Title XI (§ 1112) of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”) requires pharmaceutical applicants (both brand and generic) to file with the Federal Trade Commission (“FTC”) and the Assistant Attorney General certain agreements executed on or after January 7, 2004.  (Information on the types of agreements that must be filed is provided in the FTC’s “Pharmaceutical Agreement Filing Requirements”.)  Since the enactment of the MMA, the FTC has published summaries of these agreements.  Copies of previous summaries are available here (FY 2004), here (FY 2005), and here (FY 2006).

On May 21, 2008, the FTC announced the availability of the Commission’s FY 2007 summary.  According to the summary, the FTC received 45 agreements in FY 2007 (the same number as in FY 2006), with the following breakdown in agreement types:

• Thirty-three of the agreements were final settlements of patent litigation brought by a brand company against a generic company.

• Nine were interim agreements that occurred during patent litigation between a brand and a generic company, but did not resolve the litigation.

• One was an agreement between a first-filer generic company and a subsequent generic filer.

As in FY 2006, a significant number of final settlement agreements filed in FY 2007 reportedly included both compensation to the generic company and a restriction on generic marketing (79% of these agreements involved “first filer” generics eligible for 180-day exclusivity).  However, according to the FTC, unlike the agreements reported on in the Commission’s FY 2006 summary, the agreements filed in FY 2007 concerning restrictions on generic entry “generally did not include some type of side-deal involving elements not directly related to the resolution of the patent dispute between the brand and the generic.  Rather, in most of these agreements the compensation to the generic takes the form of the brand’s agreement not to sponsor or compete with an authorized generic for some period of time.” 

FTC Chairman William E. Kovacic commented that “[t]his report confirms that settlements with potentially anticompetitive arrangements continue to be prevalent.  The Commission remains committed to ensuring that brand and generic companies do not use such settlements as a way to deny consumers the benefits of competition.” 

In March 2006, the FTC proposed a study of the competitive effects of authorized generics.  In April 2007, the FTC announced that it was seeking public comment on its proposed information requests to firms in the prescription drug industry.  In December 2007, the FTC announced the issuance of those information requests.  The FTC has not publicly discussed a timeframe for issuing a study report. 

By Kurt R. Karst    

A U.S. District Court recently denied the Drug Enforcement Administration’s (“DEA’s”) attempt to use an injunction to suspend a physician’s DEA registration.  The court noted that the Controlled Substances Act (“CSA”) provides adequate administrative procedures to suspend a DEA registration.  The court also denied the government’s motion for summary judgment, determining that the government’s contention that the physician prescribed outside the course of professional practice juxtaposed against the practitioner’s assertion that he followed accepted pain guidelines, present genuine issues of material fact to be decided at trial.

On May 12, 2008,  in United States v. Seth Paskon, Judge Carol E. Jackson of the U.S. District Court of the Eastern District of Missouri denied the government’s motions against Seth Paskon, M.D.  The government alleged that Dr. Paskon issued medically unnecessary prescriptions for narcotic medications.  The government’s civil case against the practitioner under the False Claims Act and the CSA seeking restitution to Medicaid, civil penalties and an injunction against future CSA violations, is set for trial in July. 

Preliminary Injunction

The government sought injunctive relief directing Dr. Paskon to immediately stop prescribing controlled substances and to surrender his DEA registration.  The court concluded that the government failed to meet the burden of showing why the injunction should be issued before trial.  The government did not cite, and the court did not find, any cases in which a court limited a physician’s registration prior to disposition of the government’s claims.  The court noted that “the CSA provides a comprehensive regime-complete with standards, burdens, and review procedures-pursuant to which DEA may revoke or suspend a physician’s registration.”  The court further found that the government did not explain why it did not rely on the CSA’s administrative process to stop Dr. Paskon’s prescribing and terminate his DEA registration.  In other words, DEA could have immediately suspended Dr. Paskon’s registration under the CSA’s standard and administrative remedies, that is, if his continued registration posed an imminent danger to the public health or safety. 

Summary Judgment

The government also sought partial summary judgment in the matter.   The government alleges that Dr. Paskon violated 21 U.S.C. § 842(a)(1), which provides that it is unlawful for any person to distribute or dispense controlled substances in violation of 21 U.S.C. § 829.  Section 829 provides that controlled substances cannot be dispensed without a prescription issued by a practitioner.  For prescriptions to be valid, they must “be issued for a legitimate medical purpose by an individual practitioner acting in the usual course of his professional practice.” 

Judge Jackson cited examples from cases where defendant physicians had acted outside the bounds of “professional practice.”  The court distinguished those cases from the case against Dr. Paskon.  For example, the court found no evidence that Dr. Paskon, gave inadequate physical examinations, ignored test results, distributed controlled substances away from the office, or demanded cash for prescriptions. 

The court noted the government provided an expert opinion but lacked evidence from patients and undercover agents to support its contention while Dr. Paskon contended that he followed accepted guidelines, including the World Health Organization’s Pain Ladder, for managing patients with chronic pain.  Finding that the record presents genuine disputes of material fact, the court denied the government’s motion for partial summary judgment. 

By Larry K. Houck

The latest issue of the Food and Drug Law Institute’s “Update” magazine features articles written by three Hyman, Phelps & McNamara, P.C. attorneys.  The first article, titled “FDA Moves Against Marketed Unapproved Human Drugs,” was written by Susan J. Matthees and John R. Fleder and discusses recent FDA actions against companies marketing unapproved drugs.  According to the article, the FDA began an enforcement initiative with respect to such drug products in June 2006 to “ensure that all drugs marketed in the United States meet safety, effectiveness, manufacturing, and labeling standards.”  Since FDA began this initiative, FDA has publicly taken action with respect to many marketed unapproved drugs, including carbinoxamine, colchincine for injection, hydrocodone, and guaifenesin. Since this article was published, FDA announced a new enforcement action against Scientific Laboratories for manufacturing and distributing several unapproved drugs.   

