On August 14, 2008, the President signed into law Public Law No. 110-314, the Consumer Product Safety Improvement Act of 2008. The new law contains a number of provisions relating to children’s products, including lead.  It also contains provisions relating to the administrative functions that have been delegated to the United States Consumer Product Safety Commission ("CPSC"), enhances the authority of the CPSC to order recalls, increases the amount of the civil penalties that the CPSC may impose, and has other miscellaneous provisions.  Most of the provisions took effect on the date of enactment, although some provisions will not take effect for up to sixty days.

When Congress passed the Food Allergen Labeling and Consumer Protection Act of 2004 to require source declaration for ingredients derived from major food allergens, Congress chose not to include any requirements with respect to so-called advisory labeling (e.g., “may contain peanuts,” or “processed in a facility that also processes peanuts”).  FDA has always been skeptical of advisory labeling.  Now that its use has grown increasingly widespread, the agency has decided that it’s time to try to rein it in.

On August 8, 2008, FDA announced that it will be holding a public hearing on September 16, 2008 to help the agency in “developing a long-term strategy to assist manufacturers in using allergen advisory labeling that is truthful and not misleading, conveys a clear and uniform message, and adequately informs food-allergic consumers and their caregivers.”  FDA is calling for information on three issues: (1) the circumstances under which manufacturers use advisory labeling; (2) what type of advisory labeling is most effective in helping consumers avoid adverse allergic reactions; and (3) how advisory statements should be worded to be the most effective in communicating the likelihood that an allergen may be present in a food.

In its notice, FDA observes that “manufacturers use advisory labeling for a variety of reasons, such as to advise consumers of the potential presence of an allergen, to avoid the need to develop and use multiple labels, or to reduce legal liabilities.”  From FDA’s perspective, the key question is whether a given claim on a given product is truthful and not misleading under FDC Act § 403(a)(1), which incorporates the definition of “truthful and not misleading” in FDC Act § 201(n) and its admonition against the omission of material facts.  In FDA’s view, “[i]f manufacturers choose to use advisory labeling to inform consumers of the potential presence of food allergens in the finished products, such labeling must be truthful and not misleading and should provide clear, uniform, and accurate information to food-allergic consumers about the potential presence of food allergens.”  FDA squarely states its belief that, “[a]s currently used in the marketplace, advisory labeling may not be protecting the health of allergic consumers.”  It appears most likely that FDA will seek to develop guidance on the use of advisory labeling, but the possibility that FDA will opt to develop a regulation can not be entirely discounted, as FDA’s notice makes reference to the warning and safe handling statements required under 21 C.F.R. § 101.17.  The corresponding Docket No. is FDA-2008-N-0429.

By Ricardo Carvajal & Bryon F. Powell

Robert A. Dormer of Hyman, Phelps & McNamara, P.C. will be speaking at American Conference Institute’s FDA Boot Camp conference, September 22-23, 2008 at the Sheraton Boston Hotel in Boston, MA. Click here for a copy of the agenda.

At the event, preeminent members of the nation’s Food and Drug bar will

drill products liability and IP/patent lawyers in the basics of current FDA law and regulation — including the nuances of the FDA Amendments Act. They will help you:

• MASTER the basics of the application and approval processes for drugs, biologics, and devices
• DEVELOP a practical working knowledge of clinical trials for drugs and biologics and the clearance process for devices
• APPRECIATE the regulatory balance between brand name and generic products
• UNDERSTAND the complexities of the patent and IP landscape, including Hatch-Waxman, Orange Book, 180-day exclusivity, 30-month stay, Paragraph IV, NDA, ANDA and 505(b)(2)
• RECOGNIZE the role of labeling in the drug/biological product approval process
• SEE the importance of cGMPs to the post-approval regulatory process
• NAVIGATE the protocols of adverse events monitoring, pharmacovigilance, and Risk Evaluation and Minimization Strategies (REMS)
• LEARN how devices are classified, monitored, and regulated
• EXPLORE FDA’s expectations and guidance for recalls

Additional details and registration information are available at the American Conference Institute’s website or by calling 888-224-2480. If you register by or before August 29th, you can lock in the lowest rate.

