The Consumer Products Safety Commission (“CPSC”) yesterday announced that former South Carolina State Superintendent of Education Inez Moore Tenenbaum has been sworn in as the ninth CPSC Chairman.  We previously reported on her nomination and President Obama’s plans to expand the CPSC from the current three Commissioners to five Commissioners.   Chairman Tenenbaum reportedly plans to focus on three major areas: accessibility and transparency to parents and consumers; education and advocacy; and enforcement.

By Kurt R. Karst –      

There has been a frenzy of activity on Capitol Hill in recent days over Follow-On Biologics (“FOBs”).  At least four different proposals – all titled as the “Biologics Price Competition and Innovation Act of 2009” – have reportedly been floated in closed-door meetings of the U.S. Senate Health, Education, Labor, and Pensions Committee. 

Senator Ted Kennedy’s (D-MA) proposal would provide a 9-year “base period” of exclusivity, a single 3-year “bonus exclusivity” period for an application supplement approved no later than 1 year before the expiration of the “base period” of exclusivity, and a single 1-year second period of “bonus exclusivity” under certain circumstances.  However, such exclusivity would only be available for products approved after enactment of the bill.  Previously approved products could get a 2-year period of exclusivity for a new indication.  The bill would also provide a 6-month pediatric exclusivity extension for both pre- and post-enactment products.

Senator Barbara Mikulski’s (D-MD) proposal, which would reportedly apply to all biologics – pre- and post-enactment – would provide a 10-year exclusivity base period, which:

may be extended by 1 year if the Secretary approves, within the first 8 years of such 10-year period, a supplemental application submitted by the sponsor of the reference product for such product.  In order for the previous sentence to apply, the supplemental application must be approved for one or more new therapeutic indications and bring a significant clinical benefit, in comparison with existing therapies. Such benefit may be based on improved efficacy or improved safety, and shall reflect a major contribution to patient care.

Senator Sherrod Brown’s (D-OH) proposal would provide a 7-year “base period” of exclusivity for a biological product approved after enactment of the bill for which “no major substance of the product, nor any highly similar major substance, has been approved in any other application . . . .”  A 3-year exclusivity period would also be available for a “major substance previously approved” if the product “represents a significant therapeutic advance.  Also, a 6-month period of “bonus exclusivity” would be available under certain circumstances.

Senator John McCain’s (R-AZ) proposal would provide a 10-year period of exclusivity that could be extended by 2 years “if there has been significant therapeutic advancements with respect to the reference product.”

FOB bills introduced in the House of Representative earlier this year by Reps. Henry Waxman (D-CA) and Anna Eshoo (D-CA) have also proposed different exclusivity periods.  Under Rep. Waxman’s bill – H.R. 1427 – an original product with a novel molecular structure would be entitled to 5 years of exclusivity, and a modification of a previously approved product would be entitled to 3 years of exclusivity.  The 5- and 3-year periods under the Waxman bill could be extended by up to 1 year if the applicant establishes that the product can be used for a new disease indication or conducts pediatric studies.  However, market exclusivity would be reduced by 3 months for a “blockbuster” product (i.e., combined U.S. annual gross sales exceeding $1 billion).  Rep. Eshoo’s bill – H.R. 1548 – would provide for up to 14.5 years of market exclusivity for a new biologic product.

Senators Orrin Hatch (R-UT) and Michael Enzi (R-WY) are reportedly poised to introduce their own FOB legislation shortly.  We understand that the Hatch/Enzi bill will be a duplicate of the version introduced in the 110th Congress – S. 1695.  That bill provided a 12-year exclusivity period.

By Anne Marie Murphy –

FDA’s final rule requiring IRBs that review FDA-regulated clinical investigations to register through a system maintained by the Department of Health and Human Services (“HHS”) takes effect on Tuesday, July 14, 2009.  In the Federal Register notice announcing the final rule, FDA explained that the IRB registration will help the agency “identify more precisely those IRBs reviewing clinical investigations regulated by FDA . . . send education information and other information to IRBs . . . [and] identify IRBs for inspection.”  The required registration information includes contact information, the number of active protocols involving FDA-regulated products reviewed during the preceding 12 months, and a description of the types of FDA-regulated products involved in the protocols reviewed. 

Previously, registration was required by HHS through the Office for Human Research Protections (“OHRP”) for IRBs that reviewed federally-funded research.  IRBs that review FDA-regulated studies and that are not already registered with OHRP will now be required to submit an initial registration.  IRBs already registered in the OHRP system must update their registrations to include all of the information required by the new rule.  IRBs have until September 14, 2009 to submit an initial registration or update an existing registration.  The database used by OHRP was modified to accomplish the new registration requirements.  A guidance document on the new registration requirements is expected soon.

Sigh.  We've been dragged (kicking and screaming) into the 21st Century.  So, we've put down our quill pens and are now twittering at www.twitter.com/fdalawblog.  Many of our "tweets" will link to the blog, but we will also be putting up other FDA-related news and updates as well.  Now if we could just figure out how to program the VCR . . . .

By Kurt R. Karst –      

The recent challenge to FDA’s five-year New Chemical Entity (“NCE”) exclusivity determination concerning the ADHD drug VYVANSE (lisdexamfetamine dimesylate) Capsules and the reportedly ongoing debate over whether to grant NCE exclusivity with respect to certain pancreatic enzyme products are not the only NCE exclusivity debates at FDA these days.  FDA is also reportedly considering whether GlaxoSmithKline’s (“GSK’s”) corticosteroid drug VERAMYST (fluticasone furoate) Nasal Spray, which was approved on April 27, 2007 under NDA No. 22-051, is eligible for NCE exclusivity under a narrow exception applicable to certain esters. 

Under the FDC Act (as amended by Title I of the Hatch-Waxman Amendments), five-year exclusivity is available to the sponsor of an application (either a “full” 505(b)(1) NDA or a 505(b)(2) application) for a drug product that does not contain an active moiety previously approved under § 505(b) of the FDC Act.  NCE exclusivity prevents the submission of an ANDA (or a 505(b)(2) application) that “refers to the drug for which the [approved § 505(b) NCE NDA] was submitted before the expiration of five years from the date of the approval” of the NCE NDA.  FDC Act §§ 505(c)(3)(E)(ii) & 505(j)(5)(F)(ii) (emphasis added).  

