moneywings.pngAbsent an agreement in today’s Senate votes on dueling legislative proposals to prevent the budget “sequester,” automatic wholesale spending cuts will likely take effect tomorrow evening in the form of a 5% hit for all government agencies. This will amount to $85 billion (2.4% of the federal budget) in total. The cuts are a result of a 2011 law mandating that, if Democrats and Republicans should be unable to agree on a plan to reach the goal of $4 trillion in deficit reduction, then over a trillion dollars of arbitrary cuts would start to take effect this year. The draconian nature of the law was an intentional effort to force the parties to reach some other compromise.

A failure to achieve that goal may now have serious consequences, in particular for the healthcare industry. Estimated cuts for this fiscal year include $210 million to FDA, $1.6 billion to the National Institutes of Health (“NIH”), and $11 billion to Medicare. While the so-called “mandatory” programs (Medicaid, the Children’s Health Insurance Program, and Social Security) are exempt, the remaining reductions have given the industry more than enough to worry about. According to Bill Hall, spokesman for the Department of Human Health and Services, “It will affect all disease areas, all research areas. Because it is across the board and deep down in every single institute, it would affect virtually everything.”

More specifically, hospitals and doctors anticipate a 2% cut in Medicare reimbursement fees and, by some estimates, up to 200,000 job losses; the pharmaceutical industry expects a substantial increase in drug and medical device approval delays from FDA; and research institutes will undoubtedly see the effects of the NIH cuts. Francis Collins, director of NIH called the sequester “sand in the engine” that will force NIH to reject 1,000 promising new research proposals. As a result, he continued, “Medical research in America will be slowed by this, advances that could have happened sooner will happen later or perhaps not at all…” The pharmaceutical industry may also see effects of research program cuts to the extent of NIH-industry collaboration.
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The last day of the Generic Pharmaceutical Association (“GPhA”) 2013 Annual Meeting also featured an FDA Keynote Address by FDA Commissioner Margaret A. Hamburg, M.D. For a summary of public sessions from Day Two, please see the previous blog here; a summary of the CEOs Unplugged session may be found here.

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Following the CEOs Unplugged session on day three, Hamburg delivered her Keynote Address. Hamburg said that GPhA was one of the few organizations that she has chosen to address each year since becoming Commissioner, “because of the dynamic character of this group, your prominent role in the nation’s health care system and the importance of the work you do.” Celebrating GDUFA and the FDA Safety and Innovation Act (“FDASIA”), Hamburg emphasized that FDA is making “quality one of the highest priorities this year,” hoping that GPhA’s members do the same. Despite generic drug companies providing 85 percent of all prescriptions filled, some studies have suggested that many physicians still have “negative perceptions about the quality of generic medicines,” which Hamburg said was “troublesome – and assuredly not fair.”

Hamburg reported “impressive strides in implementing GDUFA,” explaining that FDA got the word out of new requirements and fees early, resulting in the collection of almost $125 million in fiscal year 2013 user fees to help brining in staff and other resources to help reduce the backlog of ANDAs above 2,500 applications with median review times at about 31 months. FDA has assembled a list of about 2,000 facilities supplying generic drugs to the U.S. following self-identification procedures.
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The last day of the Generic Pharmaceutical Association (“GPhA”) 2013 Annual Meeting featured a program known as “CEOs Unplugged” and an FDA Keynote Address by FDA Commissioner Margaret A. Hamburg, M.D. For a summary of public sessions from Day Two, see the previous blog here. This blog focuses on the CEOs Unplugged session. A subsequent blog will cover FDA’s Keynote Address.



The CEOs selected for this year’s program included Donald DeGolyer, President, Sandoz, Inc., Tony Mauro, President, Mylan, North America, Thomas Moore, President, Hospira USA, Allan Oberman, President and CEO, Teva Americas Generics, and Siggi Olafsson, President, Actavis Pharma.

