July 17, 2012

FDA E-Mail Whistle-Blower Investigation Continues as New Documents Are Revealed

whistle.bmpIn February 2012, FDA Lawyers Blog wrote regarding FDA's secret e-mail monitoring of whistle-blowers in the Center for Devices and Radiological Health ("CDRH"). Now it appears that FDA's surveillance program, which began as an effort to determine whether five FDA scientists were leaking trade secret information, may have been much broader than previously known. According to a New York Times article published on July 15, an FDA contractor inadvertently posted a database containing more than 80,000 surveillance-related documents onto a public website. These documents revealed the extent of the surveillance program that tracked communications between the scientists and Congressional officials, journalists, and others. The surveillance software utilized by FDA allegedly tracked keystrokes, intercepted personal e-mails, and took screen shots of letters being drafted to members of Congress, the Office of the President, and the Office of Special Counsel ("OSC"), an independent federal agency which investigates whistle-blower retaliation claims.

Federal agencies have broad power to monitor employees' computer usage. In fact, FDA computers warn employees when logging on that they have "no reasonable expectation of privacy," and that the Agency may intercept data for any lawful government purposes. However, it is still possible that FDA acted unlawfully when intercepting certain legally protected communications, such as, attorney-client communications, whistle-blower complaints, and workplace grievance filings. The OSC sent a memorandum to all government agencies in June identifying the legal restrictions and guidelines that agencies should consider with regard to monitoring employee communications. Members of Congress have demanded an investigation into the legality of the FDA's program.

Written by Douglas Oosterhouse

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FDA defended the program, saying it restricted surveillance to the five scientists suspected of leaking trade secret information. The Agency established the operation after the Inspector General at the Department of Health and Human Services refused to launch a criminal investigation into the scientists' alleged wrongdoing. FDA officials acknowledge that the operation intercepted communications that the scientists had with Congressional officials, journalists, and others, but FDA maintained that the e-mails "were collected without regard to the identity of the individuals with whom the user may have been corresponding." Additionally, FDA claimed that they did not intend to prevent employees from making these communications, and that individuals outside of the agency were not targets of the operation.

Continue reading "FDA E-Mail Whistle-Blower Investigation Continues as New Documents Are Revealed" »

July 13, 2012

GDUFA and Biosimilars Key Topics at Q1 Productions Regulatory and Commercialization of Generic Drugs & Biosimilars in Alexandria

On July 12-13, Q1 Productions hosted a conference in Alexandria, Virginia: "Regulatory Clearance & Commercialization of Generic Drugs & Biosimilars" to a full house. FLH Partner Brian J. Malkin spoke on "Biobetters and Extending into the Marketplace Beyond Patent Expiration", moderated and commented in a kickoff panel with Marcie McClinitic Coates, Chief of Staff Mylan and Hayden Rhudy, Senior Health Policy Advisor, The Office of Senator Orrin G. Hatch, on "Preparing for the Evolution of the Generic Drug and Biosimilar Industry", and chaired the Biosimilars Tracked Session in the afternoon. Other featured key conference speakers included FDA's Peter Beckerman, Senior Policy Advisor, Office of the Commissioner, and Russell Wesdyk, Center for Drug Evaluation and Research ("CDER"), Office of Pharmaceutical Science, and Bruce Pokras, Senior Corporate Counsel, Pfizer, and Elizabeth Jex, Attorney Advisor, Federal Trade Commission ("FTC").

Q1 Productions Regulatory Clearance & Commercialization of Generic Drugs & Biosimilars

In the kickoff panel, Coates questioned whether there was a "patent cliff", given the numerous opportunities to improve up on currently-marketed products and the inevitable development of a biosimilar pathway. Coates, moreover, had been involved in the Generic Drug User Fee Act ("GDUFA") negotiations and was hopeful that with the infusion of generic drug use fees starting in October 2012, the generic drug industry would see faster review times and a more responsive FDA when it came to new product development for generics.