The FDC Act is ambiguous with regard to the meaning of the term “drug” in §§ 505(c)(3)(E)(ii) and 505(j)(5)(F)(ii).  Neither provision addresses whether “drug” means the particular drug product that is the subject of the approved NCE NDA with five-year exclusivity, or, more generally, the approved active moiety.  FDA identified this ambiguity in the preamble to its proposed rule implementing the exclusivity provisions of the Hatch-Waxman Amendments:

The language of sections 505(c)(3)[(E)] and 505(j)[(5)(F)] of the act is ambiguous as to which ANDA’s or 505(b)(2) applications are affected by an innovator’s exclusivity.  The statutory language allows at least two interpretations.  The narrower interpretation of the protection offered by exclusivity is that exclusivity covers only specific drug products and therefore protects from generic competition only the first approved version of a drug . . . . The broader interpretation of the coverage of exclusivity is that it covers the active moieties in new chemical entities . . . . FDA has concluded that the broader interpretation of the scope of exclusivity should be applied to all types of exclusivity conferred by sections 505(c)(3)[(E)] and 505(j)[(5)(F)] of the act.  Therefore, when exclusivity attaches to an active moiety or to an innovative change in an already approved drug, the submission or effective date of approval of ANDA’s and 505(b)(2) applications for a drug with that active moiety or innovative change will be delayed until the innovator’s exclusivity has expired, whether or not FDA has approved subsequent versions of the drugs entitled to exclusivity, and regardless of the specific listed drug product to which the ANDA or 505(b)(2) application refers.

FDA, Proposed Rule, ANDA Regulations, 54 Fed. Reg. 28,872, 28,897 (July 10, 1989) (emphasis added).  This policy, which is known as FDA’s “Umbrella Policy,” effectively replaces the term “drug” in the statutory text with the term “active moiety.”  FDA’s regulations at 21 C.F.R. § 314.108(a) define the term “active moiety” to mean “the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or coordination bonds), or other noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule, responsible for the physiological or pharmacological action of the drug substance.” 

Although the general rule of thumb is that an ester of an approved drug is not considered a new active moiety eligible for five-year NCE exclusivity – because most ester linkages are rapidly cleaved in vivo to provide the de-esterified molecule circulating in the blood, see Letter from Ronald G. Chesemore, FDA, to John D. Siegfried, M.D., McNeil Pharmaceutical, at 12, n.5 (July 26, 1989) – there is a narrow exception.  FDA has explained in one document that “[a]n ester that is stable, both in vitro and in vivo, is considered to be the active moiety, because the de-esterified molecule is devoid of activity . . . .”

FDA has applied this policy on rare occasion; for example, in the context of organic nitrates.  Specifically, FDA approved ISMO (isosorbide mononitrate) on December 30, 1991 under NDA No. 19-091 and granted NCE exclusivity despite the previous approval of products containing isosorbide dinitrate. 

So what does this all have to do with VERAMYST?  According to documents contained in the VERAMYST Summary Basis of Approval, GSK requested that FDA grant five-year NCE exclusivity for the drug notwithstanding the Agency’s previous approval of drug products containing fluticasone propionate (e.g., FLONASE, FLOVENT, and ADVAIR).  According to GSK, fluticasone furoate “is a unique molecular entity that exhibits distinctive functional characteristics of clinical significance that are directly attributable to the continuing presence of the furoate ester group at the local site of drug action,” and that “the furoate group remains an integral part of this new chemical entity while exerting therapeutic activity at the site of action, and reviewers should appreciate that neither fluticasone furoate nor fluticasone pripionate is ever metabolized to fluticasone.”  GSK goes on to argue that FDA’s decision to grant NCE exclusivity for isosorbide mononitrate “establishes precedent for supporting GSK’s request for a 5-year marketing exclusivity for fluticasone furoate.” 

Although GSK initially requested NCE exclusivity when the company submitted its NDA for VERAMYST in June 2006, and company officials reportedly met with FDA officials in March 2008 to discuss the issue, FDA has apparently not yet – now more than two years after NDA approval – made an exclusivity decision.  The reasons for FDA’s substantial delay in making an exclusivity determination are unclear.  We will continue to follow this developing story.

By Kurt R. Karst –      

Over the past week, generic drug manufacturer Apotex, Inc., which we understand recently parted ways with the generic drug trade association, GPhA, has filed two similar declaratory judgment actions in an effort to “unpark” 180-day exclusivity eligibility that is reportedly held by Ranbaxy Laboratories, Ltd.  Both complaints cite Ranbaxy’s Good Manufacturing Practice (“GMP”) problems as a basis for arguing that absent a declaratory judgment to trigger 180-day exclusivity, generic competition will be “indefinitely delayed.”  Apotex’s efforts are consistent with recently introduced legislation that we understand was backed by the company, as well as a paper the company issued earlier this year, titled “Patent Settlements Between Brand and Generic Pharmaceutical Companies: Parked Exclusivity & Lack of Incentive for Subsequent Generic Filers to Fight On Are the Problems, Not ‘Reverse Payments.’”  (see our June 23, 2009 post)

In December 2003, the Medicare Modernization Act (“MMA”) amended the FDC Act to affirmatively permit a generic applicant with an application containing a Paragraph IV certification to bring an action for declaratory judgment of patent invalidity or noninfringement (referred to in the law as a “civil action to obtain patent certainty”), provided: (1) the NDA holder or patent owner has allowed the 45-day period in which to file a suit for patent infringement to expire without bringing an action for patent infringement or invalidity; and (2) if the generic applicant’s notice to the NDA holder or patent owner relates to patent noninfringement, the notice includes an offer of confidential access to the generic applicant’s application for purposes of determining whether the NDA holder or patent owner should bring an action for patent infringement.  The MMA also amended the patent statute to provide that “courts of the United States shall, to the extent consistent with the Constitution, have subject matter jurisdiction in any action brought  . . . under [28 U.S.C. § 2201] for a declaratory judgment” of invalidity or noninfringement.

