October 26, 2012

Black Salve Manufacturer Sues FDA

Thumbnail image for gavelgold.jpgOn October 19, Toby McAdam sued FDA to restrain FDA from further action until FDA puts in place criteria for a dietary supplement labels and clarify what constitutes a medical or drug claim on FDA's website, holding all dietary supplements to the same standards. McAdam also requested to be compensated for lost revenues by FDA preventing him from selling his formula of "black salve" for $8,000 per month since November 5, 2010 and to reimbursed for his expenses to hire a "label expert" for $3,600.

McAdam appears to have filed the Complaint himself, alleging that FDA's actions "puts the health of the general public at risk." According to the complaint, McAdams believes that he was treated differently that other similarly-situated parties that manufacture dietary supplements.

Starting in May 2007 until present, the complaint states, FDA notified McAdams that the dietary supplements that McAdams's company manufactures contain "medical claims." McAdams asserts that he "attempted to comply with every request and has submitted labels and wording that are similar and even more compliant than those companies similarly situated." McAdams' complaint continues that he can provide web sites, labels, and other documents to substantiate these facts "beyond any reasonable doubt that he is in fact being treated and prosecuted differently than those similarly situated." Later in the complaint, McAdams indicates that he recorded communications with FDA representatives after so informing the officials, which McAdams appears to include as part of his evidence of unequal treatment.


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October 24, 2012

Compounding Pharmacies Under Increased FDA Scrutiny

pharmacy.jpgThe Centers for Disease Control and Prevention ("CDC") has reported 21 deaths caused by and 271 cases of fungal meningitis linked to compounded painkiller steroid injections as of October 19, 2012. The New England Compounding Center ("New England Compounding") located in Massachusetts shipped more than 17,000 vials containing contaminated steroid injections of preservative-free methylprednisolone acetate to 23 states resulting in approximately 14,000 patients receiving injections. Based on ongoing reports, it appears that New England Compounding was acting more like an unregulated drug company than a pharmacy preparing a drug product specifically for a single patient based on that doctor's prescription. "The red flag that they had overstepped was that they were producing 17,000 units of this steroid," said Marcus Ferrone, Associate Professor of Clinical Pharmacy at the University of California, San Francisco, who also directs the Drug Products Service Laboratory that compounds various drug products and has its own pharmacy course for students.

The current meningitis outbreak has led to a renewed scrutiny of the regulations for compounding pharmacies, pharmacies that specialize in taking existing drugs and formulating them, such as New England Compounding. Doctors and clinics often rely on compounding pharmacies to supply medications instead of major pharmaceutical companies, because often the drugs from compounding pharmacies are cheaper and in greater abundance. Much of the regulation of compounding pharmacies is performed not by FDA, but by state boards with varying standards.

FDA, wary of the potential danger of unregulated compounding pharmacies, developed guidelines for them culminating in the enactment of Section 503A of the Food and Drug Administration Modernization Act of 1997 ("FDAMA"). Section 503A exempted compounded drugs from the regulations instated by the Federal Food, Drug, and Cosmetic Act of 1938 (FD&C Act) for new drugs provided that they conform to a number of regulations, including that the compounded drug provider refrain from advertising the compounding of a specific drug. The U.S. Supreme Court found this to be a restriction on advertising and that Section 503A violated the First Amendment's free speech guarantee. Thompson v. Western State Medical Center, 535 U.S. 357, 360 (2002). Since the rest of Section 503A was found not be severable from the restriction on advertising by the court below and this finding was not challenged at the Supreme Court, the Supreme Court's decision invalidated the entire statute designed to regulate compounded drugs and compounding pharmacies. Id.

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October 22, 2012

Avon Wrinkle Care Receives Warning Letter from FDA

antiaging.jpgOn October 5, FDA sent a warning letter to Avon Products, Inc. ("Avon") concerning the cosmetic company's online promotion of its anti-aging skin care products. The letter, which FDA posted last week, objects to Avon's marketing claims for a variety of its anti-wrinkle products. Specifically, it warns that they "appear to be intended for uses that cause these products to be drugs under section 201(g)(1)(C) of the Federal Food, Drug, and Cosmetic Act ['FD&C Act']."

