By Kurt R. Karst –      

Recent judicial setbacks for the Federal Trade Commission (“FTC’) in actions challenging patent settlement agreements (or what opponents call “pay-for-delay” or “reverse payment” agreements) and opposition from both Republicans and Democrats to the inclusion of the Preserve Access to Affordable Generics Act (S. 369) in the Fiscal Year 2011 Financial Services and General Government Appropriations Bill (S. 3677) may cause the FTC to consider “Plan C” to address such agreements, according to Commissioner J. Thomas Rosch.

During the World Generic Medicine Congress Americas 2010 earlier this month, Commissioner Rosch remarked that the FTC is mulling issuing its own rules next year that would shift the burden of proof to require companies to prove that patent settlement agreements are not anti-competitive.  In late July, the U.S. Senate Committee on Appropriations approved the inclusion of the Preserve Access to Affordable Generics Act in the report (Senate Report No. 111-238) accompanying S. 3677.  The legislation would make patent settlement agreements presumptively anticompetitive and unlawful if challenged by the FTC, unless it can be demonstrated “by clear and convincing evidence that the procompetitive benefits of the agreement outweigh the anticompetitive effects of the agreement.”  The patent settlement provisions were added to the report accompanying S. 3677 after the Senate decided to drop the House patent settlement agreement provisions passed as part of a package of amendments to the War Funding Bill (H.R. 4899) – see our previous post here.

In September and October, some Republicans and Democrats sent separate letters (here and here) to their respective party leaders requesting that the provisions of S. 369 not be included in any appropriations bill this Congress.  The letters also note substantive concerns with the provisions of S. 369.  For example, the Republican letter alleges that S. 369 gives “excessive power over such settlements to the FTC – a power that the FTC has shown itself in the past to be unable to exercise in a responsible or economically rational manner – and that the bill would do serious violence to the Hatch-Waxman process for the market entry of generic drugs.”  It is unclear how an FTC “Plan C” to address patent settlement agreements would address such concerns. 

During his speech, titled “The Antitrust/Intellectual Property Interface: Thoughts on How To Best Wade Through the Thicket in the Pharmaceutical Context,” which primarily focused on patent settlement agreements, but also touched on myriad other issues, including patent use codes, authorized generics, citizen petitions, and so-called “product hopping,” Commissioner Rosch commented that although he supports a legislative fix to address patent settlement agreements – and specifically pending legislation (with the possible exception of the “clear and convincing” standard) – he thinks any legislation should stand or fall on its own merits.  According to Commissioner Rosch:

. . . . I believe a legislative fix is likely the only way to eliminate these anticompetitive settlements.  Nevertheless, where I depart from the Chairman and perhaps the rest of the Commission (although I can’t say for sure) is on process. In my view, the legislation should rise or fall on its own merit; put differently, I think tacking it on to the war funding bill is a terrible idea.  If the goal is to put money back in consumers’ pockets, then that is what we should be doing – not funding the war.

Commissioner Rosch also waded into the FTC’s challenge concerning a patent settlement agreement on generic ANDROGEL (testosterone gel) 1% (i.e., In re: AndroGel Antitrust Litigation), commenting that the case “should be winnable, not withstanding the popularly-held view that the FTC’s chances are slim . . . .” 

As we previously reported, this case stems from a February 2009 challenge by the FTC and the California Attorney General concerning Solvay’s ANDROGEL in which the FTC alleged that Solvay and generic companies violated various federal antitrust laws when they agreed to dismiss patent infringement litigation in exchange for a profit-sharing arrangement and provided the generic competitors would not launch their generic versions of ANDROGEL until 2015.  In February 2010, in a setback to the FTC, the U.S. District Court for the Northern District of Georgia (Atlanta Division) largely dismissed the case.  In June, the FTC filed a notice of appeal to the U.S. Court of Appeals for the Eleventh Circuit.  As  reported by our fellow bloggers over at PatentDocs, the defendants-appellees in the case recently filed a brief arguing that the district court’s judgment should be affirmed.

By Susan J. Matthees –

Congresswoman Louise Slaughter (D-NY) recently sent a letter to FDA Commissioner Margaret Hamburg requesting that FDA ban the use of triclosan in consumer products.  Triclosan is commonly used as an antibacterial agent in topical antiseptic products, such as soaps and hand sanitizers, and is also found in some toothpastes, mouthwashes, and similar consumer health products.  The ingredient is included in FDA’s ongoing review of over-the-counter (OTC) healthcare antiseptic and first aid antiseptic drug products, but the use of triclosan in toothpaste was approved via an NDA.  Although FDA states that “[t]riclosan is not currently known to be hazardous,” some recent studies have suggested that triclosan may be an endocrine disrupter and may contribute to antibiotic resistance.  Congresswoman Slaughter’s letter points to those recent studies as a cause for concern and justification for a ban on the use of triclosan in consumer products.  In particular, the letter states that that antibiotic resistance and contaminated water, due in part to the use of triclosan, “have created a public health crisis in the United States.”  The letter also points to studies that suggest that triclosan may harm the environment and human health as reason for the ban. 

