By Bryon F. Powell –

On November 26, 2008, the Massachusetts Department of Public Health delayed plans to propose emergency regulations that would implement the state’s recently enacted pharmaceutical and device marketing law at a December 10 meeting of the Public Health Council.  A pair of hearings will be held in January 2009 to address issues surrounding the law with the earliest possible vote on proposed regulations taking place in February.  We previously reported on the enactment of Senate Bill 2863.

By Kurt R. Karst –      

Late last week while those of us in the U.S. were still digesting our turkey dinners, FDA issued a draft guidance document describing the Agency’s current thinking on the implementation of § 4(b)(1) of the Q1 Program Supplemental Funding Act (Pub. Law No. 110-379) (“the Q1 Act”).  Specifically, FDA’s draft guidance addresses when sponsors of NDAs for “old” antibiotics must submit patent information to FDA for Orange Book listing under the transition rules of the Q1 Act.  The draft guidance does not address FDA’s interpretation of the scope of, and procedural requirements associated with FDC Act § 505(v). 

As we previously reported (here and here), the Q1 Act, which was enacted on October 8, 2008, amended the FDC Act to add new § 505(v) – “Antibiotic Drugs Submitted Before November 21, 1997” – to create Hatch-Waxman benefits for “old” antibiotics.  The Q1 Act includes three “transition provisions.”  Those provisions: (1) require antibiotic drug NDA sponsors to submit to FDA for Orange Book listing information on applicable patents within 60 days of enactment of the Q1 Act; (2) require FDA to list those patents in the Orange Book not later than 90 days after the enactment of the Q1 Act; and (3) create “fist applicant” status (for 180-day exclusivity purposes) for each ANDA applicant that not later than 120 dates after enactment of the Q1 Act amends a pending application to contain a Paragraph IV certification to a newly listed antibiotic drug patent. 

To date, few patents have been submitted to FDA for Orange Book listing.  The first “old” antibiotic patents were listed on October 24, 2008 for MOXATAG (amoxicillin).  Since then, other patents have been listed for ZMAX (azithromycin), and NEORAL (cyslosporine).  We understand that other patents covering “old” antibiotic drug products will soon be added to the Orange Book before the 60-day deadline for Orange Book patent listing expires later this week.

FDA’s draft guidance reminds NDA sponsors of the fast-approaching deadline:

Section 4(b)(1) of the Q1 Act requires the submission of patent information to FDA “not later than sixty days after enactment of [the Q1 Act].”  Sixty days after enactment falls on Sunday, December 7, 2008.  Therefore, to be in compliance with this provision, sponsors must submit the patent information on or before the weekday preceding December 7, 2008, that is, on or before December 5, 2008.  [(emphasis added)]

FDA’s draft guidance also clarifies who must submit the patent information to FDA under §  4(b)(1) of the Q1 Act:

The sponsor of an NDA approved on or before October 7, 2008, for a drug (including a combination drug) containing an antibiotic drug that was the subject of an application approved under section 507 of the FD&C Act (as in effect before November 21, 1997) must submit this patent information.  [(emphasis added)]

One of the reasons so few patents covering “old” antibiotics have been submitted to FDA for Orange Book listing might be due to a misunderstanding of the applicability of the transition provisions.  Some have speculated that the transition provisions might apply only to NDAs for “old” antibiotics approved after October 8, 2008 when the Q1 Act was enacted.  According to FDA, this is not the case:

The application of section 4(b)(1) of the Q1 Act set forth in this guidance gives meaning to both section 505(v) of the FD&C Act, as added by section 4(a) of the Q1 Act, and the legislation’s transitional rules at section 4(b).  Section 4(b)(3) of the Q1 Act contemplates submission of patent certifications by applicants of pending ANDAs that reference drugs for which patent information must be listed under section 4(b)(1).  By statute, ANDAs may reference only already approved drugs.  See 21 U.S.C. 355(j)(2)(A). Therefore, the drugs referenced by these pending ANDAs (that is, drugs for which patent information was submitted under section 4(b)(1) of the Q1 Act) must be drugs that were approved on or before October 7, 2008.  This approach is further supported by the requirement that FDA must, upon receipt of the patent information required to be submitted under 4(b)(1) of the Q1 Act, publish the information in the electronic version of FDA’s Approved Drug Products with Therapeutic Equivalents (the Orange Book).  Per section 505(j)(7) of the FD&C Act, the Orange Book includes only information about approved drugs.  See section (4)(b)(2) of the Q1 Act. 

