Articles Posted in Legislation

troll.jpgOnce again, legislation aimed at deterring abusive patent litigation is making headlines. The Patent Litigation Integrity Act of 2013 (S. 1612) was introduced by Senator Orrin Hatch, R-Utah, on October 30, 2013, and seeks to address patent troll litigation abuses by targeting “the economic incentives that fuel frivolous lawsuits.”

Patent troll litigation is often characterized by non-practicing entities, holding patents in a shell company with very few assets, who bring baseless claims, and seek nuisance settlements. The Bill seeks to address those concerning aspects of patent troll litigation in two ways: (1) by awarding fees to the prevailing party and (2) by requiring patent trolls to post a bond sufficient to cover the accused infringer’s fees.

Fees would no longer just be awarded to the prevailing party in exceptional cases at the court’s discretion. In the proposed Bill, the court would be required to award fees to the prevailing party, except if the court found that the nonprevailing party’s position was substantially justified or the award would be unjust. With this deterrent, the Bill hopes that patent trolls will think twice about bringing baseless claims and that defendants, knowing they will be awarded their fees if they prevail, won’t be as quick to take a nuisance settlement.
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[Update: After unanimously passing the Senate on November 18, 2013, H.R. 3204–the Drug Quality and Security Act–is set to become law after an expected signature from President Obama. President Obama signed into law on November 27, 2013.]

On November 12, 2013, the Senate voted to close debate on and advance a compounding pharmacy bill–H.R. 3204–aimed at tightening government oversight of pharmacy compounding and creating a national tracking system for prescription drugs. The 97-1 vote indicated overwhelming bipartisan support for the proposal, which passed the House in September. The lone dissenter, Sen. David Vitter, objected to a final Senate vote on the proposal because he wanted the Senate to first vote on a measure that he proposed to require lawmakers to disclose which of their aides are signing up for health insurance under the Affordable Care Act and which are remaining in the Federal Employee Benefit Program.

Originally introduced in the House by Rep. Fred Upton, H.R. 3204–the Drug Quality and Security Act–seeks to address two major concerns regarding the safety and quality of the U.S. drug supply. First, and in response to last year’s deadly meningitis outbreak, the Bill seeks to strengthen government oversight of compounding pharmacies. More specifically, Title I–the Compounding Quality Act–would amend the Federal Food, Drug, and Cosmetic Act (“FD&C Act”) as to the regulation of compounding pharmacies, which have historically been regulated by state pharmacy boards. Under the proposal, pharmacies that perform traditional, small-scale compounding will continue to be regulated by state pharmacy boards. Additionally, drugs compounded by or under the direct supervision of a licensed pharmacist in a facility can elect to register as an outsourcing facility. In doing so, these drugs would be exempt from the FD&C Act’s labeling, new-drug, and proposed track-and-trace requirements if certain conditions were met, including: (1) proper registration of the facility; (2) no compounding using bulk drug substances; (3) compounding with ingredients that comply with applicable standards; (4) no compounding of drugs that have been withdrawn or removed due to lack of safety or efficacy; (5) no compounding of drugs that are essentially a copy of one or more approved drugs; (6) no compounding of drugs that have been identified as ones that present demonstrable difficulties for compounding; (7) no sale or transfer of the compounded drug by any entity other than the outsourcing facility; and (8) appropriate labeling.

The Bill also seeks to increase protection of the prescription-drug supply chain. More specifically, Title II–the Drug Supply Chain Security Act–will establish requirements to establish a track-and-trace system that will follow prescription drugs from manufactures to retail pharmacies. This national system should facilitate greater protection against counterfeiting, earlier detection of possible drug shortages, simpler recalls of defective drugs, and other drug supply-chain issues. While there will be certain waivers and exemptions, the proposal would require drugmakers to affix a product identifier on each package and case of product intended to be introduced in a transaction into commerce. Ten years after enactment, the Bill adds an electronic-tracing requirement. The Bill will require FDA to publish guidelines: (1) establishing standards for the interoperable exchange of transaction information, transaction history, and transaction statements; and (2) establishing the process by which companies may obtain waivers, exceptions, and/or exemptions to the product-identifier requirements. The national track-and-trace program will also preempt all state and local requirements regarding tracing drugs through the supply channels.
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pharmacy.jpgCompounding pharmacies are petitioning against a recent bill that would give FDA greater control over compounding manufacturers of sterile products. S.959, The Pharmaceutical Compounding Quality and Accountability Act, was unanimously passed by the Senate Health, Education, Labor and Pension Committee on May 22, 2013, and places compounding manufacturers that sell sterile products over state lines under FDA control.

