By Alan M. Kirschenbaum –

Individuals may have their tax cuts extended, but a new tax on the drug industry is about to begin in 2011, and the IRS has issued a notice to implement it.  As we explained in our summary of the Patient Protection and Affordable Care Act ("ACA"), the ACA imposes an industry-wide tax on companies that manufacture or import branded prescription drugs or biologics (i.e., those approved under an NDA or BLA) for sale in the U.S.  The aggregate annual fee for all such companies is specified in the statute, and ranges from $2.5 billion to $4.1 billion each year, then remains at $2.8 billion in 2019 and subsequent years.  Each manufacturer’s share of the fee is based on the ratio of its branded drug sales to the branded drug sales of all covered entities during the prior year.  Branded drug sales are sales of brand (i.e., NDA or BLA) prescription drugs (excluding orphan drugs) made to or reimbursed by Medicare, Medicaid, the Department of Veterans Affairs ("VA"), the Department of Defense ("DoD"), and the TRICARE retail pharmacy program. 

On November 27, the IRS issued Notice 2010-71 explaining how the drug industry fee will be implemented.  Although the statute specifies that the fee is to be based on sales during the prior year, the Notice explains that CMS is unable to provide data on Medicaid and Medicare drug utilization during a calendar year in time to set the fee for the following year.  Therefore, the sales used to establish the fee for any calendar year will be sales for the second year preceding the fee year – in other words, the sales data will be two years old.  To address the problem of basing the fee on data that is somewhat stale, the IRS proposes an adjustment to the fee that is derived from the increase (or decrease) in a company’s sales from the third to second year preceding the fee year.  Perhaps the IRS reasons that, if a drug’s sales increased (or decreased) between those two years, this justifies a presumption that sales continued to increase (or decrease) from the second to the first year preceding the fee year, so that the sales data from the second preceding year should be adjusted upward (or downward) to set the fee.

The Notice describes how sales to the VA, DOD, Medicaid, and Medicare Parts B and D will be calculated.  A company’s sales will be reduced by rebates the company paid to Medicaid (i.e., the Medicaid rebate but not Medicaid supplemental rebates) and Medicare Part D plans. 

Issued with the Notice was Form 8947, which covered manufacturers must submit to the IRS by January 20, 2011 to provide corporate information and data on orphan drugs, rebates paid to Part D plans, and other drug information.  The IRS will then provide each covered manufacturer with a preliminary fee calculation by May 2, 2011.  Comments on the Notice will be accepted until June 2, 2011, after which a final Notice will be issued.  A final fee calculation (taking into account any methodology changes) will be sent to manufacturers by August 15, 2011.

This week, the Republican Steering Committee selected Congressman Fred Upton (R-MI) to succeed Congressman Henry Waxman (D-CA) as Chair of the House Energy and Commerce Committee in the next Congress.  In August 2008, at the Democratic National Convention in Denver, Hyman, Phelps & McNamara’s Frank Sasinowski, the current chairman of the National Organization of Rare Diseases ("NORD"), had the idea to start a Congressional caucus on rare and neglected diseases in order to have a forum for issues that matter to the more than 25 million Americans with rare or orphan disorders.  Frank approached Rep. Waxman in Denver and broached the idea, which Rep. Waxman immediately supported.  Fast forward: NORD took up the idea and championed the creation of this caucus.  In forming this caucus, John Crowley, CEO of Amicus Therapeutics, (the subject of the film "Extraordinary Measures" as portrayed by Brendan Fraser), was "extraordinarily" instrumental.  Frank suggested to John that Cong. Upton be asked to co-chair the caucus.  Rep. Upton along with co-chair Rep. Joseph Crowley (D-NY) (no relation to John), announced the formation of the caucus this past July.  Now, Rep. Upton will be chairing the committee that has jurisdiction over FDA.  Orphan ideas are blossoming in December in DC!