By Kurt R. Karst -     

On November 25, 2008, FDA granted in full a citizen petition (petition supplements are available here and here) submitted by Osmotica Pharmaceutical Corp. earlier this year requesting that FDA determine that any company with a pending Abbreviated New Drug Application ("ANDA") for a proposed Venlafaxine HCl Extended-Release Tablets drug product, and in particular Sun Pharmaceutical Industries Ltd. ("Sun"), be required to submit to FDA a new ANDA citing Osmotica's approved Venlafaxine HCl Extended-Release Tablets drug product as the Reference Listed Drug ("RLD"), and that FDA require any such ANDA applicant to conduct new bioequivalence studies comparing its proposed drug product to Osmotica's approved drug product.  FDA's 26-page decision: (1) affirms FDA's longstanding "RLD Change Policy," which requires a generic applicant with a pending ANDA subject to an approved suitability petition to change RLD and provide appropriate bioequivalence information once the Agency approves an application for the drug product covered by the suitability petition; (2) affirms FDA's "RLD Choice Policy," under which a generic applicant must choose the most pharmaceutically equivalent listed drug as the RLD; and (3) and implements FDC Act § 505(j)(2)(D)(i), which was added to the statute in 2003 by the Medicare Prescription Drug, Improvement, and Modernization Act ("MMA") and precludes an applicant with a pending ANDA from amending that application to change RLD.  It is the first citizen petition covered under FDC Act § 505(q) that FDA has granted in full - see the FDA Law Blog FDC Act § 505(q) Citizen Petition Tracker.

Osmotica's May 30, 2008 citizen petition concerns FDA's May 20, 2008 approval of Osmotica's 505(b)(2) application (NDA #22-104) for Venlafaxine HCl Extended-Release Tablets, and FDA's March 30, 2005 decision approving a suitability petition submitted pursuant to FDC Act § 505(j)(2)(C) for a dosage form change from Venlafaxine HCl Extended-Release Capsules (i.e., Wyeth's EFFEXOR XR) to Venlafaxine HCl Extended-Release Tablets.  Sun had submitted an ANDA to FDA pursuant to FDA's suitability petition decision seeking approval of Venlafaxine HCl Extended-Release Tablets – pharmaceutically the same drug product FDA approved under Osmotica's NDA.

Under FDA's RLD Choice Policy, a generic applicant should refer to the approved pharmaceutical equivalent designated by FDA as the RLD as it basis for ANDA submission.  As FDA explained in a 2004 citizen petition response (page 9, note 13):

if a tablet and a capsule are approved for the same moiety with patents listed for the tablet and none listed for the capsule, an ANDA applicant seeking approval for a tablet should cite the approved tablet as the [RLD].  It should not circumvent the patents on the tablet by citing the capsule as the [RLD] and filing a suitability petition under [FDC Act § 505(j)(2)(C)] and 21 CFR 314.93 seeking to change to a tablet dosage form.

Under FDA's longstanding RLD Change Policy, the Agency has required a generic applicant with a pending ANDA subject to an approved suitability petition to change RLD and provide appropriate bioequivalence information once the Agency approved an application for the drug product covered by the suitability petition.  For example, after FDA approved NDAs for Carboplatin Injection drug products that were also the subject of pending ANDAs submitted pursuant to an approved suitability petition, the Agency required generic applicants to change RLD.  FDA has also required generic applicants to take the same action in an Rx-to-OTC switch scenario, where the Agency approved a new NDA for an OTC drug product – thus creating a new RLD listed in the Orange Book to which generic applicant must cite.

FDA's RLD Change Policy became particularly important with the enactment of the MMA in 2003.  The MMA amended the FDC Act to add § 505(j)(2)(D)(i), which states: "[a]n applicant may not amend or supplement an [ANDA] to seek approval of a drug referring to a different listed drug from the listed drug identified in the application as submitted to [FDA]."  A similar provision was added to FDC Act § 505(b)(4)(A) with respect to 505(b)(2) applications.  That provision states: "[a]n applicant may not amend or supplement [a 505(b)(2) application] to seek approval of a drug that is a different drug than the drug identified in the application as submitted to [FDA]."  Thus, given FDA's RLD Change and Choice Policies, a generic applicant must cite the most appropriate RLD, and must change RLD (for a pending application) when a pharmaceutically equivalent listed drug is approved.  However, the MMA precludes an ANDA applicant with a pending application from changing RLD.  Instead, Osmotica argued in its citizen petition that a new application must be submitted citing the appropriate RLD, and such application must contain the required bioequivalence data comparing the proposed generic drug to the new RLD (in this case, Osmotica's approved Venlafaxine HCl Extended-Release Tablets drug product).

In October 2004, FDA issued a draft guidance document discussing, among other things, FDC Act § 505(j)(2)(D)(i).  FDA's draft guidance document states, in relevant part:

All changes that would have the effect of seeking approval for a drug product different from the listed drug cited in the initial submission (e.g., different active ingredient, dosage form, route of administration) should be made in a new application.  When the Orange Book identifies as a separate listed drug a product with the characteristics (e.g., active ingredient, dosage form, route of administration) for which the applicant is seeking approval, the applicant should submit a separate ANDA referencing the corresponding listed drug.  The applicant should not submit a supplement or amendment to its pending or approved application to seek approval for such a change.
     
