By Jamie K. Wolszon –    

On January 21, 2009, the California Supreme Court decided that it would not review a remarkable California appeals court decision that a brand-name drug manufacturer could be liable for an adverse event the plaintiff suffered as a result of taking a generic version of the drug, if the physician foreseeably relied upon the brand-name drug company’s labeling.  We previously reported on the First Appellate District in the Court of Appeal in the State of California decision.

Wyeth submitted a petition in Conte v. Wyeth, Inc., et. al. requesting that the California Supreme Court review the appeals court decision. The California Supreme Court does not automatically review appeals court decisions in civil cases:  Parties seeking review file petitions for review with the court.  The California Supreme Court did not provide any explanation of its decision to deny the petition, although it did note that Justice Marvin Baxter wanted to grant the petition.

The Washington Legal Foundation (“WLF”), a group well known in food and drug law circles for challenging FDA’s policies regarding the dissemination of information pertaining to off-label information, filed an amicus brief urging the California Supreme Court to hear the case.  WLF argued in its brief that the appeals court holding represented a radical departure from the long-standing legal principle that a manufacturer only can be liable under products liability law if it makes the drug that injured the plaintiff.

WLF also argued in its brief that allowing the appeals court ruling to stand would discourage generic drug makers’ from ensuring that their labeling contain sufficient safety information.  FDA regulations call on generic drug manufacturers, as well as innovator drug makers, to ask FDA to change the label if new information comes to light. 
 
WLF stated in a litigation update about the case that it expects other plaintiff attorneys will try to use a similar theory in future cases.  The group added that it will look for opportunities to defeat the theory as it arises in other cases. 

The controversial appellate court ruling that was the subject of the petition for review held: “that the common law duty to use due care owed by a name-brand prescription drug manufacturer when providing product warnings extends not only to consumers of its own product, but also to those whose doctors foreseeably rely on the name-brand manufacturer’s product information when prescribing a medication, even if the prescription is filled with the generic version of the prescribed drug.” 
 
The appellate court also found that the plaintiff created a sufficient factual dispute as to whether the plaintiff’s physician relied on the information submitted by Wyeth to the Physician’s Desk Reference (“PDR”) for its drug REGLAN (metoclopramide) to defeat a motion for summary judgment.  The plaintiff claimed that the information Wyeth submitted to the PDR did not adequately warn about the adverse effects that could occur from taking the drug for more than 12 weeks at a time, that the physician relied on that information, and as a result, the plaintiff suffered injury. 

The trial court, reversed by the appellate court, had granted Wyeth’s motion for summary judgment on the grounds that a brand-name drug manufacturer does not owe a duty of care to the plaintiff who only took the generic version of the drug, and that the plaintiff could not show that she or her physician relied upon warnings or product labeling disseminated by Wyeth. 

Now that the California Supreme Court has refused to hear the case, the case will return to the trial court.

By Michelle L. Butler –

With the effective date for a number of requirements imposed by the Consumer Product Safety Improvement Act (“CPSIA”) quickly approaching (February 10, 2009), the Consumer Product Safety Commission engaged in a flurry of activities.  We recently reported on the Commission’s decision to stay enforcement of the testing and certification requirements in the CPSIA as to the majority of products, including products subject to the child resistant packaging standards of the Poison Prevention Packaging Act.  Late last week, the Commission took a number of actions related to the underlying requirements pertaining to phthalates and lead content in children’s products.

Phthalates:  On February 5, 2009, a judge in the United States District Court for the Southern District of New York set aside an advisory opinion letter issued by the General Counsel of the Commission that the prohibitions on phthalates in children’s products (children’s toys and child care articles) did not apply to existing inventory.  See National Resources Defense Council, Inc. v. U.S. Consumer Product Safety Commission, No. 08-10507 (PGG), Memorandum Opinion and Order (S.D.N.Y. Feb. 5, 2009).  On February 6, 2009, the Commission stated in a press release that it would abide by the Court’s decision.  This position, along with the fact that the Commission chose not to avail itself of certain procedural arguments that might have delayed a ruling, indicates that the Commission wanted a ruling from the Court, even if the decision was contrary to the position originally taken by the General Counsel.  The press release also stated that the Commission would be issuing further guidance this week. 