The cited statutory provision (21 U.S.C. § 321(g)(1).) defines "drug" to include "articles (other than food) intended to affect the structure or any function of the body of man or other animals." FDA asserts that Avon's marketing claims indicate that the creams and serums listed in the letter are intended to affect the structure of human skin tissue, in which case they would fall under that definition. For example, the company's website describes that the Anew Clinical Advanced Wrinkle Corrector as "formulated to boost shock-absorbing proteins to help strengthen skin's support layers," and "start rebuilding collagen in just 48 hours." While it is not out of the ordinary for anti-wrinkle products to claim to reduce the appearance of wrinkles and fine lines, FDA believes that Avon's statements go too far. According to the letter, the products are "not generally recognized among qualified experts as safe and effective for the above referenced uses" and are thus new drugs, requiring marketing approval.

Written by Rachael P. McClure

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Congress has prohibited the introduction of new drugs into interstate commerce without filing, and subsequent approval of, a new drug application ("NDA") as stated in 21 U.S.C. § 355(a). A new drug application ("NDA") must include, among other things, "full reports of investigations which have been made to show whether or not such drug is safe for use and whether such drug is effective in use." Id. at § 355(b)(1). Other requirements address labeling information and manufacturing controls. Id. The warning letter asks Avon to review its website and product labels and requests a response within 15 days of receipt (October 20) detailing the steps the company has taken to correct the alleged violations. At least some of the accused descriptions still seem to remain on Avon's website.

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October 18, 2012

European Biosimilars to Reference Non-European Biosimilars

Thumbnail image for Thumbnail image for dna.jpgWhenever an applicant wishes to register their follow-on medicinal product, be it a generic product or a biosimilar, the applicant has to include in their dossier a comparison between the newly-developed product with a previously-approved and registered medicine. For "standard" generic products evidence, such as the approved product's dosage form, strength, excipient and content can be obtained from published information and further "proof" is generated by such things as dissolution profiling and bioequivalence studies. However, there is always a question as to whether the comparison product (usually the originator's product) is the same internationally. For example, it is possible that the same active ingredient in the same dosage form could have been formulated differently from country to country, either as a result of differing timing of the drug's development and launch or on purpose to create artificial barriers, such that the follow on products will be more complex to develop. Of course, the difficulty of having what outwardly appears to be the same product, but inwardly is significantly different, creates potentially dangerous problems for both doctors and patients. Clearly, if a patient travels across borders and needs to refill their prescription, it could result in real problems, if the apparent same drug and dosage form act differently biologically.

Health authorities around the world now work much more closely together and confidential information about their registered and approved products can be passed between them, such that differences in formulations that affect bioavailability would be available to them and thus will be alert to possible issues. For a company making a follow-on product, however, this information is not available. As a result, companies wishing to make a generic product have to carry out extra studies as outlined above to investigate the differences from country to country and carry out bioequivalence studies against a local reference product.

Biological medicines are medicines that are made by or derived from a biological source. They can consist of relatively small molecules, such as human insulin or erythropoietin, or complex molecules, such as monoclonal antibodies. Biosimilar products are, thus, far more complex and need far more studies to show similarity, requiring a large number of clinical trials, as opposed to the bioequivalence studies that generic products undergo. Given the difficulty in developing, testing and registering new biological, it may well be that, unlike non-biological medicines, biological products may well be the same product internationally.

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October 16, 2012

FTC Asserts K-Dur Applies to Authorized Generic Deals

shaking hands.jpgThe Federal Trade Commission ("FTC") on October 5, 2012, again filed an amicus curiae brief asking a federal district court in New Jersey to apply the ruling in K-Dur to an authorized generic deal. The present deal under scrutiny is an agreement in which Teva Pharmaceutical Industries Ltd. ("Teva") promised to delay launching a generic version of the drug Lamictal® (lamotrigine), while GlaxoSmithKline PLC ("GSK") granted Teva an exclusive license to market a generic product thereby excluding the marketing an authorized generic.

