Attorney East Hampton

The authors of this blog are busy, and we are actively seeking attorneys interested in working at the nation’s largest boutique food and drug regulatory law firm (and ideally writing for the FDA Law Blog).  We have at least two openings:

• The first position is for a junior to mid-level associate. A demonstrated interest in food and drug law and regulation is preferred; strong research and writing skills are required.
• The second position is specific to our drug development team. The attorney will assist our clients secure FDA approval for new drugs by leveraging our legal expertise of the approval standards in the FDC Act and implementing regulations to overcome potential regulatory or scientific impediments. The position affords the opportunity to participate in product development strategy at the initiation stage and to navigate the drug through the FDA regulatory process. Strong verbal and writing skills are required, as well as a detailed understanding of FDA and the regulatory process.

Compensation is competitive and commensurate with experience. HPM is an equal opportunity employer.  Please send your curriculum vitae, transcript, and a writing sample to Anne K. Walsh (awalsh@hpm.com). Candidates must be members of the DC Bar or eligible to waive in.

By Ricardo Carvajal —

FDA published a Consumer Update acknowledging the ubiquitous presence of CBD products in the marketplace, and providing the agency’s current perspective on questions regarding the regulatory status, safety, and quality of such products.  The Consumer Update follows closely on the heels of a recent statement issued jointly by FDA’s Principal Deputy Commissioner and Principal Associate Commissioner for Policy.  That statement emphasizes the agency’s commitment to “sound, science-based policy on CBD,” and thereby suggests that FDA should not be expected to make significant policy decisions until it has the data and other information needed to answer to its satisfaction the scientific issues identified by the agency thus far (e.g., “How much CBD is safe to consume in a day? How does it vary depending on what form it’s taken? Are there drug interactions that need to be monitored? What are the impacts to special populations, like children, the elderly, and pregnant or lactating women? What are the risks of long-term exposure?”)

Consistent with FDA’s past statements on cannabis and CBD, these more recent statements reiterate FDA’s intent to act against CBD products marketed with medical claims, be they labeled as dietary supplements, pet treats, or cosmetics.  The agency regards such products as unapproved drugs that present a risk to consumers’ health and safety.  The agency can also be expected to take action against products found to be contaminated with microbiological or chemical substances that pose a hazard to health.

With respect to CBD products that do not make medical claims and that are manufactured to a high standard of quality, the agency’s intentions are less clear.  FDA is aware of “products on the market that add CBD to a food or label CBD as a dietary supplement.”  The agency maintains that “it is currently illegal [under federal law] to market CBD this way.”  Nonetheless, at present, FDA does not appear to be directly challenging the marketing of such products.  In the interim, consumer education is a tool FDA can deploy at will to help consumers help themselves.  As stated in the closing paragraph of the Consumer Update:  “As we learn more, our goal is to update you with the information you need to make smart choices about CBD products.”  Stay tuned.

By Alan M. Kirschenbaum & Rachael E. Hunt —

The pharmaceutical industry has filed a lawsuit challenging a recently finalized rule from the Centers for Medicare & Medicaid Services (CMS) which requires drug pricing disclosures in television advertisements for certain prescription drugs and biological products (the Final Rule).  In an effort to block the rule from going into effect on July 9, 2019, Merck, Eli Lilly, Amgen, and the Association of National Advertisers, Inc., filed a lawsuit on June 14, 2019 in the D.C. District Court seeking a declaratory judgment that the Final Rule is invalid under the First Amendment and the Administrative Procedure Act.

The Final Rule

By way of background, the Final Rule requires that any advertisement on TV for most prescription drugs or biological products for which reimbursement is available under Medicare or Medicaid must include the following statement:

The list price for a [30-day supply of] [typical course of treatment with] [name of prescription drug or biological product] is [insert price]. If you have health insurance that covers drugs, your cost may be different.

The “list price” to be inserted is the Wholesale Acquisition Cost, or WAC, which is defined as the manufacturer’s published list price for the most recent month available, not including discounts or rebates.  For a more detailed overview of the Final Rule, see our previous post here.

