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  • The Supreme Court Refuses to Hear Park Doctrine Case

    After a lengthy struggle that began with a major Salmonella outbreak in 2010, Jack and Peter DeCosters’ criminal case came to an end on May 22, 2017 when the U.S. Supreme Court denied their petition for writ of certiorari. We have followed this case with great interest, as it tested the limits (and the very existence) of the Park doctrine, also known as the “responsible corporate officer” doctrine.

    In refusing to hear the case, the Supreme Court leaves in place a fractured Eighth Circuit Court decision upholding the DeCosters’ three-month prison sentences – one that we previously called the most significant Park doctrine ruling in over four decades. We described the Eighth Circuit’s ruling in some detail here.

    Beyond the obvious critical importance of food safety, and the gravity of an outbreak of food-borne illness, the DeCosters’ saga provides useful reminders for all industry executives about potential criminal liability.

    Importantly, a supervisory liability conviction may justify a penalty of imprisonment without violating due process only where “blameworthiness” exists, either inherent in the offense, or based on case-specific findings of fact. However, according to at least one judge of the Eighth Circuit, a misdemeanor Park doctrine conviction, implicates sufficient “blameworthiness” to justify a penalty of imprisonment, because the corporate officer in question is being held responsible “for his own failure to prevent or remedy ‘the conditions which gave rise to the charges against him.’” United States v. DeCoster, 828 F.3d 626, 633 (8th Cir. 2016). Even if the Park doctrine itself does not implicate “blameworthiness,” however, the facts of the DeCosters’ case demonstrate that pleading guilty to a Park offense without admitting knowledge or negligence does not preclude the sentencing judge from going on to find facts that support scienter.

    Based on its position in this case and subsequent official statements, the DOJ under Jeff Sessions continues to favor aggressive prosecution and sentencing of strict-liability offenses. The government’s brief urged the Supreme Court to refuse to review the DeCosters’ case, and argued that strict Park doctrine liability, without further finding of fact, would justify the prisons sentences imposed on the DeCosters. More generally, Attorney General Sessions has stated that DOJ “will continue to emphasize the importance of holding individuals accountable for corporate misconduct” and that “those who choose to disregard the law will be caught and punished.” See Attorney General Jeff Sessions, Remarks at Ethics and Compliance Initiative Annual Conference (Apr. 24, 2017).

    Given the stated importance of individual responsibility to the DOJ, and the unsettled nature of the Eighth Circuit’s seminal ruling, we would not be surprised to see another case testing the limits of Park. When it does, you will read about it here.

    Categories: Uncategorized

    Implementation of 340B Final Rule Postponed Until October 1, 2017

    Today the Health Resources and Services Administration (“HRSA”), the federal agency responsible for overseeing the 340B Drug Discount Program, published in the Federal Register a rule delaying until October 1, 2017 the implementation of a final regulation establishing the methodology for calculating the 340B ceiling price (including so-called penny pricing) and civil monetary penalties (CMPs) for knowing and intentional overcharges of 340B covered entities.

    The history of these regulations is a tortured one. The final regulation in question was published on January 5, 2017 (see our post here) with an effective date of March 6, 2017. On March 6, 2017, HRSA issued a rule delaying implementation to start of the following quarter.  Later, to comply with the new administration’s regulatory freeze memorandum (see our previous post here), HRSA further postponed the effective date until May 22, 2017, and invited comment on whether the effective date should be even further delayed until October 1, 2017 (see also our post here).  HRSA has opted for the latter effective date to implement the ceiling price methodology and CMP regulation, explaining that the delay was “necessary to provide adequate time for compliance and to mitigate implementation concerns.” 82 Fed. Reg. 22893, 22894 (May 19, 2017).

    Categories: Health Care

    Schrader Amendment to House UFA Package Creates New “Competitive Generic Therapy” Pathway and 180-Day Exclusivity

    Earlier this week, the Subcommittee on Health of the House Energy and Commerce Committee held a mark-up session of several bills, including H.R. 2430, the FDA Reauthorization Act of 2017 (“FDARA”). (The Senate version of FDARA, S. 934, passed out of committee earlier this month.)  Initially proposed as a “clean” user fee bill, several riders were added to the bill during the mark-up session, including provisions concerning over-the-counter hearings aids, requiring risk-based device inspections, restricting drug imports . . . . and, of particular interest to this blogger, provisions creating a new class of competitive generic drugs, including associated 180-day exclusivity.

    Introduced by Representative Kurt Schrader (D-OR), the amendment, which passed by voice vote, would amend the FDC Act to add Section 505H, titled “Competitive Generic Therapies.” As explained by Rep. Schrader in his opening remarks:

    We know that when generic drugs compete in the market, drug prices come down dramatically. Although nine out of every ten prescriptions is for a generic drug, generic drugs only make up 28% of the total prescription drug spending in the United States.  Unfortunately, though, some drugs for small patient populations may not attract the same interest from generic drug manufacturers due to market and regulatory uncertainty.  This amendment takes many steps to encourage competition where there is none today.

    First, the amendment requires greater communication between the FDA and manufacturers for these competitive generic products before and during the application process. We have seen great strides toward faster drug approvals in the brand drug breakthrough process, and this is modeled after that.

    The amendment also creates an incentive for this select set of particular generic drugs to come to market by guaranteeing them the same six months of exclusivity that the vast majority of first generic drugs receive. Under current law, if a first generic drug challenges a patented drug, they get this treatment.  This would extend that treatment for new generic drugs competing with off-patent brand drugs where there is no competition.

    The “competitive generic therapy” pathway described in the amendment is a new (and we think much improved) take on Rep. Schrader’s “Lower Drug Costs Through Competition Act” (H.R. 749), which was introduced earlier this year (see our previous post here).

    Under the new pathway, a generic drug sponsor would request, either before or upon the submission of an ANDA, that FDA designate, within 60 calendar days of receipt of the designation request, a drug as a “competitive generic therapy.” The designation process would be described in draft guidance provided by FDA not later than 18 months after enactment of the provisions, and, if necessary, in new regulations.

    A drug would be eligible for designation if FDA determines that there is “inadequate generic competition.” The term “inadequate generic competition” is defined in the bill to mean that:

    there is not more than one approved drug product on the list of products described in section 505(j)(7)(A) (not including products on the discontinued section of such list) that is—

    (A) the reference listed drug; or

    (B) a generic drug with the same reference listed drug as the drug for which designation as a competitive generic therapy is sought.

    In other words, there is “inadequate generic competition” if the “active” section of the Orange Book does not show generic competition for an NDA-approved RLD, or if there is a single ANDA approved (presumably identified as the “reference standard”) and the NDA RLD is no longer marketed (and identified in the “discontinued” section of the Orange Book).

    Designation as a “competitive generic therapy” carries with it several benefits. FDA would be required to:

    (1) Hold meetings with the sponsor and the review team throughout the development of the drug prior to submission of the application for such drug under section 505(j).

    (2) Provide timely advice to, and interactive communication with, the sponsor regarding the development of the drug to ensure that the development program to gather the nonclinical and clinical data necessary for approval is as efficient as practicable.

    (3) Involve senior managers and experienced review staff, as appropriate, in a collaborative, cross-disciplinary review, including with respect to drug-device combination products and other complex products.

