Attorney East Hampton

By Sara W. Koblitz —

In yet another step to address drug pricing, Commissioner Gottlieb announced last week several new initiatives, including an update to the revered Orange Book.  Cue the crazy Muppet arms!  Proclaiming the Orange Book update a “transparency initiative,” FDA expects that this undertaking will “provide greater certainty around timing of market entry and enable more informed decisions.”  This is all part of the Agency’s extensive effort to enhance competition, which has resulted in several new guidance documents pertaining to generic development, efforts to reform the Citizen Petition process, new priority reviews, an ICH proposal, and other efforts to expedite generic approval.  As Commissioner Gottlieb points out, FDA has made great strides in streamlining the generic review process in the last few years, including record numbers of generic drug approvals and tentative approvals in 2017 and 2018.

Over the course of 2019, FDA intends to issue two Orange Book-focused draft guidances.  The first is a draft guidance document explaining the process for therapeutic equivalence evaluation and the assignment of the TE codes listed in the Orange Book.  This is intended to facilitate requests for TE codes, as well as encourage development of more therapeutically equivalent drugs – particularly under the 505(b)(2) pathway, as 505(b)(2) applicants typically must request a TE code by Citizen Petition (unlike ANDAs, where a TE code is routinely assigned upon listing).  As such, FDA also believes that such clarity on TE codes may facilitate development of complex generics through the 505(b)(2) pathway.  The second Orange Book guidance will be a draft guidance with FAQs about reading and using the Orange Book.

FDA also plans to solicit public comment on the use of the Orange Book with an emphasis on potential enhancements.  It also seems like FDA may finally address whether drug-device patents – or now, given the hi-tech era we are in – drug-digital app patents should be listed in the Orange Book.  Industry has been asking for instruction on this issue for about 15 years, and without word from FDA, many manufacturers have decided to list them anyway if the device is integral to the drug as approved, so it will be interesting to see if FDA will change the current practice.  Again, FDA is doing this for the purposes of transparency so that potential manufacturers can now determine if a digital app patent might block marketing of a generic drug before investing resources.

FDA also announced a new guidance document, Marketing Status Notifications Under Section 506I of the Federal Food, Drug, and Cosmetic Act; Content and Format, which provides notification instructions for discontinued drugs, as required under FDARA.  506I of the FDCA requires manufacturers to provide notification to the Agency of the drug withdrawn from sale or the unavailability of a drug and requires the submission of a one-time report on marketing status for actively marketed drugs.  These statutorily-required notifications are intended to help the Agency understand which products are actively marketed and where there is a need for more generic competition.

Of note, the guidance explains that “withdrawn from sale” does not mean that the NDA or ANDA itself has been withdrawn, but that the drug has been discontinued from marketing – even temporarily.  FDA will use these notifications to determine whether to move products not available for sale to the “Discontinued” list.  Applicants withdrawing their product from sale must submit the notification 180 days prior to withdrawal, and newly approved drugs must submit the notification within 180 days of the date of approval of a drug if that drug will not be available for sale within 180 days of the date of approval.  Notifications are expected to include NDC numbers (for previously marketed drugs); the established name of the drug; the proprietary name of the drug, if applicable; the NDA or ANDA number; the strength of the drug; the date in which the drug will no longer be for sale or on which the drug will be available for sale, if known; and the reason for withdrawing or not marketing the drug.  Application holders who fail to submit this notification may also find their drugs moved from the “Active” to the “Discontinued” list.

Needless to say, we here at the FDA Law Blog are excited.

By Kurt R. Karst —

Over the 12 years that we’ve been doing this blogging gig, we’ve never before drawn inspiration for a post from Lebowski Pony – a.k.a. “the Dude” – that iconic character from the 1998 film The Big Lebowski, written and directed by Joel and Ethan Coen. (By the by, “the Dude” is supposed to be making an appearance in a Super Bowl commercial on Sunday.)  But the Dude came to mind while cogitating on a bill – the Bringing Low-cost Options and Competition while Keeping Incentives for New Generics Act, or “BLOCKING Act” – introduced on January 31, 2018 by Representatives Kurt Schrader (D-OR) and Earl L. “Buddy” Carter (R-GA) to amend the FDC Act’s 180-day exclusivity provisions.  Well, as the Dude says, “[t]his will not stand, ya know, this aggression will not stand, man.”

We’de normally give you a lot of background on the issue at this point in our post, but channeling our inner Dude, we’ll just say: “This is a very complicated case, Maude.  You know, a lotta ins, lotta outs, lotta what-have-you’s.  And, uh, lotta strands to keep in my head, man. Lotta strands in old Duder’s head.  Luckily I’m adhering to a pretty strict, uh, drug regimen to keep my mind, you know, limber.”

Well, on second thought, we may need a little more here than the Dude’s script can offer. (Ha!  Get it?) . . . .

Last February, the Trump Administration released a proposed Fiscal Year 2019 Budget.  Tucked into the Proposed Budget are provisions concerning 180-day generic drug exclusivity billed as an incentive to increase generic drug competition.  But as we noted in a post at the time, the Budget Proposal could have exactly the opposite effect.   Here’s a small taste of how the 180-day exclusivity provisions are described in the Budget Proposal:

The proposal ensures that first-to-file generic applicants who have been awarded a 180-day exclusivity period do not unreasonably and indefinitely block subsequent generics from entering the market beyond the exclusivity period.  Under this proposal, when a first-to-file generic application is not yet approved due to deficiencies, FDA would be able to tentatively approve a subsequent generic application, which would start the 180-day exclusivity clock, rather than waiting an indefinite period for the first-to-file applicant to fix the deficiencies in its application.