Lead Content:  On January 28, 2009, a coalition of manufacturers requested emergency relief from the Commission to stay the effective date of February 10, 2009 for the lead content limit in section 101(a)(2) of the CPSIA, which requires that consumer products intended for children 12 and under not have more than 600 parts per million (“ppm”) of lead in any accessible part.   On February 6, 2009, the Commission denied this request.  Notwithstanding this decision, the Commission voted on February 6, 2009 to adopt a draft “Statement of Commission Enforcement Policy on Section 101 Lead Limits.”   The Commission’s Office of Compliance and Field Operations drafted this enforcement policy because the rulemaking process to grant certain relief from the lead limits could not be completed before February 10, 2009, when the lead content limits are to go into effect.  Among other things, this enforcement policy provides that the Commission will not impose penalties against anyone for making, importing, distributing, or selling

• a children’s product that is made of certain natural materials, such as wood, cotton, wool, or certain metals and alloys that the Commission has recognized as rarely, if ever, containing lead;
• an ordinary children’s book printed after 1985; and
• dyed or undyed textiles (not including leather, vinyl, or PVC) and non-metallic thread and trim used in children’s apparel and other fabric products, such as baby blankets – this class does not include such products if (1) they have undergone further treatment that may impart lead, (2) they are ornamented with metal, rhinestones, or other objects, or (3) they have plastic or metal fasteners with possible lead content (such as snaps, grommets, zippers, or buttons).

The enforcement policy states that the Commission generally will not prosecute someone for making, selling, or distributing an item in these categories even if it turns out that such an item actually contains greater than 600 ppm lead.  The policy states, however, that a seller could face prosecution if the Commission’s Office of Compliance finds that the seller had actual knowledge that one of these children’s products contained greater than 600 ppm lead or continued to make, import, distribute, or sell such a product after being put on notice of the lead content by the Commission staff.  The Commission intends to issue further guidance addressing these categories of products in greater detail.

Though this enforcement policy will provide relief to certain manufacturers, sellers, distributors, and importers of children’s products while the Commission’s rulemaking is underway, it does not affect the ability of interested persons, including State Attorneys General, to bring an action for violation of the lead content limits contained in the CPSIA.

On February 6, 2009, the Commission also decided to withdraw a proposed rule relating to exemptions for electronic products for which it is not technologically feasible to meet the lead content limits.  At the same time, the Commission issued an interim final rule that provided exemptions for such products. 

Proposed Legislation:  On February 4, 2009, Senator Jim DeMint introduced legislation to amend the Consumer Product Safety Act.  (This bill is not yet available from the Government Printing Office.)  According to a press release issued by Senator DeMint, the bill is intended to reform the CPSIA to protect the needs of small businesses and has six major components:

• Delays implementation of certain regulations for six months to balance the needs of small business and public safety.
• Allows small manufacturers to use testing and certification from component suppliers to certify that the components do not contain impermissible amounts of lead.
• Exempts thrift stores, yard sales, consignment shops, and other re-sellers from the prohibitions in the CPSIA.
• Prevents retroactive enforcement of the CPSIA.
• Provides a one-time, good faith exemption for small businesses from the requirements of the CPSIA.
• Requires the Commission to provide small business with a compliance guide.

By Ricardo Carvajal –      

FDA has approved the biological product ATryn, an anticoagulant derived from the milk of genetically engineered ("GE") goats.  The approval follows on the heels of the agency’s issuance of long-awaited guidance on its regulatory approach to GE animals, which we discussed in a prior posting.  Responses to the agency’s approval of ATryn are already raising concerns about animal welfare, environmental effects, and food safety.  FDA’s press release attempts to address all of these concerns. 

With respect to food and feed safety, the approval of ATryn is conditioned on exclusion of the goats from  the food and feed supply.  A Freedom of Information summary of the NADA lists the following as control measures supporting a conclusion that there exists a “reasonable certainty” that the GE goats won’t enter the food supply:

• Secure locked fencing around the entire facility, with double fencing around animal paddocks;
• Well maintained secure barns leading to fenced paddock and exercise yards;
• Round-the-clock staffing of the facility;
• Active on-site security with personnel supplemented with video surveillance;
• SOPs for animal identification and disposal that include procedures to ensure that all GE animals are identified by ear tag, tattoo, and implanted identification chip;
• all animals are incinerated at termination use.

Hyman, Phelps & McNamara, P.C.’s Anne Marie Murphy will present at the International Consumer Product Health and Safety Organization’s (“ICPHSO’s”) 16th Annual Meeting and Training Symposium, which is scheduled to take place from February 24-27, 2009 at the Florida Hotel and Conference Center in Orlando, Florida.  A copy of the conference agenda is available here.  Ms. Murphy, along with other panel members, will discuss questions arising from the potential effects of the Consumer Product Safety Improvement Act of 2008 ("CPSIA”) on FDA-regulated products, such as:

• Jurisdictional overlaps between the FDA and the Consumer Product Safety Commission on safety of products regulated by both agencies;
• How to prepare properly qualified General Conformity Certifications for products regulated by both agencies;
• How third-party testing for dual-regulated children's products may affect product development and manufacture; and
• How new enforcement authorities in the CPSIA potentially may affect dual-regulated products.