In the Federal Register notice announcing the availability of the draft guidance, FDA stated:

A situation that is not considered in this guidance is that where a pending ANDA was submitted referencing a [suitability] petition approved under [FDC Act § 505(j)(2)(C)], and another application is approved for the product described in the petition before the pending ANDA is approved.  FDA has not completed its analysis of this situation, and therefore the draft guidance does not cover it.

Despite the apparent uncertainty in 2004, however, FDA has completed its analysis and has determined that a generic applicant with a pending ANDA subject to an approved suitability petition must submit a new ANDA citing the appropriate RLD when the drug product described in the approved suitability petition is approved under an NDA.  FDA's petition response states:     

our requirement that an applicant with a pending ANDA subject to an approved suitability petition change the RLD upon FDA approval of an NDA for the same drug product described in the approved suitability petition reflects the Agency's judgment that considerations regarding an ANDA's limited reliance on an approved suitability petition are outweighed by the need for a clear determination of therapeutic equivalence for a generic drug product and protection of intellectual property rights accorded an NDA holder. . . .

[T]his approach reduces the potentially confusing proliferation of pharmaceutically equivalent drug products that have not demonstrated therapeutic equivalence, and ensures that ANDAs for venlafaxine HCl extended-release tablets will be therapeutically equivalent and thus substitutable for the RLD, Osmotica's venlafaxine HCl extended-release tablets. . . .

FDA's policy of requiring all pending ANDA applicants to change their basis for ANDA submission upon approval of an NDA for the same drug product described in the suitability petition is intended to ensure that ANDA applicants do not circumvent the patent certification requirements of section 505(j)(2)(A)(vii)-(viii) of the Act through the suitability petition process.  In addition, our policy would appropriately protect any marketing exclusivity that has been granted to the newly-approved RLD.

In the case of Sun's pending ANDA for Venlafaxine HCl Extended-Release Tablets, FDA determined that:

an ANDA for venlafaxine HCl extended-release tablets submitted based upon an approved suitability petition that was pending at the time of approval of Osmotica's NDA 22-104 and that seeks approval for a pharmaceutically equivalent drug product must be withdrawn, as the ANA is required to reference the corresponding approved strengths of Osmotica's venlafaxine HCl extended-release tablets as its RLD, and section 505(j)(2)(D)(i) of the Act precludes such a change from being submitted as an amendment to an ANDA.  If Sun or any other applicant wishes to pursue approval of an ANDA for venlafaxine HCl extended-release tablets, it must submit a new ANDA containing data and information required by section 505(j) of the Act for approval (including, but not limited to, a demonstration of bioequivalence to the RLD, Osmotica's venlafaxine HCl extended-release tablets).

FDA's citizen petition response also applies to 505(b)(2) applications pursuant to FDC Act § 505(b)(4)(A).  FDA states in the context that "[o]ur interpretation of the MMA provisions related to the Hatch-Waxman Amendments upholds the legislative balance of facilitating the availability of generic drug products that meet the statutory requirements for approval while protecting innovator intellectual property rights (and allowing for an early resolution of any patent infringement litigation)" that:

We note that our interpretation of § 505(b)(4)(A) of the Act, also added by the MMA, for 505(b)(2) applications is influenced by and intended to be consistent with section 505(j)(2)(D)(i) regarding ANDAs.  Accordingly, a 505(b)(2) applicant may not amend or supplement a 505(b)(2) application to seek approval of a drug that relies on the Agency's finding of safety and/or effectiveness for a drug that is different from the drug identified in a previous submission of the application.

The importance of FDA's citizen petition response cannot be overstated.  It has significant implications – and creates significant risk – for generic companies that rely on the suitability petition process.  And for 505(b)(2) applicants, it also creates a risk of application resubmission and underscores the importance of carefully choosing the appropriate listed drug(s).

By John A. Gilbert

On December 4 and 5, FDLI will hold a conference on Regulation of Controlled Substances: Balancing Medical Need and Diversion Control.  The conference will focus on issues related to drug scheduling and regulation of controlled substances and List I chemicals and provide information on new initiatives to ensure medical availability of these drugs while reducing diversion.  John Gilbert of HPM will be speaking at the conference along with other government and industry representatives.  More information on the conference can be found at: http://www.fdli.org/conf/446/index.html.

By James P. Ellison

In a November 10, 2008 response posted on November 24, 2008, FDA denied an April 27, 2005 Citizen Petition challenging a March 29, 2005 Interim Final Rule increasing Color Additive Certification Fees as violating the FDC Act and the Administrative Procedure Act (APA), because notice and comment rulemaking was required under the law.
 
FDA's response rejected the argument by the International Association of Color Manufacturers that notice and comment rulemaking was required, citing the APA's "contrary to public interest" exception to the general rule requiring notice and comment rulemaking.