In the same panel, Malkin asked Rhudy how the Biosimilars Price Competition and Innovation Act ("Biosimilars Act") came to be added to the Patient Protection and Affordable Care Act ("Affordable Care Act") in March 2010. Rhudy replied that once Congress had reached agreement on the exclusivity period for new biologicals (12 years), Congress essentially lifted the language from the most well-supported bill at the time without additional debate. Coates and Malkin then discussed why they thought that no applicant had filed a biosimilar application almost two and half years since the Biosimilars Act was passed. Much of their discussion regarding the lack of a developing biosimilars industry in the U.S. centered on the uncertain regulatory framework articulated by FDA and the complicated litigation pathway that would undoubtedly be costly for a biosimilar applicant to pursue. For instance, they noted that to date FDA had only partially discussed in its initial guidances the analytical process to compare a proposed biosimilar with its referenced product, while leaving out important details such as the clinical requirements for interchangeability, product naming, and what requirements FDA may waive. In response to these criticisms, Rhudy said that Congress would be focused more on the Affordable Care Act, now that the Supreme Court said that it was Constitutional, and the election, knowing that if they opened up the Biosimilars Act for debate, it might never be passed again. In essence, Rhudy said that Congress wanted to give more time to the Biosimilars Act to work, especially since Congress provided FDA with considerable discretion to help develop the industry and improve patients' access to affordable biological medicines.

Following the kickoff presentation, another key presentation featured Coates, Beckerman, and Wesdyk, speaking about GDUFA--why it was needed and what it hoped to accomplish. The speakers noted that since the industry took off with the Hatch-Waxman Act in 1984, the industry has continued to grow with increasing foreign product and active pharmaceutical ingredient development, which has strained FDA's limited resources. Wesdyk stressed that GDUFA differed from the previous iterations of the Prescription Drug User Fee Acts ("PDUFAs") in that it featured efficiency enhancements that promised to provide greater impact of the approximate $299 million in user fees per year at a relatively-low cost (less than one-half of one percent of generic drug sales), resulting in anticipated ten-month review cycles. Coates cautioned that since GDUFA mandated FDA to collect backlog fees for pending abbreviated new drug applications ("ANDAs") as of September 30, 2012, ANDA applicants should take a careful look at their ANDA portfolios to make sure that they withdraw any pending ANDAs that they were no longer pursuing. The FDA panelists noted that GDUFA had no waivers or grace period for backlog fees but thought most of the fees were "de minimis," noting that most GDUFA fees would be collected via a similar system as PDUFA. Failure to pay fees not tied to backlog fees, however, could lead to a product being deemed misbranded, the FDA panelists cautioned, but these fees had a limited grace period. The FDA panelists hoped that the fees would incentivize the generic drug industry to submit higher quality ANDAs resulting in fewer review cycles.

Continue reading "GDUFA and Biosimilars Key Topics at Q1 Productions Regulatory and Commercialization of Generic Drugs & Biosimilars in Alexandria" »

July 9, 2012

FLH Partner Andrew S. Wasson Speaks at FDLI's Inaugural Intellectual Property Throughout the Drug Development Lifecycle Conference on July 17 in Washington, D.C.

FDLILogo.jpgFDA Lawyers Blog is pleased to announce that Andrew S. Wason, Partner, in our New York office is a key presenter at the Food and Drug Law Institute's ("FDLI's") Intellectual Property Throughout the Drug Development Lifecycle: Opportunities and Challenges Conference in Washington, D.C. on July 17, 2012. FDLI's new Conference will address the intellectual property issues most important to patent litigators and in-house counsel in the pharmaceutical and generic industries, as well as the critical regulatory issues affecting these industries.

Course Topics:

  • The Role of IP During Drug Discovery and Pre-Clinical Drug Development
  • Brand Development Through IP in the Clinical Testing Phase
  • Post-Marketing IP Protection and Enforcement
  • Third Party IP: Preserving Freedom to Operate
This conference is designed for professionals in regulatory affairs, legal, and marketing, in the pharmaceutical and generic industries, as well as consulting, pharmacy and management representatives. This conference also targets intellectual property, and more specifically, patent attorneys.

FDA Lawyers Blog readers can join us at this program and receive a 15% discount off registration by using the promotional code: IPSP2012. Please feel free to share this code with your colleagues.

For more information and to register, visit the course website. We hope to see you there!

July 6, 2012

Nanotechnology: User Fee Bill Increases Funding for FDA Studies

nanotechnology.bmpThe Food and Drug Administration Safety and Innovation Act, otherwise known as the User Fee Bill, has passed through Congress and awaits the President's signature. This Bill, mostly known for implementing user fees for generic drug applications, also provides new programs to foster the study of nanomaterials in products regulated by FDA. Section 1126 of Title XI, Subsection C calls for the Secretary to "intensify and expand activities related to enhancing scientific knowledge regarding nanomaterials, ... to address issues relevant to the regulation of those products, including potential toxicology, the potential benefit of new therapies derived from nanotechnology, the effects of nanomaterials on biological systems, and the interaction of such nanomaterials with biological systems." This provision mirrors the Nanotechnology Regulatory Science Act of 2011 introduced by Sens. Ben Cardin (D-MD) and Mark Pryor (D-AR) last year, which stalled after its introduction in the Senate.

