Hyman, Phelps, and McNamara’s Sara Koblitz will be presenting at the DC Bar’s annual webinar, “FDA for IP Lawyers” on May 25, 2022 with Brian Malkin of McDermott, Will, and Emery.

The webinar will provide practical tips for integrating FDA regulatory law into IP law practices for FDA-regulated products and hopes that this program will be the springboard for future more in-depth FDA legal topics relevant to IP lawyers.  The event has been revamped with new commentary on recent cases and legislative topics, including:

• GSK v. Teva and follow-up on skinny labeling
• FDA letter to USPTO / GW Roundtable  (patent listings, patent prosecution, patent thickets/evergreening, and more)
• Catalyst and orphan drug exclusivity
• 180-day exclusivity and potential BLOCKING Act
• Biologics transferred from NDAs to BLAs and impact
• Interchangeable biosimilars and impact going forward

For registration information, please see the DC Bar’s website here

As one of several means to alleviate the ongoing shortage of infant formula in the U.S., earlier this week FDA issued a guidance document that outlines the factors FDA will consider in deciding whether to allow the distribution of an infant formula that does not meet all applicable statutory and regulatory requirements. Those requirements are extensive, as infant formula is the most tightly regulated of all human food products. In addition to having to meet the requirements that are generally applicable to all foods, an infant formula must also meet specific requirements with respect to its formulation, manufacture, and what are referred to as “quality factors” – namely a demonstration of sufficient biological quality of the protein in the formula, and the ability of the formula to support normal physical growth. Meeting these quality factors can require specific animal and human studies, such that bringing a formula to market can be an expensive endeavor with a long lead time.

Ordinarily, a “new” infant formula cannot be marketed without prior notification to FDA. (In this context, “new” is a term of art that encompasses previously marketed infant formulas in which there is a “major change,” as well as infant formulas that have not previously been notified to FDA. In turn, the definition of “major change” encompasses a variety of scenarios – including first entry to the U.S. market.) The premarket notification submitted to FDA must demonstrate that the formula meets applicable requirements. If FDA concludes otherwise, proceeding to market with the formula could leave the manufacturer vulnerable to regulatory action. Over the years, this notification requirement has served as an effective gatekeeper, notwithstanding the fact that it does not strictly constitute  premarket approval.

FDA’s new guidance invites any manufacturer of an infant formula “that is safe and nutritionally adequate but may not comply with all FDA statutory and regulatory requirements” to submit information in support of a request for enforcement discretion. The guidance lists the information elements that should be included in the request – essentially a compendium of information that will enable FDA to assess whether the formula is indeed safe and nutritionally adequate. The guidance offers an opportunity that could be of special interest to foreign manufacturers who already market infant formula in other countries and have considered entering the U.S. market. However, by its terms, the guidance will remain in effect only until November 14, 2022, at which time FDA will decide whether to extend it. It remains to be seen whether the uncertainty associated with that potentially limited window of opportunity dampens foreign manufacturers’ interest. FDA announced a webinar to be held on May 20^th that will provide an overview of the guidance and give manufacturers an opportunity to ask questions.

In late-breaking news, President Biden invoked the Defense Production Act to help bolster production of infant formula. The President delegated authority to the Secretary of Health and Human Services to determine “the proper nationwide priorities and allocation of all ingredients necessary to manufacture infant formula, including controlling the distribution of such materials (including applicable services) in the civilian market, for responding to the shortage of infant formula within the United States.” We will be tracking implementation of that authority.

Last June, we blogged about a lawsuit brought by the Pharmaceutical Research and Manufacturers of America (PhRMA) challenging CMS’s ill-conceived Accumulator Adjustment Rule (“final rule”), which amended the Medicaid Rebate best price regulation. The final rule, which was set to go into effect on January 1, 2023, would have significantly narrowed the exclusions from best price for patient savings programs such as co-pay coupons, vouchers, consumer rebates, and free drug programs, which would, in turn, have discouraged manufacturers from offering such programs.

On Tuesday, May 17, 2022, the D.C. District Court granted PhRMA’s motion for summary judgment and struck down the final rule, holding that it exceeded CMS’s statutory authority. The court also denied the government’s cross-motion and refused to find that Chevron deference applied.

Since 2007, the best price regulation has contained exclusions for patient saving programs so long as the savings are passed on to the consumer, and do not represent a price concession to the pharmacy or other entity involved in the redemption or administration.  See 42 C.F.R. §§ 447.505(c)(8)-(12).  Insurers argue that the savings programs cause patients and their physicians to favor brand drugs over generics or cheaper formulary alternatives.  In order to discourage such programs, commercial insurance plans and their pharmacy benefit managers (PBMs) have, in recent years, implemented “accumulator adjustment programs,” whereby the insurers refuse to count the manufacturer assistance dollars towards the patient deductibles or out-of-pocket maximums.  The effect of this is to eliminate the benefit of the savings to the patient, who must ultimately pay those amounts to plans in order to meet their deductibles or copay maximums.

The CMS final rule was ostensibly designed to decrease the impact of accumulator programs siphoning off the benefit of manufacturer assistance.  But instead of restricting accumulator programs, the final rule would have required a manufacturer to “ensure” that the full value of the assistance or benefit is passed on to the consumer or patient.  Thus, CMS imposed upon manufacturers the onus of somehow determining whether a particular patient’s insurance plan has an accumulator program and then negating it.

PhRMA argued that manufacturers cannot structure their patient assistance programs to avoid accumulator programs because they do not know whether a particular patient’s health plan operates an accumulator program; even most patients are unaware of them.  PhRMA argued that manufacturers will either be forced to conduct extensive investigations of health plans or claim adjudications for each transaction, somehow gain the cooperation of health plans, or withdraw their assistance programs altogether to avoid significantly higher Medicaid rebates.

In its decision, the court first addressed PhRMA’s standing to sue. CMS argued that the harm PhRMA members allege cannot be traced to this rule, but rather to CMS’s 2007 and 2016 rules that included an obligation to account for accumulator programs in BP calculations. The court disagreed, holding that the final rule would add significantly greater obligations for PhRMA members because of its requirement to “ensure” that patients receive the full benefit of savings programs. The court noted that the government recognized this additional burden on manufacturers when it delayed the effective date of implementing the final rule by two years.

On the merits, the court decided that the statute does not give CMS the authority to adopt the final rule. According to the court, the statute defines “best price” as the lowest price available to certain specified types of entities.  See 42 U.S.C. § 1396r-8(c)(1)(C).  As CMS acknowledged, patients do not qualify as best-price-eligible entities.  See 85 Fed. Reg. 87000, 87052 (Dec. 31, 2020). Therefore, “[a] manufacturer’s financial assistance to a patient does not count as the lowest price available from a manufacturer to a best-price-eligible purchaser.”  As a result, the court found that HHS lacks the statutory authority to adopt the accumulator adjustment rule.  See Opinion at 10.

