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

The AAPS complaint asks the court to:

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

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

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

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

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

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

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

On April 4, 2007, FDA published proposed regulations for the labeling of irradiated foods and dietary supplements.  The proposed revisions are in response to the Farm Security and Rural Investment Act of 2002, which directed FDA to propose changes to the current regulations at 21 C.F.R. Part 179, and to amend the definition of “pasteurization” in section 403(h)(3) of the Federal Food, Drug, and Cosmetic Act (“FDC Act”).  The proposed regulations address three issues: 1) when an irradiated food or dietary supplement does not need to be labeled “irradiated”; 2) when an irradiated food may be labeled “pasteurized” rather than “irradiated;” and (3) when a manufacturer may use an alternative term for “irradiated.”   

The most significant revision is FDA’s proposal that an irradiated food need not be labeled with the radura symbol and a radiation disclosure statement unless the irradiation causes a material change.  FDA explains in the preamble that a material change is “a change in the organoleptic, nutritional, or functional properties of a food . . . that the consumer could not identify at the point of purchase,” e.g., irradiation of bananas to slow the ripening process.  The effect of irradiation is not material if the change is “within the range of characteristics normally found.”  FDA asks for comments with respect to the Agency’s position that the extension of shelf life by inactivating micro organisms and other pests does not constitute a material change.  FDA is also soliciting comments regarding material and non-material irradiation-induced changes.

An irradiated product that is materially changed must be labeled with the radura symbol and a radiation disclosure statement.  The proposed regulations provide two alternatives to labeling the product as “irradiated.”  These proposals are essentially restatements of statutory provisions.  The option for use of “pasteurized” rather than “irradiated” incorporates the definition of pasteurization in FDC Act § 403(h)(3) allowing an irradiated food to be labeled “pasteurized” provided that certain conditions are met.  The manufacturer must notify FDA and submit data showing the effectiveness of the irradiation process 120 days before a manufacturer plans to label an irradiated product as “pasteurized.”  If during those 120 days FDA has not objected to the proposed use, the manufacturer may label the irradiated product as “pasteurized.”  In addition to the term “pasteurized,” alternative terms are permitted.  For use of an alternative term, the manufacturer must submit a petition to FDA rather than a notification.  A petition must contain data that “show consumer understanding of the purpose and intent of the proposed alternative labeling.”  This option has been available since 2002 under an FDA guidance document.  To date, FDA has not received a petition requesting the use of an alternative for irradiated foods.  Because the proposed regulations will reduce the number of foods that must be labeled with a radiation disclosure, future use of this provision seems unlikely.

Written comments to the proposed regulations should be submitted to Docket No. 2005N-0272 by July 3, 2007. 

By Riëtte van Laack

On April 10, 2007, CMS issued a draft of its revised Clinical Trial Policy, renamed Clinical Research Policy.  The draft policy was issued after CMS’s consideration of public comments on the agency’s July 10, 2006 coverage tracking sheet announcing the reconsideration of the September 19, 2000 Clinical Trial Policy.  CMS also considered recommendations from the December 13, 2006 Medicare Evidence Development and Coverage Advisory Committee (MedCAC) after further consideration by a panel of federal agencies.  There will be a 30 day public comment period on the draft Clinical Research Policy followed by issuance of a final policy 60 days later.

Among other changes, the draft Clinical Research Policy:

·         Renames the seven highly desirable characteristics of a clinical research study as "General Standards for a Scientifically Sound and Technically Sound Clinical Research Study;"

·         "Deems" FDA required and approved post-approval studies as meeting the general standards of a scientifically and technically sound clinical research study;

·         "Deems" studies conducted under a National Coverage Determination requiring Coverage with Evidence Development (CED) as meeting the general standards of a scientifically and technically sound clinical research study;

·         Expands "deemed" studies to those approved by any HHS agency, the Department of Veterans Affairs and the Department of Defense;

·         Requires a written protocol for research studies;