The second article, titled “The Pathway to Market for Your Medical Device: A Primer on Obtaining Information from FDA,” was written by Jeffrey K. Shapiro and provides an overview of ways to obtain advance information from FDA on regulatory issues concerning medical device clearance.  The article provides a helpful overview of the options available for approaching FDA as well as the pros and cons of each option.      

Valeant Pharmaceuticals International’s (“Valeant’s”) EFUDEX (fluorouracil) Topical Cream, 5%, (also known as 5-FU) is a locally-acting antineoplastic drug product FDA first approved in July 1970 for the topical treatment of multiple actinic or solar keratoses (“AK”).  In 1976, FDA approved the drug for a second indication – for the topical treatment of superficial basal cell carcinomas (“sBCC”) when conventional methods are impractical.  In December 2004, Valeant submitted a citizen petition to FDA requesting that the Agency not approve any Abbreviated New Drug Application (“ANDA”) for a generic version of EFUDEX Cream unless the application contains data from an adequately designed comparative clinical study conducted in sBCC subjects.  Specifically, Valeant argues in the company’s petition that:

The inadequate treatment of sBCC can lead to serious complications for patients, including the growth of their cancer. In that light, . . . is critical that FDA not make assumptions about whether a proposed generic product will be safe and effective in treating sBCC, based on a showing of comparable efficacy in patients with AK. These two conditions occur at different sites of drug action and exhibit different growth patterns. Comparable absorption of a drug to one site of action does not demonstrate comparable absorption to another, more difficult to reach site of action. Similarly, comparable efficacy in an easier to treat condition does not demonstrate comparable efficacy in a more difficult to treat condition. 

For these reasons, FDA must not allow onto the market generic versions of EfudexÒ Cream until a demonstration of bioequivalence has been made, at a minimum, in patients with sBCC.

On April 11, 2008, FDA denied Valeant’s petition and approved Spear Pharmaceuticals, Inc.’s (“Spear’s”) ANDA #77-524 for Fluorouracil  Cream, 5%.  Citing judicial precedent upholding FDA’s authority to determine the appropriate methods to determine bioequivalence, the Agency states in its petition response that “even when clinical trials are needed, it has not been the Agency’s policy to require that bioequivalence be shown in every indication if drug release from the dosage form and appearance at the or sites of activity has been demonstrated.”  Furthermore, FDA concludes that “an AK bioequivalence study is sufficient to establish that the generic topical 5-FU formulation will be available in the epidermis and the upper dermis to act on both AK and sBCC lesions to an extent that is comparable to Efudex Cream.” 

Two weeks after denying Valeant’s petition and approving Spear’s ANDA, Valeant sued FDA on April 25, 2008 in the U.S. District Court for the Central District of California (Southern Division) for declaratory and injunctive relief pursuant to the Administrative Procedure Act (“APA”).  Specifically, Valeant requests in the company’s complaint that the court declare FDA’s decision to approve ANDA #77-524 unlawful and invalid and order FDA to suspend ANDA approval.  Valeant also seeks a Temporary Restraining Order (“TRO”) compelling FDA to suspend ANDA approval.  (Valiant’s TRO is filed under seal.)  FDA, as the Agency did in its petition response, argues in its TRO opposition memorandum that the Agency has broad discretion to determine the appropriate requirements for a generic applicant to demonstrate bioequivalence.  Furthermore, FDA argues that its petition decision and ANDA approval are entitled to deference under the APA, and that Valeant has not met the requirements to support a TRO.  Spear, which has intervened in the case, makes similar arguments in its TRO opposition papers and also alleges that Valiant’s lawsuit and citizen petition are merely tactics to block or delay generic competition.  (Valiant’s petition was submitted to FDA prior to the enactment of the FDA Amendments Act, which amended the FDC Act to require FDA to take final action on certain petitions that would delay generic drug approval within 180 days after petition submission.)

After submitting its TRO opposition papers, FDA became aware of an “administrative issue” and “an additional issue concerning Spear’s ANDA which, in the agency’s judgment, necessitates administrative reconsideration of the ANDA approval,” and requested that the court stay proceedings and refer the matter to FDA.  On May 14, 2008, FDA issued an “Administrative Reconsideration and Stay of Action” to Spears staying the approval of ANDA #77-524, and the company has since suspended selling the drug product.  FDA hopes to complete its review of these issues and the administrative reconsideration process by May 30, 2008.  Until then, further litigation is stayed.

It is unclear what, exactly, the two issues are that led FDA to suspend the approval of ANDA #77-524.  According to FDA’s Orange Book, EFUDEX Cream, 5%, is not subject to any period of patent or non-patent market exclusivity, so the administrative and scientific issues referred to by FDA would not appear to involve such issues.  We will update you as we learn additional information.

By Kurt R. Karst    

FDA recently announced that on June 5 and 6, 2008, the Center for Drug Evaluation and Research and the Center for Biologics Evaluation and Research will hold a public meeting to discuss the Agency’s plans to launch a pilot program on the testing and review of proprietary names and the issuance of a concept paper that will describe the logistics of the pilot program, recommendations for implementing a proprietary name review, and the proposed review of submissions made under the pilot program.  The pilot program will allow participating companies to submit data generated from their own testing and evaluation of proposed proprietary product names.  FDA expects to issue the concept paper by the end of Fiscal Year (“FY”) 2008 and begin enrollment in the pilot program in FY 2009.