By Ricardo Carvajal –

The D.C. Circuit Court of Appeals upheld the D.C. District Court’s grant of an injunction that bars FDA's regulation of e-cigarettes as drug/device products absent claims of intended use to that effect (for our prior posting on the district court decision, see here). Finding that the breadth of FDA’s authority under the FDC Act (as opposed to the Family Smoking Prevention and Tobacco Control Act, or Tobacco Act) is governed by the Supreme Court’s decision in FDA v. Brown & Williamson, the appellate court interpreted that decision to preclude FDA from regulating all tobacco products as customarily marketed – not just those tobacco products that were the subject of federal legislation at the time Brown & Williamson was decided.

FDA argued to no avail that the appellate court’s interpretation of Brown & Williamson would hamper the agency’s efforts to address potential risks posed by e-cigarettes. The appellate court noted that "the Tobacco Act gives the FDA broad regulatory authority over tobacco products, including, for instance, authority to impose restrictions on their sale, and on the advertising and promotion of such products, to regulate the mode of manufacture of tobacco products, and to establish standards for tobacco products" (citations omitted). In summary, the court concluded:

Together, Brown & Williamson and the Tobacco Act establish that the FDA cannot regulate customarily marketed tobacco products under the FDCA’s drug/device provisions, that it can regulate tobacco products marketed for therapeutic purposes under those provisions, and that it can regulate customarily marketed tobacco products under the Tobacco Act.

FDA must now decide whether to continue its quest to regulate e-cigarettes (and possibly other less traditional products derived from tobacco) as drugs/devices, or to content itself with regulating them under the Tobacco Act.

The Washington Legal Foundation recently published an article written by HPM attorneys, Ricardo Carvajal and Nisha P. Shah, on the February 2010 Government Accountability Office ("GAO") report that criticized FDA's general oversight of uses of ingredients that are generally recognized as safe (“GRAS”) and the agency's voluntary GRAS notification program.  The GAO report identified several gaps in FDA’s current approach, and recommended tighter oversight of industry GRAS determinations.  However, the GAO gave short shrift to the drain on resources that would result from implementation of its recommendations, and failed to acknowledge the GRAS regime’s important role in fostering innovation in the food supply.

By William T. Koustas –

The Red Flags Rule (“the Rule”) requires entities covered by it to establish and implement an identity theft prevention program.  We have been following this issue for some time now and have previously reported that the FTC last delayed enforcement of the Rule to December 31, 2010 at the suggestion of members of Congress.  It took up legislation in an effort to better define the entities covered by the Rule.  Congress has now passed the Red Flag Program Clarification Act of 2010 (“the Act”) that amends the Fair Credit Reporting Act (“FCRA”) to more clearly define who the Rule applies to.  Prior to this legislation being passed, the FTC determined that the Rule applied to a variety of entities that are not generally considered creditors, such as legal and medical practices, simply because they usually bill clients after the services are rendered. 

The FCRA currently applies to creditors as defined in the Equal Credit Opportunity Act (“ECOA”) which defines a creditor as “any person who regularly extends, renews, or continues credit; any person who regularly arranges for the extension, renewal, or continuation of credit;” or “any person…who participates in the decision to extend, renew or continue credit.”  ECOA § 702(e).  The FTC interpreted this definition to apply to any entity that regularly bills customers or clients for services rather than requiring payment at the time the service is rendered.  This effectively meant that companies and professions were creditors, although they had never considered themselves creditors before.  As creditors, the Rule required that they create and implement a written program to prevent and mitigate identity theft. 

However, the Act would amend the FCRA to clearly state that the definition of a creditor, for the purpose of the Rule, “does not include a creditor…that advances funds on behalf of a person for expenses incidental to a service provided by the creditor to that person.”  Act § 2(a)(4).  Therefore, billing customers or clients for services rendered would no longer be a basis for treating an entity as a creditor for the purpose of the Rule.  We presume that the President will sign the Act before the end of the year.