Apotex’s declaratory judgment actions, both of which were filed in the U.S. District Court for the Middle District of North Carolina, concern generic versions of ARICEPT (donepezil) and VALTREX (valacyclovir).  Copies of the complaints are available here and here.  Both actions are intended to trigger Ranbaxy’s 180-day exclusivity.  According to FDA’s Paragraph IV Certification List, 180-day exclusivity for generic ARICEPT and two generic VALTREX products appears to be governed by the pre-MMA statute under which exclusivity is triggered by the earlier of “the first commercial marketing of the drug,” or “the date of a decision of a court in [a patent infringement action] holding the patent which is the subject of the certification to be invalid or not infringed.”  Another generic VALTREX product appears to be governed by the post-MMA statute, under which a court decision is a component in the 180-day exclusivity failure-to-market forfeiture calculus. 

In each complaint, Apotex argues that due to Ranbaxy’s GMP problems a declaratory judgment is necessary to remove the bottleneck for subsequent ANDA applicants for generic versions of these drugs.  In February 2009, FDA determined that Ranbaxy “submitted untrue statements of material fact in abbreviated and new drug applications filed with the Agency” and stated that the review of certain pending applications would likely be stopped. 

By Susan J. Matthees –

The Institute of Medicine (“IOM”) has released a report and a list of priorities for comparative effectiveness research to be funded by The American Recovery and Reinvestment Act of 2009 (the stimulus bill).  The IOM list contains 100 priority topics, which are listed in groups of 25 from the highest priority group to the lowest priority group.  The top priorities vary widely and include comparative effectiveness studies for use of biologics to treat inflammatory diseases (e.g., Crohn’s disease), imaging technologies used to diagnose and monitor patients, genetic and biomarker testing to treat certain cancers, pharmacologic and non-pharmacologic treatments in managing behavior disorders in people with Alzheimer’s disease, and treatments for hearing loss in children in adults (e.g., assistive listening devices, cochlear implants, sign language).  The bottom of the list includes comparative effectiveness studies for long-term treatments for acne, diagnostic imaging performed by non-radiologists and radiologists, and smoking cessation strategies. 

By William T. Koustas & John R. Fleder –

FDA-regulated businesses are certainly closely regulated by FDA and other federal agencies.  However, one area that many of these businesses erroneously believe does not affect them is the federal laws and regulations that apply to identity theft.  The federal government is taking the position that companies, lawyers and doctors who send their customers and clients bills, expecting payment within a set period of time (even if they are not trying to extend credit), are governed by a recent rule which took effect in May.  Of greater importance to those entities covered by the rule is that the federal government has stated that covered entities are required to establish and implement a Written Identity Theft Prevention program by no later than August 1, 2009.

Several federal agencies, including the FTC, issued the “Red Flags Rule” (“the Rule”) on November 9, 2007.  After a few delays, the Rule became effective on May 14, 2009.  The Rule was promulgated under the Fair and Accurate Credit Transaction Act of 2003 (“FACT Act”) and applies to any financial institution and/or creditor with “covered accounts.”  The federal government believes that the Rule requires most businesses and other entities to implement a written program to prevent identity theft by detecting warning signs (i.e., red flags) and to take actions to prevent, mitigate and resolve incidents of identity theft.

“Creditor” is defined 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.”  15 U.S.C. § 1691a.  The FTC has stated the term creditor encompasses any business that “regularly defer[s] payment for goods or services or provides goods or services and bill customers later.”  This extremely broad definition has been interpreted by the FTC to include utility companies, health care providers, telecommunications companies, and even attorneys.  Essentially, according to the federal government, any business that bills customers, rather than collecting full payment at the time of delivery of the goods or services, is deemed a “creditor,” and thus potentially subject to this Rule.

Even if an entity is a creditor, its activities are regulated under the Rule only with regard to “covered accounts.”  A “covered account” includes any “account that the financial institution or creditor offers or maintains for which there is a reasonably foreseeable risk to customers or to the safety and soundness of the … creditor from identity theft […]” 16 C.F.R. § 681.2(b)(3)(i) and (ii).  The FTC appears to interpret this provision broadly, essentially determining that any organization that is considered a creditor under the Rule is also very likely to have “covered accounts.”

If a business is a creditor with covered accounts, the Rule mandates that the entity create and implement a written program to prevent and mitigate identity theft.  The Rule affords a fair amount of flexibility in designing a program that fits a company’s needs.  The FTC has indicated that the Rule also directs covered entities to train staff, exercise oversight and involve the board of directors or senior management.

According to the FTC, these broad definitions of creditor and covered account apply to companies and professions that have never considered themselves creditors in their daily business transactions, such as lawyers and doctors.  Given the apparent reluctance of the FTC to create exemptions from this regulation, most companies regulated by FDA must determine if the Rule applies to them.  If the answer is yes, there is an August 1, 2009 deadline fast approaching to develop and implement a compliance plan.  Failure to comply may subject the entity to administrative enforcement action by FTC as well as civil liability to consumers.

By David B. Clissold & Ricardo Carvajal –

In an unusually open-ended request, FDA is asking “all interested parties to provide information and share views” on FDA’s implementation of the Family Smoking Prevention and Tobacco Control Act ("Tobacco Act"), which was signed into law on June 22, 2009.  FDA seeks “comments that will inform strategies to protect the public health” as it implements the new legislation, and is “particularly interested in comments on the approaches and actions the agency should consider initially to increase the likelihood of reducing the incidence and prevalence of tobacco product use and protecting the public health.”  Notably, in taking certain actions under the Tobacco Act, FDA is required to consider the effects of its action on the incidence of tobacco product use and whether its action is appropriate for the protection of public health.  The notice asks that comments be organized into the following categories:

• Federal, State, and local government collaboration;
• New product submission and approval;
• Product ingredient disclosure;
• Prevention;
• Tobacco use by specific groups including minors, women, and racial and ethnic minority populations;
• Tobacco addiction;
• Smoking cessation;
• Data collection;
• Products with reduced harm/risk claims;
• Enforcement;
• Research and testing;
• Advertising and marketing of tobacco products;
• Label statements and warnings (including graphic warnings);
• Tobacco product standards (including flavors, ingredients, etc.);
• Sale and distribution of tobacco products;
• Manufacturing restrictions and facilities controls; and
• Other.