Nanomaterials utilize nanotechnology--manipulation of matter on the atomic and molecular scale. Nanomaterials, measured in billionths of a meter, range from 1- 100 nanometers (nm) and are used in a range of products, from paint and sunscreen to drugs and cosmetics. In 2010, the National Science Foundation estimated that nanotechnology-based products and manufacturing would add 2 million jobs and $1 trillion dollars in revenue to the world economy by 2015. These nanoproducts have different physical, chemical, and biological properties than conventionally-scaled materials, and some speculate that these properties may involve unknown risks to humans and our environment.

Written by Caroline Bercier

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The importance of nanomaterials has been recognized for some time. President Clinton advocated nanotechnology research, and President George W. Bush increased funding for nanotechnology development in 2003 with the passage of The 21st Century Nanotechnology Research and Development Act. However, this will be the first time that Congress has mandated that FDA study nanotechnology to evaluate the safety and toxicity of nanomaterials in consumer goods and products.

Continue reading "Nanotechnology: User Fee Bill Increases Funding for FDA Studies" »

July 5, 2012

European Pharmacovigilance Goes Into Effect July 2

eyemouthnew.jpgOn July 2, the much heralded new European Pharmacovigilance legislation came into operation. This new piece of legislation is aimed at promoting and protecting public health by strengthening the existing Europe-wide system for monitoring the safety and benefit-risk balance of medicines and provides regulators with a range of new or improved tools to ensure that patients are not exposed to unnecessary risks when taking medicines.

Highlights of the new legislation include:

  • The establishment of a new scientific committee, the Pharmacovigilance Risk Assessment Committee ("PRAC").

  • A clarification of the roles and responsibilities leading to more robust and rapid European Union ("EU") decision-making.

  • The engagement of patients and healthcare professionals in the regulatory process.

  • An improved collection of key information on medicines, e.g., through risk-proportionate, mandatory post-authorization safety and efficacy studies.

  • More transparency and better communication.

The first meeting of the new key committee, PRAC, will be on July 19 and 20, 2012. PRAC's mandate includes, among other things, "All aspects of the risk management of the use of medicinal products including the detection, assessment, minimization and communication relating to the risk of adverse reactions, having due regard to the therapeutic effect of the medicinal product, the design and evaluation of post-authorization safety studies and pharmacovigilance audit".

Continue reading "European Pharmacovigilance Goes Into Effect July 2" »

July 3, 2012

Infringement Contention Failure Leads to Summary Judgment of Non-infringement

gavelgold.jpgOn June 28, Judge Katherine B. Forrest of the United States District Court for the Southern District of New York granted summary judgment of non-infringement to SAP AG and SAP America, Inc. ("SAP") due to DataTern, Inc.'s ("DataTern") failure to serve patent infringement contentions. SAP AG v. DataTern, Inc., No. 1:11-cv-02648. The ruling stems from a suit filed by SAP, seeking a declaratory judgment that it has not infringed U.S. Pat. No. 5,937,402 ("the '402 patent"). DataTern counterclaimed, asserting infringement of the '402 patent. Although Judge Richard J. Holwell was originally the presiding judge over this case, he stepped down from the bench in February 2012, and the case was reassigned to Judge Forrest. Shortly after taking over the case, Judge Forrest issued an order, mandating that DataTern serve its infringement contentions for the '402 patent by March 23, 2012. Broadly speaking, infringement contentions are the patent holder's assertion of which claims of the patent-in- suit it believes are infringed by which products or methods of use of the accused infringer. Specifically, the patent holder must produce a "claim chart", identifying where each element of each asserted claim is found in each accused product or method of use. The patent holder must also indicate how it intends to satisfy each element of the asserted claims for infringement.

