Attorney East Hampton

By Kurt R. Karst —

Early each morning, when most folks are still sleeping (or perhaps just getting up to have their first cup of coffee and read the newspaper), this blogger is usually already in the office poring over FDA-related news, citizen petitions, and new legislation to update the FDA Law Blog trackers (here, here, and here) and to rev up the @FDALawBlog Twitter feed. One day last week, as we were looking at new legislation, one bill in particular caught our attention.  The bill carried the following title: “A bill to amend the Federal Food, Drug, and Cosmetic Act to ensure that valid generic drugs may enter the market.”

Hmmm . . . . What could that mean? Perhaps a bill to implement the Trump Administration’s recent budget proposal that we think would cheapen 180-day exclusivity (see our previous post here)?  Or maybe something entirely different?  We went on a mission to find out.  And when we finally did obtain a copy of the bill several hours later and took a look through the text, we were struck with a case of déjà vu.

The bill, S. 2476, is called the “Expanding Access to Low Cost Generic Drugs Act” and was introduced by Senator Tina Smith (D-MN) on February 28, 2018.  Although S. 2476 is styled as the “Expanding Access to Low Cost Generic Drugs Act,” it’s really just a new name for nearly identical bills introduced in 2011 (S. 1882) and 2015 (S. 131) as the “Fair And Immediate Release of Generic Drugs Act, or the “FAIR GENERxICS Act” (and even before that in another form in 2009 as S. 1315, the “Drug Price Competition Act of 2009” – see our previous post here).  As we noted back in 2011 when the “FAIR Generics Act” was introduced by Senators Jeff Bingaman (D-NM), David Vitter (R-LA), Sherrod Brown (D-OH), and Jeff Merkley (D-OR), the bill is pretty complex, but essentially concerns parked 180-day exclusivity.  According to a summary of the bill made at that time:

The legislation would prevent “parked exclusivities” from delaying full, fair, and early generic competition by:

• Granting the right to share exclusivity to any generic filer who wins a patent challenge in the district court or is not sued for patent infringement by the brand company.
• Maximizing the incentive for all generic challengers to fight to bring products to market at the earliest possible time by holding generic settlers to the deferred entry date agreed to in their settlements.
• Creating more clarity regarding litigation risk for pioneer drug companies and generic companies by requiring pioneer companies to make a litigation decision within the 45 day window provided for in the Hatch-Waxman Act.

The same summary applies to S. 2476, the current version of the “FAIR Generics Act.” But let’s take a closer look at the current bill.  Here’s how it would amend the FDC Act’s 180-day exclusivity provisions, and other portions of the FDC Act and the patent laws (additions in bold red typeface and deletions in bold strikethrough typeface).

FDC Act § 505(j)(5)(B)(iv) (AMENDED)

(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 date of the first commercial marketing of the drug (including the commercial marketing of the listed drug) by any first applicant.

(II) DEFINITIONS.—In this paragraph:

(aa) 180-DAY EXCLUSIVITY PERIOD.—The term “180-day exclusivity period” means the 180-day period ending on the day before the date on which an application submitted by an applicant other than a first applicant could become effective under this clause.

(bb) FIRST APPLICANT.—As used in this subsection, the term “first applicant” means an applicant that, on the first day on which a substantially complete application containing a certification described in paragraph (2)(A)(vii)(IV) is submitted for approval of a drug, submits a substantially complete application that contains and lawfully maintains a certification described in paragraph (2)(A)(vii)(IV) for the drug.

(cc) (bb) SUBSTANTIALLY COMPLETE APPLICATION.—As used in this subsection, the term “substantially complete application” means an application under this subsection that on its face is sufficiently complete to permit a substantive review and contains all the information required by paragraph (2)(A).

(dd) (cc) TENTATIVE APPROVAL.—

(AA) IN GENERAL.—The term “tentative approval” means notification to an applicant by the Secretary that an application under this subsection meets the requirements of paragraph (2)(A), but cannot receive effective approval because the application does not meet the requirements of this subparagraph, there is a period of exclusivity for the listed drug under subparagraph (F) or section 505A, or there is a 7-year period of exclusivity for the listed drug under section 527.

(BB) LIMITATION.—A drug that is granted tentative approval by the Secretary is not an approved drug and shall not have an effective approval until the Secretary issues an approval after any necessary additional review of the application.

FDC Act § 505(j)(5)(B)(v) (NEW)

(v) FIRST APPLICANT DEFINED.—As used in this subsection, the term “first applicant” means an applicant—

(I)(aa) that, on the first day on which a substantially complete application containing a certification described in paragraph (2)(A)(vii)(IV) is submitted for approval of a drug, submits a substantially complete application that contains and lawfully maintains a certification described in paragraph (2)(A)(vii)(IV) for the drug; and

(bb) that has not entered into a disqualifying agreement described under clause (vii)(II); or

(II)(aa) for the drug that is not described in subclause (I) and that, with respect to the applicant and drug, each requirement described in clause (vi) is satisfied; and

(bb) that has not entered into a disqualifying agreement described under clause (vii)(II).

FDC Act § 505(j)(5)(B)(vi) (NEW)

(vi) REQUIREMENT.—The requirements described in this clause are the following:

(I) The applicant described in clause (v)(II) submitted and lawfully maintains a certification described in paragraph (2)(A)(vii)(IV) or a statement described in paragraph (2)(A)(viii) for each unexpired patent for which a first applicant described in clause (v)(I) had submitted a certification described in paragraph (2)(A)(vii)(IV) on the first day on which a substantially complete application containing such a certification was submitted.

(II) With regard to each such unexpired patent for which the applicant described in clause (v)(II) submitted a certification described in paragraph (2)(A)(vii)(IV), no action for patent infringement was brought against such applicant within the 45-day period specified in clause (iii); or if an action was brought within such time period, such an action was withdrawn or dismissed by a court (including a district court) without a decision that the patent was valid and infringed; or if an action was brought within such time period and was not withdrawn or so dismissed, such applicant has obtained the decision of a court (including a district court) that the patent is invalid or not infringed (including any substantive determination that there is no cause of action for patent infringement or invalidity, and including a settlement order or consent decree signed and entered by the court stating that the patent is invalid or not infringed).