Information that FDA receives in response to its request could well help the agency implement the Tobacco Act within the aggressive timeframes that the Act imposes.  However, given the open-ended nature of the request, and the fact that FDA’s attempted regulation of tobacco in the mid-90’s netted over a half-million comments, FDA had better be ready for a deluge.

By Ricardo Carvajal –

FDA has announced public workshops on the Reportable Food Registry intended to “explain the purpose of the Registry, how it will work, and the responsibilities of persons required to submit a report regarding instances of reportable food to FDA through the Reportable Food electronic portal.”  The public workshops will also address the role of public health officials in submitting instances of reportable food to the Registry.  Previously, FDA issued and requested comment on a draft guidance titled “Guidance for Industry: Questions and Answers Regarding the Reportable Food Registry as Established by the Food and Drug Administration Amendments Act of 2007” (see our prior posting here).  At that time, the agency indicated that the Registry would be implemented on September 8, 2009.  This latest announcement of the public workshops suggests that further delays in implementation of the Registry are unlikely, and that FDA intends to meet the September 8 implementation date.  Have you incorporated the Registry requirements into your recall SOP’s and training program?

By Kurt R. Karst –      

Teva Pharmaceuticals USA, Inc. (“Teva”) recently filed a Complaint and a Motion for Preliminary Injunctive Relief (and a memorandum supporting the company’s motion) in the U.S. District Court for the District of Columbia against FDA concerning 180-day exclusivity forfeiture for generic versions of Merck & Co., Inc.’s (“Merck’s”) blockbuster angiotensin II receptor antagonist drugs COZAAR (losartan potassium) Tablets and HYZAAR (hydrochlorothiazide; losartan potassium) Tablets.  Teva’s lawsuit is the latest challenge to FDA’s interpretation of the “failure to market” 180-day exclusivity forfeiture provisions at FDC Act § 505(j)(5)(D)(i)(I), and in particular with respect to FDA’s interpretation of the patent information withdrawal provision at FDC Act § 505(j)(5)(D)(i)(I)(bb)(CC).  The 180-day exclusivity forfeiture provisions were added to the FDC Act in December 2003 by the Medicare Modernization Act (“MMA”).

Under the FDC Act, an ANDA applicant who is a “first applicant” (i.e., “an applicant that, on the first day on which a substantially complete [ANDA] containing a [Paragraph IV certification] is submitted for approval of a drug, submits a substantially complete [ANDA] that contains and lawfully maintains a [Paragraph IV certification]”) is eligible for 180-day exclusivity, but forfeits such exclusivity if there is a “failure to market” under FDC Act § 505(j)(5)(D)(i)(I).  Specifically, FDC Act § 505(j)(5)(D)(i)(I) states that a first applicant forfeits 180-day exclusivity if it fails to market the drug by the later of two dates:

(aa) the earlier of the date that is –

(AA) 75 days after the date on which the approval of the application of the first applicant is made effective under subparagraph (B)(iii); or

(BB) 30 months after the date of submission of the application of the first applicant; or

(bb) . . . the date that is 75 days after the date as of which, as to each of the patents with respect to which the first applicant submitted and lawfully maintained a certification qualifying the first applicant for the 180-day exclusivity period under subparagraph (B)(iv), at least 1 of the following has occurred:

(AA) In an infringement action brought against that applicant with respect to the patent or in a declaratory judgment action brought by that applicant with respect to the patent, a court enters a final decision from which no appeal (other than a petition to the Supreme Court for a writ of certiorari) has been or can be taken that the patent is invalid or not infringed.

(BB) In an infringement action or a declaratory judgment action described in subitem (AA), a court signs a settlement order or consent decree that enters a final judgment that includes a finding that the patent is invalid or not infringed.

(CC) The patent information submitted under [FDC Act § 505(b) or (c)] is withdrawn by the holder of the application approved under [FDC Act § 505(b)]. [(Emphasis added)]

In FDA’s May 2008 Letter Decision concerning 180-day exclusivity for generic PRECOSE (acarbose) Tablets, the Agency ruled that a request to withdraw patent information from the Orange Book is a forfeiture event under FDC Act § 505(j)(5)(D)(i)(I)(bb)(CC).  (See our May 11, 2008 post here.)  In reaching this conclusion, FDA determined that the U.S. Court of Appeals for the District of Columbia Circuit’s 2006 decision in Ranbaxy Labs. Ltd. v. Leavitt holding that FDA may not condition the delisting of a patent on the existence of patent litigation and deprive an ANDA applicant eligible for 180-day exclusivity of such exclusivity does not apply to the version of the FDC Act amended by the MMA.  FDA’s PRECOSE Letter Decision states:

[T]he Ranbaxy court noted that the decisions rendered by the FDA and the district court had been made pursuant to the Act “as it stood before the MMA and, because the MMA was not made retroactive . . . this decision is also geared to the Act pre-MMA” (469 F.3d at 122). Therefore, the court did not purport to render a decision on patent delisting and exclusivity under the MMA. The effect of patent delisting on eligibility for 180-day exclusivity is expressly addressed by the plain language of section 505(j)(5)(D)(i)(I) of the Act. . . .  FDA reads the plain language of 505(j)(5)(D)(i)(I)(bb)(CC) to apply whenever a patent is withdrawn (or requested to be “delisted”) by the NDA holder.

FDA’s Letter Decision was challenged in the U.S. District Court for the District of Columbia; however, the challenge was abandoned after the court denied a generic applicant’s motion for a temporary restraining order. 

In October 2008, FDA once again applied its interpretation of FDC Act § 505(j)(5)(D)(i)(I)(bb)(CC) when the Agency issued a Letter Decision ruling that Hi-Tech Pharmacal Co., Inc. (“Hi-Tech”) forfeited 180-day exclusivity for a generic version of Merck’s COSOPT (dorzolamide hydrochloride; timolol maleate) after the information on two exclusivity-qualifying Orange Book-listed patents covering the drug had been withdrawn by Merck.  (See our October 28, 2008 post here.)  FDA issued its Letter Decision after the U.S. District Court for the District of Columbia decided not to grant Hi-Tech’s preliminary injunction motion seeking to prevent FDA from granting final ANDA approval to any subsequent ANDA applicant during Hi-Tech’s period of 180-day exclusivity and to obtain a prompt exclusivity decision from FDA to allow Hi-Tech to seek judicial relief in case of an adverse FDA decision.  Hi-Tech challened FDA’s Letter Decision in the U.S. District Court for the District of Columbia, but was ultimately unsuccessful in its lawsuit.  (Teva submitted an amicus brief in that case.)       