A recent Federal Trade Commission (“FTC”) action serves as a reminder that the agency takes seriously cases referred to it by the National Advertising Division of the Council of the Better Business Bureaus (“NAD”).  In a press release issued earlier this week, the FTC announced that a federal court ordered North American Herb and Spice Co. to pay $2.5 million to settle civil charges brought by the agency, after the NAD alerted the FTC to certain claims that had been made by the company.

The FTC complaint alleged that North American Herb and Spice falsely claimed that its products, Oreganol P73, Super Strength Oreganol P73, and Oregacyn, are “scientifically proven to cure colds and flu.”  In addition, advertisements for the products claimed that they would kill germs, including human cold and flu viruses, avian bird flu, hepatitis C, staph aureus, and Helicobacter pylori. 

The NAD had challenged the claims in July 2007, but the company reportedly never responded to the challenge or provided substantiation for its claims.  The NAD then referred the matter to the FTC.  As a result of the FTC lawsuit, the company agreed to a stipulated final judgment and order for permanent injunction that was entered in the federal court in Chicago.  The FTC’s press release declared that the defendants’ claims “were false and unsubstantiated in violation of federal law.”  The company agreed to pay the $2.5 million in settlement, and was enjoined by the court from making any similar claims without “competent and reliable evidence that substantiates the representation.” 

The NAD, which has a small staff of lawyers who review advertising based on their own routine scrutiny or on challenges by competitors, generally relies on voluntary compliance with its decisions.  However, if the advertiser does not comply, the NAD often refers the matter to the FDA or the FTC.  The FTC in particular has given special attention to matters that come from the NAD.  This action serves as a reminder that, although the NAD lacks the statutory authority of the FTC or FDA, its inquiries are not without consequences and should be taken seriously.   

By Susan J. Matthees

Now that FDA has set the Fiscal Year 2009 Prescription Drug User Fee Act (“PDUFA”) user fee rates and is preparing invoices for delivery (payable by October 1, 2008), a quick review of the options available to companies to request user fee waivers and reductions seems in order. 

Under PDUFA, FDA collects three types of user fees for a drug product that is the subject of a “human drug application” (i.e., a new drug approved under FDC Act § 505 and a biological product licensed under PHS Act § 351): (1) a one-time application fee that must be paid in order for FDA to accept an application for filing; (2) an annual establishment fee for “each prescription drug establishment listed in [an] approved human drug application as an establishment that manufactures the prescription drug product named in the application;” and (3) an annual product fee for each drug listed in FDA’s Orange Book (i.e., the active section of the Orange Book and not the Discontinued Drug Product List) that is the subject of an approved human drug application.  There are several exceptions under PDUFA that could preclude the assessment of user fees.

For those companies that are subject to user fees – and in particular annual product and establishment fees – FDC Act § 736(d) provides a few mechanisms to offer relief.  Specifically, a company can request FDA to waive or reduce user fees under: (1) the “public health” mechanism; (2) the “barrier to innovation” mechanism; and (3) the “fees-exceed-the-costs” mechanism.  In addition, a firm that qualifies as a “small business” (i.e., 500 or fewer employees, including employees of affiliates) and that does not have a drug product approved and marketed pursuant to a human drug application may request FDA to waive the application fee for its first human drug application.  Please note, however, that to qualify for consideration of a waiver or reduction of fees, an applicant must submit a written request to FDA no later than 180 days after the fee is due.

Under the public health mechanism (FDC Act § 736(d)(1)(A)), FDA can waive or reduce user fees if the Agency finds that “such waiver or reduction is necessary to protect the public health.”  FDA explained in what is now a sorely out of date July 1993 guidance document that a “public health” waiver/reduction may be appropriate when: (1) the product protects the public health; and (2) the person requesting the waiver shows that a waiver is necessary to continue an activity that protects the public health. 

Under the barrier to innovation mechanism (FDC Act § 736(d)(1)(B)), FDA can waive or reduce user fees if the Agency finds that “the assessment of the fee would present a significant barrier to innovation because of limited resources available to such person or other circumstances.”  FDA’s 1993 guidance document explains that a “barrier to innovation” waiver/reduction may be appropriate when: (1) the product for which the waiver/reduction is being requested is innovative, or the entity requesting the waiver/reduction is otherwise pursuing innovative drug products or technology; and (2) the fee would be a significant barrier to the entity’s ability to develop, manufacture, or market innovative products or technology. 

