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  • Orphan Drug User Fees – The Unintended Gift that Keeps on Giving

    “Orphan drugs” are products recognized by FDA that are intended for use in a “rare disease or condition” ─generally a disease or condition with a United States prevalence less than 200,000 persons.  Because the market for orphan drugs is often limited, Congress and FDA have traditionally accorded orphan drugs special consideration.  For example, sponsors of applications for designated orphan drugs are statutorily exempt from paying the one-time application user fee.  This is significant.  The full application user fee for Fiscal Year 2007 is $896,200 (a figure that is certain to rise under the next iteration of the Prescription Drug User Fee Act (“PDUFA”)). 

    Orphan drug sponsors are not exempt under the FDC Act from paying annual product and establishment fees (which for Fiscal Year 2007 are $49,750 and $313,100, respectively ─also certain to rise under PDUFA IV).  Instead, such sponsors may request that FDA waive or reduce the annual product and establishment fees on the basis that a waiver/reduction “is necessary to protect the public health,” or because “the assessment of the fee would present a significant barrier to innovation because of limited resources available to such person or other circumstances.”  FDC Act § 736(d)(1)(A)-(B).  Indeed, when Congress enacted PDUFA in 1992, it specifically contemplated that although user fee waivers and reductions would be available to all NDA sponsors, the so-called “public health” and “barrier to innovation” waivers “will give the FDA sufficient authority to waive fees for orphan drugs.”  H.R. Rep. No. 102-895, at 17 (1992). 

    According to recent testimony from the National Organization for Rare Disorders (“NORD”), however, Congress’ intent has been impeded by an FDA policy developed in 1993 under which the Agency interprets both the “public health” and the “barrier to innovation” waiver/reduction mechanisms to involve a specific financial test (i.e., $10 million in annual gross revenues and no corporate parent or funding source with annual gross revenues of $100 million or more).  According to NORD:

    The current waiver program administered by FDA for product and facility fees has chosen to interpret gross revenues of $10 million or greater as evidence that an entity and its affiliates are fully capable of developing and marketing orphan drugs without regard to the cost of users fees.  We know that FDA believes that a higher threshold than $10 million in corporate gross sales will result in a significant expansion of waived products and a noticeable increase in the fees that would be charged to remaining companies.  Nonetheless, this does not conform with any common sense view of what constitutes a small company in the bio-pharmaceutical industry and seems unrealistically low, especially with the higher fees that will be required under PDUFA IV.

    NORD is requesting that Congress resolve the issue “in a way that assures the continued success of the Orphan Drug Act without undercutting the user fee program.”  Specifically, NORD believes that FDA should waive product and establishment user fees for drug products with annual United States revenues less than $25 million.  One recent PDUFA IV proposal does not include any user fee relief for orphan drug sponsors specifically.  There is still plenty of opportunity, however, for Congress to address the issue in new draft legislation.

     

    FDA was previously asked to address this issue in a January 2003 citizen petition submitted by Orphan Medical, Inc.  The petition (supported by NORD) requested, in part, “that FDA establish a clear and fair waiver policy from the establishment and product fees for orphan drugs that have modest sales.”  The petition was withdrawn in August 2006 without a substantive response by FDA. 

    Categories: Drug Development

    U.S. District Court Rules on FDA Ephedra Rulemaking

    On March 16, 2007, the U.S. District Court for the District of Utah ruled that FDA’s 2004 rulemaking banning ephedrine alkaloid dietary supplements [EDS] was “procedurally and substantively proper.”  Nutraceutical and Solaray brought the suit against FDA to prevent the Agency from enforcing its 2004 final rule banning EDSs of any dosage from the U.S. market.  The bases of the plaintiffs’ challenge were that FDA gave insufficient statutory notice and opportunity for comment on its use of a risk-benefit analysis to determine that EDS are adulterated, and that by banning EDS but not other products containing ephedrine alkaloids FDA’s action was arbitrary and capricious.  In April 2005, the District Court granted summary judgment in favor of the plaintiffs on their separate claim that the risk-benefit analysis used by FDA in the final rule did not conform to its statutory mandate.  However, in August 2006, the Tenth Circuit overturned the lower court’s decision, and the District Court has since granted summary judgment for the defendants on this point.

