Source: http://www.fdalawblog.net/fda_law_blog_hyman_phelps/2012/01/index.html
Timestamp: 2016-05-03 12:28:45
Document Index: 493177758

Matched Legal Cases: ['§ 505', '§ 505', '§ 505', '§ 505', '§ 505', '§ 505', '§ 505', '§ 505', '§ 505', '§ 505', '§ 505', '§ 744', '§ 744', '§ 744', '§ 744', '§ 505', '§ 744', '§ 505', '§ 744', '§ 505', '§ 744', '§ 505', '§ 744', '§ 744', '§ 505', '§ 505', '§ 744', '§ 502', '§ 744', '§ 502', '§ 744', '§ 744', '§ 744', '§ 744', '§ 744']

FDA Law Blog: January 2012
CDRH Issues its Strategic Priorities for 2012
On Tuesday, January 24, FDA’s Center for Devices and Radiological Health (“CDRH”) released its strategic priorities for 2012: (1) fully implement a total life cycle approach; (2) enhance communication and transparency; (3) strengthen the CDRH workforce and workplace; and (4) proactively facilitate innovation to address unmet public health needs. Though the priorities have remained consistent over the last three years, the strategies and goals (sometimes) differ. This blog post addresses some of the highlights.
Total life cycle approach. This is the most comprehensive and aggressive of the four priorities. Perhaps most ambitious is CDRH’s goal to finalize all guidance documents issued as part of the plan to improve premarket programs. Given the number of draft guidance documents issued in 2011 for this purpose (approximately 11), it is unlikely CDRH will achieve this goal, nor, perhaps would it be advisable to do so. While final guidance is helpful to industry, in this case, rapid finalization would likely mean that CDRH did not take the time necessary to consider and address all the comments submitted by stakeholders or consider the relationship between the various documents. Rather than striving to finalize all guidances, CDRH should focus on those likely to have the biggest impact: those regarding benefit-risk determinations, the 510(k) paradigm, appeals, and when to submit a 510(k) for modifications to currently marketed products.
This priority also proposes implementing a knowledge management strategic plan and a Center-wide quality assurance program. It is not clear what role these proposals will play in day-to-day operations of the Center, or what issues they are intended to address.
A repeat goal is to enhance compliance capability by implementing its “business-case-for-quality” (in 2011 this was referred to as “Case for Quality”), though the sub-goals are different. In 2011, this goal was to be completed by September 30, 2011. In the 2012 priorities, CDRH will begin to implement the program by December 31, 2012. Precisely what this initiative will entail is not clear from either the 2011 or 2012 language.
Enhance communication and transparency. Given the importance of improving communication and transparency with industry, it is surprising that this priority has only two rather thin strategies and goals. One goal (a repeat from 2011) is to continue taking “steps to strengthen information exchange and improve gathering feedback” from external constituencies. It seems that industry’s concern is less about CDRH’s ability to gather feedback, and more its failure to adequately respond to the feedback it receives and its shortcomings in communicating with companies. Strengthen the workforce and workplace. This priority emphasizes employee training and education, and enhancing effective leadership, all of great importance to industry. Hopefully, training “to enhance premarket reviewer knowledge of how medical devices are designed, manufactured, and utilized” will allow for a better, more realistic understanding of devices by reviewers. The proposal “to provide CDRH managers and supervisors information and tools to assure effective leadership” has the potential to, for instance, encourage supervisors to work with reviewers to understand the boundaries of requests for additional information and to provide better guidance to staff. Hopefully, it will also empower supervisors to overturn a subordinate’s decision when appropriate.
Proactively facilitate innovation to address unmet public health needs. Innovation, and FDA’s role in its facilitation, is a “hot topic” in medical device regulation and reform. Though the first strategy within this priority is the same as 2011—to foster the development of innovative medical devices—there are far fewer goals to implement this strategy in 2012 than there were in 2011. The only goal in 2012 is to “create processes and tools that will improve the pipeline for innovative medical devices and transform the way CDRH works with medical device innovators.” While this is a laudable goal, it lacks any specifics. Until the review processes are more transparent and predictable, and review times are shortened, it is likely also an unrealistic one.
