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  • Competitive Enterprise Institute Report Makes the Case for BioGenerics; House Mulls Competing BioGeneric Legislation

    On May 22, 2007, the Competitive Enterprise Institute (“CEI”), a self-described non-profit public policy organization dedicated to advancing the principles of free enterprise and limited government, published a report, titled “Healthy Competition: The Case for Generic and Follow-On Biologics.”  The report, authored by Gregory Conko, states:

    [M]any groups have sought the creation of a new abbreviated regulatory pathway for generic—or what the FDA calls “follow-on”—biopharmaceuticals.  It may be possible for FDA to establish such an abbreviated approval process on its own, and the agency’s initial attempt to create such a process for generic conventional drugs may serve as a useful model. That effort was frustrated, however, by a variety of inefficiencies, so new statutory authority is probably necessary to make the approval process for follow-on biopharmaceuticals efficient and effective. . . .  [Some] observers note that, because the research and development costs for biopharmaceuticals are significantly greater than for conventional drugs, and because the biotechnology industry is considerably less mature, Congress should enact special provisions—such as additional patent life or data exclusivity protections—that will help the industry remain viable. Indeed, Congress should consider certain limited incentives for innovation. However, once the patent and data exclusivity protections expire, there should be a simple and proficient method for getting approval of follow-on biopharmaceuticals.

    The report also cites several FDA drug approval actions, including the Agency’s May 2006 approval of a 505(b)(2) application for OMNITROPE (somatropin [rDNA origin]) for injection, as an indication that “FDA has begun to reconsider the ‘process is the product’ philosophy that has governed biologics regulation since 1902 —at least so far as small and relatively well-characterized protein products are concerned.”  Indeed, FDA has been departing from the “process is the product” philosophy ever since the mid 1990s when the Agency accepted “bioequivalence data” to compare the monoclonal antibody produced at an original manufacturing site to the monoclonal antibody submitted to FDA as VERLUMA (nofetumomab). This change was further signaled in 1996 when FDA issued its comparability guidance document, “Demonstration of Comparability of Human Biological Products, Including Therapeutic Biotechnology-derived Products,” which permits reliance on clinical data from a “precursor product” if there is evidence of comparability.

    Meanwhile, the U.S. House of Representatives is considering two competing bills that would create a biogeneric approval pathway.  The first bill, H.R. 1038 (“Access to Life-Saving Medicine Act”), was introduced by Rep. Henry Waxman (D-CA) earlier this year, and is generally backed by supporters of generic biologics.  The bill would amend the Public Health Service Act (“PHS Act”) to authorize FDA to approve applications for products that are “comparable” to and “interchangeable” with an innovator product.  A generic applicant may elect to establish that its product can be substituted for the innovator product.  To encourage the development of interchangeable products, the first generic applicant to obtain approval would be awarded a 180-day exclusivity period during which no other interchangeable version may be approved.  However, FDA may approve a comparable version if the product has not been shown to be interchangeable.

    The second bill, H.R. 1956 (“Patient Protection and Innovative Biologic Medicines Act of 2007”), was introduced by Rep. Jay Inslee (D-WA) in April 2007.  The bill would, among other things, amend the PHS Act to authorize FDA to approve “similar biological products,” but would prevent interchangeability.  In addition, the bill would provide marking exclusivity to innovator drug companies.


    Categories: Hatch-Waxman

    FDA Issues Draft Guidance Clarifying Clinical Study Investigator Responsibilities

    On May 10, 2007, FDA announced the availability of a draft guidance for industry –“Protecting the Rights, Safety, and Welfare of Study Subjects – Supervisory Responsibilities of Investigators.”  The draft guidance document is intended to help investigators meet their responsibilities with respect to protecting human subjects and ensuring the integrity of the data from clinical investigations, and clarifies FDA’s expectations concerning the investigator’s responsibility for supervising a clinical study in which some study tasks are delegated to employees of the investigator or to outside parties. 

    Under FDA’s Investigational New Drug and Investigational Device Exemption regulations, clinical study investigators have significant responsibilities. They are responsible for ensuring that a clinical investigation is conducted according to the signed investigator statement, the investigational plan, and for protecting the rights, safety, and welfare of study subjects under the investigator’s care.

    In assessing the adequacy of supervision by a study investigator, FDA’s draft guidance focuses on four major points:  (1) whether there is appropriate delegation of study-related tasks; (2) whether study staff received adequate training; (3) whether there was adequate supervision and involvement in the ongoing conduct of the study; and (4) whether there was adequate supervision or oversight of any third parties involved in the conduct of the study. 