Slaughter’s letter comes just months after the Natural Resources Defense Council (“NRDC”) filed a Complaint in the U.S. District Court for the Southern District of New York against FDA to try to force the Agency to finalize its topical antimicrobial drug products monograph.  We posted on the suit in August.  The NRDC subsequently filed a Motion for Summary Judgment asking the court to declare unreasonable FDA’s delay in finalizing the Agency's topical antimicrobial drug products monograph and to order FDA to finalize the monograph within ninety days.  FDA is in the process of reviewing the safety of triclosan and intends to make those findings public in spring 2011.

By Ricardo Carvajal –

It’s the time of year for holiday food safety alerts.  The home kitchen has long been recognized as a significant source of foodborne illness.  Reliable data are hard to come by, but a recent survey and study suggest that consumer awareness and implementation of basic food safety measures continues to lag. 

It’s not clear what proportion of the public health toll exacted by foodborne illness is attributable to consumer mishandling – or, for that matter, what that toll is.  Although the statistics of 5,000 deaths and 325,000 hospitalizations are widely cited in the press, in blogs maintained by personal injury lawyers,  in government reports, and even in food safety legislation pending in Congress, some have openly questioned the accuracy of those statistics.  The need for updated statistics has been recognized by FDA, which has held public workshops on the subject of how to measure progress in food safety, and updated estimates from CDC are said to be on the way.  In the meantime, don’t pass up your chance to display your food safety savvy.

By Ricardo Carvajal & Diane B. McColl –

FDA issued warning letters to the manufacturers of certain caffeinated alcoholic malt beverages contending that the products are adulterated under the Federal Food, Drug, and Cosmetic Act (“FDC Act”) because caffeine is not an approved food additive for its use in those beverages.  For its part, FTC issued warning letters to the same manufacturers contending that the marketing and sale of the beverages might constitute an unfair or deceptive act or practice in violation of the Federal Trade Commission Act (“FTC Act”).  The letters describe scientific and anecdotal evidence of harm associated with the beverages, request prompt corrective action, and give the manufacturers 15 days to respond.

Because alcoholic beverages are food, the use of substances such as caffeine in those beverages is potentially subject to premarket approval under the food additive provisions of the FDC Act unless that use is generally recognized as safe (“GRAS”) or the subject of a prior sanction by the agency.  As we noted in a prior blog posting, FDA questioned the regulatory status of the beverages a year ago, and asked manufacturers to provide information demonstrating that the use of caffeine in their beverages is GRAS.  One beverage manufacturer submitted a comprehensive response in the form of a GRAS notice providing FDA with a summary of the basis upon which the manufacturer concluded that the use of caffeine as a flavoring ingredient in alcoholic beverages at levels of up to 200 parts per million is GRAS.  The manufacturer's conclusion was based upon the consensus opinion of a panel of independent scientific experts that such use is GRAS based on scientific procedures.  The safety evaluation described in the GRAS notice focuses primarily on traditional toxicological parameters (e.g., absorption, distribution, metabolism, and excretion; acute and chronic toxicity; and carcinogenicity, genotoxicity, and teratogenic effects).  Described as “not related specifically to the safety-in-use of caffeine in alcoholic beverages," the scientific evidence relating to behavioral effects of caffeine and alcohol combined are also briefly discussed in the GRAS notice.  

FDA’s warning letter makes clear that the agency finds the pending GRAS notice wanting.  FDA faults the manufacturer (and presumably the expert panel)  for relying “primarily upon safety studies of caffeine alone (i.e., not in the presence of alcohol),” and for not giving greater consideration to “studies that have reported the adverse behavioral effects elicited by the co-consumption of caffeine and alcohol.”  However, neither the FDC Act nor its implementing regulations make clear that the safety evaluation of a substance added to food should include consideration of potential “adverse behavioral outcomes.”  Nor is it readily apparent that, in considering whether the use of an ingredient in food is safe, one must consider the potential behavioral impact of  packaging and marketing of the finished food.  Yet these factors are at the crux of FDA’s conclusion that the use of caffeine in the alcoholic beverages that are intended for adults (> 21 years of age in most states) targeted by the warning letters is not GRAS:

GRAS status is not an inherent property of a substance, but must be assessed in the context of the intended conditions of use of the substance (section 201(s) of the Act [21 U.S.C. § 321(s)]). The assessment includes a consideration of the population that will consume the substance (21 CFR 170.30(b); section 409(b) of the Act [21 U.S.C. § 348(b)]). Therefore, the scientific data and information that support a GRAS determination must consider the conditions under which the substance is safe for the use for which it is marketed. Reports in the scientific literature have raised concerns regarding the formulation and packaging of pre-mixed products containing added caffeine and alcohol. For example, these products, presented as fruity soft drinks in colorful single-serving packages, seemingly target the young adult user. Furthermore, the marketing of the caffeinated versions of this class of alcoholic beverage appears to be specifically directed to young adults (Bonnie and O'Connell, 2004). FDA is concerned that the young adults to whom these pre-mixed, added caffeine and alcohol products are marketed are especially vulnerable to the adverse behavioral effects associated with consuming caffeine added to alcohol, a concern reflected in the publicly available literature (O'Brien et al., 2008; Simon and Mosher, 2007).

