On October 30, CDRH issued the Final Guidance “De Novo Classification Process (Evaluation of Automatic Class III Designation)” (the “De Novo Guidance”). This is a final version of the 2014 draft by the same name (see our earlier blog post here). On the same day, CDRH also issued the draft guidance “Acceptance Review for De Novo Classification Requests” (the “De Novo RTA Guidance”).   Subsequently, on November 21, FDA held a webinar regarding the guidances. During the webinar, FDA explained the key provisions of both guidances and emphasized that the De Novo RTA Draft Guidance is not yet in effect. FDA will be posting a transcript, audio recording and slides here.

The final De Novo guidance is virtually unchanged from its 2014 draft. One new addition of note – which the Agency also highlighted during last week’s webinar – has to do with what happens if there is more than one de novo submission pending for a new type of device. The final guidance indicates that if there is more than one de novo submission for the same type of device, CDRH will review both simultaneously. When the first submission is granted, the Agency will notify the sponsor of the second submission (the second sponsor). The second sponsor will have the opportunity to withdraw their de novo and then submit a 510(k) establishing substantial equivalence to the first de novo (appropriately referencing information in its original de novo). While the guidance says it does not anticipate such a situation will arise, it will be a difficult situation for the second sponsor because it will lose its significant de novo submission user fee (currently $93,229). Even though the second sponsor will be able to reference the data in the de novo application, marketing authorization will be delayed while a 510(k) submission is prepared and a new review clock is initiated.

The Agency raised a few additional interesting points regarding the De Novo Guidance during the webinar. First, CDRH clarified that unlike 510(k)s which are cleared and PMAs which are approved, de novo requests are “granted.” This may be an important promotional point for companies after their de novo is granted, and a helpful semantic distinction. Second, a webinar participant asked how to determine if a de novo or a PMA is the appropriate regulatory pathway. We expected the Agency to refer the caller to the 513(g) process, a response that we have had several clients receive. Instead, however, CDRH indicated that it is up to the company to determine if its product fits within the definitions of Class I, II, or III, and it will also depend on the company’s business strategy. While it was somewhat surprising to hear CDRH defer to the company’s judgment and preference regarding classification when it directly affects the regulatory pathway, we are certain FDA would provide guidance if requested through the appropriate pathway (e.g., the 513(g) process).

The draft De Novo RTA Guidance is also unremarkable. The draft guidance contains checklists and looks very similar to the 510(k) RTA. Like the 510(k) RTA process, the de novo administrative review will occur in the first 15 days after receipt of a submission. In addition, the draft guidance gives the CDRH reviewer discretion to determine if missing items can be addressed interactively instead of refusing a submission.

Unlike the 510(k) RTA checklist, the De Novo RTA Guidance contains two checklists: a high-level checklist of required items; and a more detailed checklist of recommended items. If the submission contains the items on the second checklist, the guidance recommends including a completed copy of the second checklist. There is some duplication between the two checklists, e.g., both lists include a classification summary. In addition, the second list appears to include information that one would expect to see in a de novo submission. For example, the second list includes labeling and full tests reports. These are items that are typically required in a premarket submission; they are not optional. According to the guidance, a de novo request should only be refused if items on the first checklist are missing. Because of the duplication and the appearance of apparently required items on the option list, we expect that it may be administratively difficult to implement the two-checklist approach.

CDRH is accepting comments on the draft guidance through December 29. Once a final version of the guidance is issued, according to the draft, there will be a 60-day delay on implementation meaning that de novo submissions received in the first 60 days after issuances of the final guidance will not be refused for failure to include all required items. This will be important for companies with de novo submissions in process of being drafted to allow them time to comply. Although the De Novo RTA Guidance is not yet final, sponsors would be wise to begin reviewing and operationalizing the checklists now to ensure that their submissions contain the appropriate content for review.

Sherman, set the Way-Back Machine.

A press release from the U.S. Department of Justice announced that the former Compliance Director of Pharmakon Pharmaceuticals, Inc. has pleaded guilty in Indiana to conspiring to defraud the United States government by lying about failed potency tests of drugs that the pharmacy had compounded. This brings back memories to me about another Pharmakon, in another part of the world.

But, first, the current news. Caprice Bearden was indicted earlier this year by the U.S. Attorney’s Office for the Southern District of Indiana for her conduct while Director of Compliance at a compounding pharmacy located in Noblesville, Indiana, owned by Pharmakon Pharmaceuticals, Inc. She pleaded guilty on November 21 to the most of the charges in the Indictment (Indictment). She admitted to a statement of facts stating that she was aware of serious super-potency of drugs including morphine sulfate and midazolam, although she told FDA investigators she was not aware, prior to reports to FDA about superpotency in later lots (Plea Agreement). According to the Indictment against her and pharmacy owner Paul Elmer, sterile drugs compounded at the pharmacy were distributed to hospitals, including a hospital where the drugs were used in a neonatal intensive care unit, and caused serious distress to at least one patient. Ms. Bearden’s sentencing is not yet scheduled. Mr. Elmer is scheduled to go to trial on April 16, 2018.

So why the obscure reference to a frequent saying by a minor character in the Bullwinkle and Rockie cartoon series (a reference probably lost on any readers under the age of 60)? Because years ago, in Tampa, Florida, our firm represented a drug manufacturing company named Pharmakon. The U.S. Food and Drug Administration (FDA) and the Department of Justice demanded that Pharmakon, and its owner Abelardo Acebo, sign a “Consent Decree” which included, characteristically, a grant of broad shutdown powers to FDA. If they refused to sign, FDA would file a lawsuit. Like very few other companies, Pharmakon refused the Consent Decree, and faced an injunction action brought in federal court. The government failed to win a Preliminary Injunction against Pharmakon, and the presiding judge appointed as a special master the expert who had testified on behalf off Pharmakon at the Preliminary Injunction hearing, to monitor Pharmakon and file regular reports with the Court. He did so. But about three years later, the final hearing on the injunction request was held, the circumstances had changed, and the judge ruled against Pharmakon, forcing it to shut down.

