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  • Former FTC Staffer Recommends a “Moderate Approach” to “Reverse Payment” Settlements; Bills Would Outlaw Them

    Yesterday, a former Federal Trade Commission (“FTC”) staffer recommended that drug companies follow a “moderate approach” in pursuing “reverse payments” — payments made by brand name companies to generic drug companies to persuade the generic companies to stay off the market for a particular drug.  Such payments are made in the context of a patent infringement settlement agreement.  The comments were made during a May 7, 2007 panel discussion at the BIO International Convention. 

    The Federal Trade Commission (“FTC”) has contested a number of reverse payment settlements.  Last week, FTC Commissioner Jon Leibowitz testified before the House Subcommittee on Commerce, Trade, and Consumer Protection of the Committee On Energy and Commerce that “recent court cases have made it more difficult to bring antitrust cases to stop exclusion payment settlements between brand manufacturers and their generic competitors, and that ‘the impact of the court rulings is becoming evident in the marketplace.’”  Commissioner Leibowitz’s testimony was given at a hearing on H.R. 1902 introduced by Rep. Bobby Rush (D-IL).  That bill would end such settlement arrangements.

    Earlier this year, Rep. Henry Waxman (D-CA) introduced H.R. 1432, the “Preserve Access to Affordable Generics Act.”  The bill also seeks to end reverse payment settlements.

    Rep. Waxman’s reverse payment bill, if enacted, would amend the Clayton Act to add new § 28 (Unlawful Interference With Generic Marketing) making it unlawful for a person, in connection with the sale of a drug product, to be a party to any “agreement” (as defined in § 1 of the Sherman Act) resolving or settling a patent infringement claim in which: (1) an ANDA applicant receives anything of value; and (2) such generic applicant agrees not to research, develop, manufacture, market, or sell the generic product for any period of time.  However, the bill would exclude a resolution or settlement that includes no more than the right to market the generic product prior to the expiration of the patent:

    Nothing in [§ 28] shall prohibit a resolution or settlement of patent infringement claim in which the value paid by the NDA holder to the ANDA filer as a part of the resolution or settlement of the patent infringement claim includes no more than the right to market the ANDA product prior to the expiration of the patent that is the basis for the patent infringement claim.

    The bill would also amend § 1112 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (“MMA”) to set forth additional filing requirements related to agreements between brand name and generic drug companies. MMA § 1112(c)(2) currently states:

    The parties that are required in [MMA § 1112] (a) or (b) to file an agreement in accordance with this subsection shall file with the Assistant Attorney General and the [FTC] the text of any agreements between the parties that are not described in such subsections and are contingent upon, provide a contingent condition for, or are otherwise related to an agreement that is required in [MMA § 1112] (a) or (b) to be filed in accordance with this subsection.

    H.R. 1432 would add a second report requiring parties to file with the Assistant Attorney General and the FTC “a description of the subject matter of any other agreement the parties enter into within 30 days of an entering into an agreement covered by [MMA § 1112] (a) or (b).”  The bill also requires the Chief Executive Officer or the company official responsible for negotiating any agreement to file a certification that materials filed with respect to such agreements are complete, final, and exclusive.

    Finally, H.R. 1432 would amend the 180-day exclusivity forfeiture provision at FDC Act § 505(j)(5)(D)(i)(V) to provide that an ANDA applicant that is a “first applicant” forfeits exclusivity if an agreement violates new § 28 of the Clayton Act.

    Categories: Hatch-Waxman

    Senate Finance Committee Releases Report on Drug Industry CME Grants

    On April 25, 2007, the Senate Finance Committee released the results of a Committee inquiry into drug company grants to fund continuing education for medical providers.  The Finance Committee report was two years in the making and addresses the Committee’s belief that the pharmaceutical industry uses educational grant funding to promote the use of their drugs, including unapproved uses of some medicines.  This report will likely fuel the government’s continued crackdown on pharmaceutical companies engaged in off-label promotion and signals the government’s continued skepticism of the use of Continuing Medical Education (“CME”) programs to transmit off-label information.   

    The Committee contacted the 23 largest pharmaceutical manufacturers to inquire about their use of educational grants and subsequently sent questions to the Accreditation Council for Continuing Medical Education (“ACCME”), the primary accrediting body for CME providers. The Committee found that “drug companies have used educational grants as a way to increase the market for their products in recent years.  This practice is of particular concern when the companies use educational grants to encourage physicians to prescribe products for uses beyond their FDA approval.”  The Committee cited ACCME’s records, which the Committee believed showed numerous cases over the past 3 years in which companies exercised too much influence over the content of supposedly independent educational programs. 

    The Committee stated that drug manufacturers have implemented compliance policies that separate the grant-making process for educational programs from their marketing efforts.  In most instances, drug manufacturers have limited the direct involvement of field sales representatives and sales and marketing departments in the educational grant-making process.  The Committee concluded that the “major drug companies have adopted corporate policies that, on their face, do not allow educational grants to be awarded for unlawful purposes.  However, corporate policies still allow this industry to walk a fine line between violating rules prohibiting off-label promotion and awarding grant money in a manner likely to increase sales of their products, including sales for off-label uses.”  According to the Committee, risks still exist for kickbacks, unveiled advertising of drugs, efforts to bias clinical protocols, and off-label promotion.  Another concern expressed by the Committee is the lack of proactive or real-time oversight for educational grant programs. 

    In a follow-up letter to the ACCME, the Committee was quite critical of the ACCME’s oversight activities of CME providers, noting that the ACCME considered CME providers to be in compliance with ACCME standards, even if a substantial minority of CME providers’ programs were not in compliance with ACCME standards, including the requirement that the program be free of commercial influence or bias.  The Committee noted that “[i]t also appears that compliance with ACCME standards still allows CME providers to accommodate the business interests of their commercial sponsors and affords drug companies the ability to target their grant funding at programs likely to support sales of their products.”   