To be sure, the potential health risks associated with caffeinated alcoholic beverages posed a thorny challenge for FDA.  But in seeking to address those risks, it appears that FDA has broadened the scope of factors that must be considered in evaluating the safety of substances added to food – and thereby introduced an element of uncertainty into the conduct of those evaluations when "behavioral effects” might be at play.

As for the warning letters sent out by FTC, those make clear that the two agencies have been collaborating closely on the matter.  FTC’s view that the marketing and sale of the beverages might constitute an unfair or deceptive act or practice in violation of the FTC Act is premised in part on FDA’s finding of adulteration:

The FDA’s warning that caffeine is an “unsafe food additive,” as used in Four Loko, is a relevant consideration in the FTC’s analysis of whether the marketing of caffeinated alcohol products such as Four Loko and Four Maxed is deceptive or unfair under the Federal Trade Commission Act.  In the past, the FTC has accorded significant weight to FDA findings regarding product safety and efficacy.

Significant as FDA and FTC’s actions may be, they are only part of the challenge faced by manufacturers of caffeinated alcoholic beverages.  A number of states are acting to prohibit the sale of those beverages, and if history is any guide, product liability actions cannot be far behind.

By Kurt R. Karst –      

Sandoz Inc.’s recent Complaint filed in the U.S. District Court for the District of Columbia concerning Orange Book-listed U.S. Patent No. 7,429,602 (“the ‘602 patent”) covering ELESTAT (epinastine HCl) Ophthalmic Solution, could, if successful, serve as a model for future cases involving patent delistings. 

FDA approved ELESTAT under NDA No. 21-565 on October 16, 2003 with a period of 5-year New Chemical Entity (“NCE”) exclusivity that, according to the 2008 Orange Book, expired on October 15, 2008.  (Presumably this date is incorrect and the NCE exclusivity expiration date was, in fact, October 16, 2008.)   No patents were listed in the Orange Book for ELESTAT until Friday, October 10, 2008, when the ‘602 patent, which was issued on September 30, 2008, was received by FDA.  (The electronic Orange Book was first updated on October 14th to reflect the addition of the ‘602 patent.)  Thus, prior to the ‘602 patent listing, no ANDA could have been submitted to FDA for a generic version of ELESTAT until the expiration of NCE exclusivity on October 16th.  With the ‘602 patent listing, however, the law permitted the submission of an ANDA beginning at year 4 of the 5-year NCE exclusivity period. 

Some ANDA sponsor was on its game, as FDA’s Paragraph IV Certification List shows that the first ANDA containing a Paragraph IV certification to the ‘602 patent was submitted to FDA on October 14, 2008.  (An ANDA containing a Paragraph IV certification to the ‘602 patent could have been submitted as early as October 10th when the patent was officially considered to be Orange Book-listed.  An after-hours submission on October 10th would not have been considered submitted to FDA until the next business day, Tuesday, October 14th, as Monday, October 13th was a federal holiday – Columbus Day.)  This certification qualified the ANDA sponsor as a “first applicant” eligible for 180-day exclusivity.

According to Sandoz’s October 19, 2010 Complaint, the company submitted ANDA No. 90-950 to FDA on October 15, 2008 without a Paragraph IV certification.  On October 17th, Sandoz reportedly amended ANDA No. 90-950 to contain a Paragraph IV certification to the ‘602 patent.  As such, Sandoz is a subsequent applicant subject to a first applicant’s 180-day exclusivity, unless that exclusivity is forfeited under one of the various forfeiture provisions established by the 2003 Medicare Modernization Act (“MMA”). 

After FDA received ANDA No. 90-950, Sandoz provided notice of its Paragraph IV certification to the NDA holder and patent owner, but was not sued for patent infringement.  In July 2009, Sandoz filed a declaratory judgment action (Case No. 1:09-cv-01444) in the U.S. District Court for the District of Columbia seeking a declaration from the court that the ‘602 patent is invalid, unenforceable, or would not be infringed by Sandoz’s proposed generic version of ELESTAT.  That case was voluntarily dismissed by Sandoz on October 5, 2009 after a statutory disclaimer with respect to the ‘602 patent was filed with the U.S. Patent and Trademark Office and a request sent to FDA to delist the ‘602 patent from the Orange Book. 

