In an 8-to-1 decision, the U.S. Supreme Court held earlier this week that preemption principles and the 1976 Medical Device Amendments (“MDA”) bar common law claims on the basis of safety or effectiveness of devices approved by FDA under a Premarket Approval Application (“PMA”).  The case, Riegel v. Medtronic, is a decisive victory for device manufacturers.  In the Supreme Court’s 1996 decision in Medtronic, Inc. v. Lohr, the Court ruled that certain state tort claims involving medical devices cleared under the premarket notification (i.e., 510(k)) process are not preempted.  The Riegel case provides a definitive decision preempting state tort law claims for PMA-approved devices. 

The plaintiffs in the case, Charles and Donna Riegel, brought suit in the U.S. District Court for the Northern District of New York after Charles Riegel was injured in heart surgery.  During the surgery, his doctor inserted a Medtronic Evergreen Balloon Catheter into his coronary artery but inflated it beyond its rated burst pressure.  The catheter burst, causing Mr. Riegel to develop a blocked heart and require coronary bypass surgery.  The Riegels alleged that the catheter was designed, labeled, and manufactured in a manner that violated New York common law, and that these defects caused Mr. Riegel’s injury and suffering. 

Both the district court and the U.S. Court of Appeals for the Second Circuit ruled in favor of Medtronic.  The Second Circuit, which joined a number of circuits that have addressed this issue, reasoned in its 2006 opinion that because devices approved through the PMA process are subject to the standards set forth in their approved applications, such devices are subject to “a requirement applicable to the device under [the FDC Act],” and that the claims for strict liability, breach of warranty, and negligent design, testing, inspection, distribution, labeling, marketing, and sale would (if successful) impose state “requirements” that differed from, or added to, the PMA-approved standards for the device.

The MDA provides federal oversight for devices and amended the FDC Act to add § 521 (21 U.S.C. §360k(a)), which states, in relevant part: 

[N]o State or political subdivision of a State may establish or continue in effect with respect to a device intended for human use any requirement –

(1) which is different from, or in addition to, any requirement applicable under this Act to the device, and

(2) which relates to the safety or effectiveness of the device or to any other matter included in a requirement applicable to the device under this Act.

In granting review in this case, the Supreme Court was asked to address the following question:

Whether the express preemption provision of the Medical Device Amendments to the Food, Drug, and Cosmetic Act, 21 U.S.C. §360k(a), preempts state-law claims seeking damages for injuries caused by medical devices that received premarket approval from the Food and Drug Administration.

Justice Scalia, writing for the majority, stated that the Court would adhere to a view that “requirements” under the MDA include common-law causes of action for negligence.  Justice Scalia explained that state tort law is a method of controlling conduct and “[s]tate tort law that requires a manufacturer’s catheters to be safer, but hence less effective, than the model the FDA has approved disrupts the federal scheme no less than state regulatory law to the same effect.”  However, Justice Scalia stated that FDC Act § 521 does not prevent damages based on claims that a device manufacturer violated FDA regulations, as these “parallel” cases “add to federal requirements.” 

The opinion includes interesting dictum (on page 13) with respect to the effect that FDA’s current view supporting preemption is entitled only to little deference because of the different position FDA has previously taken.  Justice Scalia states in response to Justice Ginsburg’s dissent that:

In the case before us, the FDA has supported the position taken by our opinion with regard to the meaning of the statute. We have found it unnecessary to rely upon that agency view because we think the statute itself speaks clearly to the point at issue. If, however, we had found the statute ambiguous and had accorded the agency’s current position deference, the dissent is correct . . . that – inasmuch as mere Skidmore deference would seemingly be at issue – the degree of deference might be reduced by the fact that the agency’s earlier position was different. . . .  But of course the agency’s earlier position . . . is even more compromised, indeed deprived of all claim to deference, by the fact that it is no longer the agency’s position.

Justice Ginsburg, the lone voice of dissent, argued that “Congress. . .did not intend [FDC Act § 521] to effect a radical curtailment of state common-law suits seeking compensation for injuries caused by defectively designed or labeled medical devices.”  Justice Ginsberg admonished the majority’s decision as contrary to the “MDA’s central purpose: to protect consumer safety.”

Sen. Edward Kennedy (D-MA), who sponsored the MDA, spoke out against the decision, stating “Congress never intended that FDA approval would give blanket immunity to manufacturers from liability for injuries caused by faulty devices.”  Rep. Henry Waxman (D-CA) also expressed disappointment with the decision, vowing that Congress will “pass legislation as quickly as possible to fix this nonsensical situation.”

Additional information on this case, including briefs and analysis, is available from SCOTUSBlog. 

Last week, Apotex Inc. submitted an interesting Petition for Stay of Action to FDA requesting that the Agency recognize the company’s remaining 180-day exclusivity for its generic version of Sanofi-Synthelabo’s PLAVIX (clopidogrel bisulfate) by staying the effective date of final approval of other ANDAs (and in particular Dr. Reddy’s Laboratories, Inc.’s ANDA #76-273 approved on January 14, 2008) containing a paragraph IV patent certification with respect to U.S. patent #4,847,265 (“the ‘265 patent”).  The ‘265 patent is listed in the Orange Book with other patent and non-patent market exclusivities as covering PLAVIX.  Specifically, Apotex requests that FDA stay the effective date of final approval of competitor applications until the earlier of either: (1) 156 days after the August 31, 2006 permanent injunction issued by the U.S. District Court for the Southern District of New York barring Apotex from marketing clopidogrel bisulfate is lifted; or (2) the expiration of the ‘265 patent on November 17, 2011.  Apotex also requests that FDA, at a minimum, stay the effectiveness of final approvals of competitor ANDAs until the injunction is lifted, provided the U.S. Court of Appeals for the Federal Circuit finds the ‘265 patent invalid.  Any other decision, contends Apotex, “will result in the anomaly that Apotex, the first to file a paragraph IV certification challenging the validity or enforceability of the ‘265 patent . . . may be the last to market.” 

