FDA Lawyers Blog

On April 23 and 24, 2013, the Food and Drug Law Institute ("FDLI") held its Annual Conference in Washington, D.C. As expected, FDLI's Conference featured the FDA Commissioner, Margaret A. Hamburg, M.D., presentations from leaders from all of FDA's Centers and the Chief Counsel, Elizabeth Dickinson, and leaders from industry, academia, and the legal bar. Unlike previous years, however, there were far fewer FDA attendees due to budget cuts, and FDA seemed more reluctant to use the Conference as a platform for announcing new policy or initiatives.

Hamburg kicked off the Conference with her recognition that FDA's budget was cut, along with other government agencies, noting that it would make times tight but that there are no planned furloughs. Hamburg said that this fiscal year, FDA lost about $209 million-$126 million in budget authority and $83 million in user fees. FDA will continue to collect user fees, but FDA cannot use them this fiscal year due to the sequesteration issue. Hamburg said that the reduced budget would mean reductions in programs but did not specify which ones. Yet, at the same time, Hamburg emphasized that FDA has been busy implementing its new regulatory authorities, including the new Center for Tobacco Products and authorities in the Food and Drug Administration Safety and Innovation Act ("FDASIA").

Written by Brian J. Malkin

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Hamburg stressed that it has become more and more apparent that its regulated industries need to build quality in their products. She highlighted that quality issues have caused two out of three drug shortages, and FDA has uncovered "shockingly unsafe drugs" at compounding pharmacies. Over the past several months, Hamburg explained, FDA has been inspecting compounding pharmacies and has found unidentified black particles in what were supposed to be sterile injectable products, rust and mold in sterile rooms, and products being processed with bare hands. At the same time, FDA has encountered increased resistance during its inspections, resulting in at least two cases needing administrative warrants. Hamburg said that FDA believes there should be a distinction between traditional and nontraditional compounding--traditional is individualized to patient; nontraditional is sterile product prepared out of state compounded and anticipated without a prescription. For nontraditional compounding, FDA has asked Congress for more clear FDA authority to monitor and examine records in the "patchwork" of compounding rules.

The 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.

Written by Shelly Fujikawa, Ph.D.

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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.

On 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.

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.

On September 6, District of Columbia District Judge Amy Berman Jackson granted FDA's motion to dismiss claims brought by K-V Pharmaceutical Company ("K-V") either because the claims were unreviewable as discretionary FDA enforcement activities or failed to state a claim. Jackson's Memorandum Opinion helps solidify FDA's position that its discretion not to take an enforcement action is presumed to be immune from review unless Congress has otherwise provided "meaningful standards . .. for defining the limits of that discretion." (citing Heckler v. Chaney),

Makena™ is essentially a story about K-V's bid to take advantage of provisions under the Orphan Drug Act to obtain seven years of exclusivity to market the active ingredient in Makena™ (17-hydroxyprogesterone caproate) for women who have had a singleton pregnancy and a history of prior preterm delivery. Under the Orphan Drug Act, no other company can obtain approval to market the same active ingredient for this indication, which affects less than 200,000 patients per year in the United States, until this exclusivity would have expired. Prior to approval of Makena™, however, pharmacies had been compounding the same active ingredient for individual patients based on individual prescriptions--not a marketed product--at far less cost, around $10-20 per injection rather than the initial price of Makena™ at $1500 per injection, or up to $30,000 for the entire treatment. For more background, see, for example, an earlier blog here.

Written by Brian Malkin

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K-V had hoped that orphan drug approval would block competitors for seven years and its approval would make FDA take additional enforcement actions against pharmacies that had been routinely compounding the same active ingredient for the same indication. Indeed, many had feared, including a number of Congressmen, that FDA would take such actions, causing the cost of treatment to dramatically rise, under a general assumption that an approved drug product would be preferred, from a public health perspective, over a compounded product.

