consumer” that the product does not contain synthetic ingredients.  Complaint at 1.

Determining whether an ingredient is “natural” is generally a very complex question.  The Food and Drug Administration’s (“FDA’s”) informal definition of “natural” is “that nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in the food.”  58 Fed. Reg. 2302, 2407 (Jan. 6, 1993).  While this definition might seem straightforward, in practice, it has proven to be open to interpretation and influenced by other factors.  For example, FDA has reportedly stated that high fructose corn syrup may be “natural” or not, depending on how the syrup is manufactured. 

In light of this lawsuit, and absent a formal FDA definition of “natural,” it would be prudent for food companies considering a “natural” claim to determine what, if anything, the USDA has said about the ingredients.

By Kurt R. Karst –      

A recent decision from the U.S. District Court for the Eastern District of North Carolina in patent infringement litigation concerning Sandoz, Inc.’s (“Sandoz’s”) pending ANDA for a generic version of XYZAL (levocetirizine dihydrochloride) is one of the rare instances in which a court has vacated a 30-month litigation stay triggered by a timely filed patent infringement lawsuit pursuant to FDC Act § 505(j)(5)(B)(iii).

Under the FDC Act, a timely filed patent infringement lawsuit in response to a Paragraph IV certification means that “the [ANDA] approval shall be made effective upon the expiration of the [30-month stay] . . . or such shorter or longer period as the court may order because either party to the action failed to reasonably cooperate in expediting the action . . . .”  FDC Act § 505(j)(5)(B)(iii).  As we previously reported, in May 2008, Sandoz submitted an ANDA to FDA containing a Paragraph IV certification to U.S. Patent No. 5,698,558 (“the ‘558 patent”), which is listed in the Orange Book for XYZAL as a method-of-use patent with a U-812 patent use code (“RELIEF OF SYMPTOMS ASSOCIATED WITH SEASONAL AND PERENNIAL ALLERGIC RHINITIS”) and that is subject to a period of pediatric exclusivity that expires on March 24, 2013.  In February 2010, Sandoz reportedly revised its Paragraph IV certification to the ‘558 patent to a “section viii” statement and requested ANDA approval for chronic idiopathic urticaria and labeling that carves out seasonal and perennial allergic rhinitis.  (FDA ruled in response to a citizen petition – Docket No. FDA-2010-P-0545 – that such a labeling carve-out is permissible.)

Despite the change from a Paragraph IV certification to a “section viii” statement, Magistrate Judge William A. Webb issued a Memorandum and Recommendation/Order on December 3, 2010 extending the 30-month patent litigation stay on the basis that Sandoz had failed to cooperate reasonably in expediting the patent litigation.  Sandoz appealed Judge Webb’s Order and asserted lack of subject matter jurisdiction, that a stay is no longer applicable because the company’s ANDA no longer contains a Paragraph IV certification to the ‘558 patent, and that the facts upon which Magistrate Judge Webb based his decision simply do not warrant an extension of the 30-month stay.

Judge Malcolm J. Howard agreed with Sandoz on this issue.  According to Judge Howard:

The stay authorized by 21 U.S.C. § 355(j)(2)(B)(iii) applies only where an ANDA contains a paragraph IV certification.  In light of Sandoz’s withdrawal of its paragraph IV certification, plaintiffs were not entitled to an extension of the the [sic] thirty-month stay.  In the event Sandoz is subsequently required to amend its section viii statement to a paragraph IV certification, plaintiffs may be entitled to an additional stay or injunctive relief delaying FDA approval.  Absent such a determination, however, no basis exists for extending the stay of FDA approval. [(Emphasis added)]

Despite vacating the 30-month litigation stay extension, Judge Howard denied a separate Motion to Dismiss for Lack of Subject Matter Jurisdiction filed by Sandoz.  In that motion, Sandoz argued that the patent infringement case should be dismissed because the change from a Paragraph IV certification to a “section viii” statement divested the court of subject matter jurisdiction. 

By Michelle L. Butler –

On September 27th, FDA published a guidance document regarding user fee waivers, reductions, and refunds for drug and biological products.  See 76 Fed. Reg. 59705 (Sept. 27, 2011); FDA, Guidance for Industry: User Fee Waivers, Reductions, and Refunds for Drug and Biological Products (Sept. 2011).  This is a final version of the document FDA published in draft in March 2011, which we described in detail here.  

