FDA Outlook: New Leadership, More Enforcement, New Legislation

Transcription

1 FDA Outlook: New Leadership, More Enforcement, New Legislation Linda R. Horton Partner 1

2 Introduction - Linda Horton Counsels clients in the pharmaceuticals, medical devices, animal health industries and food sectors on regulatory requirements of the European Union, the U.S. FDA and regulatory counterparts elsewhere Strategies, regulatory pathways, clinical trials Marketing practices and relations with health professionals, in Europe and globally Transatlantic cutting edge issues, e.g., drug safety, biosimilars, combination products Helps other countries develop laws and regulations PLC Which Lawyer?, EU - Life Sciences: Regulatory, Recommended, Served FDA for 30+ years as Director, International Policy; Deputy Chief Counsel; Device/Drug Counselor; Trial Attorney; Legislative Director Linda R. Horton Partner Hogan & Hartson, Brussels Washington, DC Tel: Mobile: E: LRHorton@hhlaw.com Former adjunct professor, FDA administrative law, George Washington Law School; international food, drug and medical device law, Georgetown Law School 2

3 What we will discuss What can we expect from FDA? New leadership Outlook for pharmaceutical enforcement: recent trends Legislative proposals for follow-on biologics Canada reimportation issue 3

4 New Leadership Administration and Congress

5 Key Obama Administration Players Margaret Hamburg, M.D. FDA Commissioner Joshua Sharfstein, M.D. Principal Deputy FDA Commissioner Acting FDA Commissioner (3/30/09) Kathleen Sebelius Governor, Kansas Secretary of Health And Human Services William Corr Deputy Secretary of Health and Human Services (Nominated) 5

6 Key Congressional Players Rep. Henry Waxman (D-Calif.) Chairman, House Energy and Commerce Committee Rep. John Dingell (D-Mich.) Rep. Bart Stupak (D-Mich.) Rep. Frank Pallone (D-N.J.) Sen. Edward Kennedy (D-Mass.) Chairman, Health, Education, Labor and Pensions Sen. Max Baucus (D-Mont.) Chairman, Finance Sen. Charles Grassley (R-Iowa) Ranking Member, Finance 6

7 FDA Enforcement Overview and Trends

8 Pharmaceutical enforcement A brief review of FDA enforcement tools and penalties generally A focus on key issues in 2009 FDA Warning Letters Advertising and promotion False Claims Act State attorneys general activities Good clinical practices Good manufacturing practices (GMPs) Increased focus on imports 8

9 FDA-Controlled Enforcement Regulations/guidance Inspections Warning/Untitled Letters Recalls Publicity Civil penalties Debarment Import controls 9

10 Additional Enforcement Department of Justice-controlled enforcement Seizures Injunctions Criminal prosecutions False Claims Act State attorneys general enforcement State False Claims Act State consumer protection/unfair trade practice laws Both focus on off-label promotion 10

11 Key FDA Players New Commissioner/Principal Deputy Associate Commissioner, Office of Regulatory Affairs Office of Enforcement Office of Regional Operations (the field force) Office of Criminal Investigations Chief Counsel CDER/CBER Compliance Offices 11

12 Key Players in Enforcement Congress FDA Sets policy direction through legislation and oversight Initiates most administrative enforcement Recommends court enforcement actions to DOJ No independent litigation authority Resources are key limitation in both areas 12

13 Key Players in Enforcement (cont.) Department of Justice (DOJ) Ultimately decides and initiates all civil and criminal litigation on behalf of FDA Office of consumer litigation, civil division, DOJ U.S. Attorney offices throughout the United States Increasingly important in false claims cases involving offlabel promotion Department of Health and Human Services, Office of Inspector General (OIG) Key player in false claims settlements Corporate integrity agreements (CIAs) 13

14 Key Players in Enforcement (cont.) State attorneys general State food and drug laws State consumer protection and unfair trade practice laws Increasing number of state false claims laws Will be an increasing force in developing federal policies in off-label promotion 2008 consumer protection settlements define a wide array of acceptable conduct previously the sole domain of FDA Merck (Oregon, 2008) Pfizer (Oregon, 2008) Lilly (Illinois, 2008) 14

15 FDA Administrative Enforcement: Statutory Authority and Statistics Inspections (21 USC 374) Down from a 2003 high (22,534) to 2007 (15,581) CDER inspections trending down: 2007 (2,305) Warning Letters (21 USC 336) Down from 2001 (1,154) to 2007 (471) CDER warning letters (all types) slightly up in 2007 (75); advertising and promotion letters up in 2008 (21) 15

16 FDA Administrative Enforcement: Statutory Authority and Statistics (cont.) Seizures (21 USC 334) 2007 (6) CDER 2007 (0) Injunctions (21 USC 332) 2007 (12) CDER 2007 (1) Recalls (Voluntary) 2007 (5,585) CDER 2007 (988) 16