In short, the concern the Trump Administration appears to want to address is a first applicant’s ability to “park” 180-day exclusivity eligibility because of alleged “deficiencies” (e.g., unresolved cGMP concerns) that prevent FDA from granting final ANDA approval and commercial marketing under that application (thus triggering 180-day exclusivity) while subsequent ANDA applicants otherwise ready for approval are blocked from obtaining final approval solely because of a first applicant’s continuing eligibility for exclusivity.  (Perhaps the most prominent examples of the occurrence of this scenario concerned Ranbaxy Laboratories.  Ranbaxy, which was a first applicant eligible for 180-day exclusivity on several blockbuster drugs – e.g., valsartan, esomeprazole magnesium, and valganciclovir HCl – entered into a Consent Decree with FDA and the Department of Justice in January 2012, and was placed on FDA’s Application Integrity Policy List because of alleged fraudulent activity in connection with ANDA submissions.  Those concerns and allegations prevented FDA from granting final ANDA approval, and resulted in “parked” 180-day exclusivity until an alternative basis for forfeiture of 180-day exclusivity was found by FDA.)

The Fiscal Year 2019 Budget did not include draft language to implement the proposal discussed above.  That task became FDA’s (HHS’s) responsibility, and draft language was eventually forwarded to Capitol Hill.  Now that draft language has made its way into a bill: the BLOCKING Act.

The BLOCKING Act would amend FDC Act § 505(j)(5)(B)(iv), titled “180-day exclusivity period,” to place some new conditions on when a subsequent Paragraph IV ANDA can be approved, and thus, when 180-day exclusivity is triggered.  Below is the relevant text from the bill with proposed additions identified in red, italicized, bold typeface:

(iv) 180-day exclusivity period.—

(I) Effectiveness of application.—Subject to subparagraph (D), if the application contains a certification described in paragraph (2)(A)(vii)(IV) and is for a drug for which a first applicant has submitted an application containing such a certification, the application shall be made effective on the date that is 180 days after the earlier of—

(aa) the date of the first commercial marketing of the drug (including the commercial marketing of the listed drug) by any first applicant; or

(bb) the applicable date specified in subclause (III).

***

(III) APPLICABLE DATE.—The applicable date specified in this subclause, with respect to an application for a drug described in subclause (I), is the date on which each of the following conditions is first met:

(aa) The approval of such an application could be made effective, but for the eligibility of a first applicant for 180-day exclusivity under this clause.

(bb) At least 30 months have passed since the date of submission of an application for the drug by at least one first applicant.

(cc) Approval of an application for the drug submitted by at least one first applicant would not be precluded under clause (iii).

(dd) No application for the drug submitted by any first applicant is approved at the time the conditions under items (aa), (bb), and (cc) are all met, regardless of whether such an application is subsequently approved.

Let’s take a closer look at the proposed (III) conditions – all of which must be in place for 180-day exclusivity to be triggered – one at a time . . .

Condition “(aa)” assumes a “but for” world in which a subsequent Paragraph IV ANDA could be approved if no first applicant were eligible for 180-day exclusivity.   In the “real world” this means that a subsequent Paragraph IV ANDA can only be tentatively approved because of a first applicant’s eligiblity for 180-day exclusivity.

Condition “(bb)” seems to assume – at least when read in connection with condition “(dd)” – that if a first applicant is unable to secure final ANDA approval within 30 months of ANDA submission, then there must be problems (i.e., deficiencies) with the application.  In fact, in a case where there are multiple first applicants, all it takes under the language of the bill is any one of those first applicants to reach the 30-month mark without approval.  We note in passing that FDA’s Fiscal Year 2019 Justification of Estimates for Appropriations Committees says that the “Median Review Time from ANDA Receipt to Approval” was 37.26 months (FY 2017 Actual), is 37.00 months (FY 2018 Annualized CR), and is estimated to be 36.75 months (FY 2019 President’s Budget).  Those figures are alarming when matched up with the 30-month provision in the bill (i.e., condition “(bb)”).

Condition “(cc)” – again referring to “at least one first applicant” – says that ANDA approval would not be precluded under  FDC Act §  505(j)(5)(B)(iii).  That provision governs 30-month patent infringement litigation stays.  In other words, if at least one first applicant no longer has a 30-month litigation stay in effect (perhaps because of a license agreement and dismissal of litigation) or there is no court-ordered preliminary injunction, then this condition goes into effect.  We note that in cases in which a company with a pending ANDA amends (or supplements) that application to include a Paragraph IV certification to newly-listed patent information, the statute precludes the imposition of a 30-month litigation stay on ANDA approval.  Thus, in cases in which all ANDA applicants qualify as a first applicant by virtue of a Paragraph IV amendment to newly-listed patent information, this condition would not apply.

Finally, condition “(dd)” says that regardless of what may happen in the future with respect to first applicant approval, 180-day exclusivity is triggered, perhaps as early as the date that is 30 months after the first ANDA submission (regardless of whether or not that initial ANDA was later amended to contain a Paragraph IV certification), because no first applicant ANDA is approved at the time a subsequent Paragraph IV ANDA is tentatively approved (because of a first applicant’s eligiblity for 180-day exclusivity), and there is no 30-month stay or preliminary injunction in effect for at least one first applicant.

There’s a lot to object to in this proposal to amend and augment the FDC Act’s 180-day exclusivity provisions.  But first off . . . is a legislative change even necessary??  After all, FDA already has sufficient statutory and regulatory authority to determine that a first applicant has forfeited eligibility for 180-day exclusivity because of ANDA “deficiencies” preventing final approval.

First, there’s the “withdrawal of application” forfeiture provision at FDC Act § 505(j)(5)(D)(i)(II).  That provision states that eligibility for 180-day exclusivity is forfeited under either of the following circumstances:

(II) WITHDRAWAL OF APPLICATION.—The first applicant withdraws the application or the Secretary considers the application to have been withdrawn as a result of a determination by the Secretary that the application does not meet the requirements for approval under paragraph (4).

