Source: http://www.fdalawblog.net/page/50/
Timestamp: 2020-01-18 11:45:24
Document Index: 738897270

Matched Legal Cases: ['§ 256', '§ 1301', 'art 806', 'art 806', 'art 806', 'art 806', 'art 803', '§ 505', '§ 505']

January 13, 2017 By Sara W. Koblitz & Kurt R. Karst —
Drug Compounding: FDA Issues Final Guidance on Section 503A’s Individually Identified Prescription Requirement – With At Least Three Noteworthy Changes
January 11, 2017 By Karla L. Palmer & James E. Valentine —
As the door was closing on 2016, FDA squeezed through three guidance documents on drug compounding: (1) Final guidance on Section 503A prescription requirement here; (2) Final guidance on electronic drug product reporting for outsourcing facilities here, and (3) Draft guidance on compounding of radiopharmaceuticals here. This blog post focuses on FDA’s final guidance addressing the prescription requirement under Section 503A (guidance document available here; see our coverage of the draft guidance here).
As a reminder, Section 503A of the Federal Food, Drug, and Cosmetic Act (“FD&C Act”) describes the conditions under which drug products compounded by a licensed pharmacist in a state-licensed pharmacy or federal facility, or by a licensed physician, are exempt from certain requirements of the FD&C Act (i.e., new drug, adequate directions for use, and FDA’s current good manufacturing practices (“cGMP”)). A condition to qualify for Section503A’s exemptions is that the drug product must be compounded for an identified individual patient based on the receipt of a valid prescription order or a notation for the patient or in limited quantities before receipt of a valid prescription order for an identified individual patient. The final guidance issued on December 30, 2016 addresses the prescription requirement in Section 503A, including FDA’s policies regarding compounding after the receipt of a prescription for an identified individual patient, compounding before the receipt of such a prescription (referred to as “anticipatory compounding”), and compounding for office use (referred to as “office stock”). The final guidance contains at least three noteworthy changes from FDA’s earlier draft:
1. Documentation of the “Valid Prescription Order” Requirement for Purposes of Section 503A
In the draft guidance, FDA proposed that, to be a valid prescription order for a compounded drug product, the prescription order needed to state clearly that it is for a compounded drug and necessary for the treatment of the identified individual patient. If the prescription did not contain this information, then the draft guidance recommended that the pharmacist consult with the prescriber to determine whether the patient needs a compounded drug, and that the compounder must make the appropriate notation on the prescription order or other appropriate documentation that the compounded preparation is necessary (including suggested language for the notification). The final guidance no longer states that pharmacists should contact a prescriber for clarification concerning the individual patient who will receive the drug, and that the compounder document the same.
To the extent compounders believe FDA has softened its position concerning the necessity of documentation in the final guidance, however, please note the final guidance states that FDA intends to describe its policies regarding the documentation requirement in a future policy document (Guidance at 8 n.10).
The final guidance maintains the complementary requirement that, for a notation in a health record (i.e., patient chart) in an office or hospital setting to serve as the basis for compounding under Section 503A, this type of information should be recorded in the patient chart.
Importantly, the guidance recognizes (using an ophthalmologist as an example) that some drugs – for safety or emergency reasons – require immediate administration in a physician’s office. For example, if a patient presents with a fungal eye infection, “timely administration of a compounded antifungal medication may be critical to preventing vision loss. In such a case, the ophthalmologist may need to inject the patient with a compounded drug product immediately, rather than writing a prescription and waiting for the drug product to be compounded and shipped to the prescriber.” (Guidance at 3; 3 n.3). Although FDA recognizes the importance of the availability of compounded medications for office use in exigent situations and as a matter of patient safety, FDA’s policy remains (at page 10-11) that these medications are only available from outsourcing facilities. Otherwise, for compounding pursuant Section 503A, FDA requires a prescription for an individually identified patient.
2. Clarification of “Interim” Compliance Policy for the “Limited Quantity” Condition
The final guidance clarifies that FDA’s draft guidance for considering whether a compounder has exceeded the “limited quantity” (i.e., 30-day supply) condition for anticipatory compounding in Section 503A(a)(2) is an interim policy.
Furthermore, FDA’s interim policy now explicitly contemplates that a drug compounded before receipt of a valid prescription might be distributed to any identified individual patient for the particular compounded drug. The limited quantities policy also may not alter the beyond use dating on the product. (Guidance at 9 n. 13).
Finally, the final guidance includes an illustrative example of anticipatory compounding that is consistent with the interim compliance policy, where compounders are allowed to adjust the number of units of a compounded product produced based on real-time changes in the historically highest number of valid patient-specific prescriptions (e.g., for the most recent 30-day period, even if not a calendar month). FDA provides as an example that a compounder may consider a rolling 30-day period in a given year to determine the quantity it may compound in advance of receiving prescriptions. (Guidance at 9-10, 9 n. 16).