The FTC encouraged the District Court to apply broadly the Third Circuit ruling in K-Dur that a payment from a patent holder to a generic drug company to delay the generic from entering the market is "prima facie evidence of an unreasonable restraint on trade." In re K-Dur Antitrust Litig., 686 F.3d 197, 218 (3rd Cir. 2012). However, as pointed out by Frommer Lawrence & Haug Associate Richard Kurz in an article recently published by FDAnews, it is unclear whether the Third Circuit considered authorized generic deals in the K-Dur ruling. This particular distinction is targeted by Teva and GSK claiming that, in contrast to K-Dur, no monetary payment occurred in the agreement under question.

Nonetheless, the FTC argues that the settlement between GSK and Teva is anticompetitive and should be prohibited in view of the findings in K-Dur. According to the FTC, under the Hatch-Waxman Act, Teva was entitled to receive 180 days of marketing exclusivity during which other generics were not approved to launch their product. However, this exclusivity does not preclude the brand company from launching an authorized generic during this period thereby competing with the generic. Competition from an authorized generic has the potential to reduce the profits of the generic supplier during this period by approximately half. Thus, under the settlement terms, Teva received the benefit of extra profits, anticipated to be hundreds of millions of dollars, during its generic exclusivity period while GSK enjoyed an extended period of brand exclusivity. The FTC argues that both of theses consequences hurt consumers. The FTC also asserts that prohibiting these types of "no-authorized generic" agreements would not generally prevent settlements as feared by Teva.

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October 3, 2012

Depomed Challenged Orphan Drug Designation Clawback from FDA

shingles.pngOn September 25, 2012, Depomed Inc. ("Depomed") filed suit against FDA in the United States District Court for the District of Columbia, due to the FDA's failure to grant it orphan-drug exclusivity for its product Gralise®, a gabapentin product that is used to treat postherpetic neuralgia ("PHN," commonly known as "after-shingles pain"). The case is Depomed Inc. v. United States Department of Health & Human Services et al., No. 1:12-cv-01592.

Before a drug can be protected under the Orphan Drug Act, a sponsor must go through two procedures. Prior to new drug application submission ("NDA"), a sponsor must apply for orphan-drug designation. Orphan-drug designation must be granted if, among other things, the drug is designated for a disease or condition that (A) affects less than 200,000 people in the United States, or (B) affects more than 200,000 people in the United States, but there is no reasonable expectation that the cost of developing and making the drug available in the United States will be recovered by sales of the drug in the United States. 21 U.S.C. § 360bb(a)(2). Then, once orphan-drug designation is established and FDA approves the NDA for the orphan drug designation's indication, the sponsor is entitled to orphan-drug exclusivity. Under orphan-drug exclusivity, FDA must refrain from approving an application from another sponsor for seven years, if the later application is directed to the "same drug" for the same disease/condition. 21 U.S.C. § 360cc(a). Relevant to this case, the FDA defines "same drug" as a drug that "contains the same active moiety as a previously approved drug and is intended for the same use as the previously approved drug," but excludes from the definition of "same drug" a "subsequent drug . . . shown to be clinically superior to the first drug." 21 C.F.R. § 316.3(b)(13).

According to the Complaint, FDA granted an orphan-drug designation to Gralise® in 2010 based on certain information Depomed provided FDA suggesting enhanced safety of Gralise® compared to Neurontin®. FDA subsequently approved the new drug application ("NDA") for Gralise® in 2011. Nevertheless, FDA has allegedly refused to grant Gralise® orphan-drug exclusivity despite curiously listing it as having a designation and 2011 approval in its orphan drug database. In support of this action, FDA has allegedly explained that to qualify for orphan-drug exclusivity, Gralise® still must be shown to be clinically superior to Neurontin®, another gabapentin product that was approved in 2002 for the treatment of PHN. However, the Complaint alleges that Neurontin® was never granted orphan-drug designation, and thus was never awarded orphan-drug exclusivity. Therefore, the Complaint alleges, FDA is improperly requiring Depomed to show that Gralise® is clinically superior to Neurontin®, as a prerequisite to awarding orphan-drug exclusivity to Gralise®.