To register for the conference, visit ICPHSO’s website.

By Ricardo Carvajal & Susan J. Matthees –      

The FDA Globalization Act (“FDAGA”) of 2008 was “meant to stimulate discussion about how to provide adequate funding and authority for FDA to ensure safety” of products over which the agency has jurisdiction.  When we commented on that proposed legislation, we couldn’t help but make special mention of the many fees that were included.  FDAGA 2009 brings back the fees, and adds a number of new authorities – and responsibilities – for FDA and for industry.  Below we summarize some of the principal changes that are not fee-related.

FDAGA 2008 proposed several new requirements and authorities applicable to foods, including establishment of a food safety plan, safety standards for fresh produce, periodic inspections, certification of facilities and accreditation of laboratories, and mandatory notification and recall, among others.  FDAGA 2009 retains these and adds others, including:

• All facilities would be required to develop and implement a HACCP plan (conduct a hazard analysis, implement preventive controls, monitor effectiveness of those controls, and keep records).
• FDA’s access to records would be significantly strengthened, perhaps finally putting to rest the decades-long debate over the extent of FDA’s authority to access records during a food inspection. In addition, farms and restaurants would be subject to recordkeeping requirements.
• FDA’s administrative detention authority would be significantly strengthened.
• Some of the violations that were previously categorized as “prohibited acts” (e.g., failure to register or pay fees) would now render a food misbranded.
• Making false statements to a facility or laboratory certifying agent would be a prohibited act.
 
Many of these provisions (as well as those carried over from FDAGA 2008) would require FDA to issue implementing regulations or guidance, for which tight timeframes are provided.  It is not clear whether the costs of doing so would be covered by the fees that would be raised under FDAGA.  In addition, the Department of Health and Human Services (“HHS”) is tasked with taking numerous additional measures to improve surveillance and understanding of food borne illness.  If those efforts meet with success, they could result in greater capabilities to link outbreaks to specific foods, thereby helping to overcome one of the historic obstacles to successful product liability actions in the food arena – that of establishing causation.  Finally, we couldn’t help but notice that FDAGA 2009 requires HHS to conduct research to “develop methods to reduce or destroy pathogens before, during, and after processing.”  Unfortunately, getting those methods approved by FDA is another matter, as illustrated by the ongoing difficulties in getting irradiation technologies to market.
 
The sections of FDAGA 2008 that pertained to drugs included provisions for FDA inspections of manufacturing facilities, requirements for risk management plans, detailed supply chain requirements, greater recall authority for FDA, country of origin labeling, and requirements for testing of purity and identity for drug products.  The drug section of FDAGA 2009 retains many of these same provisions and includes others, such as: 
 
• Failure to pay registration fees would render a drug misbranded, but FDAGA 2009 exempts orphan drugs and certain not-for-profit medical centers from paying registration fees and allows for a waiver or reduction of fees for drugs that are necessary for public health or where the fee would be a financial hardship for the company. 
• New inspection requirements call for drug facilities to be inspected every 2 years unless the Secretary determines that once every 4 years would be sufficient. 
• No personal use exemption from the requirement that imported drugs have information demonstrating compliance with FDA requirements. 
• A drug is misbranded if the manufacturer’s Website does not list the country of origin of the active pharmaceutical ingredients and finished dosage form of the drug. 
• New “voluntary” procedures for manufacturers to follow for a recall.
 
As with the food section of FDAGA, many of the provisions in the drug section would require FDA to issue regulations or guidance.
 
FDAGA 2008 proposed several new requirements for cosmetic products, including good manufacturing practice and adverse event reporting requirements.  FDAGA 2009 retains these, expands some of them, and adds a few new ones.  Of particular interest:
 
• FDAGA 2009 retains the requirement that cosmetic manufacturers register and adds more detailed registration requirements, including annual registration of both foreign and domestic facilities and  the requirement that the Secretary keep a list of registered establishments.
• Cosmetic companies will be required to submit an ingredient list for every cosmetic manufactured. 
• More comprehensive requirements for adverse event reporting

Finally, for those of you who have been following the bouncing ball on preemption, section 2 of FDAGA 2009 makes clear that no preemption of state law is intended.