REMINDER: HP&M is hosting FDA Appeals - Improving Your Odds of Success: Trends, Expectations, Strategies, a webinar on March 21, 2012, 12:30 - 2:00 p.m. ET. Click here to register.
Posted at 01:00 PM in Medical Devices | Permalink
Supreme Court Rules Federal Meat Inspection Act Preempts California's Ban on Slaughter of Non-Ambulatory Animals
On Monday, January 23, 2012, the U.S. Supreme Court ruled that a California state law prohibiting the slaughter, processing, and sale of any non-ambulatory animals is preempted by the Federal Meat Inspection Act (“FMIA”).
As we previously reported, under California's Downed Animal Law, section 599f of the California state penal code, prohibits the slaughter of any non-ambulatory livestock. This law was adopted in 2008 as a reaction to the publication of an undercover video in 2008, showing workers at the California Westland/Hallmark Meat Co. cattle slaughterhouse dragging sick and disabled cows. This video resulted in the largest beef recall in U.S. history, and federal regulations prohibiting slaughter of non-ambulatory cattle but not of other non-ambulatory livestock. California’s law, section 599f, expanded the federal protections provided to non-ambulatory cattle to all non-ambulatory livestock, requiring that these animals must be returned to the farm or immediately euthanized, without examination by a veterinarian. Shortly after passing of the California law, the National Meat Association ("NMA") filed a request for an injunction on the grounds that the California law was preempted by the FMIA. The U.S. District Court granted the injunction. However, the Court of Appeals of the Ninth Circuit upheld California’s right to prohibit slaughter of non-ambulatory pigs, reasoning that a non-ambulatory pig is a different kind of animal and that regulating what kind of animal may be slaughtered fell within the type of regulatory activity typically reserved for states. According to the Ninth Circuit, just as California had the right to prohibit slaughter of horses, it had a right to prohibit slaughter of non-ambulatory pigs. NMA petitioned the U.S. Supreme Court.
In the Supreme Court's unanimous decision (Docket No. 10-224), Justice Kagan writes that the FMIA regulates a broad range of activities to ensure the safety as well as human handling of animals. The FMIA contains an express preemption provision in section 678 of the FMIA, which was added in 1967. Section 678 provides, in relevant part, that “Requirements within the scope of this [Act] . . . which are in addition to, or different than those made under this [Act] may not be imposed by any State.” As Justice Kagan explained, this section “prevents a State from imposing any additional or different-even if non-conflicting-requirements that fall within . . . the scope [of the act] and concern slaughterhouse facilities or operations.” According to the Court, the California law effectively tried to ban slaughterhouse activities that the FMIA and FSIS implementing regulations expressly allow. As the Court explained, under federal law, non-ambulatory pigs can be slaughtered, processed and sold, subject to FSIS inspection and monitoring requirements. Thus, the Court concluded, California’s section 599f is preempted by the FMIA. Although this case focused on pigs, the ruling applies equally to non-ambulatory sheep, goats and veal calves.
Posted at 04:21 PM in Foods, Foods and Dietary Supplements | Permalink
GAO Recommends Coordination and Assessment of Federal Efforts to Educate About Prescription Pain Reliever Abuse and Misuse
The Government Accountability Office (“GAO”) has issued a report focusing on federal agency efforts to educate prescribers and the public about prescription pain reliever abuse and misuse. The report’s title, “Prescription Pain Reliever Abuse: Agencies have Begun Coordinating Education Efforts, but Need to Assess Effectiveness” telegraphs the report’s conclusion. The report evaluates the nine programs to educate current and future prescribers and nine programs to educate target groups within the general public about prescription pain reliever abuse and misuse, noting duplicative efforts and recommending coordination between the multiple agencies and measuring their effectiveness.
The GAO conducted the performance audit of federal efforts to educate prescribers and the public about prescription pain reliever abuse and misuse from December 2010 to December 2011. The report notes at the outset that key measures of prescription pain reliever abuse and misuse increased from 2003 to 2009. “Abuse” and “misuse” refer to using a prescription pain reliever to get high, using a prescription pain reliever for pain relief without a prescription or using a prescription pain reliever but in ways other than as prescribed. The report summarized the increased problem of prescription pain reliever abuse and misuse through several key measures. The estimated number of emergency visits annually related to prescription pain reliever abuse and misuse increased by 288,000 visits, (142 percent), from 2004 to 2009; annual admissions to substance abuse treatment facilities for prescription pain reliever abuse and misuse increased by 133,000 admissions, (131 percent), from 2003 to 2009; and the annual number of deaths from unintentional overdoses of prescription pain relievers increased by more than 5,000, (83 percent), from 2003 to 2008. Lastly, the estimated number of persons who abused or misused prescription pain relievers increased from an estimated 11.7 million in 2003 to 12.4 million in 2009, an increase of 6 percent.