3. Removing Recordkeeping Requirements to Demonstrate Compliance
To the (at least temporary) relief of prescribers and pharmacies, FDA’s final guidance dispenses with the draft’s section addressing onerous recordkeeping, including additional tracking and maintaining the documentation of compounding necessity, clarification of prescriptions, and quantities dispensed. The draft’s terms required pharmacists and physicians seeking to compound drugs under section 503A to maintain records to demonstrate compliance with the prescription requirement (e.g., valid prescription orders) and to document the basis for any anticipatory compounding (e.g., calculations performed to determine the limited quantities of drug products compounded before receipt of a valid prescription order).
January 11, 2017 By David C. Gibbons & Alan M. Kirschenbaum —
Section 340B of the Public Health Services Act (“the Act”; codified at 42 U.S.C. § 256b) requires pharmaceutical manufacturers who participate in the Medicaid Drug Rebate Program (“MDRP”) to enter into a Pharmaceutical Pricing Agreement (“PPA”) with HHS, under which the manufacturer agrees to sell Covered Outpatient Drugs to statutorily designated Covered Entities at a price not exceeding a statutory “ceiling price.”
340B Ceiling Price and the Penny Pricing Policy
“The manufacturer made an isolated inadvertent, unintentional, or unrecognized error in calculating the 340B ceiling price;
“The manufacturer sells a new covered outpatient drug during the period the manufacturer is estimating a price based on this final rule, as long as the manufacturer offers refunds of any overcharges to covered entities within 120 days of determining an overcharge occurred during the estimation period;
Congress also could disapprove or reject the Final Rule regardless of any action taken on the ACA. On November 17, 2016, the House passed the Midnight Rules Relief Act of 2016, H.R. 5982, 114th Cong. (2016), which would amend the Congressional Review Act to allow Congress, by joint resolution, to reject a group of regulations submitted by federal agencies for congressional review within the last 60 days of a legislative session of Congress during the final year of a President’s term. Currently, Congress must reject each regulation on a case-by-case basis. This bill has been referred to a Senate committee.
January 9, 2017 By Jennifer D. Newberger —
January 8, 2017 By John A. Gilbert & Larry K. Houck —
The Drug Enforcement Administration (“DEA”) published a final rule on December 30th revising its import and export regulations governing controlled substances, listed chemicals and tableting and encapsulating machines. Revision of Import and Export Requirements for Controlled Substances, Listed Chemicals, and Tableting and Encapsulating Machines, Including Changes to Implement the International Trade Data System (ITDS); Revision of Reporting Requirements for Domestic Transactions in Listed Chemicals and Tableting and Encapsulating Machines; and Technical Amendments, 81 Fed. Reg., 96,992 (Dec. 30, 2016) (hereinafter “Final Rule”). The final rule implements recent amendments to the Controlled Substances Import and Export Act (“CSIEA”) for controlled substance reexports among members of the European Economic Area (“EEA”) as provided by the Improving Regulatory Transparency for New Medical Therapies Act. The final rule also revises reporting requirements for the unusual or excessive loss or disappearance of listed chemicals and for domestic transactions involving listed chemicals and tableting/encapsulating machines. DEA is also mandating electronic filing and reporting related to import/export permit applications, declarations and certain other import/export and domestic notifications and reports electronically through the DEA Diversion Control Division secure network application. The mandate represents DEA’s latest move from a paper-based system of applications, reports and communications to an electronic one.
In summary, while the electronic reporting and other technical amendments provide some benefits, in our view the Agency missed the opportunity to remove certain obstacles which have hindered re-exports of controlled substances since 2005. For example, DEA implemented certain required regulations based on the amendments to the CSIEA, but DEA rejected a comment to remove the 180-day re-export requirement on all exports. While the CSIEA amendments required that DEA eliminate this limit for exports to the EEA, the Agency could have eliminated this unreasonable restriction in all cases. Requiring product to be re-exported within an arbitrary 180 day time period has been a significant obstacle to many exporters where processing and distribution reasonably takes longer. Also, DEA rejected a request to limit re-export reporting where ownership is maintained by the U.S. exporter. In cases where the product has been transferred to other entities, complying with DEA reporting requirements within the 30 day limit is difficult and does not further U.S. interests.
While the final rule is effective on January 30, 2017, the industry has until June 28, 2017 to implement most of the requirements. We summarize the final rule’s most significant revisions below
1. The Final Rule Requires Electronic Submission of Import/Export Permits, Declarations and Certain Reports
The CSIEA and regulations promulgated by DEA require importers and exporters of controlled substances to apply for permits, submit declarations and/or file certain reports. As noted in DEA’s Notice of Proposed Rulemaking, Executive Order 13659 of February 19, 2014 directs DEA and other federal agencies to have the capabilities, agreements and requirements in place to allow electronic filing through the International Trade Data System (“ITDS”) and other data systems required for imported and exported goods. Revision of Import and Export Requirements for Controlled Substances, Listed Chemicals, and Tableting and Encapsulating Machines, Including Changes to Implement the International Trade Data System; Revision of Reporting Requirements for Domestic Transactions in Listed Chemicals and Tableting and Encapsulating Machines; and Technical Amendments, 81 Fed. Reg., 63,576 (Sept. 15, 2016). The final rule mandates submission of all applications and filings electronically through the DEA Office of Diversion Control secure network application to integrate required import and export procedures through the ITDS as directed by Executive Order 13659.