The Bill, authored by Senator Tom Harkin, was a response to a deadly meningitis outbreak reported by FDA in October of 2012. The U.S. Centers for Disease Control and Prevention (“CDC”) traced the outbreak to fungal contamination in three lots of methylprednisolone acetate used for epidural steroid injections made by the New England Compounding Center (“NECC”). The CDC reported that the NECC meningitis outbreak has made 745 people sick and has caused 58 deaths in the United States. On May 24, 2013, another meningitis outbreak was announced. This recent outbreak was reportedly caused by Tennessee-based Main Street Family Pharmacy’s methylprednisolone acetate injections. The recent outbreak has sickened 24 people in Illinois, North Carolina, Florida, and Arkansas. These meningitis outbreaks have spurred the legislation that is being petitioned against.

Currently, individual States oversee their own compounding pharmacy operations. The potential shift from State to FDA control is worrisome to many pharmacists, doctors, and their patients. Specifically, there is concern that the FDA may ban compounded bio-identical hormones used to treat chemical imbalances.
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Obamabudget.jpgOver the past months, there has been a lot of speculation (see recent blogs here , here, and here) whether the White House’s proposed budget would cause a sequester situation for FDA, resulting in potential layoffs or program cuts, in an era of new user fees for generic drugs and biosimilar biological products. While initial reports and temporary budget fixes (called continuing resolutions) appeared to keep FDA’s user fees intact and available for use, FDA’s Commissioner, Margaret A. Hamburg, M.D., recently reported to members of a biotechnology trade association, the Massachusetts Biotechnology Council (“MassBio”), that it was not clear what would happen with user fees in the new federal budget.

Released on April 10, the White House’s proposed fiscal year 2014 budget is a mixed bag that has been called a “political document rather than a serious piece of legislation” with a “series of bargaining positions” that “would bleed pharma.” On the one hand, the plan would appear to confirm that FDA’s user fees would not be sequestered, given that it supported the $4.7 billion in total program budget requested by FDA, which included user fees that would help fund over 90 percent of the requested increases. On the other hand, the budget includes a myriad of proposals that would change the way the government pays for medical care and products. For example, Medicare (senior citizens’ drug coverage) Part D manufacturer discounts for branded drugs would be increased from 50% to 75% in 2015 (rather than 2020) and low-income individuals would be pushed more to generic drugs by increasing certain copayments for branded drugs and lowering certain copayments for generic drugs.

Many of the more controversial proposals were nestled in a document called “Reducing the Deficit in a Smart and Balanced Way”. Here, the White House proposes, among other things, several items to purportedly lower drug costs, including: 1) authorizing the Federal Trade Commission to stop companies from entering into certain “pay-for-delay” agreements (see below) and 2) beginning in 2014, to reduce biologic product exclusivity from 12 years to 7 years and prohibit additional periods of exclusivity for minor changes to product formulations. These two items could open up some unanticipated debate regarding the White House’s budget.
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With the $85 billion spending cuts now in effect, it is time for FDA and other agencies to adapt. The 2013 impact will be condensed into the next seven months because the federal fiscal year ends on October 1. While few details have been made available, FDA Commissioner Margaret A. Hamburg, M.D. said in an interview on Thursday that she did not anticipate FDA having to furlough workers and emphasized that the majority of the effects would not be felt in the short term. However, Hamburg estimated that the cuts will result in more than 2,000 fewer food safety inspections: “[C]learly we will be able to provide less of the oversight functions and we won’t be able to broaden our reach to new facilities either, so inevitably that increases risk.” FDA may renew efforts to implement a user fee program for the food industry to offset this hit.