FDAGA 2008 proposed several new requirements for cosmetic products, including good manufacturing practice and adverse event reporting requirements.  FDAGA 2009 retains these, expands some of them, and adds a few new ones.  Of particular interest:

• FDAGA 2009 retains the requirement that cosmetic manufacturers register and adds more detailed registration requirements, including a requirement for annual registration of both foreign and domestic facilities and a requirement that the Secretary keep a list of registered establishments.
• Cosmetic companies will be required to submit an ingredient list for every cosmetic manufactured. 
• More comprehensive requirements for adverse event reporting

Finally, for those of you who have been following the bouncing ball on preemption, section 2 of FDAGA 2009 makes clear that no preemption of state law is intended.

By Ricardo Carvajal –      

USDA has suspended, and proposes to debar, Peanut Corporation of America ("PCA") from “participating in government contracts or subcontracts, as well as federal non procurement programs,” among other activities.  The suspension is for one year and is effective immediately.  The proposed debarment would be effective for three years.  PCA has 30 days to object to USDA’s actions. In its press release announcing the actions, USDA had harsh words for PCA, alleging that the firm “lacks business integrity and business honesty.”

Meanwhile, in a written statement submitted by FDA/CFSAN Director Stephen Sundlof to the Senate Committee on Agriculture, Nutrition and Forestry, FDA reiterated its confidence that the PCA facility in Georgia is the source of the current Salmonella outbreak, and confirmed that FDA’s Office of Criminal Investigations is investigating.  FDA has taken the somewhat unusual step of posting the Form 483 issued at the conclusion of its recent inspection of the Georgia facility on the internet.  The inspectional observations listed in the Form 483 detail numerous apparent failures to adhere to good manufacturing practice requirements.

The Center for Business Intelligence (“CBI”) will hold its 2nd Annual Summit on Biosimilars and Follow-On Biologics on March 10-11, 2009.  The Conference will be held at the Marriott Baltimore Inner Harbor at Camden Yards in Baltimore, Maryland.  A copy of the conference brochure is available here.  Hyman, Phelps & McNamara’s Kurt R. Karst will present at the conference on the patent and non-patent market exclusivity provisions of follow-on biologic legislation that has been introduced. 

The CBI conference is intended to provide participants with the opportunity to evaluate follow-on biologic legislation while also investigating the guidelines being used in other countries – and most importantly, how these guidelines have affected company strategies, profits and the economic landscape.  Key topics to be addressed at the conference include:

• WHO Guidance, expectations and implications for globally accepted biosimilar standards
• The similarities, differences and potential impact of Canadian biosimilar legislation
• Naming concerns for biosimilar products and post-launch tracking
• The FTC’s perspective on biologic fair competition
• The exclusivity issues in proposed legislation
• Lessons learned from pharmaceutical patent litigation
• How the criteria for comparability is being/should be established
• The economic implications of the EU approval pathway
• The testing, distribution and pricing of biosimilars in India, China and Brazil

Special FDA Law Blog Discount – CBI is offering FDA Law Blog readers a $400 discount off of the registration fee.  To register for the conference, go to the CBI website and enter the following code – KZG958.

By Kurt R. Karst –      

The American Intellectual Property Law Association (“AIPLA”) recently submitted a letter to FDA concerning § 4 of the recently enacted “QI Program Supplemental Funding Act of 2008” (the “QI Act”).  (The "QI" stands for Qualifying Individual).  As we previously reported, the QI Act was enacted on October 8, 2008 and amended the FDC Act to add new § 505(v) – “Antibiotic Drugs Submitted Before November 21, 1997” – to create Hatch-Waxman benefits for so-called “old” antibiotics. 

In November 2008, FDA issued a draft guidance document describing the Agency’s current thinking on the implementation of § 4(b)(1), 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 antibiotic drug patent.  FDA’s latest Paragraph IV Certification List shows two entries with a “PIV received prior to 2/5/2009” notation: (1) DORYX (doxycycline hyclate) Delayed-Release Tablets; and (2)  SOLODYN (minocycline HCl) Extended Release Tablets.  Patent infringement lawsuits have been initiated with respect to the Orange Book patent listings for each drug product – see the compalints here (DORYX), here (DORYX), and here (SOLODYN).  (Also, as a point of interest, earlier this week, FDA responded to a citizen petition concerning generic SOLODYN.)

AIPLA’s letter to FDA requests that the Agency establish a docket requesting public comment on QI Act implementation, similar to the docket FDA established after the enactment of the 2003 Medicare Modernization Act (“MMA”).  In addition, AIPLA raises three issues for FDA to consider as the Agency works to implement the QI Act: (1) the availability of 30-month stays with respect to patents submitted to FDA for Orange Book listing under the QI Act transition provisions; (2) the availability of additional exclusivity given the limitations described in FDC Act § 505(v)(3)(A); and (3) the availability of exclusivity for old antibiotics covered under FDC Act § 505(v)(2)(A).  With respect to the availability of a 30-month stay, AIPLA comments that:

If FDA interprets the law such that the amendments made to the FDC Act by the MMA apply, then presumably no 30-month stay would apply to an ANDA applicant with a pending ANDA that amends such application to add a Paragraph IV certification to a newly-listed Orange Book patent.  It is unclear, however, whether FDA intends to interpret the law in such manner, or whether FDA believes that the law could be interpreted to permit a 30-month stay under such circumstances, similar to pre-MMA version of the FDC Act. 