The report notes that agency officials have suggested that the increase in adverse health consequences that are key measures of prescription pain reliever abuse and misuse are due to the increasing availability of prescription pain relievers, especially higher potency extended-release and long-acting pain relievers. Another factor is the increase in high-risk behavior. High-risk behaviors include combining the prescription pain relievers with other prescription drugs and alcohol as well as inhaling or injecting the pain relievers instead of taking them orally as prescribed.
The report notes that officials from each of the responsible federal agencies opined that more prescriber education about prescription pain reliever abuse and misuse is required. The Food and Drug Administration (“FDA”), National Institutes of Health (“NIH”), and Substance Abuse and Mental Health Services Administration (“SAMHSA”) have implemented different voluntary CME programs to educate prescribers about issues related to prescription pain reliever abuse and misuse. FDA requires manufacturers to develop a CME or CE course for prescribers as part of a Risk Evaluation and Mitigation Strategy (“REMS”) for extended-release and long-acting pain relievers. NIH communicates with prescribers at medical conferences while SAMHSA developed a CME course on prescribing opioids for chronic pain, partnering with local organizations such medical organizations. FDA requires prescribers of certain transmucosal immediate-release fentanyl products to be trained and certified, then re-certified every two years. NIH and SAMHSA are pursuing funding to develop physician clinical support systems that provide educational resources and free mentoring services related to prescribing prescription pain relievers. Lastly, NIH and SAMHSA are developing curricula for medical students. The report further notes that the Office of National Drug Control Policy (“ONDCP”) with Drug Enforcement Administration (“DEA”), FDA and SAMHSA assistance, “are working to develop a legislative proposal to require all prescribers who request DEA registration to prescribe controlled substances be trained on the appropriate and safe use, proper storage, and disposal of prescription pain relievers as a precondition of registration.” HPM will monitor and report on this legislative proposal.
The report also discusses the various efforts of DEA, FDA, NIH, ONDCP and SAMHSA to educate teenagers, parents, college students and the general public about prescription pain reliever abuse and misuse. The report notes that several of the public education efforts are duplicative of those of other agencies though concedes that the agencies have different constituencies and approaches to the issue. The report concludes that the agencies have established or plan to establish metrics to assess the impact of only two of the educational efforts, which leaves the agencies “with limited knowledge as to whether such efforts are effective.” The GAO states the agencies should establish metrics to measure the effectiveness of their education efforts. The GAO also believes that the agencies have missed opportunities to share feedback about their efforts, leveraging their resources and coordinating similar efforts. The report concludes that “there is much to be gained from continued and robust coordination among similar education efforts” and that ONDCP occupies a unique position to coordinate similar agency efforts and ensure that agencies do not duplicate efforts. While duplicative educational efforts can reinforce messages, given the limited resources available to government, it is reasonable for agencies to coordinate education efforts aimed at similar constituencies. The report’s appendices also contain several informative discussions relevant to the prescription pain reliever abuse and misuse issue in the appendices. One section discusses the various abuse-deterrent formulations of prescription pain relievers. A second summarizes DEA’s controlled substance aggregate production, bulk manufacturing and procurement quota system. We would like to see GAO investigate and issue a full report on DEA’s quota process and its impact on these issues. Posted at 05:41 PM in Controlled Substances, Drug Enforcement Administration | Permalink
A New Hatch-Waxman DJ Jurisdiction Decision . . . . And an Added Twist
By Kurt R. Karst – In a recent Hatch-Waxman decision from the U.S. District Court for the Northern District of Illinois (Eastern Division), the court denied Plaintiffs’ Seattle Children’s Hospital, Novartis Vaccines and Diagnostics, Inc., and Novartis Pharmaceuticals Corporation (collectively “Novartis”) Motion to Dismiss the lawsuit that they brought against Akorn, Inc. (“Akorn”) for lack of subject matter jurisdiction and granted Akorn’s Motion to Amend its Answer to include a claim for a declaratory judgment of noninfringement of U.S. Patent No. 5,508,269 (“the ‘269 patent”). The ‘269 patent, which expires on October 19, 2014, is the only patent listed in the Orange Book for TOBI (tobramycin solution for inhalation), 300 mg/5 mL (NDA No. 050753). The court’s decision sets up the possibility of a subsequent ANDA sponsor causing a 180-day exclusivity forfeiture event for a first applicant under the failure-to-market provisions at FDC Act § 505(j)(5)(D)(i)(I).