By Kurt R. Karst –      

Speculation was running high that the U.S. Supreme Court would be petitioned on whether a patent settlement agreement (what opponents call “pay-for-delay” agreements or “reverse payments”) involving manufacturers of Ciprofloxacin HCl (CIPRO) is per se lawful under the Sherman Act after the U.S. Court of Appeals for the Second Circuit denied earlier this year a Petition for Rehearing and Rehearing En Banc filed on behalf of certain plaintiffs-appellants in In Re Ciprofloxacin Hydrochloride Antitrust Litig.  That Petition for Writ of Certiorari was filed with the U.S. Supreme Court earlier this week.

As we previously reported (here and here), in September 2010, the Second Circuit denied without comment a Petition for Rehearing and Rehearing En Banc that a panel of the judges on the Court invited in their April 2010 decision affirming (3-0) a 2005 decision by the U.S. District Court for the Eastern District of New York granting summary judgment for defendants (i.e., Ciprofloxacin HCl manufacturers) (In re Ciprofloxacin Hydrochloride Antitrust Litig., 363 F. Supp. 2d 514 (E.D.N.Y. 2005)).  In the April decision, the Court affirmed the district court decision because the Court believed its 2005 decision in Joblove v. Barr Labs., Inc., (, compelled it to do so.  According to the Court, “[s]ince Tamoxifen rejected antitrust challenges to reverse payments as a matter of law, we are bound to review the Cipro court’s rulings under the standard adopted in Tamoxifen.”  The Department of Justice and the Federal Trade Commission (“FTC”), which has been a vocal opponent of patent settlement agreements, filed amicus briefs in the Cipro case advocating that the Second Circuit grant rehearing en banc and apply an “inherently suspect” standard to patent settlement agreements, under which such agreements would be considered presumptively unlawful, but could nevertheless be proven to be procompetitive.  (This standard is similar to that in legislation introduced in Congress to address patent settlement agreements.)  The government is sure to actively support the petition to the U.S. Supreme Court.

According to the Petitioners, a group or purchasers including Louisiana Wholesale Drug Company, Inc. and Arthur’s Drug Store, Inc.:

This Court has repeatedly “emphasized the necessity of protecting our competitive economy by keeping open the way for interested persons to challenge the validity of patents which might be shown to be invalid.”  The Second Circuit nevertheless held, contrary to the decisions of three other circuits and the views of the United States and the [FTC], that, except in very limited circumstances, a pharmaceutical patentee may lawfully pay a generic drug manufacturer to forgo judicial testing of the patent’s validity and stay out of the market.  The Second Circuit’s decision cannot be squared with those of other circuits or with this Court’s prohibition on patentees “muzzling” those who otherwise would have an “economic incentive to challenge the patentability of an inventor’s discovery.” . . . .

The Court should grant review to resolve the circuit split, reject the Second Circuit’s precedents that favor judicial testing of patent validity, and restore the Hatch-Waxman Act balance by prohibiting brand manufacturers from paying competitors to forgo judicial examination of patents and thereby preserve unwarranted monopolies. [(internal citations omitted)]

The circuit split over the proper standard for determining whether an exclusion payment is actually a three-way split. . . .

The Sixth Circuit and the D.C. Circuit have adopted (and the FTC has applied) a “patent strength” standard, “which bases the but-for amount of competition on the patent litigants’ own view of the likely outcome of the litigation, as reflected in their objective conduct,” according to the petition.  This standard was applied by the Sixth Circuit in In re Cardizem CD Antitrusty Litig., 332 F.3d 896 (6th Cir. 2003), relied on by the D.C. Circuit in Andrx Pharm. Inc. v. Biovail Corp. Int’l, 256 F.3d 799 (D.C. Cir. 2001), and applied by the FTC in an administrative proceeding – In re Schering-Plough Corp., F.T.C. Docket No. 9297 (Dec. 8, 2003). 

The Eleventh Circuit has rejected the “patent strength” standard and instead applies a “patent relitigation” standard, under which “it determines the amount of but-for competition by engaging in an ex-post judicial determination of the patent issues as part of the antitrust case,” according to the petition.  The Eleventh Circuit applied this standard in Valley Drug Co. v. Geneva Pharms., Inc., 344 F.3d 1294, 1303 (11th Cir. 2003) and in Schering-Plough Corp. v. Fed. Trade Comm’n, 402 F.3d 1056 (11th Cir. 2005). 