DEA clarified that permits expire no later than 180 calendar days after issue rather than the less exacting “six months.” DEA has also clarified how importers and exporters may amend or cancel permits. Declarations must continue to be filed at least 15 calendar days before the anticipated date of release by a customs officer at the port of entry or port of export, and while declarations did not previously expire, they now expire no later 180 calendar days after issue. As with import/export permits, the final rule also clarifies how to amend or cancel import/export declarations.
2. DEA Clarifies that Drop Shipments of Imports are Prohibited
There has been confusion within the industry as to whether imports of controlled substances could be drop shipped directly to customers. In many cases drop shipments are more efficient and reduces handling and the potential for diversion. Also, there have been cases where local DEA offices have been aware of such activity without objection further confusing whether such actions were permitted. However, in the final rule, DEA has clarified that the final destination of an import must be the registered location of the importer before being transferred to another location of the importer or delivered to a customer, thus prohibiting drop shipments.
3. DEA Narrowly Interpreted its Obligations to Promulgate Regulations on the CSIEA Amendments
Not all controlled substance reexports are created equal. The Improving Regulatory Transparency for New Medical Therapies Act (“2015 Act”), amended the CSIEA to allow additional reexportation of certain controlled substances among members of the EEA. The final rule implements additional reexportation to EEA countries under the 2015 Act. The CSIEA had provided that schedule I or II controlled substances and narcotic drugs in schedule III or IV could be exported from the U.S. for subsequent reexport from the recipient country to a second country, but allowed no further reexports. The 2015 Act removed certain restrictions on reexporting if every subsequent recipient country is a member of the EEA. The final rule implements the following changes:
Allows unlimited reexports among EEA countries;
Eliminates the 180 day period to complete reexport from the first country to the second country and subsequent countries;
Does not require bulk substances to undergo further manufacturing within the first EEA country if the substance is reexported within the EEA;
Does not require the exporter to provide product and consignee information beyond the first country prior to export from the U.S.; and
Establishes a new DEA Form 161R-EEA for reporting reexports among EEA members through the DEA Diversion Control Division secure network application.
Of note, one commenter requested that the reexport provisions should apply to EEA member countries as of November 25, 2015, noting that the United Kingdom was a member of the European Union at that time. DEA replied that the 2015 Act is devoid of language stating that the EEA includes all members as of November 2015 so for the EEA provisions to apply, a country must be a member at the time the export leaves the U.S.
Moreover, as discussed above, DEA refused to remove reexport restrictions outside of the EEA because the 2015 Act did not require it to do so. We continue to not see a distinction between EEA members and other signatories to the international treaties and disagree with DEA that the 180 day limit serves a useful anti-diversion or public policy function.
4. The Final Rule Provides Several Technical Amendments Regarding Listed Chemicals
The final rule requires regulated persons who import or export a listed chemical that meets or exceeds a threshold quantity to submit a declaration to DEA via a DEA Form 486/486A through the DEA Diversion Control Division secure network application also no later than 15 calendar days before the date of release by a customs officer at the port of entry or export. DEA requires notification at least three business days before the date of release by a customs officer at the port of entry for those entities with regular customer and regular importer status. Consistent with the controlled substance import/export permits, declarations expire in 180 calendar days. And as with controlled substance imports, the final destination of List I chemical imports must be the registered importer’s registered location. Brokers and traders must also electronically file notifications for international transactions involving listed chemicals that meet or exceed the thresholds not later than 15 calendar days before the transaction is to occur.
The final rule also mandates electronic submission of required monthly reports of domestic transactions involving ephedrine, pseudoephedrine, phenylpropanolamine, and gamma-hydroxybutyric acid (including drug products containing these chemicals/controlled substances) through the U.S. Postal Service or any private or commercial carrier required to be filed pursuant to 21 U.S.C. 830(b)(3). DEA is implementing a new DEA Form 453 to be completed and submitted through the DEA Diversion Control Division secure network application.
The final rule requires regulated persons to report orally, not in writing, any proposed regulated transaction with a person whose description or other identifying characteristic was provided by DEA, and DEA must approve the transaction. Regulated persons must orally report any regulated transaction involving an extraordinary quantity of a listed chemical, an uncommon method of payment or delivery, or any other circumstance the regulated person believes may indicate the chemical will be used in violation of the law at the earliest practicable opportunity to the DEA Field Division Office where they are located.