    The draft guidance also provides recommendations for investigators for protecting the rights, safety, and welfare of clinical study subjects.  In particular, clinical investigators should provide a reasonable standard of medical care for study subjects for medical problems arising during participation in the trial, reasonable access to medical care, and attention to protocol violations that can expose study subject to unreasonable risks.

    By Noelle C. Sitthikul

    Categories: Drug Development

    FDA Completes Timed-Release Guaifenesin Enforcement Initiative; Adams Spokesperson, Mr. Mucus, Says “Thanks, FDA! But Why Didn’t You Act Sooner?”

    Last Friday, FDA announced the Agency’s plans to take enforcement action against firms marketing unapproved drug products in timed-release dosage forms containing guaifenesin, a commonly used expectorant drug.  On May 29, 2007, FDA published a Federal Register notice to this effect.  FDA’s latest action is at least the fourth in 2007 –a year FDA in which the Agency has promised to be particularly aggressive in enforcement actions concerning marketed unapproved drugs.  (FDA’s  previous enforcement actions concerned the drug products ergotamine and trimethobenzamide, and the firm PharmaFab.) 

    FDA first took enforcement action with respect to unapproved timed-release guaifenesin drug products in October 2002, when the Agency issued scores of Warning Letters to firms marketing unapproved products competing with Adams Respiratory Therapeutics’ FDA-approved Over-the-Counter (“OTC”) drug MUCINEX (guaifenesin) Extended-Release Tablets, also marketed under the trade name HUMIBID. (You know, the drug product in those ubiquitous “Mr. Mucus” commercials.)  However, that enforcement action was limited to single-ingredient timed-release guaifenesin drug products.  Since then, Adams has obtained FDA approval for 2 other OTC timed-released drug products containing guaifenesin – MUCINEX DM (dextromethorphan HBr; guaifenesin) Extended-Release Tablets (approved in April 2004), and MUCINEX D (guaifenesin; pseudoephedrine HCl) Extended-Release Tablets (approved in June 2004). 

    Adams has been trying to get FDA to take enforcement action against firms marketing unapproved timed-release multiple-ingredient guaifenesin drug products ever since MUCINEX DM and MUCINEX D were first launched.  FDA’s delay of enforcement action until 3 years after Adams’ approvals is curious.  FDA’s Federal Register notice simply states that in accordance with the Agency’s June 2006 Compliance Policy Guide:

    [t]he agency is taking action at this time against these products because the agency has approved applications to market timed-release drug products containing guaifenesin, alone and in combination with other active ingredients, for relief of cough, cold, and allergy symptoms; thus the continued marketing of unapproved timed-release guaifenesin is a direct challenge to the drug approval process.       

    FDA’s “Question and Answer” document accompanying this enforcement action is no more illuminating:

    Why is FDA taking this action?  When drugs lack required FDA approval, consumers and health care providers cannot be assured that those drugs are safe, effective, accurately labeled, and properly manufactured. For products in timed-release form, FDA approval is also necessary to ensure that the product is made so that the active ingredients are released at the correct rate. Improperly manufactured timed-release products may release the active ingredients too quickly, too slowly, or not at all, making the product unsafe or ineffective. FDA has stated in a regulation since 1959 that drugs in this form need to be reviewed and approved by the FDA.

    Whatever reasons FDA might have had for delaying enforcement action, Adams is clearly pleased.  Adams’ President and CEO, Michael Valentino, commented in a press release that:

    We are extremely pleased with the FDA announcement today. We have always believed that the FDA would take enforcement action against the unapproved prescription versions of our Mucinex DM and Mucinex D and remove them from the market in due course. Our initial review of this regulatory action is underway and we expect to be able to serve the additional market demand for our products as it develops.

    Firms currently marketing unapproved timed-release guaifenesin drug products must cease manufacturing them by August 27, 2007.  The products may not shipped in interstate commerce after November 25, 2007.  In addition, FDA’s Federal Register notice “cautions firms against reformulating their products into guaifenesin-free unapproved new drugs that are marketed under the same name or substantially the same name (including a new name that contains the old name) . . . .  Depending on the circumstances, these products may be considered misbranded . . . .”

    Categories: Enforcement

    Is Industry Receiving Full User Fee Benefits? “No,” According to a PricewaterhouseCoopers/BIOCOM Report, But Progress in Other Areas is Being Made

    In a recently-released report on the pharmaceutical, biotech, and medical device industries’ relationship with FDA, a significant number of representatives surveyed responded that user fees have not succeeded in decreasing approval times.  The report, “Improving America’s Health IV: A Survey of the Working Relationship between the Life Sciences Industry and the FDA,” summarizes the results of a 2006 survey of industry conducted by PricewaterhouseCoopers and BIOCOM, a Southern California regional trade association.  The report is the fourth in a series.  Previous reports were based on surveys conducted in 1995, 1997 and 1999. 