    (4) Assign a cross-disciplinary project lead for the Food and Drug Administration review team— (A) to facilitate an efficient review of the development program and application, including manufacturing inspections; and (B) to serve as a scientific liaison between the review team and the sponsor.

    Rep. Schrader’s amendment would also incentivize competitive generic therapy development by creating a new 180-day exclusivity provision applicable to such drug products. Specifically, FDC Act § 505(j)(5)(B) would be amended to add the following:


    (I) EFFECTIVENESS OF APPLICATION.—If the application is for a competitive generic therapy, the application shall be made effective on the date that is 180 days after the date of the first commercial marketing of the competitive generic therapy.

    The term “competitive generic therapy” in the exclusivity provision above is further defined to mean a drug “that is designated as a competitive generic therapy under section 506H,” and “for which there are no blocking patents or exclusivities” identified in the Orange Book.

    As with the “standard” form of 180-day exclusivity, eligibility for competitive generic therapy 180-day exclusivity could also be forfeited . . . but only on a single “failure-to-market” basis:

    (iv) SPECIAL FORFEITURE RULE FOR COMPETITIVE GENERIC THERAPY.—The 180-day exclusivity period described in subparagraph (B)(v) shall be forfeited by the holder of the approved abbreviated application for the competitive generic therapy involved if the holder fails to market the competitive generic therapy within 75 days after the date on which the approval of the application is made effective.

    In addition to “clos[ing] a loophole and improv[ing] program integrity in the Tropical Disease priority review voucher program,” Rep. Schrader’s amendment would make other modifications intended to enhance ANDA review transparency and to study what can be done “to get more first-cycle approvals in the generic drug review program,” according to Rep. Schrader. For example, FDC Act § 505(j) would be amended to require FDA to provide ANDA applicants with application review updates:

    Upon the request of an applicant regarding one or more specified pending applications under this subsection, the Secretary shall—

    (A) by telephone or electronic mail, provide review status updates; and

    (B) indicate in such updates the categorical status of the applications by each relevant review discipline.

    Earlier this year, Office of Generic Drugs Director Dr. Kathleen (Cook) Uhl, during her keynote address at the annual meeting of the Association for Accessible Medicines, reported that for the Fiscal Year 2015 cohort of ANDAs covered under GDUFA, the rate of first cycle approval/tentative approvals was only 9%.  Rep. Schrader’s amendment would require the Government Accountability Office to study first-cycle approval rates under GDUFA and determine “whether there are ways the review process for generic drugs could be improved to increase the rate of first cycle approvals and tentative approvals for generic drug applications.”

    FDA, Under New Leadership, Seeks More Comments on Rules Affecting Off-Label Communications

    Dr. Scott Gottlieb was sworn in as FDA’s 23rd Commissioner on May 11, 2017. There has been a lot of speculation about what policies he will prioritize for the Agency during his tenure.  A review of his background shows he has been an advocate for autonomy in the practice of medicine and the use of medical products for off-label uses.  He has opined that doctors are appropriately trained to make medical decisions based on the best interest of their patients.  Dr. Gottlieb is well-versed on the controversies surrounding FDA’s current restrictions on drug and device manufacturers from discussing off-label uses with health care practitioners.

    Given his expertise, he may be poised to loosen FDA’s enforcement of off‑label communications and to provide clarity to industry on these issues. Perhaps it is telling that one of the first actions the Agency has undertaken since his confirmation was to further extend the time period for reviewing the rules defining “intended use.”  As reported here, FDA derives authority to regulate a product based on its intended use. Although FDA first proposed changes to the “intended use” rules back in 2015, it was not until after the 2016 election but before the inauguration, that FDA issued its final rule.  It is not uncommon for a former administration to fast-forward pending rules before the political climate shifts; nor is it uncommon for a new administration to stay the most-recently implemented rules until it has time to consider them.

    In the case of the “intended use” rules, FDA issued the final rule on January 9, 2017, with a stated effective date of March 21, 2017. The proposed version of the rule was markedly different from the January 9 version because it permits FDA to look at the “totality of the evidence” in determining a manufacturer’s intended use for its drug or device.  Pharmaceutical groups filed a Citizen Petition requesting reconsideration of the language, and FDA without the benefit of a confirmed Commissioner, agreed to delay the effective date of the rule for a year.  FDA solicited comments on the decision to postpone the effective date, as well as on its regulation of product distribution in light of First Amendment considerations.  The 60-day comment period was expected to end on May 19, 2017.

    Yet on May 18, 2017, without substantive explanation, FDA further extended the comment period until July 18, 2017. According to the Federal Register notice, FDA “has received a request for a 30-day extension and another request for a 90-day extension of the comment period . . . . The requests conveyed concern that the current 60-day comment period does not allow sufficient time to develop a meaningful or thoughtful response to issues FDA raised in the Final Rule Extension.”  The 90-day extension request was submitted on April 5, 2017, by the same group that filed the Citizen Petition leading up to the initial comment period: the Medical Information Working Group, the Pharmaceutical Research and Manufacturers of America, and the Biotechnology Innovation Organization.  We were unable to find in the docket the request FDA referenced that sought a 30-day extension.

    It is unclear why FDA felt compelled to honor requests for more time in this case. The additional time could signal that the new Commissioner seeks to weigh in before FDA takes further action related to these rules affecting off-label communications.  We will continue to monitor these developments closely.

    A New Orange Book Tool: Reference Listed Drugs by ANDA Reference Standard List

    Since it was first published in 1980, the Orange Book has undergone a lot of change. Over the decades we’ve seen the publication transform and evolve from a paper edition to an electronic database, and now to an app (see our previous post here).  Although the Orange Book has become more complex to navigate, the first edition was rather simple, with two primary sections and several subsections:

    I.    Preface

    A.    Introduction

    B.    Definitions

    C.    General Policies Governing the List

    D.    Legal status of the List

    E.    Precautions to Users of the List

    F.    Codes and Specific Policies for Therapeutic Equivalence Evaluations

    G.    Description of Special Situations

    H.    Updating Procedures

    II.    Listings

    A.    Format Guide

    B.    Drug Product List

    C.    Trade Name Index

    D.    Application Holder Index

    E.    Application Holder Abbreviation List

    F.    Appendix: Prescription Drug Products Deemed Approved – Pending Resolution of Safety or Effectiveness Issues

    Today, the Orange Book contains a preface and six Drug Product Lists, either in their entirety, or by reference to an FDA website containing the full list:

    1. Prescription Drug Product List
    2. OTC Drug Product List
    3. Drug Products with Approval under Section 505 of the Act Administered by the Center for Biologics Evaluation and Research List
    4. Discontinued Drug Product List
    5. Orphan Products Designations and Approvals List
    6. Drug Products Which Must Demonstrate in vivo Bioavailability Only if Product Fails to Achieve Adequate Dissolution

    (Although the Orange Book used to contain a list of ANDA suitability petitions approved by FDA, that list is now posted separately on FDA’s website. . . . but the list has not been updated in nearly three years!)

    The Orange Book also contains three appendices (Product Name Index; Product Name Index Listed by Applicant; and Uniform Terms) and a Patent and Exclusivity Information Addendum (divided into Patent and Exclusivity Lists and Patent and Exclusivity Terms) that are updated monthly. (In the first few editions of the Orange Book, FDA listed in an appendix – later named the “DESI Addendum” – those drug products still in the Drug Efficacy Study Implementation program administrative process.)