While the question of whether FDA should proceed with an interim final rule, a direct final rule, a direct final rule in tandem with a proposed rule, or simply a proposed rule–in this case specifically or in connection with rulemakings generally–raises potentially interesting APA questions, one cannot help but feel that the writing was on the wall in connection with this issue as the increased fees have been in effect for over 3 and 1/2 years.  Those who are intrigued by agency decisions concerning publication of rules may want to stay tuned to see how FDA proceeds in connection with its next Color Additive Certification Fee increase, which given the delay in responding to this Citizen Petition, may be just around the corner.

By Cassandra A. Soltis

The Federal Trade Commission (FTC) is seeking comments on proposed revisions to its Guides Concerning the Use of Endorsements and Testimonials in Advertising.  The Guides, although advisory in nature, set forth the principles the FTC will follow in reviewing endorsements and testimonials and provide examples that illustrate the principles set forth therein.

The proposed revisions have taken into consideration the comments the agency received in response to its January 2007 notice concerning the results of consumer research on consumer endorsements and related issues.  Among other things, the Commission is proposing to make clear in the Guides that advertisers can be held liable for any false or unsubstantiated statements made by endorsers or for not disclosing any material connections between themselves and the endorsers.  In addition, the proposed revisions would provide that endorsers, including expert endorsers and celebrities, may be held liable for their statements. 

Several new examples are proposed to be added to the Guides.  One example will demonstrate how advertisers may be liable for using bloggers to promote their products and how bloggers themselves may be held liable.  Another will make clear that experts must have the level of expertise that the advertisement suggests.  Yet another example will illustrate the FTC’s expectation that celebrities disclose their financial connection to any product they endorse during routine interviews because consumers do not expect celebrities to be paid for what appear to be genuine, unplanned discussions of a product. 

The proposed revisions are expected to be published in the Federal Register soon, but they can currently be viewed through the FTC’s website at http://www.ftc.gov/opa/2008/11/endorsements.shtm.  Comments on the revisions are due by January 30, 2009.

By William T. Koustas & Kurt R. Karst –

We previously reported that the Federal Trade Commission (“FTC”) is planning a Roundtable on Follow-on Biologics (“FOBs”) to be held on November 21, 2008 in Room 432 at FTC Headquarters in Washington, D.C.  The Roundtable was first announced earlier this year in the Federal Register.  In that notice, the FTC requested comment on two sets of questions concerning regulatory exclusivities and FOB competition, and patent dispute resolution issues.  Comments responding to the FTC’s notice are available here.  Discussion at the Roundtable will likely aid the FTC as it drafts a report analyzing the potential impacts on the marketplace of FOBs, which the FTC reportedly plans to issue in spring 2009.

On November 18, 2008, the FTC issued a press release detailing the scope and providing an agenda for the November 21, 2008 Roundtable.  The Roundtable is scheduled to begin with remarks from FTC Commissioner Pamela Jones Harbour, who recently gave a speech on the FTC’s perspectives on FOBs, followed by a presentation on FOBs by FDA’s Rachel Behrman.  The FTC’s press release notes that the session will the be broken out into panel discussions on the following five issues: “the price and market share effect of entry of both biosimilar and biogeneric drugs, the likely competitive effects of reference product regulatory exclusivity, biotechnology patent issues, the likely competitive effects of follow-on biologic regulatory incentives, and the patent resolution process.”

The panel session regarding the effects of entry by biosimilar and biogeneric products will specifically address how the competition between FOBs and innovator products will affect reimbursement by private and public payers.  The second panel, related to competitive effects of reference products and regulatory exclusivity, will focus on the benefits and drawbacks of FOB non-patent market exclusivity for innovator companies and follow-on applicants.  The third panel on biotechnology patent issues will discuss the differences between patents on biologics and small molecule drugs with specific emphasis on claim drafting, Patent and Trademark Office approval, judicial review, and how patent and non-patent market exclusivity affect business planning.  The fourth panel on the competitive effects of FOBs and regulatory incentives is scheduled to center on whether Hatch-Waxman-like statutory exclusivity incentives are needed to promote the growth of FOBs.  Finally, the patent dispute resolution panel will consider the different ways to structure a system to resolve patent disputes between innovator companies and follow-on competitors using case study. 

The Roundtable is free and open to the public without the need for pre-registration.  Only a photo ID is necessary to enter the FTC Headquarters.  A live webcast will be available on the day of the Roundtable. 

The issue of non-patent FOB market exclusivity has been hotly debated in Congress and by scholars.  Recent papers by the American Enterprise Institute’s Alex Brill and Duke University Fuqua School of Business Professor Henry Grabowski (both of whom are scheduled to present at the Roundtable) have taken different views about the appropriate period of such exclusivity, assuming FOBs can overcome the scientific, statutory, and regulatory hurdles currently in place.

By James R. Phelps & Kurt R. Karst –      

On November 17, 2008, Representatives John Dingell (D-MI), Chairman of the Committee on Energy and Commerce, and Bart Stupak (D-MI), Chairman of the Subcommittee on Oversight and Investigations of the U.S. House of Representatives, announced their most recent investigation of FDA – “whether managers within the [FDA] Center for Devices and Radiological Health (CDRH) knowingly corrupted the scientific review process and approved or cleared medical device applications in gross violation of laws and regulations designed to assure the safety and effectiveness of medical devices.”  The investigation was prompted by an October 14, 2008 letter written on behalf of a group of CDRH scientists and physicians who allege that CDRH managers have “corrupted the scientific review of medical devices.” 