    Of the 66 companies that responded to the survey, approximately one-third of pharmaceutical and biologic companies, and nearly one-half of medical device companies indicated that user fees have not resulted in decreased approval times for products under consideration by FDA.  The report notes that this finding may become significant as Congress considers whether to reauthorize the Prescription Drug User Fee Act and the Medical Device User Fee and Modernization Act.  The report suggests that FDA may need “to explain how staff increases speed up reviews,” and that “[g]reater transparency may be needed about how the user fees are being employed, especially by [the Center for Biologic Evaluation and Research].”  The report urges consideration of “a structural review of the product approval process resourcing model . . . to help ensure a proper balance of resources.”

    In addition, among the “most worrisome findings” of the survey is that approximately half of the responding companies reported that goal timeframes caused FDA to reject products because reviewers have not been able to resolve questions within those timeframes.  The report suggests that the availability of additional reviewers may help to alleviate this problem.

    The news is not all bad, however.  The report notes that “[i]n the nearly ten years since the passage of [the FDA Modernization Act], both FDA and life sciences companies have met somewhere in the middle, both making great strides to improve communication and effectiveness of their working relationship.”  Indeed, a majority of surveyed companies “agreed that FDA promptly facilitated requests for clarification from the reviewers, the Agency contact was extremely knowledgeable about their submission status and promptly responded to requests.”  With respect to FDA’s risk mitigation and product lifecycle management initiatives, 88% of surveyed companies “agreed that new FDA guidance . . . has enhanced their comprehension of submission requirements,” and a significant majority of respondents “agreed that FDA is making better decisions because of these guidance tools.”   

    By Brian J. Wesoloski

    Categories: Drug Development

    Houston: We Have A Problem – Who Decides A Company’s Fate in FDA Enforcement Matters?

    Our colleague John Fleder has just written an article for FDLI Update that outlines the agencies and offices that get involved in decisions to commence FDA enforcement actions, such as Warning Letters, seizures, injunctions (consent decrees), and criminal prosecutions.  Mr. Fleder, who used be the Director of the office in the Justice Department that represents FDA in court proceedings, sets forth both FDA’s published and unpublished policies on these matters.  We believe that this article is the first published or otherwise public statement that presents an overview of the way that enforcement actions weave their way through the government bureaucracy.  It is a roadmap for companies and their counsel to determine the people they need to speak with to influence decisions to bring or not bring enforcement actions.

    Categories: Enforcement

    CMS Restricts Coverage Of Anti-Anemia Drugs For Cancer: Are Restrictions For ESRD Use Up Next?

    The Centers for Medicare & Medicaid Services (“CMS”) continues to evaluate and modify, where necessary, Medicare coverage of anti-anemia drugs.  On May 14, 2007, after reviewing clinical evidence in peer-reviewed literature and considering concerns raised by a recent FDA advisory panel, CMS issued a Proposed Decision Memorandum restricting use of “Erythropoiesis Stimulating Agents” (“ESAs”) in cancer and related neoplastic conditions.  ESAs enhance red blood cell production by a hormone pathway that involves erythropoietin and erythropoietin receptors.  Citing safety concerns including thrombosis, cardiovascular events, tumor progression and reduced survival, CMS has decided that there is sufficient evidence to conclude that ESA treatment is not medically reasonable and necessary for certain Medicare beneficiaries undergoing anticancer therapy.  Contemporaneously, CMS will continue to review ESAs in the end-stage renal disease (“ESRD”) setting for possible Medicare coverage policy modification.

    A 30-day public comment period on the Proposed Decision Memorandum ends June 14, 2007.  CMS requests public comments on the restriction of ESAs used to treat certain non-renal clinical conditions either because of the deleterious effect of ESAs on certain underlying diseases or because the underlying disease increases a patient’s risk of suffering adverse effects related to ESA use.  Generally, the clinical conditions include anemia caused by certain cancers or related chemotherapy.  CMS proposes that ESAs are only medically reasonable and necessary to treat cancer-related anemia in cancers in which the presence of erythropoietin receptors on either normal tissue/cell lines or malignant tissue/cell lines has been reported in peer-reviewed literature.  The cancers include, for example, bone, breast, cervical, hepatic, ovarian, prostate, and uterine cancers.  CMS would also impose certain clinical limitations on ESA use for treatment.