Perhaps Oberman summed up the overall themes best when he acknowledged that the lines between innovator and generics are beginning to blur, where generic medicines are becoming more complex, and generic manufacturers are increasingly seeking a niche to compete in. The CEOs noted that none of the same CEOs were on the stage five years ago, which signals just how much the key players and CEOs have been changing. Other comments Oberman made included: (1) he hoped the Generic Drug User Fee Act (“GDUFA”) approval and efficacy measures would be used effectively and manufacturing sites outside the U.S. would be under similar scrutiny as in the U.S., (2) no one is really planning for shortages, but it is important to have effective communication to prevent them in particular with FDA, (3) industry needs to stop “fear mongering” to figure out when biosimilars will be approved or interchangeable–some people will take biosimilars and others will not, just as with generic drugs, (4) more mergers in the generic pharmaceutical industry should be expected, especially in emerging markets, (5) generic pharmaceuticals should be more available in the eastern part of the world where access to medicine may still be restricted, which provides more growth opportunities, and (6) traditional generic manufacturers should consider either developing new molecular entities or combining older generics in ways to improve convenience, safety, or effectiveness.
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On February 20-22, 2013, the Generic Pharmaceutical Association (“GPhA”) held its 2013 Annual Meeting attracting over 600 attendees to see how the nation’s health and regulatory issues will impact the generic industry and consumers who use generic medicines. While some events are for GPhA members only, a majority of the events are open to all attendees and were held in a single room or exhibit hall. Most of the main events were held in a slickly-decorated room filled with stars, comets, and planets.



While the Meeting covered a lot of territory, recurrent themes appeared to emphasize that the generic industry has come of age, where it joins its big-pharma brothers in having an office on par level with the Office of New Drugs (“OND”) in FDA’s Center for Drug Evaluation and Research (“CDER”) and now pays user fees to speed up generic drug approvals. GPhA’s members announced that they are ready to develop high quality generic versions of specialty pharmaceuticals and biologics, some of which may require the expenditure of hundreds or more millions of dollars to develop, obtain approval for, and market. At the same time, GPhA appears to hold onto the notions that that they can continue to settle cases with reverse payments that the Federal Trade Commission (“FTC”) views as so-called “pay-for-delay” settlements that are presumptively anticompetitive. GPhA also believes that manufacturers should be allowed to sell generic versions of products with the same labeling as the innovator, when the innovator or generic companies that manufacture and sell the product are aware of safety information not presently included in the FDA-approved labeling.

Kicking off the meeting with a “State of the Association”, GPhA President and CEO Ralph G. Neas described generic drugs as the “backbone of the pharmaceutical industry.” Neas expressed the Association’s confidence that FDA will “come through” and help the industry understand what will be expected of it to develop biosimilars and interchangeable biosimilars, which are the future to save lives and money.
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pills.jpgOn February 13 and 14, 2013, Leerink Swann (“Leerink”) held its annual Global Healthcare Conference at the Waldorf-Astoria Hotel in New York, New York. Each year the Conference highlights emerging themes and controversies in healthcare, where Leerink’s equity analysts present surveys and moderate discussions with MEDACorp Key Opinion Leaders and industry specialists to provide unique and timely insights. MEDACorp is Leerink’s network of 30,000 healthcare professionals including key opinion leaders, practitioners, clinicians, and hospital administrators. In between the main panels, senior management from some of the companies identified by Leerink as the most prominent and promising deliver “fireside chats” and presentations with company updates, including discussions of new products in their pipeline under review. This year the sole sponsor of Leerink’s Global Healthcare Conference was Latham & Watkins LLP.

Headlining the Conference was a Keynote Address entitled “Innovating Medical Product Development – FDA and Other Forward Looking Trends” delivered by Vicki L. Seyfert-Margolis, Ph.D. Seyfert-Margolis just recently was the Senior Advisor for Science Innovation and Policy in FDA’s Office of the Commissioner. Seyfert-Margolis is currently Chief Science and Strategy Officer for Precision Health, which provides services, infrastructure, and technologies to companies developing personalized medicines.