(III) If an applicant described in clause (v)(I) has begun commercial marketing of such drug, the applicant described in clause (v)(II) does not begin commercial marketing of such drug until the date that is 30 days after the date on which the applicant described in clause (v)(I) began such commercial marketing.

FDC Act § 505(j)(5)(B)(vii) (NEW)

(vii) AGREEMENT BY FIRST APPLICANT TO DEFER COMMERCIAL MARKETING; LIMITATION ON ACCELERATION OF DEFERRED COMMERCIAL MARKETING DATE.—

(I) AGREEMENT TO DEFER APPROVAL OR COMMERCIAL MARKETING DATE.—An agreement described in this subclause is an agreement between a first applicant and the holder of the application for the listed drug or an owner of one or more of the patents as to which any applicant submitted a certification qualifying such applicant for the 180-day exclusivity period whereby that applicant agrees, directly or indirectly, (aa) not to seek an approval of its application that is made effective on the earliest possible date under this subparagraph, subparagraph (F) of this paragraph, section 505A, or section 527, (bb) not to begin the commercial marketing of its drug on the earliest possible date after receiving an approval of its application that is made effective under this subparagraph, subparagraph (F) of this paragraph, section 505A, or section 527, or (cc) to both items (aa) and (bb).

(II) AGREEMENT THAT DISQUALIFIES APPLICANT FROM FIRST APPLICANT STATUS.—An agreement described in this subclause is an agreement between an applicant and the holder of the application for the listed drug or an owner of one or more of the patents as to which any applicant submitted a certification qualifying such applicant for the 180-day exclusivity period whereby that applicant agrees, directly or indirectly, not to seek an approval of its application or not to begin the commercial marketing of its drug until a date that is after the expiration of the 180-day exclusivity period awarded to another applicant with respect to such drug (without regard to whether such 180-day exclusivity period is awarded before or after the date of the agreement).

FDC Act § 505(j)(5)(B)(viii) (NEW)

(viii) LIMITATION ON ACCELERATION.—If an agreement described in clause (vii)(I) includes more than 1 possible date when an applicant may seek an approval of its application or begin the commercial marketing of its drug—

(I) the applicant may seek an approval of its application or begin such commercial marketing on the date that is the earlier of—

(aa) the latest date set forth in the agreement on which that applicant can receive an approval that is made effective under this subparagraph, subparagraph (F) of this paragraph, section 505A, or section 527, or begin the commercial marketing of such drug, without regard to any other provision of such agreement pursuant to which the commercial marketing could begin on an earlier date; or

(bb) 180 days after another first applicant begins commercial marketing of such drug; and

(II) the latest date set forth in the agreement on which that applicant can receive an approval that is made effective under this subparagraph, subparagraph (F) of this paragraph, section 505A, or section 527, or begin the commercial marketing of such drug, without regard to any other provision of such agreement pursuant to which commercial marketing could begin on an earlier date, shall be the date used to determine whether an applicant is disqualified from first applicant status pursuant to clause (vii)(II).

FDC Act § 505(j)(5)(B)(ix) (REDESIGNATED)

(v) (ix) 180-DAY EXCLUSIVITY PERIOD FOR COMPETITIVE GENERIC THERAPIES.—

FDC Act § 505(j)(5)(D)(i)(IV) (AMENDED)

(IV) FAILURE TO OBTAIN TENTATIVE APPROVAL.— The first applicant The first applicant, as defined in subparagraph (B)(v)(I), fails to obtain tentative approval of the application within 30 months after the date on which the application is filed, unless the failure is caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed.

FDC Act § 505(j)(14) (NEW)

(14)(A) The holder of an abbreviated application under this subsection shall submit to the Secretary a notification that includes—

(i)(I) the text of any agreement entered into by such holder described under paragraph (5)(B)(vii)(I); or

(II) if such an agreement has not been reduced to text, a written detailed description of such agreement that is sufficient to disclose all the terms and conditions of the agreement; and

(ii) the text, or a written detailed description in the event of an agreement that has not been reduced to text, of any other agreements that are contingent upon, provide a contingent condition for, or are otherwise related to an agreement described in clause (i).

(B) The notification described under subparagraph (A) shall be submitted not later than 10 business days after execution of the agreement described in subparagraph (A)(i). Such notification is in addition to any notification required under section 1112 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

(C) Any information or documentary material filed with the Secretary pursuant to this paragraph shall be exempt from disclosure under section 552 of title 5, United States Code, and no such information or documentary material may be made public, except as may be relevant to any administrative or judicial action or proceeding. Nothing in this paragraph is intended to prevent disclosure to either body of the Congress or to any duly authorized committee or subcommittee of the Congress.

FDC Act § 301(e) (AMENDED) (Prohibited Acts)

(e) The refusal to permit access to or copying of any record as required by section 412, 414, 417(j), 416, 504, 564, 703, 704(a), 760, or 761; or the failure to establish or maintain any record, or make any report, required under section 412, 414(b), 417, 416, 504, 505 (i) or (k) 505 (i), (j)(14), or (k), 512(a)(4)(C), 512 (j), (l) or (m), 572(i), 515(f), 519, 564, 760, 761, 909, or 920 or the refusal to permit access to or verification or copying of any such required record; or the violation of any recordkeeping requirement under section 204 of the FDA Food Safety Modernization Act (except when such violation is committed by a farm).

35 U.S.S. § 271(e)(7) (NEW)

(7) The exclusive remedy under this section for an infringement of a patent for which the Secretary of Health and Human Services has published information pursuant to subsection (b)(1) or (c)(2) of section 505 of the Federal Food, Drug, and Cosmetic Act shall be an action brought under this subsection within the 45-day period described in subsection (j)(5)(B)(iii) or (c)(3)(C) of section 505 of the Federal Food, Drug, and Cosmetic Act.