    The Proposed Decision Memorandum reflects CMS’s evaluation of public comments on an internally generated National Coverage Decision (“NCD”) formally accepted and opened on March 14, 2007. The NCD reviewed Medicare coverage of non-renal use of ESAs.  CMS’s review follows several FDA Alerts issued in November 2006, and February and March 2007 regarding ESA safety.  Also, as we previously reported, on March 9, 2007, FDA strengthened its warning about cardiovascular and thrombotic events in several populations requiring and Black Box warning, and one Medicare contractor, Noridian, has issued a Local Coverage Decision (“LCD”) restricting off-label coverage and payment for three ESAs — ARANESP, EPOGEN, and PROCRIT. 

    After the June 14th close of the public comment period on the Proposed Decision Memorandum, CMS plans to issue a final NCD within 60 days.  Interested parties should also monitor CMS’s website for further guidance on Medicare coverage of ESAs used to treat patients with ESRD.

    By Kirk L. Dobbins

    Categories: Reimbursement

    West Virginia Prescription Drug Advertising Expense Reporting Rule Revised

    West Virginia continues to move forward with implementing its prescription drug advertising expense reporting law.  On April 24, the West Virginia Secretary of State filed the West Virginia Pharmaceutical Cost Management Council’s revised emergency rule for Prescription Drug Advertising Expense Reporting.  The rule will go into effect upon approval of the Secretary or the 42nd day after filling (June 5, 2007), which ever occurs first.  While this rule is substantially similar to a December 2006 version of the rule, there are two key differences.

    Generally, the rule requires all drug manufacturers or labelers whose drugs are dispensed in West Virginia to annually report the advertising expenses they incurred in the preceding calendar year.  Advertising expenses required to be reported include:

    • Direct or indirect gifts, grants, or payments to prescribers for advertising purposes;
    • Direct-to-consumer (“DTC”) advertising;
    • Direct or indirect gifts of $10,000 or more to a disease-specific patient support or advocacy group for advertising purposes; and
    • Direct or indirect gifts of $10,000 or more to a pharmacy licensed in West Virginia for advertising purposes.

    The first change from the December 2006 version of the rule eliminates the need to report for the 2006 calendar year.  Instead, March, 1, 2008 is the deadline for filing the first report, which will cover only the period from July 1, 2007 through December 31, 2007.  Subsequent annual reports must cover the full preceding calendar year and will be due on April 1, 2008.

    The second change lowers from $1,000 to $100 the minimum annual aggregate amount of gifts, grants and payments that requires reporting on the prescription drug advertising expenses reporting form.

    In addition, the revised rule also clarifies that national or regional DTC advertising expenses should be reported on a prorated basis.  Such expenses are to be calculated by multiplying the total expenses by West Virginia’s most recent population (as reported by the U.S. Census Bureau), divided by the total population targeted by the DTC advertising.

    Comments on the rule are due to the West Virginia Pharmaceutical Cost Management Council by May 25, 2007.

    By Bryon F. Powell

    Categories: Miscellaneous

    DDMAC Issues Two Untitled Letters Focusing on Comparative Claims and the Need for Substantial Evidence; A Momentary Departure From Past Practice or a Sign of Things to Come?

    As we previously reported, FDA’s Division of Drug Marketing, Advertising, and Communications (“DDMAC”) has, in the past year, focused its efforts on ensuring that promotional pieces contain proper presentations of safety data and appropriate efficacy claims.  Two new Untitled Letters from DDMAC, however, illustrate that safety issues are not DDMAC’s sole focus; companies also need to support any comparative efficacy and superiority claims with substantial evidence. 

    On May 9, 2007, DDMAC issued two Untitled Letters, one concerning a detail aid for GlaxoSmithKline’s FLONASE (fluticasone propionate) Nasal Spray, 50 mcg and the other regarding a detail aid for Schering Corporation’s NASONEX (mometasone furoate monohydrate) Nasal Spray, 50 mcg.  FLONASE and NASONEX are approved for seasonal allergic and perennial allergic rhinitis in certain patients. 

    According to DDMAC’s Untitled Letters, the detail aids misbrand the drugs in violation of the FDC Act §§ 502(a) and 201(n) because:

    • Both detail aids make unsubstantiated superiority claims that misleadingly imply that each drug is superior to the other;
    • Both detail aids use the word “congestion” when neither drug is specifically indicated for congestion, thus overstating their efficacy; and
    • The FLONASE detail aid fails to reveal a material fact in that it does not contain the full, approved indication. 