The Lawsuit

The Complaint argues that the required disclosure, rather than achieving increased drug pricing transparency, will instead lead to consumer confusion and may discourage patients from seeking valuable information regarding treatment options.  This is because the WAC price differs significantly from the actual out-of-pocket expense incurred by patients, which can vary based on insurance coverage, deductibles, and copay requirements.  According to the Complaint, HHS is willing to “discourage patients from using beneficial medications,” as a means to reduce Medicare and Medicaid expenditures on pharmaceutical products.

The promulgation of this Final Rule, plaintiffs argue, exceeds HHS’s statutory authority and violates their First Amendment rights.  Specifically, plaintiffs note that HHS originally looked to the Food and Drug Administration to adopt a price disclosure requirement under the Federal Food, Drug, and Cosmetic Act (FDCA).  When it became clear the FDCA does not authorize price disclosure mandates, HHS invoked its rule-making powers under the Social Security Act.  Plaintiffs argue that Congress never intended for HHS to have the authority to regulate drug pricing disclosures and, in doing so, HHS is attempting to “sidestep the limitations of the statute that actually governs this specific area.”  Complaint at 26.

With respect to the First Amendment, plaintiffs point to the “heavy burden” the government must bear in justifying compelled speech in the commercial arena by showing that the regulation “directly and materially advances a substantial government interest that could not be served just as well by means that do not regulate speech to the same degree.”  Id.at 28.  HHS cannot meet this burden, plaintiffs argue, because the Final Rule, in fact, frustrates a substantial government interest by essentially misleading consumers about their out-of-pocket costs.  Id.at 28-29.

Also on June 14, 2019, plaintiffs filed a Motion for Stay Pending Judicial Review, seeking to stay the effective date of the rule pending the resolution of the lawsuit challenging its validity, as well as a Motion to Expedite judicial review.  The Court approved an expedited briefing schedule and set the matter for hearing on July 2, 2019 at 2:00pm.  In the briefing schedule, the Court indicated its intent to issue a decision by July 8, 2019, one day prior to the effective date of the Final Rule.

We will continue to report on the updates and outcomes of this lawsuit.

By Anne K. Walsh —

The government lost a significant battle in its aggressive prosecutions of individuals involved in the New England Compounding Center (NECC) disaster, in which the vilified, and now-defunct, NECC “compounded” contaminated batches of drugs that led to a multitude of deaths and injuries.  Gregory Conigliaro, a co-owner of NECC, and Sharon Carter, the Director of Operations, were convicted by unanimous jury verdict for conspiring to defraud the United States, also known as a Kleinconspiracy.  The core allegation was that the defendants were engaged in a concerted effort to hold out NECC as a “more or less conventional pharmacy” when in actuality NECC was operating as a drug manufacturer.  The distinction carried significant regulatory impact because, at that time, FDA only regulated drug manufacturers, while traditional pharmacy compounders were regulated by the state boards of pharmacy.

Both pre-, during, and post-trial, defendants argued that there was no discernible federal law defining any clear distinction between a compounding pharmacy and a drug manufacturer, and thus that it was a “legal impossibility” for defendants to have defrauded FDA.  “Legal impossibility” applies when the actions of a defendant, even if carried out as desired, would not constitute a crime (e.g., smoking marijuana in Massachusetts in the mistaken belief that the recreational use of marijuana was illegal in the state).  On June 7, 2019, in response to the defendants’ Rule 29 motions for acquittal, U.S. District Judge Richard G. Stearns agreed and acquitted these defendants.  The court recognized that the “legal impossibility” defense had not proved effective in any precedential case, but reasoned that the facts, coupled with basic principles of lenity and due process, required its application in this case.

The court was convinced by arguments that the government failed to meet its burden of proof on a required element of the Klein conspiracy, namely that FDA was in fact exercising regulatory authority over compounders.  The court recounted the history of FDA’s authority to regulate compounding activities, noting that Congress created a “regulatory lacuna” because it failed to provide clarity on the dividing line between drug compounding and manufacturing, causing confusion among state and federal regulators as to who was responsible. And the court relied heavily on FDA’s own statements to Congress and its recognition that compounding pharmacies fulfilled a public health need for supplying hospitals with drugs otherwise unavailable to them.  Ultimately, the court was unwilling to impose criminal liability on such a “shaky foundation.”