Apotex submitted ANDA #76-274 to FDA in 2001, prior to the enactment of the Medicare Modernization Act (“MMA”).  The application contained a paragraph IV certification to the ‘265 patent that made Apotex eligible for 180-day exclusivity.  Such exclusivity (in a pre-MMA case like this) is triggered by either the first commercial marketing of the drug approved under ANDA #76-274, or a court of appeals decision that the ‘265 patent is invalid, not infringed, or unenforceable.  In March 2002, Sanofi sued Apotex for infringement of the ‘265 patent in the U.S. District Court for the Southern District of New York, thereby triggering a 30-month stay of approval of ANDA #76-274.  FDA approved ANDA #76-274 on January 20, 2006, after the 30-month stay expired in May 2005 without a relevant court decision.  Almost six months later, on August 8, 2006, Apotex began commercially marketing its generic clopidogrel bisulfate drug product at-risk of an adverse court decision, thereby triggering the company’s 180-day exclusivity.  Sanofi quickly sought a permanent injunction barring Apotex from further marketing the drug product, and on August 31, 2006, the district court granted the injunction pending the outcome of the case.  Meanwhile, Apotex’s 180-day exclusivity was ticking away, notwithstanding that marketing of the generic drug was enjoined 24 days after such exclusivity was triggered. 

Apotex appealed the decision to the U.S. Court of Appeals for the Federal Circuit, where the case is pending.  Oral arguments in the case are scheduled for March 3, 2008.  If the Federal Circuit issues a mandate requiring the district court to lift the injunction, then Apotex could resume marketing the drug product approved under ANDA #76-274.  The timing of a decision by the Federal Circuit is unclear, as the issuance of the mandate could be delayed if Apotex is initially successful in the Federal Circuit, but Sanofi then timely requests a rehearing and/or a rehearing en banc. 

The Federal Circuit’s decision will also affect generic clopidogrel bisulfate patent infringement litigation between Sanofi and generic applicants Teva Pharmaceuticals, Cobalt Pharmaceuticals, and Dr. Reddy’s.  In the Teva and Cobalt cases, which are also before the Federal Circuit and concern later-filed ANDAs with paragraph IV certifications to the ‘265 patent, decisions on the permanent injunctions have been stayed pending the outcome of Apotex’s appeal.  In the case involving Dr. Reddy’s, in which a permanent injunction was not entered, Sanofi and Dr. Reddy’s entered into an agreement permitting Dr. Reddy’s to, among other things, import clopidogrel bisulfate into the U.S. for sale if Apotex obtains a favorable result in the Federal Circuit. 

During the pendency of the ‘265 patent litigation, Apotex’s 180-day exclusivity would have naturally expired on February 4, 2007.  Nevertheless, Apotex argues in the company’s Petition for Stay of Action that the language, intent, and policy goals of the Hatch-Waxman Act would be frustrated if FDA does not recognize the remaining 156 days of that exclusivity period (provided, of course, that Apotex is ultimately successful in the company’s pending patent infringement litigation).  “The wording of the [FDC Act] makes clear that later-filed applications cannot be approved until at least 180 days after the first filer has begun commercial marketing – it does not, however, require FDA woodenly to approve such applications on the 181st day after such marketing begins,” states the petition (emphasis in original).  Apotex contends that:

Certainly, nothing in the language of the statute prohibits a first filer who risks coming to market prior to an operative court decision and who successfully overturns an improvidently granted injunction from enjoying the full benefit of the 180-days of exclusivity granted by Congress.  Rather, the “not earlier than” language [in FDC Act § 505(j)(5)(B)(iv) (2002)] gives FDA discretion to delay the effective date of approval of ANDAs submitted by subsequent filers to ensure that the first filer who has undertaken the risk of opening up the market for a particular drug product to generic competition can reap the full benefit of Congress’s 180-days of marketing exclusivity.

Moreover, Apotex argues that FDA’s decision to recognize the remaining 156 days of generic exclusivity “would best effectuate Congress’s intent and policy animating the Hatch-Waxman Amendments in general and the exclusivity provision in particular” by encouraging generic companies to continue to challenge questionable Orange Book-listed patents and by preserving the meaningfulness of 180-day exclusivity. 

Whether FDA will ultimately recognize any remaining 180-day exclusivity is uncertain.  Apotex requests that FDA respond to the petition no later than March 15, 2008.

By Kurt R. Karst    

In December 2007, we reported on what was a then yet-to-be-released FDA draft guidance on Good Reprint Practices (“GRPs”) and Rep. Henry Waxman’s (D-CA) November 30, 2007 letter to FDA strongly urging the Agency to refrain from disseminating the draft guidance and requesting certain information related to the draft guidance.  On December 21, 2007, FDA responded to Rep. Waxman by providing some of the requested information and refusing to provide other information reflecting ongoing Agency deliberations.  Rep. Waxman penned another letter to FDA in January 2008 criticizing the Agency for not providing much of the requested information.  For now, it appears that FDA is moving forward with the draft guidance.  Last Friday, FDA announced the availability of the draft GRP guidance.  FDA will publish a notice in the Federal Register later this week formally announcing the availability of the GRP draft guidance.  Once finalized, the draft GRP guidance will effectively “replace” FDA’s regulations at 21 C.F.R. Part 99, which expired in September 2006 with the sunsetting of Section 401 of the 1997 FDA Modernization Act.  (We note that many companies did not utilize Part 99 in disseminating reprints, so there wasn’t much to replace.)

As we reported in December, and contrary to the treatment of the subject in the mainstream media, the general principles articulated in the draft guidance are consistent with FDA’s prior approach and are not a radical departure from Agency practice, or, for the most part, current industry practice.  In fact, although Rep. Waxman is concerned that the guidance would “open the door to abusive marketing practices that will jeopardize safety,” the draft guidance provides more restrictive requirements on how the reprint must be disseminated and clarifies the types of documents that FDA considers acceptable for dissemination.  The guidance states that letters to the editors, abstracts, Phase 1 study reports, and reference publications that contain little or no substantive discussion of the relevant investigation or data are not consistent with GRPs.  (As we reported in December, there has been debate among practitioners as to whether these types of documents were appropriate to disseminate.)  In addition, some new requirements include: distributed scientific or medical information should be accompanied by a comprehensive bibliography of publications discussing adequate and well-controlled clinical studies, be distributed separately from information that is promotional in nature, and be in the form of an unabridged reprint, copy of an article, or reference publication that is free of highlighting, markings, and manufacturer summaries. 