The court also agreed with PhRMA that it was infeasible for manufacturer to “ensure” that the patient’s health plan does not have an accumulator program, because that information is in the sole possession and control of commercial health insurers.  Manufacturers would have to conduct transaction-by-transaction investigations into programs over which they have no control and about which they have no information.

It is uncertain whether the government will appeal the District Court’s decision.  If not, or if the court’s decision is upheld on appeal, the opinion would represent another defeat of Trump-era drug pricing and payment regulations, most of which have been struck down by the courts (see here and here) or delayed or withdrawn by the Biden administration or Congress (see here and here).  The Biden administration’s own drug pricing agenda has so far focused on legislation, with little success. It remains to be seen whether the current administration pivots to regulatory strategies of its own.

We’re in the midst of UFA (User Fee Act) season!  It’s the quinquennial event when many of the UFAs are up for reauthorization.  And with “must-pass” FDA legislation, comes a host of riders—pieces of FDA-related legislation not specific to UFA reauthorization, but that folks seek to get added to the UFA bill to address various issues and topics.  Often, it is industry that lobbies Congress to get the law amended to address some issue where FDA is being difficult or non-responsive; but don’t be fooled, FDA is also walking the halls of Congress looking for advocates for its own causes.  Usually FDA’s lobbying activities are done rather quietly.  Every once in a while, however, FDA is a bit bolder in its actions.  And that brings us to a May 12, 2022 FDA statement, titled “FDA’s Overview of Catalyst Pharms., Inc. v. Becerra.”  But before we go too far, some background is in order . . .

As we previously posted (here, here, and here), in Catalyst v. Becerra, Catalyst Pharmaceuticals, Inc. (“Catalyst”) sued FDA for approving the “same drug for the same disease or condition” as its orphan drug-designated product, FIRDAPSE (amifampridine) Tablets (NDA 208078), during its seven-year orphan drug exclusivity period.  FDA approved FIRDAPSE in November 2018, with a period of orphan drug exclusivity, for the treatment of Lambert-Eaton Myasthenic Syndrome (“LEMS”) in adult patients.  But in May 2019, FDA approved a second amifampridine drug product, Jacobus Pharmaceutical Company, Inc.’s (“Jacobus”) now-tentatively approved RUZURGI (amifampridine) Tablets (NDA 209321), for the treatment of pediatric patients with LEMS—a population generally acknowledged to be fewer than 30 in the U.S. and more likely 15-20.  FDA granted the approval despite Jacobus’ failure to conduct any of the routine studies expected for a pediatric approval, and all of RUZURGI’s efficacy data being for adult LEMS patients, the population within FIRDAPSE’s indication, rather than the FDA-approved indication.  FDA even described the process it followed to approve RUZURGI as “unprecedented” in in the Agency’s Catalyst court filings.  In any case, Catalyst sued FDA in June 2019 alleging that the plain language of the Orphan Drug Act precluded the Agency’s approval of RUZURGI in any LEMS patients until the expiration of the orphan drug exclusivity period covering FIRDAPSE.  Jacobus intervened, and the case made its way to the U.S. Court of Appeals for the Eleventh Circuit.

In September 2021, the Eleventh Circuit held that FDA’s interpretation of the Orphan Drug Act such that exclusivity was limited to the indication for which the drug was approved—rather than the disease or condition for which the drug was designated—is foreclosed by the plain language of the statute.  Consequently, the Court held that FDA’s approval of RUZURGI contravened the plain language of the Orphan Drug Act in violation of the Administrative Procedures Act and ordered FDA to rescind RUZURGI approval. . . which FDA ultimately did, converting the NDA approval to a tentative approval.  On April 7, 2022, Jacobus appealed the Eleventh Circuit’s decision to the U.S. Supreme Court in a Petition for Writ of Certiorari.

We’re all still waiting to hear whether or not the Supreme Court will take up the case.  But in the meantime, FDA has apparently been busy trying to get a legislative “fix” passed that would undo the Eleventh Circuit’s decision.  And UFA reauthorization provides the perfect vehicle for the Agency to try and get this accomplished.  A provision has already been included in H.R. 7667, the “Food and Drug Amendments of 2022,” which will be considered by the House Energy and Commerce Committee at a markup session on May 18, 2022, and that the Subcommittee on Health marked up and passed at a May 11, 2022 session (here and here).   Specifically, Section 811 of the bill, titled “Clarifying application of exclusive approval, certification, or licensure for drugs designated for rare diseases or conditions,” would amend the statute to replace the phrase “same disease or condition” (and similar phrases) with “same approved indication or use within such rare disease or condition” (and similar phrases).

But even before the House Energy and Commerce Committee acts, the Senate Health, Education, Labor and Pensions Committee held a April 26, 2022 hearing on UFA reauthorization.  During that hearing, FDA’s Patrizia Cavazzoni, M.D. and Peter Marks, M.D., Ph.D., in response to questions posed by Senators Tammy Baldwin (D-WI) and Bill Cassidy, M.D. (R-LA), spoke out about the Agency’s need for a legislative fix.   Dr. Cavazzoni commented that the Eleventh Circuit’s decision “will send a chill through the development of rare diseases and it will disproportionately affect children with rare diseases.”  Similarly, Dr. Marks commented that FDA sees the Eleventh Circuit decision “as a potential problem for the development of drugs for rare diseases,” and for pediatric indications in particular.

On May 11, 2022, Senators Baldwin and Cassidy introduced S. 4185, the “Retaining Access and Restoring Exclusivity Act” (“RARE Act”).  In a press release and in a backgrounder accompanying the introduction of the bill, which differs somewhat in language (but not intent) compared to the House bill, the Senators laid out their concerns with the Eleventh Circuit’s decision:

The court’s decision in Catalyst has far-reaching, adverse impacts, especially for children with rare diseases.  Without a fix, drug companies are incentivized to seek the broadest orphan drug designation as possible and then focus clinical studies only on the narrowest patient populations that would support approval.  In so doing, companies could then rely on the broader designated orphan disease and block approval for any different uses or other patient populations.