DataTern failed to serve the infringement contentions for the '402 patent by the deadline that Judge Forrest set. Accordingly, on April 26, 2012, SAP filed a motion for partial summary judgment, seeking a judgment that it has not infringed the '402 patent. In opposition, DataTern alleged that it has not served infringement contentions because SAP failed to timely provide it with the source code necessary to formulate the contentions. Judge Forrest was unconvinced by this argument and pointed out that DataTern had never filed a motion to compel discovery. Accordingly, Judge Forrest concluded that any alleged failure by SAP to provide source code could not excuse DataTern's failure to file infringement contentions.

DataTern additionally argued that under Judge Forrest's Procedures for Patent Cases, a party may amend its infringement contentions "upon a timely showing of good cause." Judge Forrest rejected this argument. She explained that a prerequisite to amending infringement contentions is to serve initial infringement contentions for the relevant patent in compliance with the court's orders. Judge Forrest noted that if this rule were read otherwise, patent holders in multi-patent cases could serve infringement contentions with respect to one patent, and then "amend" the contentions to include the other patents in suit. Further, Judge Forrest noted that even if DataTern's late contentions were considered "amendments," they would not be accepted, because DataTern had failed to show good cause for the delay, as required by the rule.

Continue reading "Infringement Contention Failure Leads to Summary Judgment of Non-infringement" »

July 2, 2012

Supernus Receives Tentative Approval for its Epilepsy Drug Trokendi XR™

epilepsybrian.jpgOn June 25, FDA granted tentative approval to Supernus® Pharmaceuticals for its Trokendi XR™ (extended-release topiramate) drug product. Trokendi XR™ is a once-daily oral extended-release capsule intended for use as an initial monotherapy in patients 10 years of age and older who suffer from partial-onset or primary generalized tonic-clonic seizures, and for adjunctive therapy for patients 6 years of age and older with either partial-onset or primary generalized tonic-clonic seizures, or with seizures associated with Lennox-Gastaut syndrome (a form of childhood-onset epilepsy).

Immediate-release topiramate is currently marketed by Johnson & Johnson as Topamax®, and the immediate-release product is also available from various generic companies. Trokendi XR™, referred to by Supernus® as SPN-538, is the first extended-release form of topiramate, and it is designed to increase patient compliance and tolerability (smoother and more consistent levels of topiramate in the blood) as compared to the immediate-release form. Reduced fluctuations of topiramate levels in the blood result in fewer side effects and lower frequencies of breakthrough seizures.

Supernus® filed its NDA for Trokendi XR™ under Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 355 (b)(2)), which allows for the submission of a New Drug Application ("NDA") in which one or more of the investigations relied on by the applicant for approval "were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted . . . ." NDAs that are submitted under section 505(b)(2) must include a certification for each patent claiming the drug for which the investigations were conducted. Supernus® relied on the safety and efficacy studies performed by Johnson and Johnson for its Topamax® immediate-release product. Supernus® conducted its own studies to ensure that the differences between Trokendi XR™ and Topamax® did not compromise Johnson & Johnson's Topamax® safety and efficacy data.

Because Supernus® had to make certifications for any relevant patents covering Topamax®, final approval from FDA depends on whether Supernus® can resolve a marketing exclusivity issue for a certain pediatric population. In its approval letter, FDA said, "A tentative approval, and not an approval, is necessary because of the existence of protected information included in the present Topamax® labeling that provides safety information in patients 1 to 24 months of age, and is considered necessary for safe use." Jack Khattar, CEO and President of Supernus®, said that the company is working with FDA to better understand this outstanding issue, and that they continue to move towards final approval for Trokendi XR™.

June 27, 2012

FLH Partner Malkin Quoted in FDA News Article on Biosimilars - Upcoming Conferences Featuring Biosimilars

dna.jpgFDA Lawyers Blog is pleased to announce that FLH Partner Brian J. Malkin was quoted in an FDAnews article by David Pittman on June 20 commenting on biosimilars and the increasing innovator biological - generic drug pair-ups that have been occurring. Pittman's article focused on the latest Dr. Reddy's - Merck KGaA ("Merck") partnership that reportedly will focus on oncological, monoclonal antibodies. The plan calls for Dr. Reddy's to conduct early-phase research and development with Merck handling the later-phase clinical trials and scale-up manufacturing. In addition, Merck will commercialize the products in most parts of the world, paying Dr. Reddy's royalties, but in the United States, the companies will commercialize the products together on a profit-sharing arrangement.