    The report did not provide any recommendations on how to address the concerns.  However, a press release issued by Senators Max Baucus (D-MT) and Charles Grassley (R-IA) stated that the Committee will follow up on its findings with participating drug manufacturers and with organizations that have issued guidelines on medical educational grants, including the FDA, the Inspector General at the Department of Health and Human Services, and the ACCME.

    By Noelle C. Sitthikul

    Categories: Fraud and Abuse

    Wave of Regulatory and Legislative Activity Addresses U.S. Food Safety System

    FDA has come under fire from U.S. lawmakers and public interest groups for its handling of a spate of recent food contamination outbreaks concerning E. coli-contaminated bagged spinach, salmonella-contaminated peanut butter, and melamine-contaminated pet food and animal feed.  Speaking at a recent congressional hearing, former FDA Commissioner David Kessler stated that major improvements were needed from Congress, the industry, and FDA:

    FDA scientists are ill-resourced to do the research necessary to turn scientific findings about foodborne illness into practical guidance that food companies can implement to make our food supply safer.  This lack of scientific leadership does not make the headlines, but there is no question that one of the greatest losses from lack of resources is the Agency’s ability to serve as a leading voice on sound scientific decision-making.

    In an effort to address concerns about the food safety system, on May 1, 2007 FDA announced the creation of the position of Assistant Commissioner for Food Protection (a “food safety czar”).  The position will be filled by Dr. David Acheson, who is the current chief medical officer and director of the Office of Food Defense, Communication and Emergency Response at the Center for Food Safety and Applied Nutrition. Dr. Acheson has been involved in the investigation of E. coli-contaminated spinach, the peanut butter recall, and the recent recall of melamine-contaminated pet food.

    FDA’s new food safety czar is to “advise and counsel . . . the [FDA] Commissioner on strategic and substantive food safety and food defense matters.” He is expected to work with individual FDA product centers and the Office of Regulatory Affairs, to coordinate FDA’s food safety and food defense assignments and commitments, and to serve as liaison to other U.S. departments and agencies influencing food safety.  One of his first projects will be to develop a strategy to identify potential gaps in the food safety system and determine how to fill those gaps.

    Some lawmakers do not believe that the creation of a food safety czar is the answer to addressing the nation’s food safety problems.  Instead, they suggest that the increase in outbreaks of foodborne illnesses is the result of a systemic problem that can only be solved by creating a single food safety agency. Such calls are nothing new.  In the 90s, the General Accounting Office and others called for the creation of a single food safety agency. In recent years, Senator Richard Durbin (D-IL) introduced several bills aimed at creating a single food safety agency.  For example, Sen. Durbin and Rep. Rosa DeLauro (D-CT) introduced The Safe Food Act (S. 654 and H.R. 1148), which is intended to give FDA the authority to order mandatory recalls and fine companies that do not promptly report contamination of food. The bill, if enacted, would also establish a single food safety agency.

    Acknowledging, however, that the political climate is not right for such a dramatic change, on May 2, 2007, Sen. Durbin proposed amendments to S.1082, which reauthorizes the Prescription Drug User Fee Act.  The amendments, if enacted, would, among other things, establish “an early warning and notification system for human food, as well as pet food, establish fines for companies that don’t promptly report contaminated products, [improve] inspections/monitoring of imports, and [provide] better, more uniform pet food safety standards.” 

    By Riëtte van Laack

    Categories: Foods

    Mylan & Apotex Submit Motions For Reconsideration of District Court Decision; Mylan Petitions FDA to Prevent the Delisting of NORVASC Patent

    It has been a hectic week for those of us following the various twists and turns involving generic versions of Pfizer’s high blood pressure drug NORVASC (amlodipine besylate) Tablets and the availability and applicability of both 180-day generic drug exclusivity and pediatric exclusivity with respect to U.S. patent No. 4,879,303 (“the ‘303 patent”) covering NORVASC. 

    On Monday, the U.S. District Court for the District of Columbia issued its opinion in Mylan Labs. et al. v. Leavitt et al., No. 07-579 (D.D.C. 2007) denying: (1) Mylan’s application for a preliminary injunction; (2) Apotex’s motion for a preliminary injunction; and (3) Teva’s application for injunctive relief.  The court essentially agreed with FDA’s April 18, 2007 letter decision, in which the Agency concluded that:

    • All of the unapproved ANDAs are currently blocked by Pfizer’s pediatric exclusivity.
    • If and when the mandate effectuating the panel’s March 22 decision issues in the Apotex case, Apotex’s ANDA will not be blocked by Pfizer’s pediatric exclusivity.
    • FDA cannot determine on the current record whether other ANDAs will continue to be blocked by pediatric exclusivity at this time.
    • Mylan’s 180-day marketing exclusivity terminated when the patent expired.

    Orange Book Blog provides an excellent overview of the court’s decision.

    Today we learned that Apotex filed an Emergency Motion for Reconsideration of Denial of its Motion for Preliminary Injunction, and that Mylan filed a Motion for Reconsideration of the Opinion and Order Denying Mylan’s Motion for Preliminary Injunction.

    Apotex requests that the court reconsider its April 30, 2007 decision, because:

    in view of the fact that, in addition to being reversed by the Federal Circuit in Pfizer v. Apotex, the district court’s judgment against Apotex was vacated by the district court in an Order dated March 29, 2007 . . . .  Under this Court’s ruling in the present case, a district court’s decision is considered binding on FDA unless it is stayed or mandate issues overturning the judgment . . . .  Because the district court injunction in Apotex’s case has been vacated, Apotex is entitled to the same benefit that Mylan has already received . . . .  In other words, if a stay of the district court’s injunction counts for Mylan, it must count for Apotex too under the logic of FDA’s and this Court’s decisions.  As such, Apotex is entitled to an injunction to compel immediate final approval and entry to market, just like Mylan.