5. DEA Created a New Reporting Requirement for Unusual or Excessive Losses or Disappearances of Listed Chemicals.
The final rule also requires regulated persons to report any unusual or excessive loss or disappearance of listed chemicals orally to DEA “at the earliest practicable opportunity”. The regulations create a new form, a DEA Form 107, that must be electronically submitted through the DEA Diversion secure network application within 15 calendar days after becoming aware of the circumstances. Importers are responsible for reporting listed chemical losses after a shipment is released by the customs officer at the port entry, and exporters must report losses until a shipment has released at the port of export.
The final rule establishes guidelines for determining whether a listed chemical loss or disappearance is unusual or excessive and thus reportable. The guidelines for determining whether a listed chemical loss is unusual or excessive include:
The actual quantity of the listed chemical;
The specific listed chemical involved;
Whether the loss or disappearance can be associated with access by specific individuals, or can be attributed to unique activities involving the listed chemical;
A pattern of losses or disappearances over a specific time period, whether the losses or disappearances appear to be random, and the result of efforts taken to resolve the losses; and
If known, whether the listed chemical is a likely candidate for diversion and local trends and other indicators of the diversion potential.
DEA notes that “[t]his language,” meaning the unusual or excessive loss factors, “is similar to the current regulatory language relating to theft and loss of controlled substances in § 1301.74(c).” Final Rule at 97,007. We do not agree. First, it is unclear whether all thefts of listed chemicals must be reported or whether a theft only needs to be reported if it is “unusual” or “excessive.” Second, it is very ambiguous as to what would constitute an “unusual” loss or disappearance. Third, we do not believe the criteria established here equates to the requirement for controlled substances. For example, “Significant” (controlled substance losses) is not necessarily “excessive” (chemical losses). Fourth, how listed chemicals must be reported is also more ambiguous than what is required for controlled substances. While registrants must report controlled substance losses in writing within one business day of discovery and follow-up with a DEA-106, regulated persons must first report chemical losses orally “at the earliest practicable opportunity” followed 15 calendar days later by a DEA-Form 107 filed electronically.
6. DEA Standardizes Transactions Involving Tableting and Encapsulating Machines
The final rule standardizes electronic reporting for regulated transactions involving tableting machines and encapsulating machines, including domestic, import, and export transactions, through use of a new DEA Form 452 through the DEA Diversion Control Division secure network application.
The final rule makes oral reporting of domestic transactions in tableting and encapsulating machines mandatory and requires electronic filing of the written report. Regulated persons must orally report domestic regulated transactions of a tableting machine or an encapsulating machine when an order is placed rather than at the earliest practicable opportunity after the regulated person becomes aware of the circumstances. Written DEA Form 452 must be filed within 15 calendar days after the order has been shipped by the seller.
DEA requires submission of Form 452 through the DEA Diversion Control Division secure network application 15 calendar days before the anticipated date of arrival at the port of entry or port of export. An importer or exporter cannot initiate a transaction involving a tableting machine or encapsulating machine until DEA has issued a transaction identification number. DEA also requires import shipments of tableting machines or encapsulating machines that have been denied release by customs to be reported to DEA through the DEA Diversion Control Division secure network application within five business days of denial.
January 5, 2017 By Michelle L. Butler & Serra J. Schlanger —
CDRH Finalizes Post-Market Cybersecurity Guidance
January 4, 2017 By Allyson B. Mullen —
Last week, FDA finalized the guidance document, “Postmarket Management of Cybersecurity in Medical Devices.” We previously blogged on the draft guidance released in early 2016 (here). The final guidance is similar to the draft issued in early 2016. There are, however, several noteworthy and significant edits.
In our view, the most significant of these edits is that FDA has changed nearly all references to “essential clinical performance” to “patient harm.” This change appears to shift the way in which FDA plans to evaluate cybersecurity risk—from essential clinical performance to the potential for patient harm. Specifically, FDA modified the purpose of the guidance to read, “this guidance recommends how to assess whether the risk of patient harm is sufficiently controlled or uncontrolled. This assessment is based on an evaluation of the likelihood of exploit, the impact of exploitation on the device’s safety and essential performance, and the severity of patient harm if exploited.” As exemplified by this quote, patient harm is now a key element of the final guidance.
The draft guidance dedicated several sections to defining and discussing essential clinical performance. It stated:
Thus, while the shift from essential clinical performance to patient harm is significant for purpose of the guidance, it may ultimately be simpler for manufacturers to apply. Essential clinical performance incorporated the concept of harm, but also used more amorphous concepts such as acceptable and unacceptable clinical risk. These elements may have been difficult for manufacturers to determine on a case-by-case basis. Patient harm appears to be more straightforward and in line with standards that the device industry is already used to, including for example, reporting corrections and removals under 21 C.F.R. Part 806, which is required when the action is undertaken to reduce a risk to health.
A few additional important changes include:
FDA added a new definition section discussing patient harm. The term “patient harm” was not used at all in the draft guidance. Thus, it was essential for FDA to provide additional clarity regarding this term. The final guidance defines patient harm “as physical injury or damage to the health of patients, including death. Risks to health posed by the device may result in patient harm.”