FDA briefly discussed this forfeiture provision in January 2017 draft guidance document, stating:

The withdrawal of application provision provides for forfeiture under two conditions: (1) if the first applicant withdraws the application or (2) if FDA considers the application withdrawn for failure to meet the various general requirements for approval laid out in section [FDC Act § 505(j)(4)].   A first applicant’s affirmative withdrawal of its ANDA would meet the first condition, resulting in a forfeiture under this provision.  FDA has not yet considered a forfeiture under the second condition.

Second, FDA’s ANDA regulations (at 21 C.F.R. § 314.107(c)(3)) have for decades allowed the Agency to conclude that 180-day exclusivity will not be awarded to a first applicant that does not diligently pursue ANDA approval: “If FDA concludes that a first applicant is not actively pursuing approval of its ANDA, FDA may immediately approve an ANDA(s) of a subsequent applicant(s) if the ANDA(s) is otherwise eligible for approval.”  In promulgating this regulation (59 Fed. Reg. 50,338, 50,354 (Oct. 3, 1994)), FDA commented that:

For purposes of this rule, the phrase “actively pursuing approval” is intended to encompass a drug sponsor’s good faith effort to pursue marketing approval in a timely manner.  In determining whether a sponsor is actively pursuing marketing approval, FDA will consider all relevant factors, such as the sponsor’s compliance with regulations and the timeliness of its responses to FDA’s questions or application deficiencies during the review period. [(Emphasis added)]

Despite FDA’s apparent hesitance to make a determination under either FDC Act § 505(j)(5)(D)(i)(II) or 21 C.F.R. § 314.107(c)(3) that a first applicant has forfeited or otherwise lost 180-day exclusivity, the Agency has clear authority to make such a determination.  In particular, FDC Act § 505(j)(5)(D)(i)(II), by virtue of its internal reference to FDC Act § 505(j)(4), gives FDA broad discretion to determine if an ANDA is considered withdrawn.  Among other things, FDC Act § 505(j)(4) provides that FDA will not approve an ANDA because of certain cGMP and bioequivalence deficiencies.

If the intent of the BLOCKING Act is to address a first applicant’s ability to “park” 180-day exclusivity eligibility because of alleged “deficiencies” that prevent FDA from granting final ANDA approval and commercial marketing under that application while subsequent ANDA applicants otherwise ready for approval are blocked from obtaining final approval solely because of a first applicant’s continuing eligibility for exclusivity, then the BLOCKING Act doesn’t quite hit the mark.  It would punish ANDA applicants eligible for 180-day who are diligently pursuing final application approval, and would further dilute and cheapen the 180-day exclusivity incentive Congress created in the Hatch-Waxman Amendments.

After reading and re-reading the BLOCKING Act – and now at 2:32 AM in the morning – we have some initial specific concerns with the bill.  First, the BLOCKING Act is immensely and unnecessarily complex and becomes more complex with the addition of each variable (e.g., multiple first applicants).  Enactment of the proposed language would almost certainly lead to costly and time-consuming litigation.  Second, the BLOCKING Act makes 180-day exclusivity eligibility unpredictable for ANDA applicants.  Factors that can lead to the triggering of exclusivity under the proposed legislative language are not readily available (or are not immediately available) to the public, such as the time of a subsequent applicant’s tentative approval and the date of submission of an ANDA.  (Indeed, FDA may not update the Agency’s Drugs@FDA website for several days after tentatively approving an ANDA.  Moreover, the basis of such tentative approval is not known because FDA does not regularly post tentative approval letters.)

Moreover, the BLOCKING Act could allow for myriad other circumstances outside of alleged ANDA “deficiencies” to trigger 180-day exclusivity.  Some potential examples include:

1. New bioequivalence or other required testing (e.g., elemental impurity testing or new or updated USP standards) that a first applicant is working diligently to complete;
2. A pending Citizen Petition specific to a first applicant’s ANDA (e.g., formulation-specific) that has not been resolved at the time FDA grants tentative approval to a subsequent applicant’s ANDA; and
3. Circumstances outside of an applicant’s control, such as: (a) the need to repeat bioequivalence studies, re-assay biostudy samples, or commission a scientific audit by a qualified independent expert because of concerns raised by FDA about the validity of reported studies conducted by a contract research organization (e.g., MDS Pharma Services); (b) catastrophic events such as explosion, fire, storm damage to manufacturing facilities; and (c) events that could not have been reasonably foreseen, and for which the applicant could not plan (e.g., abrupt discontinuation of supply of active ingredient, packaging material, or container closure system, or relocation of a facility or change in an existing facility because of a catastrophic event).

Although “the Dude abides” in The Big Lebowski, this FDA Law Blog dude does not and cannot abide with the BLOCKING Act.

By Alan M. Kirschenbaum —

Today the U.S. Department of Health and Human Services (HHS) Office of the Inspector General (“OIG”) released a proposed rule to put into practice an idea floated in HHS’ May 2018 Blueprint for lowering drug prices:  eliminating discount safe harbor protection for manufacturer rebates offered to Medicare Part D plans (including Medicare Advantage Prescription Drug Plans), Medicaid Managed Care Organizations (MMCOs), and their PBMs, as an incentive for drug manufacturers to reduce list prices.  The proposed exclusion was accompanied the addition of new proposed safe harbors for manufacturer point-of-sale discounts provided to such plans and PBMs, and non-volume based administrative fees paid to PBMs.  The intent of these amendments taken together is simply stated by the OIG:  it is “to eliminate rebates from manufacturers to PBMs, and replace them with discounts provided to beneficiaries at the point of sale.”  (p. 66)

OIG’s case against formulary rebates:  In brief, the preamble presents a three-pronged criticism of the current rebate framework:

• PBM rebates increase drug costs to beneficiaries in the deductible phase and those with percentage-based cost-sharing obligations, since both of these out-of-pocket costs are based on the list price (WAC), which does not take into account rebates paid by the manufacturer to the plan or its PBM. According to the OIG, PBMs and manufacturers benefit from higher WACs, but beneficiaries pay more.
• Current rebates skew PBM and plan formulary decisions in favor of drugs with the highest rebates, which may be more expensive and/or less effective than drugs with lesser rebates.
• Current rebates are not transparent. Since manufacturer-PBM rebate agreements are confidential, plan sponsors do not know what portion of manufacturer rebates to PBMs, if any, are passed on to the plans.