·         Revises the Medicare coverage requirements for a clinical study and renames the requirements as "Medicare -Specific Standards," which include, among other requirements:

·         an explanation in the research protocol of how the results are generalizable to the Medicare population;

·         a discussion in the research protocol of inclusion criteria and consideration of relevant subpopulations (as defined by age, gender, race/ethnicity, socioeconomic or other factors);

·         study results, negative or positive, must be published;

·         Clarifies and renames "routine clinical services" that will be covered under the policy;

·         Clarifies and defines administrative services that Medicare will not cover;

·       Defines investigational clinical services that may be covered for clinical research studies or through CED.

Manufacturers conducting clinical trials on drugs, biologics or medical devices that treat Medicare covered diseases or injuries should review the draft policy carefully and consider commenting on the draft policy.   

By Kirk L. Dobbins

The Government Accountability Office (“GAO”) recently released a report detailing the revenue information from certain companies that participate in the Medical Device User Fee Program (“MDUFMA”).  MDUFMA authorizes FDA to charge user fees to review applications for the clearance or approval of medical devices.  MDUFMA was passed in 2002 out of concern that FDA lacked the resources necessary to review such applications in a timely manner.  FDA’s authority to collect fees under MDUFMA will sunset on October 1, 2007, unless Congress reauthorizes the law.

The GAO report was issued in response to a 2006 letter from Representative Joe Barton (R-TX), the Ranking Minority Member on the House Committee on Energy and Commerce, which requested the revenue information to assist Congress in determining whether changes to MDUFMA’s small business qualification are necessary.  The fees charged under MDUFMA vary, depending on details such as the type of application and the size of the company submitting the application.  For example, in Fiscal Year 2006, fees for Premarket Notifications (for clearance of a device through the 510(k) process) were $3,833, while fees for Premarket Approval (“PMA”) applications were $259,600.  These fees can be reduced or waived if companies filing the applications qualify as small businesses.  When MDUFMA was enacted in 2002, a company could qualify as a small business if its annual revenues (including those of any affiliate, partner, or parent) were $30 million dollars or less.  In 2005, this threshold was increased to $100 million.

Based on GAO’s review of FDA application data and companies’ revenue information, 697 companies qualified as small businesses under MDUFMA in Fiscal Year 2006.  These companies’ applications constituted about 20% of the approximately 4,500 device applications subject to user fees that were submitted to FDA that year.  Ninety-five percent of the small businesses –656– had revenues below the original $30 million small business threshold.  Forty-one companies had revenues above $30 million but below the current $100 million small business threshold; of these, thirty-five companies’ revenues were below $70 million. 

The GAO report also revealed that there were 258 publicly traded companies that submitted device applications subject to user fees in Fiscal Year 2006 that did not qualify as small businesses.  These companies were responsible for about 37% of the approximately 4,500 device applications subject to user fees that were submitted to FDA that year.  Sixty percent of these companies –155– had revenues that exceeded $500 million.  Another forty-seven companies had revenues between $100 million and $500 million; fifty-six companies had revenues below the $100 million small business qualification threshold, but for reasons that were not determined, did not qualify as small businesses. 

By Christine P. Bump

Last week, we reported on several citizen petitions submitted to FDA by Mylan and Pfizer concerning the availability and applicability of 180-day exclusivity and pediatric exclusivity to amlodipine drug products.  FDA has also established a separate docket to solicit the views of interested parties on these issues as part of the Agency’s efforts to respond to the U.S. District Court for the District of Columbia’s order in Mylan Laboratories, Inc. v. Leavitt that FDA decide by Wednesday, April 11th whether it will approve any Abbreviated New Drug Applications (“ANDAs”) for generic amlodipine besylate besides Mylan’s ANDA.  In a new development, Zydus Pharmaceuticals (USA) Inc. has submitted a fourth citizen petition to FDA concerning amlodipine. 