According to the Federal Register notice that announced publication of the guidance document, the Agency received no comments in response to its request for comments on the draft guidance document earlier this year, and the only changes to the guidance document were minor editorial changes and a small clarification.  This clarification pertains to the determination of whether an applicant has limited financial resources for purposes of the public health and barrier to innovation waiver grounds.  FDA clarified that $20 million benchmark for determining that an applicant has limited resources for user fee purposes will begin with fees assessed for FY 2011.  Guidance, at 8.  For waivers of fees for fiscal years prior to 2011, “the Agency intends to continue to use as its general market of limited resources the $10 million benchmark cited in the 1993 interim guidance, adjusted for inflation.”  Id. at 8, n.20.

By Kurt R. Karst –      

With each stroke of the pens President Obama used to sign into law the Leahy-Smith America Invents Act, it seemed as though another nail was hammered into the coffin of any attempts to deny The Medicines Company (“MDCO”) a win in the company’s decade-long battle to obtain a Patent Term Extension (“PTE”) for U.S. Patent No. 5,196,404 (“the ‘404 patent”) covering ANGIOMAX (bivalirudin).  Indeed, in what we thought might very well be our final blog post on the issue, we essentially said adieu to the case, but did leave some room open for something crazy to happen in the U.S. Court of Appeals for the Federal Circuit (where APP Pharmaceuticals, LLC (“APP”) has been duking it out with MDCO – see here and here) given all of the twists and turns that have occurred with the ANGIOMAX ‘404 patent PTE over the years.    

The ink from President Obama’s signature on the Leahy-Smith America Invents Act was hardly dry when MDCO, on September 19, 2011, sent a letter to the Federal Circuit notifying the Court of the enactment of Section 37 of the new law and asserting that Section 37 resolves the merits of the ongoing litigation with APP, for which oral argument had been set for October 5, 2011.  As we previously reported, Section 37, titled “Calculation of 60-Day Period for Application of Patent Term Extension,” amended the PTE statute at 35 U.S.C. § 156(d) as follows:

(a) IN GENERAL.—Section 156(d)(1) of title 35, United States Code, is amended by adding at the end the following flush sentence:

“For purposes of determining the date on which a product receives permission under the second sentence of this paragraph, if such permission is transmitted after 4:30 P.M., Eastern Time, on a business day, or is transmitted on a day that is not a business day, the product shall be deemed to receive such permission on the next business day. For purposes of the preceding sentence, the term ‘business day’ means any Monday, Tuesday, Wednesday, Thursday, or Friday, excluding any legal holiday under section 6103 of title 5.”.

(b) APPLICABILITY.—The amendment made by subsection (a) shall apply to any application for extension of a patent term under section 156 of title 35, United States  Code, that is pending on, that is filed after, or as to which a decision regarding the application is subject to judicial review on, the date of the enactment of this Act.

In response to MDCO’s letter, APP, on September 20, 2011, filed a letter of its own, as well as a motion.  In both documents, APP requests the Court to order supplemental briefing on Section 37 and to postpone oral argument.  According to APP:

Even assuming Section 37 of the Act means what MDCO says (a question not yet briefed), Section 35 provides that it does not take effect for one year. Pub. L. 112-29 § 35, 125 Stat. 284, 341 (2011).  Unlike other provisions, Section 37 provides no other effective date. . . .

Moreover, and in any event, the amendment cannot constitutionally be applied here.  Among other reasons, Congress cannot revive a patent that has entered the public domain.

Allowing Congress to resurrect an expired patent would obviate the Constitution's "limited Times" provision and would not promote the progress of science.  U.S. Const. art. I, § 8, cl. 8.  "Congress may not … 'authorize the issuance of patents whose effects are to remove existent knowledge from the public domain, or to restrict free access to materials already available.'''  Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 146 (1989) (quotation omitted). . . .

Late last week, the Federal Circuit ordered that oral argument be postponed and that MDCO and APP simultaneously file supplemental briefs addressing the effect of Section 37 of the America Invents Act on the disposition of the case. 

By Kurt R. Karst –      

Generic Pharmaceutical Association (“GPhA”) Board of Directors Chairman Paul Bisaro recently sent a letter to members announcing both the completion of the negotiating phase (see here and here) of what is intended to become the Generic Drug User Fee Act (“GDUFA”) and GPhA’s formal ratification of the performance goals letter and the proposed legislative language needed to authorize GDUFA agreed to between industry and FDA.  Both of those documents have been sent off to the Department of Health and Human Services and to the Office of Management and Budget (“OMB”) for review.  Once approved, the documents will then be sent to Congress for enactment (presumably as part of a larger bill including other user fee statutes, such as the Prescription Drug User Fee Act (“PDUFA”)). 