On May 12, 2022, just one day after the introduction of the RARE Act in the U.S. Senate, FDA took the highly unusual setp of issuing a statement—and essentially a press piece—titled “FDA’s Overview of Catalyst Pharms., Inc. v. Becerra.”  In it, FDA provides a brief overview of the Eleventh Circuit’s decision . .  and then lays out what the Agency terms “Key Impacts”:

• The Catalyst decision adversely resolves a statutory issue about the scope of ODE. The Catalyst decision interpreted the Orphan Drug Act to unambiguously tie ODE to the disease or condition for which the drug was designated, which would leave the FDA with no discretion to address the issue differently. In the coming months, the FDA will need to consider how the decision affects drugs with active terms of orphan drug exclusivity as well as currently marketed drugs, including generics. Going forward, the FDA expects that some drugs that are in late-stage development, or that have already been submitted for marketing application review, would be blocked from approval under the Catalyst decision’s interpretation of the Act.

• The Catalyst decision implicates approval of drugs for rare diseases. Because the FDA generally grants orphan-drug designation for the entire rare disease or condition—to incentivize sponsors early in drug development to study all persons with the rare disease or condition—and because FDA can only approve a drug for the specific indications for which there is adequate data in the marketing application, the designated disease or condition can represent a much broader population than the approved indication.

Sponsors could seek approval and exclusivity for their drugs by focusing on the smallest, easiest-to-study populations. Under the interpretation in the Catalyst decision, such an approval would result in exclusivity for their drug for the entire disease, even though the sponsors did not invest in studying and developing their drug for all individuals with the disease.

• The FDA expects that the Catalyst decision’s interpretation could adversely affect children—particularly the youngest pediatric populations—and other populations that are typically studied later in drug development. Because clinical studies in certain populations including children can be more challenging to conduct, sponsors often focus first on the populations who are easiest to study: adults with the fewest co-morbidities and complications. Except for certain oncology products, FDA cannot require pediatric studies of orphan-designated products. These barriers to development could mean that children (and other later-studied populations such as elderly individuals) would not have formulations, or dosing and safety information, appropriate for their needs for years after the product’s original approval.

While the FDA piece does not mention the RARE Act by name, the May 12, 2022 publication on FDA’s website—just one day after the introduction of the RARE Act—is more than coincidence.  It appears to be part of a concerted effort by FDA to lobby—and very publicly—for a change in the law.  That’s pretty unusual.  Just as curious is FDA’s messaging on the alleged effects on pediatric drug development.  Children are a perennial soft spot on Capitol Hill, and thus provide a good “in” for lobbying efforts.  But it’s unclear from FDA exactly how the Eleventh Circuit’s decision will affect pediatric drug development, particularly with the continued availability of other programs specifically designed to incentivize the research to support pediatric approvals and whether or not the the “race to approval” that occurred in the amifampridine situation will ever repeat itself in the next 40 years of the Orphan Drug Act.

To be clear, we’re not taking any particular position for or against the RARE Act in this post.  But FDA’s intense lobbying effort to legislatively reverse the Catalyst decision, and the arguments that the Agency is using to support that effort, deserve some mention and attention.

Hyman, Phelps & McNamara, P.C. (HP&M) seeks to add a 2nd to 5th year associate to its enforcement and litigation team.  Our team investigates and defends against threatened enforcement actions by government prosecutors and regulators, including the FDA and DEA.  Types of matters include:

• Representing clients in False Claims Act investigations or in criminal investigations by the U.S. Department of Justice;
• Assisting clients in investigations by U.S. Attorney’s Offices, DEA, or Main Justice, including responding to administrative and criminal subpoenas;
• Conducting internal investigations;
• Representing FDA-regulated entities and DEA registrants in administrative hearings and federal courts; and
• Litigating affirmative and defensive civil litigation matters.

The boutique, collaborative nature of this firm provides junior attorneys unique opportunities to work directly with clients and to contribute in substantive ways to sophisticated, high-end matters.  Strong verbal and writing skills are required.  The ideal candidate will have experience working at FDA, DOJ, or DEA, prior big firm experience, including litigation experience, and a federal judicial clerkship.  E-discovery expertise is a bonus.

Compensation is competitive and commensurate with experience.  HP&M is an equal opportunity employer.  Please send your curriculum vitae, transcript, and a writing sample to Deborah Livornese (dlivornese@hpm.com).  Candidates must be members of the DC Bar or eligible to waive in.

Hyman, Phelps & McNamara, P.C. is pleased to announce that Sophia Gaulkin will be speaking on an expert panel at the 20th Advanced Summit on Life Sciences Patents, which is being held virtually and in-person in New York City on June 2-3, 2022.

Ms. Gaulkin will join speakers from the biopharmaceutical industry and academia to discuss the impact of drug pricing on patent prosecution in the session, Drug Price Regulation: What’s Patent Law Got to Do With It?  She will set the stage for the discussion by tracing the landscape of drug pricing legislation and other reform efforts at the state, federal, and international level and identify drug pricing considerations that patent prosecutors should consider in their practices. The panel will also cover the status of U.S. and global responses to escalating drug costs and access issues, including price controls, compulsory licensing, and the TRIPS waiver.

This hybrid event brings together thought leaders working in or with the life sciences patents industry to share best practices and discuss how recent cases and policy changes will impact fundamental patent law concepts.

FDA Law Blog readers are offered a discount of 10% off the registration price.  The discount code is S10-762-762L22.S.  You can access conference information and register for the event here.

A few weeks back, OPDP issued its second Untitled Letter of 2022 (third letter in 2022 overall) to Bausch Healthcare alleging violative DTC and HCP promotional communications for Duobrii (halobetasol priopionate and tazarotene) lotion.  Of interest (to me) is the DTC communication cited where OPDP, again, focuses on a video and alleges false or misleading representations regarding risks and efficacy.  This, however, is not just any video.  This was a segment from Lifetime Television’s “The Balancing Act” and signals FDA’s continuing interest in native advertising.

Although overall enforcement against prescription drug ads has been relatively low, the OPDP Warning and Untitled Letters issued over the past year reflect OPDP’s interest in not only the substance of the communications, but in the audience processing of information based on the platform used.  We discussed this with regard to OPDP’s recent Untitled Letter to Eli Lilly that raised issues with adequate communication of information (despite the fact that the relevant information was included within the ad).  And we’ve previously seen FDA take issue with content appearing as news (see Warning Letters to CytoDyn, and Cooper Surgical).

In a recent CDER Conversation with Kit Aikin, senior social science analyst and research team lead in OPDP, Dr. Aikin discusses OPDP’s social science research program and a November 2021 workshop with Duke Margolis that identified growing trends in advertising including social media influencers (“people with credibility in a specific industry, access to a large audience, and the power of persuasion”) and native advertising (“advertising embedded in a media source, so that consumers don’t necessarily know it’s advertising”).   The slide deck posted on Duke’s page includes a presentation entitled “DTC Rx Promotion in the Digital Space:  Native Advertising, TikTok & Gen Z as a Vulnerable Audience”  and highlights a prescription drug case study of advertising done in conjunction with the Dr. Phil show.  While OPDP’s research agenda does not specifically call out native advertising, there has long been an interest in consumer perceptions of DTC TV advertising, and OPDP in-progress research is evaluating endorsers and whether disclosure of payment influences participant reactions.