On July 17, 2012, FLH Partner Brian J. Malkin joined other experts in the field of clinical trials to discuss methods for ensuring safe and compliant domestic and international clinical trials. New to the ACI's Clinical Trials Conference running for more than seven years was Malkin's presentation "Safely Conducting Biosimilars Clinical Trials: Understanding FDA's Requirements for Biosimilar Clinical Trials". The audience was comprised of many individuals seasoned in traditional clinical trials, who came to the conference in Boston to learn about the newest trends in clinical trials.

Some of the featured government speakers included Karena Cooper, J.S., M.S.W., Acting Associate Director of Policy and Communications and Regulatory Counsel, Office of Scientific Investigations ("OSI"), Center for Drug Evaluation and Research, FDA, and Mary E. Crawley, Assistant U.S. Attorney, Eastern District of Pennsylvania. Other featured speakers included former government enforcers and top in-house counsel from sponsor biopharmaceutical and medical device companies, contract research organizations ("CROs"), hospitals, universities, and research institutions.

Written by Brian Malkin

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Cooper described FDA's new inspection platform, where FDA does not need to inspect a facility to issue a warning letter, and the reorganization of the Office of Compliance. In terms of postmarket studies, sponsors are now provided with milestone timetables where failure to complete a milestone by a certain time will result in a violation. While a sponsor may show "good cause" for failure to meet a milestone, FDA has a very limited high bar, essentially for items completely outside the sponsor's control. Examples where FDA did not find good cause included difficult recruitment, costly studies, or development of data in lieu of the data that the sponsor agreed to provide. Regarding postmarket studies, however, FDA has already issued its first warning letter dated February 17, 2012 that utilized the no-inspection format. In this letter, FDA provided the sponsor with 30 calendar days to respond. FDA's Office of Compliance also has new civil money penalties to enforce its provisions that Cooper said FDA is "actively considering" but has not utilized yet. Cooper also described how FDA is working with the European Medicines Agency ("EMA") for joint and observed inspections, where there is a "robust" confidentiality agreement in place.

In 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.

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.

On 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.

Written by Howard E. Rosenberg, Ph.D.

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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".

The 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.

Written by Jonathan Herstoff

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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.

In a recent 43-54 vote, the U.S. Senate defeated a proposed amendment to the FDA Safety and Innovation Act (S.3187), which we previously reported on here, that would have allowed Americans to purchase drugs from Canadian pharmacies. The Amendment, proposed by Sen. John McCain (R-Ariz.) sought to lower the cost of prescription drugs for Americans.

In the days leading up to the vote, McCain had been critical of the pharmaceutical industry for lobbying the Senate to defeat the Amendment. "In a normal world, this would probably require a voice vote, but what we're about to see is the incredible influence of the special interests, particularly pharma, here in Washington, that keeps people who cannot--that have to make a choice between eating and medicine," McCain said. "So what you're about to see is the reason for the cynicism that people have for the way we do things in Washington. Pharma, one of the most powerful lobbies in Washington, will exert its influence again at the expense of average, low income Americans who, again, will have to choose between medication and eating."

Written by Kenneth J. Szeto

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While the Amendment was defeated, several fellow Republicans voiced support for McCain's proposal. Sen. Charles Grassley (R-Iowa), a proponent of importation of Canadian pharmaceuticals, reasoned that allowing importation would provide economic incentives. "I have always considered drug importation a free-trade issue," Grassley said. "Imports create competition and keep domestic industry more responsive to consumers. If Americans could legally and safely access prescription drugs outside the United States, then drug companies will be forced to re-evaluate their pricing strategies."

In an effort to further investigate the position in emerging economies, FDA commissioned the Institute of Medicine ("IOM") to study and identify the core elements of food, drug, medical product, and biologics regulatory systems in developing countries with a view to identifying the main gaps in those systems and to design a strategy for FDA and other stakeholders, which can be used to strengthen the food and medical products regulatory systems abroad. FDA is under relentless pressure to increase the number of inspections it carries out of foreign medicinal product manufacturers. However, FDA cannot do this without help and without substantial improvements in the capacity of their counterpart agencies, particularly those in emerging economies.