The pilot program and concept paper are intended to increase the transparency of FDA’s review process of proprietary names and to decrease the risk of medication errors. Currently, FDA reviews proprietary names to determine any promotional or safety issues.  For example, FDA considers whether a proposed name overstates the efficacy of the drug product, minimizes the drug product’s risks, or broadens its indications.  FDA also considers whether the name is spelled similarly or sounds similar to another marketed product or could otherwise cause confusion, such as having similar abbreviations.  The current safety review expands the entire medication process, taking into consideration, for example, errors that could arise during the procurement, prescribing, ordering, dispensing, and administration of a drug.

Under the performance goals FDA agreed to as part of the recent reauthorization of the Prescription Drug User Fee Act (i.e., PDUFA IV), the Agency committed to implement various measures with respect to proprietary name review in an attempt to reduce medication errors.  These measures include meeting certain proprietary name review performance goals (beginning in FY 2009) during the IND and NDA/BLA review phases, publishing guidance and policy procedures on proprietary name review and best practices, developing and implementing a pilot program “to enable pharmaceutical firms participating in the pilot to evaluate proposed proprietary names and submit the data generated from those evaluations to the FDA for review,” and “exploring the possibility of ‘reserving’ proprietary names for companies once the names have been tentatively accepted by the Agency.”  FDA’s June 2008 meeting is part of the Agency’s efforts to meet these goals.  FDA’s efforts also respond to calls for more industry involvement in the proprietary name testing process, including requests made in reports by the Institute of Medicine in 2006 and 1999 and recommendations made by the Health and Human Services Advisory Committee on Regulatory Reform in November 2002. 

During the meeting, FDA plans to discuss the following key issues: (1) best practices in safety and promotional testing of proprietary names; (2) testing procedures that should be used and data that should be submitted by those participating in the pilot; (3) standardization of testing; (4) criteria to consider in evaluating the testing and data submitted; (5) the structure and evaluation of the pilot program; and (6) any public health concerns raised by the pilot program.  FDA will use the information gathered from the meeting and from comments submitted to the docket to develop the concept paper and the pilot program.

The meeting will be held from 8:30 a.m. to 5:00 p.m. each day at the Crowne Plaza Hotel in Silver Spring, Maryland.  Information on meeting attendance and registration is provided in FDA’s Federal Register notice announcing the meeting.  Written comments regarding the concept paper and pilot program must be submitted by July 6, 2008 to the Division of Dockets Management or electronically at www.regulations.gov.

By Carrie S. Martin

Dextromethorphan is an important ingredient in many cough/cold medications.  The World Health Organization (“WHO”) is considering whether to schedule dextromethorphan as a controlled substance under the international conventions of the United Nations system.  If that occurs, then the U.S. government will be obligated to schedule dextromethorphan under the Controlled Substances Act, an action that could dramatically affect the manufacturing, distribution, and availability of medicines containing the substance.

At the next meeting of WHO’s Expert Committee on Drug Dependence, dextromethorphan is scheduled to be given a “pre-review.”  That meeting will occur in April, 2009.  If, following this “pre-review,” the drug is recommended for “critical review,” the committee will at the meeting thereafter determine whether to recommend scheduling.

Space does not permit a full description of the WHO scheduling process.  If this issue is of interest, please call Jim Phelps or John Gilbert at Hyman, Phelps & McNamara, P.C.   Also, please see our previous post, which, among other things, provides some background information on the WHO scheduling process.

On May 1, 2008, a federal judge in the Middle District of Florida brought some measure of closure to FDA’s more than six years of attempts to regulate a self-identified custom device manufacturer.  In his May 1st order, Judge G. Kendall Sharp mostly sided with Endotec, Inc., and the two individual defendants, Michael J. Pappas, Endotec’s co-owner and president, and Dr. Frederick F. Buechel, Endotec’s other co-owner and medical director. 

Since at least its March 15, 2002 Warning Letter to Endotec, FDA has maintained that Endotec’s devices were not custom devices under FDC Act § 520(b).  While the Judge agreed with FDA with respect to the knee devices manufactured by Endotec, he refused to grant FDA’s request for disgorgement of profits even with respect to these devices.  Judge Sharp found, as a conclusion of law, that Endotec’s ankle and TMJ devices were custom devices, and thus not adulterated or misbranded.

The court, without the deference to agency expertise and regulations that one often sees in challenges to FDA decisions, stated that an FDA witness’ “interpretation of ‘custom device’ is so narrow as to make the definition useless.”

FDA typically takes the position that a device being studied under an investigational device exemption (“IDE”) cannot also qualify as a custom device, because it is capable of being studied.  The court concluded, however, that even though Endotec had an approved IDE for the Buechel-Pappas Ankle (“B-P Ankle”), the ankle devices at issue were custom devices.  The court so held based on testimony from Endotec that the “surgeon specials” although “similar to the standardized B-P Ankle that was being studied under the IDE,” were custom devices and not “‘merely a variation’ within a range.”

While not strictly relevant to its analysis, the court’s decision notes as several points that there is no allegation that these devices are unsafe or ineffective.  Additionally, while recognizing that it is up to Congress to improve the law, the court suggested that FDA’s premarket approval (“PMA”) and 510(k) processes were unduly burdensome and time-consuming and were preventing technological advances from reaching patients. 

The case was not a total loss for FDA.  As noted above, the court did find that Endotec’s knee devices were adulterated and enjoined their manufacture and distribution.  In addition, with respect to the ankle devices that the court found to be custom devices, the defendants are enjoined “from advertising the B-P Ankle or any custom ankle device through websites, in professional journals, at professional conferences, or by any other means, thereby essentially incorporating the statutory and regulatory restrictions into a court order.   