Although not a topic taken on directly by FDA,  native advertising has been overtly addressed by FTC, and sponsorship identification has been an ongoing FCC issue.  Outside of regulators (and, if I do say so, in a much more entertaining way), John Oliver has taken on the spon-con topic several times, including a 2021 episode highlighting issues with local news spon-con and “dicey medical claims.” (During the episode, Oliver provides examples of medical devices featured as part of spon-con on local news stations, and demonstrates how his team was able to buy local news time to promote “the world’s first sexual health blanket.”)

With regard to OPDP’s most recent letter, we note that Lifetime Television’s “The Balancing Act” is no stranger to FDA.  A Brandstar Original, the show leverages its platform to deliver branded “storytelling” content to its Lifetime TV audience.  Companies and their brands pay for segments and may further disseminate the segments through product/corporate websites and through social media platforms.  In the case of prescription drug segments (and in the case of the Duobrii segment), companies typically submit storyboards and scripts to FDA on Form 2253.  FDA has issued Untitled Letters for segments on the Balancing Act ranging from a flu vaccine, to a treatment for iron deficiency anemia, as well as one for multiple sclerosis.

In this most recent letter, the video segment tells the story of Katie, a plaque psoriasis patient and mother of 2 children.  Katie describes getting psoriasis when pregnant with her first child and, over the years, using creams on her psoriasis that did not work.   Katie discusses using Duobrii when she has a flare up and seeing results within days.

OPDP cited Bausch for misleading risk presentations as well as misleading efficacy.  Duobrii is indicated for the topical treatment of plaque psoriasis in adults and is contraindicated in pregnancy.  The Duobrii prescribing information carries warnings and precautions regarding embryofetal risk, hypothalamic-pituitary-adrenal axis suppression and other unwanted systemic glucocorticoid effects, photosensitivity and risk for sunburn.

OPDP expressed concerns that the video fails to include material facts regarding the warning and precaution for embryofetal risk, including the suggestion that “a female of reproductive potential can initiate Duobrii or use it whenever she has a psoriasis flare up without regard to the measures needed to mitigate the risk of birth defects associated with Duobrii . . .”  OPDP also expressed concerns about representations that the patient would not need to wear three quarter length sleeves when it was warm out because of the warning to use sunscreen and protective clothing when using Duobrii.  Bausch was cited for presenting information in text-only format while benefit claims were presented on screen in large print and announced verbally.  This citation is not new – we have seen it in several recent letters and is specifically addressed as part of 21 C.F.R. §202.1(e)(1) which provides that broadcast advertisements include information relating to the major side effects in the audio or audio and visual parts of the presentation.

On the efficacy side, OPDP cited Bausch for suggesting Duobrii is superior to other products intended for plaque psoriasis.  Of interest (again, to me) was OPDP’s recognition that the spokesperson’s own experiences may be TRUE, but are otherwise misleading because, “the personal experience of this patient does not support the suggestion that Duobrii is superior to other plaque psoriasis drugs on the market.”  With regard to disclaimers, OPDP states, “We acknowledge that the video includes the SUPER, ‘People with psoriasis may respond to treatments differently and at different times. Individual results may vary.’ However, this does not mitigate the misleading impression.”

While only time will tell, given the success of “The Balancing Act,” the sponsorship opportunities on both national and local TV show levels, as well as the rise in the use of social media influencers, it’s safe to say that these “storytelling” forms of promotion for medical products will not be going away anytime soon.  When appropriately utilized, that’s not a bad thing – elevating awareness of disease states and potential treatments helps improve patient understanding and may ultimately impact access.  Sponsors should responsibly communicate medical product information and be mindful that given FDA’s recognition of these promotional trends, we will likely see additional enforcement in these areas as well.

Last week, Attorney General Merrick Garland reiterated the position expressed during his confirmation hearing that enforcement of marijuana cases in states where activities are legal is an inefficient use of Department of Justice (“DOJ”) resources.  Responding to Senator Brian Schatz (D-Hawaii) during a Senate Appropriations subcommittee hearing on whether Garland intended to reinstate guidance to U.S. Attorneys on not prosecuting marijuana cases in states that have legalized activities, the Attorney General replied that the position taken during his February 2021 confirmation hearing had not changed.  Merrick Garland, Testimony Before the Senate Subcommittee on Appropriations, Apr. 26, 2022, (01:06:35).  Garland had opined during his confirmation that “I do not think it the best use of the Department’s limited resources to pursue prosecutions of those who are complying with the laws in states that have legalized and are effectively regulating marijuana.  I do think we need to be sure, for example, that there are no end runs around the state laws by criminal enterprises, and that access is prohibited to minors.”  Merrick Garland, Responses to Questions for the Record to Judge Merrick Garland, Nominee to be United States Attorney General, 24.

Marijuana is legal for medical use in 37 states, and for recreational use by adults in 18 states, but the drug remains a federal schedule I substance.  21 U.S.C. § 812(c)(10).  Under the federal Controlled Substances Act, schedule I substances by definition have a high potential for abuse, lack currently accepted medical use in treatment in the United States and lack accepted safety for use under medical supervision.  21 U.S.C. § 812(b)(1).  They are the most stringently regulated substances of abuse and it is unlawful to manufacture and distribute them.

It is important to understand the lead up to Garland’s stance.  In response to states authorizing and legalizing marijuana while it remained a schedule I substance federally, Deputy Attorney General James Cole provided guidance in a memorandum to U.S. Attorneys in August 2013 that DOJ was unlikely to take enforcement action against marijuana-related businesses operating in compliance with state law unless the businesses implicated any one of eight enforcement priorities.  The “Cole Memo” guidance rested on DOJ’s expectation that states legalizing marijuana would implement strong and effective regulatory and enforcement systems to control cultivation, distribution, sale and possession of marijuana.  James M. Cole, Memorandum for All United States Attorneys, Aug. 29, 2013, 3.