At the time a patent delist flag was added to the Orange Book for the ‘602 patent, FDA’s position with respect to 180-day exclusivity forfeiture under the failure-to-market provisions was that the mere request to delist a patent from the Orange Book was an event that could lead to a forfeiture.  That all changed earlier this year, however, with the D.C. Circuit’s March 2, 2010 decision in Teva Pharms USA, Inc. v. Sebelius.  In that case, a 3-judge panel of the D.C. Circuit ruled in a 2-1 decision concerning 180-day exclusivity for generic COZAAR (losartan potassium) Tablets and HYZAAR (hydrochlorothiazide; losartan potassium) Tablets that a mere patent delisting request is not enough to trigger a forfeiture event under the failure-to-market forfeiture provision at FDC Act § 505(j)(5)(D)(i)(I), and that there is “no reason to conclude that the 2003 addition of forfeiture provisions meant to give the brand manufacturer a right to unilaterally vitiate a generic’s exclusivity.”  (As we previously reported, the U.S. Supreme Court has been petitioned to review the ruling in Teva Pharms USA, Inc. v. Sebelius.)

Given the changed landscape created by the D.C. Circuit in the losartan case, the disclaimer of the ‘602 patent and the subsequent request that FDA delist the patent from the Orange Book that presumably led Sandoz to voluntarily dismiss the company’s July 2009 declaratory judgment action could no longer serve as an event to trigger 180-day exclusivity forfeiture in April 2011 (i.e., the “later of” date of the two bookend events described at FDC Act § 505(j)(5)(D)(i)(I)).  Instead, 180-day exclusivity remains intact . . . . absent a forfeiture event.  And that is exactly what Sandoz’s October 2010 Complaint seek to create.

Sandoz’s October 2010 Complaint requests a declaratory judgment that the ‘602 patent is invalid and unenforceable, and that Sandoz’s proposed generic ELESTAT drug product does not infringe the ‘602 patent.  But can an applicant seek a declaratory judgment against a disclaimed patent?  What is the actual and justiciable controversy?  Citing the recent Federal Circuit decision in Teva Pharms. USA, Inc. v. Eisai Co. Ltd., Case No. 2009-1593 (Fed. Cir. Oct. 6, 2010), in which the Court ruled that a subsequent Paragraph IV filer has a legally cognizable interest in when a first-filer’s 180-day exclusivity period begins for declaratory judgment purposes, Sandoz states in its Complaint that an actual and justiciable controversy exists regarding validity and infringement of the ‘602 patent “[b]ased on Sandoz’s intent to launch its generic 0.05% Epinastine Ophthalmic Solutions as soon as legally permissible, and the fact that the FDA will not approve Sandoz’s ANDA until the 180-day exclusivity period has run or been forfeited. . . .”  Stay tuned. . . .  this could get even more interesting!

By Kurt R. Karst –      

Last month FDA responded to an August 25, 2010 request from New Jersey State Senator Joseph F. Vitale (D) concerning pending legislation – Assembly Bill 1995 (the State Senate version of which is Senate Bill 961) – that, if enacted, would require pharmacists to dispense epilepsy drugs from the same manufacturer as previously dispensed for certain patients, unless otherwise prescribed.  Although FDA’s response does not provide the Agency’s position on Assembly Bill 1995 as Sen. Vitale requested, it does provide some insight into FDA’s current thinking on the substitution of bioequivalent generic anti-epileptic drugs for their brand-name counterparts. 

The issue of generic anti-epileptic drug substitution has been brewing for a few years.  Questions have been raised about whether there is an increased risk of so-called “breakthrough” seizures or toxic side effects when patients are switched from a brand name anti-epileptic to a generic version.  Still pending at FDA is a 2006 citizen petition requesting that the Agency address the issue of brand-name and generic anti-epileptic drug substitution. 

In its response to Sen. Vitale, FDA comments that “[t]o date, we have not seen any scientific evidence that demonstrates a problem with therapeutic equivalence for this group of products or any other class of generic drug products.  Those who are questioning the quality of generic epilepsy products have produced only anecdotal evidence.”  Nevertheless, FDA further states:

[W]e believe that the concerns of some of those raising questions (in particular, physician groups) can not be dismissed lightly.  Because of FDA’s respect for these groups and the concern that patients may lose confidence in their prescribed medications, we have sought to conduct further study.  Our decision to further study this issue does not stem from doubt within the agency about data we currently have on approved generic epilepsy products.  Rather, it is based on a desire to obtain further independent scientific evidence that might address these concerns.

As we previously reported, last year Congress requested in the Conference Report (Report No. 111-279) accompanying the 2010 Agriculture, Rural Development, FDA, and Related Agencies Appropriations Act (Public Law No. 111-80) that FDA examine and report on “A” rated anti-epileptic drugs (i.e., drug products that FDA considers to be therapeutically equivalent to other pharmaceutically equivalent products).  According to the Conference Report:

The conferees request the FDA report on adverse events and seizures associated with brand and generic anti-epileptic drugs.  Specifically, the agency should examine the pharmacokinetic profiles of “A” rated anti-epileptic drugs from different manufacturers of the same therapeutic agent.  The Committee directs the FDA to submit a report not later than September 30, 2010, detailing whether the agency believes that any changes to the current bioequivalence testing should be recommended.