    But in addition to what appears in the printed version of the Orange Book, there is other information FDA maintains that is important to drug manufacturers and that we consider to be an extension of the Orange Book. Some of that information is identified on FDA’s Orange Book website as “Additional Resources.”  Thus, for example, for many years now FDA has published “Additions/Deletions for Prescription and OTC Drug Product Lists” and has provided monthly “Orange Book Data Files.” Those files can be quite helpful in pinpointing when a particular change occurred with respect to a particular drug product listing. (Other extensions of the Orange Book include the daily updated “Newly Added Patents or Delisted Patents” electronic Orange Book search function . . . and perhaps even the recently published ANDA “Program Fee List,” which FDA prepared for GDUFA II user fee purposes, but that can assist with determining what ANDAs listed in the discontinued section of the Orange Book have merely been discontinued and which have had their approval withdrawn.)

    FDA’s latest additional resource is a list called “Reference Listed Drugs by ANDA Reference Standard List.”  Dated April 2017 and published last week for the first time, the new list is described by FDA as follows:

    This list refers to drug products approved under an Abbreviated New Drug Application (ANDA) that FDA has selected as reference standards and the associated reference listed drugs (RLDs). The purpose of this list is to assist applicants submitting an ANDA to seek approval of a generic drug in identifying an RLD when an ANDA RS has been selected. If the applicant has a question about which listed drug it should refer to as the RLD, the applicant may consult with FDA (refer to section 1.4 Reference Listed Drug and Reference Standard of the Orange Book Preface for more information).

    This list is updated monthly. Information in this list is sorted by Active Ingredient(s), Dosage Form, Route, Trade Name, Applicant Name and Strength. Additional information included are marketing status (RX, OTC, DISCN), Application Number, Product Number, and approval date of the Reference Standard.

    The new list is an outgrowth of FDA’s retooling of the 37th (2017) edition of the Orange Book to identify RLDs (i.e., NDA-approved drug products) and Reference Standards (i.e., an NDA- or ANDA-approved drug product used for bioequivalence testing purposes) and carves out of the Orange Book a select category of ANDA-approved Reference Standards. We previously posted on the retooling of the Orange Book and FDA’s guidance document, titled “Referencing Approved Drug Products in ANDA Submissions,” which delves into the details of RLD and Reference Standard status and designation.

    FDA Extends the Future Compliance Deadlines for Newly Deemed Tobacco Products by 90 Days

    As we previously reported, FDA issued a final rule in May 2016 that extended the agency’s authority to regulate all tobacco products, including e-cigarettes, cigars, hookah tobacco and pipe tobacco, among others. The final rule contained numerous compliance deadlines for manufacturers and retailers of these products.

    As FDA explained in a “Web Statement” dated May 3, 2017, in lawsuits over the final rule involving e-cigarettes, cigars, and pipe tobacco, FDA had stated that it would defer enforcement of all future compliance deadlines for these particular products for three months. The Web Statement explains that the three-month extension applies to the future compliance deadlines for all categories of newly regulated products, not just those products involved in the lawsuits. FDA said that the extension “will allow new leadership at the FDA and the Department of Health and Human Services additional time to more fully consider issues raised by the final rule that are now the subject of multiple lawsuits in federal court,” and said that it would “issue guidance describing its position in the near future.”

    FDA has now announced the availability of that guidance. The extension applies to compliance deadlines set for May 10, 2017 or later, and includes deadlines for the submission of cigar warning label plans, registration of manufacturers and listing of products, ingredient listing, the submission of health documents, substantial equivalence exemption requests, substantial equivalence applications, premarket tobacco product applications, and harmful and potentially harmful constituent reports. However, any compliance deadline that occurred before May 10, 2017, such as mandatory age and photo-ID checks, is not affected. The new compliance dates are detailed in a chart that accompanies the guidance.

    Categories: Tobacco

    DEA Administrative Decisions Update: What’s Prescribed in Vegas . . . Has Got to Stay in Vegas

    On April 17, 2013, Dr. David A. Moon was held up at a TSA checkpoint at a Las Vegas airport. Law enforcement officers stopped the physician—the holder of DEA registrations in Tulsa, Oklahoma, and Las Vegas, Nevada—carrying an unregistered firearm, and found in his carry-on luggage drugs in pill bottles labeled for other individuals, drugs in unlabeled pill bottles, and other loose drugs.  The physician was placed under arrest, and a subsequent DEA investigation ensued.

    On December 8, 2015, DEA issued an order to show cause (OSC) alleging that the physician (1) possessed controlled substances with intent to redistribute them to individuals for whom they were not originally dispensed, (2) accepted controlled substances from patients (i.e., non-DEA registered sources) and redistributed them to other patients, (3) failed to conduct a biennial inventory, (4) had shortages of controlled substances and was missing purchase records, and (5) issued prescriptions in Nevada under his Oklahoma license. On top of that, DEA alleged that both Oklahoma and Nevada’s medical boards had revoked his state license to handle controlled substance.

    The physician never responded to the OSC, and the Acting Administrator issued a Final Order over a year later on April 27, 2017. Unfortunately, the Administrator declined to rely in his opinion on most of the juicy facts—i.e., the attempted escape from Vegas, the illicit drugs and weapons, and the airport arrest—and determined that DEA had failed to provide sufficient factual or evidentiary support for many of the allegations (e.g., the arrest report submitted on evidence by DEA did not identify that the pills in the physician’s possession were controlled substances).

    The Administrator likely left out the interesting facts because he did not need to rely on them to render a decision: The Administrator found that there was evidence that the physician lacked state authority to handle controlled substances (see our previous post here on state authority cases) after both medical boards revoked his state licenses, and that the physician’s improper recordkeeping and issuance of prescriptions in states without proper registration were evidence that his continued registration was not in the public interest. Accordingly, the Administrator revoked the physician’s registration.

    Probably the most interesting takeaway from this decision is the Administrator’s discussion of Factor One of the CSA’s public interest factors for practitioners found in 21 U.S.C. § 823(f), specifically the “recommendation of the appropriate State licensing board or professional disciplinary authority.”

    Historically, DEA has taken a broad interpretation of this factor to include any form of disciplinary action taken against the registrant (e.g., probation, suspension, revocation, restoration). See, e.g., Tyson D. Quy, M.D., 78 Fed. Reg. 47412, 47417 (Aug. 5, 2013); Daniel Koller, D.V.M., 71 Fed. Reg. 66975, 66981 (Nov. 17, 2006); Saihb S. Halil, M.D., 64 Fed. Reg. 33319, 3320-21 (June 22, 1999); William E. Brown, D.O., 58 Fed. Reg. 64004, 64005 (Dec. 3, 1993).

    The plain language of the statute suggests a stricter interpretation, such as an actual recommendation from the state board to DEA, and this interpretation is more consistent with 21 U.S.C. § 824(a)(3)’s separate ground for revocation based on a loss of state authority. (See this law review article for a fuller analysis and critique of DEA’s historic Factor One precedent.)