    With regard to the plaintiffs’ notice and comment challenge, the court found that FDA had given adequate opportunity for notice and comment.  Judge Cassell noted that “[t]he [Administrative Procedure Act] requires only limited opportunity to participate – no more.”  Judge Cassell went on to state that the risk-benefit analysis FDA used in determining EDS were adulterated was specifically limited to EDS and had not been established for other dietary supplements.  However, it should be noted that nothing in the decision bars FDA from employing this same risk-benefit analysis in later rulemaking regarding the adulteration of other dietary supplements.  Furthermore, the EDS ban precedent would be useful to FDA if the Agency were sued with regard to its application of the risk-benefit analysis to another dietary supplement.  The court similarly found for the defendants on the plaintiffs’ arbitrary and capricious challenge.  Judge Cassell wrote “[t]he [Dietary Supplement Health and Education Act] requires the FDA to regulate dietary supplements differently than conventional foods –conventional foods and other drug products are subject to their own statutory and regulatory requirements. . . .”

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    By Bryon F. Powell

    Is Advice Provided by Food and Drug Lawyers Legal Advice Protected from Discovery?

    A recent California case, In re CV Therapeutics, Inc. Securities Litigation, raised the question of whether, within the context of the attorney-client privilege, regulatory advice provided by food and drug attorneys qualifies as “legal” (protected) advice or “business” (generally not protected) advice.  The court concluded that “[d]ocuments created in the context of seeking FDA approval, an inherently legal process, present ‘a circumstance virtually necessitating legal representation,’ as the FDA approval process requires close supervision by legal counsel.” 

    Our colleague, John Fleder, wrote in a recent article for FDLI Update that “[t]he Magistrate Judge’s decision was a fundamental ruling on whether food and drug lawyers provided legal advice.”  Of course, not all advice provided by food and drug attorneys may automatically qualify as “legal” advice.  As such, Mr. Fleder notes that “[t]o maximize the protection of confidentiality, it is important that companies and/or their outside counsel timely document that counsel are rendering legal advice to the client when the purpose of the advice sought is, as it normally should be, legal advice.”

    Categories: Miscellaneous

    FDA Advisory Committee Gives a “Thumbs-Up” to PROVENGE Cancer Vaccine

    Yesterday, FDA’s Cellular, Tissue and Gene Therapies Advisory Committee voted in favor of Dendreon Corp.’s PROVENGE (sipuleucel-T), an autologous active cellular immunotherapy intended to treat men with asymptomatic metastatic androgen independent prostate cancer.  The committee unanimously voted (17-0) that PROVENGE is reasonably safe for the intended population, and overwhelmingly voted (13-4) that the submitted data provide substantial evidence to establish the efficacy of the biologic, based on a demonstrated 4.5 month survival advantage over placebo in the follow-up period of a randomized, double-blind, placebo-controlled trial.  Equally importantly, the unique product characterization issues presented by cell therapy were discussed at yesterday’s meeting.  FDA is expected to make a final decision on the PROVENGE Biologic License Application by mid-May. 

    If approved, PROVENGE would be the first autologous cancer cell therapy, and the first cancer immunotherapy approved by FDA.  According to a Dendreon press release, “If approved, PROVENGE could become a breakthrough treatment for patients with advanced prostate cancer who currently have few treatment options. . . . More than one million men in the United States have prostate cancer, with an estimated 218,890 new cases of prostate cancer diagnosed each year.”