FDA added a new Section IX to detail what it means to actively participate in an Information Sharing Analysis Organization (ISAO). ISAOs are public-private partnerships that, according to the guidance, “gather and analyze critical infrastructure information in order to better understand cybersecurity problems and interdependencies, communicate or disclose critical infrastructure information to help prevent, detect, mitigate, or recover from the effects of cyber threats, or voluntarily disseminate critical infrastructure information to its members or others involved in the detection and response to cybersecurity issues.” Both the draft and final guidances state, “the Agency considers voluntary participation in an ISAO a critical component of a medical device manufacturer’s comprehensive proactive approach to management of postmarket cybersecurity threats and vulnerabilities and a significant step towards assuring the ongoing safety and effectiveness of marketed medical devices.”
FDA expanded the scope to expressly include mobile medical applications (MMAs). MMAs could have been inferred from the original scope which included all devices.
Both the draft and final state that software changes made to strengthen cybersecurity are not typically subject to Part 806 recall reporting requirements so long as they meet certain criteria. One such criteria in the draft guidance required implementing device changes and compensating controls within 30 days of becoming aware of the cybersecurity vulnerability. The final guidance modified this requirement to be that as soon as possible, but no later than 30 days after becoming aware of the cybersecurity vulnerability, a manufacturer must “communicate with . . . customers and user community regarding the vulnerability, identify interim compensating controls, and develop a remediation plan to bring the residual risk to an acceptable level.” The final guidance adds several other requirements regarding this process and timing.
The final guidance adds that upgrades to increase confidentiality protection (i.e., cybersecurity) are also not generally subject to Part 806 reporting.
Both the draft and final guidances indicate that routine cybersecurity updates and patches will not generally require premarket review. The final guidance adds, however, that cybersecurity routine updates and patches could change other functionality of the device, and therefore must be assessed to determine whether premarket review is required.
One of the recommendations in the draft and final guidance for remediating a cybersecurity threat is to “identify and implement compensating controls to adequately mitigate the cybersecurity vulnerability risk.” The final guidance notes that manufacturers should consider the knowledge and expertise necessary to properly implement the recommended control.
The final guidance adds a new section titled “Examples of Vulnerabilities Associated with Controlled Risk and their Management.” In this section FDA provides four examples of instances in which a device manufacturer becomes aware of a cybersecurity vulnerability after a device has been commercialized. The examples describe the manufacturer’s evaluation as to whether the risk of patient harm is controlled or uncontrolled and the manufacturer’s response. In all three examples, the risk of patient harm is controlled, and consequently, the resulting routine update or patch to address the cybersecurity vulnerability does not need to be reported to FDA. While these examples are helpful, there are no corresponding examples of when the risk is uncontrolled and reporting under Part 806 would be required.
In assessing uncontrolled risk, the final guidance states that “manufacturers should consider the exploitability of the vulnerability and the severity of patient harm if exploited.”
This list of some of the most significant changes in the final guidance highlights a key point we made in our post on the draft guidance: this guidance imposes significant new requirements on manufacturers of devices with potential cybersecurity vulnerabilities. For legacy products, manufacturers may need to consider cybersecurity vulnerability for the first time in its product’s life cycle. This can be a daunting task. However, like the draft guidance, the final guidance provides no additional information as to how FDA plans to enforce the recommendations set out in this guidance. Thus, only time will tell how (or if) FDA will choose to enforce the need for cybersecurity in medical devices in the postmarket setting.
January 3, 2017 By Riëtte van Laack —
January 2, 2017 By Jeffrey K. Shapiro & Jennifer D. Newberger —
CDRH Finalizes Benefit-Risk Factors in Making Compliance and Enforcement Decisions Guidance
December 29, 2016 By Allyson B. Mullen —
In June 2016 CDRH released the draft guidance “Factors to Consider Regarding Benefit-Risk in Medical Device Product Availability, Compliance, Enforcement Decisions” (see our earlier post here). In the waning days of 2016, CDRH finalized the guidance.
The final guidance is largely unchanged from the draft with CDRH making mostly minor clarifying changes. A few of these changes are noteworthy, including:
Clarifying that manufacturers wishing to provide relevant risk-benefit information, including data and calculations, should contact FDA or provide it to the FDA contact person for the matter.
Noting that the guidance is adopting the definitions for serious injury and malfunction from 21 C.F.R. Part 803.
Adding further information regarding how the Agency will assess uncertainty, one of the factors considered as part of the overall benefit-risk assessment. The added language focuses on the real-world data being assessed, including its type, the degree to which it is representative of the intended use population, and statistical inferences and limitations.