 We’re still in the process of sorting out how all of these new and amended provisions would operate. And not all of them seem to make complete sense (e.g., How can an agreement described in the proposed text control when an applicant may seek an approval of its ANDA? Isn’t that really an FDA decision?)  In any case, whether renewed interest in changes to the statutory 180-day exclusivity provision, as a result of the Trump Administration’s recent budget proposal, will lead to passage of the “Expanding Access to Low Cost Generic Drugs Act” or another bill remains to be seen.

By Riëtte van Laack —

On March 1, 2018, FDA announced the release of several guidance documents: final guidance on Scientific Evaluation of the Evidence on the Beneficial Physiological Effects of Isolated or Synthetic Non-digestible Carbohydrates Submitted as Citizen Petition; final guidance on Reference Amounts Customarily Consumed: List of Products for Each Product Category Product Category; a small entity compliance guide on the new regulations regarding serving sizes; Questions and Answers for Industry on Dietary Fiber; and a Draft Guidance on Declaration of Added Sugars on Honey, Maple Syrup, and Certain Cranberry Products. The dietary fiber guidance and the added sugar in honey maple syrup and cranberry products guidance raise new issues.

Dietary Fiber Guidance

As we previously reported, in May 2016, FDA published a final rule amending the nutrition labeling regulations. Among other things, FDA redefined dietary fiber as non-digestible soluble and insoluble carbohydrates (with three or more monomeric units) and lignin that are intrinsic and intact in plants, and isolated or synthetic non-digestible carbohydrates (with three or more monomeric units)(hereinafter “added NDCs”) that FDA determines to have a physiological effect that is beneficial to human health.  In November 2016, FDA issued a draft guidance describing FDA’s criteria in evaluating the evidence that an added NDC has a beneficial physiological effect. Using the approach described in the draft guidance, FDA determined that the available evidence for 26 added NDCs was insufficient to meet the standard. Therefore, these added NDCs did not qualify as dietary fiber for purposes of nutrition labeling.

As described in the final guidance, FDA has reconsidered some of its criteria and approaches used in the evaluation of evidence for added NDCs.  Appendix A to the final guidance discusses the main changes in FDA’s position.  Specifically:

• FDA will consider clinical studies conducted in diseased populations.
• In the draft guidance, FDA had taken the position that since foods are intended for the general U.S. population, it would not consider results from studies on individuals with a specific disease. However, as explained in the final guidance, FDA has decided that it will consider evidence from studies on individuals with a disease under certain circumstance, namely when “extrapolating to individuals who do not have the disease is scientifically appropriate.” For example, FDA would consider studies on constipated individuals when evaluating the effect of an added NDC on laxation.
• FDA also has reconsidered its position on evaluating whether a combination of two NDCs has a beneficial physiological effect. If a combination of isolated NDCs will be used as an ingredient, there are two options. Either the citizen petition provides data on a specific (fixed) combination of the added NDCs, or it provides evidence regarding the beneficial physiological effect of each individual NDC included in the combination.
• The final guidance also includes additional examples of physiological endpoints that FDA may consider, e.g. satiety and fecal output/fecal weight as measured on the basis of grams/day as a measure of laxation. However, FDA maintains its position that fermentation and changes in microbiota in the large intestine are not valid physiological endpoints.
• FDA will consider studies in which there is a statistically significant difference in baseline values between groups, provided that the statistical analysis includes adjustments for these differences or otherwise corrects for these differences.
• The final guidance provides more information about how FDA will weigh the strength of the evidence.
• In its request for data on added NDCs, FDA provided for a process to submit unpublished data. Although FDA maintains that it will consider unpublished data in its determination of whether the added NDC is a dietary fiber, it does encourage submission of publicly available data. Amending the regulation to include an additional added NDC that meets the definition of dietary fiber requires notice and comment rulemaking. This is a public process. Thus, data critical for the evaluation of the evidence of a beneficial physiological effect will need to be available to the public.

It remains to be seen to what extent FDA’s changes in its position regarding inclusion and exclusion criteria for the evaluation of evidence will affect its assessment of the data for the 26 added NDCs in 2016.As readers of this blog know, several Petitions regarding added NDCs have been submitted. The timing of FDA’s responses to these Petitions remains uncertain. In the updated Questions and Answers regarding Dietary Fiber, FDA states that it remains committed to completing the review process in the “near future.” Although the publication of the final guidance and the reconsiderations regarding key issues are a step forward, much uncertainty remains. Among other things, clarification as to what constitutes an added NDC vs. what is an intrinsic and intact NDC is needed.

Declaration of Added Sugars on Honey, Maple Syrup, and Certain Cranberry Products; Added Sugars with A Twist 

FDA’s draft guidance on declaration of added sugars on honey and maple syrup and cranberry products is – for lack of a better word – interesting.

As readers of this blog may recall, a major issue in the amendment to the nutrition labeling regulations was the inclusion of the new requirement to declare added sugars. The final rule defines “added sugars,” in part, as “sugars that are either added during the processing of foods, or are packaged as such.” (Emphasis added).  As a result, the term includes single ingredient products such as honey and syrups; e.g. a jar of honey and a bottle of maple syrup would need to declare added sugars in the nutrition facts panel.  FDA got a large number of comments by the honey and maple syrup industries about this requirement.  Specifically, the comments raised concerns that declaring added sugars on single ingredient honey and maple syrup products would suggest to consumers that the pure products contain added table sugar because added sugars are listed in the Nutrition Facts panel. Both of these product categories have a history of economic adulteration with cheaper sweeteners, and according to the comments, the declaration of added sugars might lead consumers to believe sweeteners are added.

FDA’s draft guidance provides a possible solution to this issue. FDA proposes to exercise enforcement discretion for products that use a “†” symbol immediately following the added sugars percent Daily Value in the Nutrition Facts panel. The “†” symbol may direct consumers to a truthful and non-misleading statement on the package outside the Nutrition Facts panel.  In that statement, manufacturers may explain that no sugar was added to the pure honey or pure maple syrup.  In short, the Nutrition Facts panel will state that the product contains added sugars but a statement outside the Nutrition Facts panel will state that these are not added sugars, but are naturally occurring.