FDA’s February 3, 2008 approval of an ANDA for generic SOLODYN (with 180-day exclusivity) does not address the availability of a 30-month stay, because a patent infringement lawsuit was not brought within the statutory 45-day period. 

FDC Act § 505(v)(3)(A) – “Limitations — Exclusivities And Extensions” – states that FDC Act §§ 505(v)(1)(A) and (2)(A) “shall not be construed to entitle a drug that is the subject of an approved application described in [FDC Act §§ 505(v)(1)(B)(i) or (2)(B)(i)], as applicable, to any market exclusivities or patent extensions other than those exclusivities or extensions described in [FDC Act §§ 505(v)(1)(A) and (2)(A)].”  AIPLA comments that “[w]hile FDC Act § 505(v)(3)(A) clearly places limits on how the new law can be interpreted, it is unclear whether it is also intended to limit the availability of” pediatric and orphan drug exclusivity under FDC Act § 505A and § 527, respectively. 

Finally, FDC Act § 505(v)(2)(A) states that an application for an antibiotic drug submitted to FDA after October 8, 2008, and which antibiotic drug was the subject of an application submitted under FDC Act § 507 but not approved by FDA before the enactment of the 1997 FDA Modernization Act “may elect to be eligible for, with respect to the drug,” a period of 3-year exclusivity “and” a period of 5-year NCE exclusivity, or a PTE under 35 U.S.C. § 156, subject to the requirements for obtaining such patent or non-patent exclusivity.  AIPLA’s letter notes that:

The use of the conjunctive “and” in FDC Act § 505(v)(2)(A) is curious.  It is unclear how a drug can simultaneously qualify for both 3-year “new use” exclusivity and 5-year [New Chemical Entity] exclusivity. . . . Congress’ use of the word “and” might have been intentional, such that an old antibiotic drug covered under FDC Act § 505(v)(2) can qualify for 3-year exclusivity for a new condition of use after an initial NDA approval that would qualify for 5-year exclusivity or a [Patent Term Extension] – as an old antibiotic drug covered under FDC Act § 505(v)(2) does not appear to convert to an old antibiotic drug covered under FDC Act § 505(v)(1) once it is initially approved. Under this interpretation, 3-year and 5-year exclusivity are not granted simultaneously, but rather sequentially, provided the requirements for granting such exclusivity are met.

Given the interest we have seen in QI Act implementation issues, FDA will likely receive substantial comment from interested parties if the Agency decides to open a public docket.   

LATE-BREAKING NEWS:

• FDA has received a citizen petition 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 (i.e., DORYX), which ANDA contains a Paragraph IV certification to a patent listed in the Orange Book in accordance with the QI Act.  The petition argues that the plain language of the QI Act requires application of the 30-month stay provisions of the original Hatch-Waxman Amendments, instead of the version of the statute amended by the MMA.

By Ricardo Carvajal –      

In January 2008, FDA received a citizen petition asking it to “issue a formal determination that when applied to foods and dietary supplements, California's Proposition 65 causes consumer confusion, ‘misbrands’ safe and wholesome products, and frustrates FDA's ability to carry out its statutory mandates.”  California’s recent Proposition 65 action against lead in dietary supplements appears to be reinvigorating that effort.  FDA has received a supplemental submission to the docket established for the petition noting that California’s action is founded on an FDA survey showing that the products at issue posed no safety concerns.  The supplemental submission also highlights the cooperation between California’s Attorney General (AG) and private plaintiffs in the case, and attacks the AG’s inclusion of claims under the state’s unfair competition law, which would give rise to additional penalties and extend the statute of limitations.  If the recent news about the potential presence of mercury in high fructose corn syrup begets another Proposition 65 action, we’re betting that this citizen petition will find a few more friends.