Seyfert-Margolis worked for about three and a half years in FDA’s Office of the Commissioner, where she led the effort to help develop a more coherent policy for companion diagnostic and personalized medicine, including developing guidances for personalized medicine such as “In Vitro Companion Diagnostic Devices” and “Qualification Process for Drug Development Tools“. While at FDA, Seyfert-Margolis looked at why companies were not seeing as many returns from their investments in research and development, noting that it was not FDA’s “fault” for less new chemical entity filings, because FDA can only review or approve products that are filed in new applications.
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Thumbnail image for Thumbnail image for Money in hand.jpgOn February 11, the American Medical Association (“AMA”) voiced its opinions regarding the U.S. Supreme Court’s upcoming review of pharmaceutical patent litigation settlements that include payments to patent challengers, commonly referred to as “pay for delay” settlements.

As explained here, pay-for-delay settlements occur in the context of pharmaceutical litigation under the Hatch-Waxman Act. In a nutshell, they involve payments from a patent holder to a generic manufacturer (who has filed an abbreviated new drug application (“ANDA”) relying on the patent holder’s brand-name drug product and been sued) in return for an agreement to refrain from selling the generic product for a period of time. These settlement deals have become targets of the antitrust enforcement agencies and, as widely predicted, the High Court has agreed to resolve a circuit split over their presumptive legality.

The question presented, from the 11th Circuit case FTC v. Actavis (Docket No. 12-416), is “whether reverse-payment agreements are per se lawful unless the underlying patent litigation was a sham or the patent was obtained by fraud (as the court below held), or instead are presumptively anticompetitive and unlawful (as the Third Circuit has held).” The Eleventh Circuit determined that the U.S. Federal Trade Commission’s (“FTC’s”) assertion that a patent holder was “not likely to prevail” in the underlying infringement action against generic manufacturers did not assert a valid antitrust claim because focus is “on the potential exclusionary effect of the patent, not the likely exclusionary effect,” and a settlement that imposes restraints lesser than that full potential effect do not exceed the “scope of the patent.” The Third Circuit, conversely, applied a “quick look rule of reason,” finding that “any payment from a patent holder to a generic patent challenger who agrees to delay entry into the market [is] prima facie evidence of an unreasonable restraint of trade,” rebuttable by a “showing that the payment (1) was for a purpose other than delayed entry or (2) offers some pro-competitive benefit.”
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alheimers.jpgOn February 5, 2013, FDA announced the availability of Draft Guidance relating to the development of drugs for the treatment of early stage Alzheimer’s disease. The Draft Guidance, titled, “Alzheimer’s Disease: Developing Drugs for the Treatment of Early Stage Disease” addresses: (1) diagnostic criteria for early stage Alzheimer’s disease; (2) appropriate clinical outcome measures; and (3) ways to demonstrate disease modification. Addressing these issues in early stage Alzheimer’s disease poses unique difficulties, because patients may have little to no impairment of global functioning. FDA is seeking public comment on the Draft Guidance within sixty days.

The Draft Guidance provides FDA’s current thinking on useful diagnostic criteria for early Alzheimer’s disease. FDA cited useful research in developing diagnostic criteria, such as the research criteria for prodromal Alzheimer’s disease and preclinical Alzheimer’s disease. Specifically, FDA also cited as useful efforts by the research community to incorporate biomarkers into the diagnostic criteria. FDA concluded that, “we support the concept of enriching trial populations with patients most likely to progress to more overt dementia, using both clinical biomarker-based criteria.” FDA also indicated, however, that FDA could not formally endorse any specific diagnostic framework, because more work was necessary to assess the specificity and sensitivity of these criteria, as well as the validation of these methodologies.