In addition to these criteria, FDA also considers other factors in determining whether either a “public health” or “barrier to innovation” waiver/reduction should be granted.  These factors include the size and annual gross revenues of a business, whether a human drug application is for a new chemical entity, or has priority review status or fast track status, and, for a barrier to innovation waiver/reduction, special circumstances subject to FDA’s discretion. FDA has interpreted the financial test to mean a company with $10 million in foreign and domestic annual gross revenues and no corporate parent or funding source with annual gross revenues of $100 million or more (in 1993 dollars).

The fees-exceed-the-costs mechanism (FDC Act § 736(d)(1)(C)) involves a complicated calculation used by FDA to determine whether the total fees paid by an applicant since the enactment of PDUFA in 1992 exceed the Agency’s total costs in reviewing all submissions to the Agency by the applicant since that time.  FDA’s fees-exceed-the-costs guidance document and accompanying standard costs chart provide additional information on this mechanism.  While this mechanism is not often used (because many applicants are continually submitting applications to FDA and the Agency’s costs usually exceed the fees paid), it has been successfully used by companies with a small number of FDA submissions approved several years ago that are still subject to annual user fees.  Thus, for such companies, FDA’s costs remain static while the total amount of fees paid by the company continues to grow, eventually leading to an overage. 

The FDA Amendments Act (“FDAAA”) introduced a new user fee exemption applicable to orphan drugs.  As we previously reported, sponsors of orphan drugs have been exempt from paying the application user fee since the enactment of PDUFA II in 1997, but have not been exempt from paying annual product and establishment fees.  With the enactment of PDUFA IV under FDAAA, however, the law was amended to add new FDC Act § 736(k) to exempt orphan drugs from annual product and establishment fees.  Specifically, an approved drug designated as an orphan drug is exempt from product and establishment fees if: (1) “[t]he drug meets the public health requirements contained in [FDC Act § 736(d)(1)(A)] as such requirements are applied to requests for waivers for product and establishment fees;” and (2) “[t]he drug is owned or licensed and is marketed by a company that had less than $50,000,000 in gross worldwide revenue during the previous year,” and provided a certification to this effect is submitted to FDA. 

By Kurt R. Karst

Massachusetts has now joined California and Nevada in imposing marketing compliance obligations on drug and device companies marketing products in the state.  On Sunday, August 10th, Massachusetts Governor Deval Patrick signed into law Senate Bill 2863, which requires the Massachusetts Department of Public Health (DPH or Department) to establish a pharmaceutical and medical device marketing code of conduct, and imposes compliance and reporting requirements on pharmaceutical and medical device companies that employ a person to sell or market prescription drugs or medical devices in Massachusetts.  The law will become effective on January 1, 2009.  It does not apply to wholesale drug distributors or retail pharmacies.

The law requires the DPH to establish a marketing code of conduct that is no less restrictive than the most recent versions of the Codes on Interactions with Healthcare Professionals issued by the Pharmaceutical Research and Manufacturers of America (the PhRMA Code) and the Advanced Medical Technology Association (the AdvaMed Code).  As we reported in June, the PhRMA Code was recently revised to add more stringent restrictions on meals, gifts, and other drug marketing activities.

Under the statute, the DPH marketing code must contain specific prohibitions, some of which are more restrictive than the revised PhRMA Code.  For instance, the DPH marketing code may not allow a pharmaceutical or device manufacturing company to provide meals that are part of a recreational event, offered without an informational presentation, consumed outside of the office, or for a practitioner’s spouse or other guest.  The PhRMA Code, in contrast, permits a drug company to provide meals outside the professional’s office if they are not provided by field representatives or their immediate managers.  The DPH code must also prohibit the sponsorship of independent medical education programs that do not meet the Accreditation Council for Continuing Medical Education (ACCME) Standards for Commercial Support, whereas the PhRMA Code permits support for non-ACCME accredited third-party programs.  The DPH code must, like the PhRMA Code, prohibit the provision of entertainment or recreation.  In addition, the Code must prohibit all payments to healthcare practitioners, except as compensation for bona fide services.  This latter provision is drafted broadly enough to prohibit rebates and other price reductions offered after a purchase.  Hopefully, the DPH will clarify that price reductions are not affected by the code.