Your intrepid bloggers understand that FDA did not submit the report by the September 30, 2010 deadline and that the Agency is still working on the report.  It is unclear when the report might be completed and submitted to Congress.  Nevertheless, FDA’s response to Sen. Vitale seems to give some foreshadowing as to what conclusions the Agency may include in its report.

By Ricardo Carvajal –

An article in the current edition of the Food and Drug Law Institute’s Update discusses a recent development in the European Union's regulation on health claims used in food labeling that could have the effect of suppressing publication of scientific research on the health benefits of food substances. Given that scientific research and collaboration is an international phenomenon, the negative effect of the European Commission's current direction might well be felt in the United States.

On December 9, 2010, Hyman, Phelps & McNamara, P.C.’s Kurt R. Karst will speak at a webinar on accelerated drug and biologic approvals. 

In 1992, FDA published final regulations providing for the “accelerated approval” of applications for certain new drugs and biologics. Section 506 of the FDC Act, created in 1997, codified and expanded on FDA’s Accelerated Approval regulations. Both provisions include requirements for sponsors to conduct post-approval studies. Fast track and “accelerated approval” are conditioned on a sponsor’s commitment to timely complete required postmarketing studies to demonstrate the product’s clinical benefits. FDA may expedite the withdrawal of approval of an application if a sponsor fails to perform the required postmarketing study with due diligence, or if a postmarketing clinical study fails to verify clinical benefit.  FDA has approved scores of products under both the fast track and accelerated approval procedures, but has never withdrawn approval for a sponsor’s failure to conduct post-approval studies.  Only recently has FDA threatened to do so.

The December 9th webinar is titled “Navigating The FDA Accelerated Approval Process” and will be moderated by Pharmalot’s Ed Silverman.  Additional information on the webinar, including how to register, is available here.

By William T. Koustas –

The confirmation hearing for Michele M. Leonhart for the Administrator of the U.S. Drug Enforcement Administration (“DEA”) was held by the Senate Judiciary Committee on Wednesday, November 17, 2010.  Ms. Leonhart has been Acting DEA Administrator since the resignation of former DEA Administrator Karen Tandy in the fall of  2007.  Ms. Leonhart was previously (unanimously) confirmed as Deputy DEA Administrator back in 2004 during the administration of President George W. Bush.  President Obama nominated Ms. Leonhart for the position of  DEA Administrator in February 2010.

The relatively non-controversial hearing lasted approximately three hours.  Ms. Leonhart was introduced at the hearing by Senators Diane Feinstein (D-Cal.), Amy Klobuchar (D-Minn.) and Al Franken (D-Minn.), all of whom endorsed her nomination.

Ms. Leonhart received questions from various senators including Senators Herb Kohl (D-Wis.), Sheldon Whitehouse (D-RI), Jeff Sessions (R-Ala.) and Chairman Patrick Leahy (D-VT).  In response to a question from Chairman Leahy regarding the issue of abuse of prescription drugs, Ms. Leonhart acknowledged that it is a growing problem, particularly among teenagers, and insisted that the answer was a combination of better education and enforcement, including enforcement against organized crime groups illegally distributing prescription drugs.

Senator Kohl pushed Ms. Leonhart to provide comments on draft legislation he has sent to DEA that reduces the barriers patients in long-term care facilities face in order to receive their prescription pain medication.  In its current form, this draft legislation would grant nurses in long-term care facilities the ability to call in orders for controlled substances, including Schedule II drugs, pursuant to a consultation with the patient’s physician.  This legislation would also create a new registration category for nursing homes under DEA jurisdiction, which would require that they certify that all staff has received appropriate training.  Ms. Leonhart acknowledged that this is an important issue and DEA issued a policy statement on it, but will do more as soon as possible.  Senator Whitehouse signaled his support for Senator Kohl’s draft legislation and also chastised DEA for “standing in the way” of electronic prescribing (“e-prescribing”) of controlled substances, to which Ms. Leonhart noted she signed a e-prescribing statement of policy as Acting DEA Administrator, but she would continue to prioritize e-prescribing if she were confirmed.

One of the most interesting lines of questioning came from Senator Sessions, who asked Ms. Leonhart about her views on the legalization of marijuana and Mexican drug cartels.  Ms. Leonhart agreed with Senator Sessions that it is dangerous to legalize marijuana, because she feels that many people focus on the financial benefits of legalizing marijuana while ignoring the social costs of legalization.  She flatly stated that she would enforce federal drug laws in all areas regardless of state law.  Senator Sessions also asked Ms. Leonhart how DEA can help defeat Mexican drug cartels.  Ms. Leonhart did not have a specific answer to this question, but indicated that she thought more could be done by DEA, and she would do so if confirmed.