Akorn appears to have submitted ANDA No. 201422 to FDA back in 2010 seeking approval for a generic version of TOBI. Akorn’s ANDA, which FDA has not yet tentatively approved, contains a Paragraph IV certification to the ‘269 patent; however, according to the court, non-party Teva Pharmaceuticals USA, Inc. (“Teva”) submitted the first ANDA containing a Paragraph IV certification to the ‘269 patent, making Teva a first applicant eligible for 180-day exclusivity. (FDA’s Paragraph IV Certification List shows June 29, 2009 as the date of the first ANDA submission.) In June 2011, Novartis granted Akorn a covenant not to sue with respect to infringement of the ‘269 patent, and subsequently argued that the court lost subject matter jurisdiction since the covenant not to sue moots the patent infringement lawsuit. Although Akorn admitted that the covenant not to sue “resolves the infringement issue,” the company has maintained that the covenant does not resolve the “regulatory issue;” namely, approval of ANDA No. 201422.
Enter the now familiar Federal Circuit decisions in Caraco Pharm. Labs. v. Forest Labs., 527 F.3d 1278 (Fed. Cir. 2008) and Janssen Pharmaceutica, N.V. v. Apotex, Inc., 540 F.3d 1353 (Fed. Cir. 2008) which analyzed whether an Article III controversy exists in a declaratory judgment action arising under the Hatch-Waxman Amendments. As the Illinois District Court notes, “Caraco holds that the exclusion of non-infringing generic drugs from the market can be a judicially cognizable injury-in-fact,” and “Janssen reaffirms Caraco’s holding that the injury-in-fact must stem from the actions of the company that listed the patents in the Orange Book, not the inherent framework of the Hatch-Waxman Act.”
Holding that the TOBI case presents an actual controversy, and that as in Caraco, a favorable judgment for Akorn “would eliminate the potential for the [‘269 patent] to exclude [Akorn] from the drug market,” the court stated:
Notwithstanding Plaintiffs’ unilateral covenant not to sue, the case or controversy between the parties here endures because of the continued listing of the ‘269 Patent in the FDA’s Orange Book in connection with NDA No. 50-753 for Novartis’ TOBI drug product, which bears on Akorn’s efforts to obtain FDA approval to market a generic version of Novartis’ TOBI. In these circumstances, guidance from the Federal Circuit, admittedly decided under the pre-2003 version of the Hatch-Waxman Act, suggests that Akorn may pursue a court judgment in order to advance the regulatory issues surrounding Akorn’s efforts to obtain FDA approval to market a generic version of Novartis’ TOBI in light of Akorn’s status as a subsequent filer.
Moreover, the court made its decision notwithstanding the fact that FDA had not yet tentatively approved Akorn’s ANDA No. 201422:
Notably, such a [civil action to obtain patent certainty] would have been authorized by statute even though Akorn had not received tentative approval for its ANDA at that time and even if Plaintiffs had not threatened suit. The case law and the expression of congressional intent . . . , as well as the realities and time commitments associated with complex litigation, support Akorn’s attempt to pursue tentative approval of its ANDA with the FDA while simultaneously seeking “a favorable judgment in this action [to] eliminate the potential for the [listed] patent to exclude [Akorn] from the drug market.” See Caraco, 527 F.3d at 1293; see also Pfizer, 726 F. Supp. 2d at 930 (denying motion to dismiss even though applicant’s ANDA had not yet been approved and its Paragraph III certification independently precluded approval at the time it filed its claims).