The law also spells out certain activities that must be permitted under the marketing code.  The code must allow companies to distribute peer reviewed scientific information; purchase advertising in peer reviewed scientific journals; provide pharmaceuticals exclusively for use by the practitioner’s patients; compensate a practitioner for consulting services in connection wth genuine research or a clinical trial; and pay reasonable expenses in connection with medical device training if those expenses are part of the purchase contract.

The law does not impose a deadline for the development of the marketing code, but once it is established, the DPH must update it at least every two years.

Under the new law, drug and device companies that employ a person to sell or market a prescription drug or medical device in Massachusetts must adopt and comply with the DPH’s most recent marketing code of conduct; adopt a training program for compliance with the code; conduct annual audits to monitor compliance with the code; and adopt policies and procedures for investigating noncompliance with the code.  In addition, these companies must take corrective action in response to noncompliance with the code, and report any noncompliance to state authorities.

The law also requires covered drug and device companies to provide two annual reports to the Department.  The first report will include a description of the company’s training program, a description of the investigation policies, information on the compliance officer, and a certification that the company has conducted its annual audit and is in compliance with the DPH marketing code.  The annual deadline for this report is not specified.

Second, by July 1 every year, a covered drug or device company must also report the “value, nature, purpose and particular recipient” of any payment, fee, or economic benefit of at least $50 it provided to a physician, hospital, nursing home, pharmacist, or other specified healthcare practitioner.  The Department will then make such information available on its website.  Notably, unlike the reporting laws of other states, there are no exceptions to this reporting obligation for bona fide service fees, investigator payments, or any other payments.

The law, which will be enforced by the Attorney General, provides for a fine of up to $5,000 for each transaction, occurrence, or event that violates this law.

By Bryon F. Powell & Alan M. Kirschenbaum

The latest FDLI Update article by Hyman, Phelps & McNamara, P.C.’ s Gwendolyn M. McKee and John R. Fleder discusses the potential consequences to company executives and companies of submitting false information to a government agency, even when the submission is not made under oath.  The article discusses the recent indictment of a former high ranking officer of Bristol-Myers Squibb for information allegedly omitted in a certification to the Federal Trade Commission (“FTC”).  The article also discusses the FTC’s enforcement efforts involving marketing agreements between brand name and generic pharmaceutical manufacturers.

On September 8, FDA will hold a public meeting to receive data and other information on the effects of nanoscale materials on quality, safety, and effectiveness of FDA-regulated products.  FDA will consider the information that it receives in its development of guidance that addresses: (1) the data required to demonstrate safety and effectiveness of a product that contains nanoscale materials; and (2) the circumstances under which the use of nanoscale materials might change the regulatory status of a product.  There will be breakout sessions that will address different product categories, including medical devices, prescription drugs, food and color additives, dietary supplements, and cosmetics.

The issues to be addressed in the breakout sessions include: (1) characteristics of materials to be identified and evaluated; (2) availability of tools to assess characteristics of nanoscale materials that could affect safety, effectiveness, and quality; (3) whether the manufacturing processes for nanoscale materials have unique features that merit evaluation; (4) whether there are aspects of formulation, processing, or storage that affect quality, safety, or effectiveness of products that contain nanoscale materials; (5) experience with, avoidance of, and concerns about products containing nanoscale materials; and (6) whether FDA should consider additional questions regarding characterization and manufacture of products containing nanoscale materials.

FDA also is requesting data that: (1) identify Over-the-Counter (“OTC”) drug products that contain nanoscale versions of ingredients in an OTC drug monograph; (2) identify nanoscale versions of food and color additives; (3) address the safety and effectiveness of both new FDA-regulated products and those that are reformulated to contain, or increase the content of, nanoscale materials; (4) address the effects of nanoscale versions of materials on bioavailability; and (5) address the effects of nanoscale materials on the manufacturing process for FDA-regulated products.

