By James P. Ellison –

The relationship between the federal government and qui tam relators is defined in part by statute and case law, but that law does not fully capture the often complex and varying relationship between qui tam relators and the government on whose behalf they bring suit. 

Relationship on the Rocks:  The March 6, 2009 announcement from the U.S. Attorney’s Office for the Southern District of New York that, the day before, it had achieved  closure on a settlement it had reached with a defendant in the fall of 2007 showed that  sometimes the government relator relationship can be a rocky one.

According to the release, the government had agreed to terms with Weill Medical College of Cornell University over a year ago, but the relator who initiated the lawsuit objected to the settlement, and challenged it in court.  That challenge was denied by Judge William H. Pauley on March 5, 2009, allowing the settlement to move forward.  Under the terms of the settlement Weill Medical College will pay $2.6M to settle civil fraud charges arising out of federal grant applications.  The government alleged that the principal investigator for those grants failed to disclose the full extent of her research activities (which according to the government exceeded 100% of her available time). 

Indeed, the government can even dismiss a qui tam case over the objection of a Relator.  In Hoyte v. American National Red Cross, the Department of Justice successfully moved to dismiss a qui tam case, over the strenuous objection of the Relator.  On March 4, 2008, the D.C. Circuit ruled that the Justice Department has virtually unfettered discretion to dismiss a qui tam action, even if the government has not intervened in the case.  (Hyman, Phelps & McNamara, P.C. represented the defendant in the case.)

Lending a Helping Hand: The February 25, 2009 announcement out of Main Justice announcing the unsealing of suit against Forest Laboratories for alleged off-label promotions and ant-kickback violations shows how the government can help.

Not only did the government intervene in two existing qui tam lawsuits, but it filed its own Complaint in Intervention.  We have previously noted (here and here) that a number of courts have imposed stricter pleading requirements on relators who bring off-label cases.

Frequently, the relator (often a former sales employee) does not have access to claims data (which would be in the possession of the physician or other practitioner who submitted the claim for reimbursement to a federal healthcare program).  In contrast, the government has that information, and apparently can put it into easy to read charts, thus making challenges to the specificity of fraud allegations considerably more difficult. 

Too Early toTell: Lastly, while the February 19, 2009 press release out of the U.S. Attorney’s Office for the Northern District of California announcing the government's intervention in another off-label case is seemingly a statistically bad sign for defendants, Scios Inc. and Johnson & Johnson (according to 2008 statistics, 98.5% of the money recovered last year was in cases in which the U.S. intervened), it is not clear what this means for the government relator relationship.  The press release notes that: “The qui tam or whistleblower actions contain additional allegations.  However, the United States is only intervening with regard to allegations that Scios marketed the drug Natrecor for serial infusions in outpatient setting.”  On one hand, the relators may be pleased that they have the government’s help on those particular allegations.  On the other hand, if – down the road – the the government seeks to settle the case without giving value to the relator-only allegations, things could get complicated.

By Ricardo Carvajal –      

The USDA Animal and Plant Health Inspection Service (“APHIS”) plans to hold public meetings in the Washington D.C. area in April to address issues raised by its proposal to revise its regulations on the importation, interstate movement, and environmental release of genetically engineered organisms.  In a previous Federal Register notice (74 Fed. Reg. 2907), APHIS requested comment on the following four issues:

(1) Scope of the regulation and which [Genetically Engineered (“GE”)]  organisms should be regulated;
(2) Incorporation into APHIS regulations of the Plant Protection Act’s noxious weed authority;
(3) Elimination of notification procedure and revision of the permit procedure;
(4) Environmental release permit categories and regulation of GE crops that produce pharmaceutical and industrial compounds.

These four issues will be included in the agenda for the April public meetings.  The dates of those meetings have yet to be announced.  However, APHIS has announced a scoping session scheduled for March 13 to consider recommendations for additional issues to include in the agenda for the April public meetings.  According to a prepublication copy of the Federal Register notice announcing the scoping session, APHIS will also welcome recommendations for what meeting format to use so as to “best ensure agenda issues will be frankly and fully explored.”  In addition, APHIS is extending the comment period for the proposed rule until 60 days after the April meetings (the current comment period would have closed on March 17).  Transcripts of the scoping session and the public meetings will be part of the administrative record for the proposed rule.