By Kurt R. Karst –      
 
On February 2, 2009, the Federal Trade Commission (“FTC”) announced that the Commission filed a complaint in federal district court challenging agreements in which Solvay Pharmaceuticals, Inc. allegedly paid two generic drug companies to delay generic competition to Solvay’s drug product ANDROGEL (testosterone gel) 1%.  Specifically, the FTC’s complaint alleges that in 2006, Solvay agreed to share its profits with certain  generic competitors – one of whom already has ANDA approval and is eligible for 180-day exclusivity – provided they would not launch their generic versions until 2015.  Under FDC Act § 505(j)(5)(D)(i)(V), which the Medicare Modernization Act (“MMA”) made retroactive to pre-MMA cases, if there is a final court decision that an agreement violates antitrust laws, then 180-day exclusivity is forfeited.

On the heels of the FTC’s announcement, Senators Herb Kohl (D-WI) and Chuck Grassley (R-IA) introduced S. 369, “The Preserve Access to Affordable Generics Act.”  According to a press release issued by Sen. Kohl, “[t]he legislation would make illegal anti-competitive, anti-consumer patent payoffs in which brand name drug companies pay generic manufacturers millions of dollars to keep generic competition off the market.”  (Check out our new “FDA Legislation Tracker” for a copy of the bill and other FDA legislation.)  Sen. Kohl introduced similar legislation in the 110th Congress – S. 316.  Rep. Henry Waxman (D-CA) introduced the House version of the bill – H.R. 1902.  Similar to previous versions, the latest iteration of the bill (S. 369) would:  

• Amend the Clayton Act to add new § 29 (Unlawful Interference With Generic Marketing) making it unlawful for a person, in connection with the sale of a drug product, to be a party to any agreement resolving or settling a patent infringement claim in which: (1) an ANDA applicant receives anything of value; and (2) such generic applicant agrees not to research, develop, manufacture, market, or sell the generic product for any period of time;

• Amend MMA § 1112 to set forth additional filing requirements related to agreements between brand name and generic drug companies; and

• Amend the 180-day exclusivity forfeiture provision at FDC Act § 505(j)(5)(D)(i)(V) to provide that an ANDA applicant that is a “first applicant” forfeits exclusivity if an agreement violates new § 29 of the Clayton Act.

By Kurt R. Karst –      

Representative Jo Ann Emerson (R-MO) has introduced a bill to amend the FDC Act that would prohibit the marketing of authorized generics during a generic applicant’s 180-day exclusivity period.  The bill, H.R. 573, is almost identical to the bill Rep. Emerson introduced during the 110th Congress – H.R. 806.  The Senate version of that bill was introduced by Senator Jay Rockefeller (D-WV) – S. 438, the Fair Prescription Drug Competition Act.  A Senate companion bill to Rep. Emerson’s latest bill has not yet been introduced. 

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 Federal Trade Commission (“FTC”) is currently studying the competitive effects of authorized generics.  Some legislative action has already been taken with respect to gathering information on authorized generics.  As we previously reported, the FDA Amendments Act 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.  FDA has issued a direct final rule, as well as a companion proposed rule, to implement FDAAA § 920.  Among other uses, this list is intended to assist the FTC as the Commission moves ahead with its study.

Pundits have predicted that a large amount of FDA-related legislation will be introduced in the 111th Congress.  To help our loyal FDA Law Blog readers follow these legislative developments, we have decided to create a new tracker feature on the blog – the “FDA Legislation Tracker.”  The legislation tracker, along with our “FDC Act § 505(q) Citizen Petition Tracker,” appear on the right-hand side of FDA Law Blog.  We will update the legislation tracker as new bills are introduced.  To access the text and a summary of legislation identified in the tracker, press and hold the control key on your keyboard and click on the pdf icon.

Hyman, Phelps & McNamara, P.C. today posted on its website an updated version of its outline entitled “Application of Health Care Fraud and Abuse Laws to Pharmaceutical Marketing."  This 89-page outline, authored by Alan Kirschenbaum and Jeff Wasserstein,  provides a comprehensive overview of how the federal health care program antikickback law, the Federal False Claims Act, and other federal and state laws affect pharmaceutical marketing activities.  The outline focuses on the major problem areas for drug marketing under these laws, and, for each area, describes the pertinent safe harbors, OIG advisory opinions, and major enforcement actions.  The outline also provides general guidelines for evaluating marketing proposals. 

This outline was first published by Hyman, Phelps & McNamara, P.C. in 1996, and has been updated periodically.  The new version is current as of January 31, 2009.  Although the primary focus is on marketing of pharmaceuticals, much of the outline is equally applicable to the marketing of medical devices, and the major government actions against device companies are discussed.