According to Teva’s Complaint, the company believes it is a first applicant with respect to both COZAAR and HYZAAR based on ANDA submissions in 2003 and 2004.  There are three patents listed in the Orange Book for both drug products.  Teva reportedly submitted a Paragraph III certification with respect to two of the patents, which expire in February and April 2010, and a Paragraph IV certification with respect to U.S. Patent No. 5,608,075 (“the ‘075 patent”), which expires in September 2014.  Subsequent to Teva’s Paragraph IV certification, Merck reportedly requested that FDA withdraw (or “delist”) the ‘075 patent information from the Orange Book for both COZAAR and HYZAAR.  Thus, according to Teva:

forfeiture events have already occurred under both prongs of the failure-to-market trigger.  As of August 12, 2006, thirty months had passed from the date Teva submitted its ANDA for generic Cozaar.  And as of January 16, 2007, thirty months had passed from the date Teva submitted its ANDA for generic Hyzaar.  these dates serve as the applicable dates in the (aa) subsection of the failure-to-market provision . . . .  And with respect to the (bb) subsection, well over 75 days now have passed from the date that Merck voluntarily asked FDA to delist the ‘075 patent from the Orange Book’s patent listings for Cozaar and Hyzaar.

But Teva argues that it should not forfeit 180-day exclusivity because FDA’s interpretation of FDC Act § 505(j)(5)(D)(i)(I)(bb)(CC) (which Teva terms as the “Delisting Rule” in its court papers) is unlawful.  Teva states that:

The Agency’s assertion that the delisting trigger renders Ranbaxy irrelevant because the trigger now “expressly addresses” the “effect of patent delisting” is a classic non-sequitur.  While the delisting trigger unquestionably addresses “the effect” of patent delistings after they occur, it says nothing about when patent delistings are permissible – and thus can occur – in the first instance.  Other amendments made by the MMA supply the answer to that question, by creating a new mechanism for delisting: a cause of action that for the first time allows patent-challenging generic applicants to seek a court order compelling the brand manufacturer to delist a challenged patent against its will.  See 21 U.S.C. § 355(j)(5)(C)(ii)(I).

Read together, as statutory provisions must be, it thus is clear that these twin
Amendments – the delisting mechanism, on one hand, and the delisting trigger, on the other – were not remotely intended to open the proverbial floodgates to manipulative, exclusivity-divesting patent delistings by brand manufacturers, and thus sub silentio to abrogate the longstanding prohibition against such delistings that Ranbaxy recognized.  To the contrary, these interlinked provisions merely provide that when a first applicant secures a court-ordered patent delisting that clears the last remaining hurdle to generic competition, it cannot indefinitely delay generic competition by refusing to sell its product for more than 75 days after the court-ordered delisting.  Beyond that, however, the delisting trigger does not remotely authorize manipulative patent delistings that take place apart from, and wholly outside the confines of, the statute’s new delisting mechanism.  FDA has no answer to this simple point, and it is dispositive. [(Emphasis in original)]

Furthermore, Teva states that FDA’s policy – as expressed in the Hi-Tech case – of not providing early exclusivity decisions, but rather issuing 180-day exclusivity  decisions simultaneous with taking action on ANDA approvals, “has shielded the Delisting Rule from challenge in the courts” and “thwarts effective judicial review of that rule.”  Thus, Teva argues that “[b]ecause FDA’s Delisting Rule is arbitrary, capricious and contrary to law, and because any delay will deprive both Teva of its right to meaningful judicial relief and the public of its right to access generic losartan potassium products, the Delisting Rule immediately must be invalidated.”

Although originally assigned to Judge Gladys Kessler, the Teva case has been reassigned to Judge Rosemary M. Collyer.  FDA’s response, originally due on June 26th, will likely be due on July 1st once Judge Collyer rules on an unopposed motion for extension of time for FDA to respond to Teva’s preliminary injunction.  We will certainly be watching this case closely and will update FDA Law Blog readers on important developments. 

By Kurt R. Karst –      

The Federal Trade Commission (“FTC”) announced the publication of an interim report on authorized generic drugs.  The report, titled “Authorized Generics: An Interim Report,” presents the first set of results from an FTC study conducted, at the request of several members of Congress, to examine the short-term and long-term effects of authorized generics on competition in the prescription drug marketplace.  The report has been in the making for some years.  In March 2006, the FTC proposed a study of the competitive effects of authorized generics.  In April 2007, the FTC announced that it was seeking public comment on its proposed information requests to firms in the prescription drug industry.  In December 2007, the FTC announced the issuance of those information requests.

Below are the results of the FTC’s preliminary data analysis on the short-term effects of authorized generics on competition during 180-day exclusivity.  According to the FTC:

• Retail prices are on average 4.2 percent lower, relative to the pre-generic brand price, when an AG competes with one ANDA generic during the 180-day exclusivity period than when an AG does not enter.

• Wholesale prices are on average 6.5 percent lower, relative to the pre-generic brand prices, when an AG competes with one ANDA generic during the exclusivity period than when an AG does not enter.

• Revenues of a sole ANDA generic company during the180-day exclusivity period drop substantially with AG entry, with estimates of the average decline ranging from 47% to 51%.  The revenue effect for generics is so much larger than the price effect for consumers primarily because the AG represents a very close substitute for the ANDA generic and therefore typically obtains significant market share at the expense of the ANDA generic.  This is confirmed by an analysis of the quantities dispensed by retail pharmacies.

• To prevent this loss of revenue, a generic may be willing to delay its entry in return for a brand’s agreement not to launch an authorized generic – that is, a brand’s agreement not to compete with the generic through an AG – during the generic’s 180 days of marketing exclusivity.

• Between FY2004-FY2008, about one-quarter (38 out of 152) of the final patent settlements reviewed by the FTC contained provisions relating to AGs. 