    Mylan requests that the court reconsider its April 30, 2007 decision with respect to the applicability of Pfizer’s pediatric exclusivity to Apotex’s ANDA, and argues that:

    Apotex’s ANDA must be treated as a paragraph II certification for all purposes.  As a matter of fact, the FDA converted Apotex’s paragraph IV certification to a paragraph II certification when the ‘303 patent expired on March 25.  The mistaken assumption that Apotex retained its paragraph IV certification led the Court to apply § 355a(c)(2)(B) of the [Best Pharmaceuticals for Children Act], which governs paragraph IV certifications.  The Court should have applied § 355a(c)(2)(A), which governs paragraph II applications and unambiguously provides that such applications shall not be approved for six months after patent expiration.

    Mylan has not yet indicated whether the company will challenge FDA’s and the district court’s decisions that Mylan’s eligibility for 180-day exclusivity does not extend beyond expiration of the ‘303 patent covering NORVASC.  However, three days before the district court’s decision, Mylan submitted a citizen petition to FDA requesting that the Agency not delist the ‘303 patent from the Orange Book during any 180-day exclusivity period to which Mylan is entitled. 

    Mylan argues that the company’s “hard-earned exclusivity is in jeopardy if Pfizer requests the Agency to delist the ‘303 patent and the Agency complies with that request,” and that the “policy underlying [180-day exclusivity] would be frustrated if an NDA holder such as Pfizer could extinguish a first-filer’s market exclusivity by delisting its patent.”  Mylan cites the FDC Act, FDA’s regulations, and precedents involving mirtazapine and brimonidine tartrate to support the company’s position. 

    Mylan’s petition acknowledges, however, that FDA’s regulations “would allow delisting after patent expiration,” but notes that the company is challenging FDA’s position that 180-day exclusivity ends when the patent subject to a paragraph IV certification expires.  Given the fact that Mylan’s petition preceded the district court’s April 30th decision, the company’s petition would appear to be moot, unless Mylan challenges the court’s decision on this issue.

    Categories: Hatch-Waxman

    FDA Issues New “Critical Path” Report Highlighting Research Needed to Foster Generic Drug Development

    On May 2, 2007, FDA announced the availability of a report, titled “Critical Path Opportunities For Generic Drugs.”  The report identifies several unanswered scientific questions that FDA believes impede the development of generic versions of commonly used brand name drugs, and is part of FDA’s broader Critical Path Initiative launched in March 2004.  FDA’s Critical Path Initiative is the Agency’s long-term “effort to stimulate and facilitate a national effort to modernize the sciences through which FDA-regulated products are developed, evaluated, and manufactured.”

    The goal of FDA’s new Critical Path report “is to bring the critical path challenges related to generic drugs to the attention of interested parties and to stimulate additional discussion and collaboration about the science needed to meet these challenges, with a goal of facilitating generic product development.”  To this end, the report identifies four areas of opportunity where the collaborative activities of FDA, the generic drug industry, and other government institutions (e.g., the National Institutes of Health) could advance the public health by more efficient development of high quality generic products:

    ·        Improve the science underlying quality by design for the development and manufacture of generic drug products

    ·        Improve the efficiency of current methods for assessment of bioequivalence of systemically acting drugs including products that use complex and novel drug delivery technologies

    ·        Develop methods for the assessment of bioequivalence of locally acting drugs such as topical and inhalation products

    ·        Develop methods for characterizing complex drug substances and products

    According to FDA, “[p]rogress in these areas will accelerate approval of generic drug products.  More importantly, it will expand the range of products for which generic versions are available, while maintaining high standards for quality, safety, and efficacy.”  FDA’s findings in each of the four areas are summarized below.

    (1)       Quality by Design (“QbD”)

    The current drug development and manufacturing paradigm primarily determines drug product quality and performance by endproduct testing. Under a QbD paradigm, however, “quality is built into the final product by understanding and controlling formulation and manufacturing variables: testing is used to confirm the quality of the product.”  FDA’s report encourages QbD implementation for all drug products, but notes that “there are unique issues in the application of QbD to generic products. To use QbD to develop a product that is bioequivalent to a reference product, a generic applicant must understand attributes of the formulation and manufacturing process that have the potential to change the bioavailability of a particular active ingredient.”

    (2)       Bioequivalence Methods for Systemically Acting Drugs

    For systemically acting drugs (i.e., drugs that have their effect on the body as a whole, following distribution around the body in the blood), FDA’s critical path goal “is to increase the efficiency of a process that is already providing safe and effective generic drugs to the public.”  To do this, FDA recommends expanding the use of “biowaivers,” improving dissolution methods, and improving the methods of assessing bioequivalence.

    (3)       Bioequivalence Methods for Locally Acting and Targeted Delivery Drugs

    For locally acting drugs (i.e., drugs that have their effect on the tissues onto or into which the drug has been delivered) and targeted delivery drugs (i.e., drugs whose pharmacological activity is localized to the site or organ of action), FDA notes that the assessment of bioequivalence “has presented scientific challenges to the approval of generic products.”  Specifically:

    Currently, it may be difficult to demonstrate the bioequivalence of locally acting drug products when drug concentration profiles in the plasma or in vitro dissolution are not appropriate surrogates of pharmacological activity. The current method of comparative clinical trials can be prohibitively expensive and is the least efficient way to detect differences in product performance (as well as being relatively insensitive).

