May 2011 Archives

May 31, 2011

Solicitor General Urges High Court to Take Up Patent Use Code Case

by Andrew S. Wasson

444221_93338615.jpgThe Solicitor General filed a brief as amicus curiae urging the Supreme Court should grant Caraco's petition for writ of certiorari to review Novo Nordisk A/S v. Caraco Pharm. Labs., Ltd. (Fed. Cir. 2010). The Solicitor General's brief came in response to the Supreme Court's request for the U.S. government's views on the matter. The Solicitor General's brief asserted that the Federal Circuit erred in its April 2010 decision and that the Supreme Court's review was warranted.

We have blogged on this case a number of times, from a number of angles. In broad strokes, Caraco submitted a section viii statement subject matter related to the combined administration of repaglinide and metformin in an ANDA to market a generic version of Novo Nordisk's Prandin® product. Indeed, Novo Nordisk had listed a patent in the Orange Book reciting such a combination. Originally, Novo Nordisk had submitted a use code narrative to FDA for this method of use patent which described the combined administration of these two active agents. FDA approved Caraco's section viii. When Novo Nordisk submitted a broader use code narrative, however, FDA determined that Caraco could not properly submit a Section viii statement, because the use code narrative now overlapped with Caraco's proposed uses. Caraco filed a counterclaim under 21 U.S.C. § 355(j)(5)(C)(ii), requesting that the court order Novo Nordisk to revert the use code narrative to its original scope. While the District Court granted this request, the Federal Circuit reversed.

Critically, FDA has taken the position that its role vis-à-vis patents is merely "ministerial." In other words, FDA will not pass on whether the use code narrative properly describes the scope of an Orange Book patent. Nor will FDA pass on whether a generic labeling does not propose to market the drug for a protected patent use. Rather, FDA will merely compare the use code narrative submitted by the NDA holder on its face to the generic labeling. FDA will allow the use of a Section viii statement if no overlap exists between the narrative and generic's proposed labeling. While we have argued elsewhere that FDA should revisit its ministerial role for the sake of administrative efficiency, it is interesting to note that FDA's ministerial role plays a major part in the Solicitor General's argument.

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May 27, 2011

Inequitable Conduct Under Fire in Federal Circuit

by Andrew M. Nason

federalcircuit.jpgOn May 25, an en banc Federal Circuit issued its long-anticipated opinion in Therasense, Inc. v. Becton, Dickinson & Co., raising the standard for rendering a patent unenforceable due to inequitable conduct. Under the heightened standard, an accused infringer must prove that the applicant misrepresented or omitted material information in a patent application, and that the applicant intended by the misrepresentation or omission to deceive the U.S. Patent and Trademark Office ("USPTO"). The court rejected the previously-employed, sliding-scale approach under which a strong showing of materiality would compensate for a lesser demonstration of intent, or a strong showing of intent would offset a lesser demonstration of materiality. Under the new standard, the accused infringer must prove both materiality and intent to deceive by clear and convincing evidence. Additionally, before imposing the severe sanction of complete patent unenforceability, the court finding inequitable conduct must "weigh the equities" to determine whether the conduct at issue warrants the sanction of unenforceability.

Under Therasense, an accused infringer must now demonstrate materiality by clear and convincing evidence that "but-for" the omission or misrepresentation, the USPTO would not have or should not have allowed the claim. To prove the element of intent to deceive the USPTO, an accused infringer must now present evidence that the applicant made a "deliberate decision" to deceive. A showing that an applicant knew of a reference, should have known of its materiality, and decided not to submit it to the USPTO will no longer suffice to show specific intent. Neither will a demonstration that an applicant was negligent or even grossly negligent in its failure to disclose material prior art. Rather, the intent element now requires "clear and convincing evidence that the applicant knew of the reference, knew [of its materiality], and [deliberately decided] to withhold it." If an accused infringer succeeds in proving both materiality and intent to deceive, the court must then balance the equities to determine whether to hold the patent unenforceable due to inequitable conduct. Under the new standard, only where "the patentee's misconduct resulted in the unfair benefit of receiving an unwarranted claim" should the court impose the severe sanction of unenforceability. A court should not hold a patent completely unenforceable if the misconduct at issue was not material to the issuance of the patent.

By tightening the standards for inequitable conduct, the court hopes to curb some of the "unintended consequences" of lowering the standards in the first place. According to the court, patent litigants have overused the defense of inequitable conduct to the detriment of the public. Namely, the over-pleading of inequitable conduct has influenced patent prosecutors to bury USPTO examiners with a "tidal wave of disclosure" of prior art, making it difficult for examiners to identify the most relevant prior art. Faced with the threat of inequitable conduct charges, practitioners often submit references even when they do not believe the references to be relevant to patentability. This in turn has led to increased examination costs, strained USPTO resources, increased USPTO backlog, and reduced patent quality. Furthermore, the ubiquity of inequitable conduct pleadings in patent cases has contributed to increased litigation costs and complexity, and reduced likelihood of settlement.

In practice, the tightened standards could significantly influence patent applicants and litigants strategies and decisions. Practitioners will likely reassess their Information Disclosure Statement policies, and litigants may assess differently the value of claiming inequitable conduct, depending on the availability of evidence of a "knowing and deliberate" intent to deceive. The decision will likely influence all aspects of patent law, from prosecution to litigation, but it remains to be seen whether the heightened standard will deal adequately with the perceived problems of USPTO examiners receiving "too much prior art of marginal relevance" and "patent litigators . . . charg[ing] inequitable conduct in nearly every case."