The GDUFA draft performance goals letter and the proposed legislative language have not yet been publicly released.  They will be posted on FDA’s website once OMB clears them.  Both the GPhA member letter and the negotiation meeting minutes provide some details on the program.  (We’ll stick to those documents now and will plan on providing greater detail on the GDUFA performance goals letter and the proposed legislative language once they are out in the public domain.) 

The intent of GDUFA, like other user fee statutes, is to provide FDA with funding supplemental to the traditional funds Congress appropriates to FDA each year with the expectation that FDA will significantly enhance the approval process.  Since the beginning of GDUFA negotiations, the aims of the program have been three-fold: (1) Safety (“Ensure that industry participants, foreign or domestic, who participate in the U.S. generic drug system are held to consistent high quality standards and are inspected biennially, using a risk-based approach, with foreign and domestic parity.”); (2) Access (“Expedite the availability of low cost, high quality generic drugs by bringing greater predictability to the review times for ANDAs, amendments and supplements, increasing predictability and timeliness in the review process.”); and (3) Transparency (“Enhance FDA’s ability to protect Americans in the complex global supply environment by requiring the identification of facilities involved in the manufacture of generic drugs and associated APIs, and improving FDA’s communications and feedback with industry in order to expedite product access.”).  Both the draft performance goals letter and the proposed legislative language seek to embody these three principles.

With these principles in mind, FDA and the generic drug industry agreed early on to conduct GDUFA negotiations under a metaphorical “four walls and a roof” – specifically:

• FDA must continue to adhere to a general first-in-first-reviewed application review policy, with no separation of the currently pending application queue (the so-called “backlog”);
• A goal to reduce the queue to a steady state level, where applications coming in can go out within the goal times, by the end of year 5 of the program;
• A primary application review goal of 10 months in year 5 of the program;
• User fee resources not exceeding $250-$300 million annually, as a basis for discussion; and
• Commitment by FDA to a risk-adjusted biennial surveillance inspection model with foreign and domestic parity in year 5.

What You Pay (GDUFA User Fees)

The total amount of annual funding from GDUFA user fees, which is supposed to be set at $299 million in Fiscal Year (“FY”) 2013 (and at $299 million plus an annual adjustment in FYs 2014-2017), is intended to come from various funding sources, “and any individual fee is expected to be approximately an order of magnitude of lower than PDUFA application fees.” 

There are proposed to be four types of fees in two categories – application fees and facility fees.  Application fees, which account for 30% of total fee revenue each FY, include a one-time (FY 2013) ANDA backlog fee for ANDAs pending on October 1, 2012, an original ANDA and Prior Approval Supplement (“PAS”) fee, and a Type II Drug Master File (“DMF”) “first reference fee.”  A facility fee, which accounts for 70% of total fee revenue each FY, must be paid by both Finished Dosage Form (“FDF”) and Active Pharmaceutical Ingredient (“API”) manufacturers.  FDF facility fees account for 80% of facility fee revenue, and API facilities account for 20% of facility fee revenue, and there is “a modest fee differential” for foreign FDF and API facilities “reflecting the added costs of overseas inspection.” 

According to GDUFA negotiation meeting minutes, the percentage of user fees to be obtained from different industry segments by fee type and year are estimated to be as follows:

FY 2013

• 17% from ANDA submissions pending on October 1, 2012 (i.e., the ANDA backlog)
• 5% from Type II DMF submissions
• 20% from ANDAs and PASs (where the PAS fee is half the amount of that for an original ANDA)
• 46% from FDF facilities
• 12% from API facilities

FYs 2014-2017

• 6% from Type II DMF submissions
• 24% from ANDAs and PASs (where the PAS fee is half the amount of that for an original ANDA)
• 56% from FDF facilities
• 14% from API facilities

With respect to the backlog fee, $50 million, or approximately 17% of the $299 million fee revenue set for FY 2013, will be split equally among the ANDAs pending at FDA as of October 1, 2012.  As of August 31, 2011, we understand that the ANDA backlog stood at around 2,500 applications.  Assuming that number remains constant, the ANDA backlog fee could be around $20,000 per ANDA.  (It is possible, however, that with the prospect of paying a backlog fee, ANDA sponsors will withdraw some pending ANDAs before October 1, 2012, thereby decreasing the ANDA backlog andincreasing the per-ANDA backlog fee.)