Undeterred by the district court’s decision, Novartis promptly filed a Renewed Motion to Dismiss the case and Akorn’s counterclaim for lack of subject matter jurisdction. According to Novartis, since the court issued its decision “any possible remaining case or controversy has been mooted by the statutorily mandated forfeiture of any 180-day exclusivity” available with respect to Teva’s ANDA. Novartis points to the faiure to obtain tentative ANDA approval forfeiture provision at FDC Act § 505(j)(5)(D)(i)(IV) and alleges that Teva’s failure to obtain tentative approval by December 29, 2011 (“30 months after the June 29, 2009 submission of its ANDA”) means that exclusivity was forfeited and that there is no barrier to FDA approving Akorn’s ANDA No. 201422, and therefore, no Article III controversy supporting subject matter jurisdiction in the case. (Novartis says in a footnote that this is the same issue recently raised in another Illinois District Court Hatch-Waxman case involving generic FOSRENOL (lanthanum carbonate) 500 mg, 750 mg, and 1000 mg Chewable Tablets – Shire Canada Inc. v. Alkem Laboratories, Ltd., Case No. 11-cv-00206 (N.D. Ill.).) Interestingly, Novartis asserts that the exception provision under the tentative approval forfeiture provision – that failure to obtain timely tentative approval results in forfeiture unless such failure “is caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed” – “is inapplicable here as there is no evidence that there was any change in the requirements for ANDA approval that resulted in Teva’s failure to obtain tentative approval by December 29, 2011.” Of course, only FDA really knows the answer to the question of whether there has been a change in or review of ANDA approval requirements. In our experience, it is a fact-intensive and case-specific analysis. Whether the court will effectively step into FDA’s shoes on the matter remains to be seen. Posted at 06:34 PM in Hatch-Waxman, Prescription Drugs and Biologics | Permalink
Leap Year and Hatch-Waxman – An Unusual Conundrum Years in the Making
By Kurt R. Karst – It’s absolutely amazing how, after nearly 28 years, the 1984 Hatch-Waxman Amendments continue to provide surprises. Consider the latest example we came upon recently (with a little help) involving PRISTIQ (desvenlafaxine) Extended-Release Tablets.
FDA approved PRISTIQ under NDA No. 021992 in a leap year, on February 29, 2008 at 3:15 PM Eastern Time (within business hours). PRISTIQ is listed in the Orange Book with a single patent – U.S. Patent No. 6,673,838 (“the ‘838 patent”) expiring on February 11, 2022. PRISTIQ is also identified in the Orange Book as a New Chemical Entity (“NCE”) with a period of 5-year exclusivity that expires in a non-leap year, on March 1, 2013. The combination of an Orange Book patent listing and the 5-year NCE period granted to NDA No. 021992 sets up the possibility under the FDC Act that an ANDA (or a 505(b)(2) application) containing a Paragraph IV certification to the ‘838 patent could be submitted on the so-called “NCE-1 date.” But is the correct 2012 (also a leap year) submission date March 1st or February 29th?
Let’s turn to the FDC Act’s ANDA provision at FDC Act § 505(j)(5)(F)(ii) under which 5-year NCE exclusivity is discussed. (The provision applicable to 505(b)(2) applications – FDC Act § 505(c)(3)(E)(ii) – is substantially identical.) FDC Act § 505(j)(5)(F)(ii) states, in relevant part (emphasis added):
If an application submitted under [FDC Act § 505(b)] for a drug, no active ingredient (including any ester or salt of the active ingredient) of which has been approved in any other application under [FDC Act § 505(b)], is approved after September 24, 1984, no application may be submitted under [FDC § 505(j)] which refers to the drug for which the [FDC Act § 505(b)] application was submitted before the expiration of five years from the date of the approval of the application under [FDC Act § 505(b)], except that such an application may be submitted under this subsection after the expiration of four years from the date of the approval of the [FDC Act § 505(b)] application if it contains a [Paragraph IV] certification . . . .
In the case of PRISTIQ, “four years from the date of the approval” of NDA No. 021992 is February 29, 2012, not March 1, 2012. If one were to use the often-referred-to “NCE-1 date” in this case, which calculates the submission date backwards beginning on the date of NCE exclusivity expiration, it would yield March 1, 2012, not February 29, 2012. So what’s the lesson here? Beware of Hatch-Waxman shorthand and do the math under the statute. After all, we all know how dates count and how counting can lead to controversy (and even changes in the law) – think ANGIOMAX (for which a settlement was just announced); also, see our previous post on counting here. UPDATE: A new note was added to the Orange Book stating: "Applications referencing NDA 021992 Pristiq (Desvenlafaxine Succinate) and challenging the listed patent may be received by the Agency beginning on Feb 29, 2012, four years from the NDA approval date."