    Breaking from tradition, the Administrator made an interesting statement, perhaps signaling an agency switch in precedent to a strict reading of Factor One. In a footnote, the Administrator noted that there was no evidence relating to a Factor One analysis, despite the prior disciplinary actions by the state boards:

    As to factor one, there is no evidence that either the Oklahoma State Board of Osteopathic Examiners or the Nevada State Board of Osteopathic Medicine made a recommendation to DEA; both, however, revoked Registrant’s licenses to practice osteopathic medicine.

    82 Fed. Reg. 19385, 19389 n.9 (Apr. 27, 2017).

    This development may be a positive one for practitioner registrants, or it may be a distinction without a difference. The more strict, plain language interpretation of Factor One could allow a practitioner in an administrative hearing to request a recommendation from the appropriate state licensing board (even after a license suspension or probation), and an adverse state action will not necessarily count against the registrant in the public interest determination.  However, that specific determination did not need to be made here, because the practitioner ultimately lacked state authority continue to handle controlled substances.

    LDTs: The Saga Continues

    Over its ten years the FDA Law Blog has posted numerous stories about FDA's regulation of laboratory developed tests (LDTs) (see, e.g., here, here, and here)  Yet, the story of FDA's efforts to regulate LDTs goes back even further than the FDA Law Blog, to 1992.  While there have been other regulatory initiatives that have lasted longer – the OTC review, DESI review, and the program to end Class III 510(k) devices spring to mind– the 25 year LDT saga has had a healthy run.  
    Hyman, Phelps & McNamara, P.C. Director Jeff Gibbs recently published in the FDLI Update an article that summarizes this 25-year history.  The article, titled "LDTs: The Saga Continues," summarizes the tale of LDT regulation, from FDA's initial statement of authority through developing a plan to regulate to LDTs, culminating in FDA's issuance of a Discussion Draft about how LDTs might someday be regulated in the future.  For devotees of LDTs – or of epic efforts to regulate a class of products – it will be riveting reading.  And for those who have not read about laboratory developed tests before, and never thought about them, this succinct summary is the one to read.

    ACI’s 5th Annual FDA Boot Camp: Devices Edition

    The American Conference Institute’s (“ACI’s”) 5th annual “FDA Boot Camp: Devices Edition” conference is coming up fast! The conference will take place from July 26-28, 2017 in Chicago, Illinois.

    ACI’s FDA Boot Camp: Devices Edition delivers in-depth coverage of FDA regulatory law to professionals who work in conjunction with the medical device industry. In addition to providing a “basic training,” ACI’s brand new 2017 agenda offers “advanced training” sessions covering the “ins and outs” of applying this knowledge to real-life situations.  Highlights from this year’s program include a “Ripped from the Headlines” section covering the recent hot issues of 21st Century Cures Act, Cybersecurity, and Digital Health, and their impact on FDA practice, and an in-depth Post-Conference Skills session, providing an interactive, step-by-step journey through the submission process with strategies and tips for success.

    A distinguished faculty of top FDA regulatory device experts — a “Who’s Who of the FDA Bar” — will share their knowledge and give you critical insights on:

    • The organization, jurisdiction, functions, and operations of FDA
    • An overview of medical device regulations and classification
    • Clinical trials and IDEs
    • The 510(k), PMA, and de novo pathways and choosing the right one
    • Device labeling, promotion, and related First Amendment concerns
    • General post-market controls and MDRs
    • Quality Systems Regulation and UDI
    • Understanding FDA’s Enforcement authority and how to remain compliant
    • Recalls and Withdrawals

    Hyman, Phelps & McNamara, P.C.’s Jeffrey N. Gibbs will be speaking at a session titled “Low to Moderate-Risk Devices: Weighing the Pros and Cons of 510(k) Clearance vs. De Novo Pathways.” FDA Law Blog is a conference media partner. As such, we can offer our readers a special 10% discount.  The discount code is: P10-670-FDALB17.  You can access the conference brochure and sign up for the event here.  We look forward to seeing you at the conference.

    Categories: Medical Devices

    ACI’s 30th FDA Boot Camp: Drugs & Biologics Edition

    The American Conference Institute’s (“ACI’s”) “FDA Boot Camp: Drugs & Biologics Edition” – now in its 30th iteration – is scheduled to take place from September 13-15, 2017, at the Omni Parker House, in Boston, Massachusetts. The conference is billed as the premier event to provide folks with a roadmap to navigate the difficult terrain of FDA regulatory law.

    This year’s FDA Boot Camp will provide you not only with the essential background in FDA regulatory law to help you in your practice, but also key sessions that show you how this regulatory knowledge can be applied to situations you encounter in real life. A distinguished cast of presenters will share their knowledge and provide critical insights on a host of topics, including:

    • The organization, jurisdiction, functions, and operations of FDA
    • The essentials of the approval process for drugs and biologics, including: INDs, NDAs, BLAs, OTC Approval, the PMA process and the Expedited Approval Process
    • Clinical trials for drugs and biologics
    • Unique Considerations in the approval of combination products, companion diagnostics, and stem cell therapies
    • The role of the Hatch-Waxman Amendments in the patenting of drugs and biologics
    • Labeling in the drug and biologics approval process
    • Off-Label use and a New World Order
    • cGMPs, adverse events monitoring, risk management and recalls

    Hyman, Phelps & McNamara, P.C.’s Kurt R. Karst, will present with a panel of experts and provide an overview of the Hatch-Waxman Amendments and the Biologic Price Competition and Innovation Act (“BPCIA”). Mr. Karst will also lead a conference workshop, titled “Hatch-Waxman and BPCIA in the Trenches: Deconstructing and Constructing an Exclusivity Dispute.”  During the workshop, Mr. Karst will deconstruct, in a step-by-step manner, a complex exclusivity dispute, analyzing the various (and sometimes evolving) positions on exclusivity presented.  Relevant court decisions will also be analyzed and their practical and future effects discussed.  After the exclusivity case analysis is completed, attendees will have the opportunity to construct their own exclusivity dispute by choosing from various base facts.  Once the case is constructed, Mr. Karst will lead attendees through the exclusivity analysis.

    FDA Law Blog is a conference media partner. As such, we can offer our readers a special 10% discount. The discount code is: P10-999-FDAB17.  You can access the conference brochure and sign up for the event here.  We look forward to seeing you at the conference.

    To Reduce Regulatory Burdens, Citizen Petition Asks FDA to Permit Interstate Sales of Raw Milk

    A citizen petition (Docket No. FDA-2017-P-2626) recently submitted to FDA asks the agency to exercise enforcement discretion with respect to the regulatory prohibition on interstate shipments of milk products that have not been pasteurized (21 CFR 1240.61).  There have been previous petitions asking FDA to allow the interstate shipment of raw milk on a variety of grounds.  This one breaks new ground by citing as support for the requested action several Executive Orders and Memoranda issued by President Trump that are intended to reduce regulatory burdens.

    The petition contends that FDA’s enforcement of the regulatory prohibition have been “extremely burdensome, forcing some farmers out of business.”  The petition further contends that “public health can be adequately protected through labeling bearing a warning and safe handling instructions.”  The warning could be one that is required by a state, or where no such state requirement exists, the following:

    WARNING: This raw (unpasteurized) milk [cream] may contain disease-causing organisms. Persons at highest risk of these organisms include newborns and infants; the elderly; pregnant women; those taking corticosteroids, antibiotics or antacids; and those having chronic illnesses or other conditions that weaken their immunity.