The importance of submitting comments to FDA as the Agency works to implement the recommendations in the 2007 Nanotechnology Task Force Report and sets a course for the future regulation of nanotechnology can hardly be overstated.  Comments can be submitted to Docket No. FDA-2008-N-0416. 

By Ricardo Carvajal

ADDITIONAL READING:

• April 17, 2008 FDA Law Blog post

• August 1, 2007 FDA Law Blog Post

In the coming days, President Bush is expected to sign into law H.R. 6432 – the Animal Drug User Fee Amendments of 2008.  The new law reauthorizes and amends the Animal Drug User Fee Act (“ADUFA”) through Fiscal Year (“FY”) 2013, creates a new law for generic animal drug user fees (the Animal Generic Drug User Fee Act of 2008), and makes a couple of technical changes to the FDA Amendments Act (“FDAAA”), which was enacted in September 2007. 

ADUFA was first enacted in 2003 (Pub. L. No. 108-130).  Like its human drug counterpart, the Prescription Drug User Fee Act (“PDUFA”), ADUFA authorizes FDA to collect user fees to enhance the performance of the drug review process and ensure that new drugs are safe and effective. Under both laws, FDA has agreed to certain performance goals to review and act on applications. While human drug products under PDUFA are subject to three types of fees (application, establishment, and product fees), animal drug products approved under ADUFA are subject to four types of fees – application, product, establishment, and sponsor fees.  FDA’s ADUFA website provides additional information on the law.

The House Report accompanying H.R. 6432 details the changes made to ADUFA I by ADUFA II.  Among other things, the new law requires animal drug sponsors to submit annual reports to FDA on certain products containing antimicrobial active ingredients, and requires FDA to make summaries of the reports publicly available.  The information is intended to support FDA’s continuing efforts to address antimicrobial resistance.

Unlike PDUFA, which does not cover human generic drug products approved under Abbreviated NDAs (“ANDAs”), H.R. 6432 establishes a generic animal drug user fee system under the Animal Generic Drug User Fee Act of 2008 (“AGDUFA”).  Under AGDUFA, generic animal drug applicants are subject to three types of fees – application, product, and sponsor fees.  The enactment of AGDUFA will fulfill the Bush Administration’s FY2009 budget proposal to create such a law.  It is possible that the creation of a user fee system for generic animal drugs might lead to the creation of such a system for generic human drugs.  Indeed, the Bush Administration’s FY2008 and FY2009 budget proposals recommended the creation of generic human drug user fees.  While it is unlikely that a generic human drug user fee system will be proposed in Congress this year, it could happen once the 111th Congress convenes in January 2009.

In addition to handling animal drug user fees, H.R. 6432 makes a few technical corrections to FDAAA.  FDAAA added FDC Act § 505(q) concerning certain types of citizen petitions that could delay generic competition.  H.R. 6432 clarifies that “[c]onsideration of the petition shall be separate and apart from review and approval of any application.”  FDA has been criticized for its implementation of FDC Act § 505(q), and, in particular for not decoupling ANDA approval from responding to an applicable petition that could delay generic competition.  Despite this criticism, FDA has in at least one post-FDAAA instance decoupled ANDA approval and petition response.  Specifically, FDA approved ANDAs for generic CAMPTOSAR (irinotecan HCl) Injection in February 2008, notwithstanding a January 29, 2008 petition requesting that FDA stay further ANDA approvals.  FDA formally responded to the petition late last month.  H.R. 6432 also makes minor clarifying amendments to the clinical trial registry and results data bank provisions of Public Health Service Act § 402(j) added by FDAAA § 801.

An earlier version of the so-called “FDAAA fix” language that was circulated on Capitol Hill would have made more significant changes to FDAAA, including adding a provision creating Hatch-Waxman benefits for “old” antibiotics – i.e., antibiotic active ingredients (and derivatives of such ingredients) included in an application submitted to FDA for review or approved prior to the enactment of the 1997 FDA Modernization Act on November 21, 1997.  The proposal circulated on Capitol Hill mirrored § 1111 of the Staff Agreement version of FDAAA.  Section 1111 was stripped from FDAAA hours before the House of Representatives voted on the bill, reportedly due to costs concerns.  The same provisions in a proposed FDAAA fix addition to H.R. 6432 were removed, but for reasons that are unclear.