FDA has 60 days to appeal from the court’s order to the Eleventh Circuit.  Aside from an appeal, it is uncertain how this case may affect FDA’s regulation of custom devices.  The court did not hold or suggest that FDA’s definition of custom device is invalid.  Nevertheless, the decision demonstrates that for device manufacturers who may disagree with FDA’s application of the custom device exemption, FDA’s enforcement position is not necessarily the final word.

By J.P. Ellison

We previously reported (here and here) on FDA’s efforts to resolve 180-day exclusivity forfeiture issues concerning generic versions of Bayer Pharmaceuticals’ (“Bayer’s”) diabetes drug PRECOSE (acarbose) Tablets by establishing a public docket.  (FDA has also taken similar actions to resolve 180-day exclusivity issues concerning ramipril and granisetron.)  Under changes made to the Federal Food, Drug, and Cosmetic Act (“FDC Act”) by the 2003 Medicare Modernization Act (“MMA”), generic applicants that are “first applicants” are eligible for 180-day exclusivity, unless such eligibility is forfeited.  A “first applicant” eligible for 180-day exclusivity is defined in FDC Act § 505(j)(5)(B)(iv)(II)(bb) to mean “an applicant that, on the first day on which a substantially complete [ANDA] containing a [Paragraph IV certification] is submitted for approval of a drug, submits a substantially complete [ANDA] that contains and lawfully maintains a [Paragraph IV certification].”  Forfeiture of 180-day exclusivity eligibility can occur under several statutory provisions.   

In September 2007, FDA issued a letter soliciting public comment on whether the “first applicant” to submit an ANDA for generic PRECOSE Tablets was eligible for 180-day exclusivity, or whether such eligibility was forfeited.  Specifically, FDA’s September 2007 letter identifies the following facts and requested comment on the following forfeiture issues:

As of the date of this letter, which is more than 30 months from March 22, 2005 [when the first ANDA was submitted], no first applicant’s ANDA has been approved.  Also, on April 16, 2007, Bayer requested that [U.S. patent #4,904,769 (“the ‘769 patent”] be “delisted” as to Precose, i.e., they withdrew the patent information.  On September 26, 2007, FDA indicated in [the Orange Book] that the request to delist this patent had been submitted on April 16, 2007.

To determine whether any ANDA referencing Precose is eligible for final approval, the agency must consider how the 180-day generic drug exclusivity forfeiture provisions at section 505(j)(5)(D) of the [FDC Act] apply to this set of facts.  As part of the process for making such a determination, we are seeking your views regarding the applicability of sections 505(j)(5)(D)(i)(IV) — failure to obtain tentative approval within 30 months — and 505(j)(5)(D)(i)(I)(aa)(BB) — failure to market by 30 months. We also are interested in your views regarding the applicability of section 505(j)(5)(D)(i)(I)(bb)(CC) — relating to the delisting of a patent.

The “first applicant” eligible for 180-day exclusivity was later revealed to be Cobalt Pharmaceuticals, Inc. (“Cobalt”) when the company submitted an Emergency Petition for Stay of Action to FDA on October 24, 2007 requesting that the Agency stay the approval of all subsequent acarbose tablets ANDAs until Cobalt’s 180-day exclusivity period expires.  Sixteen days later, Cobalt submitted a Citizen Petition and another Emergency Petition for Stay of Action to FDA challenging the Agency’s bioequivalence recommendations for generic PRECOSE Tablets. 

Cobalt submitted ANDA #77-532 to FDA in January 2005 containing a Paragraph IV certification to the ‘769 patent; however, after initially reviewing the application, FDA refused to receive the ANDA.  FDA later received the application on March 22, 2005, and Cobalt provided the required notice of the Paragraph IV certification to Bayer.  Bayer did not sue Cobalt.  In October 2007, Cobalt filed an action for declaratory judgment of non-infringement and invalidity of the ‘769 patent.  The case was later voluntarily dismissed without prejudice. 

On May 7, 2008, FDA issued a Letter Decision in which the Agency determined that Cobalt forfeited 180-day exclusivity eligibility on September 22, 2007 under the “failure to market” forfeiture provisions at FDC Act § 505(j)(5)(D)(i)(I) because the company did not begin to market its drug product by that date.  (FDA also simultaneously denied Cobalt’s October 2007 Emergency Petition for Stay of Action.) According to FDA’s calculations, September 22, 2007 is the “earlier of” date between March 22, 2005 (i.e., the date that is 30 months from the date on which Cobalt submitted a substantially complete ANDA #77-532 containing a Paragraph IV certification to the ‘769 patent) and July 21, 2008 (i.e., the date that is 75 days after FDA approved ANDA #77-532 on May 7, 2008).  September 22, 2007 is also the “later of” date that is 75 days after April 16, 2007, when Bayer withdrew the ‘769 patent from the Orange Book (i.e., June 30, 2007). 

In what will likely be a surprise to those following 180-day exclusivity issues (and could have significant implications on some currently pending ANDAs otherwise eligible for 180-day exclusivity), FDA notes that the U.S. Court of Appeals for the District of Columbia Circuit’s 2006 decision in Ranbaxy Labs. Ltd. v. Leavitt holding that FDA may not condition the delisting of a patent on the existence of patent litigation and deprive an ANDA applicant eligible for 180-day exclusivity of such exclusivity does not apply to the version of the FDC Act amended by the MMA.  FDA’s Decision Letter states:

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

FDA’s Decision Letter also addresses the forfeiture of exclusivity under FDC Act § 505(j)(5)(D)(i)(IV), which states that 180-day exclusivity eligibility is forfeited when “[t]he first applicant fails to obtain tentative approval of the application within 30 months after the date on which the application is filed, unless the failure is caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed.”  (FDA has previously made determinations under this forfeiture provision – see FDA Law Blog post here – but has not, until now, substantively discussed the provision.) FDA states that “[t]o calculate the start of the 30-month period under this forfeiture provision, it is reasonable to use the date that qualifies the applicant as a first applicant for 180-day exclusivity purposes: the date the ANDA is sufficiently complete to permit a substantive review,” and further notes that:

[I]n contrast, the failure to market provision at section 505(j)(5)(D)(i)(I)(aa)(BB) of the Act calculates the 30-month period from the date of “submission,” rather than the date the application is “filed.”  The exclusivity provisions appear to use the terms “submit” and “file” interchangeably; there is no evidence that Congress intended a difference in meaning between these latter two terms.  Because both terms are used in the context of “first applicant” status, we will interpret the terms to refer to the time that the agency has determined [an] ANDA to be sufficiently complete to permit substantive review.  If we interpreted the term “submission” in this context to mean the date the ANDA is date-stamped by FDA, regardless of whether the application is found to have been reviewable, an applicant whose ANDA cannot be reviewed without the submission of additional information would find its failure to market period under section 505(j)(5)(D)(i)(I)(aa)(BB) to have begun to run even before the agency could begin a substantive review of the application.

In the context of Cobalt’s ANDA #77-532, FDA notes that the application “was sufficiently complete to permit review and was received on March 22, 2005, and that the 30-month period beginning on this date ended on September 22, 2007.  As of that date FDA had not granted tentative or final approval.  However, because FDA’s May 7, 2008 decision with respect to Cobalt’s November 2007 Citizen Petition and Emergency Petition for Stay of Action changed certain bioequivalence requirements, and as a result of a new provision added to the FDC Act at § 505(q)(1)(G) by the FDA Amendments Act permitting the extension of this 30-month period if “approval of the application was delayed because of a petition,” FDA determined that Cobalt did not forfeit exclusivity for failing to obtain tentative approval by September 22, 2007.   

FDA’s May 2008 Letter Decision also addresses the Agency’s interpretation of the beginning of the two 30-month periods described in the “failure to market” and “failure to obtain tentative approval” forfeiture provisions at FDC Act § 505(j)(5)(D)(i)(I) and § 505(j)(5)(D)(IV), respectively.  Cobalt had argued that “FDA must interpret the two 30-month periods described in the MMA forfeiture provisions as beginning not from the date the application is submitted or filed, but rather from the date the NDA holder and patent owner receive the first applicant’s notice of paragraph IV certification.”  FDA disagreed, and referring back to a passage quoted above, states that “although there is some ambiguity created by the use of the term ‘submission’ in section 505(j)(5)(D)(i)(I)(aa)(BB) and ‘filed’ in section 505(j)(5)(D)(i)(IV) to identify what appears to have been intended to be the same event, that ambiguity can be easily resolved in a manner that is both consistent with the agency’s use of these terms in the review of ANDAs and with the statutory scheme.”

Dissatisfied with FDA’s decision, Cobalt sued FDA in the U.S. District Court for the District of Columbia on May 8, 2008 seeking declaratory and injunctive relief.  A copy of Cobalt’s Complaint, Cobalt’s Motion for Temporary Restraining Order, FDA’s Opposition Memorandum, and Cobalt’s Supplemental Memorandum are available via the hyperlinked text.  We understand that on May 9th the court denied Cobalt’s motion for a temporary restraining order.  Roxane Laboratories has also filed a Motion to Intervene in the case.  We understand that the court granted Roxane’s motion.  The lawsuit is the latest in a recent spat of cases concerning Hatch-Waxman issues, including controversies over generic PLAVIX (clopidogrel bilsulfate), generic DEPAKOTE (divalproex sodium), and generic RISPERDAL (risperidone) Tablets. 

By Kurt R. Karst   

The Committee on Energy and Commerce of the U.S. House of Representatives sent a letter of inquiry to 49 major food firms that requests extensive information on the firms’ handling of food recalls and food contamination events.  The letter was signed by both John Dingell, Chairman of the Committee on Energy and Commerce, and Bart Stupak, Chairman of the Subcommittee on Oversight and Investigations. The Congressional press release states that FDA has failed to maintain the integrity of the food supply, and that “it is time to determine if the owners of the largest brand names on supermarket shelves have been forthcoming with the American people about the safety of their products.”  The press release provides a link to a list of 313 food recalls that are asserted to have occurred in the past 16 months, based on notices released by FDA and the affected companies.

For the time period dating back to January 1, 2000, the letter of inquiry requests: 1) a list of all food recalls and safety alerts issued and the corresponding contaminant, if any; 2) all instances of positive internal test results for certain bacteria and viruses in excess of limits acceptable to FDA or state regulatory authorities; 3) all instances of positive internal test results for chemical contaminants in excess of limits acceptable to FDA or state regulatory authorities; 4) for imported products, all instances of positive internal or external test results for chemical or microbiological contaminants in excess of FDA or State regulatory limits; 5) for each of the preceding items, information as to whether FDA was notified, and if not, why not; and 6) a list of all instances where FDA or a state regulatory authority was denied entrance to any foreign or domestic facility or denied access to records regarding microbiological or chemical testing.  The Committee requests domestic facilities’ information by May 22, 2008 and foreign facilities’ information by June 5, 2008.

Issuance of the letters of inquiry follows closely on the heels of the release of a discussion draft of the FDA Globalization Act of 2008, which would overhaul the nation’s food safety system. The issuance of the letters is further evidence, as if any were needed, that food safety is likely to remain at the top of the Congressional agenda and that additional hearings are likely.

By Diane B. McColl & Ricardo Carvajal

“The Constant Gardener,” a 2001 novel and 2005 movie, revolves in part around an ethically questionable drug trial a foreign drug company conducts in Africa.  Real life events have also occurred where a company was accused of ethical violations during the conduct of foreign clinical studies.  In 2001, “The Washington Post” ran a series of articles titled “The Body Hunters” describing the news organization’s investigation into corporate drug tests around the world. 