    As such, FDA identifies new bioequivalence methods and approaches for specific product categories, including inhalation products, nasal sprays, dermatological products, gastrointestinal products, and liposome products. 

    (4)       Characterization of Complex Drug Substances and Products

    Certain drugs, such as botanicals and other natural source products, because of their complexity, present unique and difficult characterization challenges for generic applicants, as opposed to products containing small molecules.  As such, FDA recommends the development of improved analytical methods for identity and statistical methods for profile comparisons.

    Categories: Drug Development

    FDA Continues Aggressive Marketed Unapproved Drugs Enforcement Initiative

    As we previously reported, FDA has promised to accelerate its enforcement efforts against marketed unapproved drugs in 2007.  Indeed, in the past month, FDA has announced two enforcement actions, and future actions are likely.

    In early April 2007, FDA announced that companies must stop manufacturing and distributing unapproved suppository drug products containing trimethobenzamide hydrochloride as of May 9, 2007, because such drug products lack evidence of effectiveness. Trimethobenzamide is used to treat nausea and vomiting in adults and children. FDA’s Federal Register notice outlines the Agency’s order to manufacturers and distributors.  The notice concludes all outstanding issues for drugs containing trimethobenzamide under the Drug Efficacy Study Implementation program (“DESI”) proceeding FDA began for such drug products in 1971.

    In 1979, FDA announced in a DESI notice that the Agency was classifying trimethobenzamide hydrochloride suppositories as lacking substantial evidence of effectiveness, and proposed to withdraw approval of the NDAs for trimethobenzamide hydrochloride suppositories.  During the past 28 years, FDA has evaluated efficacy data on trimethobenzamide hydrochloride suppositories and has been in discussions with companies marketing such drug products. After one company notified FDA that it had decided not to pursue additional studies of its drug product, TIGAN Suppositories, FDA decided to take action to prevent the continued marketing of such drug products.

    On April 25, 2007, FDA announced the entry of a Consent Decree of Permanent Injunction against PharmaFab Inc., its subsidiary, PFab LP, and two company officials to stop the illegal manufacture and distribution of various prescription and OTC drug products.  The Consent Decree follows two FDA Warning Letters sent to PharmaFab in October 2002 and June 2004 noting serious deviations from Current Good Manufacturing Practice (“CGMP”) and the lack of required FDA approval for several drug products.

    According to FDA’s Complaint For Permanent Injunction, PharmaFab failed to comply with CGMP by not investigating manufacturing failures and by not recording and justifying why it deviated from written manufacturing procedures. PharmaFab also lacked an effective quality control unit and failed to establish reliable expiration dates for products.  FDA’s complaint also adds unapproved new drug charges with respect to 8 drug products:

    1.         De-Congestine Sustained Release Capsules;

    2.         GFN 1200lDM 60/PSE 60 Extended-Release Tablets;

    3.         Rhinacon A Tablets;

    4.         Sudal 12 Chewable Tablets;

    5.         Histex PD 12 Suspension;

    6.         Atuss HX CIII;

    7.         Ergotrate Tablets; and

    8.         Hyoscyamine Sulfate Time-Release Capsules

    FDA stated in its June 2006 Marketed Unapproved Drugs Compliance Policy Guide that the Agency will follow a risk-based approach with regard to enforcement against marketed unapproved products. Under this approach, FDA gives higher priority to enforcement action against unapproved drugs in several categories, including unapproved new drugs that are also violative of the FDC Act in other ways (e.g., CGMP violations).  FDA relies on the decision in United States v. Sage Pharma., Inc., 210 F.3d 475 (5th Cir. 2000), to permit the addition of unapproved new drug charges after finding CGMP violations. In Sage, the United States Court of Appeals for the Fifth Circuit agreed that FDA was permitted “to address the unapproved status of a particular drug outside the established priorities in the same enforcement proceeding as other violations of the [FDC Act.].”

    Categories: Enforcement

    HPM Announces New Director

    Hyman, Phelps & McNamara, P.C. is very pleased to announce that Jeffrey K. Shapiro has joined the firm as a director. Prior to joining the firm, Mr. Shapiro was a partner at Hogan & Hartson. Mr. Shapiro’s practice focuses primarily on assisting medical device and diagnostic manufacturers in complying with FDA regulatory requirements. Mr. Shapiro assists clients with obtaining premarket clearance or approval and compliance with postmarket requirements, such as labeling and advertising, the quality system regulation, adverse event reporting requirements, the regulation of in vitro diagnostic assays and analyte specific reagents, and responding to Form 483s and Warning Letters. He has extensive experience in FDA regulatory aspects of mergers and acquisitions, supplier contracts, and filings with the U.S. Securities and Exchange Commission. Mr. Shapiro frequently advises clients in combination product and product jurisdiction matters. For many years, he has assisted clients in addressing FDA’s evolving regulation of human and cellular based tissue products, along with state licensure requirements in that area. Mr. Shapiro is the co-editor of “Promotion of Biomedical Products,” a textbook on FDA’s regulation of promotion and advertising, and is also the co-author of the book, “Combination Products: How to Develop the Optimal Strategic Path for Approval.” He has authored numerous articles.

    Categories: Miscellaneous

    Medicis Challenges FDA’s Policy on Hatch-Waxman Benefits for Combination Drugs Containing an “Old” Antibiotic

    On April 20, 2007, Arnold & Porter submitted a citizen petition and a petition for stay of action on behalf of Medicis Pharmaceutical Corp. asking FDA to change the Agency’s policy with respect to Hatch-Waxman patent and exclusivity benefits for combination drugs containing a so-called “old” antibiotic.  “Old” antibiotics are antibiotic active ingredients (and derivatives of such ingredients) included in an application submitted to FDA for review prior to November 21, 1997, the date of enactment of the 1997 FDA Modernization Act (“FDAMA”).  The Medicis petitions concern the company’s combination drug product ZIANA (clindamycin phosphate; tretinoin) Gel, which the Agency approved in November 2006 for the treatment of acne vulgaris, and which contains the “old” antibiotic clindamycin. FDA’s decision on the Medicis petitions will determine whether such combination drugs are eligible for Hatch-Waxman patent and non-patent marketing exclusivities.