The October 14, 2008 letter to Chairman Dingell is quite remarkable and includes several serious allegations.  According to the letter:

This misconduct reaches the highest levels of CDRH management including the Center Director and the Director of the Office of Device Evaluation (ODE) . . . .  To avoid accountability, these managers at CDRH have ordered, intimidated and coerced FDA experts to modify their scientific reviews, conclusions and recommendations in violation of the law. Furthermore, these managers have also ordered, intimidated and coerced FDA experts to make safety and effectiveness determinations that are not in accordance with scientific regulatory requirements, to use unsound evaluation methods, and accept clinical and technical data that is not scientifically valid nor obtained in accordance with legal requirements, such as obtaining proper informed consent from human subjects.  These same managers have knowingly avoided and failed to properly document the basis of their decisions in official Agency records.

Under the banner of regulatory “precedent,” managers at CDRH have demanded that physicians and scientists review regulatory submissions employing methods, and accepting evidence and conclusions, that are not scientifically proven and clinically validated. These demands appear to be based on the misguided notion that because flawed methods, evidence and conclusions were used or accepted in the recent or even the remote past, we must continue to blindly and knowingly accept these flawed methods, evidence and conclusions and continue to use them as the basis for regulatory recommendations. Such invalid regulatory “precedent” goes against current scientific and clinical evidence. Rather than remedy past regulatory or scientific errors after they come to light, and rather than applying the best and latest scientific knowledge and methodology, these managers at CDRH knowingly continue to make the same regulatory and scientific mistakes over and over again. Rather than recall, re-evaluate or otherwise deal with potentially unsafe or ineffective devices that are already on the market, these managers at CDRH continue to approve more devices of the same kind in a non-transparent and non-scientific manner. This is especially true of the 510(k) program but also applies to the PMA program as well as the advice and guidance given to manufacturers before they make regulatory submissions. The practices described above represent an unwarranted risk to public health and a silent danger that may only be recognized after many years.

The October 14, 2008 letter reportedly follows up on a similar letter sent by some CDRH scientists to FDA’s Assistant Commissioner for Integrity and Accountability on May 31, 2008.  In a November 17, 2008 letter from Reps. Dingell and Stupak to FDA Commissioner von Eschenbach, the Representatives: (1) express concern that “no action has been taken to address the serious concerns raised by CDRH scientists or the retaliatory behavior of CDRH managers toward those concerned FDA employees;” (2)  remind FDA officials that it is a violation of Federal law to retaliate against whistleblowers and to interfere with a congressional inquiry; and (3) request a briefing by FDA no later than December 1, 2008 of what actions have been or will be taken to respond to the allegations raised in the October 14, 2008 letter. 

Managing FDA is an excruciatingly difficult task.  One of the principal reasons this is so is laid bare in the letters discussed above.  At this stage, it is impossible to know what will happen to the CDRH personnel involved.  Do the complainants have a better grasp of good scientific methodologies than the senior people at CDRH?  Will they be viewed as heroic whistleblowers or back-stabbing knaves?  We may never learn.

We can, however, foresee yet another season of congressional activity – grillings by Hill staff and maybe hearings.  The one easily predictable consequence of all this is that FDA, and especially CDRH, will for some time to come be in a defensive mode.  When this happens, history teaches that FDA reviews will reach a new level of difficulty.  The affected personnel will be distracted to attend to the allegations.  The managers will have a heightened interest in making judgments that no one – not even the worst informed employee – can criticize. 

Will the enhanced rigidity of the approval system that occurs as Congress sorts out FDA’s personnel issues give the public access to new technologies in an appropriate time frame?  Time will tell.

By James P. Ellison –

FDA’s November 12, 2008 Federal Register Notice of its Direct Final Rule to comply with the Federal Civil Penalties Inflation Adjustment Act, 28 U.S.C. § 2461 note, is not in itself a blogworthy event, but it could be part of something bigger. 

While FDA has used its civil penalty authority sporadically (for example settling in July of this year with Advanced Bionics LLC for $1.1M based on an administrative complaint seeking $2.2M), generally speaking, based on historical enforcement, one would not list FDA civil penalty actions among the top ten things likely to keep CEOs in FDA regulated industries up at night.  But see The Pursuit of Civil Money Penalties— An Important Weapon in FDA’sEnforcement Arsenal (discussing the TMJ Implants case).

A new administration, the FDA Amendments Act ("FDAAA"), and an inflation increase for older civil penalties may just be the triple threat that civil penalties need to move up that top ten list of things keeping CEOs awake, however. 