The added sugar labeling requirement also puts certain cranberry products in a bad light. The cranberry industry submitted comments to FDA explaining that the added sugars declaration would be detrimental to the cranberry industry by implying that cranberry products are less nutritious than competing products that have similar amounts of total sugars and nutrients.  Cranberries naturally contain little sugar and are extremely tart, so sugars usually are added for palatability.  Other fruits that naturally contain more sugar and are palatable without additional sugar would not need to declare added sugars.  For example, sweetened dried cranberries contain 29 grams of total sugars including 25 grams of added sugars per serving while raisins contain 29 grams of total sugars with zero added sugars per serving.

As with the honey and maple syrup products, FDA proposes to exercise enforcement discretion when such products use a “†” symbol immediately following the added sugars percent Daily Value in the Nutrition Facts panel. The “†” symbol may direct consumers to a truthful and non-misleading statement outside the Nutrition Facts panel explaining that addition of sugar to the cranberry product is meant to increase the palatability of the naturally tart fruit and that the amount of total sugars per serving is at a level that does not exceed the amount of total sugars in a comparable product with no added sugars.

Although these solutions might be palatable to some stakeholders, FDA’s proposed approach seems to undercut the basis for the requirement to declare added sugars. Undoubtedly consumer education will be crucial to explain that in some products added sugars are not a concern, whereas in other products these same added sugars are a concern.

To ensure consideration, comments to the draft guidance must be submitted by May 1, 2018.

By David C. Gibbons & Dara Katcher Levy —

While likely not FDA’s intent, the net effect of FDA’s requirements surrounding importation of active pharmaceutical ingredients is driving manufacturing of investigational finished drug products outside the United States. In its most egregious implementation, FDA’s current interpretation sets up a Catch-22 in which a batch of investigational API cannot be imported for manufacture of finished drug product without an IND, but an IND cannot be obtained without analyses and stability data on that drug product.  As a result, investigational API and drug product, from a practical perspective, must be made entirely within or entirely outside the US. Because API manufacturing is largely done outside the U.S., FDA’s requirements have the effect of encouraging sponsors to manufacture outside the U.S. to the detriment of pharmaceutical developers, U.S. contract manufacturers and patients.

An active pharmaceutical ingredient (API), or bulk drug substance, is “any substance that is intended for incorporation into a finished drug product and is intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease, or to affect the structure or any function of the body,” but does not include intermediates used in the synthesis of the API. 21 C.F.R. § 207.1. Because API is intended to diagnose, cure, mitigate, treat, or prevent disease, or to affect the structure or function of the body according to this regulation, it meets the definition of a drug under the Federal Food, Drug, and Cosmetic Act (FD&C Act). See 21 U.S.C. § 321(p). Generally, API undergoes further manufacturing into a drug product, or finished dosage form, that contains the API and excipients (see, e.g., 21 C.F.R. § 210.3(b)(4) for a definition of drug product). Recent estimates from FDA indicate that approximately 80 percent of APIs used in the U.S. drug supply are manufactured in more than 150 countries. United States Government Accountability Office, Drug Safety: FDA Has Improved Its Foreign Drug Inspection Program, but Needs to Assess the Effectiveness and Staffing of Its Foreign Offices, at 1 (Dec. 2016).

Like all FDA-regulated products, API is subject to examination when it is imported or offered for import into the United States and must meet applicable statutory and regulatory requirements. FDA has the authority, under the FD&C Act, to refuse admission to any drug that “appears” to be misbranded or in violation of the requirements for new drugs, such as the need for an approved marketing application. 21 U.S.C § 381(a)(3). In general, the FD&C Act requires that any drug must have labeling that provides adequate directions for use or be subject to a regulatory exemption from this requirement. Id. § 352(f). API, because it is not yet a finished drug product, is unavoidably misbranded within the meaning of the FD&C Act as its labeling cannot bear such adequate directions for use. Therefore, any API imported into the United States must be subject to a regulatory exemption from the labeling requirements, such as existence of an active IND, and comply with all regulatory exemption requirements.

To see this in operation, one can examine the impact of regulatory exemption requirements at certain points in the drug development cycle. Early in the drug development cycle, manufacturers may utilize a single lot of API to conduct preclinical testing, manufacture drug product for analytical and stability testing and for use in initial clinical trials. Certain preclinical testing, as well as the manufacture and testing of drug product must be completed prior to filing an investigational new drug application (IND) to initiate human testing of a drug. See 21 C.F.R. § 312.23(a)(7). Initial U.S. clinical trials, on the other hand, can only occur after an IND is opened and in effect. Before the IND is opened and in effect, the importing pharmaceutical company can bring the API into the country for laboratory research so long as it complies with an exemption for API not intended for clinical use. The importer must provide information on this intended use to FDA at the time of import.

A separate import shipment that complies with a different exemption must be made in order to lawfully manufacture clinical trial material from the API. Under this exemption, the API must be labeled with the statement “Caution: For manufacturing, processing, or repacking in the preparation of a new drug limited by Federal law to investigational use.” In addition, the API must be used only in the manufacture of such new drug limited to investigational use as provided under the IND regulations. 21 C.F.R. § 201.122(b). The importer must provide information on this intended use to FDA at the time of import and, if the clinical trial is to be conducted under an IND, the IND number must be provided.

The practical effect is that pharmaceutical firms who wish to import API from outside the U.S. but manufacture drug product in the U.S. must undertake at least two separate imports prior to initiation of clinical trials. Even then, however, there are more hurdles. Because imported API for clinical drug product can enter the U.S. no earlier than the day the IND becomes effective (no sooner than 30 days after submission of the IND), drug product for use in clinical trials can not be available for use on day 30, when the clinical trial would otherwise be able to begin enrolling subjects. Instead, the clinical trial cannot begin until that API is manufactured into drug product and subjected to sufficient testing for release. Thus, the use of imported API to manufacture clinical trial material in the United States will result in a delay to beginning the clinical trial—a delay imposed by FDA’s overly rigid interpretation of its regulations. On the other hand, the manufacturer could produce clinical trial material outside the U.S. in time to import it into the U.S. and ship it to investigators on day 30, without delaying the start of clinical trials.