    The Medicis citizen petition asks that FDA:

    1. . . . .reconsider, as a matter of policy, its current position that any combination drug that has, as one of its active ingredients, a pre-1997 antibiotic ingredient is denied the incentives of market exclusivity and patent listing in that FDA reverse that position[; and]

    2. . . . list the patent submitted for the Medicis product Zianaä and acknowledge the 3-year period of market exclusivity earned by that product.

    The Medicis petition for stay of action asks that FDA:

    1.  prevent the approval of any ANDA or Section 505(b)(2) application referencing the Zianaä NDA during the 3-year [period] of market exclusivity that would be earned by the Zianaä application if the citizen petition is granted, and

    2.  provisionally list the patent submitted by Medicis for Zianaä in the Orange Book.

    FDA’s policy on patent and exclusivity benefits for combination drugs containing “old,” pre-FDAMA antibiotics stems from the Hatch-Waxman Act, which excluded antibiotic drugs approved under FDC Act § 507 from such benefits. 

    FDAMA repealed FDC Act § 507 and required all NDAs for antibiotic drugs to be submitted under FDC Act § 505.  FDAMA included a transition provision declaring that an antibiotic application approved under § 507 before the enactment of FDAMA would be considered to be an application submitted, filed, and approved under FDC Act § 505. 

    Congress created an exception to this transition provision.  FDAMA § 125(d)(2) exempts certain antibiotic applications for antibiotic drugs from those provisions of § 505 that provide patent listing, patent certification, and marketing exclusivity.  Specifically, FDAMA § 125(d)(2) exempts an antibiotic application from Hatch-Waxman benefits when “the drug that is the subject of the application contains an antibiotic drug and the antibiotic drug was the subject of an application” received by FDA under § 507 of the FDC Act before the enactment of FDAMA (i.e., November 21, 1997). 

    Thus, applications for antibiotic drugs received by FDA prior to November 21, 1997, and applications submitted to FDA subsequent to November 21, 1997 for drugs that contain an antibiotic drug that was the subject of an application received by FDA prior to November 21, 1997 are within the FDAMA § 125(d)(2) exemption and are not eligible for Hatch-Waxman benefits.  Applications for antibiotic drugs not subject to the FDAMA § 125(d)(2) exemption are eligible for Hatch-Waxman benefits.  A 1998 FDA guidance document explains the effects of FDAMA § 125 in greater detail. 

    On January 24, 2000, FDA published proposed regulations in the Federal Register that include a list of “old,” pre-FDAMA antibiotic drugs not subject to Hatch-Waxman benefits.  The list includes clindamycin.  FDA has not yet promulgated final regulations.  In addition to the specific chemical substances listed, the list also includes “‘any derivative’ of any such [listed] substance, such as a salt or ester of the [listed] substance.”

    The Medicis petitions claim that FDA’s interpretation of FDAMA § 125(d)(2) “requires unwarranted verbal gymnastics with respect to the meaning of ‘drug,’” and that it:

    is not a sensible way to read a statute.  Instead, Congress clearly intended the reference to “contains” to follow the normal understanding of the term: when one asks “what does a combination of tretinoin and clindamycin contain,” the answer is “tretinoin and clindamycin,” not “clindamycin” . . . .  Thus, the drug product is in common parlance the active ingredient or ingredients it contains.  If the word “contains” is read as intended to mean “is,” the statute then parses: the statutory incentives are not available when the drug product that is the subject of the application is an antibiotic drug product and that antibiotic drug product was the subject of an application for marketing under Section 507 on the FDAMA effective date.

    If FDA grants the Medicis petitions, it is unclear how the Agency might retroactively apply its decision to approved marketing application for combination drugs containing an “old” antibiotic previously denied Hatch-Waxman benefits.

    Categories: Hatch-Waxman

    FDA Warning Letter Confirms DDMAC Focus on Accurate Presentation of Safety Information and Comparative Claims

    On April 20, 2007, FDA’s Division of Drug Marketing, Advertising, and Communications (“DDMAC”) issued a Warning Letter to Alcon Laboratories, Inc. concerning the company’s promotion of CIPRODEX (ciprofloxacin, 0.3%; dexamethasone, 0.1%) Sterile Otic Suspension in a retail sell sheet and a sales aid.  FDA approved CIPRODEX in 2003 for the treatment of acute otitis media and acute otitis externa in certain pediatric patients. 

    According to DDMAC’s Warning Letter:

    Both the retail sell sheet and sales aid omit material facts about Ciprodex, including important risk information and limits to Ciprodex’s indication; the sales aid also makes numerous unsubstantiated superiority claims. Therefore, the materials misbrand the drug in violation of the [FDC Act], 21 U.S.C. §§352(a) and 321(n). These violations are concerning from a public health perspective because they suggest that Ciprodex is safer or more effective than has been demonstrated, and they encourage use in circumstances other than those for which the drug has been shown to be safe and effective.

    DDMAC found that the main page of the retail sell sheet contains efficacy claims for CIPRODEX, but no risk information.  Further, “the retail sell sheet claims Ciprodex is ‘approved for the treatment of acute otitis media with tympanostomy tubes and acute otitis externa.’ This claim misleadingly broadens the drug’s indication by failing to reveal, for example, that it is only approved for use in the treatment of certain susceptible isolates of the designated microorganisms causing acute otitis media and acute otitis externa infections.”