Finally, the Second Circuit and the Federal Circuit, which have rejected the “patent strength” standard and have refused to apply the “patent relitigation” approach, apply a “sham litigation” standard, under which “[t]hey have conclusively presumed for purposes of the antitrust case that the patent was valid, and thus that no competition was likely to result from the patent litigation, unless the patent was obtained by fraud or the patent cliam was a graud,” according to the petition.  This is the standard applied by the Second Circuit in Tamoxifen and Cipro, and by the Federal Circuit in In re Ciprofloxacin Hydrochloride Antitrust Litig., 544 F.3d 1323 (Fed. Cir. 2008).

The U.S. Supreme Court has previously denied certiorari in several of the cases mentioned above, but perhaps this will be the time that it is granted.

By Ricardo Carvajal –

As required by its Good Guidance Practices regulation, FDA published its annual guidance document agenda and request for comment on “possible topics for future guidance document development or revisions of existing [guidance documents].” 

Among the food-related topics that caught our eye are new dietary ingredient notifications, use of dietary guidance statements, calorie declaration (think FOP labeling), menu labeling, and effect of the use emerging technologies on the safety and regulatory status of ingredients and food contact substances (think nanotechnology).  It appears that the agency also intends to address the safety of nanoscale materials in cosmetics.

On the tobacco side, FDA is considering addressing rotational warning plans for smokeless tobacco, use of descriptors such as “light,” restrictions on distribution of cigarettes and smokeless tobacco to minors, “harmful and potentially harmful constituents,” and issues of interest to retailers such as training programs and civil money penalties.

As swimmers in the social media pool, we also note with interest that CDER will (hopefully) address the promotion of prescription drug products using social media tools.

By Kurt R. Karst –      

Does “federal law, which imposes a strict set of labeling requirements on manufacturers of Final Monograph [Over-the-Counter (‘OTC’)] drugs, including mandatory product warnings authored by the FDA, [preempt] state-law product liability actions premised on theories of failure to warn[?]”  That is the question posed by McNeil-P.P.C., Inc. (“McNeil”) in a recent Petition for Writ of Certiorari filed with the U.S. Supreme Court.

The petition stems from the tragic events of April 24, 1999, when 16-year old Armando Valdes, III collapsed during a roller hockey game.  Armando allegedly consumed McNeil’s OTC drug Tylenol Cold (and/or Tylenol Flu) containing pseudoephedrine for a head cold, along with a caffeinated beverage, the morning of the roller hockey game.  Doctors diagnosed Armando with having suffered a heat stroke and cardio-respiratory arrest which resulted in a brain injury, hypoxic ischemic encephalopathy, and left Armando completely disabled.

Armando and his parents filed a negligence and products liability suit against McNeil (as well as the hockey club and equipment vendor, which settled with the Valdes family) for Armando’s injuries.  They contend that McNeil’s product “increased the risk of heat-related illness and heart-related risks when ingested with caffeinated products and coupled with strenuous or athletic events in a hot environment like that of South Florida,” and asserted that McNeil’s failure to warn of these risks breached Florida state law requirements. 

McNeil asserted, among other affirmative defenses, federal preemption.  After discovery, McNeil moved for final summary judgment on federal preemption grounds – specifically, that “federal law, which governs [OTC] and non-prescription drugs, and the FDA’s labeling requirements, which did not require McNeil to include the risk of heat-related illness on the label, preempted the state law claims in the Valdeses’ complaint.”  The Circuit Court for Miami-Dade County agreed with McNeil and granted final summary judgment, finding that “implied conflict pre-emption applied because it would have been impossible for McNeil to comply with federal regulations that mandate the exact warnings for labels of all OTC pseudoephedrine-containing products (including those sold by McNeil) while also meeting state common law jury determinations of whether the FDA-crafted warnings were adequate.”  The Valdeses appealed the decision to the Third District Court of Appeal of Florida.