To date, thirteen employees have pled guilty or been convicted of various charges, including mail fraud and RICO violations.  We expect to see the other individuals previously convicted for participating in the Klein conspiracy to raise these same arguments in whatever legal mechanisms remain available to them.  The U.S. Attorney in Massachusetts, Andrew Lelling, has stated that his office is considering whether to appeal Judge Stearns’ ruling.

By Sara W. Koblitz —

The Paragraph IV certification list on FDA’s website is a very useful tool for generic drug manufacturers in evaluating the potential for 180 day exclusivity for any given product. The list generally describes drug products for which one or more substantially complete ANDA containing a paragraph IV certification has been submitted to FDA.  As a generic sponsor, the list helps sponsors assess whether they are a first-filer, or whether they may be blocked by a first-filer after approval. It also tells you whether a first-filer has already been established, which helps determine whether it is worth investing resources to submit a Paragraph IV certification.

Up until June 18, 2019, the Paragraph IV certification list contained limited information. Specifically, the list included only the name of the drug product, dosage form, strength(s), reference listed drug (RLD)/new drug application (NDA) number, and the date on which the first substantially complete ANDA(s) (or amendment or supplement to one) was submitted to the Agency that contained a paragraph IV certification to at least one patent listed for the RLD in the Orange Book.  But, as an element of the Drug Competition Action Plan, FDA updated this listtoday in an effort to “provide greater clarity to ANDA applicants regarding the earliest date when they may be able to obtain final approval.”  To this end, FDA now plans to include the following information for individual drug products on the Paragraph IV certification list:

• Active Ingredient Name
• Dosage Form
• Strength
• RLD Name and NDA Number
• Date of First Substantially Complete ANDA Containing PIV Submission
• Number of Potential First Applicant ANDAs Submitted
• 180-Day Decision Status (whether FDA has made a decision regarding eligibility for 180-day exclusivity for a drug product)
• 180-Day Decision Posting Date (the month and year that FDA updated the PIV Certification List to reflect the corresponding 180-day decision status)
• Date of First Approval of “First Applicant” ANDA(the first date on which a first applicant’s ANDA received final approval)
• Date of First Commercial Marketing; and
• Expiration Date of Last Qualifying Patent(if there are multiple applications submitted on the first day, the patents that have at least one PIV certification amongst all the submissions will be posted)

As of now, FDA intends to update the retrospectively “as practicable,” but this is a pretty big undertaking.  In general, the information added here represents a pretty significant overhaul to the Paragraph IV certifications page.

The data points added to the Paragraph IV list are intended to provide information to enable generic sponsors to make better decisions.  FDA explains that

With the update today, this new data may allow generic applicants to make more informed business decisions about which of their specific generic drug applications have a higher likelihood of being approved sooner. This data may also provide more public transparency into instances in which the FDA approves an ANDA with exclusivity, but the generic product is not marketed for an extended time which among other reasons may signal “gaming” tactics in the generic market.

And indeed this information can be very useful.  For example, knowing that a product already has a first-filer will help sponsors determine whether it is worth commencing a patent challenge for a given product. Additionally, knowing that FDA has made an exclusivity determination already – and the date of that first-filer’s ANDA submission – is helpful to knowing where your application stands in the pack.  As FDA explains, from this information alone, one can deduce that (1) FDA approved at least one first applicant’s ANDA and considered that first applicant’s drug product eligible for 180-day exclusivity at the time of approval (“eligible”); (2) FDA approved a first applicant but did not make a determination regarding eligibility for exclusivity at the time of approval (“deferred”); (3) FDA tentatively approved a subsequent applicant solely on the basis of a first applicant’s eligibility for 180-day exclusivity at a time that none of the grounds for forfeiture were found to apply (“non-forfeiture”); or (4) FDA determined that 180-day exclusivity has been extinguished, for example, if all first applicants have forfeited or voluntary relinquished eligibility for 180-day exclusivity (“extinguished”).  Of course, not all 180-day exclusivity determinations will be included in the Paragraph IV certification list because of FDA’s practice to make certain forfeiture decisions in the context of specific ANDAs that are otherwise eligible for approval.  So don’t expect any early forfeiture decisions here.  But it is helpful nonetheless to know if a competitor with first-filer status is the subject of an exclusivity determination.