Once all necessary clinical and nonclinical studies have been completed to support an NDA, the manufacturer will want to begin producing finished drug product—the final dosage form in finished packaging “suitable for distribution to pharmacies, hospitals, or other sellers or dispensers of the drug product to patients or consumers” (21 C.F.R. § 207.1)—in anticipation of marketing the product upon FDA approval of the NDA. Because the finished drug product is not for investigational use, the API used in its manufacture cannot be imported under the previously described exemption. A separate exemption covers API intended for use in the manufacture of a finished drug product that is subject to a pending NDA. See 21 C.F.R. § 201.122(c). FDA regulations state that API can be subject to this exemption if an NDA has been “submitted but not yet approved, disapproved, granted, or denied, the bulk drug is not exported, and the finished drug product is not further distributed after it is manufactured until after the new drug application . . . is approved.” Id. Alternatively, manufacturers could produce commercial scale batches of finished drug product outside the U.S. and import them into the U.S. once the NDA is approved or utilize FDA’s Pre-Launch Activities Importation Request to stage finished product in advance of approval.

FDA has significant concerns about API imports, as is reflected in its Import Alert 66-66, requiring detention without physical examination for APIs that appear to be misbranded because they do not meet one of the exemptions provided in the regulations. FDA, Import Alert 66-66 (Dec. 1, 2017). Import Alerts are issued when FDA identifies a potentially recurring problem with imported articles. A drug placed on import alert shifts the burden to the importer to prove that its drug does not violate the FD&C Act. FDA issued the Import Alert for APIs because of concerns that importers obtained entry of their APIs by supplying legitimate NDA or IND numbers when the number did not cover the source of the API or when the importer had no right of reference to the NDA or IND number.

In essence, FDA’s current interpretation of its regulations may delay the importation of API at critical times during the development cycle and thus result in an overall delay to drug development. It may also present substantially increased costs involved with manufacturing the same finished drug product twice, but for different uses. Manufacturing drug product outside the U.S. may be a viable strategy for eliminating certain delays imposed by regulatory requirements. Therefore, the unintended consequence of FDA regulations covering the importation of APIs may be to drive the manufacturing of drug product outside the United States.

FDA should interpret and enforce the law and regulations to allow for the intended use of imported API to “evolve” through the drug development cycle.

By Kurt R. Karst —

February 28, 2018 is Rare Disease Day. In honor of that day, we thought it would be the perfect time to provide our annual rundown of the past calendar year in orphan drug designations and approvals.  And what a year 2017 was for orphan drugs!  As we’ve previously said, hardly a day goes by that we don’t see a press release or announcement that a company has requested or received from FDA’s Office of Orphan Products Development (“OOPD”) designation of its drug or biological product as an “orphan drug.”  And there’s a good reason for that: FDA received orphan drug designation requests at a near record rate of 1.4 per day (more than 2 per work day) in 2017, and  granted designation requests at a record rate of 1.3 per day (more than 2 per work day) in 2017!

In 2017, FDA’s orphan drug program continued to break new ground. Orphan drug designations and approvals (which include not only approvals of NDAs for new molecular entities and BLAs for original biological products, but also applications approved for new orphan uses of previously approved drugs and biologics) skyrocked compared to previous years.  FDA granted 77 orphan drug approvals, and granted 476 orphan drug designation requests.  Those numbers obliterate the previous records of 49 orphan drug approvals (2014) and 355 orphan drug designation requests (2015).  The increase in orphan drug designations may be attributed to FDA’s Orphan Drug Designation Modernization Plan, which targeted the elimination of  the backlog of pending designation requests.  FDA’s OOPD also received a near record 526 requests for orphan drug designation in 2017.  That’s a slight dip over the 2016 record of 582, but still not too shabby! Since 1983, FDA has granted more than 650 orphan drug approvals, has granted nearly 4,500 orphan drug designations, and has received more than 6,300 orphan drug designation requests.

Below are three tables – one for each metric we track – showing the year-by-year numbers since 1983. The numbers are largely based on information from FDA’s Orphan Drug Designations and Approvals Database.

New efforts FDA announced this week could mean that new records will be set in 2018. Those new efforts include a pilot program for more efficient orphan designation requests.  The components of the pilot program include a fillable form intended to make the designation process easier for sponsors and more efficient for FDA to review, an on-line tutorial to guide sponsors through the submission process, and a new inter-center consult process to streamline and standardize the Agency’s communications process.

By Karla L. Palmer —

Today the PEW Charitable Trusts released a detailed report on the general state of pharmacy compounding of human drug products in the United States. The Report focuses on compounding pharmacies, but addresses both sterile and non-sterile compounding regulation by states.  The Report also touches on states’ regulation of Outsourcing Facilities, which Congress created when it enacted Title I of the Drug Quality and Security Act (The Compounding Quality Act).  The detailed Report provides a helpful roadmap of where states stand concerning their widening role in the regulation of human drug compounders in a post-NECC world.  Given the morass of inconsistent state laws covering both traditional pharmacy compounding and Outsourcing Facilities (for both sterile and non-sterile human drugs) the roadmap is a welcome tool for industry, and those curious about what states are doing to address these important issues. The press release accompanying the Report notes the following points:

• Thirty-two state pharmacy boards require pharmacies that engage in sterile human drug compounding to be in “full compliance” with the quality standards for sterile compounding set forth in USP<797>.
• An additional ten states have requirements that are “’equivalent to or stricter than’” USP<797>, while an additional four states have pending policy changes that, if they are passed, would require USP<797> compliance or additional, more stringent requirements. The Report notes that, in 2015, 26 states required compliance with USP <797> or an equivalent quality standard.
• Thirty-nine states and the District of Columbia prohibit pharmacies from human drug compounding of sterile office stock formulations. This contrasts with responses to a PEW survey back in 2015 from two-thirds of the responding state boards that permitted office use compounding “to at least some extent.”

The Report does note, however, that only 22 states and D.C. report that they routinely inspect their in-state sterile compounders at least annually, which is down from 26 states in 2015.  The Report states that “interviews with state officials underscore the need for more financial resources and inspection capacity.”