Narrowing of Discount Safe Harbor:  To address these problems, the proposed rule would add an exclusion from the current discount safe harbor for “a reduction in price or other remuneration from a manufacturer in connection with the sale or purchase of a prescription pharmaceutical product to a plan sponsor under Medicare part D, a Medicaid Managed Care Organization, or to a pharmacy benefit manager acting under contract with a plan sponsor …, unless it is a price reduction or rebate that is required by law.”  Interestingly, the OIG expresses its view that the discount safe harbor even in its current form does not protect rebates paid for formulary position to Part D plans, MMCOs, or their PBMs, because these entities are not “buyers” as contemplated under the safe harbor.  (Many in the industry have heretofore taken a more expansive interpretation, since health plans arguably are ultimately “buyers” of prescription drugs.)  This raises the question why an amendment to the safe harbor is necessary.  The OIG’s answer is that the agency is acting “out of an abundance of caution and desire to offer bright line guidance regarding the treatment of retroactive payments to PBMs that they retain.”  (p. 19 and note 36).

The preamble makes clear OIG’s intent that the discount safe harbor continue to protect discounts offered to other entities, including wholesalers, hospitals, physicians, pharmacies, and third-party payors in other Federal health care programs.  (p. 41).  (One wonders how the latter payors (e.g., the Indian Health Service) can be considered “buyers” when Part D plans and MMCOs are not.)  OIG also does not intend the safe harbor exclusion to affect existing value-based arrangements between manufacturers and Part D and MMCO plan sponsors, though the text of the proposed amendment, as drafted, contains no exclusion that would protect such arrangements.  The OIG also does not intend the amendment to affect Medicaid supplemental rebate agreements.

New safe harbor for point-of-sale price reductions:  Along with the stick the OIG offers a carrot:  a new safe harbor for a reduction in price charged by a manufacturer for a drug that is payable by a Part D plan, an MMCO, or their PBMs, if the reduction is applied to the price charged to the beneficiary at the point of sale.  The rule requires that the price reduction be set in advance under a contract with the plan or PBM, and it may not “involve a rebate unless the full  value of the reduction in price is provided to the dispensing pharmacy through a chargeback or series of chargebacks . . . .”  Although this proposal is not crystal clear, the preamble describes a system under which the manufacturer would enter into a contract with the plan or PBM to offer a reduced price to network pharmacies.  This can be done through a chargeback or rebate to the pharmacy if the full price reduction to the pharmacy, combined with the patient’s cost sharing and the plan’s reimbursement to the pharmacy, is at least equal to the price agreed upon between the manufacturer and the plan or PBM.  The pharmacy, in turn, would be required to pass the entire manufacturer price reduction through to the beneficiary at the point of sale.  (p. 47)

New Safe Harbor for Administrative Fees to PBMs:  Currently, many PBMs charge administrative fees that are based on a percentage of WAC or sales.  The OIG objects that these variable fees can “function as a disguised kickback.”  (p. 23)  Accordingly, a new safe harbor is proposed for PBM administrative fees that are for services that are specified in a written agreement that covers all of the services the PBM will provide in connection with the PBM’s arrangements with health plans during the term.  Importantly, the fees must be fixed (i.e., not percentage-based), fair market value, and not take into account business generated between the parties or between the manufacturer and the PBM’s health plans.  In addition, the PBM must disclose at least annually, and to HHS on request, the services rendered by the PBM to the manufacturer.  The OIG is considering, and solicits comments on, whether PBMs should also be required to disclose their fee arrangements to their client health plans, though this requirement is not reflected in the propose rule.

*    *     *

It is by no means certain that the anticipated shift from formulary rebates to point-of-sale discounts will have the desired effect of reducing pharmaceutical list prices and beneficiary out-of-pocket costs.  The proposed safe harbor amendment does not affect plans other than Part D or MMCO plans, so drug manufacturers may contract to provide discounts to these plans but leave their WACs, and current rebating practices, in place for the commercial market.  Among beneficiaries, there will be winners and losers.  Beneficiaries in the deductible phase and with co-insurance based on a percentage of list price will benefit from reductions in out-of-pocket expenses.  Those with flat copays will benefit less, and all Part D and MMCO beneficiaries will see their premiums increase as plans stop applying manufacturer rebates to reduce premiums.  The OIG believes that total reductions in cost-sharing will exceed total premium increases (p. 99), but critics disagree.  What can be said with confidence about the proposal is that it will increase transparency.  Government beneficiaries will know that their deductible costs and percentage-based cost-sharing are based on an actual net price.

The proposed rule will appear in the Federal Register on February 6.  The proposed effective date for the discount safe harbor amendment is January 1, 2020, and that of the of the new safe harbor for point-of-sale discounts is 60 days following publication of the final rule.  (The proposed effective date for the new safe harbor for PBM administrative fees is not specified.)  Comments on the proposed rule will be due on April 7.

By Rachael E. Hunt —

FDA recently hosted a webinar on the final guidance regarding the Breakthrough Devices Program.  The Breakthrough Device Program is meant to speed access to new devices that treat or diagnose “life-threatening or irreversibly debilitating diseases or conditions.”  See our previous post for a more in-depth review of the content of the final guidance.

Maureen Dreher, Policy Analyst in the Clinical Trials Program at the Office of Device Evaluation, presented an overview of the Program as set forth in the guidance as well as a summary of the differences between the draft and final versions.  This portion of the presentation was relatively brief; most of the time was allocated for questions and answers.  We found much of the information provided during the Q&A discussion to be useful and summarize what we considered the most insightful details below.  A copy of the webinar slides is available here.