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    Categories: FDA News

    FDA Issues Draft Final Guidance Document on Fresh-Cut Fruits and Vegetables Hazards

    In FDA’s “Guide to Minimize Microbial Food Safety Hazards of Fresh-Cut Fruits and Vegetables,” FDA states that Americans are eating more fresh produce, to the point that fresh-cut products are the produce industry’s “fastest growing segment.”  Fresh-cut food processors are now faced with the task of handling a greater volume of product while still ensuring that the produce is safe.  FDA notes that of the 72 foodborne illnesses associated with fresh produce consumption from 1996 to 2006, 18 outbreaks, or 25 percent, were associated with fresh-cut produce. 

    FDA’s draft guidance document is intended to reduce the risk of microbial contamination of “fresh-cut fruits and vegetables that have been minimally processed (e.g., no lethal kill step), and altered in form, by peeling, slicing, chopping, shredding, coring, or trimming, with or without washing or other treatment, prior to being packaged for use by the consumer or a retail establishment.”  Examples of fresh cut produce include salad mixes, cut melon, and peeled baby carrots. 

    Although fresh-cut produce products are subject to FDA’s food good manufacturing practices (GMPs), which are essentially intended to reduce the risk of producing adulterated or unfit food, FDA believes that the guidance will “complement the [GMPs] by suggesting more specific food safety practices for processors of fresh-cut produce.”  The draft guidance covers worker health, hygiene, and training; building and equipment design, construction, and maintenance; sanitation operations; and production and process controls.  The draft guidance also recommends that certain records be kept to document product information and practice and suggests that traceback and recall procedures be kept. 

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    By Cassandra A. Soltis

    Categories: Foods

    Amlodipine Besylate Exclusivity Issues – the FDA Front

    The Federal Circuit’s March 22, 2007 decision invalidating Pfizer’s patent on NORVASC (amlodipine besylate), and Mylan’s commercial launch of its generic version approved under ANDA #76-418 later that day triggering the company’s 180-day exclusivity period has set off a flurry of activity, both in the courts and at FDA.  This case raises several interesting issues about the availability of 180-day exclusivity once a patent expires and the applicability of pediatric exclusivity.  FDA is being asked to address these issues in three recent citizen petitions submitted to the Agency concerning amlodipine drug products.

    Yesterday, the Orange Book Blog reported on the United States District Court for the District of Columbia’s order granting Mylan’s Emergency Application for a Temporary Restraining Order and/or Preliminary Injunction, in which Mylan argues that “[i]n the past, the FDA has taken the position that 180-day generic exclusivity does not survive patent expiration [and that there] is no basis in the Hatch-Waxman Act for such a limitation.”  Pursuant to the court’s order, FDA is enjoined from approving any other ANDAs for generic NORVASC until at least April 13, 2007 at 5:00PM, and after FDA “solicit[s] the views of other interested parties on this matter by April 4, 2007 [to] render an agency decision on April 11, 2007.”  The Federal Circuit also ordered Pfizer and Mylan “to respond, no later than 10 a.m. on Monday, March 26, 2007, concerning how the invalidity determination affects the pediatric exclusivity period and the ANDA approval.”

    Simultaneous with FDA’s solicitation and consideration of views on this 180-day exclusivity issue, the Agency must now also consider several citizen petitions concerning amlodipine drug products. 

    On March 26, 2007, Mylan submitted a petition to FDA (Docket No. 2007P-0116) requesting that FDA stay the approval of any additional ANDAs for generic amlodipine products until after Mylan’s 180-day exclusivity expires on September 23, 2007.  Mylan’s arguments hew closely to those the company made in its Emergency Application.

    On March 21, 2007, Pfizer submitted two petitions (Docket Nos. 2007P-0110 and 2007P-0111) requesting that FDA enforce pediatric exclusivity rights for amlodipine, and that FDA stay approval of any and all supplements to LOTREL concerning amlodipine and pediatric exclusivity, respectively.  LOTREL is Novartis’s brand name version of the combination of amlodipine besylate and benazepril hydrochloride.  Although Pfizer’s petitions do not concern Mylan’s ANDA approval specifically, they do raise raise issues concerning the applicability of Pfizer’s pediatric exclusivity for amlodipine, and whether the LOTREL NDA is a 505(b)(2) application subject to that exclusivity. 