The Report contains recommendations for states on best practices for compounders to ensure a safe supply of compounded formulations. Those recommendations include a focus on quality assurance and emphasis on adherence to at least USP guidelines, alignment with federal law regarding office stock compounding (which law remains controversial among the pharmacy compounding community and some members of Congress about the appropriate parameters of office use compounding pursuant to FDCA Section 503A).

Although the content of the Report itself addresses in detail each of these and other points, even more interesting components of the Report appear in its Appendices. As anyone who works in the compounding world knows, understanding positions of various states on issues such as sterile and non-sterile compounding, inspections, state licensing fees, permissibility of office stock compounding, and Outsourcing Facility licensing requirements  — to name a few — can induce both hand-wringing and hair pulling experiences for those that grapple with compliance with the myriad state requirements.

The Appendices set forth the questionnaire that PEW provided to states, and include several tables and charts specifically describing where states stand on these and other important issues (below). With respect to the Appendices, PEW sought states’ verification of data collected.  Forty-three states and D.C. responded, but seven did not respond.

• Quality Standards for Section 503A Pharmacies that Compound Sterile Drugs for Humans (App. C, Table C1): Addressing which states require compliance with USP <797> or an equivalent or stricter quality standard; whether a regulatory change will be needed to require compliance with revised <797> (not yet released); whether the state requires compliance with other quality standards; whether there is pending state legislation, and its effect if passed.

• State Policies on Section 503A Pharmacies Drugs for Humans in the Absence of Patient-Specific Prescriptions (App. C, Table C2): Addressing which states permit office use compounding and any restrictions on the same for sterile and non-sterile products; whether state legislation is pending.
• State Licensure and Registration of Outsourcing Facilities (App. C, Table C3): Addressing whether states license or register Outsourcing Facilities; the type of license required; the fees required for Outsourcing Facility state licenses; whether there is pending legislation affecting Outsourcing Facilities. Note that Table clarifies the confusing morass of state registration/licensing requirements for Outsourcing Facilities, which are both complex and at times inconsistent among states (and with the federal Compounding Quality Act).
• Inspections of In-State 503A Pharmacies that Perform Sterile Compounding for Humans (App. C, Table 4): Addressing the frequency of routine inspections; specific circumstances that trigger inspections.
• State Oversight of Out-of-State 503A Pharmacies that Perform Sterile Compounding for Humans (App. C, Table 5): Addressing applicable quality standards; whether inspections are required; frequency of inspections; who performs the inspections; whether there is pending legislation or regulations and what would happen if they passed.

By Kurt R. Karst —

Obtaining FDA decisions detailing when one orphan drug has been determined by the Agency to be “clinically superior” to another orphan drug – either to obtain approval of a product notwithstanding another company’s orphan drug exclusivity for the same drug for the same indication, and/or to obtain a separate period of orphan drug exclusivity – has historically been a bit of a task. First, us members of the public had to comb through FDA’s Orphan Drug Designations and Approvals Database to identify instances in which clinical superiority based on greater efficacy, greater safety, or a major contribution to patient care might have been an issue.  Then we had to submit – and wait for FDA to respond to – a Freedom of Information Act request to obtain FDA’s letter decision and orphan drug designation package.  The fruits of our labor are apparent in various FDA Law Blog posts that compile and categorize FDA’s various orphan drug clinical superiority decisions – see here, here, and here.  But those days of research and waiting might now be behind us!

As we previously noted in a summary memorandum, the 2017 FDA Reauthorization Act (“FDARA”) amended the FDC Act – and the Orphan Drug Act in particular – to add Section 527(e), which states:

(e) DEMONSTRATION OF CLINICAL SUPERIORITY STANDARD.— To assist sponsors in demonstrating clinical superiority as described in subsection (c), the Secretary—

(1) upon the designation of any drug under section 526, shall notify the sponsor of such drug in writing of the basis for the designation, including, as applicable, any plausible hypothesis offered by the sponsor and relied upon by the Secretary that the drug is clinically superior to a previously approved drug; and

(2) upon granting exclusive approval or licensure under subsection (a) on the basis of a demonstration of clinical superiority as described in subsection (c), shall publish a summary of the clinical superiority findings.

It’s FDC Act § 527(e)(2) that really got us excited! (Yes, this blogger gets excited about that kind of stuff.)  We had to sift through FDA’s website to find out how the Agency implemented the new statutory requirement, but we finally found a website titled “Clinical Superiority Findings.”  As of now, FDA’s website identifies only a single clinical superiority determination.  That determination concerns MYLOTARG (gemtuzumab ozogamicin), and it’s a greater safety clinical superiority determination:

The new approval for Mylotarg is for a lower dose and different schedule than the previous approval. In a cross-study analysis of clinical outcomes for patients with relapsed or refractory acute myeloid leukemia treated with single-agent Mylotarg, in comparison to the regimens using the previously approved regimen, patients treated with the new dosing regimen had less early mortality, less hepatotoxicity, less veno-occlusive disease, more rapid platelet recovery and less hemorrhage.  Therefore, the sponsor has demonstrated that the newly approved dosing regimen is safer than the previously approved dosing regimen, and thus clinically superior for the purposes of orphan-drug exclusivity.  21 CFR 316.3(b)(3), 316.34(c).

New clinical superiority determinations will be added as they are made by FDA. As for previous determinations, we assume that FDA will not add those to the website.  So, you’ll have to refer back to our previous postings for descriptions of those precedents.

By McKenzie E. Cato* —

On February 21, FDA published a final rule amending its regulations on the acceptance of data from clinical investigations for medical devices (83 Fed. Reg. 7366). These amendments are designed to ensure the quality and integrity of clinical data and the protection of human subjects.  FDA simultaneously released a draft guidance listing frequently asked questions about the new final rule. The final rule is effective for all studies in which enrollment begins on or after February 21, 2019.

Overall, the new rule seeks to provide a consistent approach to acceptance of clinical data, regardless of whether the data were collected inside or outside the United States (OUS). To this end, however, the amendments mostly affect the requirements for clinical investigations conducted OUS.  As noted in FDA’s draft guidance, these amendments appear to be, in part, the result of sponsors’ increased reliance on data from clinical investigations conducted OUS.