    DDMAC’s Warning Letter also cites Alcon’s sales aid for making several unsubstantiated CIPRODEX superiority claims over CORTISPORIN (neomycin, 0.35%; polymyxin B, 10,000 IU/mL; hydrocortisone, 1%) Otic, including that:

    • CIPRODEX superiority claims about cure rates are not valid, as the referenced study found no significant difference in cure rates between the two drugs (although there were numerical differences);
    • Comparisons of the two drugs in the area of pain relief are considered inappropriate because the references cited do not prespecify this comparison as a study endpoint;
    • Claims about superior efficacy as an anti-inflammatory are not substantiated, as the study did not demonstrate a significant difference between the drug at three of the four time points studied;
    • Claims that CIPRODEX has a lower rate of treatment failures are not supported by references, because this was not a prespecified analysis in the references and the results are not consistent across studies; and
    • Claims about superior safety are not substantiated, because the claims exaggerate the risk of CORTISPORIN and are based on results found in experimental conditions that did not mimic clinical usage.

    The Warning Letter also cites as an “omission of material fact” the failure of the sales aid to present a warning of skin rash and hypersensitivity associated with CIPRODEX.

    DDMAC’s Warning Letter to Alcon is yet another indication that the Division, due to limited resources, will continue to focus its enforcement efforts on marketing materials that have the potential to most adversely affect the public health.  That is, those materials that omit or minimize risk information, and those materials that use misleading (comparative) safety and efficacy claims.  In 2006, of the 22 Warning Letters issued by DDMAC, only one did not cite the omission or minimization of risk as a violation. 

    Earlier this year, FDA proposed the creation of a user fee system to fund the review of direct-to-consumer advertisements.  If implemented as part of the reauthorization of the Prescription Drug User Fee Act (“PDUFA IV”), it is possible that DDMAC will have the resources to broaden the Division’s enforcement focus.


    By Dara Katcher Levy

    Categories: Enforcement

    D.C. Court of Appeals Sidesteps Issue of FDA Classification of Dental Amalgam Devices

    On April 13, 2007, the U.S. Court of Appeals for the District of Columbia ruled in Moms Against Mercury v. FDA that the court lacks subject matter jurisdiction to decide whether FDA should classify “pre-amendment” Encapsulated Amalgam Alloy and Dental Mercury (“EAADM”) devices.  The Petitioners, four organizations representing the economic, health, and environmental interests of their members and the public generally, and five individuals, contend that FDA’s decision not to classify EAADM violates the FDC Act.  They petitioned the court in April 2006 to order FDA to classify EAADM, and to remove the medical device from the market until the Agency has made a classification decision. 

    The FDC Act, as amended by the 1976 Medical Device Amendments, authorizes FDA to regulate medical devices.  FDA regulates devices by placing them into one of three classes on the basis of the controls necessary to reasonably assure their safety and effectiveness. Class I or II devices require the manufacturer to submit a premarket notification (i.e., a 510(k)) requesting permission for commercial distribution. Class III devices, which are deemed by FDA to pose greater risk than Class I and II devices, require FDA approval of a Premarket Approval (“PMA”) application. Pre-amendment devices refer to devices legally marketed in the United States before the enactment of the 1976 Medical Device Amendments (i.e., May 28, 1976) that have not been significantly changed or modified since then, and for which a regulation requiring a PMA application has not been published by FDA.  Pre-amendment devices are considered to be “grandfathered” devices and do not require a 510(k).

    In dismissing the Petitioners’ petition, the court stated:

    As to subject matter jurisdiction, FDA’s failure to classify a device does not directly give rise to judicial review in this Court under the FDCA. Under section 360g, persons who are adversely affected by specified FDA regulations or orders may file, in the courts of appeals, a petition for judicial review within thirty days of the relevant FDA action. 21 U.S.C. § 360g(a). Specifically, petitioners invoke provisions authorizing this Court’s review of three FDA decisions: (1) subjecting a device to pre-market approval under subsection (a)(4); (2) determining that a post-amendment device is substantially equivalent to a pre-amendment device under subsection (a)(8); and (3) reclassifying a device from one class to another under subsection (a)(9). As petitioners concede, however, the FDA has engaged in none of these actions with regard to EAADM.  These provisions thus cannot support jurisdiction in this Court.

    Shortly after the court issued its ruling, Petitioners’ counsel sent a letter to FDA stating that “FDA’s policy on mercury amalgam is legally unsustainable, intellectually indefensible, and morally unconscionable,” and that FDA “needs to choose between (1) compliance with the law vs. covering for errant colleagues, (2) children’s health vs. dentist economics, and (3) the integrity of an agency committed to ending mercury vs. special privileges accorded a mercury-using special interest group by the Center for Devices.” 

    It has been reported that a second lawsuit against FDA is in the works, this time calling for EAADM to be permanently removed from the market.  Congress might also hold hearings on the health risks associated with EAADM, and Representatives Dan Burton (R-IN) and Diane Watson (D-CA) reportedly plan to reintroduce legislation that would phase-out dental amalgams.


    Categories: Medical Devices

    U.S. ex rel. James Marchese v. Cell Therapeutics, Inc.

    On April 16, 2007, Cell Therapeutics, Inc. (“CTI”) agreed to pay $10.5 million to resolve allegations of the company’s illegal marketing of TRISENOX (arsenic trioxide), a prescription drug indicated for treatment of refractory or relapsed acute promyelocytic leukemia.  The case arose out of a complaint filed by a whistleblower (relator) under the Federal False Claims Act in which the Government intervened.  The Complaint in Intervention alleged that CTI promoted TRISENOX for off-label uses, which caused doctors to prescribe TRISENOX and submit claims to Medicare for uses not approved or medically accepted.  The complaint also alleged that CTI used illegal kickbacks to induce physicians to prescribe TRISENOX in violation of the Federal healthcare program antikickback statute.