No connection is known to exist between the two Pharmakons, except in the synapses of this blogger.

Although the Drug Supply Chain Security Act of 2013 (DSCSA) required publication by 2015 of guidance addressing grandfathering of certain product identifier requirements for packages or homogeneous cases of finished dosage form prescription drugs, “its better late than never,” as the saying goes.  On Monday November 27th, FDA announced the availability of draft guidance titled, “Grandfathering Policy for Packages and Homogenous [SIC] Cases of Product Without a Product Identifier.” Comments on the proposed draft are due by January 26, 2018. As FDA states in its Federal Register Notice announcing the draft guidance, a critical part of the DSCSA (Section 582(a)(5)(A)) requires each package and homogeneous case of product in the supply chain to contain by a specific date a product identifier encoded with the product’s standard numerical identifier, lot number, and expiration date.  FDA’s draft guidance specifies whether and under what circumstances packages and homogeneous cases of product not labeled with an identifier will be exempt (“grandfathered”) from Section 582’s identifier requirement.

FDA states that this draft guidance must be read in conjunction with FDA’s previously issued draft guidance titled, “Product Identifier Requirements Under the Drug Supply Chain Security Act” (see our previous post here) where FDA announced, among other things, that it will exercise enforcement discretion for manufacturers that do not add a product identifier to each package and homogeneous case of product intended to be introduced in a transaction into commerce before November 27, 2018 (i.e., delaying the serialization deadline by one year).

The “scope” of the latest draft guidance is as follows: A package or homogeneous case of product “is in the ‘pharmaceutical distribution supply chain’ if it was packaged by the product’s manufacturer before November 27, 2018.”  (Emphasis added.)  Thus, a package or homogeneous case of a product that is not labeled with a product identifier “is eligible for an exemption under Section 582(a)(5)(A)” as described in the guidance ”only if the product’s manufacturer packaged the product before November 27, 2018.” (Emphasis added.)  There also must be documentation that the product was packaged by a manufacturer before November 27, 2018.  As an example, FDA states that if a package or homogeneous case not labeled with a product identifier is accompanied by transaction information (TI) or a transaction history (TH) indicating a sale before November 27, 2018, then a trading partner may “reasonably conclude” the product was “packaged” by the manufacturer before that date.  However, if TI or TH does not include a sale prior to November 27, 2018, absent other indications that the product may be suspect or illegitimate, then the transaction statement (TS) “is one indication that the product was in the pharmaceutical distribution supply chain before that date.”  One could wonder here whether “packaged” but “unsold” products qualify for the grandfathering exemption, and whether this will cause confusion for industry.

Concerning trading partner requirements under the grandfathering exemption, the draft guidance notes as follows:

Manufacturers, distributors, and dispensers are exempt from two requirements in Section 582 where there is documentation showing that the unserialized product was in the pharmaceutical distribution supply chain before November 27, 2018:

For Manufacturers:

• Where investigating an unserialized product to determine whether it is illegitimate, the manufacturer is exempt from the requirement to use the product identifier for verification. However it still must validate the TH and TI, and otherwise investigate pursuant to Section 582(b)(4)(A)(i)(H).
• In circumstances were the authorized trading partner in possession of the product requests verification from the manufacturer, the manufacturer is exempt from verification using the product identifier, but still must follow the other requirements in Section 582(b)(4)(C) (i.e., advise concerning whether the product is indeed suspect or illegitimate).

For Wholesale Distributors:

• Wholesale distributors are exempt from Section 582(c)(2), which requires they only engage transactions involving serialized product after November 27, 2019.
• Wholesale distributors shall not be required to verify product using the product identifier beginning November 27, 2019, but they must validate applicable TH, TI and TS in their possession to determine whether the product is illegitimate.

For Dispensers:

• Dispensers are exempt from Section 582(d)(2), which requires they only engage transactions involving serialized product after November 27, 2020.
• Wholesale distributors shall not be required to verify product using the product identifier beginning November 27, 2020, but they must validate applicable TH, TI and TS in their possession to determine whether the product is illegitimate.

For Repackagers:

The grandfathering exemption applies to repackagers, with certain limitations:

• Repackagers are partially exempt when they receive unserialized product after November 27, 2018, if they accept product without a product identifier after that date. However, if the repackager transfers ownership of a product without an identifier after November 27, 2018, it must add a product identifier to the package or homogeneous case.
• Like other trading partners mentioned above, repackagers will not be required to verify a product using the product identifier (if the product does not have one) after November 27, 2018, but it must take other steps outlined in the statute to otherwise investigate whether the product is illegitimate, including verifying TH and TI in its possession.
• If a repackager initially repackaged and sold unserialized product prior to November 27, 2018, it is exempted from the requirement that, upon request, it verify the product using the product identifier, but it must still follow other relevant statutory requirements.

Importantly, the draft guidance states that trading partners may engage in transactions involving grandfathered products until product expiry. FDA states that, although there is no “sunset” date for the grandfathering exemption, it expects few unserialized products  to remain  in the supply chain by November 27, 2023.

Lastly, concerning saleable returned packages and homogeneous cases of product (i.e., trading partners’ accepting returns of and redistribution of product), for returns without product identifiers after November 27, 2018, manufacturers, distributors and repackagers are exempt from the requirement to verify the product identifier.  Manufacturers are exempted from the requirement to add an identifier before redistribution.  Repackagers are exempted from the requirement so long as they initially repackaged and sold the product without an identifier before November 27, 2018.

FDA makes clear that unlike the guidance on Product Identifier Requirements, above, where FDA is exercising enforcement discretion, in this draft guidance, eligible product is “grandfathered” or exempted from certain statutory requirements.