May 26, 2011

Ear Candle Suit Appealed

by Charles J. Raubicheck

ear candle image.bmpOn May 17, the D.C. Circuit Court of Appeals entered an appeal filed May 12 by Holistic Candlers and Consumer Association and several manufacturers ("Holistic Candlers"), seeking a judicial ruling that "ear candles" are not unapproved medical devices as claimed by FDA. Holistic Candlers' original complaint, filed April 12, 2010, had recently been thrown out by a Federal Court decision on March 16, 2011.

Ear candles are hollow candle cones made of beeswax or paraffin that are lit and placed in the ear. According to the plaintiffs, these products have been used for many years as a "natural holistic modality for relaxation, comfort and general well-being." Proponents believe that the flame of the candle "creates a draw or vaccuum which pulls the wax, fungus, candida, yeast, and other particles of debris out of the ear and up into the bottom of the candle. The vacuum is caused by the warm air from the flame and the colder existing air moving through the hollow chamber of the candle." Candlers, as they are called, further believe that candling can be done on individuals of any age, including babies, who may suffer from chronic ear infections and may otherwise require ear tubal placement. The particular site hyperlinked above, however, also now notes, "CAUTION: Ear candles are not a home remedy and should not take the place of medical treatment. They make no medical claims. They are not a medical device or take the place of any medical device."

According to FDA, however, in warning letters sent to several manufacturers, the candles are medical devices because they are instruments that have been marketed to mitigate and treat various disease conditions (such as sore throats, ear aches, ear and sinus infections, tinnitus, and sleep disorders). The devices are being marketed without required pre-market clearance, FDA said. Eric Mann, M.D., Ph.D., clinical deputy director of FDA's Division of Ophthalmic, Neurological, and Ear, Nose, and Throat Devices said, "FDA believes that there is no valid scientific evidence for any medical benefit from their use." Mann warns consumers that there are burns and other risks associated with ear candling, including starting a fire, injury to the ear from dripping wax, ears plugged by candle wax, bleeding, puncture of the eardrum, and delay in seeking medical treatment needed for the underlying medical conditions for which the ear candles are being employed.

The D.C. District Court judge ruled in favor of FDA by dismissing the case, notably on the ground that the case was not ripe for the court to decide. FDA has not enforced its warning letters, and as a general rule, a court cannot hear a case in advance of enforcement by a federal agency. Significantly, though, the decision did not address the well-known Washington Legal Foundation case, which held that a warning letter can be a sufficient threat to allow a lawsuit, since FDA has already stated its legal position that is unlikely to change.

A Clerk's Order was entered also on May 17 that directs, among other things, the parties to raise their issues to be considered on June 16 and dispositive motions, if any, by July 1.

May 25, 2011

Food Safety Public Meeting Announced

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foodimage.jpgOn May 26, FDA will publish a Federal Register Notice announcing a public meeting entitled "FDA Food Safety Modernization Act: Focus on Inspections and Compliance" to be held on June 6, 2011. As the title suggests, FDA stated it is holding the meeting to seek public input from stakeholders on FDA's implementation of inspections and compliance under the recently-enacted FDA Food Safety Modernization Act ("FSMA"). In particular, FDA seeks guidance regarding FDA's FSMA implementation strategies regarding its enforcement authorities, frequency and targeting of facility inspections, manner of inspections in a preventive controls environment, and improving the reportable food registry.

The FSMA (Publie Law 111-355) amended the Federal Food, Drug, and Cosmetic Act ("FD&C Act") with the goal to establish a modern, prevention-based food safety system. The FSMA builds upon inspection as a tool for determining industry compliance with the law and overall public accountability for producing safe food products. In the Notice, FDA said it plans to utilize the new enforcement authorities in the FSMA, inspect in a risk-based manner, and consider appropriate means to efficiently use existing resources. The message here is that FDA does not plan to obtain additional resources to implement the FSMA. Below are several of the key provisions of the FSMA under consideration and that FDA hopes to discuss at the meeting.

Section 201 of the FSMA mandates a certain increased inspection frequency (implemented immediately), based on risk, for food facilities that are required to register under Section 415 of the FD&C Act. All high-risk facilities must be inspected within 5 years of FSMA's enactment and no less than 3 years thereafter. Non-high-risk domestic facilities must be inspected within 7 years of the FSMA's enactment and no less than 5 years thereafter. Within just 1 year of enactment of the FSMA, FDA must inspect at least 600 foreign facilities and double this number every year for the next five years.

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May 24, 2011

EMA Scrutiny Tightens Amidst Potential Conflict Issues

by Howard E. Rosenberg, Ph.D.

EMA Logo.jpgThe European Medicines Agency ("EMA") has now found itself under greater scrutiny and pressure from Members of the European Parliament ("MEPs") as a further consequence of the fiasco over the former EMA director Thomas Lönngren leaving and then almost immediately afterwards joining a pharma consultancy firm.