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October 1, 2012

Pay-for-Delay: U.S. Supreme Court Is Asked to Resolve the Differing Antitrust Standards Used for Pharmaceutical Patent Settlement Agreements

Thumbnail image for Thumbnail image for drugmoney.jpegOn September 21, FTC Commissioner Thomas Rosch commented on the differing antitrust standards that have been adopted by the U.S. Courts of Appeals when considering the legality of pharmaceutical patent settlements that include payments to patent challengers. A recent decision by the Third Circuit, In re K-Dur Antitrust Litigation ("K-Dur"), found that such "pay for delay" settlements create a rebuttable presumption that the settlement is anticompetitive. In contrast, in FTC v. Watson Pharmaceuticals, Inc. ("Androgel") the Eleventh Circuit recently held that such settlements are legal so long as they fall within the "scope of the patent" and there is not evidence of sham litigation or fraud in obtaining the patent. Rosch believes that this split between the circuits makes it likely that the Supreme Court will decide to consider the legality of such "pay-for-delay" settlements.

Pharmaceutical patent litigation often occurs under a legal framework called the Hatch-Waxman Act, in which a generic pharmaceutical manufacturer files an abbreviated new drug application ("ANDA") with a Paragraph IV certification that the branded pharmaceutical manufacturer's patents are invalid, not infringed, or unenforceable. Under this framework, the ANDA filing allows the patent owner to file a patent infringement lawsuit against the generic manufacturer before any infringing product is sold. Unlike other patent infringement lawsuits, this framework creates a situation in which the patent owner may not have suffered a monetary loss (called damages) at the time the patent litigation is settled. This situation leads to some settlements that include a payment from the patent owner to the generic manufacturer along with an agreement that the generic manufacturer will refrain from selling an infringing product for some period of time. The FTC refers to this type of settlement as "pay-for-delay."

As Rosch explains, the FTC has attacked "pay-for-delay" settlements as a violation of antitrust laws for several years. Many courts, however, have followed the Eleventh Circuit's scope of the patent test and have found such settlements legal because a patent gives its owner the right to exclude others from selling a patented product. Further, from a judicial policy perspective, it is preferable that parties settle litigation. Indeed, using this test the Eleventh Circuit previously found that the same settlement agreement at issue in the Third Circuit's K-Dur decision was legal. Adopting a different test, however, the Third Circuit decided that the settlement is potentially a violation of antitrust laws and remanded the question to the district court for further consideration.

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September 27, 2012

FLH Partner Malkin Quoted in FDAnews Article on Jazz's Recent Xyrem Markman Ruling

sleepingperson.pngIn a September 26 FDAnews article FLH Partner Brian J. Malkin was quoted regarding the latest decision. The article, "Jazz Appears to Win on Patent Claim Terms in Xyrem Fight." The article concerned a recent development in Jazz Pharmaceuticals' ("Jazz's") suit against generic competitor Roxane Laboratories ("Roxane"), where in an unpublished opinion, the District Court of New Jersey Judge Esther Salas Jazz appeared to side with virtually all of Jazz's claim constructions for the disputed terms in the patents-at-issue for Xyrem® (sodium oxybate), indicated for excessive daytime sleepiness and cataplexy in patients with narcolepsy.

Malkin was quoted in the article as reproduced in the following passage:

One major upside for Jazz is that it could make it harder for Roxane to negotiate more favorable terms if it chooses to settle, Brian Malkin, a partner at Frommer Lawrence & Haug, noted.

Meanwhile, Jazz was also issued another Xyrem patent Sept. 11, which the company is submitting for listing in the FDA's Orange Book. This move could prolong the case, Malkin said, as Roxane would have to amend its ANDA, likely by filing a Paragraph IV certification.

Finally, Jazz has outstanding citizen petitions related to Xyrem generics, including a July petition that demands the FDA rescind its acceptance of the Roxane ANDA because Roxane did not submit material related to a proposed risk management strategy for Xyrem when it originally filed the application (Generic Line, Aug. 1). FDA rulings on the citizen petitions are due on Nov. 18 for the earlier bioequivalence standards petition and on Dec. 10 for the July petition, Faerm said.