Since 1975, FDA has required any clinical study used to support the approval of a drug application to meet certain ethical and data management criteria, including meeting the standards of the 1989 version of the Declaration of Helsinki or the local laws of the country, whichever provided greater protection for the research subjects.  Although the Declaration of Helsinki has been amended several times since 1989 (most recently in 2004) FDA did not adopt the later versions due to various factors, including, recent changes that FDA portrayed as an attack on the use of placebos in clinical studies and that could make it more difficult to assess the safety and efficacy of proposed drug products.

On April 28, 2008, FDA promulgated final regulations revising the standards foreign clinical trials that are not conducted under an Investigational New Drug application (“IND”) must meet to support an IND or New Drug Application submission.  The regulation (at 21 C.F.R. § 312.120) only applies to a minority of studies, as FDA estimates that only about 15% of all foreign trials for drugs intended to eventually be submitted to the Agency are not conducted under an IND.  The new regulation lays out specific requirements these studies must meet.  Studies failing to meet these requirements must still be identified in regulatory submissions, but FDA will only consider them for safety issues and they will not contribute to the Agency’s efficacy evaluation unless a waiver is sought.

The specific requirements identified by FDA in § 312.120 include following Good Clinical Practices (“CGPs”), and allowing the Agency the option to validate foreign clinical data through an onsite inspection.  Major GCP components include the prior approval and continued oversight of an Independent Ethics Committee (“IEC”), and obtaining documented informed consent from every clinical study subject.  The new regulation defines an IEC to mean “a review panel that is responsible for ensuring the protection of the rights, safety, and well-being of human subjects involved in a clinical investigation and is adequately constituted to provide assurance of that protection.”  An Institutional Review Board is a type of IEC.  The new regulation also details what must be submitted to show compliance with GCPs. 

By Gwendolyn M. McKee

In response to a February 2006 citizen petition by Quaker Oats Co. (“Quaker”), FDA amended  21 C.F.R. § 101.81 concerning health claims on the relationship between soluble fiber from certain foods and a reduced risk of coronary heart disease.  Before the amendment, food eligible for the health claim had to meet the nutrient content requirements for low saturated fat, low cholesterol and low fat.  Quaker’s “flavored reduced sugar instant oatmeal products were ineligible” for the health claim because the substitution of sugar with more whole oats caused the products to exceed the low fat criterion.  Effective May 1, 2008, the final rule allows qualifying foods bearing the health claim to exceed the nutrient content requirement for low fat, provided that the fats in the foods are from whole oat sources.

In response to a comment stating that the new exemption “would be the same as saying that full fat whole oatmeal cookies could reduce the risk of heart disease,” FDA emphasized that “[u]nder the new exemption, a food must meet the low fat requirement unless the food exceeds this requirement due to fat content derived from whole oat sources . . . .  The products eligible to bear the claim would not contain any fat from sources other than the fat inherent in the whole oat sources.  Food products that are typically made with other fat sources, such as cookies, would likely be ineligible for the claim.”

By Cassandra A. Soltis

In mid-April, GlaxoSmithKline Consumer Healthcare (“GSK”) and a trio of research and advocacy organizations submitted a citizen petition to FDA that asks the Agency to prohibit structure/function claims for dietary supplements that expressly or impliedly reference weight loss. In addition to claims that expressly reference weight loss, the petition contends that the following categories of claims should be prohibited: energy expenditure, modulation of carbohydrate metabolism, increased satiety or suppression of appetite, increased fat oxidation or reduced fat synthesis, and blockage of fat absorption.  The petition acknowledges FDA’s longstanding position that weight loss claims are permissible structure/function claims.  However, the petition urges FDA to change its position on the ground that: (1) recent evidence establishes that overweight is a risk factor for disease; (2) consumers believe that there is a relationship between weight loss and a reduction of risk of disease; (3) claims that a product will reduce a risk factor for disease are disease claims; (4) the use of ineffective therapies can divert consumers from safe and effective therapies such as GSK’s weight loss drug AlliÒ; and (5) manufacturers of weight loss supplements should be forced to substantiate their claims through health claim petitions before going to market. Although the petition targets dietary supplements, the action it requests also would affect conventional foods.

The potential marketing value of the weight loss market and the food and dietary supplement industries’ major investment in weight loss products ensures that the petition will receive strong drug industry supported and vigorous food and dietary supplement industry opposition.  Although the petition contends that the requested action will not require rulemaking, there are arguments that would support the need for rulemaking given FDA’s longstanding position that weight loss claims, as opposed to claims to treat obesity, do not imply disease treatment or prevention.

By Ricardo Carvajal

On April 17, 2008, U.S. Representatives Steve Buyer (R-IN) and Jim Matheson (D-UT) introduced H.R. 5839, the “Safeguarding America’s Pharmaceuticals Act,” which would substantially expand federal drug pedigree requirements.  Among other things, the legislation would authorize destruction of counterfeit drugs at ports-of-entry, revise federal drug pedigree standards and preempt State requirements, require standardized numerical identifiers on each package, require an electronic identification and tracking system to follow drugs through the supply chain, provide grants for community pharmacies to assist them in acquiring hardware and software to comply with the new tracking system, and provide enforcement incentives for States.

If enacted, H.R. 5839 would require pedigrees, in either electronic or paper form, on all prescription drugs sold in the U.S. within 6 months. Longer term, the legislation will require that  manufacturers, distributors and pharmacies put in place systems to electronically track and trace individual prescription drugs through the supply chain.