By Ricardo Carvajal –      

In response to the recent outbreak of Salmonella in peanut-derived products, FDA has issued a Guidance for Industry targeted to manufacturers who use peanut-derived ingredients in their products. (The guidance does not target producers of those ingredients.)  The guidance addresses different factors that can impact the effectiveness of Salmonella control measures, and recommends steps to ensure that the presence of Salmonella is adequately reduced in finished products.  FDA observes that “[d]etermining the processing conditions appropriate to adequately reduce Salmonella spp. in a particular food product involves considerable expertise in both food microbiology and the physics of heat transfer.”  In addition, the guidance warns that “[a] history of negative microbiological tests for Salmonella spp. in the finished product, while useful in a verification program for a process, is not sufficient, by itself, to determine the adequacy of a process in reducing the presence of Salmonella.”  The guidance also describes as potentially useful a document on the control of Salmonella recently published by the Grocery Manufacturers Association, although FDA disclaims any responsibility for the content of that document.

FDA also discusses different factors that can impact the effectiveness of Salmonella control measures in a bulletin issued to retail food service establishments and food stores.  The bulletin explicitly advises that “any peanut-derived products recalled by a manufacturer should not be used and should be returned or discarded.”

By Ricardo Carvajal –      

FDA has announced a collaboration with the Alliance for NanoHealth ("ANH") that will aim to “expand knowledge of how nanoparticles behave and affect biologic systems, and to facilitate the development of tests and processes that might mitigate the risks associated with nanoengineered products.”  The Houston-based ANH [www.nanohealthalliance.org] describes itself as “the first multi-disciplinary, multi-institutional collaborative research endeavor aimed solely at using nanotechnology to bridge the gaps between medicine, biology, materials science, computer technology and public policy.”   ANH members include the Baylor College of Medicine, The University of Texas M.D. Anderson Cancer Center, Rice University, the University of Houston, The University of Texas Health Science Center at Houston, Texas A&M Health Science Center, University of Texas Medical Branch and The Methodist Hospital Research Institute.  FDA cites its collaboration with ANH as an example of FDA’s Critical Path Initiative, which was begun in 2004 with the goal of facilitating development of innovative medical products. 

By John R. Fleder & Kurt R. Karst –

Last week, the United States District Court for the Eastern District of Pennsylvania entered a Consent Decree against giant home shopping retailer QVC, Inc.  The Consent Decree stems from a June 14, 2000 Federal Trade Commission (“FTC”) decision and order in which the Commission ordered QVC to cease representing certain products in violation of the FTC Act.  This led to a March 2004 court complaint filed by the Department of Justice against QVC alleging that the company violated the June 2000 order by making false or unsubstantiated claims for several weight-loss products.  The 2009 Consent Decree slaps QVC with a civil monetary penalty of $1.5 million and consumer redress of $6.0 million.  In addition, the Consent Decree modifies the June 2000 order to add additional weight loss products.  Additional information on the FTC’s QVC docket is available here.

By Riëtte van Laack –      

The U.S. Government Accountability Office ("GAO") has released a report that calls for FDA to take further actions to improve oversight and consumer understanding of dietary supplements. In its 2009 Report, GAO reviews developments since its previous report in 2000.  Significant developments are FDA’s actions concerning reporting of adverse events for dietary supplements and issuance of the Current Good Manufacturing Practice regulations for dietary supplements. Nevertheless, GAO remains concerned about FDA’s oversight of dietary supplements.  It concludes that FDA needs more resources and authority to regulate dietary supplements to address safety concerns.

In the report, GAO recommends that FDA request additional authority to oversee dietary supplements, issue the long overdue guidance on new dietary ingredients, clarify the boundary between dietary supplements and foods with added dietary ingredients, and take steps to improve consumer understanding of dietary supplements.  To enable greater oversight of the dietary supplement industry, GAO recommends that dietary supplement establishments be required to identify themselves as such when registering pursuant to the existing registration requirements under the Public Health Security and Bioterrorism Preparedness and Response Act of 2002.  In addition, dietary supplement companies should be required to annually submit a list of all dietary supplements and labels for the products they market.  GAO further recommends that the requirements for reporting adverse events be expanded to include minor adverse events.  However, as FDA pointed out in its comments to GAO’s recommendations, this expansion might backfire; the huge increase in adverse event reports might hinder finding meaningful signals amidst the noise.