    Ostensibly, proper handling instructions would reduce the risk of foodborne illness by educating consumers on how to pasteurize their own milk.  The petition sets out the following example:

    SAFE HANDLING INSTRUCTIONS: To prevent foodborne illness, keep this product refrigerated at 45°F or lower and, prior to consumption, follow the pasteurization process identified below.

    Pasteurization Process: (1) Heat milk at 145°F [150°F] for 30 minutes in stainless steel pot; (2) Remove pot of milk from heat and place it in sink or large bowl filled with ice water stirring constantly until milk temperature drops to 40°F; and (3) Store pasteurized milk in a refrigerator at 45°F or lower.

    To date, FDA has been steadfast in refusing to allow interstate shipments of raw milk.  This petition aims to find out whether that position is more malleable under the new administration.

    Examining the “Drug Innovation Paradox”: Should the Length of Exclusivity Reflect the Time it Takes to Develop a Drug?

    In a new paper, titled “The Drug Innovation Paradox,” Professor Erika Lietzan of the University of Missouri School of Law (and a friend and fellow Hatch-Waxman addict) examines the relationship between the incentives offered under the law to develop drug products and the research and innovation behavior those incentives are intended to encourage.  According to Professor Lietzan’s research, there’s a paradox in this scheme: the period of exclusive marketing of a drug does not adequately reward challenging research and development programs.  Said another way, the post-market reward to the sponsor of a drug is flat (or even decreases) if the company spends a greater amount of time in pre-market research and development.  This means that whole areas of medicine could remain underdeveloped.  Here’s how Professor Lietzan summarizes the issue:

    In medicine today, we face an innovation paradox. The companies that develop new medicines are highly dependent on a period of exclusive marketing after approval, to fund their research and development programs.  But longer research and development programs are not associated with longer periods of exclusive marketing. Instead the period of exclusive marketing may be shorter. Exclusivity that dwindles with each additional month of pre-commercialization research would ordinarily lead innovators to be more efficient, but the added factor of the drug regulatory system leads to a different result.  In this system, the length of any particular premarket program turns largely on considerations not within the firm’s control.

    The design and length of the program is a function of variables that include the molecule and its chemical class, its mechanism of action, the disease and disease stage targeted, the outcomes that can be formally tested, the nature of other treatments on the market, and scientific obstacles and opportunities at the time.  Moreover, certain types of medicine — for example, drugs for long term use and prevention of disease, drugs to stop progressive or degenerative diseases, and drugs for early stage cancer — are consistently more likely to require longer research and development programs.  These findings have significant implications for innovation policy.

    The paradox in drug innovation is that we have chosen to incentivize research and development with a post-market award, but as the research and development timeline increases, the post-market reward for the innovation remains the same or decreases.  If the length of the premarket process correlates with particular drug types, disease targets, or studied outcomes, we may be offering an inadequate incentive in entire areas of medicine where we have a critical need for new treatments.

    Professor Lietzan’s research, which will be published in the Missouri Law Review, is based on a dataset of 570 regulatory review periods culled from patent term extension applications received by the Patent and Trademark Office from September 28, 1984 and September 30, 2016. In scouring and examining these records and data points, Professor Lietzan is able to draw some interesting conclusions:

    1. the preclinical research period has been getting shorter;
    2. the clinical period has increased in length, at least for some types of product;
    3. there is variability in the length of the clinical testing period by therapeutic category and perhaps also within therapeutic categories;
    4. surrogate endpoints can shorten the clinical testing period; and
    5. certain types of product will generally require a longer research and development period.

    Professor Lietzan’s research is illustrated in various tables and figures included throughout her paper. One figure we found particularly interesting shows the average length of the clinical testing period for some therapeutic categories.  The average length ranges from about 3 years for antimigraine agents, to more than 9 years for central nervous system products:

    We don’t have the time now to cover all of the topics and research discussed in Professor Lietzan’s paper, but we encourage our readers to take a closer look at the paper. Perhaps some nice weekend reading?

    FDA User Fee Package Includes “Technical Corrections” to Address Orphan Drug Clinical Superiority

    Earlier this week, the U.S. Senate Health, Education, Labor, and Pensions (“HELP”) Committee released a “Manager’s Amendment” to S. 934, the FDA Reauthorization Act of 2017 (“FDARA”). The 171-page Manager’s Amendment, which is slated for a HELP Committee vote later this week, includes several riders to the “clean” UFA (User Fee Act) package introduced last month. The package of riders includes provisions addressing drug importation and counterfeiting, device accessory classification, over-the-counter hearing aids, risk-based device inspections, generic drug product-specific bioequivalence guidance, real-world evidence, and pediatric drug development, among other things. But the rider that really caught our attention is Section 608 of the package.  Titled “Technical Corrections,” Section 608 would amend provisions added to the FDC Act by the Orphan Drug Act and that are the topic of current litigation.

    Here’s what Section 608 of the Manager’s Amendment says:


    Section 527 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) is amended—

    (1) in subsection (a), in the matter following paragraph (2), by striking “such drug for such disease or condition” and inserting “the same drug for the same disease or condition”;

    (2) in subsection (b)—

    (A) in the matter preceding paragraph (1), by striking “If an application” and all that follows through “such license if” and inserting “During the 7-year period described in subsection (a) for an approved application under section 505 or license under section 351 of the Public Health Service Act, the Secretary may approve an application or issue a license for a drug that is otherwise the same, as determined by the Secretary, as the already approved drug for the same rare disease or condition if”;

    (B) in paragraph (1), by striking “notice” and all that follows through “assure” and inserting “of exclusive approval or licensure notice and opportunity for the submission of views, that during such period the holder of the exclusive approval or licensure cannot ensure”; and

    (C) in paragraph (2), by striking “such holder provides” and inserting “the holder provides; and

    (3) by adding at the end the following:


    “(1) IN GENERAL.—If a sponsor of a drug that is designated under section 526 and is otherwise the same, as determined by the Secretary, as an already approved or licensed drug is seeking exclusive approval or exclusive licensure described in subsection (a) for the same rare disease or condition as the already approved drug, the Secretary shall require such sponsor, as a condition of such exclusive approval or licensure, to demonstrate that such drug is clinically superior to any already approved or licensed drug that is the same drug.

    “(2) DEFINITION.—For purposes of paragraph (1), the term ‘clinically superior’ with respect to a drug means that the drug provides a significant therapeutic advantage over and above an already approved or licensed drug in terms of greater efficacy, greater safety, or by providing a major contribution to patient care.

    “(d) REGULATIONS.—The Secretary may promulgate regulations for the implementation of subsection (c). Until such time as the Secretary promulgates regulations in accordance with this subsection, any definitions set forth in regulations implementing this section that were promulgated prior to the date of enactment of the FDA Reauthorization Act of 2017 shall continue to apply.”.

    And here’s how those proposed changes would appear in the statute if enacted (deletions shown in strikethrough typeface and additions in bolded and italicized red typeface):


    SEC. 527. [21 U.S.C. 360cc] (a) Except as provided in subsection (b), if the Secretary—

    (1) approves an application filed pursuant to section 505, or

    (2) issues a license under section 351 of the Public Health Service Act

    for a drug designated under section 526 for a rare disease or condition, the Secretary may not approve another application under section 505 or issue another license under section 351 of the Public Health Service Act for such drug for such disease or condition the same drug for the same disease or condition for a person who is not the holder of such approved application or of such license until the expiration of seven years from the date of the approval of the approved application or the issuance of the license.  Section 505(c)(2) does not apply to the refusal to approve an application under the preceding sentence.