Finally, CDRH also added one new example of a benefit-risk assessment in the hypotheticals section of the guidance. This additional hypothetical is a situation in which a marketed OTC pregnancy test is found to have a higher rate of false positive results than expected based on data submitted in the 510(k). CDRH reviewed the benefits, risks, patient tolerance for risk, mitigation, and patient impact, and concluded that, given the number of other similar products on the market, and the possibility that a false positive could delay certain medically necessary treatments, the risks of continuing to make the affected lots available outweighed any potential benefits. In the hypothetical, the manufacturer notified retailers and distributors to remove the affected lots, and FDA classified that removal as a Class II recall.
Both the draft and final guidances state, almost in passing, that FDA intends to use pilots “to help determine how to apply the benefit-risk framework described” in the guidance. There is no further discussion of what these pilots will include, when they will be conducted, whether the public will have any input, or whether FDA will provide the results of the pilots to the public. It would be very useful to industry for FDA to publish the results of these initial pilot cases to further allow the public to see how CDRH plans to implement the guidance. The information could be published in an anonymized fashion as to protect the companies with whom CDRH is working. Even if it does not give industry any further information, it is clear that any company facing an enforcement action or a potentially significant product shortage situation due to a recall should contact CDRH and make as strong a case as it can for enforcement discretion based on the factors laid out in the final guidance.
December 29, 2016 By Kurt R. Karst —
Empirical Evidence of Drug Pricing Games – A Citizen’s Pathway Gone Astray
George Mason University – Mercatus Center
University of California, San Diego – Department of Economics
The 2009 Family Smoking Prevention and Tobacco Control Act endeavored to alter the regulatory regime for tobacco products in the United States by allocating authority to regulate tobacco products to the U.S. Food and Drug Administration (FDA). While the law aims at greater transparency in the constituent components of cigarettes and non-combustible tobacco products, it also includes a provision which will bring FDA’s consumer protection and tobacco control mandates into tension: Section 911’s process for the approval of modified risk tobacco products. That provision allows tobacco manufacturers to submit applications to label products as “reduc[ing] the harm or the risk of tobacco-related disease associated with commercially marketed tobacco products.” As public health researchers have noted, Section 911 threatens to codify and authorize long-standing industry practices of asserting or implying health-promotion or harm-limiting claims that are in fact intended and shown to have precisely the opposite outcome including most recently the use of descriptors like “mild”, “light”, “ultra-light” and “low.”
In 2014, FDA opened a comment period for the first modified risk tobacco product produced by Swedish Match as part of a joint venture with Philip Morris. One of the most effective ways of policing industry use of modified-risk tobacco labeling is product liability claims based on state common law torts. Section 916 of the Tobacco Control Act provides an ambiguously phrased preemption provision which will implicate the reach of Article VI preemption for FDA-approved products. This article is the first to analyze the heretofore unanswered question: what is the scope of constitutional preemption when Section 911 (modified risk tobacco products) and Section 916 (preemption of state law) are read together against the broader background of U.S. Supreme Court precedent that will shape that inquiry? Tobacco consumers will inevitably use state law causes of action to allege that the content of tobacco manufacturers’ modified risk claims are misleading, that modified risk claims extend use of non-modified risk claim products, and that modified risk tobacco products are used to shape risk perception across other product lines. At stake in answering the preemption question correctly is how the tobacco industry may use Section 911 to continue historical practices with FDA’s approval and the public health implications of doing so as well as the broader relationship between the 2009 Act and state law as FDA and federal courts shape the law’s implementation.
Categories: Hatch-Waxman | Miscellaneous | Prescription Drugs and Biologics | Tobacco
December 27, 2016 By Kurt R. Karst —
It’s been a couple of months since the dust has settled from FDA’s October 26, 2016 approval of Mylan Pharmaceuticals Inc.’s (“Mylan’s”) ANDA 078276 for a generic version of Daiichi Sankyo Inc.’s (Daiichi’s) BENICAR (medoxomil) Tablets, 5 mg, 20 mg, and 40 mg, so we though it might be a good time take a look back on the case. What had the potential to raise an interesting dispute over the so-called “failure-to-market” 180-day exclusivity forfeiture provision at FDC Act § 505(j)(5)(D)(i)(I) based on Mylan’s Paragraph IV certification to U.S. Patent No. 6,878,703 (“the ‘703 patent”) – see our previous post here – never materialized. Instead, an issue concerning pediatric exclusivity applicable to U.S. Patent No. 5,616,599 (“the ‘599 patent”) listed in the Orange Book for BENICAR cropped up just before FDA was poised to take an approval action and became the defining exclusivity issue in the case. We’ve previoulsy discussed the power of pediatric exclusivity (see our previous post here). FDA’s October 26, 2016 approval of Mylan ANDA 078276 puts into action an FDA interpretation that makes it even more powerful (if just by a single day), and an interpretation we raised back in 2010 (see our previous post here).
The ‘599 patent expired on April 25, 2016, but was subject to a period of pediatric exclusivity that expired on October 25, 2016. The ‘703 patent expires on November 19, 2021, and is also subject to pediatric exclusivity that expires on May 19, 2022. Mylan ANDA 078276 contained a Paragraph III certification to the ‘599 patent (which converted to a Paragraph II certification once the patent expired), and a Paragraph IV certification to the ‘703 patent (which, we note for completeness, is identified in the Orange Book as being subject to a request for delisting).