Attorney General Jeff Sessions rescinded prior DOJ guidance on marijuana enforcement, including the Cole Memo, in January 2018.  Session directed federal prosecutors to weigh all relevant considerations, including enforcement priorities set by the Attorney General, seriousness of the crime, deterrent effect of criminal prosecution and cumulative impact of particular crimes on the community.  Jefferson B. Sessions, Memorandum for All United States Attorneys, Jan. 4, 2018.  A year later, William Barr, Sessions’ successor, stated during his nomination that while he disagreed with efforts by states to legalize marijuana, he would not as Attorney General, “go after” marijuana businesses relying on the Cole Memo in states where the activity is legal.  Confirmation Hearing on the Nomination of Hon. William Pelham Barr to Be Attorney General of the United States, S. Hearing 116-65, at 70 (Jan. 15 and 16, 2019).

Although Attorney General Garland did not indicate whether or not he would formally reissue the Cole Memo, it seems that without additional guidance businesses located in states where marijuana activity is legal cannot dismiss the now almost nine year-old Cole Memo.  Marijuana businesses should continue to be mindful of the Cole Memo’s enforcement priorities which seek to prevent:

• Distribution of marijuana to minors;
• Revenue from the sale of marijuana to criminal enterprises, gangs and cartels;
• Diversion of marijuana from states where it is legal under state law in some
  form to other states;
• State-authorized marijuana activity from being used as cover or pretext for trafficking illegal drugs or other illegal activity;
• Violence and use of firearms in marijuana cultivation;
• Drugged driving and exacerbation of other adverse health consequences associated with marijuana use;
• Growing of marijuana on public lands and attendant public safety and environmental dangers posed by marijuana production on public lands; and
• Marijuana possession or use on federal property. Cole, Memorandum for All United States Attorneys, 2013, at 1-2.

Garland could not have been clearer in identifying DOJ’s other priorities, opining last week that marijuana prosecutions are “not an efficient use of the resources given the opioid and methamphetamine epidemic.”  Garland, Testimony, Apr. 26, 2022, (1:07:26).

Our last post on the Eleventh Circuit’s September 2021 decision in Catalyst v. Becerra got a lot of attention.  We’d like to think that this is because the scope of orphan drug exclusivity is as fascinating to everyone as it is to us, but if we’re honest with ourselves, it’s probably because it was an ode to Ms. Britney Jean Spears.  Well, Catalyst v. Becerra is back with Intervenor Jacobus Pharmaceuticals, Inc. submitting a Petition for Writ of Certiorari to the Supreme Court.  Aren’t we Lucky?  Ok, ok, we’ll stop.

In Catalyst v. Becerra, innovator-drug sponsor Catalyst sued FDA for approving the “same drug for the same disease or condition” as its orphan drug-designated product, Firdapse (amifampridine), during its seven-year orphan drug exclusivity period.  FDA approved Firdapse for the treatment of Lambert-Eaton Myasthenic Syndrome (LEMS) in adult patients in November 2018 with orphan drug exclusivity and subsequently approved a second amifampridine product, Ruzurgi, in May 2019 for the treatment of pediatric patients with LEMS.  Catalyst sued FDA in June 2019 alleging that the plain language of the Orphan Drug Act precluded FDA’s approval of Ruzrugi in any LEMS patients until the expiration of the orphan drug exclusivity period covering Firdapse.  Jacobus intervened, and the case made its way to the Eleventh Circuit.  In September 2021, the Eleventh Circuit held that FDA’s interpretation of the Orphan Drug Act such that exclusivity was limited to the indication for which the drug was approved—rather than the disease or condition for which the drug was designated—is foreclosed by the plain language of the Orphan Drug Act.  Consequently, the Court held, FDA’s approval of Ruzurgi contravened the plain language of the Orphan Drug Act in violation of the Administrative Procedures Act and ordered FDA to rescind Ruzurgi approval.

On April 7, 2022, Jacobus appealed the Eleventh Circuit’s decision to the Supreme Court.  In urging the Court to review the Eleventh Circuit’s decision, Jacobus argues that the Eleventh Circuit’s extension of exclusivity from the specific indication for which the drug was approved to the entire disease or condition for which the drug was designated “eviscerated FDA’s long-standing practice and created a circuit split” with the Fourth and D.C. Circuits “over whether the [Orphan Drug Act] unambiguously forecloses FDA’s use-based approach.”  With some dramatic flair, Jacobus further states “If allowed to stand, the results of the Eleventh Circuit’s decision would be catastrophic.”  This is because the decision would lead to uncertainty for orphan designated drug sponsors while leaving patients with fewer options.

Jacobus makes two main arguments to convince the Supreme Court to hear its case.  First, Jacobus explains that the Eleventh Circuit’s decision creates a circuit split between the Fourth and the D.C. Circuit “both of which upheld FDA’s use-based approach.”  Citing Sigma-Tau Pharms., Inc. v. Schwetz, 288 F.3d 141 (4th Cir. 2002), Jacobus states that the Fourth Circuit determined that a use-based approach to exclusivity was consistent with the plain language of the Orphan Drug Act.  Orphan drug exclusivity, in other words, “protects uses, not drugs for any and all uses” and is “disease-specific, not drug-specific.”  Jacobus also cites to Spectrum Pharms., Inc. v. Burwell, 824 F.3d 1062 (D.C. Cir. 2016) to explain the circuit split, as the D.C. Circuit there deferred to the Agency’s interpretation of the Orphan Drug Act because the language does not “unambiguously foreclose FDA’s interpretation.”

Second, Jacobus points to the “catastrophic consequences” of the Eleventh Circuit’s refusal to defer to FDA’s interpretation of the scope of orphan exclusivity.  Jacobus states that the “end-result” of the decision “was to leave the pediatric population out in the cold because the drug had already been approved (only) for an adult population.”  (This is somewhat hyperbolic given that the Eleventh Circuit noted that only there are only “dozens” of pediatric LEMS patients.)  Jacobus also cites to the policy arguments that will be familiar to our Britney blog post fans: that narrow uses can now cut off competition for an entire disease or condition, and that this policy raises a significant threat of serial exclusivity.  But most of this section is dedicated to dismantling the Eleventh Circuit’s plain language discussion.  There, Jacobus argues that the term “same disease or condition” must be read in the context of the new drug approval provisions of the FDC Act.  Jacobus explains that the exclusivity provisions in the Orphan Drug Act (21 U.S.C. § 360cc(a)) states that FDA “may not approve another application under [new drug provisions at 21 U.S.C.] section 355.”  Because the new drug provisions (21 U.S.C. § 355) are approved for “uses” or “indications” rather than diseases or conditions, Jacobus argues that orphan drug exclusivity must be limited to the “use” approved in the application and not to the entire condition designated.