For Investigational Device Exemption (IDE) applications or premarket submissions supported by clinical data from investigations conducted OUS, the final rule adds a new provision to the IDE regulations (21 C.F.R. § 812.28) to ensure that the investigations comply with good clinical practices (GCP). This new provision states that FDA will accept data from a clinical investigation conducted OUS if the investigation is “well-designed and well-conducted” and the following information is provided:

1. A statement that the investigation was conducted in accordance with GCP;
2. The names of the investigators and the names and addresses of the research facilities and sites where records relating to the investigation are maintained;
3. The investigator’s qualifications;
4. A description of the research facility;
5. A detailed summary of the protocol and results;
6. Either a statement that the device used in the investigation is identical to the device that is the subject of the submission, or a detailed description of the device used in the investigation and a comparison to the device that is the subject of the submission;
7. If the investigation is designed to support the safety and effectiveness of a device, a discussion demonstrating that the data constitute valid scientific evidence within the meaning of 21 C.F.R. § 860.7;
8. The name and address of the Independent Ethics Committee (IEC) that reviewed the investigation;
9. A summary of the IEC’s decision to approve or modify and approve the investigation;
10. A description of how informed consent was obtained;
11. A description of any incentives provided to the subjects to participate;
12. A description of how the sponsor monitored the investigation; and
13. A description of how investigators were trained to comply with GCP and to conduct the investigation in accordance with the protocol.

For the purposes of this provision, GCP is defined as a “standard for the design, conduct, performance, monitoring, auditing, recording, analysis, and reporting of clinical investigations in a way that provides assurance that the data and results are credible and accurate and that the rights, safety, and well-being of subjects are protected.” 83 Fed. Reg. 7366, 7386 (new § 812.28(a)(1)).

As noted in items 8 and 9 above, GCP includes review and approval by an IEC. An IEC is defined as an “independent review panel that is responsible for ensuring the protection of the rights, safety, and well-being of subjects involved in a clinical investigation and is adequately constituted to ensure that protection.”  83 Fed. Reg. 7366, 7385 (new § 812.3(t)).  The regulation notes that an Institutional Review Board (IRB) is one type of IEC.

For significant risk devices, all of the items in the list above are required. For devices other than significant risk devices, the sponsor only needs to provide items 1, 2, 5, 6, 8‑10, and 12 from the above list in the submission.

If a sponsor is not able to comply with all of the GCP requirements listed above (e.g., because a requirement conflicts with a requirement in the country where the study is conducted), the sponsor may request a waiver from FDA.

The final rule also made conforming revisions to the premarket approval (PMA) application regulations in Part 814. The PMA regulations will now provide that if any clinical investigation in support of a PMA application was not conducted in compliance with Part 50, Part 56, or GCP, FDA may deny or withdraw approval of the PMA.

Now all IDE applications and medical device premarket submissions with OUS data must confirm compliance with GCP, as defined in the new provision described above. Submissions with data collected inside the United States must include a statement that each investigation was conducted in compliance with the applicable requirements in the protection of human subjects regulations (21 C.F.R. Part 50), IRB regulations (21 C.F.R. Part 56), and the IDE regulations (21 C.F.R. Part 812).  If any of these regulations do not apply (e.g., for IDE-exempt, non-significant risk studies), or the investigation was not conducted in compliance with these regulations, an explanation must be included in the submission.

In practice, it might be a good idea to for anyone submitting a 510(k) to add a new section that would include the statement of compliance, along with whatever additional information is required under the new rule. One can imagine that FDA will eventually add this statement as another item on the 510(k) “Refuse to Accept” checklist, so a separate section will provide greater clarity that the information is there.

These new provisions and FDA’s draft guidance will hopefully provide greater clarity to sponsors about how to demonstrate that clinical data collected from clinical investigations conducted OUS are adequate under FDA’s standards. However, now that the requirements are explicitly listed in FDA’s regulations, FDA will have less flexibility or discretion to accept OUS clinical data if compliance is not shown.  The new regulations will also increase the burden on sponsors, who must now affirmatively produce and/or describe in their IDE applications or premarket medical device submissions the items listed above.

* Law Clerk

By Allyson B. Mullen —

On February 15, FDA’s Office of Combination Products (OCP) announced the draft guidance, “How to Prepare a Pre-Request for Designation (Pre-RFD).” Don’t let the name fool you though.  Unlike the similarly named Pre-Submission, a Pre-RFD does not need to precede a formal RFD.  A Pre-RFD is, in essence, an informal RFD through which a sponsor may receive a preliminary, non-binding jurisdictional assessment.  The practice of requesting informal, non-binding feedback from OCP prior to or in lieu of a formal RFD is not new and has been occurring for many years.  The guidance provides additional details regarding the process for doing so.

The draft guidance indicates that a Pre-RFD should include a product description, proposed indications for use, and a description of how the product achieves its intended use. A Pre-RFD can also, optionally, include other information, such as a description of the product’s manufacturing processes, data/studies supporting the primary mode of action, information regarding jurisdictional assignment (e.g., classification, primary mode of action, sponsor’s recommendation), and description of similar or related products.  There is no page limit for a Pre-RFD, a significant advantage over an RFD, which is capped at 15 pages.  This feature of the Pre-RFD process will be particularly useful for sponsors with substantial data supporting their primary mode of action.

Once prepared, the draft guidance indicates that a Pre-RFD can be submitted to OCP by email or in hard copy through mail. As with most submissions these days, the draft guidance includes a short screening checklist that OCP will use to perform an administrative review of a Pre-RFD within five business days of receipt.  Once accepted for substantive review, OCP aims to review and provide written feedback regarding a Pre-RFD in 60 days.

The draft guidance appears to envision an interactive review process, stating that sponsors may contact OCP with questions at any time during the review process. OCP anticipates that it can provide jurisdictional feedback based on the information provided in a Pre-RFD.  The draft guidance, however, indicates that a sponsor may request a meeting with OCP to provide a better understanding of how the product works.  A sponsor can request a meeting at any time and should include in its meeting request an explanation of the issues to be addressed and any supportive information.  OCP estimates that it will need approximately four weeks to prepare for such a meeting.  The guidance appears to contemplate that such a meeting would take place prior to OCP’s feedback on a Pre-RFD. It seems to us, though, that such a meeting could also be helpful after receiving  OCP’s feedback.