    (b) If an application filed pursuant to section 505 is approved for a drug designated under section 526 for a rare disease or condition or if a license is issued under section 351 of the Public Health Service Act for such a drug, the Secretary may, during the seven-year period beginning on the date of the application approval or of the issuance of the license, approve another application under section 505 or issue a license under section 351 of the Public Health Service Act, for such drug for such disease or condition for a person who is not the holder of such approved application or of such license if During the 7-year period described in subsection (a) for an approved application under section 505 or license under section 351 of the Public Health Service Act, the Secretary may approve an application or issue a license for a drug that is otherwise the same, as determined by the Secretary, as the already approved drug for the same rare disease or condition if

    (1) the Secretary finds, after providing the holder notice and opportunity for the submission of views, that in such period the holder of the approved application or of the license cannot assure of exclusive approval or licensure notice and opportunity for the submission of views, that during such period the holder of the exclusive approval or licensure cannot ensure the availability of sufficient quantities of the drug to meet the needs of persons with the disease or condition for which the drug was designated; or

    (2) such holder provides the holder provides the Secretary in writing the consent of such holder for the approval of other applications or the issuance of other licenses before the expiration of such seven-year period.


    (1) IN GENERAL.—If a sponsor of a drug that is designated under section 526 and is otherwise the same, as determined by the Secretary, as an already approved or licensed drug is seeking exclusive approval or exclusive licensure described in subsection (a) for the same rare disease or condition as the already approved drug, the Secretary shall require such sponsor, as a condition of such exclusive approval or licensure, to demonstrate that such drug is clinically superior to any already approved or licensed drug that is the same drug.

    (2) DEFINITION.—For purposes of paragraph (1), the term ‘clinically superior’ with respect to a drug means that the drug provides a significant therapeutic advantage over and above an already approved or licensed drug in terms of greater efficacy, greater safety, or by providing a major contribution to patient care.

    (d) REGULATIONS.—The Secretary may promulgate regulations for the implementation of subsection (c). Until such time as the Secretary promulgates regulations in accordance with this subsection, any definitions set forth in regulations implementing this section that were promulgated prior to the date of enactment of the FDA Reauthorization Act of 2017 shall continue to apply.

    The changes above would reflect FDA’s current and long-standing interpretation of the statute – that to obtain a period of orphan drug exclusivity for a drug that is otherwise the “same drug” as a previously approved drug (i.e., a drug containing the same active moiety and that is for the same orphan disease or condition), the sponsor must demonstrate that its product is clinically superior (by showing greater efficacy, greater safety, or by providing a major contribution to patient care) to the previously approved drug – but they would also legislatively undo a September 2014 court decision.

    As we previously posted, in a September 2014 Memorandum Opinion, Judge Ketanji Brown Jackson of the U.S. District Court for the District of Columbia ruled against FDA in a case brought by Depomed Inc. (“Depomed”) challenging the Agency’s refusal to grant Depomed a period of orphan drug exclusivity for the company’s orphan drug-designated GRALISE (gabapentin) Tablets (NDA 022544) because the company did not demonstrate the clinical superiority of GRALISE vis-à-vis NEURONTIN (gabapentin). Judge Jackson decided the case on Chevron Step 1 grounds, finding that “the plain language of the Orphan Drug Act requires the FDA to recognize exclusivity for Gralise.”

    FDA decided not to appeal Judge Jackson’s decision. Instead, FDA published in the December 23, 2014 Federal Register a “clarification of policy” notice in which the Agency addresses the effects of the Depomed court decision (see our previous post here).  In that notice, FDA “double-downed” on the Agency’s pre-Depomed regulations.  In short, FDA says that Judge Jackson’s decision is limited to GRALISE, and that the Agency will continue to apply its clinical superiority regulatory paradigm insofar as orphan drug exclusivity is concerned.

    But then another similar lawsuit was filed in April 2016 by Eagle Pharmaceuticals, Inc. (“Eagle”) alleging that FDA violated the Administrative Procedure Act when the Agency refused to grant periods of orphan drug exclusivity upon the December 7, 2015 approval of Eagle’s 505(b)(2) NDA 208194 for BENDEKA (bendamustine HCl) Injection, 100 mg/4 mL (25 mg/mL), for both the treatment of patients with Chronic Lymphocytic Leukemia and for the treatment of patients with indolent B-cell Non-Hodgkin Lymphoma that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen (see our previous post here).  FDA previously approved TREANDA (bendamustine HCl) for Injection, for Intravenous Infusion (NDA 022249) for these same orpan diseases and determined that Eagle did not demonstrate the clinical superiority of BENDEKA vis-à-vis TREANDA.  Eagle says in the company’s Complaint that “FDA denied Bendeka exclusivity . . . taking essentially the same position it took in Depomed,” and that “[h]ad FDA respected Judge Jackson’s [Depomed] ruling in 2014, this case would not be necessary.  Unfortunately, FDA’s defiance of this Court’s prior order leaves Plaintiff no choice but to file this suit.”  Both parties have filed Motions for Summary Judgment (here and here).  A decision in Eagle’s case is still pending.

    FDA’s Ruling on Generic ZITHROMAX 180-Day Exclusivity: A Little Something for Everyone!

    Every once in a while we come across an instance in which FDA’s Paragraph IV Patent Certifications List does not comport with our own 180-Day Exclusivity Tracker.  Either the date on FDA’s list is different from the date we have (perhaps because of a change FDA made in a subsequent version of the List), or FDA’s List simply does not identify a drug and date listing that we believe should be there.  That, of course, piques our interest; and it leads to research so that we can get clarification.  The “old antibiotic” Azithromycin for Oral Suspension, both 100 mg/5 mL and 200 mg/5 mL strengths, which are generic versions of Pfizer, Inc.’s (“Pfizer’s”) ZITHROMAX (approved under NDA 050710 on October 19, 1995), are two such drug products.

    As folks might recall, nearly a decade ago Congress passed the QI Program Supplemental Funding Act of 2008 (“the QI Act”).  The QI Act amended the FDC Act to add new § 505(v) – “Antibiotic Drugs Submitted Before November 21, 1997” – to create Hatch-Waxman benefits for so-called “old antibiotics.”  “Old antibiotics” are antibiotic active ingredients (and derivatives of such ingredients) included in an application submitted to FDA for review prior to November 21, 1997, the date of enactment of the FDA Modernization Act.  The 1984 Hatch-Waxman Amendments excluded antibiotic drugs, which were then approved under FDC Act § 507, from the Act’s patent and non-patent market exclusivity provisions (except for the availability of a patent term extension).  Section 4(b)(1)of the QI Act includes three transition provisions: one on Orange Book patent listing; one on patent certifications; and another on 180-day exclusivity for each ANDA applicant that not later than 120 dates after enactment of the QI Act (i.e., February 5, 2009) amended a pending application to contain a Paragraph IV certification to a newly listed antibiotic drug patent.  ZITHROMAX, approved in 1995, is one of several “old antibiotics.”