    UPDATE:

    • FDA Docket No. 2007N-0123 established to solicit comments on amlodipine exclusivity issues  
    Categories: Hatch-Waxman

    Deficit Reduction Act of 2005 False Claims Act Education Requirements Are Not Applicable to Pharmaceutical Manufacturers

    The Deficit Reduction Act of 2005 (“DRA”) provided that any entity that receives or makes annual payments under a Medicaid State plan of at least $5,000,000 must, as a condition of receiving such payments, establish written policies for employees, contractors, and agents that provide detailed information regarding the federal and state false claims laws, including remedies and whistleblower protections.  Pub. L. No. 109-171, § 6032(a)(3).  Because the statute requires compliance from any entity that “receives or makes” payments to Medicaid, there is an argument that the provision applies to pharmaceutical manufacturers who make rebate payments to States under the Medicaid Drug Rebate Program.  However, since that language is qualified by the statement “as a condition of receiving such payments,” another reading is that Congress did not intend for the provision to apply to entities that only make rebate payments to States pursuant to the Medicaid Drug Rebate Program.

    On March 22, 2007, CMS issued guidance to State Medicaid agencies regarding implementation of section 6032 of the DRA in the form of Frequently Asked Questions (“FAQs”).  CMS clarified that pharmaceutical manufacturers that make payments to States under the Medicaid Drug Rebate Program are not “entities” that must comply with section 6032 of the DRA solely by virtue of making such payments.  FAQ No. 11.  Accordingly, such pharmaceutical manufacturers are not required by the DRA to establish written policies related to federal and state false claims laws. 

    By Michelle L. Butler

    Categories: Reimbursement

    Senate Appropriations Committee Votes to Increase Rebates for Brand Name Products under the Medicaid Drug Rebate Program

    On March 22, 2007, the Senate Appropriations Committee approved S. 965, a bill making emergency appropriations primarily for the wars in Iraq and Afghanistan.  During the Committee’s consideration of the bill, it adopted an amendment offered by Senator Dick Durbin (D-IL) regarding the Medicaid Program.  Senator Durbin’s amendment would raise the minimum rebate amount owed by manufacturers under the Medicaid Drug Rebate Program for single source drugs and innovator multiple source drugs to 20 percent (from 15.1 percent), effective March 31, 2007.  S. 965, 110th Cong. § 2705(b) (2007).  The purpose of this increase in rebates is to pay for the other portion of Senator Durbin’s amendment, which would be a two-year moratorium on action to finalize and/or implement (1) a rule proposed by CMS, which would, among other things, limit reimbursement for health care providers that are operated by units of government to an amount that does not exceed the provider’s cost and (2) the restriction of payments for graduate medical education under the Medicaid Program.  Id. § 2705(a); CMS, Medicaid Program; Cost Limit for Providers Operated by Units of Government and Provisions to Ensure the Integrity of Federal-State Financial Partnership, 72 Fed. Reg. 2236 (proposed Jan. 18, 2007).

    S. 965 has not yet cleared the full Senate –it is expected before the full Senate this week.  If Senator Durbin’s amendment remains in the version that clears the Senate, but is not in the House version, it is possible that when the conferees meet to reconcile the competing bills, this provision will be struck.  In addition, the House version includes a timetable for the withdrawal of the troops from Iraq.  President Bush has threatened to veto the bill if it is presented to him with the timetable.  Since the House version barely cleared the House, it is unlikely that there would be sufficient votes to override a veto. 

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    By Michelle L. Butler

    Categories: Reimbursement

    180-Day Exclusivity Forfeiture – A Zen Moment

    As the backlog of pre-Medicare Modernization Act (“MMA”) ANDAs is cleared and disputes over 180-day exclusivity under the old statutory regime become a vestige of the past, new post-MMA disputes over 180-day exclusivity will certainly take their place, particularly as they concern forfeiture.  Indeed, within 24 hours of the enactment of the MMA, Senator Orrin Hatch (R-UT) was already expressing concern about the “failure to market” forfeiture provision in FDC Act § 505(j)(5)(D)(i)(I). 