Additionally, the first commercial marketing date is helpful for subsequent applicants to know when they will be permitted to launch.  Because 180-day exclusivity is triggered at commercial launch, which is typically not the same day as approval, there may be a question about the exact date that exclusivity ends.  This information in the Paragraph IV certification list addresses that issue. (Of note, though, these products can be identified by a “Patent Challenge” (PC) code in the Exclusivity Data section of the Orange Book.)  Further, the addition of patent expiration dates may be helpful in knowing whether 180-day exclusivity will continue to be an issue for later filers.  This is because, upon expiration of the patent with a Paragraph IV certification results in 180-day exclusivity forfeiture.  But because it’s not always possible to know which patents have been the subject of a Paragraph IV certification, including this information in the Paragraph IV list will help other potential applicants know when the potential for any 180-day exclusivity to run has expired.

While this information may not be groundbreaking, as much of it can be deduced for individual products if you know what you’re looking for, having it all in one place is and easily accessible is very helpful for sponsors.  And it’s always a good thing when an agency not exactly known for transparency takes the initiative to make a complicated process easier on industry.

By Riëtte van Laack —

On June 5, 2019, the Animal Plant Health Inspection Service of the USDA (APHIS) announced the availability of a proposed rule titled “Movement of Certain Genetically Engineered Organisms.”  The proposed rule was published on June 6, 2019.  On June 7, the 449 pages long draft environmental impact statement of the proposed rule also was made available.

Among other things, APHIS oversees the importation, interstate movement and environmental release of genetically engineered organisms to ensure they do not pose a plant pest risk.  The current regulations have been in place since 1987.  They require that APHIS consider a new genetically engineered (GE) plant as regulated until APHIS determines that the plant does not fall under the agency’s authority or does not pose a plant pest risk.  Industry has long complained that the rules are outdated and an impediment to innovation in the sector.  Moreover, for more than a decade the USDA Office of Inspector General, National Research Council and others have made recommendations and suggestions how to modernize and increase efficiency of APHIS regulation of GE plants. As described in the preamble to the proposed rule, since 2004, APHIS has considered options to modernize the regulations.  The proposal marks the first significant change in three decades.

The proposed amendment is intended to promote process efficiency by allowing APHIS to focus its resources on oversight of GE organisms that in fact have potential plant pest risks and reduce its oversight of GE organisms that are unlikely to pose such risks.  According to APHIS, it addresses and implements and is consistent with various recommendations by OIG.  Under the proposed rule several categories of GE plants are exempt from permitting requirements and the notification procedure has been removed.  Some major changes include:

• Exemption for certain categories of GE plants from the regulations because they could (also) be produced through traditional breeding techniques; APHIS claims that this exemption is justified because such GE plants are unlikely to pose new plant pest risks.
• Change of the basis for APHIS regulatory review from one in which GE plants are regulated based on the use of plant pests in their development, to one in which APHIS reviews the GE plants themselves for plant pest risks. Regulated status will be based on regulatory status reviews rather than on a petition process. (The regulatory status review applies only to GE plants not to GE plant pests or other GE non-plant organisms).
• Focuses APHIS oversight on those GE organisms that are found to be likely to pose plant pest risks, as determined by science-based risks assessments.
• Exemption for GE plants with plant-trait-mechanism of action combinations that APHIS has previously evaluated (under a regulatory status review) and found to be unlikely to pose a plant pest risk. APHIS proposes to publish the results of all completed regulatory status reviews on its website.
• APHIS will continue to regulate GE organisms that are, in and of themselves, plant pests, as well as other GE non-plant organisms that pose plant pest risks. Such organisms would require permits for movement. (APHIS requests public comments as to the option of applying regulatory status review to these products also).
• Elimination of the notification procedure and requirement for a permit for the interstate movement, importation, or environmental release for GE organisms for which APHIS was unable to reach a finding of unlikely to pose a plant pest risk.
• Provides an option for biotech developers to do a “self-determination” about whether new traits qualify for an exemption. APHIS would then give those developers a chance to request a confirmation letter from APHIS of the plant’s exempt status.  According to the Agency, “these confirmation letters . . . would provide a clear and succinct statement about the regulatory applicability of the GE plants and the nexus to plant health.”
• The current rule includes details about timing/timeframes for APHIS reviews/responses/actions. The proposed rule no longer includes this type of provision, providing APHIS with greater flexibility.