The law requires FDA to adjust its civil monetary penalties at least one time every 4 years to account for inflation, and FDA last adjusted these penalties in 2004.  While the increases do not affect the new civil penalty authority granted FDA under FDAAA in 2007, the Notice does list the nine (9) new civil penalties created by FDAAA, which we previously described.

The resulting new 21 C.F.R. § 17.2  may now have sufficient heft to warrant more FDA enforcement resources, especially because of coincidental timing that nevertheless almost compels one to speculate about the enforcement priorities of an Obama administration FDA.

The FDA’s Rule was published as a direct final rule, which means that FDA did not believe notice and comment rulemaking was necessary under the Administrative Procedure Act.  To prevent the Rule from becoming final, significant adverse comments on it are due by January 26, 2009 (i.e., 6 days after Inauguration Day).  If no such comments are received, the increased civil penalties become effective on March 27, 2009, by which time a new President may have selected a new FDA Commissioner who is just getting down to work on enforcement priorities.

By Jeffrey N. Wasserstein –

First, it was the son of the former Nigerian dictator who wanted my bank account information (I’m still waiting for the bank transfer, by the way!).  Now, apparently FDA “special agents” are in on the act.  In a scam originating out of the Dominican Republic, scammers impersonating FDA personnel are extorting money from unwitting consumers.  Don’t be fooled:  FDA personnel do not call you on the phone demanding money – they leave that to the Department of Justice. 

By Ricardo Carvajal & Diane B. McColl – 

FDA has announced a pretest of a survey instrument designed to gather information about five issues relevant to modernization of the food CGMP regulations at 21 C.F.R. Part 110.  The food CGMP regulations are essentially unchanged since 1986, and the information to be solicited by the survey will assist FDA in its effort to revise the regulations. The survey will focus on five issues: employee training, sanitation and personal hygiene, allergen controls, process controls, and recordkeeping.  Selection of these issues was based on a report issued in 2005 by CFSAN’s Food CGMP Modernization Working Group.  After considering public comments, that group concluded that there is “generally strong support for limited revision of the CGMP regulation.”

Several factors are likely to influence the outcome of FDA’s food CGMP modernization effort.  First and foremost is whether FDA will have sufficient resources to devote to the task given its other existing food safety and defense responsibilities, and the new ones that are almost certain to be heaped upon the agency in the coming year. Second is whether FDA chooses to maintain the relative vagueness of the existing regulations, which has been lauded by some as permitting needed flexibility for a highly heterogeneous industry, but criticized by others as being so flexible as to mean little.  If the dietary supplement CGMP final rule is any indication, a revised food CGMP regulation could be considerably more detailed than current Part 110.  Third is whether someone chooses to raise a challenge on some of the more contentious issues at play (records maintenance and access requirements other than those mandated under the Bioterrorism Act stand out in this regard).

For the moment, an overhaul of Part 110 appears to be what FDA has in mind.  But as events unfold, if that climb proves to be as steep and lengthy as it did with FDA’s issuance of the dietary supplement CGMP final rule (10 years!), FDA could choose to tackle the highest risk food CGMP issues piecemeal by issuing more guidance documents such as those that address fresh-cut fruit and vegetable safety and Listeria in ready-to-eat foods.  That approach would not satisfy those who want specific, enforceable requirements, but it’s an approach that could yield a decent return on investment – not a small thing in these lean times.

By Dara Katcher Levy & Ricardo Carvajal –      

On November 12, 2008, FDA issued an Import Alert on all food containing milk products from China.  The Import Alert was issued because of concerns over melamine contamination of China’s milk products, including Chinese infant formula, which has been linked to 53,000 illnesses and at least four infant deaths.  To request removal from the new Import Alert, firms will need to provide (1) evidence of five consecutive non-violative shipments (demonstrated through independent laboratory analyses and subsequent FDA release); (2) documentation from a third-party, in whom FDA has sufficient confidence, demonstrating that controls are in place such that products will not be contaminated with melamine and melamine analogues; and (3) documentation that the firm is in compliance with all Chinese government requirements for exporting the product to the United States. 

Notably, the new Import Alert references appropriate standards for third party laboratories to test for melamine and cyanuric acid in foods.  In 2007, FDA issued an Import Alert on bulk vegetable proteins from China before it had established acceptable testing standards for melamine.  For several weeks thereafter, compliant products were subjected to unnecessary import delays.  Without appropriate testing standards in place, importers were left with no means of providing adequate information to FDA to secure the product’s release from Customs.  It appears that this scenario will not repeat itself.  However, a different, equally unpleasant scenario appears to be unfolding.  Although the Import Alert is for food containing milk products, foods that do not contain milk products but are imported using a product code listed in the Import Alert also are likely to be detained (e.g., cereal preparations, snack foods, and candy specialties).