The report compiled by the IOM Committee on Strengthening Core Elements of Regulatory Systems in Developing Countries and entitled "Ensuring Safe Foods and Medical Products Through Stronger Regulatory Systems Abroad" put forward several recommendations as to how the United States can play its part in helping strengthen the regulatory systems in low- and middle-income countries by promoting cross-border partnerships, including government, industry, and academia, to foster regulatory science and build a core of regulatory professionals. In putting together their report IOM staff travelled to China, Brazil, South Africa, and India to meet with regulators, representatives of regulated industry, academics, and health and development workers.

Written by Howard E. Rosenberg, Ph.D.

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The IOM recommended that the FDA should use enterprise risk management to assist its inspection, training, regulatory cooperation, and surveillance efforts and should facilitate training for regulators in developing countries. The objective being workforce training and professional development through an ongoing, standard regulatory science and policy curriculum. The IOM stated that, "[E]nsuring the safety of food and medical products imported from around the world is a difficult task, and one that the FDA has executed fairly successfully so far. There is no reason to believe that their luck will hold over the next 10 years without substantive improvements in the capacity of their counterpart agencies abroad."

On April 11, Arkansas State Court Judge Tim Fox entered judgment on fines totaling $1.2 billion against pharmaceutical giant Johnson & Johnson and its subsidiary Janssen Pharmaceuticals (collectively "J&J") for wrongdoing surrounding their prescription antipsychotic medication, Risperdal® (risperidone). (No. CV07-15345.) FDA originally approved Risperdal® in 1993 for the treatment of psychotic disorders like schizophrenia.

Arkansas Attorney General Dustin McDaniel alleged, among other things, that J&J violated Arkansas' false claims act and deceptive trade practices act in marketing and selling Risperdal®. In particular, he alleged that J&J caused improper reimbursement for prescriptions covered by Medicaid by falsely asserting that Risperdal® was safer and more effective than comparable medications and not adequately warning about serious side effects, including diabetes and neurological complications. According to the complaint, J&J sold and marketed Risperdal® for off-label uses, including the treatment of bipolar disorder, dementia, and mood, and anxiety disorders.

Written by Fitz Beckwith Collings

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After a jury determined that J&J violated the Arkansas False Claims Act and Arkansas Deceptive Trade Practices Act, Fox evaluated damages. He found nearly a quarter million instances in which J&J violated the Arkansas False Claims Act, based on the number of Risperdal® prescriptions written in the state. He also found nearly 5,000 instances in which J&J violated the Arkansas Deceptive Trade Practices Act, based on the number of Risperdal® direct mailings to Arkansas physicians. As a result, he held that J&J improperly induced the state to spend Medicaid funds for Risperdal® prescriptions. The statutory minimum penalties--ranging from $2500 to $5000 per violation--resulted in a judgment of $1.2 billion. J&J has moved for a new trial, contending that the fines dwarf actual Medicaid payments for Risperdal®, which J&J argues are no more than $8.1 million. J&J further contends that the state showed no evidence that any patient suffered actual harm, that any doctor was misled into writing a prescription that was not warranted, or that any prescription did not warrant reimbursement. The Arkansas False Claims Act, however, requires only that a person "[k]nowingly makes or causes to be made any false statement or representation of a material fact in any application for any benefit or payment under the Arkansas Medicaid program." J&J may be better off trying the Eighth-Amendment route. See United States ex rel. Bunk v. Birkart Globistics GmbH & Co., Nos. 1:02cv1168 & 1:07cv1198, 2012 U.S. Dist. LEXIS 18445 (E.D. Va. Feb. 14, 2012).

by Ami E. Simunovich, Pharm.D., R.Ph.

Prescription drug abuse continues to be a leading form of drug abuse in the United States. In its ongoing efforts to curb prescription drug abuse, the U.S. Drug Enforcement Administration ("DEA") served administrative inspection warrants to six Florida Walgreens pharmacies and one of its distribution centers in Jupiter, Florida. According to the DEA, these inspection warrants were issued to determine if the Walgreens facilities are violating federal laws and regulations and dispensing controlled substances outside the scope of their DEA registrations.