17 FDA Administrative Enforcement: Statutory Authority and Statistics (cont.) Publicity (21 USC 375(b)) Standard: situations involving imminent danger to health or gross deception of the consumer FDA press release: FDA warns public about misrepresentations in marketing claims about drug to treat cancer (March 14, 2003) (regarding Supergen press release about Mitozytrex (mitomycin for injection)) Civil penalties (throughout 21 USC 301 et. Seq.) Most relevant debarment and FDAAA provisions 17

18 FDA Criminal (21 USC 333) Misdemeanor (FDA referral to DOJ) Felony (FDA referral to DOJ) Individual criminal liability Misdemeanor Corporate responsibility doctrine Park liability non-intent criminal standard Resurgence Purdue false claims settlements 18

19 FDA Criminal (21 USC 333) (cont.) Felony Criminal intent a requirement Knowingly and willfully DOJ/grand jury control 19

20 Key FDA Standards for Civil and Criminal Actions Prohibited Acts (21 USC 331) The statutory basis that establishes the legal violation Key standards Adulteration (21 USC 351) CGMPs Misbranding (21 USC 352) New drug approval (21 USC 355) IND standards 20

21 FDA Enforcement For licensed biologics (in addition to the drug adulteration and misbranding standards) Licensing and Labeling Standards of Public Health Service Act (42 USC 262) 21

22 False Claims Enforcement (31 USC 3729, et. seq.) Qui tam cases (whistleblower initiated) Include off-label promotion, kickback, and pricing charges Since 2004, at least 18 settlements involving offlabel promotion component By DOJ estimates, up to several hundred cases pending under seal in federal courts Theory: off-label promotion and/or kickback that results in submission for federal reimbursement of an off-label use is a false claim under the law 22

23 False Claims Enforcement To date, all actions where federal government has joined the case have settled Concern about being excluded from federal programs (the death penalty) Terms of settlement Criminal Usually misdemeanor violation of Federal Food, Drug, and Cosmetic Act (FFDCA) misbranding Occasionally felony violation of FFDCA or title 18 (such as conspiracy [Schering 2006]) 23

24 Warning/Untitled Letters Congressional push for more enforcement Rep. Waxman Sen. Grassley Bush policy of FDA Chief Counsel review Likely trend in Obama administration More Warning Letters 24

25 Warning/Untitled Letters (cont.) Key areas of CDER Warning Letters Advertising and promotion violations Current good manufacturing practices violations Unapproved new drugs/unlicensed biologics: 9 new letters posted by FDA on 3/31/09 Good clinical practices Clinical investigators Sponsors IRBs Recent congressional oversight on lax controls over clinical investigators and IRBs Good manufacturing practices (GMPs) 25

26 Warning/Untitled Letters (cont.) Topics of CDER advertising and promotion Warning Letters in descending order of predominance Inadequate presentation of risk information/minimizing safety concerns Broadening of indications (off-label promotion) Over-representation of efficacy (off-label promotion) Omission of material facts Inadequate substantiation for comparative or superiority claims 26

27 Consequences of Warning Letter Before: if changes made; very little consequence long term Recent trends Impact on FDA generally Impact on federal false claims cases Impact on state attorneys general cases Impact on SEC/shareholder derivative activity 27

28 Warning Letters: False Claims Cases DOJ/HHS IG driven FDA notice/repeat offense is a key criteria for federal involvement Often cited in DOJ pleadings as key factual allegation 28

29 Warning Letters: State Consumer Protection Cases May trigger independent case If existing state settlement, may trigger follow-on order Bayer state settlements Off-label promotion California consumer protection case settlement (Baycol 2007) Follow-on California settlement YAZ (2009) YAZ off-label promotion FDA warning letter (2008) West Virginia consumer protection decision against J&J cites warning letters (2/09) 29

30 Warning Letters: SEC/Shareholder Derivative Suits Factually relevant to allegations In re Gilead Sciences Securities Litigation (536 F. 3d 1049) (9 th Cir. 2008) In re Merck & Co., Inc. Securities Derivative and Erisa Litigation (MDL No. 1658) (543 F.3d 150) (3 rd Cir. 2008) 30

31 Debarment (21 USC 335a) Congress put into law as a result of the generic drug scandal of the late 1980s early 1990s Individual and corporate liability for fraud related to FDA marketing applications Permanent and temporary debarment from any involvement in FDA marketing applications or preparation thereof NDA certifications that company did not utilize a debarred individual in preparation/submission of marketing application (21 USC 335a(k)(1)) 31

32 Clinical Research Enforcement Clinical investigators IRBs Debarment permanent or temporary for violations of FDA regulations and/or fraud (21 CFR 312; 50 and 56) More FDA oversight and debarment actions Criminal prosecution for violations of FDA regulations and/or fraud United States v. Palazzo, 5 th Cir., No , Feb. 6, 2009 Registration Sponsors Overall responsibility for conduct of trial (21 CFR 312) Disqualification of data 32