Preventative Indications

One participant asked whether a device with a preventative indication that otherwise meets the breakthrough designation criteria would be eligible for the Program.  To satisfy the first criterion a device must “provide for more effective treatment or diagnosis…”  FDA did not preclude the possibility that a device with a preventative indication could qualify for breakthrough status, but suggested the determination may require careful wording of the indications and discussions with the Breakthrough Device Program staff.

Substitute for 513(g)?

A breakthrough designation request may include a statement of the planned marketing application—510(k), De Novo or PMA.  In its review of the designation request, FDA will make sure the product is, in fact, subject to premarket review, but the Agency will not comment on whether the sponsor has chosen the appropriate pathway.  The Breakthrough process is not a substitute for a 513(g).

Publication of Decisions and Metrics

One person asked whether FDA will be publishing a database of requests for designation determinations.  FDA explained that the breakthrough designation requests and decisions are confidential.  While a sponsor may wish to publicize that it received breakthrough designation, FDA will not maintain a public database of this information.

Multiple participants also expressed interest in the publication of the metrics of the Program—how many requests are received, granted, etc.  While these metrics are currently being tracked internally to inform programming decisions, FDA stated that there is no formal plan to publish them, but the speaker said that she would take the request for publication of the metrics back to management.  We note that FDA has communicated metrics from time to time.  For example, at the Association of Medical Diagnostics Manufacturers Focus meeting in Los Gatos, CA last October, FDA reported that it had granted 95 breakthrough requests (it’s unclear if this is just since the statutory change or also includes designations under the EAP guidance).  Of those 95, 29 were for IVDs.  Similarly, in a statement yesterday from Commissioner Gottlieb and CDRH Director Shuren regarding new steps to promote innovations in medical devices that help advance patient safety, the Agency reported that 112 devices have received breakthrough status.

Expected Level of Product Development

There is no expected level of product development prior to seeking breakthrough designation, but FDA is looking for evidence on technical success and clinical impact.  Specifically, FDA expects bench data that the device functions as intended, preliminary animal data on clinical impact, and/or literature that the product is likely to be more effective than currently available alternatives.  In our experience with the program, the data need not be extensive, but it must show that there is a reasonable likelihood that the device may be able to achieve the breakthrough indication.

Broad Indications

One participant asked whether a device can obtain breakthrough designation for a broad indication where a subset of that indication could qualify as a breakthrough.  The speaker explained that is not how the Program was intended to work.  A company may decide to seek designation for the narrower indication initially and pursue the broader indication in the future.  The general, non-breakthrough indication would be subject to the regular premarket procedures and timelines.

###

In concluding the call, FDA stated that any chance for FDA staff to engage with stakeholders improves understanding on both sides.  We appreciate FDA taking the time to present this information, and more importantly, to allow such a substantial portion of time to answer questions.

Hyman, Phelps & McNamara, P.C. is pleased to announce that Anne Walsh will present at this year’s Pharmacovigilance & Drug Safety: Risk Management & Regulatory Compliance Conference, to be held in Arlington, VA on March 12-13, 2019.   The focus of her presentation is on post-market approaches to drug safety, such as adverse event reporting and mandated studies.  She will speak to Agency initiatives and research surrounding post-market safety issues, methods used to determine causal relationships, and tools FDA uses to address safety concerns.

Other topics to be addressed at the conference include:

• Risk-Based Approaches to Signal Detection & Surveillance
• Supporting Clearance through Proactive Safety in Clinical Research
• Drug Safety Monitoring in the Post-Approval Environment
• Use of Real-World Data to Support Long-Term Product Safety
• Transforming Safety from National to Global Safety Surveillance
• Technology & Automation in the Future of Pharmacovigilance

Attendee registration is limited to professionals from pharmaceutical and biotech companies.

FDA Law Blog readers can receive $200 off the event price using the promo code FDALAWBLOG.  Please register on this page.

By James E. Valentine —

As we await our nation’s State of the Union address, FDA’s own Commissioner Scott Gottlieb and Center for Biologics Evaluation and Research (CBER) Director Peter Marks issued a joint statement providing a state of union of sorts on the development and regulation of cell and gene therapy.  This comes at a time when we are seeing exponential growth in the number of cell and gene therapies entering clinical development (see previous coverage of the first gene therapy that was approved here).  The statement both provides an update on the advancement of these technologies and FDA’s actions and activities intended to further support their development.

An Inflection Point

Assessing the current pipeline and trends in incoming INDs, FDA views this as an inflection point in cell and gene therapy technology and innovation.  As such, FDA attempts to project the volume of cell-based or directly administered gene therapy products in development and gaining approval in coming years:

• Currently 800+ active INDs
• Anticipate receipt of 200+ new INDs per year by 2020
• Predict approval of 10-12 cell and gene therapy products per year by 2025

Drawing an analogy to the platforms for humanizing antibodies that accelerated the mainstreaming of human monoclonal antibody drugs in the late 1990’s, FDA credits the advent of safe and effective vectors (e.g., AAV vectors) for the delivery of gene therapy products as enabling this progress.

To accommodate these increases, CBER is expanding its review group dedicated to reviewing these applications, with the hope of adding about 50 additional clinical reviewers to the CBER Office of Tissues and Advanced Therapies (OTAT).

Developing New Policy

To support the advancement of cell and gene therapies, Commissioner Gottlieb and CBER Director Marks underscored the importance of FDA developing a comprehensive framework for these technologies.  This is consistent with the work FDA has done over the last 1+ years, already weighing in on aspects of development through a series of guidance documents issued in December 2017 (see previous coverage here), followed-up with another release of guidances in July 2018 (find the full list of cell and gene therapy guidances here).