• Between FY2004-FY2008, 76 final patent settlement agreements were with first-filer generics. About one-quarter (20 out of 76) of those patent settlements involved (1) an explicit agreement by the brand not to launch an AG to compete against the first filer, combined with (2) an agreement by the first-filer generic to defer its entry past the settlement date by, on average, 34.7 months. With regard to these twenty settlements, branded sales of the affected products ranged from $12.6 million to $5.3 billion, with an average market size of $917 million and a median market size of $514 million. Five of the settlements covered products with annual sales of $1 billion, $1.1 billion, $2.1 billion, $2.5 billion, and $5.3 billion.

• Such agreements can harm consumers in two ways:

• First, generic entry, and the accompanying discounts, would not be available to consumers as soon as otherwise would be the case. Because generic drugs often are priced substantially below the price of branded drugs, overall prescription drug costs could be significantly increased by even a few additional months of branded prices in a large market.

• Second, consumers would lose the benefit of price discounts from AG competition during the 180-day marketing exclusivity. The consumer harm in such instances arises because the brand has agreed not to compete against the independent generic during the exclusivity period. The consumer harm arises from the absence of AG competition against an ANDA generic, not from the presence of AG competition against an ANDA generic.

FTC Chairman Jon Leibowitz and Commissioner Rosch issued separate statements on the interim report (here and here). 

Interest in authorized generics has steadily increased over the past few years, particularly after FDA denied citizen petitions in 2004, concluding that “[t]he marketing of authorized generics during the 180-day exclusivity period is a long-standing, pro-competitive practice, permissible under the FDC Act,” and legal challenges upheld FDA’s determination.  (See an article we published on the topic in RAPS Focus.)  The FDA Amendments Act ("FDAAA") amended the FDC Act to create new § 505(t) – “Database for Authorized Generic Drugs” – that requires FDA to compile and publish a complete list of all authorized generic drugs identified in annual reports submitted to the Agency since January 1, 1999.  Among other uses, this list is intended to assist the FTC as the Commission progresses with its authorized generics study.  In September 2008, FDA  issued a direct final rule and a companion proposed rule to implement FDAAA § 920.  FDA withdrew the direct final rule after the Agency received “significant adverse comment.”  Congress is also considering legislation concerning authorized generics.  Earlier this year, Rep. Jo Ann Emerson (R-MO) introduced H.R. 573, which would amend the FDC Act to prohibit the marketing of authorized generics during a generic applicant’s 180-day exclusivity period.  The bill is almost identical to the bill Rep. Emerson introduced during the 110th Congress – H.R. 806.  Senator Jay Rockefeller (D-WV) has introduced a similar bill in the U.S. Senate – S. 501. 

By Kurt R. Karst –      

On June 22nd, Senator Bill Nelson (D-FL) introduced S. 1315, the “Drug Price Competition Act of 2009.” (At this point we have a copy of the discussion draft; however, we understand that it is the same as the version of the bill introduced yesterday.)  The bill would amend the definition of “first applicant” at FDC Act § 505(j)(5)(B)(iv)(II)(bb) with respect to 180-day exclusivity eligibility so that certain subsequent ANDA applicants could trigger and also be eligible for such exclusivity. 

FDC Act § 505(j)(5)(B)(iv)(II)(bb) currently defines the term “first applicant” to mean:

an applicant that, on the first day on which a substantially complete application containing a [Paragraph IV] certification . . . is submitted for approval of a drug, submits a substantially complete application that contains and lawfully maintains a [Paragraph IV] certification . . . for the drug.

180-day exclusivity is triggered by the first commercial marketing of the drug product by a first applicant, and prevents FDA from approving ANDAs submitted by subsequent applicants until the expiration or forfeiture of such exclusivity.

S. 1315 would maintain the current “first applicant” definition (as FDC Act § 505(j)(5)(B)(iv)(II)(bb)(AA)), but would also define a “first applicant” (in proposed FDC Act § 505(j)(5)(B)(iv)(II)(bb)(BB)) to mean “an applicant for the drug not described in item (AA) that satisfies the requirements of subclause (III).”  Under proposed FDC Act § 505(j)(5)(B)(iv)(III), a “first applicant” described in proposed FDC Act § 505(j)(5)(B)(iv)(II)(bb)(BB) must:

(aa) submit and lawfully maintain a [Paragraph IV] certification . . . or a statement described in paragraph (2)(A)(viii) for each unexpired patent for which a first applicant described in item (AA) had submitted a [Paragraph IV] certification . . . on the first day on which a substantially complete application containing such a certification was submitted;

(bb) with regard to each such unexpired patent for which the applicant submitted a [Paragraph IV] certification . . . , no action for patent infringement was brought against the applicant within the 45-day period specified in paragraph (5)(B)(iii), or if an action was brought within such time period, the applicant has obtained the decision of a court (including a district court) that the patent is invalid or not infringed (including any substantive determination that there is no cause of action for patent infringement or invalidity, and including a settlement order or consent decree signed and entered by the court stating that the patent is invalid or not infringed); and

(cc) but for the effective date of approval provisions in subparagraphs (B) and (F) and sections 505A and 527, be eligible to receive immediately effective approval at a time before any other applicant has begun commercial marketing. [(emphasis added)]

In other words, an applicant that is today considered a subsequent applicant subject to a first applicant’s 180-day exclusivity eligibility could qualify as a “first applicant” under S. 1315, and could obtain approval and apparently trigger 180-day exclusivity for all first applicants if there is no timely filed patent infringement lawsuit arising from its Paragraph IV certification, or if there is a timely filed lawsuit and there is a court decision (including a district court decision) of patent invalidity or non-infringement or a “substantive determination that there is no cause of action for patent infringement or invalidity.” 

Even more intriguing, however, is the reference in proposed FDC Act § 505(j)(5)(B)(iv)(III)(aa) to FDC Act § 505(j)(2)(A)(viii), which concerns so-called “section viii” statements.  A “section viii” statement is submitted when a generic applicant is not seeking approval for a particular method of use covered by an Orange Book-listed patent.  As such, there is no patent infringement challenge arising out of such a statement.  Under current law, only certain generic applicants whose ANDAs contain a Paragraph IV certification challenging an Orange Book-listed patent can be eligible for 180-day exclusivity.  Under S. 1315, any subsequent ANDA applicant that submits a “section viii” statement to an Orange Book-listed patent would be considered a “first applicant” eligible for 180-day exclusivity.  And because no notice of a “section viii” statement is provided to the NDA holder or patent owner, and there is no patent infringement lawsuit, nobody would be aware that such a generic applicant could be eligible for and trigger 180-day exclusivity. 