In December 2009, the Third District Court of Appeal of Florida reversed the final summary judgment for McNeill on the basis that the U.S. Supreme Court’s March 2009 decision in Wyeth v. Levine “controls the issue of federal preemption presented in this case.”   (In Wyeth, the Court ruled, by a 6-3 vote, in the context of a brand-name prescription drug, that FDA labeling approval does not preempt state laws.)  Although McNeil argued that Wyeth is distinguishable because it dealt with prescription drugs and not OTC drugs, the court disagreed with McNeil that “the distinction carries the weight to allow it to circumvent the reasoning of the Court in Wyeth.”  McNeil sought discretionary review of the Third District Court of Appeal’s decision by the Supreme Court of Florida; however, that petition was denied on August 2, 2010.

McNeil’s November 30, 2010 petition argues that the Court should grant review to “correct” Florida’s rejection of impossibility conflict preemption in a case where the law does not contain a provision permitting a manufacturer to unilaterally change its product labeling by adding a warning.  (Although we note that there are procedures to amend an OTC drug monograph).  According to McNeil:

In rejecting Wyeth's implied conflict preemption argument, this Court relied on specIfic statutes and regulations applicable to manufacturers of brand-name prescription drugs, which allow the manufacturer to strengthen product warnings without prior FDA approval, pursuant to a "changes being effected" ("CBE") procedure.  The appellate court in Valdes ignored the fact that prescription and OTC drugs are subject to differnt federal regulatory regimes.  The appellate court failed to recognize that federal laws applicable to manufacturers of OTC products do not provide a mechanism similar to the CBE procedure that would permit a manufacturer to unilaterally change the warnings on product labeling crafted by the FDA.

Under FDA’s regulations at 21 C.F.R. Part 330, OTC drug labeling “shall be stated in the exact language where exact language has been established and identified by quotation marks in an applicable OTC drug monograph regulation.”  In addition, FDC Act § 751 (National Uniformity for Nonprescription Drugs) provides that in general “no State or political subdivision of a State may establish or continue in effect any requirement” for an OTC drug “that is different from or in addition to, or that is otherwise not identical with, a requirement under [the FDC Act], the Poison Prevention Packaging Act of 1970 (15 U.S.C. 1471 et seq.), or the Fair Packaging and Labeling Act (15 U.S.C. 1451 et seq.).” 

In addition to the Florida court reading Wyeth “so broadly as to preclude the assertion of implied conflict pre-emption based on impossibility under any circumstances,” McNeil notes that Wyeth has been misapplied by other courts in the OTC drug context.  For example, McNeil cites the Seventh Circuit Court of Appeals’ August 2010 decision in Robinson v. McNeil Consumer Healthcare, 615 F.3d 861 (7th Cir. 2010) concerning the preemptive effect of FDA’s decision not to add a warning to Children’s Motrin.  In that decision, Judge Posner cited Wyeth for the proposition that courts are free to hold “that state law requires warnings on the label of an [OTC] drug beyond what the FDA has required.” 

“Without preemption,” McNeil states, “OTC drug manufacturers would be deprived of the ability to rely on FDA’s directives as to matters that Congress delegated to the Agency and that fall within the Agency’s unique regulatory and scientific expertise.”  In addition, “[w]ithout pre-emption, McNeil, and all other OTC drug manufacturers, would be deprived of the ability to comply simultaneously with their federal and state obligations or even to ascertain what those obligations are without resort to litigation.”

Hyman, Phelps & McNamara’s Paul Hyman and Ricardo Carvajal recently published an article in Food Chemical News on the cost of inadequate substantiation of health-related claims made in the labeling and advertising of foods.  Although FDA appears reluctant to take an aggressive stance with respect to claim substantiation, FTC has forged ahead with a number of investigations of allegedly false or misleading advertising that have resulted in restrictive settlements – and the plaintiffs’ bar has taken notice.