Although industry critics are concerned about potential abuse by manufacturers, industry proponents point to FDA’s own statement that the “public health can be served when health care professionals receive truthful and non-misleading scientific and medical information” as support for their position that reprints are beneficial.  In fact, while many companies’ marketing practices will be unaffected by the draft GRP guidance, more aggressive companies may find their marketing practices reigned in.  As Hyman, Phelps & McNamara, P.C.’s Jeffrey Wasserstein (and FDA Law Blog co-author) stated in the Saturday edition of The Wall Street Journal, “There’s tremendous variation in company practices . . . .  [The draft GRP guidelines will] probably restrict the more aggressive companies.”

Considering the early start on the debate surrounding the draft GRP guidance, we anticipate escalating debate in the comings months.  As we noted in December 2007, there is a constitutional dimension to this issue, since the Washington Legal Foundation ("WLF") line of cases made clear that dissemination of reprints was constitutionally protected free speech.  It remains an open question as to whether industry or free speech advocates, such as WLF, will choose to challenge FDA’s guidance on First Amendment grounds, or whether industry will learn to live with this as a reasonable compromise. 

On February 7, 2008, the U.S. Department of Justice announced that Merck & Company, Inc. (“Merck”) agreed to pay more than $650 million to settle allegations that the company failed to pay proper rebates to Medicaid and paid illegal remuneration to health care providers to induce prescriptions for the company’s products.  The allegations arose out of lawsuits brought by a former Merck employee and a Louisiana physician under the Federal False Claims Act ("FCA") and state false claims laws.  The FCA allows for private individuals to file a qui tam or whistleblower suit on behalf of the government.  Many state false claims laws have similar whistleblower provisions.  As part of the settlement agreement, one of the whistleblowers will receive approximately $68 million.  The other whistleblower will receive $24 million of the Federal government’s settlement and an undisclosed share of the states’ proceeds.

In the first lawsuit, with respect to which Merck agreed to pay $399 million plus interest, H. Dean Steinke, a former Merck district sales manager, alleged in civil actions filed in Pennsylvania and Nevada that Merck instituted programs throughout the country designed to induce physicians to prescribe the company’s products over those of competitors in violation of federal and state anti-kickback laws and “best price” requirements under the Medicaid Rebate Statute.  Merck’s alleged fraudulent and illegal practices included paying physicians for unnecessary preceptorships and tutorials for Meck sales representatives; paying physicians to participate in bogus “clinical experience” studies and focus groups; paying speaker fees; offering free gifts to physicians who attended promotional programs; and offering unrestricted grants for computer systems and other benefits to physicians who supported Merck products. 

Merck also allegedly offered deep discounts to hospitals for ZOCOR and VIOXX but only if they met certain performance levels by using these drugs over competing products.  Merck excluded these discounts from its determination of Medicaid Rebate best price under a statutory exception for “nominal prices” – i.e, prices that are less than 10 percent of the company’s weighted average price to wholesalers and retailers – thereby avoiding substantial Medicaid Rebates.  However, the government contended that these pricing schemes did not qualify for the nominal price exclusion, presumably because they were linked to market share performance. 

In a separate suit filed by Louisiana physician William St. John LaCorte, and with respect to which Merck agreed to pay $250 million plus interest, Merck was similarly alleged to have provided deep discounts on its PEPCID products to hospitals and other healthcare institutions in return for commitments to switch patients from competing products.  As with ZOCOR and VIOXX, Merck allegedly failed to include the PEPCID discounts in Medicaid Rebate best price, and the government considered the nominal price exception inapplicable. 

As part of the resolution of the cases, Merck and the Office of Inspector General (“OIG”) of the Department of Health and Human Services entered into a Corporate Integrity Agreement for five years.  Among other things, the Corporate Integrity Agreement requires Merck and an Independent Review Organization to conduct annual reviews of the company’s Medicaid Rebate policies and procedures, and requires an IRO to conduct reviews of the company’s promotion and product services activities, such as promotional programs, speaker programs, consultancies, and grants. 

By Noelle C. Sitthikul

The debate over biogenerics legislation has intensified with the anticipated introduction of legislation to create a “generic biologics” approval pathway and that would grant innovators (i.e., reference product sponsors) and certain generic sponsors market exclusivity.  The draft legislation obtained by FDA Law Blog is titled the “Pathway for Biosimilars Act,” and will reportedly be introduced by Representative Anna Eshoo (D-CA) in the near future. 

The draft Eshoo bill would amend PHS Act § 351 to add subsection (k) (“Licensure of Biological Products as Biosimilar”) to permit the submission of an application for licensure of a biogeneric that includes, among other things, information demonstrating that the biogeneric is biosimilar to a reference product based on analytical studies, animal studies, and a clinical study or studies (such as an immunogenicity assessment and pharmacokinetics or pharmacodynamics) sufficient to demonstrate the safety and efficacy of the biosimilar product.  Analytical and animal studies may be waived by the Department of Health and Human Services Secretary (“Secretary”) if such studies are determined to be unnecessary.  The Secretary may waive immunogenicity studies if there is a final guidance document “advising that it is feasible in the current state of scientific knowledge to make determinations on immunogenicity with respect to products in the product class to which the biological product belongs,” and that explains “the data that will be required to support such a determination.” 

Importantly, the Secretary may not accept a biogeneric application until a proceeding has been initiated for the issuance of a guidance document for the product class in which the biogeneric falls, and the Secretary may not approve a biogeneric application until that proceeding is completed.  Product class-specific guidance documents must include criteria for determining biosimilarity, interchangeability, and immunogenicity (if available).  In addition, companies may not submit a biogeneric application until the later of the commencement of guidance document proceedings (product class-specific) or the date that is 4 years after initial licensing of the reference product (not including the date of a supplement approval or of a subsequent application for a new indication, route of administration, dosage form, or strength of the previously licensed reference product).  A person may petition the Secretary to commence guidance document proceedings for a reference product licensed more than 7 years prior to the date of enactment of the “Pathway for Biosimilars Act.”  The sponsor of the first biogeneric determined to be interchangeable may receive a 24-month period of market exclusivity from the later of either the first commercial marketing of its biogeneric, or, “with respect to a product marketed before the date the product is determined to be interchangeable, the date that the product is determined to be interchangeable.” 