The bill calls for a risk-based approach to application of unique standardized numerical identifiers for prescription drugs.  Under the FDA Amendments Act § 913, which created FDC Act § 505D(b)(2), FDA must develop a “standardized numerical identifier” that is to be applied to a prescription drug “at the point of manufacturing and repackaging . . . at the package or pallet level, sufficient to facilitate the identification, validation, authentication, and tracking and tracing of the prescription drug.” H.R. 5839 would require that FDA develop, not later than March 27, 2010, a list of drugs at high risk for counterfeiting and diversion.  Within 18 months later, manufacturers of these high-risk drugs would be required to place standardized numerical identifiers on their products.  Manufacturers of other drugs would be required to comply according to a timetable to be established by regulation. 

The regulations are to include a process by which a manufacturer or repackager may request an exemption from the standardized numerical identifier requirement, but only if it can demonstrate that:  “the requirement would adversely affect the safety, effectiveness, purity, or potency of the drug product or would not be technologically feasible”; and “the concerns underlying the request [for exemption] could not reasonably be addressed by measures such as package redesign . . .”

The bill also calls for the development through rulemaking of an electronic drug identification and tracking system through which drug manufacturers, re-packagers, wholesale distributors, and dispensers will be able to authenticate the wholesale distribution history of any drug by authenticating its standardized numerical identifier against an interpretable electronic database.  Regulations proposing such a system are to be published by March 31, 2010, with final regulations issued not later than one year after the date of the proposed regulations.  The regulation must take into account the technical feasibility of compliance by manufacturers, repackagers, wholesale distributors, and dispensers, for different types of drugs.  Once effective, the rules would preempt any inconsistent state requirements.  (So far, the only state to enact an electronic pedigree requirement is California.  The requirement will take effect on January 1, 2011.)

The federal bill provides for grants to pharmacies to facilitate the purchase and use of a drug identification and tracking system.  To be eligible for such grants, the pharmacy must apply to the Secretary of Health and Human Services and agree to match funds.  The bill also provides for reports to Congress for delays in issuing proposed or final regulations; civil penalties for violations; and incentives for State enforcement of federal requirements.    

The Healthcare Distribution Management Association, a national association of healthcare distributors, supports the bipartisan legislation.

By Anne Marie Murphy

As we previously reported (see post here and article here), FDA has been seeking stiffer sentences under the U.S. Sentencing Guidelines for at least the past five years.  For the preceding four years, the FDA’s pleas seemed to fall on deaf ears, but in this past year the Commission included FDC Act offenses in its priorities, held a public hearing, and received public comments with regard to some amendments the FDA asked the Commission to consider.  At the end of the process, FDA got some, but certainly not all or even most, of what it was seeking.

In the amendments to the Guidelines forwarded by the Commission to Congress on May 1, 2008, the Commission made two changes to the applicable Guideline, § 2N2.1.  First, the base offense level for a second FDC Act offense would be ten (10) , up from the current base offense level of six (6).  Under the Guidelines, a base offense level and various other factors determine the sentence imposed.  Under the FDC Act, first offense regulatory (non-fraud) offenses are misdemeanors with a maximum jail sentence of one (1) year.  In contrast, second offenses are felonies with a three (3) year maximum jail sentence.  The proposed amendment reflects this difference in the FDC Act in the Guidelines. 

Second, the proposed amendment expands the scope of conduct that the Guidelines suggest may warrant an upward departure.  Under the Guidelines, there are certain instances in which the Guidelines indicate to the sentencing court that it may be appropriate to depart upwards or downwards from the sentence otherwise calculated by the Guidelines.  To date, the Guideline applicable to FDC Act non-fraud offenses has limited consideration of such an upward departure based upon death or injury to cases in which death or bodily injury actually resulted.  In the proposed amendment, a sentencing court would be instructed to consider an upward departure in any case in which the offense created a “substantial risk of bodily injury or death” (emphasis added).  Unlike an actual death or bodily injury, which either did or did not occur, the proposed amendment would support an upward departure in any case in which the government could convince the sentencing judge that the offense created a “substantial risk” of such harm.  Based on the government’s historical position in FDC Act regulatory offense cases, one can reasonably assume that the government will routinely invoke the “substantial risk” upward departure.

The Commission declined to adopt the following FDA recommendations:

1.  to amend the Guidelines to explicitly cover human growth hormone (hGH) offenses;

2.  to amend the Guidelines to increase the sentences for Prescription Drug Marketing Act offenses; 

3.  to amend the Guidelines so that the value of any FDC Act regulated product (drug, device, food) would be zero if that product were deemed adulterated or misbranded under the FDC Act.

Absent congressional action, these proposed amendments will become effective on November 1, 2008.

By John R. Fleder, Douglas B. Farquhar, and J.P. Ellison

On May 7, 2008, the U.S. Court of Appeals for the Federal Circuit is scheduled to hear oral argument in Lupin Ltd. v. Abbott Labs.  This is a patent infringement action concerning U.S. Patent #4,935,507 (“the ‘507 patent”) with respect to Abbott’s antibiotic drug product OMNICEF (cefdinir) Oral Suspension, approved under New Drug Application (“NDA”) #50-749, and Lupin’s Abbreviated NDA (“ANDA”) for a generic version of the drug product.  The case is on appeal from the U.S. District Court for the Eastern District of Virginia, which in June 2007 granted Lupin’s motion for summary judgment with respect to certain ‘507 patent claims. The case is interesting not because of the particular drug product at issue, but rather because of the effects a decision in favor of Abbott could have on the U.S. Patent and Trademark Office’s (“PTO’s”) policy of permitting multiple patent term extensions. 