The Draft Guidance also provides FDA’s current thinking on ways to establish clinical efficacy in trials involving patients suffering from early stage Alzheimer’s disease. While FDA requires a co-primary outcome measure to demonstrate efficacy on both cognitive and functional levels for clinical trials on the dementia stage of Alzheimer’s disease, in the draft guidance, FDA acknowledged that these endpoints may be impractical for patients suffering from early stage disease. Therefore, FDA indicated that for early stage disease “clear evidence of an effect on delaying cognitive impairment may provide sufficient evidence of effectiveness.”
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venturecafe.jpgThis Thursday, FLH Partner Brian J. Malkin will host Legal Office Hours at The Venture Café in Cambridge, Massachusetts. Mr. Malkin’s Legal Office Hours description reads:

Learn how you can protect your start-up with patent and trademark protection from intellectual property Partner Brian J. Malkin, Frommer Lawrence & Haug LLP. Mr. Malkin is an expert on FDA-regulated products, in particular pharmaceutical/biotechnology products and biosimilars, and can discuss pathways for FDA approval, as well as life cycle management and due diligence investigations. Mr. Malkin recently published a chapter on biosimilars, has a primer on the drug and biologics approval process, frequently speaks on a variety of IP- and FDA-oriented topics, and is the editor of FDA Lawyers Blog, a blog that focuses on legal and scientific developments for FDA-regulated products.

Mr. Malkin welcomes members of The Venture Café community to stop by his Legal Office Hours to help discuss ways to develop and protect your innovative ideas.


Frommer Lawrence & Haug LLP is proud to announce that the Food and Drug Law Institute (“FDLI”) just published the FDLI Primer, “The Drug/Biologics Approval Process” authored by FLH Partner Brian J. Malkin and Associate Scot Pittman. Mr. Malkin has been a member of the Primer Committee for several years now. Recently, FDLI decided to make each Primer separately available for purchase ($119 for nonmembers, $95 members) rather than an entire series for its predecessor FDLI Monograph publication. FDLI asked Mr. Malkin to author this Primer based on a previous FDLI publication authored by Geoffrey M. Levitt, Senior Vice President and Associate General Counsel, Regulatory and Policy, Pfizer, Inc. Updates in the FDLI Primer include adaptations based on recent FDA legislation, including the latest user fees acts for generic drugs and biosimilars and the Food and Drug Administration Safety and Innovation Act (“FSASIA”). According to FDLI, Primers are:

[E]xtensively researched, referenced, and edited by some of the most experienced and respected professionals in the field. … The Primers are designed to provide you with information and proprietary analysis to enable you to advise your clients or help your company comply with vexing issues, regulations, and guidance.

For this particular FDLI Primer, FDLI writes:

This publication will explain, in practical terms, the approval processes for drugs and biologics. It will describe the various FDA premarket requirements and pathways for drug and biologics application reviews, including changes enacted under the Food and Drug Administration Safety and Innovation Act (FDASIA). Topics addressed will include the New Drug Application (NDA) process, non-NDA routes to market, generic drugs and the abbreviated new drug application process, as well as over-the-counter drugs and biologics. With this Primer, pharmaceutical stakeholders will feel confident that they have a helpful overview to support successfully navigating the FDA drug and biologics review processes.

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Treatment for HIV/AIDS generally requires patients to take a large number of drugs. For HIV therapy, for example, at least three active drugs, usually from two different classes are required to suppress the virus, allow recovery of the immune system, and reduce the emergence of HIV resistance. As a consequence, medicines are being developed that combine these drugs into fixed dosages, thus providing a combination therapy that simplifies dosing and helps patient compliance.

Gilead Citizen Petition by FDA Lawyers Blog

Gilead Sciences (“Gilead”) has developed a new fixed dose combination (“FDC”), STRIBILD®, which contains four distinct drugs: elvitegravir (“EVG”), cobicistat (“COBI”) , emtricitabine (“FTC”) and tenofovir disoproxil fumarate (“TDF”). EVG and COBI have not been approved before by FDA but both FTC and TDF have been.

Generally when a drug containing a new active ingredient is approved for the first time by FDA, it is considered a new chemical entity (“NCE”), which enables it to receive 5 years of market exclusivity, preventing third parties referencing that drug for their own applications for 5 years (or 4 years if their application includes a Paragraph IV certification / patent challenge).
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