The recently-enacted Food and Drug Administration Reauthorization Act (“FDARA”) includes the Medical Device User Fee Amendments of 2017 (“MDUFA IV”) (see our summary here).  This new law affects multiple aspects of the device review process.  MDUFA IV supplements FDA’s funding of device regulation, with the goal of increasing the speed and efficiency of the Agency’s review of new devices, as well as improving the safety and effectiveness of marketed devices.  In addition to modifying the user fees, MDUFA IV broadens the scope of submission subject to user fees and performance goals.

Hyman, Phelps & McNamara, P.C.’s Jeffrey N. Gibbs will be moderating the Food and Drug Law Institute’s (“FDLI’s”) November 30, 2017 webinar, titled “MDUFA IV and Related CDRH Guidance Documents: Impacts on Industry.”  Webinar panelists will discuss relevant aspects of FDARA and the MDUFA IV Commitment Letter, highlight major changes to the program, and discuss the effects on the device industry, including the issuance of substantive key new guidance documents, such as when new 510(k)s must be submitted.

Additional information on the FDLI webinar, including registration information, is available on FDLI’s website here.

Last week FDA formally announced yet another transparency initiative – this time, it’s the inclusion of patent submission dates in the Orange Book!  (FDA informally announced the change a couple of weeks ago with a note in the Orange Book stating: “Effective November 21, 2017, the Orange Book search results and drug listings will display patent submission dates where available.”) In accordance with FDA’s October 2016 final rule implementing portions of the 2003 Medicare Modernization Act (“MMA”), FDA has decided to publish this information in the Orange Book prospectively.  (That being said, FDA began patent submission date data collection in 2013, and the newly updated Orange Book includes patent submission dates since then.) According to FDA’s press release announcing the change, the data are intended to “help generic manufacturers determine the earliest date when they may be able to market new generic medicines.”

This is a big – and important – change to the Orange Book.  Now applicants will have a much clearer picture on timely listed patents and whether listed patents indeed require certification. Knowing the submission date will also help clarify whether a listed patent will trigger a 30-month patent litigation stay, otherwise delay approval of a pending application, or require a carve-out.

Previously, patent submission date information was available only by contacting the Orange Book Staff.  This made it difficult for generic companies to determine if a patent was late-listed, relisted, or properly listed, and therefore difficult to know whether an ANDA applicant needed to include a patent certification or needed to update an application with an amended certification.  All this information should be a lot clearer with this development.  Hopefully, this will streamline the process for generic drug manufacturers and cut down on some work for the Orange Book Staff.

Like any other corrections to the Orange Book, NDA holders should contact the Orange Book staff with any correction requests (with justification).

As noted, this new information is only published on a prospective basis, and going back to 2013 when FDA began collecting patent submission date information.  That means there are about 4,000 patent records for which submission dates are available and that are now published in the Orange Book. For the remaining thousands of patents without a published patent record, interested parties will still have to reach out to FDA for patent submission information.

The Association for Accessible Medicines (“AAM”) recently submitted extensive comments to FDA in response to the Agency’s June 2017 Federal Register Notice on “Administering the Hatch-Waxman Amendments: Ensuring a Balance Between Innovation and Access.” Among AAM’s litany of suggested changes and improvements is a request that FDA update the Orange Book with more comprehensive patent information:

Knowing whether patent information is timely submitted to FDA for Orange Book listing is information critical to ANDA applicants. For example, a company with a pending ANDA is not required to certify to new patent information listed in the Orange Book if such patent information is listed more than 30 days after patent issuance, or more than 30 days after a relevant approval under an NDA making a previously issued patent listable.

FDA should amend the Orange Book to include a new column in the “Patent and Exclusivity List” that identifies the date on which a particular patent was considered listed in the Orange Book. Supplying such information in a readily accessible document would avoid companies and their representatives having to send multiple requests to FDA to supply such information, and should immediately clarify for ANDA applicants whether a patent is timely listed and must be addressed in a patent certification.

With FDA’s recent announcement on Orange Book patent submission date information, that’s one item FDA and AAM can check off the list of improvements.

On October 30, CDRH finalized the guidance entitled, “Manufacturers Sharing Patient-Specific Information From Medical Devices With Patients Upon Request”.  This is the final version of the guidance, “Dissemination of Patient-Specific Information from Devices by Device Manufacturers” issued in June 2016 (see our blog post on the draft here.)

We do not typically comment on guidance name changes from draft to final, but in this case the addition of “Upon Request” to the final guidance name marks a significant change from the draft to final guidance. The draft guidance contemplated prospective, unrequested dissemination of patient-specific information from medical devices.  The final guidance, however, is limited to providing such information in response to a “request.”  The guidance does not explain or define a request other than to say that a request could be directed to a patient’s healthcare provider or a device manufacturer.

The draft guidance was significant precisely because it allowed device manufacturers to share patient-specific data, including interpretive information, directly with patients without the communication being considered labeling or requiring a new premarket clearance or approval. The more limited scope of the guidance certainly tempers the importance of the guidance if providing data upon request will have a much more limited impact.  The guidance highlights that patients are taking greater interest in and control of their health.  However, patients are likely to request certain information only if they know of its availability.  The guidance is silent as to whether a patient’s request can be solicited or not.  For example, would this guidance still apply if a manufacturer posts on its website that certain information from its device can be shared upon request?  Without specific restriction in the guidance, it appears the answer would be yes, unless FDA viewed this as improperly soliciting an unsolicited request.

In the draft guidance, the flow of information was from a device manufacturer to a patient directly. The guidance indicates that often times patient-specific information is accompanied by other explanatory text.  If a healthcare provider could also be disseminating patient-specific information, it may be appropriate for device manufacturers to have a standard template for such communication.  However, the guidance is silent on this point.