In its report, GAO also expressed concerns regarding conventional foods containing dietary ingredients, such as energy drinks.  Specifically, GAO expressed concerns that the dietary ingredients may not be generally recognized as safe.  However, “FDA officials told [GAO] that the current regulatory framework is sufficient to identify and act on safety concerns regarding” such products.  GAO did not make recommendations specifically addressing functional foods.

By Ricardo Carvajal – 

The Food and Nutrition Board of the Institute of Medicine and the Board on Agriculture and Natural Resources of the National Research Council have established an ad hoc committee to examine FDA’s oversight of food safety and make recommendations to fill “gaps in public health protection.”  The committee plans to evaluate FDA’s Food Protection Plan in the context of prior IOM and Government Accountability Office reports, and issue its report in February 2010.  The report is expected to include recommendations for new regulatory and statutory authorities.  The next public meeting of the committee is scheduled for March 24. 

By David B. Clissold –

It seems likely that the answer will be “yes.”  The Family Smoking Prevention and Tobacco Control Act (H.R. 1256) is on a fast-track under the new administration.  The bill passed the House Energy and Commerce Committee by an overwhelming margin on March 4, 2009, two days after it was introduced by Representative Henry Waxman (D-CA).  It is now headed to the full House of Representatives.  The bill is very similar to legislation introduced last year by Mr. Waxman, which stalled in the Senate.

The bill would give FDA the authority to regulate tobacco products, including cigarettes and smokeless tobacco.  The bill mimics portions of the Federal Food, Drug, and Cosmetic Act (“FDC Act”), which currently regulates food, drugs and medical devices, and thus includes concepts that will be familiar to those who interact with FDA on a daily basis.  However, most elements of the new law may seem like a foreign language to those in the tobacco industry, particularly many small businesses.  The bill adopts the general structure of the FDC Act by first defining a tobacco product, and then describing the conditions that would cause a tobacco product to be “adulterated” or “misbranded.”  Adulteration and misbranding charges traditionally form the basis of FDA enforcement action against the food, drug and medical device industries.  As with some foods, the bill provides a “standard of identity” for cigarettes that would, among other things, prohibit the addition of an herb or spice such as strawberry, clove, cinnamon, or vanilla, although “menthol” is specifically permitted.  Other tobacco products could be subject to a standard of identity to be established by FDA.  As with drug, device, and food manufacturers, manufacturers of tobacco products would also be subject to certain registration requirements for manufacturing and processing facilities, and would be required to identify the products handled at each facility.  All registered facilities would be subject to FDA inspection at least every two years. 

Manufacturers would be required to submit to FDA a list of ingredients in every brand of cigarette.  If requested by FDA, manufacturers would be required to submit “any and all documents” relating to research activities for tobacco products, ingredients, components, and additives, including marketing research and underlying financial information. 

The bill would “freeze” the world of tobacco products as it existed on February 15, 2007.  Any tobacco product that was not marketed before that date would be a “new” tobacco product.  In order to market a “new” tobacco product, a manufacturer would have to obtain premarket approval from FDA via an application containing full reports of all information concerning the health risks of the new product.  Alternatively, a manufacturer would have to show that the “new” product was “substantially equivalent” to a tobacco product marketed before that date.  At any time, FDA could refer the application to a Tobacco Products Scientific Advisory Committee.

Labeling requirements for cigarettes and smokeless tobacco, particularly required Warning statements, would be controlled by FDA.  Although already subject to enforcement by the Federal Trade Commission ("FTC"), certain retail establishments would also be brought under FDA jurisdiction, particularly with respect to advertising restrictions.  Under the bill, FDA and FTC would “coordinate” their enforcement and advertising powers.  FDA would issue new regulations regarding the sale, distribution, advertising and promotion of tobacco products.  Retailers in violation of such regulations would be subject to civil penalties (0-$250 for a first offense depending on whether the retailer has an “approved training program,” and up to $10,000 for a sixth violation within a 48-month period).  The bill would authorize FDA to collect “user fees” (a new tax) from manufacturers, although the government’s current authority to tax cigarettes apparently remains unchanged.  With respect to product liability, the bill expressly does not affect the law of any State.

Of the many bills proposed over the last few weeks affecting FDA, (check our FDA Legislation Tracker), this one seems to have a very high priority in the administration and the full support of public health groups.  Some “fine tuning” is likely to result when the measure is considered by the Senate, but we predict that the general structure is likely to survive.  WARNING: FDA may be hazardous to the health of tobacco product manufacturers and retailers.