Lönngren left EMA in December last year and took a job at the firm just a few weeks later. The EMA initially said they had no objections to the former director's new position, however, the resulting furor caused the EMA to issue a statement saying that while they were satisfied that there was no misuse of confidential or privileged data gained when he was employed at the EMA, the late notification by Mr. Lönngren of the details of what he intended to do after he left was unfortunate. The EMA then imposed limits to his activities for the next two years and limited his contact with the EMA staff and committees.

The Corporate Europe Observatory and Health Action International (HIA) Europe in a letter to the MEPs agreed with concerns raised in a report regarding the EMA's handling of potential conflicts of interest of its experts and staff and urged the MEPs to call for the European Court of Auditors to perform an audit of the EMA. They also commented that although EMA had adopted a revised Policy on the handling of conflicts of interest of scientific committee members and EMEA experts, which will be implemented in the second quarter of 2011, the Management Board seemed to be exempt from being evaluated against these more stringent criteria.

The European Parliament has indeed now refused to sign off the FY 2009 accounts of the EMA and has ordered an investigation of the EMAs performance by the European Court of Auditors (ECA). The MEPs voted 21-3 last week to postpone signing off the EMA accounts under the Parliament's budget discharge procedure and issued a report detailing their "grave" concerns about the Agency. According to the report, there is "no guarantee" that the EMA's evaluation of human-use medicines is being performed by independent experts, while conflicting interests have arisen for some experts relating to their evaluation of Servier's controversial slimming drug Mediator (benfluorex).

In addition the MEPs were highly critical of the EMAs performance in other areas, pointing to "persistent errors" in its criteria and procedures for recruiting staff and experts. "Potential deficiencies" could not only lead to less qualified candidates being recruited rather than those who are more competent but also "have negative effects on the quality of the Agency's scientific assessment work."

May 23, 2011

USDA Says No to Potatoes in School Meals

by Andrew M. Nason

spuds.jpgEarlier this month, 40 lawmakers signed and sent a letter to U.S. Secretary of Agriculture Tom Vilsack, criticizing his department for its stance on white potatoes. As part of its effort to make school meals more healthful, the U.S. Department of Agriculture ("USDA") has proposed new nutrition standards, which, among other things, remove all white potatoes from federally-subsidized school breakfasts, and limit them considerably in lunches. The proposal intends to reduce the amount of starchy vegetables, such as french fries and tater tots, students eat. Critics of the proposal contend that while a balanced diet contributes to overall health and schools should encourage kids to eat well-balanced meals, the government should not single out potatoes as public enemy number one.

Noting that nutrition experts agree that potatoes and bananas share a very similar nutritional makeup, the group of Representatives questioned whether USDA feels it should also limit the availability of bananas in school meals. The USDA says it aims to expose children to an array of healthy foods, and while nothing makes the potato especially bad, children already consume enough of them. According to USDA spokeswoman Jean Daniel, "Experts have advised the department that parents already do a great job of serving potatoes to their kids at home, so they don't need to eat as many potatoes at school." The National Potato Council ("NPC"), however, argues that potatoes are a "gateway vegetable," and that kids eat more of the other types of vegetables when potatoes are on their plate.

NPC CEO John Keeling also criticized USDA for the data it used to formulate its new guidelines. USDA based its recommendations on food consumption data from 2002. Since that time, however, the preparation of potato products in schools has changed dramatically. School lunch preparers now bake most of the items that they once fried, and "very few schools . . . have fryers even left." Conceding that some preparations (e.g., baked potatoes) may have more nutritional value than others (e.g., french fries), Keeling argues "there are no bad fruits or vegetables." Indeed, the NPC notes that one serving of a baked potato contains more potassium than a banana, and more fiber than a serving of broccoli. USDA does not disagree that schools have significantly fewer fryers and that meals have become more healthful; they just disagree about the best way to make even more progress.

May 20, 2011

PETITION ASSAILS FTC HEALTH CLAIM SUBSTANTIATION CRITERIA

by Charles J. Raubicheck

The group American Health Alliance ("AHA") has petitioned the Federal Trade Commission ("FTC") to rescind criteria the agency uses to judge the substantiation of health claims made in advertisements for foods and dietary supplements.

Alliance Petition Dietary Supplements

A health claim is a statement that consumption of a particular nutrient in a food or a dietary supplement may prevent or reduce the risk of contracting a particular disease. The petition contends that the FTC is improperly usurping powers of the FDA by requiring two clinical trials (the strict standard for drug approval) to support these advertising claims. Also, the petition maintains, FTC is unlawfully using the lack of FDA approval of specific health claims as a proxy for finding the claims unsubstantiated. (FDA has hardly approved any health claims, usually asking for more data).

In fact, the FTC has employed the above criteria in obtaining consent orders in several advertising enforcement cases involving probiotic and cold/flu immunity claims.

AHA calls FTC's actions a prior governmental restraint that unconstitutionally chills commercial free speech in the food and supplement industries.

May 19, 2011

Direct-to-Consumer Genetic Tests Continue to Draw FDA Attention

by Andrew S. Wasson

Genetic Testing 2.jpgFDA continues to focus its attention on direct-to-consumer ("DTC") genetic testing as it sent three warning letters to genetic testing manufacturers recently. On May 11, 2011, FDA sent letters to Lumigenix, Inc., American International Biotechnology Services, and Precision Quality DNA regarding their genetic testing products. In each case, the letter stated that each product "appears to meet the definition of a device as that term is defined in section 201(h) of the Federal Food Drug and Cosmetic Act."