Under 35 U.S.C. § 156, certain patents covering products regulated by FDA are eligible for a Patent Term Extension (“PTE”) if patent life was lost during a period when the product was undergoing regulatory review. The “regulatory review period” is composed of a “testing phase” and a “review phase.”  For drugs approved under the FDC Act, the “testing phase” begins on the effective date of an Investigational New Drug Application (“IND”), and ends on the date an NDA is submitted to FDA.  The “review phase” is the period between the submission and approval of the NDA.  A patent term may be extended for a period of time that is the sum of one-half of the time in the “testing phase,” plus all the time in the “review phase” (minus any of the “regulatory review period” that occurs prior to the patent grant).   The “regulatory review period” must be reduced by any time that the applicant “did not act with due diligence.”  The total (calculated) regulatory review period may not exceed 5 years, and the extended patent term may not exceed 14 years after the date of approval of the marketing application.  The PTE statute also states (at 35 U.S.C. § 156(c)(4)) that “in no event shall more than one patent be extended . . . for the same regulatory review period for any product.” 

PTO interprets 35 U.S.C. § 156(c)(4) to permit multiple PTEs under certain circumstances.  Specifically, for a drug product covered by several patents PTO may extend a different patent for each NDA approved on the same first day (even when multiple NDAs share common “testing phase” and a “review phase” dates). That is, PTO considers each NDA “regulatory review period” to be distinct and for which a PTE is available.  Of course, the difficulty in such cases is to obtain FDA approval for each NDA on the same first day, because the PTE statute states under 35 U.S.C. § 156(a)(5) that for the PTO to extend the term of a patent claiming a drug (or a use of the drug or a method of manufacturing a drug) from the original expiration date of the patent, the NDA must be for the first permitted commercial use of the drug. 

The difficulty of obtaining FDA approval for multiple NDAs for the same drug on the same first day making a company eligible for multiple PTEs is borne out in the dearth of such precedents.  Indeed, we are aware of only 3 such cases.  This post concerns two of those cases.  One case involves OMNICEF (the subject of the patent infringement litigation noted above), and the other case concerns MYCAMINE (micafungin sodium).

On December 4, 1997, FDA approved two NDAs for OMNICEF: NDA #50-739 for OMNICEF Tablets, and NDA #50-749 for OMNICEF Oral Suspension.  Abbott applied for and was granted two PTEs based on these approvals – one for U.S. Patent #4,559,334 with respect to NDA #50-739, and one for the ‘507 patent with respect to NDA #50-749.  The PTO’s decision to grant a PTE for the ‘507 patent extended the term of the patent by 1,213 days until December 4, 2011. The ‘507 patent was originally scheduled to expire on August 8, 2008.

On March 16, 2005, FDA approved two NDAs for Astellas’s MYCAMINE: NDA #21-506 for MYCAMINE for prophylaxis of Candida infections in patients undergoing hematopoietic stem cell transplantation, and NDA #21-754 for MYCAMINE for the treatment of esophageal candidiasis.  Astellas (which licensed the product from Abbott) applied for two PTEs based on these approvals – one for either U.S. Patent #5,376,634 (“the ‘634 patent”), #6,265,536 (“the ‘536 patent”), or #6,107,458 (“the ‘458 patent”) for NDA #21-506, and one for either of these same patents for NDA #21-754.  In December 2007, the PTO issued final determinations on the PTE applications, which state that “two patents are eligible for extension based on the regulatory review periods for Mycamine (micafungin sodium) in NDA 21-506 and 21-754.”  In January 2008, Astellas received a PTE for the ‘458 patent with respect to NDA #21-506.  Although Astellas was also eligible for a PTE with respect to NDA #21-754 for either the ‘634 patent or the ‘536 patent, the company decided not to elect a PTE for the second NDA and withdrew its PTE applications for these patents. 

So why would a company turn down a PTE?  We think such a decision might be related to the ongoing litigation in Lupin Ltd. v. Abbott Labs. concerning OMNICEF.

In October 2006, Lupin filed a complaint against Abbott in the U.S. District Court for the Eastern District of Virginia alleging that the ‘507 patent is invalid or not infringed by the company’s generic OMNICEF drug product.  Count III of Lupin’s First Amended Complaint for Declaratory Judgment seeks a declaratory judgment of invalidity of the PTE for the ‘507 patent.  Lupin argues that “[t]he issuance of two PTEs for regulatory review periods involving cefdinir as the active ingredient was not authorized under 35 U.S.C. § 156,” and requests that the court declare the ‘507 patent PTE invalid. 

In early June 2007, Abbott and Lupin entered into an agreement concerning the ‘507 patent after the district court ruled in Lupin’s favor with respect to certain ‘507 patent claims.  As part of a Stipulated Order of Dismissal, which incorporates the terms of the Abbott/Lupin agreement, Count III of Lupin’s First Amended Complaint for Declaratory Judgment concerning the PTE for the ‘507 patent was dismissed without prejudice.  However, the Stipulated Order of Dismissal also states that Lupin “may re-assert Count III in accordance with the parties’ Agreement in the event that the Final Judgment based on the Court’s May 21, 2007 Order on claims 2-5 or on claim 1 with regard to the doctrine of equivalents is not affirmed, and is remanded, on appeal.”  On June 14, 2007, the court granted Lupin’s motion for summary judgment with respect to the literal infringement of claims 2-5 of the ‘507 patent.  Abbott appealed the case to the U.S. Court of Appeals for the Federal Circuit where it is pending. 

If Abbott prevails in the Federal Circuit, then Lupin might once again challenge the validity of the PTE for the ‘507 patent.  It seems reasonable to conclude that in order to avoid a future decision that could invalidate the PTO’s multiple PTE policy, Astellas and Abbott decided on a conservative approach with respect to MYCAMINE.  That is, the companies apparently adopted the “a bird in the hand is worth two in the bush” approach and decided to take only one PTE instead of the two that were available.

By Kurt R. Karst