    According to the Complaint in Intervention, CTI allegedly implemented a plan to convince physicians and Medicare carriers that various off-label uses of TRISENOX were medically accepted and eligible for Medicare reimbursement.  Many oncologists rely on the Compendia Based Drug Bulletin to determine whether a drug is listed as medically accepted in the major medical compendia.  CTI allegedly gave the publisher of the Bulletin an educational grant of $10,000 per year in exchange for listing TRISENOX’s off-label indications in the Bulletin in a manner indicating that they were approved by the compendia, when they were not.  The publishers of the Bulletin also agreed to ship 3,000 copies of the next 3 issues of the Bulletin to CTI.  CTI then distributed copies of Bulletin to physicians and sent letters to Medicare carriers referring to the Bulletin, claiming that the off-label uses were medically accepted.  Many carriers paid claims for TRISENOX based on these false representations.

    According to the Settlement Agreement, CTI has contended that to the extent it provided any false or misleading statements regarding the availability of Medicare reimbursement for TRISENOX, such statements were due to negligent advice provided by a third party, The Lash Group.  This subject of the advice provided by the Lash Group is the subject of a lawsuit between CTI and The Lash Group, Cell Therapeutics, Inc. v. The Lash Group et al., No. 07-310-JLR (W.D. Wash.).

    The Complaint in Intervention also alleged that CTI provided kickbacks to physicians to induce prescribing of TRISENOX, including:

             Sham consulting agreements in which physicians were paid $500-$1,000 to attend conferences in order to listen to presentations on off-label uses of TRISENOX;

             Consultant dinners at lavish restaurants with honoraria;

             Advisory boards held at resort locations where all expenses, including entertainment, were paid for by CTI and attendees received $1,000 honoraria

             Monetary incentives to high prescribers in the form of speaker agreements in which physicians were paid $1,500 per lecture to discuss TRISENOX, especially off-label uses;

             Grants to reward physicians who demonstrated that they were advocates and active prescribers of TRISENOX (the grants ostensibly were for clinical studies but required little of the physicians and were paid out of the marketing budget);

             Purported independent CME programs that were not independent; and

             Routine monitoring of return on investment from “consultant” meetings, advisory boards, and CME programs

    CTI is not currently manufacturing, marketing, selling, or distributing any products reimbursed by Federal health care programs.  For the next five years, CTI has agreed to notify the Office of Inspector General (“OIG”) of the Department of Health and Human Services and negotiate and enter into a Corporate Integrity Agreement prior to commencing the manufacture, marketing, sales, or distribution of such products.  According to the Settlement Agreement, the OIG has agreed to refrain from seeking permissive exclusion from the Federal health care programs, but it has reserved its right to comply with its statutory obligation to pursue mandatory exclusion for CTI.

    By Michelle L. Butler

    Categories: Enforcement

    Report Assesses the Impact of Authorized Generics on Paragraph IV Patent Certifications

    On April 18, 2007, Analysis Group, Inc. announced the release of a report assessing the effects of the market entry of authorized generics on paragraph IV patent certifications.  FDA has described an authorized generic as “[a]ny marketing by an NDA holder or authorized by an NDA holder, including through a third-party distributor, of the drug product approved under the NDA in a manner equivalent to the marketing practices of holders of an approved ANDA for that drug.”  The introduction of an authorized generic may be timed to coincide with either the end of the NDA holder’s period of marketing exclusivity for the brand name drug before there is generic competition, or with a generic applicant’s 180-day exclusivity.

    The Analysis Group report, titled “Do Authorized Generic Drugs Deter Paragraph IV Certifications,” was authored by Ernst R. Berndt of MIT’s Sloan School of Management and the National Bureau of Economic Research and Richard Mortimer  and Andrew Parece from the Analysis Group.  According the authors, who analyzed three datasets on paragraph IV certifications:

    [D]espite increasing and relatively high rates of authorized generic entry, the rate of paragraph IV certifications is higher than it has ever been. . . .  [E]ven when authorized generic entry reduces the expected gains from filing paragraph IV challenges, the recent evidence is clear that sufficient incentives remain so that in spite of recent increased authorized generic entry, the intensity of filing Paragraph IV challenges remains high.  There is no evidence to suggest that authorized generic entry causes delayed generic entry.

    The Analysis Group report is one of several reports released over the past year on authorized generics, including reports by the Congressional Research Service, GPhA, and IMS Consulting for PhRMA.  GPhA’s report concludes that authorized generics “significantly reduce incentives for independent generic firms to challenge invalid brand name patents and to develop non-infringing processes.”  The report prepared for PhRMA concludes that authorized generics lead to lower drug prices for consumers.

    Congress has also taken an interest in authorized generics.  In January 2007, Sen. Jay Rockefeller (D-WV) introduced S. 438, the Fair Prescription Drug Competition Act.  If enacted, S. 438 would prohibit the marketing of authorized generics during a generic applicant’s 180-day exclusivity period.  The House version of S. 438, H.R. 806, was introduced by Rep. Jo Ann Emerson (R-MO) in February 2007.  The bills have been referred to committee.  Also, as discussed in the RAPS Focus article below, Congress has changed the Medicaid rebate calculation to include sales to authorized generic distributors in the brand manufacturer’s price calculation.