    In a somewhat recent case involving the “failure to obtain tentative approval” 180-day exclusivity forfeiture provision at FDC Act § 505(j)(5)(D)(i)(IV), FDA took a stance that is reminiscent of the old “if a tree falls in the woods and nobody is there” enigma. 

    The “failure to obtain tentative approval” forfeiture provision provides that:

    The first applicant [forfeits 180-day exclusivity eligibility if the applicant] fails to obtain tentative approval of the application within 30 months after the date on which the application is filed, unless the failure is caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed.

    Sandoz submitted ANDA #76-969 for Metoprolol Succinate Extended-Release Tablets USP, 25mg, 50mg, 100mg, and 200mg, to FDA in December 2003.  The ANDA contained paragraph IV certifications to four Orange Book-listed patents for the Reference Listed Drug, TOPROL-XL.  In July 2006, subsequent to a lawsuit involving two of the patents and a decision by the U.S. District Court for the District of Delaware that the challenged patents are invalid and unenforceable, FDA approved ANDA #76-969.  Specifically, FDA tentatively approved Sandoz’s 50mg, 100mg, and 200mg drug products because Sandoz was not a “first applicant” for these strengths, and granted full approval for the 25mg drug product for which Sandoz was the “first applicant.”

    FDA’s approval letter states that with respect to 180-day exclusivity for the 25mg drug product:

    Sandoz was the first ANDA applicant to submit a substantially complete ANDA for Metoprolol Succinate Extended-Release Tablets USP, 25 mg, with a paragraph IV certification to the four [OrangeBook-listed patents].  Therefore, with this approval, Sandoz may be eligible for 180 days of generic drug exclusivity for Metoprolol Succinate Extended-Release Tablets USP, 25 mg. . . .  The agency notes that Sandoz failed to obtain tentative approval of this ANDA within 30 months after the date on which the ANDA was filed. [citation omitted]  However, the agency is not making a formal determination at this time of Sandoz’s eligibility for 180-day generic drug exclusivity.  It will do so only if another applicant becomes eligible for approval within 180 days after Sandoz begins commercial marketing Metoprolol Succinate Extended-Release Tablets USP, 25 mg.

    FDA’s decision (or non-decision as the case might be) begs the question: does a “first applicant” forfeit exclusivity if a forfeiture event is triggered?  FDA has not, to our knowledge, had to deal with another case where a “first applicant” failed to obtain tentative approval within 30 months; but it is likely that this issue will arise in future cases.  FDA is presumably in the process of drafting regulations to implement the MMA forfeiture provisions that will attempt to answer this and many other unresolved forfeiture issues.

    Categories: Hatch-Waxman

    FDA Law Blog in the News . . .

    Although we launched this blog only two weeks ago, word is spreading fast that FDA Law Blog is a valuable source of information on timely and often overlooked issues affecting FDA-regulated industries.  Today, FDA Week, an industry publication from Inside Washington Publishers, ran an article (subscription required) reporting on FDA Law Blog’s recent post concerning 505(b)(2) application user fees.  Also, Orange Book Blogger Aaron Barkoff has kindly promoted FDA Law Blog.

    We look forward to the continuing success of FDA Law Blog.  We encourage you to email us (jwasserstein@hpm.com or kkarst@hpm.com) with your comments and suggestions.

    Categories: FDA News

    WLF Weighs in on FDA Draft Guidances on Laboratory Tests

    The Washington Legal Foundation (WLF), a public-interest law and policy center, has challenged FDA’s authority to regulate laboratory developed tests (LDTs), as well as FDA’s proposed method of changing its regulations governing analyte specific reagents (ASRs), which are components of LDTs.  LDTs are commonly referred to as "home brew" assays. 