The definition of “patient-specific information” is relatively unchanged from the draft to final guidance. However, notably the final definition excludes the statement that the device information be “consistent with the intended use of the medical device.”  The final guidance defines patient-specific information as:

information unique to an individual patient or unique to that patient’s treatment or diagnosis that has been recorded, stored, processed, retrieved, and/or derived from a legally marketed medical device. This information may include, but is not limited to, recorded patient data, device usage/output statistics, healthcare provider inputs, incidence of alarms, and/or records of device malfunctions or failures.

Like the draft guidance, the final states that interpretive information should be limited to “interpretations of data normally reported by the device to the patient or the patient’s healthcare provider.” To illustrate this point, the final guidance provides the following example as falling outside the scope of this guidance:  “results of individual component tests for specific analytes that comprise or are utilized in a cleared assay but have not been individually approved or cleared to test for those specific analytes.”  Thus, even though the “consistent with the intended use of the medical device” has been removed from the final definition, the remainder of the information continues to suggest that any patient-specific information provided should still be consistent with the intended use.

The final guidance, like the draft, emphasizes the need for providing comprehensive and contemporaneous information to patients, and manufacturers sharing such information should consider the content and context of the dissemination when responding to requests. The final guidance, interestingly, provides less guidance on these points than the draft.  We expect that manufacturers seeking to provide patient-specific information will still have a lot of questions that are unanswered by this guidance before they start sharing information.

The Food and Drug Law Institute’s (“FDLI”) Enforcement, Litigation, and Compliance Conference is just a few weeks away, and spaces are going fast!  The two-day conference will be held on December 6-7, 2017, in Washington, D.C.  Hear from new government officials, including Rebecca Wood, the new Chief Counsel for FDA, and Ethan Davis, the newly appointed Deputy Assistant Attorney General, Consumer Protection Branch, US Department of Justice.

Attendees will:

• Explore the latest enforcement action trends in food, drugs, biologics, medical devices, and tobacco
• Gain practical tips and best practices for responding to enforcement action by FDA or other government agencies
• Learn how to comply with new and upcoming FDA rules and regulations
• Hear from FDA’s Center Compliance Directors on priorities for 2018 and from ORA on the status of Program Alignment.

Hyman, Phelps & McNamara, P.C.’s Anne K. Walsh will present on enforcement issues throughout the supply chain.  View the full agenda at here and register using the discount code, save10.

The American Conference Institute’s Legal, Regulatory, & Compliance Forum on Controlled Substances is scheduled to take place in Washington, D.C. from January 29-31, 2018.

Esteemed, top-notch faculty speaking at the conference include current and former officials from the DEA and FDA, representatives from State Attorney General and U.S. Attorney Offices, as well as high-level in-house executives, and top outside counsel. Conference speakers will provide their insights into the most pressing topics affecting the space such as:

• Reassessing your Responsibilities in Light of the Changing Scope of Suspicious Order Monitoring Requirements
• Evolution of Abuse-Deterrent Opioid Drug Products
• Understanding and Comparing State Prescription Drug Monitoring Programs
• Diving into the State, County, and City Opioid-Related Investigations

Hyman, Phelps & McNamara, P.C.’s John A. Gilbert, Jr. will be speaking at a session titled “Overcoming Challenges for Schedule III Opioids and Non-Opioid Products,” and will be moderating a panel discussion, titled “Politics and Policy of Controlled Substances in View of the Opioid Overdose Crisis.”

FDA Law Blog is a conference media partner. As such, we can offer our readers a special 10% discount. The discount code is: P10-999-FDAB18. You can access the conference brochure and sign up for the event here. We look forward to seeing you at the conference.

On November 14, 2017, the USDA Agricultural Marketing Service (AMS) announced that it will further delay and reconsider the Organic Livestock and Poultry Practices (OLPP) regulations.  This is not the first delay of the effective date for the OLPP regulations.

The OLPP final rule amends the organic livestock and poultry production requirements of the organic regulations by adding provisions for (1) livestock handling and transport for slaughter; (2) avian living conditions; and (3) expanding and clarifying existing requirements covering livestock care and production practices and mammalian living conditions. The final rule was issued on January 19, 2017, in the last 24 hours of the Obama administration. The effective date for the rule was March 20, 2017.  However, in March, consistent with the memorandum “Regulatory Freeze Pending Review,” AMS delayed the effective date by 60 days.

Next, on May 10, 2017, nine days before the new effective date, AMS announced a further delay of the effective date; this time by six months, until November 14, 2017, because “significant policy and legal issues addressed within the final rule warranted further review by USDA.”  Concurrently, AMS issued a proposed rule requesting comments on the course of action for the final rule.. AMS asked comments on four possible options:

1. Let the rule become effective on November 14, 2017.
2. Suspend the rule indefinitely to allow time to consider whether to implement, modify or withdraw the final rule.
3. Delay the effective date of the rule further, beyond the effective date of November 14, 2017.
4. Withdraw the rule.

AMS received more than 47,000 comments. More than 40,000 comments (34,600 of which apparently were submitted as form letters) selected “Option 1: Implement,” 28 comments supported “Option 4: Withdraw,” some comments supported “Option 2: Suspend”; and only one comment selected “Option 3: Delay.” In light of these results, the announcement of another six months delay is somewhat surprising.

So why did AMS decide to delay the effective date yet again? According to the announcement in the Federal Register, AMS has concluded that “important questions regarding [its] statutory authority to promulgate the OLPP rule and the likely costs and benefits of [the] rule” need to be more fully assessed. AMS now questions whether it has the authority, under the Organic Food Production Act (OFPA), to issue regulations “reflecting a stand-alone concern for animal welfare.” It asserts that it has concluded that “OFPA’s reference to additional regulatory standards ‘for the care’ of organically produced livestock is limited to health care practices.” In addition, AMS is uncertain that the OLPP is consistent “with USDA regulatory policy principles . . . . because the requirements in [the] rule may not represent the most innovative and least burdensome tools for achieving regulatory ends.” AMS also is concerned that due to an error in the calculation of the benefits, it may have overestimated the benefits of the final rule. In light of these questions and uncertainties, AMS does not want to proceed with the implementation of the rule. Instead, a delay to allow for careful reconsideration is warranted.