In September 2016, Daiichi filed a motion in U.S. District Court for the District of New Jersey seeking clarification of an August 6, 2009 Final Judgment enjoining Mylan from making, using, and selling its generic olmesartan medoxomil drug products until the expiration the ‘599 patent and “all extensions” thereof. The August 2009 Final Judgment doesn’t identify the precise date when Mylan would be free to market generic. According to Daiichi, however, that date should be October 26, 2016, which is the day after expiration of pediatric exclusivity applicable to the ‘599 patent expires:
[Daiichi] ask[s] this Court to resolve a dispute between them and [Mylan] over when, consistent with the Judgment entered herein on August 6, 2009 (D.I. 143), Mylan can begin marketing its generic versions of Daiichi Sankyo’s patented olmesartan medoxomil blood pressure medicines BENICAR®, BENICAR HCT® and AZOR® (collectively, “the olmesartan medoxomil products”). The dispute is over one day—October 25, 2016, as Mylan contends, or October 26, as Daiichi Sankyo contends. But it is significant, as North American sales of Daiichi Sankyo’s olmesartan medoxomil products average over $2.2 million per day.
Mylan opposed Daiichi’s motion and argued that:
Daiichi is wrong about the “one day.” Because patents are in effect from midnight on the day they issue, they expire at the stroke of midnight on the day of expiration—i.e., at the very start of the day. Because Daiichi’s patent expired at the stroke of midnight on April 25, Daiichi’s Pediatric Exclusivity period will expire at the stroke of midnight on October 25. . . . In other words, FDA’s approval becomes effective at that moment the calendar rolls over from October 24 to October 25, and marketing can commence immediately at that time. Daiichi may not double count the issuance day of its patent by adding it on to the end of the term to extend its statutory monopoly, even by a single day.
Various briefs and letters filed in connection with the pediatric exclusivity issue are available here, here, here, here, and here.
The New Jersey District Court denied Daiichi’s motion for clarification on October 20, 2016, saying that Daiichi improperly employed Federal Rule of Civil Procedure 60(a) in an effort to fundamentally alter the Judgment. In a footnote, the court also deferred to FDA on the question of pediatric exclusivity: “The question of whether Daiichi Sankyo’s pediatric exclusivity expires on October 25 or 26, 2016, is a question for the FDA to answer. It has never been before the Court in this case and is wholly improper for the Court to consider under a Rule 60(a) motion.”
FDA’s decision on the matter is apparent in the Agency’s October 26, 2016 approval of Mylan ANDA 078276 instead of an October 25, 2016 approval. There, FDA interprets the phrase “after the date the patent expires” at FDC Act § 505A(b)(1)(B) to mean that ANDA (and 505(b)(2) NDA) approval cannot occur until the day after the expiration date identified in the Orange Book. But FDA hasn’t always interpreted pediatric exclusivity applicable to a patent in this manner. It’s a relatively new FDA interpretation of the FDC Act, and one that has only been implemented by FDA in the past (approximately) six months.
In an October 25, 2016 presentation given at the Generic Pharmaceutical Association’s Fall Technical Conference (yes, we recognize the irony in the date of the presentation), FDA’s Office of Generic Drugs announced (Slide 25) that “ANDA approval [is] permissible [on the] day after expiration of pediatric exclusivity pursuant to section 505A(b)(1)(B)(ii) of the FD&C Act.” FDA points to the Agency’s January 25, 2015 denial of a Citizen Petition (Docket No. FDA-2012-P-0661) concerning calculation of the start of the 30-month period in which an ANDA holder must obtain tentative approval or risk forfeiture of 180-day exclusivity as proof of this interpretation (see our previous posts here, here, and here). There, in footnote 20, FDA cites various courts that have considered the term “after” in the Hatch-Waxman context and that have concluded that the relevant period begins the day after a particular trigger event. Here’s FDA’s support for that proposition:
See Janssen Pharmaceutica, N.V. v. Apotex, Inc., 540 F.3d 1353, 1360 (Fed. Cir. 2008) (interpreting pre-MMA section 505(j)(5)(B)(iv)(II) of the FD&C Act (subsequent AND As approvable “one hundred and eighty days after the date” of notice of first commercial marketing) to permit marketing on “181 days after” after first-filer marketing); Caraco Pharm. Labs., Ltd. v. Forest Labs., Ltd., 527 F.3d 1278, 1284 (Fed. Cir. 2008) (same); Altana PharmaAG v. Teva Pharms. USA Inc., no. 04-2355, 2010 U.S. Dist. LEXIS, at *11-12 (D.N.J. Aug. 13, 2010) (ANDA approval permissible day after expiration of pediatric exclusivity pursuant to section 505A(b)(I )(B)(ii) of the FD&C Act (which provides that ANDA approval not permissible until “six months after date the patent expires”)); Takeda Pharm. Co. Ltd. v. Teva Pharms. USA, Inc., no. 06-0033, 2009 U.S. Dist. LEXIS 105324, at *7-8 (D. Del. Nov. 9, 2009) (same). See also Scott v. U.S. Veteran’s Admin., 929 F.2d 146, 147 (5th Cir. 1991) (upholding like interpretation of analogous language in 28 U.S.C. 2401(b), which provides that “a tort claim against the United States shall be forever barred . . . unless action is begun within six months after the date of mailing, by certified or registered mail, of notice of final denial of the claim by the agency to which it was presented”) (emphasis added); Santiago v. U.S., 2004 WL 758196, at *1-*2 (E.D.N.Y. 2004) (same).