The Petition for Writ of Certiorari was filed by Intervenor Jacobus, so we have not yet seen how FDA will respond.  Given that FDA likely wants to preserve its existing interpretation of the scope of orphan drug exclusivity, we’d expect that a Government Petition would be firmly in favor of Certiorari.  The Agency’s and Catalyst’s briefs are due on May 11, 2022.  Nevertheless, we suspect that FDA, as it did the last time it was challenged on its interpretation of the Orphan Drug Act, may be working on a legislative fix for the issues at hand.

Effective May 11, 2022, the Drug Enforcement Administration (“DEA”) will require all applications and renewals for registration to be submitted electronically.  DEA issued a final rule on April 11, 2022, eliminating the “mail-in” option, believing that initial and renewal applications submitted online will be more effective for the agency and registrants.  Requiring Online Submission of Applications for and Renewals of DEA Registration, 87 Fed. Reg. 21,019, 21,020 (Apr. 11, 2022).  Applicants will be required to submit all applications through DEA’s secure online portal.  The agency has determined that “[r]egulatory changes are needed to modernize DEA’s approach to registration and renewal applications” and requiring online submission will eliminate “inefficient paper applications” whose typographical errors and incomplete information have “routinely resulted in delayed or rejected applications.”  Id.

DEA had proposed this change in its January 7, 2021, notice of proposed rulemaking. Amending Regulations To Require Online Submission of Applications for and Renewals of DEA Registration, 86 Fed. Reg. 1,030 (Jan. 7, 2021).  DEA noted that the National Association of Chain Drug Stores (“NACDS”) and three other individuals commented on the proposed rule.  NACDS observed that DEA did not propose to modify nor address “batch” renewals for multiple locations holding multiple registrations, and expressed its desire for the agency to continue allowing registrants to submit batch renewals.  Id. at 21,020- 21,021.  DEA confirmed that the batch renewal process would not be affected, opining that batch renewals streamline the process for both registrants and the agency, and that the online portal would continue to accept batch applications and single payments.  Id. at 21,020- 21,021.

NACDS also commented that the proposed rule was unclear on whether DEA’s rejection of a single, deficient application within a batch would cause rejection of the entire batch.  DEA countered that the existing process already ensures that only completed applications are processed while incomplete applications are rejected, thereby precluding the possibility of rejecting an entire batch due to a defective application.  Id. at 21,021.

Lastly, DEA addressed NACDS’ final observation that the proposed rule listed credit cards as the only payment option, noting that some batch renewal payments exceed $1,000,000, and payment by credit card would run afoul of corporate policies requiring large transaction payment via certified bank check.  Id.  In response, DEA amended the proposed rule to allow online payment by Automated Clearing House (“ACH”) fund transfer, credit card or other means that may be available at submission using the secure application portal.  DEA will not accept bank checks for the foreseeable future.  Id.

It is worth noting that in June 2020, DEA had stopped mailing renewal notifications to registrants and instead stated that it would send out electronic reminders to renew at 60, 45, 30, 15, and 5 days prior to the expiration date of the registration to the associated email address.  Renewal Applications are available here.  DEA’s policy has been to allow a registrant to continue operations if a renewal has been submitted in a timely manner.  However, registrants will now need to be very careful to meet the online deadline and will no longer be able to argue that “it’s in the mail.”

There is no doubt that this change will significantly reduce the administrative burden on DEA in processing the applications and renewals.  We would hope that this will also mean that registrants will receive their renewal or new registration certificates on a more-timely basis.  Delays in issuing these certificates have caused issues for registrants when asked to verify their renewals to suppliers or customers.

On April 13, 2022, FDA released its long-anticipated final Guidance for Industry # 256 – Compounding Animal Drugs from Bulk Drug Substances (GFI).  As readers of this blog likely remember, the animal drug compounding GFI has had a relatively long and tortured history, blogged about here, and here and here.

In its communication released with the GFI, FDA stated that it received many comments on its previous 2019 draft guidance.  A review of the docket reveals that FDA received in fact well over 2,000 comments on its last attempt.  FDA noted that it made “significant changes” to the final GFI to provide “recommendations for veterinarians seeking to access  animal drugs compounded from bulk drug substances for those animals that need them.”  (FDA Press Release at 4).  But, FDA recommends that compounds from bulk substances only be used after the prescribing veterinarian considers whether the FDA-approved treatment options can be used. FDA is clear in its communications accompanying the GFI’s release that compounding  from bulk substances for animals is not permissible federally unless compounding pursuant to the limited conditions set forth in the Guidance.  Thus, for FDA to deem compounding appropriate, there must be a circumstance where no FDA-approved or indexed drug (including the extralabel use of an FDA-approved animal or human drug) can be used to treat the animal’s particular medical condition.

FDA’s GFI addresses in particular:

• The types of drugs compounded from bulk substances that present the greatest risk, in FDA’s determination, and thus are prioritized for enforcement action
• The circumstances under which FDA does not intend to take enforcement action (i.e., it will exercise enforcement discretion), for violation of the FDCA’s approval, adequate directions for use and cGMP requirements – separately considering non-food producing; office stock for non-food producing; and food producing animals.

FDA also strongly urges reporting of adverse events by veterinarians, pharmacists and owners on FDA’s Form 1932a.  Later in the GFI, FDA makes such reporting within 15 days a requirement of  compounding (from non-food producing animals) as a condition of FDA’s enforcement discretion.

The Guidance contains a fair amount of detail about what FDA will consider concerning documentation of reasons necessitating compounding in lieu of an FDA- approved product. To compound for individually identified non-food producing animals, pages 10-15 of the GFI list the necessary conditions, and accompanying documentation (and note that documentation of reasons seems critically important for FDA’s exercise of enforcement discretion).  Concerning controversial animal drug office use compounding (pages 15-16, and Appendix at 19-22), FDA retains (from the earlier draft) its nomination and “list” concept (adopted from FDA’s “bulks list” approach for human drugs).  The Appendix sets forth what nominators must include in their nominations.  Importantly,

• There is no marketed FDA-approved, conditionally approved, or indexed animal drug(s) that can be used to treat the condition, and demonstrates;
• There is no marketed FDA approved, conditionally approved, or indexed animal or human drug(s) with the same active ingredient(s) that could be used in an extralabel manner to treat the condition; and
• FDA has not identified a significant safety concerning specific to use of the drug substance in animals;

AND in addition,

• Urgent treatment with the compounded drug is necessary to avoid animal suffering or death, or to protect public safety.