Presumably, AMS will issue a proposed rule for comments on the revised cost benefit analysis and AMS’s interpretation of its (limited) authority under the OFPA in the near future.

Meanwhile, a September 2017 lawsuit by the Organic Trade Association challenging AMS’s repeated delays of the effective date as violations of the Administrative Procedures Act and the OFPA remains pending. As a result of the delay of the effective date, that proceeding also is delayed.

If you happened to log on to the FDA Law Blog or the Hyman, Phelps & McNamara, P.C. (“HPM”) websites over this past weekend, then you probably noticed some big changes. We’ve totally overhauled and upgraded the blog and the HPM websites to bring them into modern times and to better reflect our FDA expertise and the creative personality of HPM.  In fact, our new firm tagline is “Expertise in all things FDA.”

As for the FDA Law Blog, after celebrating 10 years of blogging earlier this year (see our previous post here), and during which 10 years we didn’t really invest much time and resources into making things “pretty,” we thought it was time to change things up.  After all, as our new blog tagline states, the FDA Law Blog is “where experts go to learn about the FDA.”  (And, as some folks from FDA have told us over the years, the FDA Law Blog is where FDAers go to learn about FDA.)  So we changed blogging platforms to better integrate the blog with the HPM website.  (Don’t worry!  All of our blogging history – about 3,250 posts – and popular trackers, such as the FDA Citizen Petition and 180-Day Exclusivity Trackers, are available on the new FDA Law Blog website.)  Now we have a cool new look, as well as a new FDA Law Blog logo that’s pretty neat-o!

We hope folks like the changes we’ve made to the FDA Law Blog. There will be other modifications and additions down the road.  As for the new HPM website, we urge you to check it out.  In addition to being a professional and informative website, it has a fun, tongue-in-cheek element to it that really says a lot about the unique personality of HPM and the depth of our expertise.  Enjoy.

Small business owners and managers of chain restaurants subject to FDA’s menu labeling rule remain confused as to the criminality of adding an extra dollop of ketchup to a hamburger. One thing is now clear — the only way to stop FDA’s years of wasteful dithering on menu labeling is for Congress to intervene.

Last week, FDA issued another in a string of guidance documents, and again failed to explain or simplify the hopelessly complex regulations aimed at requiring the disclosure of calories on menus in chain restaurants. The tortuous and bizarre history of FDA’s efforts to interpret several pages of statutory text intended to set a flexible national standard for calorie disclosure, which the restaurant industry favors, has just become more tortuous and bizarre with FDA’s latest effort to explain a needlessly inflexible regulation. We have posted regularly on FDA’s menu labeling rule and guidance documents (see, e.g., here and here).

The most entertaining (or depressing, depending on your point of view) aspect of FDA’s latest draft guidance is the agency’s attempt to calm those who justifiably fear federal prosecution for inadvertently exposing consumers to a few extra calories. When FDA issued its final menu labeling regulation in 2014, FDA required that small business owners and/or managers certify that the calorie information they submit to FDA is “true and accurate.” Because the Federal Food, Drug, and Cosmetic Act is a strict liability criminal statute, the submission of a certification that is not “true and accurate,” even if the small business owner or manager believed it to be so, is a prosecutable criminal offense potentially subjecting the individual to fines and prison. This is a highly questionable penalty for the inadvertent failure to certify to an accurate calorie count on a slice of pizza or a piece of apple pie.

The absurdity of the situation has led members of Congress and others to object, and now FDA has attempted to convince us of its good intentions in the latest menu labeling draft guidance. FDA explains that

our goal is to ensure compliance among covered establishments in a cooperative manner, and we do not intend to penalize or recommend the use of criminal penalties for minor violations. For example, we would consider examples such as the following to be minor violations:

• Inadvertently missing a calorie declaration for a standard menu item on a buffet when other items are labeled;
• Minor discrepancies in the type size/color contrast of calorie declarations, provided that they are readable;
• Minimal variations or inadvertent error that would only minimally impact the calorie declaration or other nutrition information, such as adding extra slices of pepperoni on a pizza or adding an extra dollop of ketchup on a hamburger when not typically added; or
• Not rounding your calorie declaration correctly in accordance with the menu labeling rule.

Guidance Q&A 6.2.

These examples beg the following questions: What if I miss two calorie declarations on a buffet, or miss one and the other items are incorrectly labeled? What if there are type size discrepancies and the numbers are not readable by customers with bad eyesight? What if I add two dollops of ketchup? What if I routinely add one extra dollop so that dollop is deemed by FDA to be “typically added”? Will these violations be criminally prosecuted? OK, ridiculous, right? Well, no, not if you are the target. That FDA felt the need to explain that one dollop ketchup “violations” would not be pursued as crimes as long as they are not routine violations only further illustrates the serious deficiencies and overreach of FDA’s regulation.

And, as the Wall Street Journal pointed out on Monday (here), there is much more that is wrong with FDA’s menu labeling effort. The most profound is FDA’s misinterpretation of a statute that was intended to provide a flexible framework, given the thousands of different types of businesses that the law covers, by which to informatively disclose calories to consumers. FDA has turned this flexibility on its head by over broadly interpreting the term “menu” to include coupons and other marketing materials, even though the calorie information is accessible to consumers in other formats, and by preventing the substitution of more efficient computer and internet-based technological solutions to replace expensive printed material. The latest guidance ostensibly was meant to resolve these key issues, but it fell far short of that goal. In fact, the latest FDA effort causes even more confusion and unpredictability by creating a new “enticement” test that appears to turn additional marketing materials into “menus.” And FDA purports to provide flexibility by allowing restaurants to declare calories via in-store tablets and electronic kiosks; but this is nothing new and is hardly flexible – if a restaurant that declares calories via tablet or kiosk also has a traditional menu board, the menu board must also declare calories.