By Ricardo Carvajal –

In a strongly worded opinion, a federal judge has ordered that genetically modified sugar beet stecklings (seedlings) planted pursuant to permits issued by USDA be pulled from the ground.  As we noted in a prior blog posting, USDA/APHIS was found in violation of the National Environmental Policy Act for deregulating Roundup Ready sugar beets without preparing an Environmental Impact Statement.  The agency’s subsequent decision to issue permits for the production of the stecklings was not well received by the presiding court.  Now that court has concluded that Plaintiffs have demonstrated a likelihood of irreparable harm from the production of the stecklings based on the potential for “significant risk of environmental harm” (including potential incidents of contamination), and the “significant procedural injury stemming from the NEPA violations.”  Finding Defendants’ and Intervenor-Defendants’ assertions of economic harm to lack credibility, and that the “legality of Defendants’ conduct does not even appear to be a close question,” the court granted Plaintiffs’ request for an injunction requiring that the stecklings be removed from the ground.  An appeal is certain.

By Ricardo Carvajal

No sooner had we blogged on Senate passage of the Food Safety Modernization Act than Roll Call reported that the bill might be doomed by a constitutional flaw – namely that § 107 of the bill proposes fees, and Article I, section 7 of the U.S. Constitution states that “all bills for raising Revenue shall originate in the House of Representatives.” The procedural complications that this flaw gives rise to, coupled with the rapidly approaching close of this Congress, could push further consideration of food safety legislation into the next Congress.

By Karla L. Palmer and Peter M. Jaensch

On November 24, 2010, using its emergency authority under section 202 of the Controlled Substances Act (“CSA”) (21 U.S.C. § 812), the U.S. Drug Enforcement Administration (“DEA”) published a Notice of Intent to temporarily place five synthetic cannabinoids in Schedule I of the CSA.  75 Fed. Reg. 71635 (Nov. 24, 2010). The five chemicals, JWH-018, JWH-073, JWH-200, CP-47,497, and cannabicyclohexanol, are used to make “fake pot” products.  These “smokable herbal blends” have been marketed as being legal substances, and have been increasing in popularity among teenagers and young adults because they produce a high similar to that produced by marijuana (also a Schedule I substance).

The DEA announced in its related press release that the products consist of “plant material that has been coated with research chemicals that mimic THC, the active ingredient in marijuana.”  Brands that the DEA specifically referenced include “Spice, “K2”, “Blaze” and “Red X Dawn,” and are typically labeled as “incense” in order to disguise their actual and intended purpose.  Although the products typically are marketed with disclaimers that they are not intended for human consumption, retailers promote the fact that a routine urinanalysis will not detect their presence, and they specifically market the products to young adults and teens.  See 75 Fed. Reg. at 71637.  The FDA has not approved these chemicals for human consumption, and the products are not safe for use under medical supervision.  Nor is there any oversight concerning their manufacturing process.  The DEA’s call for emergency scheduling was driven in part by the increase in incident reports from poison control centers, hospitals and various law enforcement agencies concerning the abuse of these synthetic cannabinoids.

Under its emergency authority, to which the DEA may turn as necessary to avoid an imminent hazard to the public safety, these substances will remain in Schedule I  for one year, with the possibility of a 6-month extension.  During the temporary scheduling period, the DEA and the Department of Health and Human Services will study the propriety of a permanent controlled substance status.  In order to temporarily schedule the substances using its emergency authority,  the DEA was required to consider three of the eight factors in 21 U.S.C. § 811(c).  The DEA set forth its findings with respect to the following factors 4, 5, and 6: (4) history and current pattern of abuse (finding that the increasing popularity of these products has led to both long term and acute public health and safety problems); (5) the scope, duration and significance of abuse (since appearing in the United States in 2008, there have been over 1500 reported health-related communications related to the use of these spiked products; and (6), what, if any risk to the public health exists (finding for several detailed reasons that the products pose an imminent threat to public health and safety).