The $249 million remaining for FY 2013 after the ANDA backlog fee revenue is subtracted will be split as shown above.  With many hundreds of ANDA and PAS submissions each year, the ANDA and PAS application fee could be relatively modest (at least as compared to PDUFA application fees).  Similarly, assuming there are a couple of thousand fee-paying FDF and API facilities, facility fees may not be particularly high (again, at least as compared to PDUFA establishment fees).  And that, of course, is the intent.  As explained in GDUFA negotiation meeting minutes:

Recognizing the critical role generic drugs play in providing more affordable, therapeutically equivalent medicine, the Generic Drug User Fee program is designed to keep individual fee amounts as low as possible to supplement appropriated funding to ensure that consumers continue to receive the significant benefits offered by generic drugs which provided more than $824 billion dollars in savings to the nation’s health care system in the last decade alone.  The additional resources called for under the agreement, an inflation adjusted $299 million annually for each of the five years of the program, will provide FDA with the ability to perform critical program functions that could not otherwise occur.  This program is not expected to add significantly to the cost of generic drugs: given that a reported 3.99 billion retail prescriptions per year were dispensed in the United States in 2010, and assuming that 78% of these prescriptions were filled by generic drugs, if the entire cost of the program were passed through to U.S. retail consumers (although this is not the intent), the average cost of a prescription filled by a generic drug in the Unites States would rise less than a dime per prescription.  Moreover, with the adoption of user fees and the associated savings in development time, the overall expense of bringing a product to market may decline and result in reduced costs.

Nonpayment of GDUFA user fees within the period specified by the statute could have significant implications.  Consider the following, which is taken from recent GDUFA negotiation meeting minutes:

The groups also discussed impact of nonpayment of fees, such as inclusion on an “arrears” list, non review of any new applications until all fees are paid, and potential for deeming misbranded products produced in facilities that fail to pay fees.  Special issues discussed were the impact of fee collection on paragraph IV applications, clarifying that the date of receipt of such applications will not be changed as long as fees are paid with in 20 calendar days of application submission; if fees are not paid, the FDA will “refuse to receive” the application.

What You Get (Performance Goals)

The proposed GDUFA performance goals letter, like that for PDUFA, is long and contains a lot of detail.  Below are some of the highlights. 

Application Metrics – The program is structured based on five cohorts of submission dates for original ANDAs and Type II DMFs, which correspond to the five fiscal years under GDUFA.  For ANDAs in the year 5 cohort (i.e., applications submitted in FY 2017, October 1, 2016 to September 30, 2017), FDA will review and act on 90% of complete electronic ANDAs within 10 months after the date of submission.  As under the initial iteration of PDUFA, there are various interim year metrics, but we understand that things only really begin to take off at the year 3 cohort (i.e., applications submitted in FY 2015, October 1, 2014 to September 30, 2015).

Backlog Metrics – FDA will reportedly review and act on 90% of all ANDAs, ANDA amendments and ANDA PASs regardless of current review status (whether electronic, paper, or hybrid) pending on October 1, 2012 by the end of FY 2017 (i.e., September 30, 2017).

CGMP Inspection Metrics – FDA agreed to conduct “risk-adjusted biennial CGMP surveillance inspections of generic API and generic FDF manufacturers, with the goal of achieving parity of inspection frequency between foreign and domestic firms in FY 2017.”  Domestic and foreign facility parity was an important concept during GDUFA negotiations (and has been since, with a recent GAO report and Senate Health Committee hearing).  As noted in GDUFA meeting minutes, “[t]he program’s goals of ensuring FDA has necessary resources to conduct needed inspections as part of the complete review framework and achieve parity of GMP inspections for foreign and domestic facilities by the 5th year of the user fee program will [] provide significant value to industry participants given that outstanding inspections can result in delays of ANDA approvals.”

Efficiency Enhancements – FDA agreed to implement various efficiency enhancements including: (1) use of complete review/response letters for ANDAs and DMFs; (2) a DMF completeness assessment (at least for DMFs intending to be referenced by ANDA sponsors); (3) division level deficiency review for ANDAs and DMFs; (4) rolling review of ANDAs and DMFs; and (5) first cycle deficiency meetings for ANDAs and DMF.

Regulatory Science – FDA also agreed to “undertake various initiatives designed to enhance post-market safety, to develop guidance to industry, and to mitigate regulatory science gaps in select generic regulatory pathways.”

By John R. Fleder –

It is no secret that the government has devoted considerable resources in recent years seeking to combat what it has contended is wide-spread illegal off-label marketing and promotion of devices and drugs.  Many people believe that the government has created this “problem” because of its long-standing lack of clarity regarding what is, and is not, acceptable practices for drug and device companies.  This uncertainty as to what is or is not illegal conduct has recently become even more cloudy because of positions the government has taken in recent litigation.