The quid pro quo for innovator companies is a period of 12-year exclusivity after initial licensure that may be increased to 14.5 years.  Specifically, if during the 8-year period following licensure of the reference product, the Secretary approves a supplement for a new indication that would be a “significant improvement” compared to marketed products, then a biogeneric application may not be made effective until 14 years after initial licensure of the reference product.  The 12-year or 14-year exclusivity periods may be extended by 6 months if “at any time following licensure of the reference product, the holder of the approved application for the reference product files a supplemental application to support use in pediatric age groups (including neonates) containing reports of new clinical investigations (other than bioavailability studies) essential to the approval of the application that were conducted or sponsored by the holder.” 

In addition, reference product sponsors, as well as interested third parties (such as universities), that own a patent on the reference product may sue a biogeneric applicant for patent infringement.  Under certain circumstances, such litigation could delay the approval of the biogeneric product.  The draft bill also places certain limitations on the availability of declaratory judgment actions for biogeneric applicants, and amends the user fee law to require biogeneric applicants to pay the same user fees required to be paid by reference product sponsors. 

In other biogenerics news, FDA Law Blog learned that the regulatory authorities north of the border in Canada recently released a draft guidance document outlining the regulatory review process that Health Canada will use for a biologic that is similar to an approved innovator biologic. In Canada these product are referred to as “Subsequent Entry Biologics.”

By Kurt R. Karst    

Our fellow bloggers over at The Volokh Conspiracy recently posted an interesting story concerning a congressional investigation into Merck/Schering-Plough’s cholesterol absorption inhibitor VYTORIN (ezetimibe; simvastatin).  We previously reported on, among other things, a group of letters sent by the U.S. House of Representatives Energy and Commerce Committee Oversight and Investigations Subcommittee and the U.S. Senate Finance Committee to myriad public and private parties in January 2008 concerning Merck/Schering-Plough’s ENHANCE (Ezetimibe and Simvastatin in Hypercholesterolemia Enhances Atherosclerosis Regression) study of VYTORIN versus ZOCOR (simvastatin) alone in reversing the atherosclerotic thickening of the carotid artery in patients with high cholesterol.  Those letters raised a concern that Merck/Schering-Plough officials might have delayed the results of the ENHANCE study so as not to affect VYTORIN’s market share. 

The most recent letter in this deepening controversy brings the online community into the fray.  Specifically, on February 11, 2008, the U.S. House of Representatives Energy and Commerce Committee Oversight and Investigations Subcommittee sent a letter to the operators of the website Cafepharma.com (a self-proclaimed “site for drug reps by drug reps”) requesting information on anonymous postings on the website about the ENHANCE study results.  The anonymous postings were made as early as March 13, 2007, which is about 9 months before Merck/Schering-Plough publicly released the trial results earlier this year.  “[H]ave a buddy at [Schering Plough Research Institute].  He says that the study is a bust,” reads one such anonymous posting.  “Heard it crashed and burned,” reads another posting.  According to the congressional letter sent to Cafepharma.com: “These Web site postings are obviously troubling and raise further questions as to whether anyone within Merck or Schering-Plough knew the results of the ENHANCE trial prior to [their release].”  

The letter requests that Cafepharma.com provide the Oversight and Investigations Subcommittee (within 2 weeks of the date of the letter) “all records relating to any posting on Cafepharma.com related to the ENHANCE study, including but not limited to, names, addresses, phone numbers, and e-mail and internet protocol addresses of anyone creating such a post.”  According to the The Volokh Conspiracy, Cafepharma.com’s response was short: “[W]e do not collect any user information with anonymous posts (including IP addresses).  Therefore, we do not believe we will have any information to provide regarding these posts.”

The Oversight and Investigations Subcommittee also sent a similar letter to Merck/Schering-Plough.  That letter requests written explanations as to when Merck/Schering-Plough officials first learned of the Cafepharma.com postings and what the companies plan (or have done) to investigate the sources of the posts.  It also requests all records related to the Cafepharma.com postings.

In two other letters unrelated to the Cafepharma.com postings, the Oversight and Investigations Subcommittee also requests detailed information from FDA and Merck/Schering-Plough on, among other things, the ENHANCE study protocol.  Not to be outdone by the U.S. House, the U.S. Senate Finance Committee also sent a letter to Schering-Plough CEO Fred Hassan requesting information related to the ENHANCE study.  The letter follows up on the Finance Committee’s January 2008 letter on the same topic.

By Kurt R. Karst

Yesterday, we reported that two Hyman, Phelps & McNamara, P.C. attorneys appeared on February 13, 2008, before the United States Sentencing Commission (“Commission”) regarding possible changes to the Sentencing Guidelines (“Guidelines”) that are applicable to certain FDA criminal offenses.  That same day, three FDA officials testified at the same Sentencing Commission public briefing.  Their testimony is available here (William McConagha), here (Robert Perlstein, M.D.), and here (Special Agent Alex Davis).  

In its testimony, FDA asked the Commission to alter the Guidelines by declaring that for criminal offenses involving any FDA-regulated product where “loss” is relevant to the sentence to be imposed, loss will be determined by calculating the full amount paid (by consumers and others) for the adulterated or misbranded product, without any deduction or subtraction for the value of the product.  Thus, FDA is in effect stating that for sentencing purposes where “loss” is an issue, the misbranded or adulterated products involved have a value of zero.

This suggestion, if adopted, raises many questions and concerns.  First, creative lawyers in the context of civil litigation may try to employ FDA’s proposed finding to seek a monetary recovery based on that calculation.  Second, the change would almost certainly dramatically increase sentences to be imposed in cases where “loss” is at issue (which is in at least all felony cases).  Third, if adopted, it may make it very difficult for companies and individuals to work our guilty pleas with the Government because the Guidelines will warrant a sentence that the defense will find intolerable.