When Hyman, Phelps & McNamara, P.C. launched the FDA Law Blog 2 years ago today – Is that 14 in “blog years”?  It certainly seems like it, if not more! – we could hardly imagine how successful it would become and how our subscribers (and the Food and Drug Bar generally) would come to rely on it for timely information and insightful commentary on myriad FDA-related issues.  In 2007, blogs were just beginning to be recognized as a vibrant and dynamic medium for conveying thoughts and ideas on a given topic.  Today, there are millions of blogs in the blogosphere covering just about any topic imaginable. 

During our lifetime, we have made over 450 posts, have garnered thousands of subscribers from around the world, and have been recognized as one of the top blogs covering the life sciences – and certainly the best (we believe) blog covering FDA.  In the past year, we have added useful new functions to the blog, including the FDC Act § 505(q) Citizen Petition Tracker and the FDA Legislation Tracker.  And yesterday, we introduced the Risk Evaluation and Mitigation Strategy (REMS) Tracker. 

We thank our subscribers for their continued interest in the blog, and our Hyman, Phelps & McNamara, P.C. colleagues for their time and dedication to writing interesting and informative posts.  Onward to another year of “covering topics of interest to FDA-regulated companies, fellow food and drug and healthcare lawyers and regulatory personnel, as well as people just generally interested in FDA law,” as we first promised.

By Cassandra A. Soltis –      

The Indiana Senate is currently reviewing House Bill No. 1207, passed by the House on February 25, 2009, which would require food establishments having 20 or more locations in Indiana to post both calorie and carbohydrate information “in a manner that allows consumers to consider the information when selecting an item or unit of food.”  H.B. 1207, 116th Gen. Assem., Reg. Sess. (Ind. 2009).  The bill would also require such establishments to make available to customers the amount of calories, fat, saturated fat, trans fat, cholesterol, sodium, carbohydrates, fiber, sugars, and protein in each food item.  In contrast, New York City’s ("NYC’s") menu labeling regulation requires only that calorie information be placed on all menu boards and similar displays.  In addition, NYC’s regulation covers restaurants with 15 or more establishments nationally.

Although some restaurants claim to provide nutrition information voluntarily at the point of purchase or when requested by consumers, many restaurants fail to have such information available, as the movie “Super Size Me” revealed.  NYC’s regulation and Indiana’s bill, if passed, have penalties for food establishments that do not comply with the nutrition information requirements.  (NYC can assess fines between $200 and $2,000; Indiana’s bill proposes a penalty of up to $1,000 for each violation per day.)   

If House Bill 1207 is passed, any challenge to the law would have to consider the outcome of New York State Restaurant Association v. New York City Board of Health, No. 08-1892-cv, 2009 U.S. App. LEXIS 2905 (2nd Cir. 2009), which, as we previously reported, upheld the NYC regulation to challenges on both federal preemption and First Amendment grounds.  Specifically, the court found that the Nutrition Labeling and Education Act of 1990 does not expressly preempt NYC’s regulation, and that the purpose of the regulation – to help address the obesity epidemic and its concomitant diseases – and the means used to achieve that purpose were reasonable.  

According to the Centers for Disease Control and Prevention ("CDC"), Indiana’s obesity rate for 2007 was 26.8%.  It is one of 30 states that had an obesity rate greater than 25%, with Alabama, Mississippi, and Tennessee having a prevalence of obesity equal to or greater than 30%.  Visit the CDC’s website here to view slides that show a significant increase in obesity rates since 1985.

By William T. Koustas –

As we have previously reported, Title IX of the Food and Drug Administration Amendments Act of 2007 (“FDAAA” or “the Act”) provides a new statutory framework and authority for FDA (or “the Agency”) to require Risk Evaluation and Mitigation Strategy (“REMS”) for drugs and biologics.  Specifically, FDAAA permits FDA to require the applicant of a New Drug Application, Biologics License Application, Abbreviated New Drug Application or a supplement thereof to submit a proposed REMS as part of the application prior to approval if the Agency determines that it is “necessary to ensure that the benefits of the drug outweigh the risks of the drug.”   FDC Act § 505-1(a)(1).  The Agency may also require REMS after a product’s approval if FDA “becomes aware of new safety information that makes a determination that such is necessary to ensure that the benefits of the drug outweigh the risks of the drug.”  Id. § 505-1(a)(2).  Further, FDAAA states that drugs and biologics approved prior to the effective date of the Act are “deemed to have in effect an approved risk evaluation and mitigation strategy under section 505-1 of the [FDC Act]…if [they] are in effect on the effective date of this Act elements to assure safe use (A) required under [21 C.F.R. §§ 314.520 or 601.42]; or otherwise agreed to by the applicant and [FDA].”  FDAAA § 909(b)(1).  FDA listed those products in a March 27, 2008, Federal Register notice. 