The two FDA officials used this opportunity to preview what additional draft and final guidance documents the Agency is currently developing, which include the following topics:

• Different areas of active product development (e.g., products for inherited blood disorders like hemophilia). FDA previously issued a draft hemophilia drug development guidance, as well as retinal- and rare disease-specific guidances in July 2018.
• Development of gene therapies for certain neurodegenerative diseases. In February 2018, the Agency released a series of neurology-focused drug development guidances for ALS, Duchenne muscular dystrophy, Alzheimer’s disease, partial onset seizures, and migraines (see previous coverage here), so this could be a key opportunity to see how FDA’s views on gene therapy development differ from traditional drug development.
• Manufacturing of cell-based gene therapies, such as CAR-T cells. Guidances on this topic will recommend parameters for introducing advances in manufacturing without requiring costly new clinical investigations, as well as propose alternative ways to ensure safety and effectiveness of resulting products.  This area of guidance will also cover critical quality attributes and other factors related to product manufacturing, with the goal of specifying when minor changes are allowable without clinical bridging studies.  FDA is planning a public meeting in the coming months to discuss expediting clinical bridging studies when more than minor changes are introduced to the manufacturing process, but do not represent a transformation to a fundamentally different product.
• Promote efficient development of safe and effective cell-based regenerative medicine products. For small sponsors, including academic investigators, who may not be able to conduct a clinical trial on their own, FDA intends to encourage these sponsors to pool clinical data to demonstrate safety and effectiveness of a product that is (a) manufactured with a similar manufacturing protocol and product quality specifications and (b) is used for a common clinical purpose.

Noticeably absent from the statement is any indication that the guidance documents will discuss the implications of the product quality policies on biosimilar development of cell and gene therapies.

Insights into FDA’s Evolving Regulatory Approach

While the Commissioner and CBER’s statement was mostly forward-looking, setting expectations for future policy development, a few key takeaways emerged.

The Role of Accelerated Approval

First, the statement notes that expedited programs, such as RMAT designation and accelerated approval are key to cell and gene therapy development.  Specifically, the statement sets out that accelerated, or Subpart E, approval can represent a faster route to approval when a gene therapy targets an underlying monogenetic change such that it could alter or cure the underlying genetic defect that leads to, and causes advance of, a disease.  This expedited development timeframe is able to be counterbalanced by post-marketing evaluation of the risks associated with gene therapies (i.e., durability and rare off-target effects), which require longer-term follow-up than traditional clinical trials allow.  This represents a great opportunity for FDA to more systematically utilize the accelerated approval pathway in an area outside of oncology, which has been the only area where FDA has had a well-established policy for use of this approval pathway.

In the same vein, the statement also distinguishes when CBER may view traditional approaches to drug development to be more appropriate.  FDA lays out that, where a gene therapy instead creates a genetic alteration aimed at treating the symptoms of a disease, or potentially altering the expression of a protein or enzyme believed to play a role in the advance of a disease (i.e., alter course and symptoms but not “cure” the disease), a more traditional clinical study is more appropriate.

Enforcing Pre-Market Approval of HCT/P’s

The statement expresses a continued concern by FDA that certain cell-based products that the Agency views as being subject to pre-market approval are being marketed outside of regulatory compliance and are even posing potential significant safety concerns to patients.  This refers to FDA’s ongoing attempt to reign in HCT/P manufacturing where it believes the products, primarily stem cell products, do not meet all four criteria for regulation solely under 21 CFR Part 1271.  In December 2018, the Agency issued a press release expressing its disappointment in the dearth of HCT/P manufacturers that have reached out to the Agency during the first 14 months of the enforcement discretion period (see previous coverage here).

In an apparent follow-up to last month’s press release, this statement announced FDA’s intent to undertake enforcement actions in 2019 for those products that pose a significant risk of potential harm to patients.  However, the statement did not specify what those enforcement actions would be, nor how this policy differs from what CBER’s enforcement posture has been to date regarding purportedly violative HCT/Ps.

By Riëtte van Laack —

The question of whether hydroponic operations are eligible for organic certification in the United States has been debated since 1995.  In most countries, such as Mexico and Canada, and regions, such as the EU, organic certification cannot be extended to crops not grown in soil.  However, in the United States, the USDA Agricultural Marketing Service (AMS) has historically taken the position that such operations are eligible for certification as long as they comply with the National Organic Program (NOP) regulations.  Now, organic hydroponic agriculture is facing a new challenge.

Between 2001 and 2010, the National Organic Standards Board (NOSB) Crops Committee repeatedly reevaluated the issue of “soil-less” growing systems, such as hydroponic systems.  In 2010, the NOSB once again assessed “soil-less” systems and concluded that they were inconsistent with organic status.  The NOSB recommended (by a vote of 12-1) that AMS issue a regulation specifying that hydroponic operations and hydroponically produced/grown products are not eligible for organic certification even if they use only substances permitted in organic production.  After further comments and questions by various parties, in May of 2014, AMS stated unequivocally that “Organic hydroponic production is allowed.”  Hydroponic operations continued to be eligible for organic certification.

In 2015, AMS established a Hydroponic/Aquaponic Task Force to further explore the issue and write a report giving guidance to the NOSB on whether hydroponic/aquaponic production should be allowed under the current organic regulations; and if not, how the regulations could or should be changed.  By the fall meeting of 2017, by a vote of 8-7, the NOSB rejected a proposal (by the committee) to prohibit organic certification for hydroponic operations.  Subsequently, in a Jan. 25, 2018 notice, AMS (again) acknowledged the extensive debate over hydroponic, aquaponic, and aeroponic operations since the fall 2017 meeting of the NOSB, but noted that since the origins of the NOP , hydroponic operations had been eligible for certification.  AMS declared that such operations would continue to be eligible for certification unless and until AMS issues final regulations to the contrary.