FDA’s position is breathtaking in its scope.  An FDA-regulated product is deemed misbranded for instance if the product was manufactured at a registered facility, but the particular product was not properly listed, or the labeling is false or misleading.  Many FDA-regulated products are deemed adulterated if, for instance, they have been manufactured outside the very general “current good manufacturing practices” requirements. 

Every day, many manufacturers distribute products that are not in full compliance with all of the FDC Act’s mandates (and thus those products are technically adulterated and misbranded).  This routinely occurs with FDA’s knowledge.  To say that all misbranded and adulterated products are worthless, raises serious legal and policy issues that the Commission should fully explore before adopting FDA’s suggestion.  That was exactly the course suggested by Hyman, Phelps & McNamara, P.C. at the February 13th Commission briefing, when this suggestion was first made public.  The affected industry – all FDA-regulated manufacturers and marketers – should urgently comment on the impropriety of the approach put forth by FDA.  Comments should be sent to the Commission and are due by March 28, 2008.

We previously reported on the United States Sentencing Commission’s (“Commission”) proposed changes to its Sentencing Guidelines (“Guidelines”) that would likely greatly enhance the criminal penalties applied to some criminal violations of the FDC Act, including those added by the Prescription Drug Marketing Act of 1987 (“PDMA”).  On February 13, 2008, the Commission announced that a public briefing session will be held on February 13, 2008 from 9:30 AM to 11:30 AM to discuss the proposed Guideline changes.

Hyman, Phelps & McNamara, P.C. attorneys John R. Fleder and John A. Gilbert were selected to participate on the panel testifying before the Commission regarding the proposed Guideline changes concerning FDC Act and PDMA violations.  Both attorneys testified on February 13, 2008 with respect to § 2N2.1 of the proposed amended guidelines, which is titled “Violations of Statutes and Regulations Dealing With Any Food, Drug, Biological Product, Device, Cosmetic, or Agricultural Product.”  According to the Commission’s proposal issued in the Federal Register:

[T]he proposed amendment [to § 2N2.1] adds a specific offense characteristic at § 2N2.1 that applies if the defendant committed any part of the instant offense after sustaining a conviction of an offense under 21 U.S.C. § 331.  Because PDMA offenses at 21 U.S.C. §§ 353 and 381 are incorporated into the FDCA at 21 U.S.C. § 331 the proposed specific offense characteristic also is applicable to a second or subsequent violation of the PDMA. The proposed amendment also amends the commentary to § 2N2.1 to include substantial risk of bodily harm or death as a basis for an upward departure. In addition, there is an issue for comment regarding violations of the FDCA and PDMA.

Both Mr. Fleder and Mr. Gilbert take the position in their testimony (available here and here) that § 2N2.1 appears to be working as intended and that there is insufficient evidence for the case that the § 2N2.1 Guideline needs to be revised at this time.

The latest issue of FDLI Update features an article by Hyman, Phelps & McNamara, P.C.’s Diane B. McColl and Susan J. Matthees.  The article, titled “Nutrition Labeling: A Look at FDA’s Proposed Requirements,” provides an overview of FDA’s November 2, 2007 Advance Notice of Proposed Rulemaking (“ANPR”) to revise nutrition labeling requirements for foods and dietary supplements.  We previously reported on the ANPR in December 2007.  Earlier this year, FDA issued a Federal Register notice extending the deadline for comments until April 30, 2008. 

The latest FDLI Update article by Hyman, Phelps & McNamara, P.C.’s Gwen M. McKee and John R. Fleder discusses the enforcement provisions of the Food and Drug Administration Amendments Act of 2007 (“FDAAA”).  While the enforcement provisions of FDAAA have frequently been ignored in public discussions about the new law, they are important for anyone working in the area to be aware of – particularly those entities affected by the new clinical trial database requirements, risk evaluation and mitigation strategies, or direct-to-consumer advertisements.

Those interested in a broader discussion of the new law can still access the previous, comprehensive analysis issued by Hyman, Phelps & McNamara, P.C.

On February 4, 2008, FDA announced that the Bush Administration is requesting nearly $2.4 billion ($1.77 billion in budget authority and $628 million in user fees) for the Agency as part of the Fiscal Year 2009 budget.  Of particular interest in the proposed FY2009 budget are several proposals related to follow-on biologics, new user fees, and resurrecting the Direct-To-Consumer (“DTC”) television ad user fee program created by the FDA Amendments Act (“FDAAA”).

Follow-On Biologics

The coming year will likely see a significant push to pass legislation creating follow-on biologics (also referred to as “generic biologics”).  According to the budget proposal:

For FY 2009, the Administration will seek new statutory authority to allow FDA to approve abbreviated applications for certain biologic products licensed under the Public Health Service Act (PHS Act). . . .  The legislative proposal will include necessary provisions to ensure the safety and effectiveness of these biologic products for patients. The proposal will include a predictable and public guidance process for licensing follow-on protein products under the PHS Act. The proposal will prescribe the type of data required for FDA to review applications for follow-on protein products and will require labeling for the safety concerns related to the interchangeability of these products. In addition, the proposal will include adequate intellectual property protections to preserve continued robust research into new and innovative life-saving medications. The Budget proposes a new authority for FDA to approve follow-on protein products through a new regulatory pathway that protects patient safety, promotes innovation, and includes a financing structure to cover the costs of this activity through user fees.

In 2007, the U.S. Senate Health, Education, Labor, and Pensions Committee voted on legislation approving amendments to the Public Health Service Act to add § 351(k) to provide for an approval pathway for “biosimilar” and “interchangeable” biologics that rely, in part, on FDA’s previous licensure of an innovator’s product.  At the time, it was thought that such legislation might be included in the U.S. Senate’s version of FDAAA.  Support for the bill fell apart, however, due to differences of opinion over the length of exclusivity for innovator products.  (See FDA Law blog post here).  In addition, the Bush Administration objected to including follow-on biologic provisions in FDAAA. 

We understand that the Biotechnology Industry Organization (“BIO”) is vigorously lobbying Congress on draft legislation.  Information on BIO’s position is available here.

New User Fees

President Bush’s FY2008 budget request included a proposal with draft performance goals to create a generic drug user fee program.  The FY2009 request includes a similar proposal, but without draft performance goals.  The program, which the Administration will formally introduce in draft legislation later this year, includes estimated FY2009 spending of $16.6 million.