By Kurt R. Karst –      

In a November 16th decision that might not mark the end to the dispute between Cody Laboratories, Inc. and Lannett Co., Inc. (collectively “Cody/Lannett”) and FDA over marketed unapproved Morphine Sulfate Solution Immediate-Release 20mg/mL drug products, Judge Alan Johnson from the U.S. District Court for the District of Wyoming granted FDA’s Motion to Dismiss the case.  Judge Johnson ruled that the court “does not have jurisdiction over any of the agency actions [Cody/Lannett] ask this Court to review, as the FDA has yet to complete a final agency action.  Any attempt to review such actions would be premature and contrary to law.”

As we previously reported, the Cody/Lannett lawsuit stems from FDA’s March 2009 Warning Letters to Cody and Lannett (among other companies) to stop manufacturing certain unapproved narcotic drugs, including morphine sulfate oral solutions.  At that time, FDA concluded that marketed unapproved morphine sulfate products are “new drugs [under the FDCA] and not grandfathered and that manufacturing and marketing of these products without an approved application constituted a violation of the Act.”  In subsequent communications with Cody/Lannett, FDA stated that the Agency would exercise enforcement discretion with regard to the shipment and distribution of Cody’s/Lannett’s unapproved Morphine Sulfate Solution Immediate-Release 20mg/mL drug products until July 24, 2010, which is 180 days after FDA approved Roxane’s NDA for the drug product.  Meanwhile, Lannett submitted its own NDA to FDA for Morphine Sulfate Solution Immediate-Release 20mg/mL in late February 2010.  That NDA is still under review and FDA has not taken any further enforcement action against Cody/Lannett.

Cody/Lannett sued FDA arguing that the Agency should be enjoined from taking enforcement action after July 24, 2010 if such enforcement action is based on the Agency’s contention that Morphine Sulfate Solution Immediate-Release 20mg/mL is an unapproved “new drug,” and that the court should issue a declaratory judgment that FDA violated the Administrative Procedure Act in determining that the product is a “new drug.”  In a July July 26th decision, the district court denied Cody/Lannett’s Motion for Temporary Restraining Order and Preliminary Injunction.  Cody/Lannett then filed, FDA opposed, and the court granted, a Motion for Clarification, Amendment, or Reconsideration of Order  raising certain jurisdictional issues.  FDA promptly filed a Motion to Dismiss arguing for dismissal for lack of jurisdiction or failure to state a claim (or both).

In a short, 11-page decision, Judge Johnson granted FDA’s Motion to Dismiss and quickly dispensed with the three issues raised by Cody/Lannett – (1) FDA’s alleged determination that Cody/Lannett’s product is a “new drug;” (2) FDA’s alleged failure to develop an administrative record for its determination that Cody/Lannett’s Morphine Sulfate Solution Immediate-Release 20mg/mL is a “new drug;” and (3) FDA’s alleged disparate treatment of Cody/Lannett compared to its competitor Roxane. 

Judge Johnson whittled the issue list down to two, treating Cody/Lannett’s claim that  FDA failed to develop an administrative record as a prayer for relief concerning the review of the FDA’s new drug determination.  The remaining issues were examined in the context of whether FDA’s actions in this case were final.  With respect to FDA’s alleged “new drug” determination, Judge Johnson ruled that FDA’s Warning Letters to Cody/Lannett do not constitute final agency action:

Because the warning letters. . . indicate the FDA’s intention in the future to institute enforcement action against [Cody/Lannett], this Court finds those letters do not constitute final agency action as they do not mark the consummation of the agency's decisionmaking process.  Had the FDA made its determination about the product at the conclusion of an enforcement action or in response to a citizen petition, that determination would constitute a final agency action. Such is not the case here. [(internal quotation and citation omitted)]

As to FDA’s alleged disparate treatment of Cody/Lannett compared to its competitor Roxane (specifically, that FDA granted priority NDA review to Roxane but refused to do so for Cody/Lannett), the court ruled that:

it does not have jurisdiction to review this agency action. . . .   In addition to the action marking the consummation of the agency's decisionmaking process, the agency action must be one by which rights or obligations have been determined or from which legal consequences will flow.  This agency action fails the second requirement, because no rights or obligations are determined based on the type of review given to an NDA.  It is not the type of review given – but the culmination of the application process – that determines an applicant’s rights to market a drug. [(internal quotation and citation omitted)]

Despite Cody/Lannett’s loss yesterday, we think there is a good chance that the district court’s decision will be appealed.  Only time will tell, of course.  And we’ll be there to tell you all about it.