So, for those companies out there with pending ANDAs and 505(b)(2) NDAs containing a Paragraph III certification that converts to a Paragraph II certification upon patent expiration, and to which a period of pediatric exclusivity applies, don’t forget to take into consideration that FDA approval will not occur until the day (or the next business day) after the date identified in the Orange Book when pediatric exclusivity expires.
December 26, 2016 By Allyson B. Mullen —
December 22, 2016 By Kurt R. Karst —
Change is inevitable (cue David Bowie’s “Changes”). Sometimes change occurs slowly and goes (largely) unnoticed, and sometimes it comes fast and unexpected. Sometimes change is good, and sometimes it’s not. Change should not be confused with progress, growth or retreat, which are not inevitable, but rather optional and potential reactions to change.
We were reminded about change and the reactions to change the other day when listening to a piece on National Public Radio about how some scientists are racing to preserve climate data before January 2017 when a new administration takes the helm in the United States. That got this blogger thinking about change in FDA-world . . . but not fast and unexpected change caused by a world-altering event. Instead, we were reminded of change of the slow and largely unnoticed variety. And change at FDA that isn’t particularly good for the regulated industry, and that seems to be counter to FDA’s commitment to transparency. In fact, you might say that recent changes are part of an effort by FDA to be opaque.
The change we’re talking about concerns drug approval information. Over the past several years, we’ve noticed the slow pull-back and disappearance of drug approval information that has historically been very valuable to the regulated industry for purposes of making drug development and business decisions.
We’ll start in 2009, when FDA implemented a new information technology platform called DARRTS (Document Archiving, Reporting and Regulatory Tracking System). As we reported back then, DARRTS implementation meant the creation of a new application numbering system (i.e., the new 200,000 series application numbers). Under that system, all NDA and ANDA submissions are numbered sequentially regardless of application type. With that new numbering system, as well as the ability to reserve an application number well before submission, the generic drug industry lost some transparency with respect to the ability to track when an ANDA is submitted to FDA.
Well, at least companies can still refer back to a tentative approval letter once an ANDA is approved to help inform business decisions or to inform an analysis of 180-day exclusivity . . . right? Wrong again!
The recent transition of FDA’s Drugs@FDA database to a new platform and address brought with it some other changes. Historically, the Drugs@FDA database identified and included links to approval and tentative approval information and letters. Now the tentative approval history of an application is erased. If you don’t believe us, then go to the Drugs@FDA webpage and select “Drug Approval Reports by Month.” From there, select a month and “Tentative Approvals by Month.” Note the message at the top of the page: “This report lists Tentative Approvals for the selected month. This page shows current information for the products listed. If a submission was approved after its tentative approval, it no longer appears in this report” (emphasis in original). In fact, not only does the tentative approval information not appear in the Drugs@FDA report, but other than a possible mention in a final approval letter, it’s gone entirely . . . . no link to the tentative approval letter or any mention of tentative approval in the database. (One real-world example is ANDA 202653. The final approval letter references a July 1, 2013 tentative approval letter that is neither available nor identified in the Drugs@FDA database.) Of course, the letter is still available, but someone would have to submit a FOIA request to obtain it.
The disappearance of drug approval information is not limited to ANDA approval information. We’ve also seen information on NDA drug approval packages disappear from FDA’s website. Take, for example, NDA 022051. FDA initially approved NDA 022051 on April 27, 2007 for the prescription drug VERAMYST (fluticasone furoate) Nasal Spray. On August 2, 2016, FDA approved a supplemental NDA for a prescription-to-OTC switch of the drug product (now known as FLONASE SENSIMIST). With that change, information on FDA’s drug approval package (also known as a Summary Basis of Approval) stemming from the initial 2007 approval of NDA 022051 was removed from the Drugs@FDA website. That’s too bad, because not only is easy access to FDA’s review documents now gone, but also FDA’s Exclusivity Determination. (Fortunately, however, the old link still works . . . but for how long?)
In any case, we hope this short post will cause some change of its own. Unless the regulated industry speaks up, who knows what other drug information will disappear from FDA’s website in the months and years to come.
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