A medical device under Section 201(h), in relevant part, is defined as "an instrument, apparatus, implement, machine, contrivance, implant, in vitro reagent, or other similar or related article", which is "intended for use in the diagnosis of disease or other conditions, or in the cure, mitigation, treatment, or prevention of disease, in man or other animals." FDA has taken the view that some DTC genetic tests are medical devices, because they fall under this arm of the device definition. FDA does not consider all DTC genetic tests devices, however. Because the product's intended use must be keyed to the diagnosis or treatment of disease, a test for ancestry alone would not be regulated by FDA, for example.

This is not the first time that FDA has sent warning letters to DTC genetic test manufacturers. During June and July of 2010, FDA sent letters to fourteen manufacturers of DTC tests, including major players in the DTC field like deCODE Genetics and 23andme. In the latest volley of letters, FDA targeted tests intended to "help individuals discover their genetic predisposition for 79 disease conditions" (Lumigenix), to provide athletes with information about the increased risk of developing certain conditions, such as heart conditions (American International Biotechnology Services), and to help individuals understand their own DNA sequence, with a focus on genes like BRCA1 and BRCA2 (tumor suppressor genes).

As we previously reported, the debate on the regulation of DTC genetic testing has become increasingly divisive over the last year. On the one hand, FDA generally takes the position that regulation is needed to protect public health against misleading and/or inaccurate tests. Physician groups advocate that doctors should act in gate-keeping capacity. Some patients and commentators argue that FDA and doctors are taking too paternalistic of a role and are interfering with a patient's rights to access their own genetic information. The latest warning letters suggest that FDA is showing no intention of backing down and will continue to regulate some of tests as devices.

May 18, 2011

OTC Push Toward Self-Diagnosis

by Erin A. Lawrence

pills.jpgWhat would the world be like if we had the ability to determine our own illnesses without visiting a doctor? Well, a subsidiary of the Advanced Medical Technology Association, called AdvaMedDx, is looking to make genetic diagnostic tests available for use at home or in pharmacies and drugstores.

This technology would allow a consumer to self-diagnose and to choose over-the-counter ("OTC") drugs that better meet their needs. AdvaMedDX's ideas include kiosks at drug stores and pharmacies that are capable of analyzing a consumer's saliva. Not only will such an advancement save time for the consumer, it will also likely lead to more drugs being OTC rather then prescription, because it would overcome concerns related to potential errors due to self-selection of medication. As recognized by Janet Woodcock, M.D., FDA Director of the Center for Drug Evaluation and Research, "The average consumer is not capable to determine whether they have [a certain] problem and then selecting an appropriate medication."

Advanced diagnostics will also be beneficial for consumer segments with specific genetic attributes. For instance, this could be used to create better skin care products or antiperspirants.

May 17, 2011

Risk-Characterization Framework for FDA Decision-Making Recommended by NRC Report

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NRC Risk-Characterizaton Framework.jpgOn May 9, a new prepublication copy of a 145-page Report, "A Risk-Characterization Framework for Decision-Making at the Food and Drug Administration" was released by a Committee formed by the National Research Council. The Report was commissioned by FDA and Health and Human Services to provide a "common set of metrics that would enable each center to evaluate the public-health consequences using a common terminology and approach that would allow comparisons within and among disparate programs."

FDA provided the Committee with 16 scenarios for the type of decisions with public-health consequences that FDA regularly addresses. These scenarios were then grouped by FDA into three types of decisions: (1) mitigation-selection decisions (weighing various alternatives for addressing a public-health risk, e.g., balancing safety concerns for a new product with the consequences from removing it from the market), (2) targeting decisions (resource-allocation, e.g., how should inspection resources be allocated between seafood and fresh produce), and (3) strategic-investment (longer-term, internal decisions regarding resources allocation, e.g., allocating resources to improve data on the food-supply chain or medical device surveillance).

The Report's recommendations call for a three-step method: (1) Identify and define the decision context, e.g., options to consider or appropriate end points to evaluate and compare, (2) estimate or characterize the public-health consequence using a risk attribute methodology and summarize the values in a table to facilitate comparisons for the options, and (3) use the completed characterizations to compare decision options and to communicate their public-health consequences within the agency, to decision-makers, and to the public; these comparisons should then be used along with other relevant information to make informed decisions. The risk attribute methodology consists of two sets of attribute to consider: (1) exposed population, mortality, and morbidity, and (2) personal controllability, ability to detect adverse effects, and ability to mitigate (or reduce) adverse health effects. While it may be more "palatable" to measure the risk attributes in terms of categories such as "likely", "very unlikely", or "possible", the Committee recommended that FDA employ quantitative metrics that could be expressed as a probability distribution, e.g., 5th, 50th (median), or 95th percentiles to facilitate comparisons. The Report tests this new method with four case studies.

Just where does this leave FDA? The Committee further recommends that as next steps, key FDA personnel participate in workshops to better understand the new model, so it can be effectively employed. The Committee recognizes that the greatest challenge will be for FDA personnel to begin creating quantitative rankings of the risk attributes but believes that this is a critical step for FDA to engage in "making advances in FDA management processes and decisions." The Report's proposed methodology, however, represents only recommendations. Therefore, it will be up to FDA to accept or reject the methodology as it goes forward with new and emerging decisions with public-health consequences.