Since Title IX of FDAAA went into effect on March 25, 2008, FDA has required both new and previously approved drugs to develop REMS consisting of one or more elements provided for in the FDAAA provisions.  Those elements include a medication guide or patient package insert, a communication plan to healthcare providers, and elements to assure safe use (e.g., a restrictive distribution program).  FDC Act § 505-1(e).  Additionally, all REMS must include a timetable for assessments with assessments at 18 months, 3 years and 7 years after approval of the REMS.  Id. § 505-1(d).

Because the number of approved and requested REMS continues to grow and class-wide REMS begin to emerge (see FDA’s announcements regarding opioids and TNF blockers), we decided to provide a means by which to track those REMS approved by FDA – the REMS Tracker.  This tracker is an Excel spreadsheet with links to letters of approval describing the REMS, a list of REMS elements required for each drug product, FDA’s stated rationale for requiring REMS, as well as other useful information.  (Thanks to our legal assistant Ted Kenyon for helping us to put this together!)  We will update this tracker on a regular basis as new approval letters are made available through FDA’s website.  Currently, 25 drugs and biologics have approved REMS.  We expect the number of REMS to grow significantly as FDA becomes more comfortable with its new power under FDAAA and as more decisions regarding class-wide REMS are finalized.   

By Kurt R. Karst –      

Last week, we reported on the third citizen petition submitted to FDA requesting that the Agency address whether the 30-month stay provisions of the Hatch-Waxman Amendments apply to a pending ANDA for a generic version of an old antibiotic drug, which ANDA contains a Paragraph IV certification to a patent listed in the Orange Book in accordance with § 4(b)(1) of the QI Program Supplemental Funding Act of 2008 (“QI Act”).  Now another citizen petition has been added to the mix. 

The latest petition, submitted on behalf of Stiefel Laboratories, Inc. (“Stiefel”), concerns the old antibiotic drug product EVOCLIN (clindamycin phosphate) Topical Aerosol Foam, 1%.  We previously reported that FDA’s Paragraph IV Certification List shows that an ANDA containing a Paragraph IV certification to a QI Act Orange Book-listed patent was submitted to FDA with respect to EVOCLIN.  Unlike the previously submitted citizen petitions, the Stiefel petition does not argue that the 30-month stay provisions of the original Hatch-Waxman Amendments apply, rather than the version of the statute amended by the Medicare Modernization Act (“MMA”), such that a generic applicant with a pending ANDA that amends its application to add a Paragraph IV certification to a later-listed patent is subject to a 30-month stay in connection with that certification.  Instead, Stiefel argues that:

The February 5, 2009 first applicant date is effectively the filing date under the unusual circumstances covered by the transitional rules.  This date, and not the actual date of the ANDA submission, is the most logical date to apply for purposes of determining the application of the 30-month stay.  Under this approach, the patents timely listed for covered old antibiotic drugs will predate the constructive application date for the Paragraph IV certifications.  As a result, the 30-month stay would be available, even under the restrictions imposed by the MMA. Only this interpretation provides necessary protection to old antibiotic drug NDA holders.  The availability of the 30-month stay should not be dependant solely on the arbitrary date of enactment of the QI Act.  Any interpretation and conclusion other than the one reached above unfairly singles out holders of NDAs for old antibiotic drug products that were approved prior to enactment of the QI Act and denies them the right to the 30-month stay provision to protect their intellectual property – a right that all other NDA holders of non-antibiotic drug products currently enjoy.  Application of ordinary Waxman-Hatch analysis, including restriction of the 30-month stay because of late listed patents, is not appropriate in this case as such analysis would fail to consider the unique factual and policy considerations raised in the isolated situation of the QI Act transitional rules.