Posted at 04:37 PM in Hatch-Waxman, Prescription Drugs and Biologics | Permalink
The auditing firm does not report findings to federal, state, or local officials, even when there is an egregious deficiency that prompts immediate termination of the audit and results in failure of the audit. Jensen Farms had ample advance notice of the audit, and the audit was relatively brief. Jensen Farms had final say over the selection of auditors, thereby giving rise to a potential conflict of interest. In addition, the auditing firm had recommended processing equipment that was faulted in FDA’s subsequent investigation.
The letter asserts that these issues are similar to those identified in prior committee investigations of outbreaks of Salmonella in which third party audits were faulted. As we noted in a recent posting, FDA’s oversight of food facility inspections conducted by state agencies has already come under scrutiny by the HHS Office of Inspector General. Thus, food companies can expect the reliability of non-FDA inspections and audits to remain a hot topic – one doubtless fueled by the naming of third-party auditors in follow-on litigation.
Posted at 09:26 PM in Foods, Foods and Dietary Supplements | Permalink
Pharmaceutical and medical device applicants faced with an adverse decision from FDA (e.g., regarding data requirements, study design, or regulatory pathway) may dispute that decision through multiple routes. The appeal processes in both CDER and CDRH offer numerous strategic and procedural advantages that, when used effectively, can maximize success. On March 21, 2012 (12:30 - 2:00 PM ET), Hyman, Phelps & McNamara, P.C. will host a free webinar, titled “FDA Appeals - Improving Your Odds of Success; Trends, Expectations, Strategies.” You can register for HP&M’s March 21st FDA Appeals Process webinar here.
The webinar will provide a brief overview of the appeal processes in the drug and device centers, followed by a focused, in-depth discussion of various case studies and trends. Participants will gain an understanding of how to use appeal timing, content, meeting strategy, and potential outcomes to their full advantage. The webinar will feature HP&M attorneys Josephine Torrente and Jeffrey Shapiro, who have years of experience helping drug and device companies to navigate the appeals processes. (Mr. Shapiro recently posted on FDA’s draft guidance on medical device appeals. During the webinar, Ms. Torrente and Mr. Shapiro will:
Describe the appeals processes within CDRH and CDER, including appropriate appeal content and timeframes for agency response; Share their insights on potential outcomes of an appeal, including risks and benefits; Analyze publicly disclosed case studies and evaluate appeal trends; Provide strategies for success and recommendations on how to effectively appeal within the agency; and Answer participants’ questions submitted during or before the webinar.
The FDA appeals process is a hot topic these days. We anticipate a robust turnout for the webinar, so register early. Posted at 07:46 PM in Medical Devices, Prescription Drugs and Biologics | Permalink
The conference will include presentations from a virtual “who’s who list” of FDA regulatory experts on myriad topics, including the approval process, pre-approval concerns, product labeling, clinical trials, adverse events reporting, and patent and non-patent marketing exclusivity issues. FDA Law Blog is a conference media partner. As such, we can offer FDA Law Blog readers a special $200 discount off the current price tier. The discount code is: FDA 200. We look forward to seeing you at the conference.
Posted at 07:44 PM in Hatch-Waxman, Prescription Drugs and Biologics | Permalink
FDA Sends User Fee Pacts to Congress; Proposed Generic Drug User Fee Statute Includes Some Unique Provisions
By Kurt R. Karst – Last week, FDA Commissioner Margaret A. Hamburg, M.D. announced that the Agency sent to Congress packages for three user fee programs, including proposed statutory language for the fifth iteration of the Prescription Drug User Fee Act (“PDUFA V”), and two new user fee statutes – the Generic Drug User Fee Amendments of 2012 (“GDUFA”) and the Biosimilars User Fee Act of 2012 (“BSUFA”). FDA previously announced the proposed performance goals and procedures (Fiscal Years 2013 through 2017) for PDUFA V, GDUFA, and BSUFA (here, here, and here), which we reported on here, here, and here. Noticeably absent from FDA’s submission is proposed statutory language and performance goals and procedures for the next iteration of the Medical Device User Fee and Modernization Act (“MDUFMA”). According to press reports (see here), FDA and industry are still haggling over some issues. The House Energy and Commerce Committee has scheduled three hearings for February 2012 to consider each of the four user fee programs (see here, here, and here).