    At the center of debate are two draft guidance documents FDA issued on September 7, 2006: (1) Draft Guidance for Industry, Clinical Laboratories, and FDA Staff: In Vitro Diagnostic Multivariate Index Assays (the IVDMIA Draft Guidance); and (2) Draft Guidance for Industry and FDA Staff: Commercially Distributed Analyte Specific Reagents (ASRs): Frequently Asked Questions (the ASR Draft Guidance).  Earlier this month, WLF filed comments pointing out the illegalities of both draft guidance documents. 

    Laboratories are regulated by the Centers for Medicare & Medicaid Services under the Clinical Laboratory Improvement Amendments of 1988.  LDTs, which are developed by and used in a particular laboratory, have not been regulated by FDA.  In the IVDMIA Draft Guidance, however, FDA creates a new category of LDTs, and declares that IVDMIAs are medical devices subject to FDA regulation.  At a Febryary 2007 FDA public meeting, WLF asserted that FDA’s regulation of IVDMIAs as medical devices is contrary to law.  Independent of the IVDMIA Draft Guidance, in September 2006, WLF filed a citizen petition requesting that FDA not regulate LDTs as medical devices.  The petition raises many legal issues not addressed in the IVDMIA Draft Guidance.

    In response to the ASR Draft Guidance, WLF argues that FDA’s proposed regulatory activity violates the Administrative Procedure Act and the First Amendment.  The ASR Draft Guidance introduces new characteristics that products must have in order to be considered an ASR. WLF’s comments point out, however, that these characteristics are not included in, and actually conflict with, FDA’s existing regulations.  WLF argues that the ASR Draft Guidance represents a substantive change to FDA’s regulations, and that these changes can only be made through notice and comment rulemaking.  Additionally, WLF asserts that the ASR Draft Guidance violates the First Amendment rights of ASR manufacturers by restricting commercial speech. 

    WLF and numerous other stakeholders have submitted comments on both draft guidance documents. 

    RELATED READING:

    By Christine P. Bump

    Categories: Medical Devices

    FDA Issues Draft Guidance on New Advisory Committees Membership Procedures

    Earlier today, FDA announced the availability of a draft guidance document “that would implement a more stringent approach for considering potential conflicts of interest for its advisory committee members and for recommending eligibility for meeting participation.”  The new guidance document, once finalized, will replace a guidance document FDA issued February 2000 on how the Agency manages conflict of interest issues concerning special government employees who serve as advisory committee members, consultants, or experts to the Agency.  The Federal Register notice announcing the guidance document will be published on March 23, 2007.

    According to FDA, because of the complexity of the February 2000 guidance document “FDA officials found it difficult to achieve consistent results that the public could readily understand.”  The new draft guidance document, however:

    would reduce the likelihood that the process for recommending waivers would vary from meeting to meeting.  In addition to a more streamlined approach for considering who may participate in meetings, FDA would tighten its policy for considering eligibility for participation.  If an individual has disqualifying financial interests whose combined value exceeds $50,000, after applying certain exemptions, the person would generally not be considered for participation in the meeting, regardless of the need for his or her expertise.  If the financial interests are $50,000 or less, after applying certain exemptions, the individual might be recommended to participate as a non-voting member.  Only individuals with no potential conflicts would be eligible to fully participate in meetings as voting members.

    FDA’s issuance of the draft guidance is part of the Agency’s broader efforts to improve the advisory committee process.  In February 2007, FDA issued a draft guidance document on the preparation and public availability of information given to advisory committee members.  A third guidance document will reportedly address when conflict of interest waivers will be publicly released.

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    Categories: FDA News

    Petition Seeks FDA’s “Forced Switch” of ALLEGRA and ZYRTEC to OTC Status

    On March 12, 2007, Greenberg Traurig submitted a citizen petition to FDA to switch four prescription antihistamine and antihistamine-decongestant drugs from prescription to OTC status.  The four drugs are ALLEGRA (fexofenidine HCl), ALLEGRA D (fexofenidine HCl; pseudoephedrine HCl), ZYRTEC (cetirizine HCl), and ZYRTEC D (cetirizine HCl; pseudoephedrine HCl).  The petition cites several bases justifying the forced switches –all of which are related to FDA’s previous discussion and actions concerning the OTC status of CLARITIN (loratadine). 