    Lupin Limited (“Lupin”) submitted ANDA 065488 to FDA on April 12, 2007, prior to the enactment of the QI Act, and after FDA had already approved ANDAs for generic versions of Azithromycin for Oral Suspension, 100 mg/5 mL and 200 mg/5 mL. But with the passage of the QI Act, Pfizer submitted information on U.S. Patent No. 6,268,489 (“the ‘489 patent”), expiring on July 31, 2018, to FDA for listing in the Orange Book.  Lupin amended its ANDA on January 29, 2009 to include a Paragraph IV certification to the ‘489 patent, thus becoming a first applicant eligible for 180-day exclusivity.  But because of FDA’s interpretation of the statute, and the failure-to-obtain-timely-tentative-approval-within-30-months-of-submission forfeiture provision at FDC Act § 505(j)(5)(D)(i)(IV) in particular, Lupin was at risk of a forfeiture of 180-day exclusivity eligibility just a few months after its Paragraph IV certification to the ‘489 patent, on October 12, 2009.

    FDC Act § 505(j)(5)(D)(i)(IV) provides that a first applicant’s eligibility for 180-day exclusivity is forfeited if:

    The first 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.

    The 2007 FDA Amendments Act clarified FDC Act § 505(j)(5)(D)(i)(IV), such that if “approval of the [ANDA] was delayed because of a [citizen] petition, the 30-month period under such subsection is deemed to be extended by a period of time equal to the period beginning on the date on which the Secretary received the petition and ending on the date of final agency action on the petition (inclusive of such beginning and ending dates) . . . .” (FDC Act § 505(q)(1)(G)).

    Under FDC Act § 505(j)(5)(D)(i)(IV), the date the 30-month period begins is the date of ANDA submission. The statute does not specifically reference the date of the submission of a Paragraph IV certification.  Thus, the statute leaves open the possibility that an ANDA is initially submitted to FDA without a Paragraph IV certification, thereby beginning the 30-month period, and is only later amended to include the first Paragraph IV certification to an Orange Book-listed patent covering the Reference Listed Drug (“RLD”).  That opens the possibility that an ANDA applicant could simultaneously qualify and forfeit eligibility for 180-day exclusivity (see our previous post here).  Section 1133 of the 2012 FDA Safety and Innovation Act (“FDASIA”) addressed this issue in part (see our previous post here); however, the provision does not apply to Lupin ANDA 065488 because of its “vintage” as a 2007 ANDA amended with a Paragraph IV certification in January 2009.  Thus, FDA had to tentatively approve (or approve) ANDA 065488 on or before October 12, 2009 to make forfeiture under FDC Act § 505(j)(5)(D)(i)(IV) a non-issue.  That didn’t happen (and none of the other five 180-day exclusivity forfeiture provisions came into play).  In fact, FDA never tentatively approved ANDA 065488 and did not approve the application until May 15, 2015.

    When FDA finally did approve Lupin ANDA 065488, the Agency decided that it didn’t have to address 180-day exclusivity. Instead, FDA included in the ANDA approval letter its standard “punt” language on 180-day exclusivity:

    With respect to 180-day generic drug exclusivity, we note that Lupin was the first ANDA applicant for Azithromycin for Oral Suspension USP, 100 mg/5 mL and 200 mg/5 mL, to submit a substantially complete ANDA with a paragraph IV certification. Therefore, with this approval, Lupin may be eligible for 180 days of generic drug exclusivity for Azithromycin For Oral Suspension USP, 100 mg/5 mL and 200 mg/5 mL.  This exclusivity, which is provided for under section 505(j)(5)(B)(iv) of the Act, would begin to run from the date of the commercial marketing identified in section 505(j)(5)(B)(iv).  The agency notes that Lupin failed to obtain tentative approval of this ANDA within 30 months after the date on which the ANDA was filed. . . .  The agency is not, however, making a formal determination at this time of Lupin’s eligibility for 180-day generic drug exclusivity.  It will do so only if a subsequent paragraph IV applicant becomes eligible for full approval (a) within 180 days after Lupin begins commercial marketing of Azithromycin for Oral Suspension USP. 100 mg/5 mL and 200 mg/5 mL, or (b) at any time prior to the expiration of the ‘489 patent if Lupin has not begun commercial marketing.

    Lupin did not begin commercial marketing, and ultimately another ANDA applicant became eligible for approval, thereby requiring FDA to determine whether there would be a “punt return” (see our previous post here), or a “fumble return” (see our previous post here).

    In a March 1, 2016 Letter Decision, FDA concluded that there was “a change in or a review of the requirements for approval of [ANDA 065488 ] imposed after the date on which the application [was] filed,” and that Lupin did not forfeit eligibility for 180-day exclusivity pursuant to FDC Act § 505(j)(5)(D)(i)(IV).

    As an initial matter, although Pfizer had submitted a Citizen Petition to FDA in October 2006 (Docket No. FDA-2006-P-0448) concerning Azithromycin for Oral Suspension, thereby potentially bringing FDC Act § 505(q)(1)(G) into play, that petition, which FDA denied in August 2011, was specific to action on another generic drug manufacturer’s ANDA. As such, FDA determined that the Citizen Petition “did not delay FDA’s review of ANDA 065488.”

    As of the 30-month forfeiture date (i.e., October 12, 2009), FDA had already reviewed much of ANDA 065488; however, both the chemistry and labeling reviews were pending.  But there was a saving grace in there for Lupin.  According to FDA’s March 1, 2016 Letter Decision (some of which is redacted), the Agency communicated certain chemistry deficiencies to Lupin that the company responded to in June 2009.  FDA’s review of those responses extended to March 2010, when the Agency communicated additional chemistry deficiencies.  “Based on these facts, we have determined that there was a change in requirements for approval related to [REDACTED] which Lupin had been actively addressing and FDA was reviewing at the 30-month forfeiture date, and that this change was a cause of Lupin’s failure to obtain tentative approval by the 30-month forfeiture date.”

    FDA’s handling of 180-day exclusivity for Azithromycin for Oral Suspension, 100 mg/5 mL and 200 mg/5 mL, while not groundbreaking, is nevertheless a nice example of the interaction of various and step-wise amendments to the FDC Act affecting 180-day exclusivity and how FDA deals each of them. We also see in FDA’s decision a reiteration of the “hot pursuit” requirement to escape forfeiture under FDC Act § 505(j)(5)(D)(i)(IV) (see our previous post here).  Finally, there’s the reminder that FDA’s Paragraph IV Certifications List, while an immensely helpful and important tool, is not perfect.  FDA knows this from experience, and thus provides a disclaimer on the Agency’s website that the List “should be used for reference only. The Agency will make every effort to ensure the accuracy of the information disclosed in this list.  However, any discrepancies or disparities should be discussed with the Division of Filing Review at 240-402-8859, before making any decisions based on this information.”

    How Long is 60 Days? 59 Days and Change, or a Full 60 Days? A New Challenge to PTE Application Timeliness Raises the Issue

    As simple as it may seem, counting can be a difficult human endeavor!  You need only recall Monty Python’s Holy Hand Grenade of Antioch skit to cement that fact!  Over the years we’ve commented (e.g., here) on the difficulty with counting to 60.  That’s the magic number – the deadline from FDA approval – under the Patent Term Extension (“PTE”) statute, 35 U.S.C. § 156, to timely submit to the Patent and Trademark Office (“PTO”) an application to extend the term of a patent claiming a product (such as a drug or medical device) subject to a regulatory review period.  Last minute PTE submissions to the PTO, which should and can be avoided, are not uncommon and have generated a lot of controversy.  The latest controversy involves Franklin, Tennessee-based BioMimetic Therapeutics, LLC’s (“BioMimetic’s”) Augment Bone Graft.