Malkin believes the FDA will deny Jazz's citizen petition, given that it already accepted Roxane's ANDA. However, the courts may be more apt to side with Jazz, given this latest opinion

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September 25, 2012

ACI Orphan Drugs and Rare Diseases Conference in Boston on November 28-29, 2012

Thumbnail image for Thumbnail image for Thumbnail image for aci_header_banner.gifOrphan Drugs and Rare Diseases
Maximizing Opportunities and Overcoming Stumbling Blocks in the Designation and Development Process
November 28-29, 2012
Hyatt Regency, Boston, MA

Developing drugs and investing in research and development can be risky business in general, and it can be even more so for small populations with unique disease states. Our faculty of leading experts from Pfizer, Shire, Medicis, GSK, Emergent BioSolutions and many more will give you strategies to offset potential risks inherent to orphan drug development including:

  • Understanding and factoring in the unique incentives, including favorable exclusivity, pricing, and tax benefits, for companies who decide to pursue designation
  • Replenishing product pipelines in the face of the patent cliff through novel therapies
  • Preparing for eventual pharmacovigilance and labeling issues downstream as designation takes off
  • Designing clinical trials end points and proving safety and efficacy in a smaller population
  • Protecting orphan drug status and keeping competitors at bay post-Makena

For more information, please visit our website: www.americanconference.com/orphandrugs

FDA Lawyers blog readers are entitled to a discount when referencing the code: FDA 200

September 24, 2012

TransCelerate BioPharma Partnership Announced to Help Accelerate New Drug Development

Thumbnail image for Thumbnail image for pills.jpgOn September 19, ten top U.S. and European drugmakers announced that they have formed a new nonprofit organization called TransCelerate BioPharma Inc. ("TransCelerate") to help improve how experimental drugs are tested to get them to patients sooner. The New York Times broke the story, along with the Associated Press and Reuters getting the word out for this organization that has been in the works for about a year.

The ten companies are: (1) Abbott Laboratories Inc., (2) AstraZeneca Plc, (3) Boehringer Ingelheim, (4) Bristol-Myers Squibb Co., (5) Eli Lilly and Co., (6) GlaxoSmithKline Plc, (7) Johnson & Johnson, (8) Pfizer Inc., (9) Roche Holding's AG Genentech, and (10) Sanofi SA. TransCelerate's headquarters will be in Philadelphia, Pennsylvania, which it hopes to open later this year. All of the companies will contribute financial and other resources but for right now scientists and other staff are working from their corporate offices.

FDA's Director for the Center for Drug Evaluation and Research ("CDER"), Janet Woodcock, M.D., supported the move, said in a statement,


We applaud the companies in TransCelerate BioPharma for joining forces to address a series of longstanding challenges in new drug development.... This collaborative approach in the pre-competitive arena ... has the promise to lead to new paradigms and cost savings in drug development, all of which would strengthen the industry and its ability to develop innovative and much-needed therapies for patients.

The interim chief of the effort is Garry Neil, former Corporate Vice President for Science and Technology at Johnson& Johnson. "There's never been anything like this to take on these big challenges," Neil said, who has so far offered no details on how big this project will get other than the initial focus would be five projects to make clinical trials more efficient with a budget in the millions of dollars. "We want to simplify, standardize, and also raise quality. ... We worry about potentially promising drugs which might not get studies unless we can increase the overall efficiency of the system. I think it will make it easier for companies," Neil added.

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September 21, 2012

Mammography Screening Device Approved for Dense Breasts

On September 18, FDA approved the first medical device approved for ultrasound imaging for use in standard mammography screenings for women with dense breast tissue. Sunnyvale, California-based U-Systems manufactures the device called the somo-v® Platinum Automated Breast Ultrasound System ("ABUS"). The decision follows a unanimous recommendation to approve the device by an advisory panel.

Dense breasts have a high amount of connective and glandular tissue compared to breasts that have a higher percentage of fatty tissue. Physicians can determine whether a woman has dense breast tissue via a mammography exam. The National Cancer Institute currently estimates that about 40 percent of the women having mammography screening have dense breasts. These women appear to have a higher risk for breast cancer as well.

Mammography is a low-dose x-ray image of the breast. Until the ABUS, mammograms of breasts with dense tissue show both fibroglandular breast tissue and tumors as solid white areas on a mammogram, making results difficult to interpret. Often the dense breast tissue would obscure smaller breast tumors, which could delay breast cancer detection.