President Barack Obama has vowed to continue to work with Congress to reach a compromise that would replace the cuts with a more balanced budget plan. Meanwhile, the House Appropriations Committee introduced a bill yesterday that would fund the government with $982 billion through the end of the fiscal year, assuming the sequester cuts would remain in effect. While largely focused on the Department of Defense ($518 billion) and military construction and Veterans Affairs ($71.9 billion), the general provisions maintain the funding level of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2012. The bill is scheduled to reach the House floor tomorrow.

Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for dna.jpgOn January 28, The New York Times reported that biotechnology companies are actively lobbying state legislatures to limit access to biosimilar versions, i.e., “highly similar” versions of previously-approved, innovator biological products (“biologics”). According to the author, Andrew Pollack, Amgen and Genentech are proposing bills that would make it more difficult for pharmacists to substitute biosimilar versions for the innovator’s products, unless FDA determines that a particular biosimilar version is “interchangeable” with the innovator’s product.

For instance, the Virginia House of Delegates reportedly already passed such a bill last week by a 91-to-6 vote. Other bills in the works require patient consent for substitution, pharmacist notification of the patient’s physician if a switch is made, and for both the pharmacist and patient’s physician to maintain records of any such substitutions for years.

The Generic Pharmaceutical Association (“GPhA”) and insurers generally accept that biosimilar substitution for a biologic should follow similar methods as with drugs only if deemed interchangeable by FDA but find that many of the bills go further to discourage use of biosimilars. “All of these things are put in there for a chilling effect on these biosimilars,” commented Brynna M. Clark, Director of State Affairs for GPhA, adding that many of the limits “don’t sound too onerous but undermine confidence in these drugs and are burdensome.” GPhA and insurers would prefer that legislatures leave biosimilar regulation to FDA, which has been entrusted with using its regulatory prowess to determine the necessary requirements for biosimilars and “interchangeable” biosimilars, as well as when to waive those requirements based on what is know about a particular biosimilar product.
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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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Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for Thumbnail image for drugmoney.jpegOn August 27, FDA published a Federal Register notice announcing the availability of industry guidance for generic drug user fees entitled “Generic Drug User Fee Amendments of 2012: Questions and Answers” and “Self-Identification of Generic Drugs Facilities, Sites, and Organizations.” Simultaneously with this notice, FDA also announced an upcoming public meeting on September 21, 2102 from 9 a.m. to 1 p.m. to discuss FDA’s implementation of the Generic Drug User Fee Amendments of 2012 (“GDUFA”). Finally, on the same day, another related Federal Register Notice issued: “Notice of Opportunity to Withdraw Abbreviated New Drug Applications to Avoid Backlog Fee Obligations.” Below is a snapshot of each of these items taken in turn.

GDUFA was signed into law on July 9, 2012 but the obligations arising therein begin on October 1, 2012. We have previously blogged on the genesis of GDUFA, when both the House and Senate passed GDUFA, for some background why and how we got here.

The GDUFA Q&A answers questions about the various types of fees (backlog fee, drug master file fee, generic drug submission fees (including a fee for active pharmaceutical ingredients (“APIs”) not referenced in a drug master file), and facility fees for APIs and finished dosage forms (“FDFs”)), self-identification of facilities, sites, and organizations, review of generic drug submissions, and inspections and compliance. For example, most immediately, backlog fees will be calculated based on the number of pending original abbreviated new drug applications (“ANDAs”) at the start of October 1, 2012. As was mentioned in a recent conference discussing this topic, a recommendation was made for all generic applicants to “clean house” and make sure that they did not pay fees for any pending ANDAs that they were no longer pursuing. FDA explains in this Notice that in accordance with GDUFA, FDA will divide $50 million by the number of pending ANDAs pending on this day to arrive at an individual one-time backlog fee due for each pending ANDA. Applicants wishing to remove pending ANDAs from this list, however, must do so by written notification received by FDA on or before September 28, 2012. Failure to pay the backlog fee is further explained, including a public disclosure of the failure to pay, and FDA will not receive a new ANDA or supplement submitted by that applicant “or affiliate” until the fee is paid. The GDUFA Q&A also explains when the various fees will be collected and the effect of not paying those fees timely. For new ANDAs or supplements, feed need to be paid when due, e.g., for new ANDAs, within 20 calendar days of the date that FDA provides notification that failure to pay will result in the ANDA or supplement not being receive and, therefore, reviewed.
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Thumbnail image for 3699948229_d7732f8df0_o.jpgOn August 2, four members of the House of Representatives, led by Congressman Edward Markey, introduced, H.R. 6272, “The Trial and Experimental Studies Transparency (TEST) Act of 2012.” The TEST Act will amend Section 402(j) of the Public Health Service Act, tightening the reporting requirements for the Internet site designed to better inform the public about ongoing and completed clinical trials in the United States, The main goal of the TEST Act is to prevent clinical-trial sponsors from withholding negative study data and safety concerns while emphasizing the positive results of their clinical trials.