The Zydus petition requests that FDA “file papers in opposition to plaintiff Mylan’s application for a [Temporary Restraining Order (‘TRO’)] in [Mylan Laboratories, Inc. v. Leavitt] and to seek a dissolution of the TRO . . . that lasts until April 13, 2007 at 5:00 pm.”  Zydus also requests that FDA “approve all complete amlodipine besylate ANDA[s] that are currently pending.”  In support of its requests, Zydus contends that:

Mylan through its petitions and TRO intends solely to prevent any other generic from entering the market during a period in which approved ANDA holders are rightfully permitted to enter the market. . . .  [Additionally,] by obtaining such an order, Mylan intends to extend the 180-day exclusivity period beyond that permitted statutorily . . . .  Zydus believes that Mylan has forfeited any 180-day exclusivity period that may have been awardable to it . . . .

Stay tuned for more updates on this evolving case.   

RELATED READING:

• April 5, 2007 Orange Book Blog Post

UPDATE:

Earlier today, the U.S. District Court for the District of Columbia issued an order extending from April 11, 2007 to April 18, 2007 the date on which FDA must notify the court of the Agency’s decision with respect to the issues involved in Mylan Laboratories, Inc. v. Leavitt.  Further, the court changed the date until which FDA is enjoined from taking final agency action from April 13, 2007 to April 20, 2007.

During the past several years, government enforcement authorities have focused an increasing amount of attention on the marketing activities of medical device companies.  This increased scrutiny has taken the form of investigations through subpoenas and intervention in qui tam lawsuits (lawsuits initiated by a third party on behalf of the government).  Often, these actions are brought by whistleblowers under the Federal False Claims Act (FCA).

Michelle L. Butler and Jeffrey N. Wasserstein recently published an article in Medical Device & Diagnostic Industry addressing kickback issues in the medical device industry. 

“Orphan drugs” are products recognized by FDA that are intended for use in a “rare disease or condition” ─generally a disease or condition with a United States prevalence less than 200,000 persons.  Because the market for orphan drugs is often limited, Congress and FDA have traditionally accorded orphan drugs special consideration.  For example, sponsors of applications for designated orphan drugs are statutorily exempt from paying the one-time application user fee.  This is significant.  The full application user fee for Fiscal Year 2007 is $896,200 (a figure that is certain to rise under the next iteration of the Prescription Drug User Fee Act (“PDUFA”)). 

Orphan drug sponsors are not exempt under the FDC Act from paying annual product and establishment fees (which for Fiscal Year 2007 are $49,750 and $313,100, respectively ─also certain to rise under PDUFA IV).  Instead, such sponsors may request that FDA waive or reduce the annual product and establishment fees on the basis that a waiver/reduction “is necessary to protect the public health,” or because “the assessment of the fee would present a significant barrier to innovation because of limited resources available to such person or other circumstances.”  FDC Act § 736(d)(1)(A)-(B).  Indeed, when Congress enacted PDUFA in 1992, it specifically contemplated that although user fee waivers and reductions would be available to all NDA sponsors, the so-called “public health” and “barrier to innovation” waivers “will give the FDA sufficient authority to waive fees for orphan drugs.”  H.R. Rep. No. 102-895, at 17 (1992). 

According to recent testimony from the National Organization for Rare Disorders (“NORD”), however, Congress’ intent has been impeded by an FDA policy developed in 1993 under which the Agency interprets both the “public health” and the “barrier to innovation” waiver/reduction mechanisms to involve a specific financial test (i.e., $10 million in annual gross revenues and no corporate parent or funding source with annual gross revenues of $100 million or more).  According to NORD:

The current waiver program administered by FDA for product and facility fees has chosen to interpret gross revenues of $10 million or greater as evidence that an entity and its affiliates are fully capable of developing and marketing orphan drugs without regard to the cost of users fees.  We know that FDA believes that a higher threshold than $10 million in corporate gross sales will result in a significant expansion of waived products and a noticeable increase in the fees that would be charged to remaining companies.  Nonetheless, this does not conform with any common sense view of what constitutes a small company in the bio-pharmaceutical industry and seems unrealistically low, especially with the higher fees that will be required under PDUFA IV.