May 16, 2011

Former GlaxoSmithKline Attorney Acquitted

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Thumbnail image for DOJ3363886432_d6006337fb_z.jpgOn May 13, Judge Roger Titus from the District of Maryland entered a judgment of acquittal following an oral acquittal on May 10 for Lauren Stevens, a former GlaxoSmithKline ("GSK") attorney / executive accused of various criminal changes concerning an alleged "cover-up" of GSK's offlabel marketing of Wellbutrin SR® (buproprion). As we most recently reported here, this was the second time Stevens was charged with "essentially the same charges" dating back to November 2010. These most recent charges included obstructing an official proceeding, falsifying documents, and making false statements.

In a motion for a judgment of acquittal filed on May 8, attorneys for Stevens argued that the Government/DOJ had presented insufficient evidence that Stevens (1) had been "concealing" information from FDA or had corrupt intent or (2) had been "falsifying" documents or "concealing" information, that Stevens's conduct fell within a "safe harbor" for legal representations, and that the Government/DOJ has not proven that Stevens made false statements to FDA. With regard to the "safe harbor" argument, which is of particular interest to other in-house attorneys who could find themselves in similar situations, attorneys for Stevens argued that as an in-house, corporate attorney engaged in the job of representing her company in response to an FDA inquiry, she was entitled to protection of 18 U.S.C. § 1515(c).

According to Stevens's attorney, Reid Weingarten, "The case should never have been brought in the first place," calling it a case about "lawyers exercising their judgments about document production."

Given the unusual nature of the case being brought for a second time following an improper jury instruction, it appears strange that Judge Titus would have permitted the trial to go on for 10 days yet dismissed the case prior to permitting Stevens's attorneys to offer her defense and for the case to go to the jury. Perhaps, at the end of the day, Judge Titus agreed with Stevens's most recent acquittal motion that focused on arguing Stevens had no corrupt intent and was just doing her job. No doubt other in-house counsel attorneys will rest somewhat easier following the acquittal.

May 13, 2011

Modified Risk Tobacco Products Discussed at IOM Meeting

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IOM.jpgOn May 9-10, the Institute of Medicine's ("IOM's") Board on Production Health Practice held a meeting on the Scientific Standards on Modified Risk Tobacco Products. The agenda provided that on the first day, which was a public session, stakeholders could present their views. Industry stakeholders included a familiar round of players, Altria Client Services, British American Tobacco, Lorillard Tobacco Company, R.J. Reynolds Tobacco Company, and Swedish Match. Public health representatives were also on hand from FDA, the National Cancer Institute, and various representatives from academia and other associations, such as the American Cancer Society, the American Heart Association, and the Campaign for Tobacco-Free Kids. Many of these presentations are available on IOM's website, as provided above.

IOM's Board is meant to help review and present recommendations to FDA about standards for scientific studies to permit the marketing of modified risk tobacco products, as well as post-marketing studies for these products. The Board's mission is outlined in Section 911 of the Family Smoking Prevention and Tobacco Control Act of 2009 ("Tobacco Control Act"). The Board is chaired by former FDA Commissioner Jane Henney, M.D., who is now a Professor at the University of Cincinnati's School of Medicine. IOM's Board plans to submit its recommendations to FDA by late summer or early fall this year.

During the public session, representatives presented their viewpoints on the appropriate preclinical and in vitro studies, as well as clinical studies including biomarkers, risk perception, and population communication. Many of the speakers referred to IOM's guidelines in "Clearing the Smoke", and the need for consumers to understand the risks associated with modified risk tobacco products, which in the past have been misunderstood. While industry representatives were concerned about consumer acceptance and and use of these products, public health advocates were concerned about their potential impact on smoking initiation, cessation, and failed attempts to quit the use of tobacco products. At this point, FDA still reports that is has not received a modified risk tobacco product to review and proposes that it would take a year to review the first product that meets this definition. For additional thoughts regarding modified risk tobacco products, please see a previous blog here discussing thoughts presented at FDLI's Annual Conference last month.

May 12, 2011

Pay-for-Delay-FTC Issues New Report on Pharmaceutical Settlement Agreements

by Richard F. Kurz

Money in hand.jpgOn May 3, the Federal Trade Commission ("FTC") issued a press release stating there was a "60 Percent Increase in Pharmaceutical Industry Deals That Delay Consumers' Access to Lower-Cost Generic Drugs" in 2010. Such settlements, dubbed "pay for delay" by some, have been under attack by the FTC in recent years.

FTC Chairman Jon Leibowitz states that "Collusive deals to keep generics off the market are already costing consumers and taxpayers $3.5 billion a year in higher drug prices." However, the Generic Pharmaceutical Association ("GPhA") challenges this, stating that the "FTC is continuing to perpetuate the myth that pro-competitive, pro-consumer patent settlements are harmful to consumers--an unsubstantiated position that has repeatedly failed to receive support in both Congress and the Courts."

The deals at issue are ones where "brand-name companies have paid generic challengers to settle their patent challenges." The FTC report analyzed 113 final patent settlements and found that 31 of these were settlements that contained a payment to a generic manufacturer and also restricted the generic's ability to market its product. The FTC noted that of these 31 settlements, 26 involved generics that were "so-called 'first filers,' meaning that they were the first to seek FDA approval to market a generic version of the branded drug." The FTC report found that such settlements delayed the entry of the generic drug by an average of 17 months longer than other settlements.