Prior to the proposed TEST Act, under the Food and Drug Administration Amendments Act of 2007 (“FDAAA”), most United States-conducted interventional clinical trials were registered at, and most of the results of those clinical studies were eventually published. However, loopholes in the requirements of the FDAAA resulted in clinical studies that were either not registered, that failed to report results, or both. There are a number of clinical trials, therefore, that are not registered in the publically-accessible database.

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Written by Julie E. Kurzrok

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The TEST Act will require all interventional biomedical studies conducted on humans to be registered on prior to enrolling any patients. In addition, sponsors of these clinical trials will be required to post the study results and other required information on within one year of the completion date of the trial. According to the proposed legislation, interventional studies include all human studies where patients are assigned, via protocol, by an investigator to receive specific intervention where the effects of such intervention on biomedical or health-related outcomes are evaluated. For clinical trials involving drugs or medical devices that have never been approved for any use, the TEST Act permits a delayed results submission of up to two years from the date of completion of the clinical trial.
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pediatrics.jpgThere has been an increased effort to increase pediatric testing for adult medications, due to the expense of pediatric clinical trials and parent concerns about participation. For example, an alarming 70 percent of medications prescribed for children have never been tested on them, the National Institute of Health (“NIH”) estimates.

In an effort to address the issue, on July 9, 2012, President Barack Obama reauthorized the “Best Pharmaceuticals for Children Act” and “Pediatric Research Equity Act” providing drug companies with a six month period of “pediatric exclusivity” if they perform studies approved by the FDA. This approval is a main proponent in easing parents’ minds when allowing their own children to participate in clinical trials. In addition, such initiatives have helped incentivize sponsors to conduct more pediatric research with NIH funding for pediatric research rising by 18% “from $2.77 billion in 2008 to $3.28 billion in 2011.

Written by Elizabeth Barker

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Still, while improvements are on the horizon, there is much to be done to fully address the lack of pediatric clinical trials. A July 23 study in Pediatrics found a scarcity in pediatric drug trials as well. Dr. Florence T. Bourgeois, lead researcher on the new study, expressed concern that doctors have long been known to “extrapolate” findings from adult studies to then apply them to children. Bourgeois said that “children are not small adults.” Due to children’s developing bodies, they metabolize drugs differently than adults do. In fact, children encounter disease just as frequently, or more so, than adults, according to Bourgeois, yet “[c]hildren continue to be underrepresented in clinical trials compared with their burden of disease.” Overall, just 12 percent of all clinical trials focused on children and teenagers. Yet children accounted for 60 percent of those suffering the conditions studied. Bourgeois said that more may need to be done to encourage not only drug company trials, but studies funded by non-commercial sources as well.

“One of FDA’s top priorities is giving pediatricians and parents the same level of tested and researched information on drugs used to treat children that is required for drugs used to treat adults,” FDA spokesperson Sandy Walsh reportedly said. “Congress has helped increase studies for children by passing legislation that gives companies financial incentives to conduct pediatric studies and to require them to study a product they are developing for adults if the disease also occurs in children,” Walsh added.

The impact and influence of the Best Pharmaceuticals for Children Act and Pediatric Research Equity Act will be discussed by FDA’s Pediatric Advisory Committee this upcoming September. The meeting agenda includes the discussion of pediatric-focused safety reviews as mandated by both of the recently authorized Acts.