NORD is requesting that Congress resolve the issue “in a way that assures the continued success of the Orphan Drug Act without undercutting the user fee program.”  Specifically, NORD believes that FDA should waive product and establishment user fees for drug products with annual United States revenues less than $25 million.  One recent PDUFA IV proposal does not include any user fee relief for orphan drug sponsors specifically.  There is still plenty of opportunity, however, for Congress to address the issue in new draft legislation.

FDA was previously asked to address this issue in a January 2003 citizen petition submitted by Orphan Medical, Inc.  The petition (supported by NORD) requested, in part, “that FDA establish a clear and fair waiver policy from the establishment and product fees for orphan drugs that have modest sales.”  The petition was withdrawn in August 2006 without a substantive response by FDA. 

On March 16, 2007, the U.S. District Court for the District of Utah ruled that FDA’s 2004 rulemaking banning ephedrine alkaloid dietary supplements [EDS] was “procedurally and substantively proper.”  Nutraceutical and Solaray brought the suit against FDA to prevent the Agency from enforcing its 2004 final rule banning EDSs of any dosage from the U.S. market.  The bases of the plaintiffs’ challenge were that FDA gave insufficient statutory notice and opportunity for comment on its use of a risk-benefit analysis to determine that EDS are adulterated, and that by banning EDS but not other products containing ephedrine alkaloids FDA’s action was arbitrary and capricious.  In April 2005, the District Court granted summary judgment in favor of the plaintiffs on their separate claim that the risk-benefit analysis used by FDA in the final rule did not conform to its statutory mandate.  However, in August 2006, the Tenth Circuit overturned the lower court’s decision, and the District Court has since granted summary judgment for the defendants on this point.

With regard to the plaintiffs’ notice and comment challenge, the court found that FDA had given adequate opportunity for notice and comment.  Judge Cassell noted that “[t]he [Administrative Procedure Act] requires only limited opportunity to participate – no more.”  Judge Cassell went on to state that the risk-benefit analysis FDA used in determining EDS were adulterated was specifically limited to EDS and had not been established for other dietary supplements.  However, it should be noted that nothing in the decision bars FDA from employing this same risk-benefit analysis in later rulemaking regarding the adulteration of other dietary supplements.  Furthermore, the EDS ban precedent would be useful to FDA if the Agency were sued with regard to its application of the risk-benefit analysis to another dietary supplement.  The court similarly found for the defendants on the plaintiffs’ arbitrary and capricious challenge.  Judge Cassell wrote “[t]he [Dietary Supplement Health and Education Act] requires the FDA to regulate dietary supplements differently than conventional foods –conventional foods and other drug products are subject to their own statutory and regulatory requirements. . . .”

RELATED READING:

• FDA Ephedra Website

By Bryon F. Powell

A recent California case, In re CV Therapeutics, Inc. Securities Litigation, raised the question of whether, within the context of the attorney-client privilege, regulatory advice provided by food and drug attorneys qualifies as “legal” (protected) advice or “business” (generally not protected) advice.  The court concluded that “[d]ocuments created in the context of seeking FDA approval, an inherently legal process, present ‘a circumstance virtually necessitating legal representation,’ as the FDA approval process requires close supervision by legal counsel.” 

Our colleague, John Fleder, wrote in a recent article for FDLI Update that “[t]he Magistrate Judge’s decision was a fundamental ruling on whether food and drug lawyers provided legal advice.”  Of course, not all advice provided by food and drug attorneys may automatically qualify as “legal” advice.  As such, Mr. Fleder notes that “[t]o maximize the protection of confidentiality, it is important that companies and/or their outside counsel timely document that counsel are rendering legal advice to the client when the purpose of the advice sought is, as it normally should be, legal advice.”