If enacted, S. 1315 would apply with respect to ANDAs subject to the 2003 Medicare Modernization Act (“MMA”) amendments to the FDC Act; however, the bill does include a “transitional provision” with respect to certain pre-MMA ANDAs. 

The amendments proposed in S. 1315 appear to be consistent with a paper Apotex, Inc. issued earlier this year, titled “Patent Settlements Between Brand and Generic Pharmaceutical Companies: Parked Exclusivity & Lack of Incentive for Subsequent Generic Filers to Fight On Are the Problems, Not ‘Reverse Payments.’”  In that paper, Apotex recommends that Congress work for legislation “that gives shared (if not sole) exclusivity to a generic challenger who, although not first to file a paragraph iv certification, is first to succeed in addressing the listed patents.”

And while on the topic of “reverse payments” (also known as “pay-for-delay” settlements), earlier today, the Federal Trade Commission (“FTC”) announced that in a speech before the Center for American Progress, FTC Chairman Jon Leibowitz said that “an internal FTC analysis projects that stopping collusive ‘pay-for-delay’ settlements between brand and generic pharmaceutical firms would save consumers $3.5 billion a year and also reap significant savings for the federal government, which pays approximately one-third of all prescription drug costs.”  Chairman Leibowitz’s speech was given as part of a Center for American Progress program, titled “Removing Obstacles to Generic Drug Competition.”  The Center for American Progress also issued a report authored by David Balto with the same title. 

Congress is currently considering “reverse payment” legislation (H.R. 1706 – the “Protecting Consumer Access to Generic Drugs Act of 2009”) that would prohibit such arrangements.  That bill was recently passed out of the Subcommittee on Commerce, Trade and Consumer Protection of the House Committee on Energy and Commerce, and the U.S. Senate is expected to mark up legislation very soon. 

Yesterday, the U.S. Supreme Court declined to hear a “reverse payment” case involcing ciprofloxacin – Arkansas Carpenters Health and Welfare Fund, Paper, A.F. of L. v. Bayer AG and Bayer Corp. – in which the question presented for the Court’s consideration was:

Are pharmaceutical “reverse payment” agreements – whereby the manufacturer of a brand-name drug (and patent holder) pays a generic manufacturer (and alleged patent infringer) to not launch a generic version of the brand-name drug – per se lawful without regard to the amount of cash paid or the strength of the underlying patent challenge?

In October 2008, the U.S. Court of Appeals for the Federal Circuit affirmed a lower court ruling “holding that any anti-competitive effects caused by the settlement agreements between Bayer and the generic defendants were within the exclusionary zone of the patent, and thus could not be redressed by federal antitrust law.”

By Kurt R. Karst –   

Section 11 of the Best Pharmaceuticals for Children Act (“BPCA”) of 2002 amended the FDC Act to add a new provision, which was reauthorized under the FDA Amendments Act of 2007 and is located at FDC Act § 505A(o), to require the prompt approval of ANDAs when pediatric information protected by patent or exclusivity is added to the labeling of a Reference Listed Drug.  Specifically, FDC Act § 505A(o) states:

A drug for which an application has been submitted or approved under section 505(j) shall not be considered ineligible for approval under that section or misbranded under section 502 on the basis that the labeling of the drug omits a pediatric indication or any other aspect of labeling pertaining to pediatric use when the omitted indication or other aspect is protected by patent or by exclusivity under clause (iii) or (iv) of section 505(j)(5)(F).

In addition, FDA “may require that the labeling of a drug approved under section 505(j) that omits a pediatric indication or other aspect of labeling” include: “(A) a statement that, because of marketing exclusivity for a manufacturer – (i) the drug is not labeled for pediatric use; . . . and (B) a statement of any appropriate pediatric contraindications, warnings, or precautions that the Secretary considers necessary.”

Shortly prior to the enactment of the BPCA in 2002, FDA was petitioned to issue new regulations or amend existing regulations before implementing Section 11 of the BPCA.  Although FDA denied this petition request shortly after the enactment of the BPCA, the Agency left open the possibility of issuing regulations in the future “as part of the continuing implementation process for this statutory provision. . . .”  And in 2006, FDA amended its prescription drug labeling regulations to add 21 C.F.R. § 201.56(d)(5) “to make clear that any risk information from the ‘Contraindications,’ ‘Warnings and Precautions,’ or ‘Use in Specific Populations’ section is ‘pediatric contraindications, warnings, or precautions’ within the meaning of section 11 of the BPCA,” and to “avoid any possible confusion as to what information the agency may require in generic labeling that otherwise omits a pediatric indication or other aspect of labeling pertaining to pediatric use protected by patent or exclusivity.”

FDC Act § 505A(o) has been applied in several instances since the enactment of the BPCA in 2002.  For example, FDA has approved generic versions of GLUCOPHAGE (metformin HCl), AGRYLIN (anagrelide HCl) (here and here), and PRILOSEC (omeprazole) with labeling that omits certain protected pediatric information, but that also includes certain essential pediatric safety information, regardless of pediatric exclusivity.  Moreover, in 2003, FDA responded to a citizen petition in which the Agency stated that it would apply Section 11 of the BPCA with respect to generic versions of ALPHAGAN (brimonidine), and issued a Manual of Policies and Procedures discussing, among other things, the review of generic drug labeling pursuant to Section 11 of the BPCA. 

Given the interest our previous post and scorecard on labeling carve-out issues generated, we thought it would be worthwhile to update the scorecard with a more complete list of petitions and FDA responses and to add a new section on BPCA Section 11 (FDC Act § 505A(o)) petitions (for which there will likely be only a few petitions given the express language in the statute).