    Superiority Claims

    DDMAC found that the superiority presentations in the FLONASE detail aid are misleading because the cited reference does not constitute “substantial evidence” for two reasons.  First, the study design did not clearly plan a head-to-head trial (it originally contemplated a placebo-controlled trial of FLONASE and, therefore, it is difficult to determine the significance of the comparison finding).  Second, the study was not replicated, and typically superiority claims should be based on comparisons of the two drug products in two adequate, well-designed, head-to-head clinical trials.

    DDMAC found that the superiority presentations for NASONEX in the detail aid are misleading because they are based on patient responses to a single question in the “overall preference questionnaire” that assessed 8 product sensory attributes.  DDMAC found that the use of a response to a single question is insufficient to support the broad concept of overall patient preference.  DDMAC also stated that patient preference claims should be derived from well-designed and controlled head-to-head studies using well-developed instruments that can evaluate patient preference.  Further, DDMAC found a graph in the NASONEX detail aid to be misleading in that it only presented favorable results from the preference questionnaire, when NASONEX only received favorable results for half of the questions. 

    Overstatement of Efficacy

    DDMAC cited both detail aids for highlighting “congestion” when the drugs are approved, in relevant part, for seasonal allergic rhinitis.  The indication, “seasonal allergic rhinitis” is based on studies reviewing results of both FLONASE and NASONEX on a composite of several symptoms that may have included congestion as one of those symptoms.  These results are referred to as a total nasal symptoms score (“TNSS”).  DDMAC stated that because the primary efficacy endpoint of the studies for both drugs was on TNSS, the studies do not represent a clear effect on any individual TNSS component.

    DDMAC’s Untitled Letters to Glaxo and Schering are consistent with previous enforcement letters addressing comparative claims, but are an interesting departure from DDMAC’s practices in the past year in that they do not cite to the omission or minimization of risk information.  As we previously reported, in 2006, of the 22 Enforcement Letters issued by DDMAC, only one did not cite the omission or minimization of risk as a violation. 

    By Dara Katcher Levy

    Categories: Enforcement

    Dietary Supplement GMPs Expected to be Published in June 2007; Will FDA Pull a “Switcheroo”?

    The Office of Management and Budget (“OMB”) recently gave clearance for FDA to publish final regulations on current good manufacturing practices (“GMPs”) for dietary supplements.  The dietary supplement GMPs are expected to appear in the Federal Register in June 2007, which is over four years after they were proposed in March 2003.  Upon hearing the news, Sen. Orrin Hatch (R-UT) exclaimed “Finally!”  Sen. Hatch is one of the principal authors of the Dietary Supplement Health and Education Act of 1994 (“DSHEA”).  DSHEA gave FDA the authority to write dietary supplement GMPs.

    The key question, given that over 4 years have passed since the publication of the proposed rule, will be whether the final rule has changed so much from the proposed rule that the regulation could be subject to legal challenge.  If the changes are significant, the final dietary supplement GMPs could be challenged under the Administrative Procedure Act for a lack of notice if the final GMPs are not a “logical outgrowth” of the proposed GMPs.  As the U.S. Court of Appeals for the District of Columbia Circuit stated in its 2005 opinion in Envtl. Integrity Project v. EPA, “we have refused to allow agencies to use the rulemaking process to pull a surprise switcheroo on regulated entities.”  There is some indication, however, that the rule may be published as an “interim final rule” permitting further comments and changes, which would likely avoid legal challenges.   The rule is purported to be part of a 1,300-page document.  No wonder it took more than 4 years to get them written!

    By Cassandra A. Soltis

    USDA Proposes the Addition of 38 Substances to NOP National List

    On May 15, 2007, the U.S Department of Agriculture (“USDA”) issued a proposed rule to amend the agency’s National Organic Program (“NOP”) regulations at 7 C.F.R. Part 205.  The proposal, if finalized, would add 38 ingredients to the National List of Allowed and Prohibited Substances (“National List”) at § 205.606 of the NOP regulations. 

    The NOP develops the federal regulatory framework governing organic food, and covers all agricultural products, including crops and livestock, and fresh and processed food.  Under the NOP regulations, farmers and food processors must be certified in order to use the word “organic” in reference to their businesses and products.  A finished food product qualifies for an organic seal if at least 95% of the product is organic and the remaining non-organic substances appear on the National List as permitted substances. A finished product may bear a label stating “made with organic” if at least 70% of the product is organic and the remaining non-organic substances appear on the National List.