Yesterday, FDA’s Cellular, Tissue and Gene Therapies Advisory Committee voted in favor of Dendreon Corp.’s PROVENGE (sipuleucel-T), an autologous active cellular immunotherapy intended to treat men with asymptomatic metastatic androgen independent prostate cancer.  The committee unanimously voted (17-0) that PROVENGE is reasonably safe for the intended population, and overwhelmingly voted (13-4) that the submitted data provide substantial evidence to establish the efficacy of the biologic, based on a demonstrated 4.5 month survival advantage over placebo in the follow-up period of a randomized, double-blind, placebo-controlled trial.  Equally importantly, the unique product characterization issues presented by cell therapy were discussed at yesterday’s meeting.  FDA is expected to make a final decision on the PROVENGE Biologic License Application by mid-May. 

If approved, PROVENGE would be the first autologous cancer cell therapy, and the first cancer immunotherapy approved by FDA.  According to a Dendreon press release, “If approved, PROVENGE could become a breakthrough treatment for patients with advanced prostate cancer who currently have few treatment options. . . . More than one million men in the United States have prostate cancer, with an estimated 218,890 new cases of prostate cancer diagnosed each year.”

RELATED READING:

• PROVENGE Advisory Committee Materials
• Washington Post Article

In FDA’s “Guide to Minimize Microbial Food Safety Hazards of Fresh-Cut Fruits and Vegetables,” FDA states that Americans are eating more fresh produce, to the point that fresh-cut products are the produce industry’s “fastest growing segment.”  Fresh-cut food processors are now faced with the task of handling a greater volume of product while still ensuring that the produce is safe.  FDA notes that of the 72 foodborne illnesses associated with fresh produce consumption from 1996 to 2006, 18 outbreaks, or 25 percent, were associated with fresh-cut produce. 

FDA’s draft guidance document is intended to reduce the risk of microbial contamination of “fresh-cut fruits and vegetables that have been minimally processed (e.g., no lethal kill step), and altered in form, by peeling, slicing, chopping, shredding, coring, or trimming, with or without washing or other treatment, prior to being packaged for use by the consumer or a retail establishment.”  Examples of fresh cut produce include salad mixes, cut melon, and peeled baby carrots. 

Although fresh-cut produce products are subject to FDA’s food good manufacturing practices (GMPs), which are essentially intended to reduce the risk of producing adulterated or unfit food, FDA believes that the guidance will “complement the [GMPs] by suggesting more specific food safety practices for processors of fresh-cut produce.”  The draft guidance covers worker health, hygiene, and training; building and equipment design, construction, and maintenance; sanitation operations; and production and process controls.  The draft guidance also recommends that certain records be kept to document product information and practice and suggests that traceback and recall procedures be kept. 

RELATED READING:

• FDA Press Release on Draft Guidance Document
• FDA Press Release on 2006 Spinach Outbreak Report

By Cassandra A. Soltis

The Federal Circuit’s March 22, 2007 decision invalidating Pfizer’s patent on NORVASC (amlodipine besylate), and Mylan’s commercial launch of its generic version approved under ANDA #76-418 later that day triggering the company’s 180-day exclusivity period has set off a flurry of activity, both in the courts and at FDA.  This case raises several interesting issues about the availability of 180-day exclusivity once a patent expires and the applicability of pediatric exclusivity.  FDA is being asked to address these issues in three recent citizen petitions submitted to the Agency concerning amlodipine drug products.

Yesterday, the Orange Book Blog reported on the United States District Court for the District of Columbia’s order granting Mylan’s Emergency Application for a Temporary Restraining Order and/or Preliminary Injunction, in which Mylan argues that “[i]n the past, the FDA has taken the position that 180-day generic exclusivity does not survive patent expiration [and that there] is no basis in the Hatch-Waxman Act for such a limitation.”  Pursuant to the court’s order, FDA is enjoined from approving any other ANDAs for generic NORVASC until at least April 13, 2007 at 5:00PM, and after FDA “solicit[s] the views of other interested parties on this matter by April 4, 2007 [to] render an agency decision on April 11, 2007.”  The Federal Circuit also ordered Pfizer and Mylan “to respond, no later than 10 a.m. on Monday, March 26, 2007, concerning how the invalidity determination affects the pediatric exclusivity period and the ANDA approval.”