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, 2002P-0252 (June 11, 2002) – ULTRAM (tramadol HCl)

• FDA Response, Docket No. 2001P-0495/PRC (Mar. 31, 2003) – ULTRAM (tramadol HCl)

• FDA Response, Docket No. 2003P-0321 (Apr. 6, 2004) – REBETOL (ribavirin)

• FDA Response, Docket No. 2005P-0383 (Dec. 1, 2006) – OXANDRIN (oxandrolone)

• FDA Response, Docket No. 2006P-0410 (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); PRC and PSA denied as moot (June 16, 2009) – PRANDIN (repaglinide)

FDA Citizen Petition Responses Denying a Labeling Carve-Out

• FDA Response, Docket No. 2003P-0518 (Sept. 20, 2004) – RAPAMUNE (sirolimus)

Pending Labeling Carve-Out Citizen Petitions

• FDA Docket Nos. FDA-2004-P-0426 and FDA-2003-P-0081; FDA Letter – SKELAXIN (metaxalone)

• FDA Docket No. 2007P-0322 – ACTOS (pioglitazone)

• FDA Docket No. 2007P-0354 – THALOMID (thalidomide)

BPCA Section 11 Pediatric Labeling Citizen Petitions

• FDA Response, Docket No. 2002P-0469 – ALPHAGAN (brimonidine)

By Carmelina G. Allis –

We previously reported that the State of New Jersey had entered into an agreement with Synthes, Inc. to settle allegations that the company failed to disclose financial conflicts of interest among doctors who conducted clinical testing on its products.  Now, Synthes has been charged by the United States government for allegedly violating several provisions of Titles 18 and 21 of the United States Code.  The 58-page indictment includes conspiracy and false statement counts under Title 18, in addition to violations of the Federal Food, Drug, and Cosmetic Act by allegedly introducing into interstate commerce adulterated and misbranded devices.  The indictment also charges Norian Corporation, a wholly owned Synthes subsidiary, Michael D. Huggins (President of Synthes North America), Thomas B. Higgins (Senior Vice President of Global Strategy of Synthes), Richard E. Bohner (Vice President of Operations), and John J. Walsh (Director of Regulatory and Clinical Affairs, Spine Division).

In brief, the defendants allegedly conducted clinical trials of a significant risk device without an approved Investigational Device Exemption ("IDE"), introduced into interstate commerce a device without FDA clearance or approval, and made false statements to government officials.  The indictment alleges that Synthes, an orthopedic device manufacturer, purchased Norian Corporation in 1999, the manufacturer of Norian SRS, a calcium phosphate bone cement.  Some time in 2000, several of Synthes’s employees allegedly conducted interviews of several surgeons with the purpose of creating a market for a version of Norian SRS with radiopaque barium sulfate for use in vertebroplasty and kyphoplasty surgeries to treat vertebral compression fractures ("VCFs").  This product was eventually marketed by defendants as “Norian XR.”

The indictment alleges that Norian SRS mixed with barium sulfate and Norian XR cannot be used on high-pressure vertebroplasty procedures, such as VCFs, because it is too thick and liquid and suspended particle components can separate/dewater.  Such leakage into the venous system can allegedly cause pulmonary embolism and death.  According to the indictment, prominent orthopedic surgeons had warned defendants that the Norian product in its pre-hardened state may interact with blood and cause serious adverse events, and that pre-clinical tests were recommended prior to using the product in humans.  In 2002, defendants allegedly learned the results of in-vitro studies conducted on human blood that allegedly demonstrated that the Norian calcium component interacts with blood, providing both a surface on which clot could form and a chemical stimulus to clot formation.

In 2001, defendants obtained FDA clearance to market Norian SRS as a general bone void filler for bony voids not intrinsic to the stability of the bony structure.  The cleared labeling warned that the Norian SRS was not to be mixed with any other substance.  According to the indictment, defendants engaged in the “test market” of the Norian SRS by directing employees to create a recipe for mixing Norian SRS with barium sulfate (known as “black-table mixing”); distributing the recipe for black-table mixing of Norian SRS to spine surgeons to treat VCFs; training spine surgeons to treat VCFs with the mixed Norian SRS; directing employees to attend such training sessions; and gathering safety and effectiveness data from spine surgeons using the mixed product to treat VCFs.

FDA later cleared the Norian XR as a general bone void filler in 2002, and specifically required that the labeling include a warning indicating that the device was not intended for the treatment of VCFs.  Defendants allegedly also engaged in a “test market” operation of the Norian XR for the off-label use to treat VCFs. 

Between 2003 and 2004, three patients died on the operating table after suffering hypotensive episodes while using Norian XR to treat VCFs.  The surgeons could not rule out Norian XR as a cause of the deaths.  In all cases, Synthes Spine sales representatives were present in the operating room during the surgeries. 

In 2004, FDA conducted an inspection of the Norian facility and cited the company for not having submitted an IDE prior to initiating the Norian XR “test market” and for shipping Norian XR in interstate commerce for off-label VCF uses.

The indictment alleges that the defendants conspired to approve, organize, and sponsor: (1) an illegal vertebroplasty clinical trial through a “test market” of the device; (2) surgeon forums at which spine surgeons were taught how to use Norian XR to treat VCFs; and (3) the sale of Norian XR to spine surgeons for the intended use of treating VCFs to gather an analyze safety and effectiveness information on the use of the device to treat VCFs.  The indictment also alleges that defendants conspired to conceal from spine surgeons and Synthes’s own Spine sales team information that Norian SRS and/or Norian XR could accelerate blood clot formation if it escaped from bone into the venous circulation, and also failed to disclose to surgeons and sales personnel that Norian XR was contraindicated in its labeling for the treatment of VCFs.  The indictment alleges that the defendants sent “dear doctor” letters to spine surgeons admitting that the use of Norian XR to treat VCFs was off-label, but that the letter omitted the thrombogenicity potential of the product and the three patients’ deaths.  The indictment also alleges MDR violations and making false and misleading statements to FDA investigators regarding the off-label use of the device.

According to the press release by the United States Attorney, Norian faces a fine of $26 million and Synthes faces a fine of $8.8 million, among probation and special assessments.  Each of the individual defendants faces a maximum sentence of one year in prison, a fine of $100,000, full restitution, and one year of supervised release.

All of the alleged violations occurred between 2003 and 2004.