The draft guidance indicates that (similar to an RFD) if a product is changed after OCP’s review, the Pre-RFD feedback may no longer be applicable. Changes can include both physical changes to the product as labeling changes such as the indications for use.  If changes are made, the guidance recommends contacting OCP suggesting that a Pre-RFD could be an iterative process.  For example, if there are particular elements of a product that put it in one category or another, those could be changed and a new Pre-RFD submitted for the modified product in an effort to receive a different (potentially more favorable) jurisdictional assignment.

In sum, we think this draft guidance is informative and useful for sponsors that are interested in a more flexible, non-binding process for getting jurisdictional feedback from OCP, as compared to the traditional RFD process.

 

 

By John A. Gilbert & Larry K. Houck —

Overprescribing and inappropriate prescribing of controlled substances are significant causes of the nationwide opioid abuse epidemic. We have long believed that to effectively address the opioid epidemic, the Drug Enforcement Administration (“DEA”) must focus on physicians and other practitioners who fail to comply with legitimate prescribing and dispensing practices.  Two recent actions by the DOJ and DEA acknowledge that data collected by DEA since 1971 can be an effective enforcement tool and in certain cases can assist manufacturers and distributors to identify potential outliers.

We reported here that in November, Attorney General Jeff Sessions announced several initiatives addressing opioid abuse to include a new Louisville, Kentucky, Field Division and designated Opioid Coordinators in every district. More recently, on January 30, 2018, the Attorney General announced that DEA is attacking the opioid epidemic by launching a “surge” over the next six weeks by special agents, diversion investigators, and intelligence specialists targeting pharmacies and prescribers that dispense “unusual or disproportionate amounts of drugs.”  Attorney General Sessions Delivers Remarks on Efforts to Reduce Violent Crime and Fight the Opioid Crisis (Jan. 30, 2018) (here). Sessions noted that DEA annually collects 80 million controlled substance transaction reports from manufacturers and distributors that contain distribution quantities and inventory information.  The Attorney General said that “DEA will aggregate these numbers to find patterns, trends, statistical outliers-and put them into targeting packages.”  Sessions concluded that the surge will lead to “more arrests, secure more convictions-and ultimately help us reduce the number of prescription drugs available for Americans to get addicted to or overdose from these dangerous drugs.”

The Attorney General did not identify the transaction reports by name, but it is clear that he was referring to the Automation of Reports and Consolidated Orders System (“ARCOS”) reports that manufacturers and distributors submit to DEA.  Since regulations were first promulgated in 1971, DEA has required manufacturers and distributors of bulk and dosage form controlled substances to report inventories, acquisitions and dispositions of schedule I and II substances, and narcotic substances in schedule III as well as other selected substances such as Gamma-Hydroxybutyric Acid (“GHB”).  21 C.F.R. § 1304.33(c).  Manufacturers must also report synthesizing activities involving those substances in addition to certain schedule III and IV psychotropic controlled substances.  Manufacturers and distributors submit transaction reports to DEA at least quarterly.  21 C.F.R. § 1304.33(b).

Manufacturers and distributors must file ARCOS reports monthly, or in some cases quarterly, for every covered transaction to include the date, customer and amount of controlled substance distributed. Thus, DEA is able to track the specific quantity of drugs sold to wholesale distributors and the amount then distributed to each pharmacy.  The DEA ARCOS Unit has routinely aggregated the data from all reports and provides information to DEA agents and investigators, and other federal and state law enforcement and regulatory agencies, to identify diversion from licit to illegal channels.

Attorney General Sessions’ announcement that DEA would use this data to increase enforcement action against prescribers and other practitioners is not surprising except we wonder why DEA has not previously taken such action. DEA has certainly taken aggressive action against manufacturers and distributors for failing to report suspicious orders of controlled substances at the same time that DEA already possessed a database on the purchasing patterns of practitioners.  Unlike manufacturers and distributors, DEA has visibility to all ARCOS-reportable transactions, including purchases by pharmacies and practitioners; visibility that other stakeholders lack.  Manufacturers and distributors can only see with certainty what they themselves sell to pharmacies.

The industry has made repeated requests over the years for DEA to share information that could be helpful in identifying potential suspicious orders. Finally, last Wednesday, DEA announced that is adding to its ARCOS Online Reporting System the ability for manufacturers and distributors “to view the number of competitors who have sold a particular controlled substance to a prospective customer in the last six months.”  DEA Creates New Resource to Help Distributors Avoid Oversupplying Opioids (Feb. 14, 2018) (here).  DEA trumpeted that “this new tool will provide valuable information for distributors to consider as part of their assessment” of suspicious orders and may present a “red flag” that the customer may be diverting drugs.

While the new ARCOS tool is a useful first step, its usefulness is limited and could be improved. For example, it would also be useful if DEA would routinely publish information about trends in purchases of controlled substances by city or region, especially identifying areas where DEA believes there is a concern about sales relative to geography and population.  We understand there are limits to what DEA can and should provide given the highly confidential nature of individual sales and purchase data.  However, more coordination with industry on diversion trends would be very useful to manufactures and distributors, in particular.  The regulated industry should consider that DEA may now expect that industry will use this information in evaluating customers and customer orders, e.g., suspicious orders.

It will be interesting to see the results of the DOJ/DEA enforcement effort. We suspect that DEA will also utilize state Prescription Drug Monitoring Program (“PDMP”) data, to further evaluate whether certain prescribing and dispensing practices are for legitimate medical purposes.  State PDMPs track prescribing by practitioners and dispensing by pharmacies, hospitals and physicians.  The ARCOS and PDMP data used together allow DEA investigators to identify prescribers and pharmacies that are dispensing, as the Attorney General characterizes, “unusual or disproportionate amounts of drugs.”

While DEA has used ARCOS data to support enforcement efforts against manufacturers and distributors, we appreciate the Attorney General’s announcement that such data will be used in a comprehensive enforcement effort to target the primary source of the opioid crisis, overprescribing, and to that we say, it is about time.