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September 19, 2012

OTC Advertising Study Finds Adverse Events Overly-Minimized

generic-drugs.jpgA research letter published online in the Journal of the American Medical Association ("JAMA") last Tuesday reports findings that pharmaceutical advertisements have a tendency to minimize potential adverse effects when the products they promote become available over-the-counter ("OTC"). The researchers attribute this shift in content to the differences in prescription drug advertising standards, governed by FDA, and those for OTC advertising, governed by the Federal Trade Commission ("FTC"). FDA requires that ads present a "fair balance" of the risks and benefits of a drug, a requirement that is absent from FTC's "reasonable consumer" standard. Commentators note that the FDA regulations are better equipped to ensure against "active deception."

The research endeavor, sponsored by CVS Caremark, considered four drugs that transitioned from prescription to OTC status within the last ten years: Claritin® (loratidine), Prilosec® (omeprazole), Xenical®/Alli® (orlistat), and Zyrtec® (cetirizine). It examined 133 total television and print advertising materials from twenty-four months prior to, through six months after, each transition, and found that the percentage of advertisements that referenced side effects plummeted from 70% while prescription only to 11% once available OTC. Conversely, the proportion describing drug benefits jumped from 83% to 97%. The study further reports that OTC advertisements frequently omit the generic names of drugs, "a powerful tool for the patient as a consumer in that it helps tie together scientific information on the drug from different places." Roughly 50% of the OTC ads mentioned the generic name, while over 95% had when the drugs were available by prescription only.

Written by Rachael P. McClure

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"In many, many cases information about risks simply disappeared from the ads once the drugs became [OTC]," remarked head researcher Dr. Jeremy Greene. This likely contributes to erroneous consumer beliefs that relocation out from behind the pharmacy counter automatically indicates a safer product. With 106 ingredients, indications, or dosage strengths having made the Rx-to-OTC switch since 1976, it is unlikely that this is always the case. Greene highlighted the danger of this situation given the frequency of overdoses on some of the most commonly used OTC drugs, such as acetaminophen (Tylenol®) and ibuprofen (Advil®). A 2006 study, for example, estimated over 450 acetaminophen overdose-related fatalities each year.

This research raises the question of where consumers can turn to obtain important information on potential side effects, if they are not receiving it from product ads or prescribers/suppliers. While some information is available online (such as at otcsafety.org or webmd.com), tracking it down requires active effort. Consumer Healthcare Products Association (CHPA) policy does note that the OTC label "is the most important element of a nonprescription drug," and "clearly lists a product's active ingredient, purpose, uses, warnings, directions, other information, and inactive ingredients." In an age dominated by electronic media, however, consumers are inevitably paying more attention to television and online/print advertising than drug labels. Also of note is that current OTC labeling requirements were promulgated by FDA, not FTC.

The Caremark study findings indicate that reform may be necessary to ensure transparency of consumer risks in the OTC pharmaceutical market, whether it be FDA oversight of OTC drugs or FTC adoption of stricter advertising criterion. With 240 million Americans currently using OTC medicines, according to a January 2012 CHPA report, it is a matter that deserves serious consideration.

September 17, 2012

FDA Staff Changes in Time for Implementation of the New UFAs

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for FDA.jpegFDA's various user fee acts ("UFAs") have not reached their implementation date in October 2012, yet FDA has already begun announcing staff changes to help with overseeing the new changes.

On the Commissioner level, Peter Lurie will be replacing David Dorsey as Acting Associate Commissioner for Policy and Planning. In a September 12 staff memorandum, FDA Commissioner Margaret A. Hamburg, M.D. announced the departure. Dorsey is leaving FDA to be a senior director in global regulatory policy and intelligence at Janssen Research & Development LLC in Rockville, Maryland. Hamburg wrote in the staff memorandum:

Throughout his long government tenure, David's colleagues repeatedly have sought him out for his extraordinary depth of knowledge, his vast experience on the Hill and at the agency, his thoughtfulness, and his patience under pressure. . . . David's departure will be a loss to the agency, and we will miss him.

(The Pink Sheet, September 13, 2012).