Simultaneous with FDA’s solicitation and consideration of views on this 180-day exclusivity issue, the Agency must now also consider several citizen petitions concerning amlodipine drug products. 

On March 26, 2007, Mylan submitted a petition to FDA (Docket No. 2007P-0116) requesting that FDA stay the approval of any additional ANDAs for generic amlodipine products until after Mylan’s 180-day exclusivity expires on September 23, 2007.  Mylan’s arguments hew closely to those the company made in its Emergency Application.

On March 21, 2007, Pfizer submitted two petitions (Docket Nos. 2007P-0110 and 2007P-0111) requesting that FDA enforce pediatric exclusivity rights for amlodipine, and that FDA stay approval of any and all supplements to LOTREL concerning amlodipine and pediatric exclusivity, respectively.  LOTREL is Novartis’s brand name version of the combination of amlodipine besylate and benazepril hydrochloride.  Although Pfizer’s petitions do not concern Mylan’s ANDA approval specifically, they do raise raise issues concerning the applicability of Pfizer’s pediatric exclusivity for amlodipine, and whether the LOTREL NDA is a 505(b)(2) application subject to that exclusivity. 

UPDATE:

• FDA Docket No. 2007N-0123 established to solicit comments on amlodipine exclusivity issues  

The Deficit Reduction Act of 2005 (“DRA”) provided that any entity that receives or makes annual payments under a Medicaid State plan of at least $5,000,000 must, as a condition of receiving such payments, establish written policies for employees, contractors, and agents that provide detailed information regarding the federal and state false claims laws, including remedies and whistleblower protections.  Pub. L. No. 109-171, § 6032(a)(3).  Because the statute requires compliance from any entity that “receives or makes” payments to Medicaid, there is an argument that the provision applies to pharmaceutical manufacturers who make rebate payments to States under the Medicaid Drug Rebate Program.  However, since that language is qualified by the statement “as a condition of receiving such payments,” another reading is that Congress did not intend for the provision to apply to entities that only make rebate payments to States pursuant to the Medicaid Drug Rebate Program.

On March 22, 2007, CMS issued guidance to State Medicaid agencies regarding implementation of section 6032 of the DRA in the form of Frequently Asked Questions (“FAQs”).  CMS clarified that pharmaceutical manufacturers that make payments to States under the Medicaid Drug Rebate Program are not “entities” that must comply with section 6032 of the DRA solely by virtue of making such payments.  FAQ No. 11.  Accordingly, such pharmaceutical manufacturers are not required by the DRA to establish written policies related to federal and state false claims laws. 

By Michelle L. Butler

On March 22, 2007, the Senate Appropriations Committee approved S. 965, a bill making emergency appropriations primarily for the wars in Iraq and Afghanistan.  During the Committee’s consideration of the bill, it adopted an amendment offered by Senator Dick Durbin (D-IL) regarding the Medicaid Program.  Senator Durbin’s amendment would raise the minimum rebate amount owed by manufacturers under the Medicaid Drug Rebate Program for single source drugs and innovator multiple source drugs to 20 percent (from 15.1 percent), effective March 31, 2007.  S. 965, 110th Cong. § 2705(b) (2007).  The purpose of this increase in rebates is to pay for the other portion of Senator Durbin’s amendment, which would be a two-year moratorium on action to finalize and/or implement (1) a rule proposed by CMS, which would, among other things, limit reimbursement for health care providers that are operated by units of government to an amount that does not exceed the provider’s cost and (2) the restriction of payments for graduate medical education under the Medicaid Program.  Id. § 2705(a); CMS, Medicaid Program; Cost Limit for Providers Operated by Units of Government and Provisions to Ensure the Integrity of Federal-State Financial Partnership, 72 Fed. Reg. 2236 (proposed Jan. 18, 2007).