The Appendix provides docket information and a description of the information that should be submitted with the bulk substance nomination.  We have seen these “bulks lists” before.  Importantly, unlike this animal compounding GFI, FDA’s “bulks list” for human drugs is dictated by the statutory command for FDA to create the lists, set forth in Section 503A (individually identified patients) and Section 503B (outsourcing facility/office use).  This blogger wonders where FDA’s authority derives to regulate through a guidance document animal drug compounding in the first instance.  This has been debated for decades and blogged about over a decade ago, right here, and here, where the Agency lost that argument at the federal district court in Florida.  Given the FDA’s recent and widely publicized troubles in its implementation of the human drug compounding MOU, blogged about here,  it is surprising FDA would again take the GFI “leap” when it may lack statutory authority to do so.

On March 22, FDA announced that it reached agreement with representatives from the medical device industry on proposed recommendations to Congress for the fifth reauthorization of the Medical Device User Fee Amendments (MDUFA V).  MDUFA authorizes FDA to collect fees from certain medical device applicants to fund FDA’s process for review of device applications.  MDUFA V would be applicable to fiscal years 2023 through 2027.

FDA published in the Federal Register a draft version of its MDUFA V commitment letter, which outlines FDA’s updated performance goals in reviewing device applications and planned process improvements.  The most important takeaways from the draft commitment letter are as follows:

Pre-Submissions:  The process and timing for requesting a pre-submission meeting, scheduling the meeting, and receiving feedback from FDA is remaining the same.  However, FDA is significantly increasing (more than double) the number of pre-submission sponsors that will receive feedback within the review goal of 70 calendar days from receipt date or 5 calendar days before the date of the scheduled meeting, whichever is sooner.  Many companies have experienced delays in receiving pre-submission feedback due to FDA’s resource constraints during COVID-19, so this increased goal will be welcome news to companies with devices in development.  As those who have had pre-submission meetings with CDRH understand, preparing for the pre-submission meeting cannot, practically, begin until the written feedback is received.  Having greater certainty as to when written feedback will arrive will allow sponsors consistent time to prepare for the meeting, thereby making the best use of its and FDA’s time.

De Novo Requests:  In the MDUFA IV commitment letter, FDA’s performance goal for review of de novo requests started with review of 50% of requests received in FY 2018 within 150 days of receipt, and increased 10% per fiscal year, ending with 70% within 150 days in FY 2022.  The draft MDUFA V commitment letter starts with a 70% goal in FY 2023, but if the de novo decision goal is met in FY 2023 and the fee revenue amount provided for FY 2026 and 2027 is adequate to support performance improvements, FDA plans to increase the goal to 80% in FY 2026.  Similarly, if the 70% goal is met in FY 2024 and adequate fee revenue is provided, the goal will be adjusted to 90% in FY 2027.

Premarket Approval (PMA) Applications, 510(k) Premarket Notifications, CLIA Waivers by Application, and Biologics License Applications (BLAs):  FDA has not recommended any changes to the timeframe and performance goals for original or supplement PMAs, 510(k) premarket notifications, CLIA waivers by application, or BLAs.

Deficiency Letters:  By January 1, 2023, FDA plans to update the 2017 guidance document on “Developing and Responding to Deficiencies in Accordance with Least Burdensome Provisions” to clarify what constitutes a statement of the basis for the deficiency.  FDA has set performance goals related to providing a statement of the basis for a deficiency in at least 75% of deficiencies in FY 2023, and that goal will increase each fiscal year.

Enhanced Use of Consensus Standards:  Pursuant to MDUFA IV, FDA established a voluntary pilot program called the Accreditation Scheme for Conformity Assessment (ASCA), which grants ASCA accreditation to qualified accreditation bodies to accredit testing laboratories that perform premarket testing for medical device companies.  During the pilot, over 85 testing laboratories have become ASCA accredited (see list here).  The draft MDUFA V commitment letter states that FDA plans to transition the pilot program to a “sustainable and expanded program” by the end of FY 2023, incorporating lessons learned from the pilot program.  While many laboratories have received ASCA accreditation during the pilot, in our experience, FDA does not inquire about the ASCA status of testing laboratories during premarket reviews.  It is possible that with transition to a more established program, FDA will become more interested in whether testing laboratories have ASCA accreditation when reviewing a device premarket application.

Patient Engagement:  The draft commitment letter notes the following plans to increase patient engagement in device premarket reviews: issue a draft guidance to provide best practices on incorporating  clinical outcome assessments (i.e., an assessment that reflects how a person feels, functions, or survives) into premarket studies; support use of innovative technologies to reduce barriers to patient participation in studies; and hold a public meeting by the end of FY 2024 to explore ways to use patient-generated health data to advance remote clinical trial data collection and support clinical outcome assessments.  The feedback received during the planned public meeting on remote data collection could potentially impact FDA’s draft guidance document on “Digital Health Technologies for Remote Data Acquisition in Clinical Investigations.”

Real-World Evidence:  FDA plans to update the 2017 guidance document on “Use of Real-World Evidence to Support Regulatory Decision-Making for Medical Devices” to provide clarity on acceptable real-world evidence methodologies and best practices.  We are, certainly, supportive of this effort.  It is relatively rare for FDA to be accepting of real-world evidence to support safety and effectiveness.  It would be beneficial for industry to have a better understanding of how real-world evidence can be used in device premarket submissions.

Digital Health:  The draft commitment letter states that FDA will finalize the draft guidance document on “Content of Premarket Submissions for Device Software Functions” by 18 months from the close of the comment period.  FDA will also publish a draft guidance document describing a process to evaluate a predetermined change control plan for digital health devices.

International Harmonization:  FDA plans to “support regulatory convergence” by developing a mechanism for FDA to communicate confidentially with regulatory partners to align international regulatory strategy (e.g., regarding scientific, clinical, or technical information).  By the end of FY 2023, FDA plans to issue for public comment a draft strategic plan with details and timelines on achieving international harmonization objectives.  Starting in FY 2024, FDA will publish an annual assessment of international harmonization activities described in the strategic plan.  Notably, this section of the draft commitment letter did not make any mention of FDA’s proposed rule to harmonize the Quality System Regulation (21 C.F.R. Part 820) with ISO 13485 (see our blog post here), which is one of CDRH’s most significant steps to-date to harmonize its requirements with international regulatory requirements.

Total Product Life Cycle (TPLC) Advisory Program (TAP):  FDA will establish the TAP pilot during the course of MDUFA V.  The goal of this program is to provide for more timely premarket interactions, enhance the experience of all participants in device development and review processes, facilitate improved strategic decision-making by identifying and mitigating product development risks earlier, facilitate regular engagement with FDA review teams, and collaborate to better align expectations regarding generation of evidence and submission quality.  Each fiscal year, FDA will enroll increasing numbers of products in the TAP pilot, starting with 15 in FY 2023, and ending with at least 325 through FY 2027.