    Interest in the issue of forced Rx-to-OTC switches has waxed and waned over the past several years.  In July 1998, Wellpoint Health Networks submitted a petition requesting that FDA switch CLARITIN and the other drugs mentioned in the Greenburg petition to OTC status.  In May 2001, FDA held a joint meeting of the Nonprescription Drugs and Pulmonary-Allergy Drugs Advisory Committees to consider the issue.  Although the committees recommended the Rx-to-OTC switches of ALLEGRA, ZYRTEC, and CLARITIN, FDA took no formal action on the recommendation.  FDA has not yet responded to the Wellpoint petition, and may never do so.  Wellpoint has reportedly lost interest in pursuing the issue because the company’s petition stimulated enough discussion to assure the company that FDA and the pharmaceutical industry are actively considering Rx-to-OTC switches.  Indeed, in November 2002, FDA approved the Rx-to-OTC switch of several CLARITIN drug products. 

    FDA attempted to force an Rx-to-OTC switch over the objections of the product’s sponsor once –in 1982, FDA proposed the Rx-to-OTC switch of metaproterenol sulfate metered-dose inhalers– but did not carry through with the switch after extensive adverse comment.  Since the switch of CLARITIN, FDA has indicated its preference to “stimulate” switches rather than force them.  The Greenberg petition, however, places the issue front and center once again.  With respect to FDA’s legal authority to force Rx-to-OTC switches, the Greenberg petition includes an 8-page legal memorandum analyzing the issue.  Three primary legal arguments are made: 

    First, the [FDC Act] expressly authorizes [FDA] to switch a drug from prescription to OTC following rulemaking.  There is no statutory provision that even suggests, let alone requires, that rulemaking in this setting must give way to adjudication, i.e., formal trial-like proceeding.

    Second, unless there is a statutory provision to the contrary, the courts have consistently held that an agency is free to undertake any type of rulemaking it deems appropriate.  Here, there is nothing that would interfere with that agency prerogative.

    Third, there is nothing in the [FDA Act], [FOIA], or any other federal law that would preclude the agency from making regulatory decisions about a drug based on drug-specific data submitted to it by the drug’s sponsor.  While the [FDC Act] and FOIA may limit public disclosure of these data, they in no way affect the ability of the FDA to use the data as part of a rulemaking.  One cannot equate “use” of data by the agency with public disclosure.  In short, a decision concerning whether to switch a product from prescription to OTC is committed to agency discretion and should be based on the scientific merit of the petition and not hindered by artificial legal constraints that nowhere appear in federal law.

    Categories: Drug Development

    Medicare Revokes Payment for ARANESP

    Reacting to a February 2007 FDA safety alert on the off-label use of erythropoietic stimulating agents (ESAs), Noridian Administrative Services (Noridian), a Medicare Administrative Contractor for 13 states in the west and midwest, announced that, effective March 5, 2007, Medicare will deny payment for the off-label use of darbepoetin alpha (ARANESP or DPA).  Other Medicare contractors are likely to follow Noridian’s lead in the coming weeks.  Three ESAs –ARANESP, EPOGEN, and PROCRIT– are FDA approved to treat anemia in patients with chronic kidney failure and cancer patients undergoing chemotherapy.  However, these drugs are also used off-label to treat anemia and fatigue in surgical patients and patients with HIV.  Noridian’s revised Local Coverage Decision (LCD) revoking payment for ARANESP noted several important developments.  FDA’s February 16, 2007 alert states that “ESAs are not FDA approved to treat anemia in cancer patients not receiving chemotherapy.”  The United States Pharmacopeia-Drug Information (USP-DI), a Medicare-recognized drug compendium, described the treatment of cancer-related anemia with DPA as “unaccepted.”  Additionally, Amgen, the manufacturer of ARANESP, recently issued a letter to health professionals stating that DPA “should be used only in accordance with its approved product labeling.”  Amgen issued the letter after observing increased mortality in patients treated with DPA for cancer-related anemia.