The most significant problems with FDA’s current regulation have not been and cannot be fixed by guidance, as “non-binding” guidance cannot change requirements that are set through regulation. Unless Congress finally turns its attention to the Common Sense Nutrition Disclosure Act, a bill that would lead FDA down the right path, small businesses will not only be forced to waste many more millions of dollars on useless compliance measures, they will be left wondering whether even their well-intended efforts might be subject to arbitrary federal prosecution.

You may be a doctor, dentist, veterinarian, pharmacy, wholesale distributor, or manufacturer, and you just received an Order to Show Cause from the Drug Enforcement Administration (DEA). An Order to Show Cause can have a significant impact on your ability to handle controlled substances and, ultimately, to practice medicine or continue business operations. An Order to Show Cause must be taken seriously and requires a prompt response. This post summarizes DEA’s Order to Show Cause process, as well as highlights some important deadlines that you must meet to preserve your rights.

What Is an Order to Show Cause?

An Order to Show Cause is DEA’s official initiation of an administrative proceeding to revoke or suspend an existing DEA registration or deny an application for a DEA registration. By law, DEA must provide you with notice and an opportunity for a hearing before it can take away your registration (or deny your application), so DEA will issue an Order to Show Cause, which explains the legal grounds for revoking or denying a registration and informs you of your right to challenge DEA’s decision.

What Are Your Options When You Receive an Order to Show Cause?

You have several options. The first is to request a hearing before one of DEA’s administrative law judges (ALJs). To preserve your right to a hearing, you must file a request for a hearing with DEA’s Office of Administrative Law Judges within thirty (30) days of service of the Order to Show Cause. A second option is to waive your right to a hearing and simultaneously file a written position statement, again within thirty (30) days of service of the Order to Show Cause. A third option is to ignore the Order to Show Cause, in which case DEA will request a final order based only on DEA’s evidence. Which option is best for you is a decision that is best made after consulting with experienced counsel.

What Happens If You Request a Hearing?

A timely request for a hearing places your case on the docket of one of the ALJs. The ALJ will issue an order for prehearing statements and schedule a prehearing conference, which is typically conducted telephonically. At the prehearing conference, the ALJ will set a date and location for the hearing.

The hearing closely resembles a trial, but the ALJ (rather than a jury) is the trier of fact. Both the government (represented by DEA counsel) and you will have an opportunity to present your case through witness testimony and written evidence. Hearings can range from half a day to several weeks, depending on the complexity of the case. After the hearing, both parties may submit post-hearing briefs, and the ALJ will issue a recommended decision. The parties may file exceptions to the decision if they believe the ALJ made a factual or legal error in the decision. The recommended decision is submitted to the DEA Administrator who reviews the decision, rules on the exceptions, and issues a final order regarding your registration, either adopting or rejecting the ALJ’s recommended decision.

Not all cases end up going to hearing, however, as DEA is often willing to reach a settlement resolution.

What Happens If You Waive Your Right to a Hearing?

If you choose to forgo a hearing, the government will forward your case with its evidence (along with any timely submitted position statement) to the Administrator. The Administrator will then issue a final order based on the review of the evidence and written statements provided.

What Is an Immediate Suspension Order?

An Immediate Suspension Order is the exception to the rule that DEA will not revoke or suspend an existing DEA registration prior to a hearing. An Immediate Suspension Order allows DEA to suspend your registration upon a determination that there is an “imminent danger to the public health and safety.” An Immediate Suspension Order is served along with an Order to Show Cause, allowing you to challenge DEA’s determination that your registration should be revoked, but it takes away your ability to handle controlled substances while your case is pending. As a result, an Immediate Suspension Order can significantly (and immediately) affect your ability to practice medicine or operate your business.

What Is a Corrective Action Plan?

A recent amendment to the law (called the Ensuring Patient Access and Effective Drug Enforcement Act of 2016) now allows recipients of an Order to Show Cause (except those also receiving an Immediate Suspension Order) to submit a Corrective Action Plan. A Corrective Action Plan provides an opportunity for the registrant to demonstrate remedial actions contemplated or taken, and requests DEA to discontinue the Order to Show Cause proceedings. What should be discussed or admitted in a Corrective Action Plan, as well when it should be submitted (the law is unclear), is a decision that likely should be made after seeking advice from an experienced attorney.

Are You Allowed to Have an Attorney Represent You?

You are permitted to proceed on your own (i.e., pro se) or to have an attorney represent you. Because of the complex nature of these proceedings and the stakes involved, representation by a law firm experienced in handling DEA hearings may be a necessity.

What Resources Are Available?

DEA’s Office of Administrative Law Judges website provides some helpful resources, including templates of various filings. We also regularly blog on DEA administrative cases and procedures (see here), and our HPM attorneys have authored articles (see here and here) and spoken (see here) on the hearing process.

On October 25, 2017, FDA issued a final guidance: Deciding When to Submit a 510(k) for a Change to an Existing Device. This guidance is a final version of the draft issued in 2016 (see our post on the 2016 draft here). Despite receiving a significant number of comments, the final guidance is largely unchanged from the 2016 draft.  Industry should also be comforted to know that the final guidance is also, at its core, very similar to the 1997 guidance – a welcome relief as compared to the 2011 draft guidance.

The most significant change from the draft to final guidance has to do with the analysis for labeling changes. As we discussed in our blog post on the draft guidance, the draft merely acknowledged that changes to the indications for use were some of the most difficult to assess.  The draft guidance did little to elaborate on how a 510(k) holder should assess whether a new 510(k) is required for a changed to a device’s indications for use.  The final guidance seeks to provide additional clarity, and in fact, adds five additional questions to Flowchart A, Labeling Changes (Questions A1.1 – A1.5).

These additional questions suggest that if an indication change goes from single use to multiple use or from prescription use to OTC use a new 510(k) is always required. The questions also highlight that there may be additional flexibility in other types of indication changes.  For example, if a change does not “describe a new disease, condition, or patient population” nor does a “risk-based assessment identify any new risks or significantly modified existing risks,” a change to the indications for use may be documented without a new 510(k).