As mentioned in previous blog posts, the FTC is challenging such settlement agreements in court, contending that the agreements violate U.S. antitrust laws. Further, the FTC has been a proponent of legislation in Congress to prohibit these settlements. However, as the GPhA notes, the "FTC already has the authority to review and reject any patent settlement that it deems unlawful."

May 11, 2011

Biosimilar User Fees-FDA Requests Comments But When FDA Plans to Issue Guidance for Biosimilar Pathway Remains Unclear

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dna.jpgOn May 10, FDA published a Federal Register Notice requesting comments on FDA's proposed development of a user fee program for biosimilar and interchangeable biosimilar biological product applications submitted under Section 351(k) of the Public Health Service Act ("PHS Act"). The biosimilar pathway was added to the PHS Act by the Biologics Price Competition and Innovation Act of 2009 ("Biosimilars Act"). As a general theme, FDA recognizes that at least during the first phase of the biosimilar user fee program (fiscal years 2013-2017), establishing a biosimilar pathway for the first applications likely will be as resource intensive as a full biologics application submitted under Section 351(a) of the PHS Act. As a result, FDA has proposed to charge biosimilar applicants a user fees equal to the Section 351(a) user fees minus any previously-paid fees associated with early product development. The Notice also proposes FDA's performance goals for the same time period.

FDA stated that while a number of companies have come to the agency asking for initial guidance regarding the requirements for a biosimilar application, FDA has yet to receive its first biosimilar application. Recognizing that the first and possibly all biosimilar applications will require more resources during the pre-application phase, FDA has proposed ways it can collect a biosimilar application fee earlier in the process. For example, new to biosimilar applications, FDA has proposed a Biosimilar Product Development fee that would be paid once an investigational new drug application ("IND") is submitted and annually thereafter for as long as the IND is active for a contemplated biosimilar application. Similar to small molecule, new drug applications ("NDAs"), there also will be fees for submitting the biosimilar application and annual establishment and product fees.

According to the Biosimilars Act, FDA must consult with a variety of interests before making its user fee recommendations to Congress on January 15, 2012, including industry, scientific and academic experts, health care professionals, and representatives of patient and consumer groups. Unlike previous user fee programs where there was already a mature industry group, FDA recognizes that it is at this time unclear what will emerge as the biosimilar industry. Based on previous comments to dockets associated with the Biosimilars Act, FDA expects that innovator drug companies and generic drug companies will pursue biosimilar applications, but FDA announced that it will follow a different process than for other user fee programs, given the competing interests and lack of an industry group to expressly represent biosimilar applicant interests.

FDA has requested comments by June 9, 2011, on its proposals for user fees for biosimilar applications. Some of the broad questions included in the Notice include: (1) What factors should the Agency consider in determining appropriate performance goals for 351(k) applications that are filed earlier than 2 years prior to the date on which a 351(k) application would be eligible for approval (i.e., 12 years after the date of first licensure of the reference product); (2) How should the performance goals take into account readiness for inspection; and (3) What other factors relating to the unique characteristics of the 351(k) approval pathway should the Agency consider when setting performance goals for 351(k) applications?

The previous day, May 9, FDA's Center Director for Drug Evaluation and Research, Janet Woodcock, M.D., reiterated that FDA plans so issue a general guidance for companies that want to submit biosimilar applications under the Biosimilars Act. FDA guidance for what requirements FDA expects for biosimilar applications is not a quid pro quo for FDA's ability to charge user fees for biosimilar applications, which was a feature built into the Biosimilars Act. While it may be too soon for FDA to act, it has been suggested that it would be prudent for FDA to issue this guidance just prior to the Biotechnology Industry Organization ("BIO") International Convention on June 27-30, 2011, which would provide a good media opportunity at a widely-attended industry event to announce this highly-anticipated guidance (http://convention.bio.org/).

May 10, 2011

Summary Bioequivalence Data for ANDAs Guidance Released

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On May 6, FDA published in the Federal Register a Notice announcing the public availability of a new guidance, Submission of Summary Bioequivalence Data for ANDAs. The Guidance was published to help abbreviated new drug application ("ANDA") applicants better understand FDA's thinking for how to comply with FDA's final rule, "Requirements for Submission of Bioequivalence Data" that published in the Federal Register on January 16, 2009. The Final Rule requires ANDA applicants to submit data from all bioequivalence studies conducted by the applicant on the drug product formulation submitted for approval, rather than the prior practice that permitted applicants to submit only the successful bioequivalence studies. This Guidance follows a draft version of the Guidance issued on July 16, 2009, for which FDA received "few" and "minor" comments that FDA did not address in the Federal Register Notice.

Submission of Summary Bio Equivalence Data for ANDAs Guidance

The Guidance addresses the following topics: (1) the types of ANDA submissions covered by the Final Rule, (2) a recommended format for summary reports of bioequivalence studies, and (3) the types of drug formulations that FDA considers to the "same" drug product formulation for different dosage forms based on differences in composition. The Guidance applies to bioequivalence studies conducted during preapproval and postapproval but does not address what formulations FDA considers to be the "same" drug product formulation based on differences in manufacture.