The Bush Administration’s FY2009 budget proposal also includes new user fee programs for activities that are currently funded through discretionary appropriations, including:

• Animal generic drug user fees with phased-in performance goals to expedite the approval of Abbreviated New Animal Drug Applications.  Sponsors of innovator drug products currently pay user fees under the Animal Drug User Fee Act;

• Reinspection user fees to require FDA-inspected establishments to pay the full costs of reinspections and follow-up work when the establishment fails to meet current Good Manufacturing Practices and other FDA requirements; and

• Food and animal feed export certification user fees.  FDA recommended the creation of these fees as part of the Agency’s November 2007 Food Protection Plan.

DTC TV Ad User Fee Program

FDA’s FY2009 budget proposal states that the Bush Administration plans to resurrect the DTC television ad user fee program added to the Prescription Drug User Fee Act (“PDUFA”) by FDAAA.  We previously reported that the new user fee program would not launch due to inadequate congressional funding, notwithstanding significant industry interest in the program.  As a result, FDA did not send out invoices, and the 120-day trigger in FDAAA for collecting adequate funding from industry participants was not met.   Nevertheless, “[t]he budget for FY 2009 contains user fees to support the review of direct to consumer television advertisements, as authorized by PDUFA.  The Administration will work with Congress to modify the 120-day requirement in FDAAA to ensure that FDA can operate the DTC-TV program in FY 2009.”

By Kurt R. Karst

Over the past few weeks, Congress has taken an acute interest in a broad range of FDA issues and FDA-regulated products, penning several letters and holding or expressing intent to hold hearings and investigations on various matters.  Below is a list of recent congressional activity:

• On January 7, 2008, the U.S. House Energy and Commerce Committee sent a letter to Pfizer concerning an investigation of LIPITOR (atorvastatin calcium) direct-to-consumer advertisements involving Dr. Robert Jarvik (the inventor of the artificial heart);

• On January 16, 2008, the U.S. House Energy and Commerce Committee sent a letter to the Government Accountability Office (“GAO”) concerning the study of behind-the-counter drugs (see FDA Law Blog Post here);

• On January 22, 2008, several influential Democrats sent a letter to FDA criticizing the Agency’s decision to issue a proposed rule clarifying its Changes Being Effected Supplement regulations (see FDA Law Blog Post here);

• On January 22, 2008, the U.S. House Energy and Commerce Committee sent a letter to the acting administrator of the Centers for Medicare & Medicaid Services concerning an investigation into VYTORIN (ezetimibe; simvastatin).  Other letters were sent to the American Heart Association, the American College of Cardiology, and Schering-Plough Corporation.  These letters followed January 16, 2008 letters sent to Schering-Plough and Merck & Co. and FDA concerning VYTORIN and direct-to-consumer advertisements.  The U.S. Senate Finance Committe has also weighed in, and has sent letters to various organizations and the Securities and Exchange Commission;

• On January 25, 2008, the U.S. House Energy and Commerce Committee issued a memorandum concerning a business meeting to vote on the issuance of subpoenas for witnesses and documents in connection with the Subcommittee on Oversight and Investigation’s ongoing investigation of KETEK (telithromycin).  On January 29, 2008, it was announced that the subpoenas would be issued;

• On January 25, 2008, members of the U.S. House Energy and Commerce Committee commented on FDA’s plans to station inspectors in the developing world to improve the Agency’s import program;

• On January 29, 2008, the U.S. House Energy and Commerce Committee held a hearing, titled “Science and Mission at Risk: FDA’s Self-Assessment.”  At the hearing, GAO released two reports, one on challenges for FDA on conducting manufacturer inspections, and the other on FDA’s food protection plan; and

• On January 30, 2008, Sen. Charles Grassley (R-IA), Ranking Member of the U.S. Senate Finance Committee, sent a letter to GlaxoSmithKline concerning a leaked New England Journal of Medicine manuscript about a clinical study concerning AVANDIA (rosiglitazone maleate).

One of the most recent missives is a letter sent by Representative Henry Waxman (D-CA) and Senator Edward Kennedy (D-MA) to the GAO requesting an examination of FDA’s oversight of food, user fees, and Information Technology (“IT”).  According to the letter:

Despite its growing list of responsibilities and accompanying needs, FDA’s budget has declined in real terms. In recent years, its annual budget requests have not covered its own needs, its annual appropriations have not kept pace with inflation, and the agency has become increasingly dependent on user fees. Federal funding for other public health agencies . . . has increased, but FDA’s federal funding is dwindling. The effects of this situation are now being felt acutely by the agency and those it serves. . . .

We are concerned about the dilemma that FDA faces in its oversight of foods and critical medical products.  Although our government always faces financial constraints, we cannot afford to put FDA, which performs tasks vital to the public health, in a situation in which it cannot succeed.  We know that we are not alone in our concern. Public confidence in FDA, and the foods and medical products it regulates, is waning. Therefore, we are requesting that you examine the staffing and other resources necessary for FDA to successfully carry out its oversight of foods, drugs, biologics, and medical devices.

The Congressional Letter goes on to cite a November 2007 FDA Science Board report, which found that “FDA’s resource shortfalls have resulted in a plethora of inadequacies that threaten our society.” 

With respect to foods, the Congressional Letter requests that GAO examine FDA’s resources necessary for the Agency to carry out its food safety responsibilities, including the effects of drug, biologic, and device user fees on the availability of funding for food oversight, and FDA’s food budget over the past 10 years.

On user fees, the Congressional Letter notes that “several key components of FDA’s oversight of drugs and devices are not, or are clearly insufficiently, supported by user fees, including generic drug review, the scientific base of the agency; inspections and general enforcement; and oversight of clinical trials and enforcement of human subject protections.” The letter requests that GAO examine, among other things, the extent to which FDA has been able to meet responsibilities not funded by user fees.