The reference to February 5, 2009 is derived from QI Act § 4(b), which includes three transition provisions on Orange Book patent listing, certification, and 180-day exclusivity for each ANDA applicant that not later than 120 dates after enactment of the QI Act (i.e., February 5, 2009) amends a pending application to contain a Paragraph IV certification to a newly listed old antibiotic drug patent. 

The Stiefel petition goes on to argue that “[t]here is FDA precedence for developing and implementing unique transitional provisions that interpret statutory provisions in a manner that best reflects statutory intent.”  Specifically, Stiefel cites to FDA’s October 11, 1984 guidance for industry letter in which the Agency discussed its policies for converting and prioritizing “paper NDAs” into applications submitted under FDC Act § 505(j) in light of the enactment of the Hatch-Waxman Amendments.  In that letter, FDA provided a single date for ANDA conversion filings – i.e., November 26, 1984, when the then new ANDA provisions in the FDC Act became effective. 

By Kurt R. Karst –      

Earlier today, the U.S. Supreme Court issued its highly anticipated opinion in Wyeth v. Levine.  By a 6-3 vote (Justice Alito, Chief Justice Roberts, and Justice Scalia dissenting), the Court ruled that FDA labeling approval does not preempt state laws.  We previously reported on the background and Oral Argument in this case.  Below is the Court’s syllabus from the opinion (which totals 80 pages).  We anticipate a future post once we have had a chance to digest the ruling.

(a) The argument that Levine’s state-law claims are pre-empted because it is impossible for Wyeth to comply with both the state-lawduties underlying those claims and its federal labeling duties is rejected.  Although a manufacturer generally may change a drug labelonly after the FDA approves a supplemental application, the agency’s“changes being effected” (CBE) regulation permits certain preapproval labeling changes that add or strengthen a warning to improve drug safety.  Pursuant to the CBE regulation, Wyeth could have unilaterally added a stronger warning about IV-push administration,and there is no evidence that the FDA would ultimately have rejected such a labeling change.  Wyeth’s cramped reading of the CBE regulation and its broad assertion that unilaterally changing the Phenerganlabel would have violated federal law governing unauthorized distribution and misbranding of drugs are based on the fundamental misunderstanding that the FDA, rather than the manufacturer, bearsprimary responsibility for drug labeling.  It is a central premise of the Food, Drug, and Cosmetic Act (FDCA) and the FDA’s regulationsthat the manufacturer bears responsibility for the content of its labelat all times.

(b) Wyeth’s argument that requiring it to comply with a state-lawduty to provide a stronger warning would interfere with Congress’ purpose of entrusting an expert agency with drug labeling decisions is meritless because it relies on an untenable interpretation of congressional intent and an overbroad view of an agency’s power to preempt state law.  The history of the FDCA shows that Congress didnot intend to pre-empt state-law failure-to-warn actions.  In advancing the argument that the FDA must be presumed to have established a specific labeling standard that leaves no room for different state-law judgments, Wyeth relies not on any statement by Congress but on the preamble to a 2006 FDA regulation declaring that statelaw failure-to-warn claims threaten the FDA’s statutorily prescribed role.  Although an agency regulation with the force of law can preempt conflicting state requirements, this case involves no such regulation but merely an agency’s assertion that state law is an obstacleto achieving its statutory objectives.  Where, as here, Congress has not authorized a federal agency to pre-empt state law directly, theweight this Court accords the agency’s explanation of state law’s impact on the federal scheme depends on its thoroughness, consistency,and persuasiveness. Cf., e.g., Skidmore v. Swift & Co., 323 U. S. 134.  Under this standard, the FDA’s 2006 preamble does not merit deference: It is inherently suspect in light of the FDA’s failure to offer interested parties notice or opportunity for comment on the preemption question; it is at odds with the available evidence of Congress’ purposes; and it reverses the FDA’s own longstanding positionthat state law is a complementary form of drug regulation without providing a reasoned explanation. Geier v. American Honda Motor Co., 529 U. S. 861, is distinguished.

By Wes Siegner –  

In April 2005, FDA published guidance for industry on dietary supplement labeling, “A Dietary Supplement Labeling Guide.”   Chapter II of this guidance contains FDA’s views on how to fulfill the statement of identity requirement for dietary supplements contained in 21 C.F.R. § 101.3(g). 

This portion of the guidance contains the following question and answer:

Can the term "dietary supplement" by itself be considered the statement of identity?