By Anne Marie Murphy –

We previously reported on the Consumer Product Safety Improvement Act of 2008 (“CPSIA”), which makes sweeping changes to the laws enforced by the Consumer Product Safety Commission (“CPSC”).  CPSIA Section 102(a), paragraph (1), amends the Consumer Product Safety Act (“CPSA”) to require each importer or domestic manufacturer of any product that is subject to any CPSC rule, ban, standard, or regulation to issue a certificate based on specific tests or a reasonable testing program that the product complies with such CPSC requirements.  CPSIA Section 102(a), paragraphs (2) and (3), require that certification of compliance for certain children’s products be based on third-party testing, and set forth a timeline for implementation of the third-party testing requirements.

On Friday evening, even as the regulated industry continued to scramble to comply, the CPSC announced a one-year stay of enforcement (with certain exceptions) of the certification and testing requirements.  The CPSC explained: 

The Commission is aware that there is substantial confusion as to which testing and certification requirements . . . apply to which products under the Commission’s jurisdiction, what sort of testing is required where the provisions do apply, whether testing is necessary for children’s products that may not by their nature contain lead, whether testing to demonstrate compliance must be conducted on the final product rather than on its parts prior to assembly or manufacture, whether manufacturers and importers must issue certificates of compliance to address the labeling requirements under the Federal Hazardous Substance Act (“FHSA”), and what sort of certificate must be issued and by whom.

In addition to substantial confusion over the requirements, the CPSC noted industry complaints concerning the expense of testing products that will ultimately be exempt by regulation and the Commission’s own lack of resources as reasons for the stay. 

The stay covers all testing and certification requirements except the following:

1. Any testing and certification requirements that were in place prior to CPSIA.
2. Four requirements (when they become effective) for third-party testing of children’s products for which the CPSC has already issued criteria for acceptance of third party testing laboratories:
• lead paint;
• cribs and pacifiers;
• small parts; and
• metal components of children’s metal jewelry.
3. Any certifications that are expressly required by CPSC regulation (e.g., bicycle helmets).
4. Certifications required by the Virginia Graeme Baker Pool & Spa Safety Act.
5. Certifications of compliance required for all terrain vehicles (“ATVs”).
6. Any voluntary guarantees provided for in the Flammable Fabrics Act (“FFA”).

The CPSC emphasized that the stay applies to testing and certification requirements.  Products must comply with the underlying safety requirements, including the upcoming CPSIA limits on lead and phthalates in children’s products.

By Kurt R. Karst –      

As a follow-up to our recent post on obtaining orphan drug designation and approval based on a major contribution to patient care – the so-called “MC-to-PC” orphan drug designation and approval – we thought we would post on another rarity in the orphan drug world: the “cost recovery” orphan drug designation and approval. 

The FDC Act, as amended by the Orphan Drug Act, and FDA’s orphan drug regulations at 21 C.F.R. Part 316 provide two routes for obtaining designation and approval of a drug for a rare disease or condition (i.e., an “orphan drug”).  Orphan drug designation and approval may be granted: (1) on the basis that a product is intended to treat a disease or condition that has a U.S. prevalence of less than 200,000 persons (FDC Act § 526(a)(2)(A)); or (2) if a disease or condition affects 200,000 or more individuals, then if a sponsor can show that there is no reasonable expectation that the costs of developing and making available the drug will be recovered from U.S. sales (FDC Act § 526(a)(2)(B)). 

An orphan drug designation request citing cost recovery as a designation basis must include certain documentation (with appended authoritative references) to demonstrate that “there is no reasonable expectation that costs of research and development of the drug for the indication can be recovered by sales of the drug in the United States.”    Such documentation must include the following information (from FDA’s orphan drug regulations at 21 C.F.R. Part 316):

• “Data on all costs that the sponsor has incurred in the course of developing the drug for the U.S. market,” including “nonclinical laboratory studies, clinical studies, dosage form development, record and report maintenance, meetings with FDA, determination of patentability, preparation of designation request, IND/marketing application preparation, distribution of the drug under a ‘treatment'’ protocol, licensing costs, liability insurance, and overhead and depreciation.”  In addition, the sponsor must “demonstrate the reasonableness of the cost data.  For example, if the sponsor has incurred costs for clinical investigations, the sponsor shall provide information on the number of investigations, the years in which they took place, and on the scope, duration, and number of patients that were involved in each investigation.” 

• “If the drug was developed wholly or in part outside the United States,” then the designation request must also include: (1) “[d]ata on and justification for all costs that the sponsor has incurred outside of the United States in the course of developing the drug for the U.S. market,” including an explanation of “the method that was used to determine which portion of the foreign development costs should be applied to the U.S. market, and what percent these costs are of total worldwide development costs,” and “[a]ny data submitted to foreign government authorities to support drug pricing determinations;” and (2) “[d]ata that show which foreign development costs were recovered through cost recovery procedures that are allowed during drug development in some foreign countries” (e.g., revenues from charging for investigational drug). 