    In January 2005, the U.S. Court of Appeals for the First Circuit ruled in Harvey v. Veneman that an interpretation that the NOP regulations at 7 C.F.R § 205.606 create a blanket exemption from the National List was contrary to the Organic Foods Production Act of 1990, which authorized the establishment of the NOP regulations.  On remand, the U.S. District Court of Maine ruled in Harvey v. Johanns that § 205.606 was unclear and had been misinterpreted to permit the use of any non-organic agricultural product in “certified organic” or “made with organic” products as long as an accredited certifying agent determined that an organic version of the product was not commercially available.  To prevent future misinterpretation, the court ordered the USDA to clarify that any non-organic agricultural product may be used in organic and made with organic food products only if that product is included on the National List as a permitted substance. The court allowed the continued sale of products “produced in conformance with the misinterpretation” until June 9, 2007.  Subsequently, the USDA issued a final rule clarifying § 205.606 (effective June 9, 2007) so that a non-organic agricultural product may only be used when the product is listed in § 205.606 and an accredited certifying agent determines that an organic form of the product is not commercially available.  Consequently, as of June 9, 2007, the use of any non-organic agricultural substance that is not included in § 205.606 is prohibited.  The use of a product is not permitted until the USDA publishes a final NOP regulation amending the National List to include the substance.  To prevent the disruption of organic commerce, the USDA/NOP allows only seven days to comment on a proposed amendment to the National List.

    Any interested person may send a petition to the NOP to add a substance to the National List.  The National Organic Standards Board (“NOSB”) reviews each petition.  At least 30 days before a public hearing by the NOSB, the petition is made available to the public for comment.  During the NOSB meeting, any interested person has an opportunity to publicly comment on the petition.  Based on the petition, oral and written comments, and discussion, the NOSB votes on whether to recommend the addition of a petitioned ingredient to the National List.  Therefore, interested parties have an opportunity to comment on proposed additions to the National List long before a proposal to amend the National List is published in the Federal Register.

    The 38 substances that the USDA/NOP proposes to add to the National List at § 205.606 include 19 colors, fish oil, fructooligosaccharides, gelatin, oligofructose-enriched inulin, pectin, chipotle chili pepper, unmodified rice starch, and whey protein concentrate.  The deadline for written comments is May 22, 2007.  Inclusion on the National List does not mean that the product can be used.  Annually, a certifying agent must evaluate whether an organic alternative is commercially available.

    By Riëtte van Laack


    • Congressional Research Service Report on Harvey v. Veneman
    Categories: Foods

    340B Program Listens to Reason – No Need for Two AMP Calculations

    As pharmaceutical manufacturers all know by now, the Deficit Reduction Act changed the definition of the average manufacturer price reported to the Centers for Medicare & Medicaid Services for purposes of the Medicaid Rebate Program, requiring that customary prompt pay discounts to wholesalers are no longer to be deducted in the calculation of AMP as of the first quarter of 2007.  (And if you don’t know this already, please contact Jeff Wasserstein or Alan Kirschenbaum right away!)

    Under the 340B program, manufacturers are required to offer certain PHS covered entities a discounted price, which is the AMP minus the unit rebate amount (which is the greater of 15.1% of AMP or AMP minus best price).  With the shift in the calculation in AMP mandated by CMS, one might have thought that this would carry over to other programs, such as the 340B program, as well, since the definition of AMP is tied into the definitions set up by the Medicaid Drug Rebate statute, 42 U.S.C. § 1396r-8.  Until recently, however, the Office of Pharmacy Affairs (OPA) at the Health Resources and Services Administration (HRSA), which administers the 340B program, insisted that manufacturers calculate two AMPs, one using the new methodology for CMS’s purposes under the Medicaid Rebate Program, and one to be used for calculating the 340B ceiling price that included prompt pay discounts. 

    Thankfully, OPA listened to reason and rescinded this policy, which directed manufacturers to calculate AMP for purposes of the 340B program by taking into account prompt pay discounts, contrary to the DRA.  A May 9 Dear Manufacturer letter from Jimmy Mitchell, Director of OPA, the letter rescinds OPA’s January 30 letter, which had set forth the requirement that manufacturers calculate two separate AMPs.  As you can see in the attached letter, OPA has listened to reason and decided that a single AMP that meets the DRA’s statutory requirements should be used for both programs.

    Categories: Reimbursement

    CMS Proposes HCPCS Coding Changes for IVIG

    The Centers for Medicare & Medicaid Services (“CMS”) proposed brand-specific Healthcare Common Procedural Coding System (“HCPCS”) code changes for intravenous immune globulin (“IVIG”) that may lead to enhanced reimbursement for the biologic.  The HCPCS coding changes are effective July 1, 2007, and were announced in preliminary decisions for a May 15, 2007 HCPCS Public Meeting Agenda.  The new HCPCS codes coincide with the release of an April 2007 report from the Health and Human Services Office of Inspector General, which examined Medicare reimbursement for IVIG and addressed concerns about the biologic’s availability.