We should also highlight a new example FDA includes in Appendix A of the final guidance. This example highlights an indication for use change using a cleared device on a similar, closely related anatomical area.  FDA proceeds through the new flowchart and concludes that a new 510(k) is required because, although “there are no new or increased safety risks associated with the use of the device . . . the new indication for use is associated with a risk of significantly reduced effectiveness” due to the difference in anatomical area.  We read this example as saying that any indication change where new effectiveness data is required to support an indications for use change, a new 510(k) will be required, because the change “could” affect safety or effectiveness.  In sum, manufacturers should ensure that they carefully consider the examples in Appendix A as well as the text associated with the flowcharts when assessing whether a new 510(k) is required.  The examples and text should especially be discussed when a decision not to file a 510(k) is documented.

A notable carry-over from the draft guidance is FDA’s requirement that decisions not to file a new 510(k) be thoroughly documented. The final guidance makes clear that simple yes/no responses or flowcharts are insufficient.  The final guidance includes sample “regulatory change assessments” with narrative explanations and responses to each inquiry in the decision-making flow chart.

A few other noteworthy changes between the final and the draft guidance include:

• The Guidance document emphasizes that it is “not intended to implement significant policy changes to FDA’s current thinking on when submission of a new 510(k) is required,” but rather the intent of the guidance is to “enhance predictability, consistency and transparency of the “when to submit’ decision-making process.” Accordingly, unlike with some other significant guidance documents, FDA has not provided for a future effective date for the final guidance meaning that it went into effect immediately on October 25^th.
• The final guidance adds an introductory statement regarding the least burdensome provision, which is unsurprising in light of the provisions in the 21^st Century Cures Act re-emphasizing “least burdensome.”
• FDA clarifies that this guidance applies to remanufacturers and relabelers who hold their own 510(k).
• In conjunction with this guidance, FDA also issued a guidance regarding when to submit changes for a software device. The final guidance clarifies that when there are multiple changes, including changes covered by this guidance as well as software changes, the changes should be analyzed under both guidances and if either guidance results in a new 510(k) being required, one should be submitted.

In sum, the final guidance provides some additional clarity beyond the 2016 draft guidance and is conceptually very similar to the 1997 guidance. This final guidance, much like the 2016 draft, provides additional detail and explanation as compared to the 1997 guidance intended to aid manufacturers in making the often difficult decision as to whether a new 510(k) is required for a change to a device.  However, as discussed above, with the extensive examples provided in this final guidance (more than 40 individual examples are provided in Appendix A) some of the manufacturer judgment allowed for by the flowcharts may be lost and manufacturers should be cautioned to consider carefully the examples provided in the Appendices when making their decisions.

Last week, FDA did something unprecedented (although not unexpected, at least by this blogger)! And based on the absence of any reporting in the trade press or online chatter, nobody seems to have taken note of FDA’s decision.  In a November 6, 2017 response to a June 9, 2017 Citizen Petition (Docket No. FDA-2017-P-3672) submitted by Millennium Pharmaceuticals, Inc. (“Millennium”) concerning the company’s drug product VELCADE (bortezomib) for Injection, 3.5 mg/vial (NDA 021602), FDA – apparently for the first time ever – ruled that the Agency will allow a generic drug manufacturer to “carve-up” brand-name labeling and “carve-in” to generic drug labeling a condition of use that no longer appears in brand-name labeling.

We won’t go page-by-page through Millennium’s 31-page Citizen Petition and various requests, or FDA’s 21-page Petition Decision. Instead, like Seinfeld’s Elaine Benes, we’re going to “yada, yada, yada” over most of the content of those documents and just get to the endgame. But first, a little background. . . .

In March 2017, we put up a post, titled “Orphan Drugs: The Current Firestorm, a Real Evergreening Issue, and a Possible Solution” We described the “Real Evergreening Issue” alluded to in the title of the post as follows:

[T]here may be a real evergreening issue that’s probably been overlooked by most folks. In some cases, a single orphan drug designation can result in multiple periods of orphan drug exclusivity. . . .

In most instances, multiple and staggered periods of orphan drug exclusivity stemming from the same designation do not stymie generic competition. For example, if FDA grants an orphan drug designation for Drug X for Disease Y and the sponsor first obtains approval of the drug for use in adults with Disease Y and then later for the same drug for use in children with Disease Y, FDA would grant two separate periods of orphan drug exclusivity – one for each approval.  An ANDA applicant may obtain approval of the drug for the adult population indication once the initial period of orphan drug exclusivity expires, and then later for the pediatric population indication once that second period of orphan drug exclusivity expires.

But not all cases are as easy as the one above. You see, indications, like Pokémon, can evolve into something new.  There appear to be a growing number of cases where FDA has granted multiple periods of orphan drug exclusivity based on the same original orphan drug designation, and where the drug’s indication evolves into something new, shedding and subsuming the previous indication statement.  This could occur, for example, as different disease stages or different lines of therapy are approved.  (Some possible examples of this might be in the cases of Ibrutinib, Cinacalcet, Bortezomib, and Bevacizumab.)  As the old labeling is shed, the new labeling may not allow for an ANDA (or biosimilar) applicant to easily (if at all) omit information protected by a new 7-year period of orphan drug exclusivity.

But is the solution to what may be a real evergreening problem opening up the Orphan Drug Act? This blogger thinks that there could be a better solution. . . . [One] possible remedy is for [the Office of Generic Drugs] to take a broader view of permissible labeling changes. That is, considering so-called labeling “carve-ins” that clarify the omission of other labeling information (and effectively return an indication to its previous state).  It’s a topic FDA raised a few years back (see our previous post here), but that the Agency ultimately decided not to address.