    But before we get into the details surrounding the submission of the PTE applications for the Augment Bone Graft, a little statutory background is warranted. . . .

    Under the PTE statute the term of a patent claiming a drug is extended from the original expiration date of the patent if: (1) the term of the patent has not expired; (2) the patent has not been previously extended; (3) the PTE application is submitted to the PTO by the owner of record within 60 days of approval; (4) the product, use, or method of manufacturing claimed has been subject to a “regulatory review period” before it is commercially marketed; and (5) the PMA is the first permitted commercial use of the product.

    With respect to the timely filing requirement, the statue, at 35 U.S.C. § 156(d)(1), provides, in relevant part:

    To obtain an extension of the term of a patent under this section, the owner of record of the patent or its agent shall submit an application to the Director. Except as provided in paragraph (5), such an application may only be submitted within the sixty-day period beginning on the date the product received permission under the provision of law under which the applicable regulatory review period occurred for commercial marketing or use. . . .

    Furthermore, in order to determine when the 60-day time period begins, the following sentence was added to 35 U.S.C. § 156(d)(1) as part of the 2011 America Invents Act:

    For purposes of determining the date on which a product receives permission under the second sentence of this paragraph, if such permission is transmitted after 4:30 P.M., Eastern Time, on a business day, or is transmitted on a day that is not a business day, the product shall be deemed to receive such permission on the next business day. For purposes of the preceding sentence, the term “business day” means any Monday, Tuesday, Wednesday, Thursday, or Friday, excluding any legal holiday under section 6103 of title 5.

    FDA purportedly approved Augment Bone Graft on September 1, 2015 under Premarket Approval Application (“PMA”) P100006.  The approval letter was emailed to BioMimetic at 9:06 AM (Eastern) and acknowledged by the company at 9:15 AM (Eastern).

    We say that FDA “purportedly” approved PMA P100006 on September 1, 2015, because the signature on the approval letter was actually made the night before. Clicking on the signature block in the FDA PMA approval letter – using the Internet Explorer web browser but not another web browser – shows the signing time from the clock on the signer’s computer as August 31, 2015 at 8:18 PM (Eastern), and specifically as “2015/08/31 20:18:59 – 04’00’.” Thus, despite the September 1, 2015 date stamp on the PMA approval letter, query whether the signature date and time are potentially relevant.  In any case, for our purposes here, we assume the PMA approval occurred on September 1, 2015.

    The Augment Bone Graft is covered by several patents, including three of which are the subject of PTE applications submitted to the PTO:

    • U.S. Patent No. 7,473,678 (“the ‘678 patent”) (FDA Docket No. FDA-2016-E-2396);
    • U.S. Patent No. 7,799,754 (“the ‘754 patent”) (FDA Docket No. FDA-2016-E-2441); and
    • U.S. Patent No. 8,106,008 (“the ‘008 patent”) (FDA Docket No. FDA-2016-E-2442).

    The PTE application for the ‘678 patent was submitted to the PTO on Saturday, October 31, 2015. The PTE applications for the ‘754 and ‘008 patents were submitted to the PTO on Monday, November 2, 2015.

    On June 14, 2016, the PTO issued an Order to Show Cause with respect to each of the PTE applications for the ‘678, ‘754, and ‘008 patents – available here, here, and here – “based on the apparent untimely filing” of the PTE application.  According to the PTO, the 60-day PTE application submission deadline was October 30, 2015, but the PTE application for the ‘678 patent was filed one day late (on October 31, 2015) and the PTE applications for the ‘754 and ‘008 patents were filed three days late (on November 2, 2015).

    BioMimetic responded to each Order to Show Cause a few months later, on August 12, 2016 – available here, here, and here.  The nearly identical responses raise the issue of whether or not the statutory 60-day period means 60 full days, or something less:

    [T]he statute and implementing regulations do not provide applicants fifty-nine days plus some fraction of a day to file a patent term extension application.  Instead, they provide applicants a full sixty-day period.  Because the PTO’s interpretation of the statute would deprive Applicant of the full sixty days to which it is entitled, that interpretation must be amended.

    The date on which the sixty-day period begins is not dispositive here.  Whether the trigger date is the date of the PMA approval letter (as asserted by the PTO in the Order) or the following day, the outcome is the same: Applicant’s PTE application was timely filed.

    At issue is whether the end of the sixty-day period may be calculated in a manner that deprives applicants of the full sixty days accorded by the statute.  It may not.  Such a calculation is not only precluded by the plain language of the statute; it would also contravene the settled principle that remedial statutes such as Section 156(d)(1) should be construed liberally. [(Emphasis in original)]

    According to BioMimetic, because the 60-day period did not begin any earlier than 8:06 AM (Central) on September 1, 2015, “the end of the first day of the sixty-day period could not have been any earlier than 8:06 am on September 2, 2015,” and “the end of the sixtieth day of the sixty-day period was not (and could not have been) any earlier than 8:06 am on Saturday, October 31, 2015.” And because October 31, 2015 was a Saturday, says BioMimetic, 35 U.S.C. § 21(b) dictates that “the last day for filing the patent term extension application . . . was automatically extended to the next succeeding secular or business day, i.e., Monday, November 2, 2015.”  (The statute, at 35 U.S.C. § 21(b), explains that “[w]hen the day, or the last day, for taking any action or paying any fee in the [PTO] falls on Saturday, Sunday, or a Federal holiday within the District of Columbia, the action may be taken, or the fee paid, on the next succeeding secular or business day.”)

    The PTO has not yet addressed BioMimetic’s Order to Show Cause responses; however, FDA has taken the position that the PTE applications were untimely submitted to the PTO. In a November 10, 2016 letter to the PTO the Agency states:

    The Augment Bone Graft PMA was approved on September 1, 2015. The approval letter was emailed to the applicant on September 1, 2015 at 9:06 am and acknowledged by the company at 9:15 am, which makes the submissions ofthe PTE application for patent no. 7,473,678 on October 31, 2015, and the PTE applications for patent nos. 7,799,754; and 8,106,008, on November 2, 2015, untimely within the meaning of 35 U.S.C. 156(d)(l).

    FDA also raises a separate issue that could disqualify BioMimetic from obtaining a PTE notwithstanding the PTE application submission timing issue. According to FDA, Augment Bone Graft fails criterion (5) of the PTE statute concerning first permitted commercial use of the product.  According to FDA:

    Augment Bone Graft consists of two components: β-TCP (beta tricalcium phosphate) granules and a recombinant human platelet derived growth factor (rhPDGF-BB). Another product, GEM21S, previously approved November 18, 2005 [(PMA P040013)], consists of the same two components, β-TCP granules and rhPDGF-BB. The only differences in the products are the particle size of the β-TCP granules and the indications for use (GEM21S is for dental use and Augment Bone Graft is for orthopedic use in foot and ankle fusion).

    With this alternative basis in hand to deny a PTE to BioMimetic, we may have to wait for another day to get a final answer to the 60-day issue raised above.