• “[A] clear explanation of and justification for the method that is used to apportion the development costs among the various indications” where “the drug has already been approved for marketing for any indication or in cases where the drug is currently under investigation for one or more other indications (in addition to the indication for which orphan-drug designation is being sought).” 

• “A statement of and justification for any development costs that the sponsor expects to incur after the submission of the designation request.” 

• “A statement of and justification for production and marketing costs that the sponsor has incurred in the past and expects to incur during the first 7 years that the drug is marketed.” 

• “An estimate of and justification for the expected revenues from sales of the drug in the United States during its first 7 years of marketing,” which should “assume the total market for the drug is equal to the prevalence of the disease or condition that the drug will be used to treat.”    

• Information on “each country where the drug has already been approved for marketing for any indication,” including “the annual sales and number of prescriptions in each country since the first approval date.” 

• “A report of an independent certified public accountant in accordance with Statement on Standards for Attestation established by the American Institute of Certified Public Accountants on agreed upon procedures performed with respect to the data estimates and justifications submitted pursuant to [21 C.F.R § 316.21].” 

In addition to the above-referenced documentation, a sponsor requesting orphan drug designation pursuant to FDC Act § 526(a)(2)(B) must, “at FDA’s request, allow FDA or FDA-designated personnel to examine at reasonable times and in a reasonable manner all relevant financial records and sales data of the sponsor and manufacturer.” 

To our knowledge, of the more than 325 designated and approved orphan drugs, there are only three drugs have been designated and approved based on a showing that a disease or condition affects 200,000 or more U.S. individuals and where the sponsor showed that there is no reasonable expectation that the costs of developing and making available the drug will be recovered from U.S. sales: (1) SUBUTEX (buprenorphine HCl) Sublingual Tablets; (2) SUBOXONE (buprenorphine HCl; naloxone HCl dehydrate) Sublingual Tablets; and, most recently, (3) EVISTA (raloxifene HCl) Tablets.

FDA approved SUBUTEX (NDA #20-732) and SUBOXONE (NDA #20-733) on October 8, 2002 for the treatment of opioid dependence.  FDA designated SUBUTEX as an orphan drug for this indication on June 15, 1994, and designated SUBOXONE for this indication on October 27, 1994.  In each case, the sponsor put forth two arguments for designation – based on FDC Act § 526(a)(2)(A) (prevalence) and § 526(a)(2)(B) (cost recovery).  Although FDA did not agree with the sponsor’s prevalence figures, the Agency concluded that the economic analysis and supporting documentation submitted by the sponsor were sufficient to support a cost recovery designation.

FDA approved EVISTA (NDA #22-042) on September 13, 2007 for reduction in risk of invasive breast cancer in postmenopausal women with osteoporosis and reduction in risk of invasive breast cancer in postmenopausal women at high risk for invasive breast cancer.  Despite some questions concerning the sponsor’s cost recovery analysis, FDA designated the drug as an orphan drug on July 14, 2005 pursuant to FDC Act § 526(a)(2)(B) for the reduction of the risk of breast cancer in postmenopausal women.  Interestingly, FDA notes in its designation recommendation that the sponsor should present certain information to the Agency post-approval to support the cost recovery designation.  FDA states that “[t]his information should be presented . . . after a certain period of postmarketing experience is available . . . .  At each of these time points, [FDA] will need to determine if the designation and/or marketing exclusivity should remain in place or whether the designation and/or exclusivity should be revoked as permitted under 21 CFR 316.29.” 

The latest issue of the Food and Drug Law Institute’s “Update” magazine features articles written by four Hyman, Phelps & McNamara, P.C. attorneys.  The first article, titled “Imported Products – FDA Is Not Fooling Around,”  was written by Dara Katcher Levy and John R. Fleder.  It provides background information on FDA’s regulation of imports, discusses inconsistencies in FDA’s enforcement actions against imported articles, and analyzes FDA’s increasing use of very broad import alerts and the adverse effects that these are having on importers. 

The second article, titled “FDA’s Implementation of FDAAA’s Food-Related Provisions: A Work In Progress,” was written by Ricardo Carvajal and Diane B. McColl.  It discusses sections 417 and 301(ll) of the FDC Act, which were added by the FDA Amendments Act of 2007.  Section 417 requires FDA to establish a reportable food registry and an electronic portal to which  responsible parties must submit instances of reportable food.  FDA is expected to implement the reportable food registry in Spring 2009.  Section 301(ll) makes it a prohibited act to market a food to which has been added a new drug, a licensed biologic, or a “drug” or “biological product” for which substantial clinical investigations have been instituted and their existence made public (with certain exceptions).