By Kurt R. Karst    

Off-label use cases have certainly become the rage.  Last week, the federal government’s Government Accountability Office released a report that outlined the government’s enforcement efforts in this area.  The report casts doubt on FDA’s ability to monitor off-label drug promotion. 

In addition, a number of individuals have filed federal False Claims Act “qui tam” lawsuits, seeking monetary rewards for lawsuits they have initiated against drug manufacturers which have allegedly engaged in unlawful off label promotional practices.  However, most of these lawsuits have been rejected by federal courts. 

On August 1, 2008, Magistrate Judge Thomas G. Wilson of the U.S. District Court for the Middle District of Florida (Tampa Division) joined the list of federal judges who have rejected off-label use qui tam cases.  In United States ex rel Hopper and Hutto v. Solvay Pharmaceuticals, Inc., Magistrate Judge Wilson issued a 27-page Report and Recommendation in which he recommended that the District Court dismiss this action under Fed. R. Civ. P. 12(b)(6).  Magistrate Judge Wilson found that although the qui tam relators’ amended complaint had gone into detail about allegations of a purported fraudulent scheme involving off label sales, the relators had utterly failed to comply with the requirements set forth in Fed. R. Civ. P (9)(b) to include specific allegations of actual false claims that were submitted to the government.  The relators acknowledged that they had no evidence of any false claims being submitted.  The Magistrate Judge rejected the argument that the court could infer that false claims were submitted because of the purported off label marketing scheme that was identified in the amended complaint.

The court’s ruling relied on three published decisions from the United States Court of Appeals for the Eleventh Circuit, which had collectively rejected qui tam cases where the relators had not submitted evidence that false claims had actually been submitted to the government.  However, the court did not need to rely on any of the four other court ruling which have dismissed off label use qui tam actions.   See e.g., United States ex rel. Rost v. Pfizer, Inc., 446 F.Supp. 6 (D. Mass 2006), a ruling later affirmed by the U.S. Court of Appeals for the First Circuit.  (Additional information on this case is available from Pharmalot.)

These qui tam off-label use cases, culminating in Hopper and Hutto establish a very demanding threshold for qui tam relators to meet in order to move forward with this type of case.  For instance, it seems very unlikely that current or former sales people can meet the 9(b) requirements even if, as in Hopper and Hutto, the sales people were allegedly involving in the off-label marketing practices of a company.

By John R. Fleder

UPDATE:

• On September 8, 2008, Judge Merryday issued an order adopting the Magistrate’s report and recommendation, and dismissing the case.

Representative John Dingell (D-MI) has revised several of the drug-related sections of the Discussion Draft of the FDA Globalization Act (“FDAGA”).  We first reported on the Discussion Draft, which has received significant attention from industry and stakeholder groups alike, in April 2008. 

Updated sections of the FDAGA were recently posted on the U.S. House of Representatives’ Energy and Commerce Committee’s website.  The updated draft does not significantly alter any sections of the original Discussion Draft, but it does include several new provisions of interest – many of which appear to be aimed at ensuring the purity of drugs.  Several of the new additions are blank placeholders left for further updating. 

First, the updated draft calls for inspections of drug, active ingredient, device, and device part manufacturing establishments every two years.  However, FDA can permit inspections once every four years if such a timeline would be appropriate when considering the class of the products, associated risks of the products, shipping volume, the history of the facility, and any other factors the Agency finds relevant.  The draft discussion also adds a section calling for reports to Congress on “the risk-based process for conducting surveillance of 8 current good manufacturing practices” under FDC Act § 510(h)(4). 

The revisions also include several sections on risk management.  If these revisions are enacted, the FDC Act would be amended to hold that a drug is adulterated if it is manufactured in a plant that fails to have a risk management plan.  The risk management plan must “provide for an assessment, prior to contracting with a person to supply raw materials or ingredients . . . of the suitability and competence of such person to carry out such activity,” explain the quality control process, “provide for the monitoring and review through periodic on-site audits of the facility,” “provide for the monitoring of incoming materials,” and explain quality control measures to ensure that the drugs manufactured are pure.  FDA would have authority to inspect this risk management plan during facility inspections.   