S. 965 has not yet cleared the full Senate –it is expected before the full Senate this week.  If Senator Durbin’s amendment remains in the version that clears the Senate, but is not in the House version, it is possible that when the conferees meet to reconcile the competing bills, this provision will be struck.  In addition, the House version includes a timetable for the withdrawal of the troops from Iraq.  President Bush has threatened to veto the bill if it is presented to him with the timetable.  Since the House version barely cleared the House, it is unlikely that there would be sufficient votes to override a veto. 

RELATED READING:

• Senate Appropriations Committee Press Release

By Michelle L. Butler

As the backlog of pre-Medicare Modernization Act (“MMA”) ANDAs is cleared and disputes over 180-day exclusivity under the old statutory regime become a vestige of the past, new post-MMA disputes over 180-day exclusivity will certainly take their place, particularly as they concern forfeiture.  Indeed, within 24 hours of the enactment of the MMA, Senator Orrin Hatch (R-UT) was already expressing concern about the “failure to market” forfeiture provision in FDC Act § 505(j)(5)(D)(i)(I). 

In a somewhat recent case involving the “failure to obtain tentative approval” 180-day exclusivity forfeiture provision at FDC Act § 505(j)(5)(D)(i)(IV), FDA took a stance that is reminiscent of the old “if a tree falls in the woods and nobody is there” enigma. 

The “failure to obtain tentative approval” forfeiture provision provides that:

The first applicant [forfeits 180-day exclusivity eligibility if the applicant] fails to obtain tentative approval of the application within 30 months after the date on which the application is filed, unless the failure is caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed.

Sandoz submitted ANDA #76-969 for Metoprolol Succinate Extended-Release Tablets USP, 25mg, 50mg, 100mg, and 200mg, to FDA in December 2003.  The ANDA contained paragraph IV certifications to four Orange Book-listed patents for the Reference Listed Drug, TOPROL-XL.  In July 2006, subsequent to a lawsuit involving two of the patents and a decision by the U.S. District Court for the District of Delaware that the challenged patents are invalid and unenforceable, FDA approved ANDA #76-969.  Specifically, FDA tentatively approved Sandoz’s 50mg, 100mg, and 200mg drug products because Sandoz was not a “first applicant” for these strengths, and granted full approval for the 25mg drug product for which Sandoz was the “first applicant.”

FDA’s approval letter states that with respect to 180-day exclusivity for the 25mg drug product:

Sandoz was the first ANDA applicant to submit a substantially complete ANDA for Metoprolol Succinate Extended-Release Tablets USP, 25 mg, with a paragraph IV certification to the four [OrangeBook-listed patents].  Therefore, with this approval, Sandoz may be eligible for 180 days of generic drug exclusivity for Metoprolol Succinate Extended-Release Tablets USP, 25 mg. . . .  The agency notes that Sandoz failed to obtain tentative approval of this ANDA within 30 months after the date on which the ANDA was filed. [citation omitted]  However, the agency is not making a formal determination at this time of Sandoz’s eligibility for 180-day generic drug exclusivity.  It will do so only if another applicant becomes eligible for approval within 180 days after Sandoz begins commercial marketing Metoprolol Succinate Extended-Release Tablets USP, 25 mg.

FDA’s decision (or non-decision as the case might be) begs the question: does a “first applicant” forfeit exclusivity if a forfeiture event is triggered?  FDA has not, to our knowledge, had to deal with another case where a “first applicant” failed to obtain tentative approval within 30 months; but it is likely that this issue will arise in future cases.  FDA is presumably in the process of drafting regulations to implement the MMA forfeiture provisions that will attempt to answer this and many other unresolved forfeiture issues.