Of the various “UFAs” (User Fee Acts) up for consideration by Congress, GDUFA will likely have the most wide-ranging and immediate effects (both on industry and on FDA and the Office of Generic Drugs). (Biosimilar are still in their infancy. Earlier this week it was reported that the highly-anticipated and seemingly always “shortly forthcoming” draft guidance from FDA on the Biologics Price Competition and Innovation Act may be further delayed.) We thought we would take a few minutes to point out a couple of the interesting and unique provisions in the proposed statutory language (as compared to other UFAs), which we alluded to in a previous post after GDUFA negotiations were completed.
User Fee Types and Amounts. People have already been asking: “What will the GDUFA user fees rates be set at?” The fact is that nobody (not even FDA) really knows yet exactly what all of the user fee rates will be set at for Fiscal Year (“FY”) 2013 or thereafter, because some of the rates depend on information that still needs to be collected. That being said, the user fee rates for FYs 2014-2017 will likely be higher than what will be set for FY 2013 given that in FY 2013, $50 million of the total user fee revenue amount of $299 million (adjusted each FY) will come from a one-time ANDA backlog fee.
There are proposed to be four types of fees in two categories – application fees and facility fees. Application fees, which account for 30% of total fee revenue each FY, include an original ANDA fee and Prior Approval Supplement (“PAS”) fee (one half of the ANDA fee) (both accounting for 24% of the total revenue amount), and a Type II Drug Master File (“DMF”) “first reference fee” (6% of total revenue amount). There is also a one-time (FY 2013) ANDA backlog fee for ANDAs pending on October 1, 2012. That fee will be calculated by dividing $50 million by the number of ANDAs in the backlog, which as of January 1, 2012, was at 2,696 ANDAs. (There was a record 210 original ANDA submissions to FDA in December alone, historically the highest volume month of submission. A total of 946 original ANDAs were submitted to FDA in 2011.) The number of ANDAs in the backlog on October 1, 2012 may increase or decrease from the current backlog number as companies decide whether or not to withdraw applications (or perhaps play a game of chicken with other ANDA sponsors). A facility fee, which accounts for 70% of total fee revenue each FY, must be paid by both Finished Dosage Form (“FDF”) and Active Pharmaceutical Ingredient (“API”) manufacturers. FDF facility fees account for 80% of facility fee revenue (56% of the total revenue amount), and API facilities account for 20% of facility fee revenue (14% of the total revenue amount). There is “a modest fee differential” of not less than $15,000 and not more than $30,000 for foreign FDF and API facilities “reflecting the added costs of overseas inspection.”
For FY 2013, FDA is supposed to set the application fees and ANDA backlog fee by October 31, 2012. The FY 2013 facility fee rates must be set “within 45 days after the date to comply with the requirement for identification of facilities in [proposed FDC Act § 744G(f)(1)].” Proposed FDC Act § 744G(f)(1) states in relevant part that “[b]y October 1, 2012, the Secretary shall cause to be published in the Federal Register a notice requiring each person that owns a facility as identified in [proposed FDC Act § 744G(a)(4)(A)] or a site identified in [proposed FDC Act § 744G(f)(3)] to identify each such facility or site. Each such person shall comply with that requirement within 60 calendar days of the publication of such notice.”