Developers who are found to be commercializing crops that are found not to be exempt from the APHIS rules may be ordered to destroy their plants or pay penalties.

Comments to the proposal may be submitted by August 5, 2019.

By Riëtte van Laack —

On June 3, 2019, the Agricultural Marketing Service (AMS) announcedthat the National Organic Program (NOP) published a letter to certifiers titled, “Certification of Organic Crop Container Systems.”

Over the last decade, there has been a disagreement within the organic industry about use of container systems in organic production of crops.  In 2010, the National Organic Standards Board (NOSB) voted against use of crop container systems, which includes container, hydroponic, and other plant pot-based systems, with or without soil as the growing media for organic crops.  However, in 2017, NOSB reversed course and rejected a proposal to prohibit container systems in organic food production.  Meanwhile, NOP has maintained that container systems are eligible for organic certification provided the certifier determines that the system complies with the Organic Foods Production Act (OFPA) and the NOP implementing organic regulations.

Discussions during the most recent NOSB meeting in April 2019 suggested that there was a lack of consistency in certifiers’ understanding of requirements for organic certification of container systems.  Under the OFPA, organic crops may not be produced on land to which any prohibited substances, including synthetic chemicals, have been applied during the three years immediately preceding the harvest of the agricultural products.  This requirement is referred to as the three-year transition period.  Allegedly, some certifying agents had certified operations in which the land on which containers were placed had not met the three-year transition period, leading to inconsistent application of the law.

As clarified in the letter by NOP, the requirements for the land do apply even if the crops do not touch the land.  NOP explains that the site where the containers will be placed must be eligible for organic crop production; the land use histories for container system sites must meet the same requirements that apply to an in-ground soil-based system.  In other words, the container system as well as the land underlying the container system must meet the organic requirements.

Certifying agents are to apply the organic certification standard as interpreted by NOP to all new container systems that have not yet been certified under the organic program.  Operations that have been certified organic are not affected.

By Karla L. Palmer —

The U.S. Food and Drug Administration (FDA) recently issued a guidance document that intends to “help small businesses better understand and comply” with the Agency’s Section 503A bulk substances final rule, issued February 19, 2019.  The final rule establishes FDA’s criteria for evaluating nominated bulk substances, places six substances on FDA’s bulks list and identifies four other substances that FDA determined to not include on FDA’s bulks list.

The May 2019 guidance document for Section 503A pharmacies (dubbed a “Small Entity Compliance Guide”) provides some “questions and answers” concerning FDA’s evolving Section 503A bulks nomination process.

Regular readers of this blog are likely aware of the bumpy, years’ long road on which FDA has traveled to solicit nominations for bulk substances for use in compounding pursuant to FDCA Section 503A.  FDA commenced the nomination process within days after passage of the 2013 Drug Quality and Security Act, Title I (The Compounding Quality Act), blogged about here, and here.  After fits and starts, and establishing an interim policy for use of bulk substances by Section 503A pharmacies, FDA published a proposed rule in 2016 for six of the hundreds of nominated substances, and rejecting the nominations of four other substances.  Note that Section 503A requires that FDA promulgate the list of bulk substances used in compounding via notice and comment rulemaking after consultation with the Pharmacy Compounding Advisory Committee.  Section 503A(d)(1).