Pharmacies and wholesalers that dispense or distribute controlled substances must register with the DEA. The DEA can subject any of its registrants to an inspection to ensure compliance with provisions of the U.S. Control Substance Act related to the distribution of controlled substances. Under the U.S Controlled Substance Act, a warrant can be issued if there is probable cause. "The term 'probable cause' means a valid public interest in the effective enforcement of this subchapter or regulations thereunder sufficient to justify administrative inspections of the area, premises, building, or conveyance, or contents thereof, in the circumstances specified in the application for the warrant."

According to DEA Special Agent in Charge Mark R. Trouville, "[T]his latest regulatory action continues DEA's effort to rid Florida of the prescription drug abuse epidemic. DEA is concerned about the recent significant rise in the number of oxycodone tablets purchased by Walgreens in Florida."

by Brian Malkin

On March 14, FDA's Office of Prescription Drug Promotion ("OPDP") issued its first Warning Letter this year to Teva for its branded product Copaxone® (glatiramer acetate injection) (solution for subcutaneous injection based on promotional materials sent to FDA on a Form FDA-2253 (pre-dissemination form) as well as its Team Copaxone®" webpage and several associated webpages for "David Kyle" and "Karen Stewart" for Copaxone®.

Team Copaxone

OPDP states in the letter that Teva's promotional materials are false and misleading because they overstate the efficacy, present unsubstantiated claims, broaden the indication of Copaxone®, omit and minimize risk information associated with the drug, present unsubstantiated superiority claims, and omit material facts. OPDP says it finds the violations "concerning from a public health perspective because they suggest that Copaxone is safer or more effective than has been demonstrated by substantial evidence or substantial clinical experience."

Copaxone® is indicated for reduction of the frequency and relapses in patients with Relapsing-Remitting Multiple Sclerosis ("RRMS"), including patients who have experienced a first clinical episode and have magnetic resonance imaging ("MRI") features consistent with multiple sclerosis. MRI is considered one of the best ways to diagnose multiple sclerosis.

by Howard E. Rosenberg, Ph.D.

Apotex, Canada's largest generic drug manufacturer, claims that as a consequence of action taken by FDA with respect to two Canadian facilities operated by Apotex-Canada, Apotex-U.S. incurred a loss of income exceeding $520 million. Apparently these two facilities produce about 80 percent of the products sold by Apotex-U.S. and an FDA-imposed import alert raised in August 2009 prevented Apotex-U.S. from receiving any drugs produced by these two facilities until the import alert was fully lifted at the end of July 2011.

Apotex alleged that during the relevant time period, FDA accorded more favorable treatment to other U.S. investors and U.S.-owned investments having issues similar to Apotex, in that these other investors were not subjected to a measure as severe as the import alert imposed on the Apotex companies. The problems began for Apotex when their two manufacturing facilities were inspected by FDA that uncovered quality system problems. These issues and the resolution of the issues by a FDA re-inspection were far more protracted to resolve than say those by Teva who, according to Apotex, appeared to have similar or analogous problems. Teva's re-inspection by FDA and the resolution of their quality failures proved to be far quicker than that for Apotex.

According to Apotex, the import alert violated North American Free Trade Agreement ("NAFTA") Article 1102 (National Treatment), Article 1103 (Most-Favored-Nation Treatment) and Article 1105 (Minimum Standard of Treatment). Article 1102 provides, in part, that each Party shall accord to investors of another Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments. Apotex claim that the Import Alert put Apotex Holdings and Apotex-Canada at a clear disadvantage compared to U.S. investors in like circumstances, who were not prevented from applying for authorization of new generic drugs or from benefiting from sales thereof.
Article 1103 extends 1102 by referring to the treatment afforded to third-country investors in like circumstances. Here Apotex pointed to the apparent favorable treatment given to Teva being in stark contrast to what they themselves received. Article 1105 provides that each Party shall accord to investments of investors of another Party treatment in accordance with international law, including fair and equitable treatment and full protection and security.