Finally, the Congressional Letter expresses concern that FDA has been unable to “effectively modernize and use its IT systems to fulfill its mission needs.”  The letter goes on to note several findings in the November 2007 FDA Science Board report concerning the Agency’s obsolete IT infrastructure, and requests that GAO review FDA’s IT system.  FDA’s PDUFA IV performance goals include several IT objectives that the Agency plans to accomplish by the end of Fiscal Year 2012.  One of the IT goals is to publish a final IT plan in 2008.  In October 2007, FDA held a meeting on the Agency’s IT strategic plan.  On December 28, 2007, FDA announced the availability of a draft plan.

We anticipate that Congress will continue to ramp up its scrutiny of FDA, particularly once President Bush publishes his Fiscal Year 2009 budget request for FDA next week. 

By Kurt R. Karst 

Earlier this month, U.S. House of Representatives Energy and Commerce Committee Chairman John Dingell (D-MI) and Oversight and Investigations Subcommittee Chairman Bart Stupak (D-MI) sent a letter to David M. Walker, Comptroller General of the U.S. Government Accountability Office (“GAO”) requesting that the Office update a 1995 report on Behind-the-Counter (“BTC”) drugs.  We previously reported that FDA scheduled a meeting for November 14, 2007 to discuss the possibility of creating a third class of drugs – in addition to prescription and over-the-counter drugs.  FDA did not put forth a specific proposal for consideration at the meeting, but instead convened the meeting to hear public suggestions as to how BTC “access can be structured and implemented in such a way as to increase access, benefit patients and improve public health.”  A copy of the November 14, 2007 meeting transcript is available here.

The 142-page 1995 GAO report, titled “Nonprescription Drugs: Value of a Pharmacist-Controlled Class Has Yet to Be Demonstrated,” was written after the GAO reviewed BTC drug distribution systems in ten countries and the European Union.  GAO concluded that:

Little evidence supports the establishment of a pharmacy or pharmacist class of drugs in the United States at this time, as either a fixed or a transition class. The evidence that is available tends to undermine the contention that major benefits are being obtained in the countries that have such a class. This conclusion is substantiated by six points.  (1) Reliable and valid studies that examine the effect of different drug distribution systems on overall health and health care system costs do not exist. (2) While a pharmacy or pharmacist class exists in all 10 countries, it is not used with any frequency in any of them to facilitate the movement of drugs to sale outside specialized drug outlets. (3) The European Union has decided not to impose any particular drug distribution system on its member countries because it has found no evidence of the superiority of one system over another. (4) There is no clear pattern of increased or decreased access to drugs as nonprescription products where a pharmacist or pharmacy class exists. (5) While a pharmacy or pharmacist class is assumed by some to improve safeguards against drug misuse and abuse, in the 10 countries these safeguards are easily circumvented, and studies show that pharmacist counseling is infrequent and incomplete.  (6) Experience in Florida with a class of drugs similar to a pharmacist class has not been successful; pharmacists have not regularly prescribed these drugs, and recordkeeping requirements have not been followed.

At the time, FDA provided only minimal comments on the report, stating that it “does not consider the additional requirements establishing a third class of drugs would impose upon the FDA, the drug manufacturers or the prescribing pharmacists.”

According to Representatives Dingell and Stupak, as a result of FDA’s recent discussion of BTC drugs, “it is imperative that more data be provided to assess accurately the true benefits, if any, of a [BTC] class of drugs.”  As such, Representatives Dingell and Stupak request GAO to update the 1995 report by conducting a “rigorous examination of any additional data since the original study that may allow us to evaluate the effect of a third class of drugs,” but without the on-the-ground investigations in foreign countries conducted to draft the 1995 report.

By Kurt R. Karst

Earlier this month, we reported on a complaint filed by Nu-Pharm Inc. against FDA in the U.S. District Court for the District of Columbia seeking declaratory and injunctive relief with respect to the company’s Abbreviated New Drug Application (“ANDA”) #77-615 for generic divalproex sodium delayed-release 500 mg tablets.  Divalproex sodium delayed-release 500 mg tablets is marketed by Abbott Laboratories under the trade name DEPAKOTE.  Nu-Pharm’s ANDA contained a paragraph IV certification to the Orange Book-listed patents for DEPAKOTE, Abbott sued within the statutory 45-day period, and the 30-month stay triggered by the suit reportedly expired in November 2007.  Late last week, the court dismissed the complaint in a one-page order.

According to Nu-Pharm’s memorandum in support of a temporary restraining order and/or preliminary injunction, FDA must approve ANDA #77-615 because the company satisfied all requirements for final ANDA approval and the 30-month stay of approval triggered by the submission of Nu-Pharm’s ANDA with a paragraph IV patent certification expired without a substantive ruling on patent validity or infringement.  FDA nevertheless refused to approve ANDA #77-615 based on an order entered in a contempt proceeding by the U.S. District Court for the Northern District of Illinois (Eastern Division) (Judge Richard Posner sitting by designation) involving an ANDA with a paragraph IV patent certification for generic DEPAKOTE submitted by Apotex Inc. (which formerly owned Nu-Pharm) that also extended to Nu-Pharm’s product. 

In October 2007, the U.S. Court of Appeals for the Federal Circuit reversed the district court’s contempt judgment in the Apotex case with respect to Apotex acting in concert with Nu-Pharm to submit an ANDA “because the district court erred in finding Apotex in contempt when the conduct at issue was not within the express terms of the injunction.”  The Federal Circuit also held, however, that the contempt procedure used by the Illinois court was proper, that Nu-Pharm’s divalproex sodium drug product was not colorably different from Apotex’s divalproex sodium drug product, and that Nu-Pharm’s product would infringe patents covering DEPAKOTE.  Apotex’s request for the Federal Circuit to hear the case en banc was denied, and in January 2008, the company petitioned the Supreme Court for review. 

Nu-Pharm contends that notwithstanding the order in the Illinois court contempt proceeding –to which Nu-Pharm was not and is not a party- FDA is required to approve ANDA #77-615 under the plain language of FDC Act § 505(j)(5)(B)(iii), which states, in relevant part:

If the applicant made a [paragraph IV certification], the approval shall be made effective immediately unless, before the expiration of 45 days after the date on which the notice described in [FDC Act § 505(j)(2)(B)] is received, an action is brought for infringement of the patent that is the subject of the certification and for which information was submitted to the Secretary under FDC Act § 505(b)(1) or § 505(c)(2)] before the date on which the application (excluding an amendment or supplement to the application), which the Secretary later determines to be substantially complete, was submitted. If such an action is brought before the expiration of such days, the approval shall be made effective upon the expiration of the thirty-month period beginning on the date of the receipt of the notice provided under [FDC Act § 505(j)(2)(B)(i)] or such shorter or longer period as the court may order because either party to the action failed to reasonably cooperate in expediting the action, except that . . .