On November 13, 2008, FDA published a Federal Register notice requesting comment on its October 3, 2008 “Interim Safety and Risk Assessment of Melamine and its Analogues in Foods for Humans.”  The agency’s interim assessment concludes that, “based on currently available data and information, there is too much uncertainty for FDA to establish a level of melamine and its analogues in infant formula that does not raise public health concerns.”  For other foods, the assessment concludes that levels of melamine below 2.5 ppm do not raise public health concerns.  The Federal Register notice states that the assessment “was developed rapidly due to the extremely time-sensitive need to understand the nature of the potential risk.”  In addition to seeking public comment, the agency will seek peer review of the assessment.

FDA’s initial conclusion that the presence of melamine in food (other than infant formula) at levels below 2.5 ppm does not raise public health concerns will be of no comfort to importers.  Under the new Import Alert, the amount of melamine permitted in foods is zero.

By Kurt R. Karst –      

On November 12, 2008, the U.S. Supreme Court issued its opinion in Winter v. Natural Resources Defense Council, Inc.  The case concerns the Navy’s power to use “mid-frequency active” sonar in military training exercises.  The Court, dividing 6-3 (Chief Justice Roberts wrote for the majority), overturned a federal judge’s order against the Navy’s use of the active sonar. 

Okay . . . so what does this have to do with Food and Drug Law, you ask?  Well, the Court clarified the law regarding the standard for obtaining a preliminary injunction.  And motions seeking a preliminary injunction are commonplace in Food and Drug Law litigation – most notably in Hatch-Waxman litigation. 

According to the Court, a plaintiff seeking a preliminary injunction must meet a four-part test.  He must establish: (1) that he is likely to succeed on the merits; (2) that he is likely to suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in his favor; and (4) that an injunction is in the public interest.  In this case, the district court and the Ninth Circuit held that when a plaintiff demonstrates a strong likelihood of succeed on the merits, a preliminary injunction may be entered based only on a “possibility” of irreparable harm.  In commenting on this “possibility” standard, the Supreme Court concluded that:

[T]he Ninth Circuit’s “possibility” standard is too lenient.  Our frequently reiterated standard requires plaintiffs seeking preliminary relief to demonstrate that irreparable injury is likely in the absence of an injunction. . . .   Issuing a preliminary injunction based only on a possibility of irreparable harm is inconsistent with our characterization of injunctive relief as an extraordinary remedy that may only be awarded upon a clear showing that the plaintiff is entitled to such relief.

Keep this opinion and the Court’s high “irreparable harm” standard in mind the next time you consider seeking injunctive relief. 

By Jeffrey N. Wasserstein & William T. Koustas –

On November 12, 2008, Senate Finance Committee Chairman Max Baucus released a white paper detailing what he sees as the substantial problems in our health care system.  The paper, titled “Call to Action: Health Reform 2009” (“the Baucus Plan”) details the Chairman’s concerns about the state of our nation’s current health care system as well as possible solutions.

Chairman Baucus divides his plan into three sections: (1) increasing access to affordable health care by placing some responsibility on individuals, increasing existing government health care programs such as CHIP, strengthening the employer-based system, creating a Health Insurance Exchange for families and small businesses, increasing access to preventative care and address health care disparities in minority or immigrant communities; (2) improving the value of health care by reforming how that care is delivered to patients by using Federal reimbursement systems to improve the value placed on the role of the primary care provider, focusing payment incentives on the quality of care and not the quantity, modifying payment systems to encourage collaboration and accountability and improving the health care “infrastructure” by using health information technology and new research to determine which treatments work best; and (3) making the health care system use the money it receives more efficiently by eliminating waste, fraud and abuse, providing greater transparency in the health care system, reforming medical malpractice to reduce costs and spending, eliminating overpayments to private insurance providers in Medicare Advantage program, reforming long-term care and implementing tax incentives to promote the use of health care services directly by the consumer.

The Baucus Plan includes some provisions that may have a substantial impact on drug and device companies.  First, it mandates disclosure of “gifts and other transfers of value made by drug and device companies to physicians and other health care professionals.”  The Baucus Plan notes that the AMA and PhRMA have each adopted conduct codes to reduce inappropriate relationships, but argues that only complete and total disclosure can determine potential bias and inappropriate influences.  Presumably, this would incorporate the proposed Federal Sunshine Act. Second, the Baucus Plan seeks to create an independent private, non-profit entity called the Health Care Comparative Effectiveness Research Institute (“the Institute”).  The Institute would be responsible for conducting studies that assess the comparative utility of nearly everything used in modern medicine, from drugs and devices to procedures and services.  The results of these studies would be used by patients, providers and insurers to determine the most effective means of treatment for a specific individual, thus reducing costs and making health care delivery more efficient.  Obviously, the findings of the Institute would have a substantial impact on utilization of drugs and medical devices.