Now, a coalition of opponents against organic hydroponics is trying to get AMS to issue such regulations, banning hydroponic operations from organic certification.  On January 16, 2019, the Center for Food Safety (CFS, endorsed by The Cornucopia Institute, Food & Water Watch, Cultivate Oregon, Maine Organic Farmers and Gardeners Association, Maine Organic Farmers and Gardeners, Association Certification Service, Northwest Organic Dairy Producers Alliance, Organic Farmers Association and several others) submitted a Petition to AMS requesting that AMS issue regulations excluding hydroponic agricultural production from organic certification, consistent with the 2010 NOSB recommendation and report.  Specifically, CFS asks AMS to amend 7 CFR § 205.105 to prohibit hydroponic systems and to revoke organic certification for currently certified hydroponic operations.

CFS points to legislative history, the statute and the regulations to support its Petition.  It also references inconsistency among organic certifiers.  Some certifying agents do not certify hydroponic operations whereas others do (According to CFS, there are currently 41 USDA certified organic hydroponic operations).  CFS also points to the prohibition of organic certification of hydroponic operations in other countries.

Next Thursday, February 7, the Food and Drug Law Institute will conduct a webinar entitled, “Patient Assistance Programs, Recent Enforcement and Best Practices.”  The webinar will cover the various forms of patient assistance programs, the legal authorities that apply to them, recent enforcement actions, best practices from both the manufacturer and charity perspectives, advertising and promotion implications, adverse event reporting, and anticipated future developments.  Hyman, Phelps & McNamara, P.C.’s Alan Kirschenbaum will moderate the program.  Registration information can be found here.

By Sara W. Koblitz —

In one of the multiple lawsuits that Pharmaceutical Manufacturing Research Services (PMRS) has filed against the FDA related to the approval of abuse-deterrent opioids in the last few years, the Eastern District of Pennsylvania summarily rejected PMRS’s bid to keep abuse-deterrent opioid, RoxyBond, off the market.  The Court determined that PMRS did not have Article III standing to challenge FDA’s approval of RoxyBond.

For those unfamiliar with the backstory, PMRS is a contact manufacturer for drug products that has petitioned FDA repeatedly to stop the approval of pending and future opioids indicated for chronic use.  These requests have specifically named opioid products approved with abuse-deterrent properties, asking that FDA stay approval of specific products, like RoxyBond, the first immediate release opioid approved for chronic use with abuse-deterrent properties. PMRS has submitted six petitions for stay and citizen petitions to FDA since February 2016 – all asking FDA to either stay or revoke approval of opioids labeled for chronic use. FDA has denied all of these petitions (Strike One) other than the one filed in March 2017 and one filed in November of 2018, which remain pending. PMRS also submitted an NDA for its own abuse-deterrent, immediate release opioid for acute rather than chronic use. FDA issued a Complete Response Letter for the product in November 2017 and denied PMRS’s NDA and Request for A Hearing on October 30, 2018 (which ultimately led to another PMRS lawsuit against FDA) (potentially Strike 3).

In August 2017, PMRS sued FDA arguing that the Agency’s denial of its petitions was arbitrary, capricious, and an abuse of discretion in contravention of the Administrative Procedures Act and asked the Curt to stay the effective date of RoxyBond. On Tuesday, the Court dismissed the case for lack of jurisdiction because PMRS lacks Article III standing. The Court made clear that an agency’s mere denial of a petition does not constitute injury in fact for purposes of Article III standing. PMRS additionally argued that FDA could compare a PMRS application to RoxyBond during the approval process and therefore the approval of RoxyBond would alter the approval process for abuse-deterrent opioids, but the Court rejected that argument as too speculative to establish injury in fact. PMRS also could not rely on the “competitor standing” doctrine either because its NDA did not have tentative approval nor was PMRS a current competitor with RoxyBond.

Notably, this decision sets forth the premise that even if a plaintiff is the recipient of a final agency action, it may not be enough to confer Article III standing. Even having a pending NDA may not be enough to seek judicial review. While we’ll have to wait to see how this is applied beyond the narrow circumstances of this case, it could have ramifications for trade associations or public interest groups that routinely use the Citizen Petition process to try to convince FDA of their policy positions.

By Adrienne R. Lenz, Senior Medical Device Regulation Expert —

On January 7, 2019, FDA released new documents related to its Software Pre-Certification (Pre-Cert) Program:

• Developing a Software Precertification Program: A Working Model (Working Model)
• Software Precertification Program: Regulatory Framework for Conducting the Pilot Program within Current Authorities (Regulatory Framework)
• Software Precertification Program: 2019 Test Plan (Test Plan)

In this post, we will cover the Working Model, which is in its third revision, and the Test Plan, which is a new document.  We will discuss the Regulatory Framework on a follow-up post.

The Pre-Cert Program is intended to create a new streamlined regulatory process for software as a medical device (SaMD) (see our earlier blog posts on the program here, here, and here).  The program focuses primarily on the software developer and its processes.  For lower risk software, there may be no premarket product review while for moderate and higher risk software, the product-specific information would be submitted in a streamlined premarket application.  FDA has stated that the goal of the program is to “have tailored, pragmatic, and least burdensome regulatory oversight that assesses organizations (large and small) to establish trust that they have a culture of quality and organizational excellence such that they can develop high quality SaMD products, leverages transparency of organizational excellence and product performance across the entire lifecycle of SaMD, uses a tailored streamlined premarket review, and leverages unique postmarket opportunities available in software to verify the continued safety, effectiveness and performance of SaMD in the real world.”  Working Model at 7.

The details of the Pre-Cert Program are outlined in the Working Model.  The first notable change to the Working Model is the introduction of the Total Product Lifecycle.  While previous versions described each of the steps, this version clarifies that the program has four key components following a Total Product Lifecycle (TPLC) approach and describes the interactions during each component.  The four components of the program are:

• Demonstrate a culture of quality and organizational excellence through an Excellence Appraisal (pre-certification).
• Determine the SaMD’s required review through Review Determination.
• Conduct a Streamlined Review, and
• Verify a SaMD’s continued safety, effectiveness and performance and the organization’s commitment to culture of quality through post-market Real-World Performance.