The Guidance explains that the following ANDA submissions must now include all bioequivalence studies conducted on the same drug product formulation: (1) original ANDAs, (2) ANDA amendments, (3) ANDA supplements that require bioequivalence studies under 21 C.F.R. § 320.21(c), (4) ANDAs submitted under a suitability petition, and (5) ANDA annual reports. The Guidance addresses differences in composition to consider when determining when a dosage form is the "same" drug product in the categories: (1) immediate release, (2) extended-release, (3) semi-solid, and (4) other complex dosage forms, such as transdermals, injectable suspensions, and suppositories. FDA states in the Guidance that FDA's definition of "same drug product formulation" (21 C.F.R. § 320.1(g)) applies whether the products are manufactured at the same or different manufacturing sites.

FDA's format for summary reports will be posted online at FDA's Generic Drugs: Information for Industry web page, as well as a model data summary tables consistent with a common technical document ("CTD") formatted application under the heading "Generic Drug Development, Abbreviated New Drug Application (ANDA) Submissions, and Review Information". Electronic or written comments on the Guidance may be submitted at any time.

May 9, 2011

Paragraph IV Disputes Conference Highlights Litigation Tactics and Attracts Hundreds

by Howard E. Rosenberg, Ph.D.

The annual American Conference Institute ("ACI") Paragraph IV Disputes Conference was held last week in New York. The speakers and delegates included a significant number of "skilled in the art" Paragraph IV ("PIV") (innovator and generic) attorneys as well as a large number of delegates wishing to know more about the subject. The conference covered all aspects of PIV litigation ranging from pre-suit due diligence, notice letters, pleadings and discovery, as well as other topics such as double-patenting-type obviousness and forfeiture issues. This year, the Conference was co-chaired by Frommer Lawrence & Haug LLP's Managing Partner, Edgar H. Haug. Mr. Haug's introduction ran through the history of PIV litigation, pointing out that both sides, innovator and generic, seem to be moving closer together. Innovator companies are selling and promoting generic drugs, Mr. Haug observed, and generic drug companies are selling and promoting innovator products. Mr. Haug said he thought that there will likely be more consolidation and integration between innovator and generic drug companies, and product life cycle management will become acceptable to both sides. As a result, Mr. Haug suggested that over time the two main trade associations for innovator and generic drug companies, the Pharmaceutical Research and Manufacturers of America ("PhRMA") and Generic Pharmaceutical Association ("GPhA"), could merge as one, perhaps as a Life Sciences Pharma Association or "LISPA".

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The "View from the Bench" was given by a panel of New Jersey district judges, the Honorable Judges Garrett Brown, Joel Pisano, and Tonianne Bongiovanni. As New Jersey is one of the busiest courts, as far as PIV actions are concerned, it was important to hear how the local New Jersey rules were performing. The judges on the whole felt that the rules were helping streamline actions, although a few tweaks here and there might be needed. They specifically highlighted how useful the Tutorials are that are provided by the parties to explain and introduce the issues. However, they did "complain" that PIV disputes seem to be the least "green" of all types of litigation, because of the mountains of documents that are being produced! In particular, the judges commented that expert reports come with so many documents that it detracted from the parties' arguments. The judges much prefer fewer documents that focus on the heart of the matter--a less is more approach.

The liveliest panel discussion was, in fact, the last one of the Conference and was missed by many delegates, who presumably had to leave early. The spirited banter between Don Mizerk and Denise Loring over the strategies and other pre-trial tactics employed by each side in a PIV dispute was remarkably energetic. Don Mirzek pointing out that most of the discovery obtained from a generic company resulted in exhibits that were never admitted at trial (other than the abbreviated new drug application ("ANDA") and prior art) and, as such, the discovery was just an exercise in delay. The potential for utilizing delaying tactics during PIV litigation and which side was the more culpable of employing them proved to be an entertaining discussion. It would have been very interesting to have seen what the New Jersey judges would have made of it had they been present.

May 6, 2011

A Victory for Embryonic Stem Cell Researchers

by Erin Lawrence

Stem Cell.jpgOn Friday, April 29, The Court of Appeals for the District of Columbia ruled that the government can continue to finance embryonic stem cell research. The decision was two-to-one in favor of the government. Judges Douglas H. Ginsburg and Thomas v. Griffin found for the government. Judge Karen L. Henderson dissented.

At issue was whether the Dickey Wicker amendment--which prohibits federal funding for "research in which human embryo or embryos are destroyed"--applies to research conducted on stem cell lines that had been developed without federal funding. The Court reasoned that the Dickey-Wicker amendment was written in the present tense and "does not extend to past actions." Therefore, the government can legally fund research on embryonic stem cells that were already cultivated prior to any action being funded. Judge Henderson criticized her colleagues stating that they "perform[ed] linguistic jujitsu" to arrive at their conclusion.

Despite this step forward, researchers have found it impossible to move forward with their work and set plans for the future research because the case is not definitively settled. The Court of Appeals ruling sends the case back to Chief Judge Royce Lamberth of the District Court in Washington. Judge Lamberth's decision banned federal funding of embryonic stem cell research and issued an immediate injunction on any current funding. The injunction was temporarily suspended in September. Friday's Court of Appeals ruling is permanent, allowing research to continue, but it leaves the door open for appeal. Researchers recognize that the fight is far from over.