The straightforward “Q&A” guidance provides no surprises for pharmacies, but not any new information either.  The one issue to which the guidance does not directly speak is whether the “interim policy” that FDA published in 2017, and permits pharmacies to compound from the bulks list pending the completion of the rulemaking process, is still FDA’s “policy.”  FDA plainly did not “revoke” that policy, but it also did not address it in the Q&A.  Note that FDA’s interim policy states that it will use enforcement discretion for those compounders that compound using substances that are listed on FDA’s “Bulks List 1.”  FDA’s new Q&A guidance asks the question: “Can substances that have been considered and not placed on the 503A Bulks List through a final rule be used in compounding under 503A?”  FDA’s answer: “No.”  FDA does not explain, as it easily could have, that the interim policy, featuring FDA’s “List 1” (i.e., nominated substances that FDA considers still under evaluation), remains in effect.

The Q&A does list the ten substances that are the subject of FDA’s final rule.  Those substances that “made the cut” and can be used in compounding include the following: (1) Brilliant Blue G, also known as Coomassie Brilliant Blue G-250; (2) cantharidin (for topical use only); (3) diphenylcyclopropenone (for topical use only); (4) N-acetyl-D-glucosamine (NAG) (for topical use only); (5) squaric acid dibutyl ester (for topical use only); and (6) thymol iodide (for topical use only).  The four substances that did not make the cut are: (1) oxitriptan; (2) piracetam; (3) silver protein mild; and (4) tranilast.

FDA states that if a compounder wants to use one of the four substances that did not make the list, then the compounder should file a citizen petition under 21 C.F.R. §10.30, and request that FDA consider revisiting the rule to include the bulk substance.   Lastly, FDA’s Q&A lists the criteria it uses to evaluate bulk substances, which criteria are also listed in FDA’s final rule.  These criteria include the following:

• The physical and chemical characteristics of the substance
• The safety of the substance in compounded drug products
• Evidence of effectiveness, and
• Historical use of the substance in compounded drug products.

By Riëtte van Laack —

In recent years, food waste has received increasing attention.  Based on studies, it appears that up to 40 percent of the food in the United States is never eaten.  Waste occurs at every step in the food production and consumption chain.  However, data suggest that a major loss occurs at the retail and consumer level.

In the context of food waste, the practice of product dating comes up frequently.  Allegedly, the use of a range of terms such as “best by,” “sell by,” “best if used by,” “expiration date” and “use by” leads to consumer confusion and may, at least partly, be responsible for consumers discarding food that is safe and wholesome merely because it is beyond some date.

As we reported previously, in 2016, USDA updated its guidance on product dating.  According to USDA, the “best if used by” term is best understood by consumers as a quality date (not a safety date).  USDA updated its guidance regarding product dating to reflect this finding.

Since then, the Food Marking Institute (FMI) and the Grocery Manufacturers Association (GMA) joined forces and launched a new industry-wide effort to help reduce consumer confusion over dates on the product label and potentially help consumers reduce food waste; in 2017, FMI-GMA also endorsed use of the term “best if used by.”

On May 23, 2019, in a letter to industry, FDA expressed its strong support of the “Best if Used by” statement for quality-based dating.  Consistent use of certain terms will help FDA and others in consumer education.  In fact, also on May 23, 2019, FDA issued an e-mail alerting consumers to an article about date labels on packaged foods.  The article clarifies that product dating generally is related to quality, not safety.  Importantly, it clarifies that the “best if used by date” is not “exact science.” Consumers are advised to look at products that are past the “best if used by” date; if the products have changed noticeably in color, consistency or texture, consumers may want to avoid eating them.

In the letter to industry, FDA specifically mentions that it does not endorse the GMA and FMI recommendation to use the term “Use By” to indicate the date by which products should be consumed or discarded for safety reasons.  It appears that confusion about the use of the term “use by” remains.  In fact, although GMA and FMI recommend “use by” dating for safety, USDA guidance asserts that “use by” is not a safety-related date.  However, for infant formula, a “use by” date is mandatory and indicates that, under the conditions prescribed by label directions, the nutrient content and quality of the formula can be guaranteed until the “use by” date.  After that date, the product should not be consumed.

For food, product dating is largely voluntary.  Thus, at this time, FDA can do little more than encourage standard terminology for product dating.