Schedule I controlled substances are those substances that, in addition to having a high potential for abuse, have no recognized medical use. The five chemicals will be subject to the “regulatory controls, and administrative, civil, and criminal sanctions applicable to the manufacture, distribution, possession, importing and exporting of a Schedule I controlled substance under the CSA.”  75 Fed. Reg. 71637. As of October 15, 2010, 15 states and European and Scandinavian countries have taken measures to control these synthetic products.

By John A. Gilbert & Karla L. Palmer –

The Drug Enforcement Administration (“DEA”) recently published a decision that considers the scope of a pharmacist’s “corresponding responsibility” under 21 C.F.R. § 1306.04(a).  East Main Street Pharmacy (Affirmance of Suspension Order) (Docket No. 09-48) (75 Fed. Reg. 66149 (Oct. 27, 2010)) (“EMS”).  As background, 21 C.F.R. § 1306.04 provides that while “the responsibility for the proper prescribing and dispensing of controlled substances is upon the prescribing practitioner . . . a corresponding responsibility rests with the pharmacist who fills the prescription.”  21 C.F.R. §1306.04.  The regulation further states, “the person knowingly filling such a purported prescription, as well as the person issuing it [is] subject to the penalties provided for violations of the provisions of law relating to controlled substances.” Id.  Thus, a pharmacist is prohibited from filling a prescription for controlled substances “when he either knows of or has reason to know that the prescription was not written for a legitimate purpose.” 75 Fed. Reg. at 66163.  Further, when prescriptions are not issued for a legitimate medical purpose, a “pharmacist may not intentionally close his eyes and thereby avoid [actual] knowledge of the real purpose of the prescription.”  Id. (Quotations and citations omitted) (emphasis added).

Pharmacists are well trained and aware of their “corresponding responsibility.” They must only fill valid prescriptions for controlled substances issued by a legitimate practitioner for a legitimate medical purpose.  Nevertheless, the standard for what exactly is – and, specifically, what exactly is the extent of — a pharmacist’s “corresponding responsibility” has been a troublesome concept for practitioners and pharmacies alike.  Admittedly, the pharmacist in the EMS matter allegedly engaged in egregious dispensing and recordkeeping misconduct, and the case involved one bad doctor (who the Deputy Administrator called a “drug dealer”).  And, although this may be a case where over-the-top facts indeed make bad law, both pharmacists and practitioners should be mindful of the EMS opinion because the DEA has taken significant strides to clarify the scope of a pharmacist’s corresponding responsibility. 

First, faced with respondent’s assertion that the “corresponding responsibility” standard is vague, “unknown” and “ambiguous,” the DEA stated that the standard is constitutional: Federal courts have had “little problem” applying the DEA regulation, which gives “fair notice that certain conduct is proscribed.”  Id. at 66163. 

The DEA next addressed certain “red flags” that should have given the respondent pharmacist a “reason to know” that the prescriptions patients presented to him were not legitimate.  Importantly, the DEA did not focus on whether the pharmacist had “actual knowledge” that the prescriptions were not issued for a legitimate medical purpose, but instead whether the pharmacist had “reason to know [they] were not issued for a legitimate medical purpose by a practitioner acting in the usual course of professional practice.” Id.

In reviewing the pharmacist’s conduct (and citing the government’s unrefuted expert), the DEA stated that the pharmacist ignored several signs that the prescriptions written by the physician were not legitimate.  These flags include the following: (1) “ample evidence” showing that the respondent repeatedly dispensed “cocktailed” prescriptions for oxycodone, hydrocodone, alprazolam, and carisoprodol; finding that this combination prescription is “well known in the pharmacy profession as being used by patients abusing prescription drugs;” (2) no individualization of dosing by the prescribing physician; (3) filling multiple prescriptions for the strongest formulations of hydrocodone and alprazolam; (4) requests for early dispensing of refills; (5) refilling prescriptions of patients or doctors located hundreds of miles away from the pharmacy; (6) an overwhelming proportion (95%) of prescriptions filled by the pharmacy were controlled substances prescriptions; (7) the pharmacist did not reach out to or otherwise contact other pharmacists to determine why they were not filling a particular doctor’s prescriptions; (8) filling prescriptions of patients that travelled to the pharmacist in groups; (9) filling a larger percentage of cash prescriptions. (“This too, was a red flag as ‘[a]ny reasonable pharmacist knows that a patient that wants to pay cash for a large quantity of controlled substances is immediately suspect.’”); and (10) “verification” of a prescription as “legitimate” was not satisfied simply because the practitioner performed MRI’s and blood tests on the patients.  Id. 