33 Impact of compliance problems on applications Application integrity policy (AIP) When fraud by manufacturer uncovered in data developed to support marketing application, FDA will suspend review on approval of NDAs/BLAs or supplements thereto until company completes full corrective action plan Fraud, untrue statements of material facts, bribery, and illegal gratuities, 56 Fed. Reg (Sept. 10, 1991) Ranbaxy (2009) AIP invoked due to fraud developed in stability data submitted as part of ANDAs 33

34 Imports Import Detentions (21 USC 381(a)) FDA may detain shipments of FDA-regulated products at border on lesser statutory standard Appears to be adulterated or misbranded FDA issues a notice of FDA action which triggers administrative process that shifts burden to importer to prove that product is not adulterated or misbranded as alleged 34

35 Imports Foreign product/ingredient concerns Increasing congressional and FDA focus on safety of imported products Heparin (e.g., FDA import alerts and warning letters) Active pharmaceutical ingredients Pending legislation 35

36 Conclusions/Precautions More FDA/DOJ enforcement Traditional somewhat constrained by resources False Claims Act Congressionally blessed/forced More state attorneys general enforcement and influences on federal policy Public promises of closer relationship with DDMAC and more enforcement cases Recent letter to CMS urging a rewrite of their off-label reimbursement policy 36

37 Conclusions/Precautions (cont.) Key company deterrent: rigorous compliance program and review process for health care and FDA requirements Substantial room for company judgment on nature of policies Should be informed judgment Needs to be regularly evaluated and updated as federal and state enforcement cases make new standards Example: 3 state consumer protection settlements for offlabel promotion in

38 Proposed Legislation Import safety, reimportation and (last but not least!) follow-on biologics

39 Proposed New Enforcement Tools Food and Drug Administration Globalization Act of 2009 (Dingell Bill) Focus on imported products Pending in Congress 39

40 Proposed New Enforcement Tools: Key Provisions of the Dingell Bill Up-to-date registration requirements for domestic and foreign drug establishments Increase in foreign inspections based upon registration fees Increase in pre-approval inspection of certain foreign drug facilities (those with safety concerns) Parity between foreign and domestic inspection Prohibition on entry of drugs into United States lacking documentation of safety Requires manufacturers to know their supply chain Requires manufacturers to identify and mitigate risk throughout supply chain Country of origin labeling Stronger remedies: product destruction, fines, criminal prosecution 40

41 Drug Reimportation from Canada Current law prohibits the reimportation of drugs manufactured and approved in the United States by anyone other than the manufacturer (21 USC 381(d)(1)) American goods returned prohibition U.S. v. Rx Depot 438 F.3d 1052 (10 th Cir. 2006) Congress passed limited exception that allows reimportation of drugs manufactured and approved in the United States by third parties if drugs come from Canada (21 USC 384) Requires government finding of safety Requires regulations Both Republican and Democratic administrations have declined to make safety finding/promulgate regulations Law does not apply to licensed biologics 41

42 New Congressional Drug Reimportation Initiatives Pharmaceutical Marketing Access and Drug Safety Act of 2009 (Sen. Byron Dorgan (D-N.D.)) Broadens number of countries substantially Sets strong importer/exporter standards and penalties Excludes biologics 42

43 New Obama Administration Drug Reimportation Initiatives Obama budget reflects goal of drug reimportation as a cost savings HHS Secretary Sebelius historical positions Supportive of drug reimportation as Governor of Kansas 43

44 Follow-on Biologics Major biosimilar bills and issues

45 Biosimilars: Battle Lines Are Set Obama administration budget outline supportive $9 billion over 10 years (assuming 7 years exclusivity) Health care reform effort likely to include biosimilars as budgetary offset Senate s Kennedy/Enzi bill from last Congress Hard 12 years of exclusivity Tussle over evergreening issue Chairman Waxman now in driver s seat Long-standing and aggressive proponent of generics Strong influence over process in the House 45

46 Follow-on Biologics Significant issues between the bills HR 1427 (Waxman) HR 1548 (Eshoo) S 726 (Schumer; companion to Waxman) S (Kennedy/Enzi; not yet introduced) Not the province of generic drug companies 46

47 Follow-on biologics Waxman/ Schumer Bill 5 years of exclusivity Additional 3 years of exclusivity for drug improvements if significant therapeutic advance 6-month extension available for supplemental BLA Eshoo/Inslee/Barton Bill 12 year exclusivity Additional 2 years exclusivity for medically significant new indications Another 6 months for pediatric studies Safety standards for interchangeability 47

48 Follow-on Biologics (cont.) Demonstrating biosimilarity Waxman does not require clinical trials Eshoo would require showing of biosimilarity for each indication Standards for interchangeability Demonstrating sameness will be difficult, as a matter of science Intersection with state substitution laws 48

49 Follow-on Biologics (cont.) Periods of marketing exclusivity Waxman: 5 years Eshoo: 12 years Exclusivity for product innovations Established name Waxman would require same name for biosimilars Resolving patent issues 49

50 In sum We foresee many changes ahead in the FDA policy arena. Enforcement will remain a priority. New legislation is likely. Questions? 50

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