    IVIG is a blood plasma derivative that is FDA-approved to treat patients whose immune systems produce insufficient antibodies to fight infection. Patients are infused with IVIG to temporarily replace antibodies to guard against various opportunistic infections that otherwise could be life-threatening.  FDA-approved indications include primary immunodeficiency, and certain immunodeficiency syndromes such as pediatric human immunodeficiency syndrome.  IVIG is also prescribed for many off-label uses, however, including chronic idiopathic demyelinating polyneuropathy, also known as chronic GuillainBarré syndrome.  There are currently two HCPCS codes for IVIG products, depending on whether they are powder or liquid.

    Medicare reimbursement for IVIG is based on manufacturer average sales price (“ASP”).  Currently, Medicare Part B IVIG administered in hospital outpatient departments and in physician offices is reimbursed at 106% of the weighted average ASP.  Medicare also makes a separate payment of $75 to physicians and hospital outpatient departments for pre-administration-related services associated with IVIG (HCPCS code G0332) to cover the effort to locate and acquire IVIG for administration.  Even so, some providers believe that Medicare ASP-based reimbursement is not enough to pay acquisition costs for IVIG.  Because reimbursement is based on a weighted average of the ASPs for the various IVIG products, providers that use more expensive IVIG products may be under-reimbursed, since the weighted average incorporates lower-priced products as well.  This has caused some providers to stop furnishing the biologic to Medicare patients.

    CMS’s decision to split HCPCS codes for IVIG into brand-specific codes may improve Medicare reimbursement for the biologic.  Brand-specific HCPCS coding will allow Medicare reimbursement to more accurately reflect provider acquisition cost of IVIG.  The new codes will also enable CMS to more readily monitor IVIG claims and access.

    By Kirk L. Dobbins

    Categories: Reimbursement

    FDARA: Priority Review For Sale

    In the near future, one might see the following ad on Ebay or Craig’s List: "For Sale:  One FDA Priority Review voucher.  Mint condition.  Entitles 505(b)(1) applicant to 6-month FDA review.  Sponsor must pay additional user fee."

    In an effort to incentivize companies to invest in the development of treatments for neglected and tropical diseases, the Senate-passed version of the FDA Revitalization Act ("FDARA") creates a transferable priority review voucher for companies that obtain approval for such products.  When FDA grants "priority review," the Agency agrees (under PDUFA III) to review and act on an application within 6 months of receipt. 

    The bill, if enacted, would add § 524 to the FDC Act –"Priority Review To Encourage Treatments For Tropical Diseases."  Under this provision, FDA "shall award a priority review voucher to the sponsor of a tropical disease product upon approval by [FDA] of such tropical disease product" after the enactment of FDARA.  "Tropical disease products" are defined to include products for HIV, malaria, tuberculosis and related diseases, and "any other infectious disease that disproportionately affects poor and marginalized populations, including those diseases targeted by the Special Programme for Research and Training in Tropical Diseases cosponsored by the United Nations Development Program, UNICEF, the World Bank, and the World Health Organization."  A priority review voucher may be used when FDA would otherwise assign a "standard review" (10-month review) to an application. 

    A priority review voucher awarded to a sponsor is transferable.  The bill states that "[t]he sponsor of a tropical disease product that receives a priority review voucher . . . may transfer (including by sale) the entitlement to such voucher to a sponsor of a new drug for which an application under section 505(b)(1) will be submitted after the date of the approval of the tropical disease product."  In addition to limiting priority review vouchers to 505(b)(1) applications (it is unclear why 505(b)(2) applications are excluded), there is a string attached to such vouchers.  Specifically, FDA must assess a new priority review voucher user fee.  Under the bill, FDA "shall establish a user fee program under which a sponsor of a drug that is the subject of a priority review voucher shall pay to [FDA] a user fee . . . in addition to any fee required to be submitted under" PDUFA.  Presumably FDA will establish this new fee under the goals document that will be issued as part of PDUFA IV once FDARA is signed into law later this year.   