Malkin was quoted as saying that the generic-biosimilar partnerships are becoming increasingly popular because they help split, the cost, risk, and difficulty in developing biosimilar products. He also explained that the partnerships make sense, because innovator companies are good and developing new products and marketing them, while generic companies are good at deformulating innovative products and finding ways to manufacture them at a lower cost. The partnerships further help to mitigate the inherent weaknesses with each party: innovators are not accustomed to many of the analytical techniques that FDA has said that it will require to demonstrate similarity between innovator biologics and the biosimilar counterparts, and generic companies are not accustomed to marketing their products (for the most part) or formulating biological products, which are much more resource intensive.

Malkin's observations were echoed by statements made by Merck in other arenas, with Merck executive board member Stefan Oschmann saying, "Sharing know-how, risks and rewards is the right approach to enter the emergent biosimilars market and will be a win-win for both parties." According to Merck, it had already factored the investments needed for this collaboration into its profit outlook.

Malkin will be speaking at two upcoming conferences featuring biosimilars next month, first in the Washington, D.C. Area on July 12 with Q1 Productions' Regulatory Clearance & Commercialization of Generic Drugs & Biosimilars Conference and then in Boston on July 17 with the American Conference Institute's Clinical Trials Conference. Malkin's presentations will take advantage of his extensive knowledge of this developing field, fueled by his observation in recent meetings such as the Biotechnology Industry Organization's International Convention, where Malkin attended events featuring key FDA decision makers Janet Woodcock, M.D., Director of the Center for Drug Evaluation and Research, and Karen Midthun, M.D., Director for the Center for Biologics Evaluation and Research identifying key issues in their respective center and speaking about the future of biosimilars, as reported here. These events will be some of the first events to follow the eagerly-anticipated Supreme Court decision regarding the constitutionality of the Affordable Care Act, which possibly threatened the immediate future of biosimilars, if the Act is entirely overturned, as some has speculated.

June 26, 2012

Isolated DNA Patentability: ACLU and Myriad Complete Supplemental Briefing Based on Prometheus

Supreme Court.jpgOn June 15, supplemental briefing was completed in Association for Molecular Pathology v. Myriad Genetics, Inc. at the Federal Circuit. The parties had been Ordered to file simultaneous briefs addressing the question: "What is the applicability of the Supreme Court's decision in Mayo [v. Prometheus] to Myriad's isolated DNA claims and to method claim 20 of the '282 patent [U.S. Patent No. 5,747,282]?" In addition, the Federal Circuit invited amicus briefs. As many as seventy organizations and individuals answered this invitation, as well as the United States (who received an express invitation). Oral argument for this appeal is scheduled for Friday, July 20, 2012.

This case considers a fundamental issue, namely: What subject matter is eligible for patent protection? This is a threshold question of patentability, previously reported here, which the United States Supreme Court recently considered in Mayo Collaborative Services v. Prometheus Laboratories, Inc. After deciding Prometheus, the Supreme Court vacated the Federal Circuit's previous decision in Myriad and set this present appeal in motion by remanding the case to the Federal Circuit for reconsideration in light of Prometheus. As demonstrated by their briefing, however, both the Plaintiffs and Myriad have very different takes on what Prometheus stands for--and what subject matter is patentable.

The Plaintiffs argue that claiming isolated DNA does no more than to patent laws of nature and products of nature; in other words, the correlation between the patented DNA and the BRCA proteins it encodes. Plaintiffs assert that the product is the DNA itself and "another entity cannot invent a DNA molecule that encodes for the same protein and embodies a person's BRCA1 and BRCA2 genetic information" because Myriad's patents stand in the way. Thus, Plaintiffs state, "[a]s a consequence, no other laboratory in the U.S. has been able to provide clinical testing of these genes . . . ."

Continue reading "Isolated DNA Patentability: ACLU and Myriad Complete Supplemental Briefing Based on Prometheus" »

June 25, 2012

Online Pharmacy Founder Arrested for Allegedly Selling Counterfeit Drugs

imagesCAJSKD4S.jpgThe founder of an online pharmacy was recently arrested for allegedly selling counterfeit prescription drugs. Specifically, the United States government has charged Andrew Strempler ("Strempler"), the founder of Mediplan Health Consulting, Inc.--also known as RxNorth.com ("RxNorth")--with one count of conspiracy to commit mail fraud and wire fraud, as well as two counts of mail fraud. A grand jury returned an indictment against Strempler for these offenses in June 2011, but because Strempler was deemed a flight risk, the indictment was sealed until his arrest.