No. This term by itself is not appropriately descriptive to be a statement of identity.  21 CFR 101.3(g)

The regulation cited is at best ambiguous as to the correct answer to the question posed.  Nonetheless, prior to the issuance of the guidance in 2005 the vast majority of dietary supplement products were labeled with “Dietary Supplement” as the only statement of identity, and this situation has not changed since FDA issued the guidance, although some companies have changed their labels to comply with the guidance.  FDA has, to our knowledge, not taken enforcement action to force industry to change, which likely explains the lack of any real interest in the question of whether the guidance is correct as to whether the term “dietary supplement” alone meets the applicable statutory and regulatory requirements.

This question became a sticking point in recent efforts to settle a multistate investigation of a dietary supplement manufacturer, and the state regulatory authorities involved were understandably confused by FDA’s guidance.  As a result, this firm submitted our analysis of the relevant statutory and regulatory requirements to FDA’s Center for Food Safety and Applied Nutrition ("CFSAN") by e-mail, the relevant substance of which follows.

Section 403(s)(2)(B) of the Federal Food, Drug and Cosmetic Act ("FDC Act"), 21 U.S.C. § 343(s)(2)(B), provides that a dietary supplement is misbranded if “the label or labeling of the dietary supplement fails to identify the product by using the term ‘dietary supplement,’ which term may be modified with the name of such an ingredient.”  Therefore, the statute, which is controlling, specifies that the use of  "dietary supplement" alone as the statement of identity is acceptable, but that other words may be added.

FDA’s regulation, if read alone without reference to the preamble, is less clear and is likely the source of the confusion in the guidance document.  The applicable regulation states that “[d]ietary supplements shall be identified by the term 'dietary supplement' as a part of the statement of identity … .”  21 C.F.R. § 101.3(g).  It is possible to read this regulation as meaning that the statement of identity must include more than just the words "dietary supplement."  However, this reading would conflict with the statutory wording.  FDA’s preamble to the final rule establishes that there is no inconsistency, and that the correct reading of § 101.3(g) is that the use of  the term "dietary supplement" alone as the statement of identity is acceptable.

FDA’s preamble states that:

Section 201(ff)(2)(C) of the act, in defining the term “dietary supplement,'' mandates that such a product must be labeled as a dietary supplement. Section 403(s)(2)(B) of the act states that a food shall be deemed to be misbranded if it is a dietary supplement, and the label or labeling of the dietary supplement fails to identify the product by using the term “dietary supplement, which term may be modified with the name of such an ingredient.'' Section 403(i)(1) of the act requires that a food label must bear the common or usual name of the food, that is, a statement that identifies the food. Dietary supplements are labeled subject to the provisions of section 403(i)(1) of the act (see the last sentence of section 201(ff) of the act). Thus, when the act is read in its entirety, it is clear that sections 201(ff)(2)(C), 403(s)(2)(B), and 403(i)(1) of the act require that the statement of identity of a product that is marketed as a dietary supplement identify the product as such.

FDA's longstanding regulations lead directly to this result. Section 102.5 (21 CFR 102.5) sets out how the common or usual name of a nonstandardized food is to be derived. Under this provision, the common or usual name must accurately identify or describe, in as simple and direct terms as possible, the basic nature of the food. The basic nature of a dietary supplement is that it is a dietary supplement.  This is the point made in both sections 201(ff)(2)(C) and 403(s)(2)(B) of  the act.  Thus, under 102.5(a), the common or usual name of these products must, at least in part, identify them as a dietary supplement.

62 Fed. Reg. 49,826, 49,827 (Sept. 23, 1997).  The preamble clarifies that the words "as part of" in § 101.3(g) mean that the statement of identity should include the term "dietary supplement" "at least in part."  Stated differently, the preamble establishes that the correct reading of § 101.3(g), consistent with the statute, is that "dietary supplement" satisfies the statement of identity requirement under § 101.3(g), but that additional words may be included.

Consistent with our reading of the statute and regulation, in its press release concerning this rule, the Department of Health and Human Services stated that “[a] statement of identity will appear on the front panel of the product label. The statement must use the terms "dietary supplement" or a term identifying the contents of the product, such as "Vitamin C supplement" or "Herbal supplement."   

A senior official within CFSAN, has confirmed that CFSAN has considered this issue and agrees that FDA’s guidance is incorrect as to the answer to the question posed in the guidance, “[c]an the term ‘dietary supplement’ by itself be considered the statement of identity,” and that the correct answer should be “Yes” rather than “No.”  However, FDA has also indicated that the agency is not likely to correct this guidance anytime in the near future. 