(II) if before the expiration of such period the district court decides that the patent has been infringed . . . .

Specifically, Nu-Pharm argues, among other things, that “for purposes of ANDA approval, the only action that matters is the one brought against the particular ANDA applicant within the 45-day period for infringement of the patent that is the subject of the applicant’s paragraph IV certification.”

FDA, in the Agency’s memorandum accompanying its motion to dismiss, comments in response to Nu-Pharm’s statutory plain meaning arguments that:

FDA must give effect to the [Illinois] court’s order, which expressly pertains to Nu-Pharm. . . .  While Nu-Pharm is correct that FDA must ordinarily approve an otherwise approvable ANDA upon expiration of a 30-month stay, in this case, FDA is subject to a direct court order requiring FDA to delay the approval of Nu-Pharm’s ANDA until after January 29, 2008.  Thus, Nu-Pharm’s statutory arguments miss the point entirely because Nu-Pharm fails to recognize (at least before this Court) FDA’s obligation to give effect to the Illinois court’s order.  For this reason, Nu-Pharm’s lengthy statutory arguments are irrelevant.

FDA goes on to cite two cases in which courts have rejected arguments that FDA’s decision to follow court orders were improper because they were inconsistent with the FDC Act. 

Although Nu-Pharm was unsuccessful in convincing the U.S. District Court for the District of Columbia to grant declaratory and injunctive relief, the company has expressed its intent to appeal the decision.  Specifically, in Nu-Pharm’s brief, the company states:

[I]n the event the Court denies Nu-Pharm’s request for emergency injunctive relief, Nu-Pharm respectfully requests that any adverse FDA decision be stayed and that Nu-Pharm’s 500 mg product be finally approved pending review by, and appeal of this matter to, the United States Court of Appeals for the D.C. Circuit . . . .

We will continue to update you as we learn more information about this interesting case.

By Kurt R. Karst

Last week, we reported on a January 16, 2008 proposed rule issued by FDA that would “reaffirm [the Agency’s] longstanding position that” labeling changes for approved drugs, biologics, and medical devices made by Changes Being Effected Supplements (“CBE Supplements”) may only be made to show newly acquired information or to “add or strengthen a contraindication, warning, precaution, or adverse reaction” when there is sufficient evidence to support the change.  We also commented that the proposed rule, if finalized, could give significant support to firms that invoke an FDA preemption defense in product liability cases where plaintiffs argue that firms should revise their own labeling in accordance with state law. 

On January 23, 2008, several influential U.S. House and Senate Democrats sent a 5-page letter to FDA Commissioner Andrew von Eschenbach expressing their “profound regret” about FDA’s proposed rule and, not surprisingly, blasting the Bush Administration.  The letter states: 

FDA has failed to provide any justification for expending its very limited resources on issuing this 26 page proposal that will serve only to deprive American consumers of critically important and timely information about the safety of their drugs and medical devices. We are concerned that the intent of this proposal is to protect companies in the pharmaceutical and device industry from being held liable for marketing products they know are unsafe. Such a policy change comes at the expense of consumers and violates the mission of the FDA. The issuance of the proposed CBE rule is not an isolated case, but part of a pattern of actions in the Bush Administration’s final months to permanently insulate the drug and device industry from liability.

The letter also cites the “rule of construction” added to FDC Act § 505(o)(4)(I) by Title IX (Enhanced Authorities Regarding Postmarket Safety of Drugs) of the FDA Amendments Act (“FDAAA”).  The rule of construction states:

This paragraph shall not be constructed to affect the responsibility of the responsible person or the holder of the approved application under section 505(j) to maintain its label in accordance with existing requirements, including subpart B of part 201 and sections 314.70 and 601.12 of title 21, Code of Federal Regulations (or any successor regulations).

In noting the rule of construction, the Congressional Letter criticizes FDA’s “glaring omission” in describing Congress’ intent with respect to FDA’s labeling change authority under FDAAA:

It is indeed true that, in FDAAA, Congress intended to give FDA, for the first time, the clear authority to require certain changes in drug labeling. Vioxx is a painful illustration of what had previously been a serious gap in FDA’s authority. In that instance, FDA haggled with the company about the content of the labeling change for over 14 months while consumers continued to take the drug, completely unaware of the serious health risks associated with it. Thus, FDAAA provides FDA with the ability to avoid this kind of protracted negotiation so that the agency can ensure that the important safety information it believes should be on the label is promptly added.

The preamble, however, makes a glaring omission in its description of congressional intent with respect to FDAAA’s labeling change authority. FDA failed to cite the “Rule of Construction” which clearly demonstrates Congress’ equally important goal: to preserve the responsibility of drug companies to promptly update their own product labels to reflect the most current safety information available.

The Congressional Letter goes on to note that “the proposed rule fails to identify a single problem associated with [FDA’s CBE Supplement regulations] that would warrant modification, much less a public health threat of such magnitude as to put issuing the proposal at the top of FDA’s priority list,” and that “the proposal was immediately cited by the Solicitor General in a letter to the United States Supreme Court in support of the industry’s argument that FDA approval preempts individual product liability cases.”  The case referred to is Wyeth v. Levine, which concerns whether prescription drug labeling preempts state law product liability claims.  A copy of the Solicitor General’s brief in that case is available here.  Other documents in the case are available at SCOTUSBlog.

Finally, the Congressional Letter requests that FDA provide certain information by February 13, 2008, including: (1) the number of CBE Supplements FDA received each year since 1982; (2) any cases in which “a manufacturer used the CBE procedure to add or strengthen a contraindication, warning, precaution, or adverse reactions in a manner that harmed the public health, including the dates of such cases;” and (3) documents from FDA officials expressing concern about misuse of CBE Supplements.

By Kurt R. Karst