    Noridian’s policy revision is noteworthy and may be used by other contractors to revoke payment for ARANESP and other ESAs.  The Medicare contractor used a provision in the Medicare Program Integrity Manual (PIM) to revise its LCD on ARANESP without notice and comment.  Chapter 13, section 13.7.3 of the PIM allows Medicare contractors to revise coverage policy immediately when there are safety concerns about a product or procedure.  Based on the safety concerns raised by FDA’s alert combined with the actions of the USP-DI and Amgen, Noridian decided that sufficient safety concerns existed to immediately revoke Medicare payment for the off-label use of ARAESP.  However, the revised policy does not affect ARAESP used on-label to treat anemia caused by chemotherapy.  Noridian also plans to review Medicare coverage of ESAs in the coming weeks and requests public comment and peer-reviewed literature on their use.  FDA, on March 9, 2007, approved a "black box" warning and other labeling revisions for both DPA and epoetin alpha (EPOGEN/PROCRIT).  CMS, on March 14, 2007, announced that it will review the use of ESAs in all non-end-stage renal disease applications.  CMS also took a step toward generating a National Coverage Decision (NCD) by opening a National Coverage Analysis (NCA) with a 30-day public comment period on ESAs in all non-renal applications.  CMS will use the NCA to analyze clinical studies, medical literature and other medical evidence submitted in public comments to determine whether the agency’s coverage and reimbursement policies on ESAs should be revised.

    Considering Medicare’s heightened review and recent FDA action, manufacturers should monitor updates to the Medicare Coverage Database and contractor websites for updates to coverage and reimbursement for ESAs in the coming weeks.  Manufacturer submission of public comments on the NCA may also be effective to ensure that CMS’s review of its ESA coverage and reimbursement policies and any ensuing NCD are based on sound medical evidence.

    By Kirk L. Dobbins

    Categories: Reimbursement

    Data Quality Act Case May have Broader Implications on FDA

    In a case that may have wider implications for the data on which FDA bases its decisions, a medical marijuana rights group, Americans for Safe Access (ASA), has sued HHS and FDA for violating the requirements under the Data Quality Act, 44 U.S.C. § 3516 (the DQA).  The DQA, which was enacted in 2001, requires federal agencies to ensure and maximize the “quality, objectivity, utility, and integrity of information” disseminated to the public.  The information quality guidelines implemented by HHS requires that the agency ensure and maximize the “quality, objectivity, utility, and integrity of information” that it disseminates, as well as administrative mechanisms that allow affected persons to seek and obtain correction of information disseminated by HHS that does not comply with the guidelines. 

    According to the ASA, since implementing its information quality guidelines under the DQA, HHS has stated that marijuana “has no currently accepted medical use in treatment in the United States.”  ASA alleges that this statement and the findings underlying it are inaccurate, and has identified numerous peer-reviewed scientific studies confirming the medical efficacy of marijuana, including a National Institute of Medicine report which was commissioned by the White House’s Office of National Drug Control Policy.  ASA complied with HHS’ administrative mechanisms and filed a petition and an appeal to correct what ASA believes to be erroneous statements.  According to the ASA, HHS’ responses were nonsubstantive and not timely. 

    ASA filed suit in United States District Court for the Northern District of California on February 21, 2007.  ASA’s complaint requests, in part, that the court enjoin HHS and FDA from continuing to disseminate statements that marijuana “has no currently accepted medical use in treatment in the United States.”  If successful, this lawsuit may provide a precedent for challenging agency actions if the parties believe that the data on which the action is based is flawed, if the data is disseminated to the public.

    By Christine P. Bump

    Categories: Cannabis |  FDA News