In addition, the updated draft adds a requirement for the documentation of the supply chain for all steps in the chain of drug manufacturing.  Each establishment registered with FDA must also be able to provide the Agency with an electronic statement that documents the chain of supply for the drug. 

Several other provisions are aimed at giving FDA greater authority.  For example, the revised Draft Discussion contains sections that would give FDA greater recall authority.  Perhaps to alert FDA to the need for a recall, a provision was added that requires that a person, other than a consumer, who “has reason to believe that a drug intended for human use would cause serious, adverse health consequences or death, shall” notify FDA as soon as practical of the danger.  The bill, if enacted, would require penalties for those who manufacture counterfeit drugs and provides for greater civil penalties for those who violate the FDC Act (although the actual dollar amounts of the penalties were mostly left blank). 

Finally, the end of the updated draft contains two very interesting additions.  First is a blank section titled “FDA Bonuses.”  Text below this heading indicates that the language will be added later.  Rep. Dingell has been a vocal critic of FDA bonuses and has launched an investigation into the Agency’s compensation practices.  Second is a section stating that FDA has “extraterritorial Federal jurisdiction over any violation of this Act relating to any food, drug, device, or cosmetic intended for import into the United States.”  It remains to be seen what, if anything, will be added to or deleted from these sections.    

Although the latest revisions to the FDAGA Draft Discussion are not extensive, they do indicate that the bill continues to receive the attention of Rep. Dingell and others in Congress.  We will continue to monitor this legislation and report on any further updates. 

By Susan J. Matthees

On July 1, 2008, ConsumerLab.com, LLC published a product review titled “Red Yeast Rice Supplements.”  Hyman, Phelps & McNamara, P.C. sent an 8-page letter to ConsumerLab on July 17 to inform the company that, as confirmed in FDA warning letters, the product review created potential safety issues for consumers as well as regulatory issues for the dietary supplement industry. 

The ConsumerLab product review of red yeast rice supplements makes incorrect statements about the law and FDA enforcement policy, and creates general confusion about the marketing of red yeast rice products.  Most important, the review encourages consumers to purchase dietary supplements with high levels of lovastatin, the active ingredient in the prescription drug Mevacor™, that FDA has determined to be unsafe.  In addition, FDA has repeatedly warned industry that the marketing of products with levels of lovastatin represented as “high” or “moderate” in the ConsumerLab review is illegal. 

Although ConsumerLab has updated its product review, ConsumerLab has not corrected the safety and regulatory issues addressed in FDA’s warning letters and this firm’s July 17 letter.  In a telephone call with counsel to ConsumerLab on July 30, this firm was informed that ConsumerLab did not intend to make further changes to the red yeast rice product review.  For this reason, we are posting a memorandum based on the firm’s letter to ConsumerLab as a warning to industry and consumers that the ConsumerLab review is in conflict with FDA’s view of the law.

By A. Wes Siegner

Yesterday, Pharmalot reported that U.S. Senator Herb Kohl (D-WI) and several co-sponsors introduced the “Independent Drug Education and Outreach Act of 2008.”   A similar version of the bill has reportedly been introduced in the U.S. House of Representatives.  According to a press release from the U.S. Senate Special Committee on Aging, the bill is intended “to provide doctors with unbiased information on prescription drugs,” and “will provide an important alternative to the way doctors currently get their information about drugs.”

If enacted, the bill would amend the Public Health Service Act to add § 904 – Prescription Drug Education and Outreach – to establish a program to award grants or contracts:

• For the development and production of educational materials concerning the evidence available on the relative safety, relative effectiveness, and relative cost of prescription drugs, non-prescription drugs, and non-drug interventions for treating selected conditions, for distribution to healthcare providers who prescribe such drugs and their patients; and

• For the development and implementation of a program to appropriately train and deploy health professionals to educate physicians and other drug prescribers concerning the relative safety, relative effectiveness, and relative cost of prescription drugs, non-prescription drugs, and non-drug interventions for treating selected conditions.