United States v. Caronia is just one of many off-label criminal cases.  Caronia was convicted of conspiring to introduce misbranded drugs into interstate commerce because those drugs allegedly did not have adequate directions for use.  His appeal of that conviction has raised some interesting issues in the briefs filed in that case, which are available here, here, and here.

First, it is noteworthy that the United States Court of Appeals for the Second Circuit on its own called for supplemental briefing in the case.  It had the litigants brief the applicability of Sorrell v. IMS Health Inc., 131 S. Ct. 2653 (2011), to the Caronia case.  In Sorrell, the Supreme Court ruled that a Vermont statute regulating certain speaker and content-based restrictions relating to pharmaceutical companies violated the First Amendment of the U.S. Constitution.  The Court of Appeals obviously read Sorrell and presumably thought that it does impact the Caronia appeal in some fashion.

One of the appellate briefs supporting Mr. Caronia’s appeal was filed by the Medical Information Working Group (MIWG), a group composed of eleven major pharmaceutical companies.  The brief argues that the FDA’s off-label regulations “are no less speaker- and content-based than was the law at issue in Sorrell.”  MIWG Amicus Brief at 1-2.  The brief also argues that there is indeed significant ambiguity regarding precisely what speech is proscribed by the FDCA, as construed and applied by FDA and the Department of Justice.

The brief also makes a number of very interesting assertions including that:

• The government has represented to courts that the presence of off-label promotion is a sufficient condition for the government to obtain a misbranding conviction, citing to the government’s proposed jury instructions in the Caronia case, which the court used to charge the jury.  The government stated in the recent Lauren Stevens case, however, that if a company pays a physician to provide an educational presentation to doctors, the manufacturer is subject to criminal prosecution if that physician affirmatively discusses the off-label use, but the same manufacturer will not be subject to prosecution if the physician provides the same information in response to an audience member’s unsolicited request.
• The government has asserted that a manufacturer cannot expressly or implicitly promote the safety or efficacy of an off-label use but can disseminate safety warnings that discourage that use.
• The government represented to the Court of Appeals in Caronia that off-label promotion is not itself a crime.
• The government stated in oral argument that a manufacturer would not be committing a crime by selling a drug or device without adequate directions for use merely because the manufacturer knew that its product was going to be used off-label. Thus, the government told the court that a manufacturer may lawfully ship a drug that it knows will be used by a physician off-label.

The government has also submitted a supplemental appellate brief in the Caronia case.  Seeking to avoid any Sorrell issue, the government is claiming that the fact that a drug was promoted for unapproved uses merely plays “an evidentiary role in” the FDCA, apparently to show that FDA is not really prohibiting speech.  In other words, the government contends that in off-label cases, the government uses the off-label speech as mere evidence of the manufacturer’s intent.  It then claims that Mr. Caronia was not convicted for conspiring to promote off-label uses.  Rather, he was convicted for distributing the drug without adequate directions for use.

While perhaps literally true, this distinction proves too much.  It shows that the government is trying to stretch an “adequate directions for use” theory to prosecute people for off-label use promotion because the statute is silent on whether it prohibits off-label use promotion.  Indeed, the government asserts that it is not restricting the dissemination of information.  Instead, it claims that it is merely following the statutory mandate that certain information must be provided to doctors (presumably only after a full FDA review of the information).  The government thus likens the “adequate directions for use” language to a “disclosure” requirement.  Indeed, the government asserts that the off-label use misbranding charges are intended “to provide the public with reliable information about the medicines they are using.”  It is of course ironic that in fact the FDA is really trying to restrict companies from providing off-label information to the public unless, of course, the FDA has approved the use.

The government also asserts that Sorrell does not alter the First Amendment cases decided before Sorrell which applied less scrutiny over the government’s statutes and regulations than the “heightened scrutiny” the Court applied in Sorrell.  The government also dismisses the MIWG brief as untimely, irrelevant and without merit.  It asserts that “the fact that an unapproved use is widely accepted in the medical community is no assurance that the drug is, in fact, either safe or effective for that use.”  The government also concedes that “to the extent that manufacturers have objective, accurate, and unbiased information about unapproved uses of approved drugs, the misbranding provisions do not prohibit manufacturers from disseminating that information.”   Addressing FDA’s guidance documents on this subject, the government asserts that manufacturers need not comply with the guidance documents but can use them as “clearly defined safe harbors.”

Undoubtedly, there must be someone who can understand, find clear legal support for, and find consistency in, the government’s many pronouncements on off label use and marketing.  That person is surely not the author of this post.