A virtual public meeting will be held on April 19th to allow the public to comment on the proposed recommendations in the draft MDUFA V commitment letter (see meeting information and instructions for submitting comments to the docket here).  FDA plans to deliver the final recommendations to Congress by the end of the month.

The American Conference Institute (“ACI”) is hosting its 17th Annual Paragraph IV Disputes Conference in New York (and livestream) from April 26-27, 2022 (Eastern Daylight Time).  Over the course of two days, this event will provide impactful and practical programming all geared towards assessing the implications and imprimaturs of court cases, legislation, and industry behaviors which affect the patent endgame and the pursuit of related profits.

2022 agenda highlights include:

• The Viability of Written Description as a Compelling Invalidity Defense
• Clarity On What Satisfies Section 1400(b)’s Venue Requirements in the Hatch-Waxman Context
• Whether a Skinny Label Alone Is Enough to Preclude Induced Infringement Allegations
• The Latest FDA Initiatives Impacting Pharmaceutical Patents -Restrictions on Reverse-Payment Settlements

Hyman, Phelps & McNamara, P.C.’s Kurt R. Karst will be speaking at a session titled “Brand and Generic Perspectives on the Latest FDA Initiatives Impacting Pharmaceutical Patents.”

FDA Law Blog is a conference media partner. As such, we can offer our readers a special 10% discount. The discount code is: D10-896-896EX04. You can access the conference brochure and sign up for the event here. We look forward to “seeing you at the conference.”

On March 28, 2022, FDA transmitted its justification to Congress for its Fiscal Year 2023 budget.  This document contains a number of legislative proposals, including three proposed amendments to the accelerated approval statutory provisions in section 506(c) of the Federal Food, Drug, and Cosmetic Act.  The proposal to “revise 506(c)(3) so that FDA can follow its dispute resolution [(FDR)] procedures for drug applications when withdrawing a drug product’s accelerated approval” caught our attention in light of our extensive experience with the FDR process.

Consistent with due process considerations, the administrative hearing process that is currently used for the withdrawal of a drug approved via accelerated approval requires the Agency to provide the administrative record to the applicant.  In contrast, FDA’s custom in an FDR is not to disclose the administrative record or even a review division’s underlying reviews to the applicant.  As previously noted, this lack of transparency significantly hampers an applicant’s ability to present a winning case.  Certainly FDA’s application of this unwarranted lack of transparency shouldn’t be extended to now also affect the withdrawal procedures for an accelerated approval.

We would instead hope to see the Agency begin to provide the administrative record and/or the medical/statistical reviews (depending on the context) for all FDRs, such as those appealing complete response actions (CRs).  The importance to sponsors and applicants of obtaining the division’s reviews of their applications is underscored by the recent lawsuit filed by Vanda Pharmaceuticals, Inc. (Vanda) to obtain the medical and scientific reviews underlying a CR letter it received for a supplement to an approved NDA.  See Vanda Pharmaceuticals, Inc. v. Food and Drug Administration, No. 1:22-cv-0938 (D.D.C. Apr. 6, 2022).  As Vanda noted in its complaint, without those underlying reviews, it cannot know the detailed basis for FDA’s decision not to approve its supplement and whether FDA’s decision was the result of a factual error or whether or how Vanda should adapt its development program.

A key to efficient drug development is transparency.  When FDA decides to take an action – be it to withdraw a drug approved via accelerated approval or to issue a CR letter – disclosure to the affected party of the detailed reasons for the decision is crucial.  If Congress were to give FDA the authority to follow its FDR procedures for the withdrawal of an accelerated approval, it is imperative that the FDR procedures specifically require that FDA provide the administrative record to the applicant.  Otherwise, the applicant will be deprived of the process it is due, the FDA deciding official will not have the benefit of a fulsome debate, and patients with serious conditions may unnecessarily lose access to a safe and effective drug when no other therapy is available.

One of the more complex areas of device regulation is the management of risks associated with malfunctions reported from the field.  A critical task in this situation is for a firm to estimate the risk posed by the issue as accurately as possible.  This estimation of risk is important because it drives both decision making and regulatory compliance.

A December 2021 warning letter to Medtronic, Inc. (Medtronic Warning Letter) provides an important reminder from FDA as to the correct estimation of risk associated with malfunctions.  The warning letter is long and covers many issues associated with the management of risks associated with malfunctions and complying with the complex web of regulations potentially applicable when malfunctions occur.

Our focus, however, is on FDA’s criticism of Medtronic’s calculation of risk.  As background, Medtronic manufactures the MiniMed 600 series insulin infusion pumps.   During an inspection, FDA learned that Medtronic had opened a CAPA to address complaints of damaged retainer rings in these pumps (more than 74,000 between June 2016 and November 2019, with more than 57,000 reported to FDA as MDRs).  An internal investigation apparently had determined the device failures were caused by a malfunction involving the retainer ring.  According to FDA, a “damaged retainer ring may result in the over or under-delivery of insulin, which may lead to hypoglycemia or hyperglycemia.”

In Medtronic’s quality system, as FDA notes:  “Your CAPA System procedure (SOP114-01DOC, Effective Date 5/19/2015, Version L) requires your firm to determine whether distributed product is potentially affected by a nonconformance and to conduct additional risk assessment activities per the Product Risk Management Process (SOP104- 08, Version W).”  FDA acknowledged that Medtronic followed the procedures but disagreed with the assessment of risk.

Specifically, FDA criticized the risk calculation formula because it used the total shipment of affected product, which “underestimates the probability of occurrence because the number of products shipped includes devices not in use by patients (e.g., devices shipped to distributors that have not yet been distributed to customers).”

Is FDA’s criticism valid?  After all, it is fairly common for firms to use shipment (or sales) as a denominator in a risk estimate.  It would seem, though, that FDA is right that total shipments of affected product could potentially overstate the number in actual use by patients, thereby underestimating the risk.  Of course, it would not always be true that there is a significant gap between the number of medical devices shipped and the number in actual use.  Some products may move with high velocity to patient use.  Nonetheless, firms would be wise to at least consider the issue when calculating risk.

One last nuance:  As FDA noted toward the end of the warning letter, there was such a large gap between the number shipped versus the number in use (according to Medtronic’s own calculation) that the number held by distributors might not account for the entire gap.  Whether true or not in that case, the lesson here is that an estimate of the delay in reaching the patient should consider all possibly contributing factors and not simply time in possession of distributors.  For instance, some products could remain in boxes in hospital inventory for an extended period.

In a nutshell, when estimating risk of harm from a malfunction, be sure to consider whether the total shipments of affected product is an adequate proxy for the total number in use!  Firms should update their procedures to include this consideration.