In support of the charges, the indictment alleges that Strempler falsely claimed that RxNorth was selling safe prescription drugs that complied with the rules of United States regulatory authorities. These claims were allegedly made through RxNorth's website and brochures. The indictment alleges that contrary to these representations, Strempler and his co-conspirators obtained the prescription drugs from various countries without ensuring the drugs' safety or authenticity. More specifically, Strempler is alleged to have operated a facility in the Bahamas, where the drugs were shipped. The orders were then allegedly filled in the Bahamas, and given labels stating that they had been filled by RxNorth in Canada. Further, the drugs allegedly were not sold in accordance with FDA regulations, because they were allegedly counterfeit, misbranded, and not FDA-approved. Additionally, the indictment alleges that RxNorth falsely boasted that it was using the "best equipped" laboratory to test its drugs for safety and authenticity even though RxNorth actually only had one piece of equipment that was capable of limited testing.

The indictment further claims that the FDA previously wrote a letter to Strempler in 2001, warning him that it would be illegal to sell drugs that were not approved by the FDA. This allegation, if proven true, will likely be used to show that Strempler knowingly violated federal law. If convicted of the charges, Strempler faces up to twenty years in prison. Additionally, the government seeks forfeiture of the proceeds that Strempler obtained from his allegedly unlawful conduct. The government estimates that Strempler's proceeds have been at least $95 million. This criminal case underscores the federal government's commitment to ensuring that only genuine, FDA-approved prescription drugs are sold in the United States.

June 22, 2012

Federal Pharmaceutical Pedigree Law Proposed to Address Concerns of "Gray Market"

In a June 11, 2012 letter, Representative Elijah Cummings of Maryland and Senator John Rockefeller of West Virginia summarized growing concerns about the "gray market" for prescription pharmaceuticals. The pharmaceutical gray market consists of the sale of prescription drugs through distribution channels that, although legal, are unofficial and generally not intended by the products' original manufacturers. The recipients of the letter included Senators Tom Harkin and Michael Enzi as well as Representatives Fred Upton and Henry Waxman. All four Congressmen are working on legislation that would reauthorize the FDA's user-fee programs. That same legislation also addresses pharmaceutical supply chain security, which was the focus of the June 11 letter. It provided the four Congressmen with information obtained from a recent investigation, launched by Representative Cummings and later joined by Senators Rockefeller and Harkin, into the pharmaceutical gray market and its impact on the cost and safety of high-demand but short-supply drugs.

Representative Cummings began his investigation in October 2011 in response to claims by hospitals and health care organizations that some pharmaceutical companies were taking advantage of drug shortages. "Hospitals and patient groups reported numerous examples in which patient care was compromised because hospitals could not obtain adequate supplies [at reasonable prices] of ... [critical] drugs through their normal distribution networks." The investigation initially consisted of information request letters sent by Representative Cummings to five companies that marketed drugs to hospitals. He sought information about the cost and source "of five injectable drugs that were at the time facing national shortages, according to FDA." The study later expanded to include information requests from more than 50 prescription drug manufacturers, distributors, and pharmacies. At least one company refused to disclose its source and price information voluntarily.

The investigation uncovered substantial evidence that many pharmaceutical companies engaged in questionable practices with respect to drugs in short supply. Rather than travel from manufacturer to distributor and then to dispenser, which is the intended distribution chain for prescription pharmaceuticals, short-supply drugs move through much longer gray market distribution channels. Such channels consist of numerous companies that purchase pharmaceuticals and then resell them at inflated prices. This process can happen several times, and on each occasion, the price of the pharmaceuticals increases. "The markups ... bear little or no relation to the companies' cost of purchasing, shipping, or storing the drugs."

Continue reading "Federal Pharmaceutical Pedigree Law Proposed to Address Concerns of "Gray Market"" »

June 21, 2012

User Fee Reauthorization Bills Reconciled by House and Senate Members--House Passes [Update--Senate Passes Too]

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for US_Congress_02.jpgSenate Update: On June 26, the Senate Okayed the reconciled user-fee reauthorization bill that had passed the House last week. Again, there was significant bipartisan support for the legislation, which bill passed by a 92-4 margin. All that remains is President Barack Obama's signature, which looks certain to occur before the July 4 goal that Congress had set for the passage of this legislation. While the President's signature will finalize a bill that has been over a year in the making, Thursday's Supreme Court ruling on the constitutionality of the Patient Protection and Affordable Care Act could have an immediate effect on the user fee bill. Most notably, if the Supreme Court strikes the entire healthcare bill, the status of the biosimilar approval pathway would be in question. This, in turn, could lead to some questions about the $128 million dollars the biosimilars companies are scheduled to pay FDA over the next five years.