By Kurt R. Karst –   

Following up on a June 11, 2010 invitation from the U.S. Court of Appeals for the Sixth Circuit to file an amicus brief in the consolidated appeals of Smith v. Wyeth, Inc. (Case No. 09-5460), Wilson v. Pliva, Inc. (Case No. 09 5466), and Morris v. Wyeth, Inc. (Case No. 09-5509),  FDA filed its brief earlier today answering the question: “Whether federal law preempts a tort claim under state law that a generic drug approved by the Food and Drug Administration was inadequately labeled.”  FDA’s amicus brief reflects the same position on generic drug preemption that the Solicitor General took in his November 2, 2010 amicus brief submitted to the U.S. Supreme Court on this topic (see our previous post here).

The consolidated Wyeth cases before the Sixth Circuit all concern the drug metoclopramide, which is marketed under the brand-name REGLAN.  The plaintiffs in each case allege that the metoclopramide they took was defective because both the generic and brand-name manufacturers failed to adequately warn of the risks of long-term use (i.e., tardive dyskinesia).  In each case, a district court dismissed the plaintiff’s claims against the generic drug manufacturers, holding that their failure-to-warn claims were preempted by federal law.

Although we are still poring over FDA’s 44-page amicus brief to see what nuggets it might contain, here is the summary of the Agency’s argument:

The district court incorrectly held that plaintiffs’ failure-to-warn claims against generic drug manufacturers are categorically preempted by the FDCA and FDA’s regulations.  The district court’s decision is inconsistent with the decisions of the only courts of appeals to address the question since Wyeth v. Levine, 129 S. Ct. 1187, 1196 (2009).  Demahy v. Actavis, 593 F.3d 428, 449 (5th Cir. 2010); Mensing v. Wyeth, Inc., 588 F.3d 603, 612 (8th Cir. 2009).  Though federal law may circumscribe the possible theories of recovery by plaintiffs, it does not present an outright bar to recovery.

Plaintiffs’ failure-to-warn claims are not categorically preempted, because a generic pharmaceutical manufacturer, like a brand-name manufacturer, can (and indeed, must) inform FDA of new information about risks that may require a change in the labeling of its drug.  Furthermore, though the “changes being effected” and prior approval supplement processes were not expressly available to generic manufacturers, the defendants could have asked FDA to coordinate appropriate “Dear Health Care Professional” letters or to take other action with respect to labeling.  Moreover, holding a generic pharmaceutical manufacturer liable on a failure-to-warn theory would not unacceptably frustrate the purposes of the Hatch-Waxman Amendments.

Now that FDA has shown its cards, it will be interesting to see whether the new Congress, once it convenes in January, will take interest in the issue of generic drug preemption.  In 2009, Sen. John Cornyn (R-TX) filed an amendment to pending legislation that, if enacted, would preempt tort suits against generic drug makers.  Specifically, Sen. Cornyn’s amendment would have amended the law to state:

Notwithstanding any other provision of State or Federal law, a person who manufacturers a generic drug approved under an abbreviated new drug application shall not be liable because the label did not warn against an adverse reaction, unless the Food and Drug Administration required a change to the label to provide such warnings and the manufacturer failed to comply with such requirement, or the manufacturer failed to provide to the Food and Drug Administration health and safety information otherwise required to be provided under regulations issued by the Secretary for Health and Human Services regarding such drug.

It is possible that similar legislation could be introduced in the 112th Congress. 

By Kurt R. Karst–      

The generic drug industry is headed for its own version of a “patent cliff” – a “180-day exclusivity cliff” – according to a report from MorganStanley on large cap and specialty pharmaceuticals issued earlier this month.  “Patent cliff” is a colloquial term used to describe the disruption that occurs when a company or industry loses the market for a product as a result of the expiration of patents. 

The report, which covers myriad issues from the prospects of legislation banning patent settlement agreements (not high) to the prospects of biosimilar approvals (don’t hold your breath), estimates that the growth in the generic drug industry seen in the past few years will begin to slow starting in 2013 “due to fewer and lower value opportunities.”  According to , generics drugs accounted for 57.7% of prescriptions dispensed five years ago, and close to 75% today.

More than $100 billion of brand name drug sales are expected to go generic between 2010 and 2015, says MorganStanley, and a majority of the generic opportunities will likely be realized by the end of 2012.  More importantly (for us Hatch-Waxman folk at least), MorganStanley estimates that “exclusivity opportunities drop by 75% after 2012, from $40B in 2010-2012 to $10B in 2013-2015.  The declining value of first-to-file exclusivities after 2012 could pressure earnings since exclusivity opportunities are roughly 4x more profitable than base business generics (75% operating margins vs. 10-20% in the base business).”

 
The “180-day exclusivity cliff” tracks the “patent cliff” brand-name companies are expected to face as many blockbuster drugs come off patent between 2011 and 2014. 

Hyman, Phelps & McNamara, P.C. is very pleased to announce that Ricardo Carvajal has been named Director of the firm, and that Dara Katcher Levy has been named Of Counsel.  Mr. Carvajal’s practice focuses on providing FDA and FTC regulatory counseling and litigation support to manufacturers and marketers of foods (including dietary supplements and medical foods), cosmetics, and OTC drugs.  He has particular expertise in the regulation of products derived through biotechnology and nanotechnology. Ms. Levy’s practice focuses on the review of launch and post-launch promotional materials.  She also concentrates on import/export issues.