This changes follows a few earlier FDA staff changes at the Commissioner level and elsewhere last month. First, Associate Commissioner for Regulatory Affairs Dona Carrigan was announced as the new Director of FDA's Europe Office and Senior Advisor for Global Operations, stationed in Brussels, Belgium. Carrigan's new position is designed to help implement the Agency's strategic and risk-based global industry oversight and enforcement. Next, Melinda Plaisier will be Acting Associate Commissioner for Regulatory Affairs effective October 1. Plaisier was previously the Regional Food and Drug Director in the Office of Regulatory Affairs' central region, and before that she was Associate Commissioner for Legislation and Associate Commissioner for International Programs.

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September 13, 2012

Biosimilar Reviews "Under-Resourced" at FDA Woodcock Reports in DIA Meeting

Thumbnail image for dna.jpgOn September 12, FDA's Center for Drug Evaluation and Research ("CDER") Director Janet Woodcock, M.D. reported FDA's biosimilars program will be "under-resourced" until the biosimilars industry develops at a Drug Information Association ("DIA")/FDA Biosimilars Conference: Guidances, Science, and BsUFA. "This is going to be an under-resourced program for the next few years because that's how it is ... That'll cause, I think, some struggle, especially with allocation of resources amongst all the important activities that we do at FDA," Woodcock said. (The Pink Sheet, September 12, 2012.)

Once again, FDA reported that while FDA has the authority to approve biosimilars, FDA still has yet to receive a single biosimilars application, called 351(k) applications, based on their new statutory provision. FDA reported the same numbers that were discussed in two recent conferences discussing biosimilars that we reported on here and here: 11 investigational new drug applications ("INDs") and 30 pre-IND meetings with the Agency concerning biosimilars. FDA recently did approve Teva's biosimilar version of Amgen, Inc.'s Neupogen® (filgrastim), but Teva submitted this as a full biologics license application ("BLA") rather than a biosimilar, because reportedly Teva believed the biosimilar pathway was either infeasible or not ready for commercial approvals yet.

Woodcock speculated that annual product fee payments for sponsors with INDs will likely be the initial source of extra funding that FDA receives, with 351(k) fees to follow only after sponsors start submitting these applications. Under the Biosimilars User Fee Act ("BsUFA") that will become effective on October 1, 2012 along with other user fees, barring any possible derailment, which we reported here, the development fees are only 10% of the marketing application fees for each year, but the payments will be subtracted from the marketing application fee, once filed. For example, in Fiscal Year 2013, the product development fee for a 351(k) application is $195,880 with 351(k) application fees set at about $1.96 million per application.

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September 11, 2012

User Fee Sequestration Imminent as Congress and Obama Fails to Decide on Government-Wide Budget Cuts

Thumbnail image for Thumbnail image for Thumbnail image for FDA.jpegOn January 2, 2013, barely three months after FDA's new user fee programs go into effect, certain mandated spending reductions, called sequestration, also may go into effect that could prevent FDA from using the user fees it collects from industry. A Congressional Super Committee failed to find the required $1.2 trillion in cuts over ten years by a November 2011 deadline. The combined effect of lost taxpayer and user fees projected by Maryland-based Alliance for a Stronger FDA, would be an initial $294 million out of a $3.65 billion budget.

The catch comes from a component of FDA's user fee programs known as the "trigger" that requires a certain baseline of taxpayer funds to go to FDA, so industry user fees supplement rather than fund FDA's operations. FDA's projected funding for fiscal year 2013, set at $2.5 billion, would be cut by an across-the-board, 8% cut in federal government, coined as a "fiscal cliff", imposed to help curb the ever-increasing government debt. While FDA's cut of about $200 million would not normally hit the trigger to prevent FDA's use of user fees, Steven Grossman, Deputy Executive Director of the Alliance for a Stronger FDA, told Anna Edney from Bloomberg that the Obama Administration may still sequester FDA's user fee funds to help with federal spending reduction goals. The exact trigger levels, moreover, are based on formulas that include consumer inflation and past spending, which so far FDA has declined to comment on.

According to Grossman, if this occurs, about $68 million in drug and device user fees and $40 million in tobacco-company payments would be diverted to a U.S. Treasury Department account that would "reduce government because it would reduce what they can do." Faced with the sudden loss of these funds, drug industry experts have speculated that FDA would be forced to lay off personnel and take other measures to reduce costs.

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