In addition to the new programs discussed above, the Baucus Plan also advocates the expansion of government programs already in place.  First, as a temporary measure, the Plan would allow Americans 55 to 64 to “buy-in” to Medicare coverage for people who could not afford private insurance or who are not receiving coverage from an employer, until the Health Insurance Exchange was created.  Second, the Baucus Plan would reform Medicaid to create a mandatory national eligibility minimum of 100 percent of the Federal poverty level and also require states to help manage costs associated with unanticipated demand for Medicaid, while also mandating Medicaid eligibility to everyone living in poverty.  Additionally, Chairman Baucus argues that Congress should extend Medicaid Rebates to drugs used by enrollees in Medicare Part D plans who are eligible for both Medicaid and Medicare (“dual eligibles”) since discounts negotiated by drug plans are usually less substantial than those required under the Medicaid Drug rebate Program.  Finally, the Baucus Plan suggests that the Federal government assist states with the costs of CHIP in order to expand enrollment.   Increasing the pool of beneficiaries eligible for the various programs will likely increase drug companies’ Medicaid Rebate liability for their covered outpatient drugs reimbursed under Medicaid, as well as providing additional downward pricing pressure as patients move into government-sponsored programs.

Finally, as part of the plan's attempt to reduce fraud, waste, and abuse, Chairman Baucus seeks to increase penalties and punishments of those who intentionally defraud the system.  In order to meet these goals, the Baucus Plan will increase resources to agencies that are primarily responsible for fighting fraud and abuse, such as HHS OIG, GAO, Medicaid Fraud Control Units, Medicare Payment Advisory Commission and law enforcement agencies. 

All of the proposed reforms discussed have far-reaching consequences to anyone involved in the health care industry, including drug and device companies.  While the ideas in Chairman Baucus’ plan may undergo substantial revision as additional healthcare reform proposals are formulated by the new Obama Administration and debated within Congress, the plan serves as a signal of the direction Congress is likely to take in the 111th Congress. 

By Michelle L. Butler –

We previously posted on the expanded certification requirements mandated by section 102(a)(1) of the Consumer Product Safety Improvement Act of 2008 (“CPSIA”).  Today, the Consumer Product Safety Commission (“CPSC”) published on its website an immediate final rule regarding these certification requirements.  CPSC, Final Rule, Certificates of Compliance with Rules under the Consume Pt Safety Act and Similar Rules, Bans, Standards and Regulations under any other Act Enforced by the Consumer Product Safety Commission (Nov. 10, 2008) (the “Final Rule”).  A copy of the document can be found here.  (Due to the federal holiday, the Federal Register was not published today.  We presume that the Final Rule will be presented for pre-publication inspection tomorrow, November 12, 2008, and published in the Federal Register on Thursday, November 13, 2008.)

The Final Rule streamlines the certification requirements of section 14(a) of the Consumer Product Safety Act (“CPSA”).  The CPSC has determined that the sole entity required to issue a certificate for imported products is the importer, and the sole entity required to issue a certificate for domestically produced products is the manufacturer.  The Final Rule states that a certificate for an imported product “must be available to the Commission from the importer as soon as the product or shipment itself is available for inspection in the United States.”   For domestic products, the certificate “must be available to the Commission from the manufacturer prior to distribution into domestic commerce.”   The preamble to the Final Rule notes that, with respect to imports, “after [an] initial period of adjustment, failure to abide by the general certificate requirement will subject shipments to refusal of admission into the country and potential destruction.” 

The Final Rule also provides information pertaining to the content of the certificate.  The CPSC “suggests” that the issuer of a certificate “maintain test records supporting the certification for at least three years.” 

According to the Final Rule, electronic certification satisfies the “accompany” and “furnish” requirements pertaining to the certification.  Specifically, the Final Rule states that:

[a]n electronic certificate satisfies the “accompany” requirement if the certification is identified by a unique identifier and can be accessed via a World Wide Web URL or other electronic means, provided the URL or other electronic means and the unique identifier are created in advance and are available, along with access to the electronic certificate itself, to the Commission or to the Customs authorities as soon as the product or shipment itself is available for inspection.

 “An electronic certification satisfies the ‘furnish’ requirement if the distributor(s) and retailer(s) of the product are provided a reasonable means to access the certificate.”  Further, “[a]n electronic certificate shall have a means to verify the date of its creation or last modification.” 

The CPSC is issuing this rule as an immediately effective final rule due to the short implementation timeline mandated by the CPSIA.  In its justification for an immediate final rule, the CPSC notes that the “certification requirements established by the CPSIA go into effect for products manufactured on or after November 12, 2008.”   The CPSC also justifies the streamlining in the Final Rule based on the multiple short deadlines imposed by the CPSIA, the CPSC’s lack of resources, and confusion over the new certification requirements as evidenced by the many inquiries received by the CPSC.   The CPSC stated that

[w]hile the Commission expects every company to make best efforts to comply promptly with the new general certificate requirements, the Commission’s resource limitations under the continuing resolution will force it to focus more on a product’s compliance with our safety rules.  The certificate is evidence of compliance and therefore it is appropriate to concentrate initially more on the substantive requirements underlying the certificate than on the certificate or the form of the certificate itself.

The preamble also notes that the CPSC recognizes the necessity of clarification for aspects of the certification program, and it will be working to resolve uncertainties, including via posting of additional FAQs.