Given the increased number of multistate investigations of the supplement industry, manufacturers responsible for labeling dietary supplements should be aware that Texas  authorities, even after learning that FDA agrees that the guidance is incorrect and being reminded that such guidance is not binding on FDA or industry, have stated their intent to enforce Texas’ view of the statement of identity requirement as expressed in the guidance.  Other states involved in the multistate investigation appeared to understand that, given the lack of ambiguity in the FDC Act, FDA’s acknowledgement of the error, and the lack of any state requirement of a different statement of identity, there is no legal basis for state enforcement that is inconsistent with the FDC Act.  Should Texas or any other state attempt to enforce the erroneous view expressed in the FDA guidance, the manufacturer targeted would have a strong basis for refusing to comply and litigating this issue.

By Cassandra A. Soltis & Wes Siegner –  

Previously we have commented on FDA’s draft guidance originally issued on January 2, 2008 and recently reissued again in draft form on December 11, 2008 (here and here).  Both draft guidance documents assert that, in the Dietary Supplement and Nonprescription Drug Consumer Protection Act of 2006, Congress's use of the term "domestic address" in sections 403(y) and 502(x) of the Federal Food, Drug, and Cosmetic Act ("FDC Act") is “a clear and unambiguous directive” that all labels for dietary supplement and OTC drug products (other than those approved through the NDA process) be revised to permit consumers to report adverse events.  Industry has submitted numerous comments pointing out that FDA’s reading of the “domestic address” requirement is obviously flawed and contradicted FDA’s longstanding regulations, 21 C.F.R. §§ 101.5(d) and 201.1(a), requiring that all dietary supplement and OTC drug labels bear the “name and place of business” of the manufacturer, packer or distributor of the product.

FDA’s two February 24, 2009 Federal Register publications (here and here) estimate the cost in terms of hours of compliance with FDA’s draft guidance, which, according to a March 2, 2009 Tan Sheet article, FDA states is equivalent to just under $44M for dietary supplements and $40M for OTC drugs.  These estimates beg the question – why would there be any cost at all when FDA has issued its views in non-binding draft guidance, the views expressed in the draft guidance are flatly contradicted by existing FDA regulations, and there is little, if any, risk that FDA would ever enforce the “domestic address” requirement?  Those companies that understand the legal requirements and FDA’s enforcement options would likely choose to do nothing, for a cost of $0.

FDA’s labeling initiative is a flawed effort to badger the dietary supplement and OTC drug industries into making labeling changes that are irrational, both from a cost and a public health perspective.  FDA’s argument is that consumers, armed with a phone book or even the Internet, need more information than the name and place of business of the company to be able to report an adverse event, and that Congress recognized the problem and therefore used the term “domestic address” to clarify that the name and place of business was insufficient.  This argument ignores the lack of any evidence of congressional intent as well as the intent of FDA’s “name and place of business” regulations, which are also aimed at company contact and have successfully achieved that goal for decades.  In addition, FDA’s view runs counter to the increased access to contact information in the modern world, and the ability of consumers to report adverse events to medical professionals and to FDA, should they somehow be unable to locate the company or, as is usually the case, prefer not to report to the company.  The labeling changes FDA seeks would have no effect on consumer reporting, but would cost industry millions.

Finally, industry should understand that the closing sentence of both draft guidances, that “FDA intends to begin enforcing the [labeling] requirements . . . on or after January 1, 2010,” is either a bluff or was written by someone who does not understand the non-binding nature of FDA guidance (see 21 C.F.R. § 10.115(d)(1)).  Any effort to enforce the “domestic address” requirement would be at least an implied threat of litigation, which would force the agency to confront several major obstacles, not the least of which is the logic of its own existing “name and place of business” regulations and the non-binding nature of FDA’s guidance, all for a cause that must be of questionable merit even to those within the agency.  Even assuming FDA might push to enforce the requested label changes, convincing attorneys at the Department of Justice that such a case would be worth bringing would be difficult, if not impossible.  The risk of litigation would be at best remote, and therefore the threat of litigation of little use as an enforcement tool.

The most likely outcome of FDA’s labeling initiative is that there will be little if any change in labels and therefore no cost to industry.  These days, no added costs would be very good news.