On June 20, the House passed a reconciled user-fee reauthorization bill by a more-than-two-thirds-voice vote. Earlier in the week, members from the House and Senate ironed out the details of a reconciled user-fee reauthorization bill for FDA. The House passed its version, the Food and Drug Administration Reform Act (H.R. 5651), earlier this month (last discussed here), and the Senate approved its version (S. 3187) in late May (last discussed here). Both versions contained near identical reauthorized the user fee programs for brand-name drugs and medical devices and created new user-fee programs for biosimilars and generic drugs. There were, however, a number of differences that had to be addressed.

Among the casualties from the reconciled version was an effort to impose stricter controls for potentially abusive prescription drugs. Congress rejected the Senate's proposal that would have: (1) required patients seeking refills for hydrocodone-combination products to obtain new prescriptions; (2) required a higher level of security for transportation and storage of the drugs; and (3) increased penalties for misusing the drugs. Pharmacists and drug stores opposed these measures, claiming they would make it more difficult from those in pain to get access to their medications and that pharmacies would face expensive administrative obligations under the proposal.

Continue reading "User Fee Reauthorization Bills Reconciled by House and Senate Members--House Passes [Update--Senate Passes Too]" »

June 20, 2012

FDA Townhall at BIO 2012

Thumbnail image for Thumbnail image for Thumbnail image for FDA.jpegOn June 19, FDA Center Directors Karen Midthun, M.D., Director of the Center for Biologics Evaluation and Research ("CBER"), and Janet Woodcock, M.D., Director of the Center for Drug Evaluation and Research ("CDER"), provided a snapshot of each of the respective Center's hot issues for the coming year. Midthun began, noting how CBER's priorities continue to focus on development of vaccines for anticipated disease areas, such as influenza and the possibility of pandemic influenza, such as H1N1, which requires increasing international collaboration with the World Health Organization ("WHO") and the European Medicines Agency ("EMA"). In addition, CBER has worked on the increasing interest in the development of in-home diagnostic test kits, such as a kit for Human Immunodeficiency Virus ("HIV").

Woodcock provided the bulk of the Townhall news, including expected priorities generated by the anticipated new user fees for generic drugs and biosimilars, as well as the Prescription Drug User Fee Act V ("PDUFA V"), which will undoubtedly usher in additional new program priorities. Some issues CDER anticipates in fiscal year 2012-2013 include drug shortages, drug standards/IT, quality management and "lean" pilots (achieving an additional 25% efficiency already), pharmacy compounding, and positron emissions scanning. Interestingly, the new user fees create their own new priorities for creating systems to charge and collect the anticipated user fees, which must be enacted by October 1, because CDER needs the fees, particularly for generic drugs, to begin to tackle the increasing backlog.

Some of the PDUFA V enhancements expected are increased communication between FDA and sponsors during the product review cycles, including additional mid-cycle feedback and late cycle meetings and modifications to the PDUFA clock, meta-analyses methods, biomarkers, a standardized benefit/risk format, use of patient-reported outcomes, additional support for orphan drugs, standardized Risk Evaluation and Mitigation Strategies ("REMS"), using Sentinel to evaluate drug safety, and mandated electronic submissions. Some potential PDUFA V enhancements (not yet passed) include enhanced use of accelerated approval and new procedures for "breakthrough therapies"--both ideas FDA supports.

Continue reading "FDA Townhall at BIO 2012" »

June 19, 2012

Raising the Bar for Class Actions?

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Supreme Court.jpgOn June 11, the U.S. Supreme Court agreed to address the issue of whether investors must prove that alleged misrepresentations had a material effect on stock price in order to pursue a class-action stock-fraud suit. Amgen, Inc. ("Amgen") petitioned the Supreme Court for a writ of certiorari addressing the decision from the Court of Appeals for the Ninth Circuit. The Ninth Circuit held that shareholders did not need to show the materiality of alleged misstatements prior to receiving class certification. The Ninth Circuit explained that plaintiffs "need only allege materiality with sufficient plausibility" to be awarded class certification. Amgen's appeal is supported by the U.S. Chamber of Commerce, former SEC commissioners, and the pharmaceutical industry's trade group.