The Excellence Appraisal would evaluate software manufacturers based on five culture of quality and organizational excellence principles (Excellence Principles), including: product quality; patient safety; clinical responsibility; cybersecurity responsibility; and proactive culture.  Organizations would be certified into one of two levels depending on their experience in developing products.  While FDA envisions the use of accredited third-parties for Excellence Appraisal in the future program, they have clarified in this version of the working model that the Excellence Appraisals will be performed by FDA during the 2019 testing of the program.

To us, the Excellence Principles relate closely to the quality system regulation (21 C.F.R. Part 820), yet there is no connection made in the Working Model.  Once precertified, the Working Model describes several factors that may trigger the need for an additional Excellence Appraisal, including patient or product issues, significant restructuring, mergers or acquisitions, continuous improvements that lead to a change in performance capability, new activities or incorporation of a new clinical domain, or continued recurrence of safety signals.  However, it does not describe how inspectional findings in a quality system inspection might affect the precertification status.  And to avoid inspectional findings, precertified software manufacturers should also be careful to ensure that their processes continue to meet quality system requirements, especially in cases where new formats for providing information may be acceptable in an Excellence Appraisal or Streamlined Review.

For precertified software manufacturers, bringing a SaMD to market would begin with a Review Pathway Determination.  While the Review Pathway Determination was described previously, it has been clarified that it requires submission to FDA of information about the SaMD and its risk.  In 2019, the information proposed for this component of the program would be provided during an optional Pre-Submission meeting or as part of the premarket submission.  In the future, FDA anticipates that the SaMD product-level elements would be submitted when the precertified organization is ready to 1) market their SaMD if review is not required or 2) submit their SaMD for Streamlined Review if review is required based on the manufacturer-determined risk category.  Depending on the organization’s precertification level and the SaMD’s Risk Categorization according to the International Medical Device Regulators Form (IMDRF), FDA will confirm whether the product requires a streamlined premarket submission or no premarket submission.  To stay within existing regulatory authority, the Regulatory Framework limits the Pre-Cert Program pilot to Pre-Cert De Novo applications and Pre-Cert 510(k)s following classification of the device in a Pre-Cert De Novo.   FDA also intends, in the future, to post review pathway determinations (when no additional review is required) or following clearance or approval (when a marketing submission is required), which should further assist companies in properly categorizing their SaMD.

For those products that require a marketing submission (which includes all pilot products), the program’s streamlined review promises a shortened review timeline, but does not give estimates on how much time might be saved.  The Working Model further states that FDA anticipates that the amount and complexity of clinical data will ultimately be the driver for the duration of the review.  In our review of the product content that would be submitted, at least for 510(k) devices, there does not appear to be much that differs from a traditional submission.  There is some elimination of possible redundancy (e.g., the device description serves as the software description), and the software development environment description and lower level software testing reports need not be submitted.  In our experience, these parts are not a large portion of the submission under review and are less likely to result in deficiencies, while review of clinical and non-clinical performance data, which is still submitted in a streamlined review, and response to FDA deficiencies related to performance data and substantial equivalence are more likely to slow down the overall time to market.

The last phase of the Pre-Cert Program’s TPLC approach includes collection and analysis of real-world performance analytics (RWPA), encompassing at least three types of analysis: Real-world Health Analytics (RWHA), User Experience Analytics (UXA) and Product Performance Analytics (PPA).  The RWPA plan would be developed in advance of introducing the SaMD to the market.  FDA envisions engaging in an iterative process with SaMD manufacturers to refine the types of data elements most relevant to the SaMD.  FDA would collect RWPA data to FDA periodically (e.g., quarterly), though the mechanism for this data collection is not described.  FDA would be analyzing the data in addition to the SaMD manufacturer and the data would be used to drive decisions such as the need to make software modifications as well as FDA’s ability to identify potential emerging issues across product classes.  It is not clear how FDA will work with SaMD manufacturers, especially if there are differences in opinion in terms of actions that should be taken based on the data.  Questions on timeliness of FDA’s review are also raised as they will be reviewing data after a SaMD manufacturer has already conducted their review and made plans for any necessary actions.

For the pilot program, FDA intends to test the process, which we applaud.  The Test Plan will include retrospective tests of SaMD submissions that have been previously reviewed and prospective tests.  For prospective tests, Pre-Cert companies volunteering to participate in the testing would not only undergo the Pre-Cert process but would also submit a full submission so that FDA can compare results of the current review process to the streamlined review process.  The Working Model states that FDA will not establish precertified companies during the testing in 2019 which suggests that only those companies that are already part of the program will also be included in the submission testing.  Reviewing the proposed methods, we find ourselves asking questions similar to those FDA typically asks device sponsors regarding their test plans.  For example, FDA states they will “consider the Pre-Cert model to be confirmed when the program framework remains static over multiple premarket submissions” but does not provide justification of this endpoint, provide a specific number of submissions over which the framework remains static that would be needed to validate the program, or state how long FDA would run the test.  Further, the Test Plan does not provide a submission sample size with justification or discuss how many divisions and reviewers will participate to account for typical review variability.  If limited to only De Novos or follow-on 510(k) submissions from the current companies participating in the precertification pilot, there may not be enough submissions to truly validate the program.

Overall, we aren’t convinced that the time and cost for market entry will be reduced given the now multi-step process and questions that these new steps raise.  For example, how much time and effort will be required for an organization to become precertified?  In addition to the precertification step, there are two additional steps needed to bring SaMD to market, including a review to confirm the appropriate market application (or that no marketing application is needed) and postmarket commitments including periodic (e.g., quarterly) review of real-world performance data by FDA.  Will FDA have adequate resources to perform these steps without delaying the overall SaMD development timeline?  It is not clear whether the promised benefit of a shorter submission review will outweigh the additional efforts.  This will likely be dependent on the organization and the number of SaMD products it develops and supports in the market.