By Dara Katcher Levy –

We previously blogged about the Amphastar lawsuit – a suit seeking declaratory judgment and injunctive relief with regard to FDA’s detention of two entries of semi-purified heparin.  Amphastar had responded to each of FDA's allegations,  however, the shipments remained detained. 

On November 5, Amphastar filed a Motion for Preliminary Injunction against FDA alleging that Amphastar was likely to succeed on the merits of its suit and that the company was suffering irreparable harm due to the continued detention of these shipments.  A week later, on November 12, Amphastar filed a Notice of Withdrawal without prejudice of its prior Motion for Preliminary Injunction on the basis that FDA had released the materials shortly after the November 5 Motion had been filed.

It is becoming increasingly common for import issues to be resolved through utilization of the courts (often, limited to initial pleadings) in order to compel cooperation from FDA.

By Kurt R. Karst –      

In our post last week on letters issued by the U.S. Patent and Trademark Office (“PTO”) clarifying when patents covering certain drug products are eligible for a Patent Term Extension (“PTE”) in light of the U.S. Court of Appeals for the Federal Circuit’s May 10, 2010 decisions in PhotoCure v. Kappos, 603 F.3d 1372 (Fed. Cir. 2010) and Ortho-McNeil Pharm., Inc. v. Lupin Pharms., Inc., 603 F.3d 1377 (Fed. Cir. 2010), we made reference to some dicta in the PhotoCure decision and a pending PTE request and promised to blog on that issue soon.  That time is now.

As we noted last week, the Federal Circuit’s PhotoCure decision, which interpreted the term “product” in the PTE statute at 35 U.S.C. § 156(a)(5)(A) to mean “active ingredient” instead of “active moiety,” contains dicta to the effect that a patent – in that case, U.S. Patent No. 6,034,267 covering the drug product METVIXIA (methyl aminoevulinate HCl) – is eligible for a PTE not only because methyl aminoevulinate HCL is a different chemical compound from previously approved aminolevulinic acid, but because “it is not disputed that they differ in their biological properties, warranting separate patenting and separate regulatory approval, although their chemical structure is similar.” 

Latching on to the above-quoted language, a PTE application was recently submitted to the PTO for U.S. Patent No. RE 41,571 (“the ‘571 patent”), a method-of-use patent listed in the Orange Book covering BUTRANS (buprenorphine) Transdermal System.  FDA approved BUTRANS under NDA No. 21-306 on June 30, 2010 “for the management of moderate to severe chronic pain in patients requiring a continuous, around-the-clock opioid analgesic for an extended period of time.” 

Buprenorphine is, of course, not new.  FDA has approved several applications for drug products containing buprenorphine, including BUPRENEX (NDA No. 18-401), SUBUTEX (NDA No. 20-732), and SUBOXONE (NDA No. 20-733).  Nevertheless, the PTE applicant for the ‘571 patent claims eligibility for a PTE because:

In contrast to these three products, the active ingredient for Butrans™ is buprenorphine base, which has never before been approved by the FDA. Moreover, buprenorphine base was required to undergo full FDA review, and has pharmacological properties that set it apart from buprenorphine hydrochloride.  Accordingly, the ‘571 patent that covers Butrans™ remains eligible for a patent term extension under 35 U.S.C. § 156.  See Photocure ASA v. Kappos, 603 F.3d 1372 (Fed. Cir. 2010) (allowing a § 156 extension even where similar active ingredient was previously approved by the FDA, since later approved active ingredient covered by extension application had different biological properties and underwent separate regulatory approval); Ortho-McNeil Pharm. v. Lupin Pharm. 603 F.3d 1377 (Fed. Cir. 2010) (allowing § 156 extension for enantiomer even though the racemate had already been approved by the FDA).

In other words, notwithstanding FDA’s previous buprenorphine NDA approvals, the PTE applicant believes that the ‘571 patent covering BUTRANS is eligible for a PTE because the drug product contains a different active ingredient (i.e., buprenorphine base) and has different properties that warranted separate patenting and separate FDA NDA approval (i.e., a different regulatory review period). 

The PTE statute does not contain the additional requirements of products having different properties that warrant separate patenting and separate FDA approval for PTE eligibility, and the PTO has historically hewed closely to the PTE statutory language in the Office’s decisions.  Moreover, as we noted last week, the PTO framed the eligibility inquiry in three parts: (1) Has the active ingredient been previously approved? (2) Has a salt of the active ingredient been approved? (3) Has an ester of the active ingredient been approved?  A "yes" to any of these questions means that permission does not meet the first permitted commercial marketing prong of 35 U.S.C. § 156(a)(5)(A).  Given the PTO’s interpretation of the PTE statute, it is possible that the BUTRANS PTE application was submitted to elicit a denial that can be challenged in court.