In 1988, the Supreme Court held in Basic v. Levenson that a class only needs to demonstrate an efficient market and alleged public misstatements in order to be certified as a class based on the fraud-on-the-market presumption. However, since that decision, there has been a split among the Circuits as to whether shareholders have to show materiality of the misstatements in order to get class certification. The Second and Fifth Circuits require proof of materiality for class certification and allow defendants to rebut such evidence. The Third Circuit does not require proof of materiality prior to class certification, but, allows defendants to present evidence disproving the materiality of any alleged misrepresentation. The Seventh and Ninth Circuits require no proof of materiality for class certification and defendants cannot present any evidence rebutting the materiality of any alleged misrepresentations.

This suit was brought by Connecticut pension funds on behalf of purchasers of Amgen stock (collectively, "plaintiffs"). Plaintiffs allege that Amgen down-played safety concerns about Aranesp and Epogen--two drugs used to treat anemia--which led to inflated share prices for Amgen stock. Amgen is seeking to overturn the Ninth Circuit's decision that certified the lawsuit as a class action. Class certification confers a substantial benefit to plaintiffs in settlement negotiations because of the substantial risk that defendants take by litigating a class action trial. Amgen argues that allowing class certification in a case such as theirs would lead to settlement of meritless cases. Amgen asserts that plaintiffs in this case cannot show that the alleged misrepresentations had a material effect on the price of Amgen shares. Amgen further asserts that market had readily available access to the drugs' safety information and therefore, adjusted itself accordingly.

Plaintiffs allege that the misrepresentations took place from April 2004 through May 10, 2007. Plaintiffs assert that Amgen's stock price was inflated because Amgen hid concerns that Aranesp and Epogen exacerbated tumor growth in clinical trials. Amgen's shares dropped more than 9% on May 10, 2007 when FDA's expressed concern about these drugs and recommended new limits on patient use. According to plaintiffs, Amgen repeatedly reassured inventors of the safety of Aranesp and Epogen despite this negative clinical trial data. Plaintiffs do not dispute that they need to show the materiality of Amgen's statements, however, they assert that issue should be left for trial, not a decision made prior to class certification. The Supreme Court will hear oral arguments in October 2012.

June 18, 2012

Pharmacies Allege Wyeth and Teva Violated Sherman Act

Thumbnail image for pilltest.jpgOn June 12, Rite Aid and several pharmacies (hereafter "Rite Aid") filed suit against Wyeth, Inc. ("Wyeth") and Teva Pharmaceuticals USA, Inc. ("Teva") in the United States District Court for the District of New Jersey, alleging that Wyeth and Teva entered into an unlawful agreement to delay Teva's launch of extended release venlafaxine (reference listed drug Effexor XR®) and that Wyeth has unlawfully monopolized the market for extended release venlafaxine. The case is Rite Aid Corp. et al. v. Wyeth, Inc. et al., No. 3:12-cv-03523.

Rite Aid claims that Wyeth entered into an unlawful conspiracy with Teva whereby Teva agreed not to market its generic version of Effexor XR® in exchange for Wyeth's promise not to compete with Teva during Teva's period of generic exclusivity. Due to this conduct, Rite Aid alleges that generic competition was delayed for approximately two years, resulting in significantly higher prices than there would have been if competition had not been blocked. This alleged conduct, according to Rite Aid, constitutes an agreement in restraint of trade in violation of Section 1 of the Sherman Act.

In addition, according to the complaint, Wyeth fraudulently procured patents relating to extended release venlafaxine. This alleged fraud forms the basis for Rite Aid's claims of monopolization under Section 2 of the Sherman Act. In support of its allegations, Rite Aid claims that Wyeth made a series of nondisclosures and misrepresentations to the Patent and Trademark Office ("PTO") that amounted to fraud. For example, Rite Aid alleges that after certain broad claims were rejected and Wyeth agreed to narrow them to secure a notice of allowance, Wyeth abandoned the application, despite the allowance over the narrower claims. Then, according to Rite Aid, Wyeth filed a continuation-in-part patent application containing claims nearly identical to the broad claims that had been rejected earlier. A different examiner was assigned to this new application. According to Rite Aid, Wyeth did not disclose the earlier rejection to the PTO and was able to secure the allowance of the broad (previously rejected) method of use claims.

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