    Categories: Hatch-Waxman

    HPM Announces New Associate

    Hyman, Phelps & McNamara, P.C. is pleased to announce that Carrie S. Martin has joined the firm as an associate.  Ms. Martin earned a law degree with honors from The George Washington University Law School in 2004. She served as an Articles Editor for the American Intellectual Property Law Association Quarterly Journal, in which her student note was published.  Ms. Martin graduated magna cum laude from the University of Arizona with a Bachelor of Science degree in Molecular and Cellular Biology and a Bachelor of Arts degree in Art History, and was inducted into Phi Beta Kappa.

    Categories: Miscellaneous

    FDA Decides Not to Approve Additional Amlodipine ANDAs at This Time

    Earlier today, FDA issued its decision with respect to amlodipine generics and the applicability of Mylan’s 180-day exclusivity and Pfizer’s pediatric exclusivity.  The U.S. District Court for the District of Columbia in Mylan v. Leavitt had ordered FDA to respond to Mylan’s TRO motion by April 18, 2007.  According to FDA’s notice to the court, “FDA has decided not to approve ANDAs other than Mylan’s at this time.”  FDA’s 14-page decision letter accompanying the notice concludes that:

    ·        All of the unapproved ANDAs are currently blocked by Pfizer’s pediatric exclusivity.

    ·        If and when the mandate effectuating the panel’s March 22 decision issues in the Apotex case, Apotex’s ANDA will not be blocked by Pfizer’s pediatric exclusivity.

    ·        FDA cannot determine on the current record whether other ANDAs will continue to be blocked by pediatric exclusivity at this time.

    ·        Mylan’s 180-day marketing exclusivity terminated when the patent expired.

    It is unclear at this time what action generic applicants other than Mylan might take to challenge FDA’s decision.  We will continue to update you on this developing story.


    ·        April 10, 2007 FDA Law Blog Post

    Categories: Hatch-Waxman

    Groups Challenge FDA’s PLAN B Approval

    On April 12, 2007, the Association of American Physicians & Surgeons (“AAPS”), Concerned Women for America, Family Research Council, and Safe Drugs For Women filed a complaint in the U.S. District Court for the District of Columbia against FDA seeking declaratory and injunctive relief concerning the Agency’s August 24, 2006 approval of a supplemental NDA for PLAN B (levonorgestrel) Tablets, 0.75mg.  FDA’s PLAN B approval permitted Over-the-Counter (“OTC”) use of the drug in women 18 years and older and maintained prescription status for women 17 years old and younger, and was made after the Agency solicited comment on the novel issues presented by the PLAN B switch.

    The AAPS complaint asks the court to:

    • Vacate FDA’s approval of PLAN B for OTC distribution;
    • Declare that FDA lacks authority to approve the same drug product for simultaneous OTC-prescription distribution;
    • Declare that FDA lacks authority to bifurcate a drug product’s OTC versus prescription status based on the patient’s age;
    • Declare that FDA lacks authority to create a hybrid “third class” of behind-the-counter drug beyond the FDC Act’s OTC and prescription classes;
    • Declare that FDA failed to conduct the required rulemakings necessary to authorize OTC distribution of PLAN B; and
    • Declare that FDA unlawfully approved PLAN B for OTC distribution under improper pressure from Senators Clinton and Murray.

    AAPS contends that “the methodologies used and the workproduct prepared by the staff at Defendant FDA’s Reproductive Health Division diverge from accepted scientific and regulatory methods.”  For example, AAPS alleges that FDA did not consider safety data in overweight women, smokers, and adolescents, and only considered acute safety data without assessing the chronic impacts of the drug.

    The complaint also alleges that FDA’s PLAN B approval violates the Administrative Procedure Act (“APA”) and the Pediatric Research Equity Act of 2003 (“PREA”).

    Under FDA’s “meaningful difference” policy, the Agency has interpreted the FDC Act to allow marketing of the same active ingredient in products that are both prescription and OTC, assuming some meaningful difference exists between the two that makes the prescription product safe only under the supervision of a licensed practitioner.  Historically, these “meaningful differences” have been active ingredient, indication, strength, route of administration, or dosage form.  The PLAN B approval added age as a sixth parameter.  AAPS contends that “[b]y failing to convene a rulemaking to add its new, patient-based ‘age’ parameter to the its prior, drug-based, five-parameter interpretation of the meaningful-difference test, FDA amended a rule without the required notice-and-comment rulemaking” in violation of the APA.

    PREA requires sponsors of marketing applications to include in their application (unless the requirement is waived or deferred) an assessment and relevant data for each relevant pediatric age group to enable FDA to assess the drug’s safety and efficacy for the claimed indications in all relevant pediatric subpopulations, and to support dosing and administration for each pediatric subpopulation for which the drug is safe and effective.  AAPS contends that:

    [FDA] premised [its] authority to approve OTC status only for women 18 and over, without requiring PREA data, on the SNDA’s changing the Plan B labeling only for non-PREA subpopulations (i.e., “adults” aged 18 and older).  Contrary to Defendants’ premise, PREA does not include such rigid age ranges, and puberty extends beyond the eighteenth birthday for a significant pediatric subpopulation of young women. . . .   Because PREA applies past the eighteenth birthday for systemically absorbed hormonal drugs like Plan B, the Plan B SNDA required not only dosage and administration data to support all indications for all pediatric subpopulations (i.e., regardless of Rx versus OTC distribution), but also safety and efficacy data to support the OTC indication for pediatric subpopulations past their eighteenth birthday but still within puberty and/or adolescence.  [The] data submitted to support Plan B’s age-bifurcated Rx-to-OTC switch did not satisfy PREA’s (and thus FFDCA’s) requirements.

    FDA’s PLAN B approval has been controversial.  It seems unlikely, however, that the AAPS complaint -despite some novel arguments- will result in FDA withdrawing approval.

    Categories: Drug Development