Curiously, Millennium’s Citizen Petition was submitted to FDA just a few weeks later and raised, among other things, the precise issue we described in our March blog post. Specifically, Millennium requested that FDA:

• Refrain from approving any ANDA or 505(b)(2) bortezomib product for any mantle cell lymphoma indication with labeling that omits information regarding the safe and effective conditions of use for treatment in previously untreated patients or labeling that adds new language to modify Velcade’s current mantle cell lymphoma indication.
• Seek public comment if FDA is considering allowing an ANDA applicant to revise Velcade’s current mantle cell lymphoma indication by adding new language, consistent with FDA’s prior action in a similar situation.

. . . and yada, yada, yada . . . FDA says in the Agency’s November Petition Decision that the Agency will, in fact, permit ANDA applicants to “carve-in” and “carve-up” brand-name labeling. Here are the important parts to note from FDA’s Petition Response (pages 12-15):

Velcade was approved as a second-line treatment for mantle cell lymphoma in 2006.  The indication was changed in 2014 to include previously untreated patients (i.e., first-line treatment), resulting in a revised indication “for the treatment of mantle cell lymphoma.”  The Petition states that the “approval of the revised mantle cell lymphoma indication resulted in multiple exclusivity periods, including orphan drug exclusivity.”  The Petition notes the following:

VELCADE was awarded orphan exclusivity in 2006 for “Treatment of patients with mantle cell lymphoma who have received at least 1 prior therapy.”  With regard to the current orphan exclusivity, FDA’s orphan database describes the “approved labeled indication” as “Treatment of patients with mantle cell lymphoma who have not received at least 1 prior therapy.”  That set of patients was incorporated into the labeling through the revised indication statement, which states that “VELCADE is indicated for the treatment of patients with mantle cell lymphoma.”

The Petition states that FDA may not approve “any bortezomib product for the treatment of patients who have not received at least 1 prior therapy” until the expiration of the orphan drug exclusivity period on April 8, 2022 and further states “[b]ecause VELCADE has only one broad mantle cell lymphoma indication, . . . FDA may not approve any ANDA or 505(b)(2) ‘for the treatment of mantle cell lymphoma.’”

The Petition argues that FDA should not allow ANDA applicants to carve out the protected first-line indication and to seek approval for the non-protected aspects of the treatment of mantle cell lymphoma indication.  The Petition states that “FDA’s carve-out authority and precedent make clear that the agency will permit only omissions and minor attendant changes” to approved labeling.  According to the Petition, “[i]t is not possible to omit words from the current mantle cell lymphoma indication and/or to make de mininus changes to arrive at an indication that does not disclose the exclusivity-protected use for first-line mantle cell lymphoma.”  The Petition states that an ANDA applicant “would have to add language to create a new indication for second-line treatment that is not part of VELCADE’s current labeling.”  In other words, because Velcade’s current labeling contains a broad indication “for the treatment of mantle cell lymphoma,” the Petition contends that applicants may not carve out the protected first-line indication without impermissibly changing the language of the indication or referencing a discontinued version of Velcade’s labeling.  The Petition asserts, however, that FDA lacks the authority to approve of such a change. . . .

FDA disagrees with the Petition’s assertion that FDA may not approve ANDAs or 505(b)(2) applications for bortezomib drug products that rely on Velcade and that propose to carve out Velcade’s protected first-line information regarding mantle cell lymphoma (i.e., the indication for “treatment of patients with mantle cell lymphoma who have not received at least one prior therapy”).  Prior to the approval of supplement 040 to NDA 021602, the labeling for Velcade included the following second-line treatment indication:  “VELCADE is indicated for the treatment of patients with mantle cell lymphoma who have received at least 1 prior therapy.”  The second-line treatment indication for mantle cell lymphoma currently is not protected by exclusivity.  Upon approval of supplement 040, the Indications and Usage section was revised to include a new patient population for mantle cell lymphoma, patients who have not received at least one prior therapy.  Thus, the revised indication included both patients who have received at least one prior therapy (the second-line treatment indication that is unprotected by exclusivity) and patients who have not received at least one prior therapy (the first-line treatment that is protected by exclusivity).  The current approved indication provides that “VELCADE is indicated for the treatment of patients with mantle cell lymphoma.”  It would be appropriate, in FDA’s view, to omit the exclusivity-protected information and retain the non-protected indication for the “treatment of patients with mantle cell lymphoma who have received at least 1 prior therapy.” . . .

In this situation, FDA may omit the first-line mantle cell lymphoma indication.  However, because of the way the indication is currently worded, the only way to omit the protected indication is to add words.  FDA could have approached the labeling for Velcade differently.  As described above, when the indication for “treatment of patients with mantle cell lymphoma who have not received at least one prior therapy” was granted exclusivity under the Orphan Drug Act, the indications for both first- and second-line treatment of mantle cell lymphoma were written as “treatment of patients with mantle cell lymphoma,” which FDA believes to be clear and concise.  We note that the mantle cell lymphoma indications could have been written as “treatment of patients with mantle cell lymphoma who have received at least one prior therapy and treatment of patients with mantle cell lymphoma who have not received at least one prior therapy.”  If the indications had been written as such, then omission of the words describing the protected indication would result in “treatment of patients with mantle cell lymphoma who have received at least one prior therapy” and would presumably be allowable under the Petition’s “only omissions” standard.  We do not believe it would be appropriate for the scope of exclusivity for Velcade to be broadened due to the writing of labeling in a clear and concise manner.  Further, we think this is consistent with our past practice.  FDA does not believe there is a need to solicit public comment on this change in labeling.

Based on some recent patent infringement litigation, it does not appear that FDA will be approving generic VELCADE any time soon.  As such, we are unlikely to see Millennium sue FDA with respect to the Petition Decision discussed above.  But the “carve-in”/“carve-up” issue is likely to come up again soon (perhaps in the coming months) in the context of another drug we identified in our previous post on the topic.  We’ll leave it to our readers to ponder what drug that might be.