Failure to Pay User Fees. The penalties for failing to pay GDUFA fees are particularly harsh under the proposed statutory language. Failure to pay the ANDA backlog fee will result in placing the ANDA sponsor on an arrears list, “such that no new ANDAs or supplement submitted on or after October 1, 2012 from that person, or any affiliate of that person, will be received within the meaning of [FDC Act § 505(j)(5)(A)] as implemented in [FDA] regulations, until such outstanding fee is paid.” Proposed FDC Act § 744G(g)(1) (emphasis added). Failure to pay the required application fee within 20 calendar days of the due date will result in the application not being received (FDC Act § 505(j)(5)(A)) until the fee is paid. ANDA receipt date is, of course, particularly important when 180-day exclusivity is at stake. And the proposed statute recognizes this at § 744G(o), which states:
An [ANDA] that is not considered to be received within the meaning of [FDC Act § 505(j)(5)(A)] because of failure to pay an applicable fee under this provision within the time period specified in [FDC Act § 744G(g)] shall be deemed not to have been “substantially complete” on the date of its submission within the meaning of section 505(j)(5)(B)(iv)(II)(cc). An [ANDA] that is not substantially complete on the date of its submission solely because of failure to pay an applicable fee under the preceding sentence shall be deemed substantially complete and received within the meaning of section 505(j)(5)(A) as of the date such applicable fee is received.
Failure to pay the DMF fee within 20 calendar days of the due date “will result in the Type II [API DMF] not being deemed available for reference.” An affected ANDA “shall not be received within the meaning of [FDC Act § 505(j)(5)(A)]” unless the fee “has been paid within 20 calendar days of the Secretary providing the notification to the sponsor of the [ANDA] or supplement of the failure of the owner of the Type II [API DMF] to pay the [DMF] fee . . . .” Proposed FDC act § 744G(g)(2).
Failure to pay a facility fee within 20 calendar days of the due date will result in several penalties, included what might be the harshest penalty of all – misbranding. Specifically, proposed FDC Act § 744G(g)(4) (emphasis added below) states that failure to pay a fee will result in:
(A) identification of the facility on a publicly available arrears list, such that no new [ANDAs] or supplement submitted on or after October 1, 2012 from that person, or any affiliate of that person, will be received within the meaning of [FDC Act § 505(j)(5)(A)] as implemented in [FDA] regulations;
(B) any new generic drug submission submitted on or after October 1, 2012 that references such a facility shall not be received, within the meaning of FDC Act § 505(j)(5)(A)] as implemented in [FDA] regulations if the outstanding facility fee is not paid within 20 calendar days of the Secretary providing the notification to the sponsor of the failure of the owner of the facility to pay the facility fee as specified in [proposed FDC Act § 744G(a)(4)(C)]; and
(C) all drugs or [APIs] manufactured in such a facility or containing an ingredient manufactured in such a facility being deemed misbranded under [proposed FDC Act § 502(aa)].
The penalties in [proposed FDC Act § 744G(g)(4)] shall apply until the [facility] fee . . . is paid or the facility is removed from all generic drug submissions that refer to the facility. Proposed FDC Act § 502(aa) (Section 106 of GDUFA) would amend the statute to state that a drug shall be deemed to be misbranded:
If it is a drug, or an [API], and it was manufactured, prepared, propagated, compounded, or processed in a facility for which fees have not been paid as required by [proposed FDC Act § 744G(a)(4)] or for which identifying information required by [proposed FDC Act § 744G(f)] has not been submitted, or it contains an [API] that was manufactured, prepared, propagated, compounded, or processed in such a facility.
The misbranding provision, which was a point of controversy during GDUFA negotiations, appears to be intended to add some teeth to the proposed user fee statute.
User Fee Refunds. Although other UFAs, like PDUFA and BSUFA, include user fee waiver/refund provisions (e.g., small business waiver), as well as strict waiver/refund request timelines (i.e., requests must be submitted within 180 days after a fee is due), the proposed GDUFA statute does not. There is a 75% refund of the application (original ANDA and PAS) fee if an application is not received, see Proposed FDC Act § 744G(a)(3)(D); however, such an application will be subject to a new fee upon resubmission. See id. § 744G(a)(3)(E). It is unclear whether an ANDA sponsor must specifically request in writing a 75% refund of the application fee, or whether such refund is automatic. Proposed FDC Act § 744G(n) (emphasis added), titled “Disputes concerning fees,” states that “[t]o qualify for the return of a fee claimed to have been paid in error under this section, a person shall submit to the Secretary a written request justifying such return within 180 calendar days after such fee was paid.” Is a fee subject to the 75% refund provision a fee that can be claimed to have been paid in error, thereby requiring a written refund request?
Posted at 01:55 PM in Hatch-Waxman, Prescription Drugs and Biologics | Permalink