Presented with the above evidence, the DEA stated that even if the pharmacist had verified with the physician “each and every” prescription, the evidence showed he still violated his corresponding responsibility because many of the prescriptions “patently served no legitimate medical purpose.” Id. 

The DEA also stated that the single fact that the pharmacist dispensed high quantities of commonly abused drug cocktails containing oxycodone, hydrocodone, and alprazolam and carisoprodol should have called into question the legitimacy of the prescriptions.  Id. at 66164-65.  The DEA added that “the other evidence,” including all of the evidence referenced above, was “simply icing on the cake” that the pharmacist violated his corresponding responsibility to fill only legitimate prescriptions issued for a legitimate medical purpose.  Id. at 66165.  When respondent presented some evidence concerning his refusal to fill prescriptions from pain clinics after he received notice to stop filling from the Ohio Board of Pharmacy, the DEA responded that a “responsible DEA registrant should be able to make these determinations without the authorities having to provide him the information on a silver platter.” 

Pain experts would certainly argue that in many cases DEA's red flags are in fact the basis for legitimate pain treatment, e.g., the “pain cocktail” is often prescribed because of the anxiety and muscle tension experienced by pain patients.  However,  pharmacists must be attentive to these factors, “red flags,” or signs — as part of their corresponding responsibility to fill only prescriptions that are issued for a legitimate medical purpose.

By Ricardo Carvajal - 

FDA announced that its Food Advisory Committee will meet on March 30 and 31, 2011, “to discuss whether available relevant data demonstrate a link between children’s consumption of synthetic color additives in food and adverse effects on behavior.”  Earlier this year, the European Union ("EU") moved to require the use of a health warning on food (including beverages) containing certain colors after the publication of a study that suggested a possible association between those colors and hyperactive behavior in children.  In the EU, the label of a food that contains one or more of the affected colors and that is produced after July 20, 2010, must state: "may have effects on activity and attention in children."  Among the colors subject to the EU warning requirement are FD&C Yellow 5, FD&C Yellow 6 and FD&C Red 40.

By Jeffrey K. Shapiro & Carmelina G. Allis –

FDA’s review of 510(k) program continues to cause concern in Congress. 

On November 24, 2010, the Minnesota delegation, including unlikely collaborators Senator Al Franken and Representative Michele Bachmann, sent a letter to Dr. Hamburg asking “FDA to review the impact of its recommendations [to the 510(k) program] on patient access as well as [Minnesota’s] economy.” 

They stated:  “As members of the Minnesota delegation, we want to work with the FDA toward a larger goal of saving and improving patients’ lives. . . Changes that may jeopardize that goal should not be made unless there is clear evidence that the changes are necessary to address a demonstrated public health problem.” 

The Minnesota lawmakers made clear that FDA should ensure that changes to the 510(k) program not stifle innovation or delay patient access to new treatments.

We previously reported on FDA’s August 2010 report recommending changes to the 510(k) program.  Our earlier post briefly discussed the proposed changes, and raised concerns with some of the agency’s recommendations because of their potential negative effect on the medical device industry and the 510(k) program. 

We also previously reported on an October 12, 2010, letter sent by House lawmakers to FDA’s Commissioner Dr. Hamburg asking to delay the implementation of certain changes that the agency is considering for the 510(k) program.  In the letter, the lawmakers raised concerns with the agency’s recommendations regarding rescission authority, split and multiple predicates, intended use and indications for use, mandatory pre-market inspections and clinical data for a subset of Class II devices, and proprietary information.