    The tropical disease incentive provision was added by an amendment sponsored by Sen. Sam Brownback (R-KS).  In introducing the amendment Sen. Brownback commented that:

    According to the World Health Organization, more than 1 billion people -nearly one in every 6 people worldwide- are affected by at least one neglected tropical disease.  In addition, neglected tropical diseases claim roughly 500,000 lives each year.  However, less than 1 percent of the 1,400 drugs registered between 1975 and 1999 -over a 25-year-period- fewer than 1 percent of the 1,400 drugs registered treated such diseases.  This disparity is clearly due to the lack of financial incentive for pharmaceutical companies to bring neglected tropical disease treatments to market because these diseases disproportionately affect low-income countries, with the poorest of the poor in those countries needing those medicines, most of them in Africa.  Creating incentives for companies to invest in treatments for these diseases is not only in our country’s national interest, but it is consistent with our longstanding tradition of caring for those who are less fortunate around the world.  In other words, it is consistent with American values.

    Although the FDC Act does not currently offer incentives specifically for the development and approval of products for tropical diseases, if a tropical disease meets the requirements of the Orphan Drug Act, e.g., United States prevalence of 200,000 or less persons (presumably many do), FDA may designate a drug for a tropical disease as an "orphan drug."  Orphan drug designation qualifies an applicant for a 7-year period of orphan drug exclusivity, tax credits, and other benefits.  Therefore, while Sen. Brownback’s amendment offers a new type of incentive for the development of drugs for tropical diseases (some of which may not qualify for Orphan Drug Act benefits), sponsors should also consider whether their drug qualifies as an "orphan drug."

    Categories: Drug Development

    U.S. Senate Passes Omnibus FDA Reform Bill

    Earlier this week, the U.S. Senate passed S. 1082, the “Food and Drug Administration Revitalization Act” (“FDARA”) by a vote of 93-1 (Sen. Bernie Sanders (I-VT) was the lone “nay” vote).  The bill is an omnibus FDA reform and user fee package that, among other things, reauthorizes the Prescription Drug User Fee Act (i.e., PDUFA IV).  The U.S. House of Representatives must now move forward on its version of the legislation.  Once the House bill is passed, any differences between the bills will be reconciled in conference committee.


    A copy of the version of the bill passed by the Senate was published in the Congressional Record, and is available here.  Next week, FDA Law Blog plans to make a series of posts on various provisions of the bill.

    Categories: Miscellaneous

    FDA Opposes Mylan & Apotex Reconsideration Motions on Amlodipine Besylate; FDA Declines to Immediately Approve Apotex ANDA

    Last week we reported on motions submitted by Mylan and Apotex requesting that the U.S. District Court for the District of Columbia reconsider its April 30, 2007 memorandum opinion concerning 180-day generic drug and pediatric exclusivity issues involving NORVASC (amlodipine besylate) Tablets and the availability of generic versions of the drug product.  Mylan’s amlodipine drug product is the only generic version of NORVASC currently approved by FDA.

    Apotex claims in its reconsideration motion that the company was successful in having the district court injunction lifted by a March 29, 2007 order entered by the U.S. District Court for the Northern District of Illinois, and that because of this order, FDA should immediately approve Apotex’s ANDA.  Mylan’s motion for reconsideration takes issue with FDA’s interpretation of FDC Act § 505A(c)(2) with respect to the applicability of Pfizer’s pediatric exclusivity to other generic applicants. 

    On May 8, 2007, FDA filed a memorandum in opposition to the Mylan and Apotex requests.  With respect to Mylan’s claims, FDA argues that “Mylan’s brief adds nothing new that requires reconsideration,” and that the court should deny the company’s reconsideration request.  With respect to Apotex, FDA refers to a May 7, 2007 letter answer the Agency sent to the company.  In that letter, FDA declines to immediately approve Apotex’s amlodipine ANDA.  FDA’s letter states:

    The issuance of the March 29 Order by the Illinois district court does not change the result under the above analysis or entitle Apotex to immediate approval.  Pediatric exclusivity will continue to bar approval of Apotex’s ANDA until Apotex affirmatively wins its patent litigation, with a final effective decision that the patent is invalid or not infringed.  The March 29 Order is not a final effective decision that the patent is invalid or not infringed.  Lifting the injunction does not by itself convert the original Illinois district court finding the ‘303 patent is valid and infringed into a finding that the patent is invalid or not infringed.  Either the Illinois district court’s original judgment that the patent is valid and infringed remains in effect until the mandate issues, or, at best, the lifting of the injunction nullified that court’s initial decision so that there is in effect no district court judgment.  Under either scenario, Apotex has not obtained a final effective court determination that the patent is invalid such that pediatric exclusivity has ceased to bar approval of Apotex’s ANDA.

    Both Mylan and Apotex have submitted briefs contesting FDA’s May 8, 2007 opposition memorandum. 

    Categories: Hatch-Waxman