May 3, 2011

Generic Giant Teva to Increase Branded Business to $7 Billion

by Andrew Nason

Tevalogo.bmpIn a move approved unanimously by the boards of both companies, Teva Pharmaceutical Industries Ltd., the world's largest generic drug maker, agreed to buy Cephalon Inc. for $81.50 per share in cash, or a total enterprise value of $6.8 billion. The transaction comes a little more than a month after Cephalon declined a $73-a-share bid from Valeant Pharmaceuticals International Inc., saying Valeant's bid was too low. The combined company's branded portfolio will represent $7 billion per year in drug sales; and the merger will bring one more blockbuster drug, the narcolepsy treatment Provigil, into Teva's portfolio. The move will help Teva offset revenue it may lose as its multiple-sclerosis drug Copaxone faces competition from generic versions and new branded products.

Investors for both companies reacted positively to the news on Monday. Cephalon shares rose 5.2 percent, to $81, at 9:35 a.m. in Nasdaq trading. Teva's American depositary receipts climbed 3.5 percent, to $47.34. The companies aim to complete the transaction in the third quarter. According to generally accepted accounting practices, the purchase will add to Teva's earnings within the fourth quarter of closing.

Cephalon reported 2010 revenue of $2.81 billion, including $1.12 billion from Provigil. Provigil faces patent expiration in 2012, but Cephalon also has more than 30 experimental medicines in the late stages of development, including medicines for treatment of lupus and pain management. With the addition of Cephalon's impressive product pipeline, Teva hopes to reduce the proportion of branded-drug revenue Teva gets from Copaxone from 70 percent in 2010 to 47 percent by 2015. Teva's President and Chief Executive Officer Shlomo Yanai said, "[the merger] is transforming for Teva's branded business, as it will help us to deliver on our strategic goal of creating a diversified, multi-faceted company."

May 2, 2011

FLH Co-Chairs, Co-Sponsors, and Partners Edgar Haug, Charles Raubicheck, and Brian Malkin Speak at ACI's Paragraph IV Disputes Conference on May 2-4, 2011

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On May 2-4, Frommer Lawrence & Haug will co-chair and co-sponsor the Fifth Anniversary Paragraph IV Disputes Conference in New York. On May 3-4, FLH Managing Partner Edgar H. Haug will Co-Chair the Conference. On May 2, Partner Brian J. Malkin will speak on "Exploring Patent Term Adjustment and Patent Term Extensions and Understanding their Applicability to Drugs and Biologics" in the Pre-Conference Workshop, and FLH will sponsor the Pre-Registration and Welcoming Cocktail Reception. And on May 4, Partner Charles J. Raubicheck will present in a panel on "Mastering Regulatory Maneuvers Essential to Paragraph IV Litigation". FLH Partner Barry S. White helped ACI design the original Paragraph IV Disputes Conference, and FLH has been an active participant in the Conference ever since, as a recognized leader in Paragraph IV litigations and related regulatory matters for both branded and generic clients. ACI expects this to be the biggest Paragraph IV Disputed Conference ever, with faculty representing clients from both branded and generic companies, renowned federal jurists, and a key official from the Federal Trade Commission. For more information and to register, click here. FDA Lawyers Blog readers can obtain a $200 discount with the code FDALWY.

May 2, 2011

Bionic Devices and the FDA "Innovation Pathway"?

by Christopher Gosselin

Earlier this year, FDA's Center for Devices and Radiological Health ("CDRH") announced a priority review program for "breakthrough medical devices" called the Medical Device Innovation Initiative. Dubbed the "innovation pathway" by FDA, the initiative seeks to complete the review process for accepted applications in fewer than 150 days-less than half the time it takes to review typical Premarket Approval Applications ("PMAs"). PMAs would be reviewed by a new oversight body called the Center Science Council, consisting of senior managers and more experienced scientists.

CDRH selected a bionic arm, developed by Johns Hopkins University's Applied Physics Laboratory and funded by the Defense Advanced Research Projects Agency ("DARPA"), as the pilot application for the new program in February. The DARPA arm uses a microchip implanted on the surface of the brain to detect neural activity and simulate natural arm movement. Understandably, FDA is excited about this new technology, and wants to see it quickly approved. Commissioner Margaret A. Hamburg, M.D. recently touted the remarkable benefits of advanced prosthetics at FDLI's Annual Conference in April.

If successful, the innovation pathway could provide expedited review to a number of new devices in the increasingly active field of bionic prosthetics. Several high profile bionic prosthetics have been making news, such as Deka's "Luke" arm (also supported by DARPA), or an arm powered by compressed air developed by students at Ryerson University. And just last week, researchers from the Rehabilitation Institute of Chicago's Center for Bionic Medicine published a paper reporting the results of their myoelectric prosthetic leg controlled by nerve impulses.

Any of these incredible devices may be seeking FDA approval in the near future, which begs the question, will other bionic devices receive similar special treatment? For now, the answer appears to be no. CDRH does not plan to issue a draft guidance detailing the program before September of this year, and in its current form the program can only accommodate one or two applications per year. It certainly remains to be seen whether the new program, which is not yet operational, will be prove to be more than an exclusive one-time benefit for DARPA's expensive and high-profile prosthetics initiative.