By Kurt R. Karst

On August 1, 2008, FDA will publish a Federal Register notice announcing the Fiscal Year (“FY”) 2009 user fee rates established under the Prescription Drug User Fee Act (“PDUFA”).  A similar notice will also be issued with the FY 2009 user fee rates established under the Medical Device User Fee Amendments.

The FY2009 PDUFA application user fee rates have been set at $1,247,200 for an application requiring clinical data, and one-half of a full application fee ($623,600) for an application not requiring clinical data and a supplement requiring clinical data.  (An FDA guidance document defines the term “clinical data” for PDUFA user fee purposes.)  Annual establishment and product fees have been set at $425,600 and $71,520, respectively.  The FY2009 fees, which go into effect on October 1, 2008, are only a modest increase from those set for FY2008.  The table below tracks PDUFA user fees since the inception of PDUFA. 

By Kurt R. Karst    

As we previously reported, Section 912 of the FDA Amendments Act (“FDAAA”) added a new prohibition to the Federal Food, Drug, and Cosmetic Act (“FDCA”).  The new prohibition, found at FDCA § 301(ll) (21 U.S.C. § 331(ll)), prohibits the introduction into commerce of any food that contains an approved drug or a licensed biologic.  It also prohibits the introduction of a food containing a drug or biologic for which substantial clinical investigations were initiated and made public.  There are four narrow exceptions to this prohibition, including a first-to-market exception.  As we previously noted, the § 301(ll) prohibition may have far reaching consequences for the development of new functional food and dietary ingredients.  The full impact will remain unknown until FDA determines how to resolve the  numerous interpretative issues presented by the provision in the absence of legislative history.

On July 29, 2008, FDA published a Federal Register notice inviting public comment on the possible interpretations of the prohibition and their potential effects on industry and consumers. Comments may be submitted to FDA until October 27, 2008.

The notice does not discuss the various interpretations FDA may consider or has considered.  Instead, the notice invites comments to a series of open-ended questions about the interpretation of various ambiguous terms and the possible impact of the § 301(ll) prohibition.  Among other things, FDA asks for comment on ambiguities in the prohibition and exceptions including the meaning of the following terms:

1. “drug”: how should FDA determine the identity of a drug?  For purposes of section 301(ll) should FDA consider the chemical structure of a substance?

2.  “substantial clinical investigations”: are clinical investigations limited to studies in humans or do they include studies in animals?  Should clinical studies in humans bar the use of that substance in animal feed?  When are clinical investigations in humans and/or animals substantial?

3. “marketed in food”: substances that were “marketed in food” before they were approved as a drug are excepted from the prohibition.  FDA questions whether “marketed in food” means something different than “marketed as food,” the term used in the exclusionary clause for dietary supplements, 21 U.S.C. 321(ff), and interpreted in the Pharmanex litigation.  FDA also asks for input as to the significance of “marketing in food” outside the United States.

4. “an independent biological or therapeutic effect”: substances that are used “to enhance the safety of the food supply” and do not have an “independent biological or therapeutic effect” are also excepted from the prohibition.  FDA asks for input on the meaning of “a biological [and] a therapeutic effect” and when such an effect is “independent.”

FDA also requests comment on the range of products subject to the prohibition and the likely consequences to products in those categories.  In particular, FDA requests information on how the prohibition would affect marketing of infant formula, dietary supplements, animal feed, and food contact substances.

Perhaps most importantly, the § 301(ll) prohibition does not exempt substances that were permitted before the enactment of FDAAA.  Its impact may therefore extend beyond new functional food and dietary ingredients and bar products that are currently legally marketed.  FDA asks for examples of foods that may be affected and the consequences of prohibiting these products for the consumers that use (and rely on) these products. 

Clearly, FDA is grappling with interpreting FDCA § 301(ll) prohibition.  Given FDA’s discretion in interpreting the prohibition, and its potential widespread and serious impact, industry would be well advised to seize this opportunity to influence FDA’s thinking and provide the Agency with information that will facilitate a reasonable construction of the law.

By Riëtte van Laack & Diane B. McColl