ECJ Rules in Favor of EMA Transparency

The European Medicines Agency published a draft guidance for clinical trial transparency in 2013, and the agency scored a win recently at the European Court of Justice in what appears to be the first legal challenge of transparency to reach the ECJ. The decision in the case of Pari Pharma v. EMA affirms the legal standing of this practice, but the decision also makes clear that broad assertions of confidentiality and unsupported claims of damaged commercial interests will not sway the European Union’s high court.

Novartis, Pari in Nebulizer Standoff

EMA announced early in February that the court had declared that three companies, including Pari Pharma of Starnberg, Germany, had no legitimate claim that the disclosures of their data constituted a compromise of intellectual property. The court’s decision makes clear that Pari’s cause was thwarted by Novartis, which along with the French government pushed the court to side with EMA in the dispute.

Novartis’ interest in the market for tobramycin nebulizers was driven by its Tobi Podhaler, which like Pari’s Vantobra aerosol is indicated for pediatric cystic fibrosis. According to an earlier court document, Novartis had acquired a marketing authorization for the Tobi via an orphan product designation in 1999, but subsequently received an extension of marketing exclusivity through 2023.

Pari had claimed its product offered superior safety, and won that debate in 2015, when EMA granted the product a CE mark. The EMA’s decision summary makes clear that the European Commission had misgivings about how EMA had interpreted orphan product legislation on the point of product similarity, but in any event, Novartis lost its exclusivity for this treatment and indication.

No General Presumption of Confidentiality

Pari’s argument before the ECJ seems to revolved in part around the notion that the information found in its filings enjoyed “a general presumption of confidentiality,” an argument the court found unpersuasive. Pari also argued that both publicly available and confidential information together would disclose the company’s proprietary strategy for obtaining marketing authorization. The Court replied that this purported strategy was enabled in part by an exchange with the EMA as “part of a specific regulatory process” and consequently not entitled to discretion.

Pari further asserted that its strategy constituted intellectual property as defined by the 1995 Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), but the Court would have none of it, in large part due to the fact that much of the information in question was already in the public domain. The Court said also that knowledge of the effect of the use of a nebulizer on intolerance to dry powder “could be obtained without difficulty and without any particular inventiveness.”

Pari fared no better on the confidentiality of its patient survey data, either, largely because the data set included information drawn from a patient registry set up by the European Cystic Fibrosis Society. According to the court, much of Pari’s survey data was little or nothing more than a “refinement” of the ECFS registry data. Much of Pari’s problem with the ECJ was due to what the court said on several occasions was as a failure to demonstrate any damage to the company’s commercial interests stemming from the disclosure.

There were two other cases in this clutch of losses on the transparency question – PTC Therapeutics fared no better over disclosure of data related to its treatment for Duchenne muscular dystrophy, Translarna (ataluren) – but only time will tell whether drug and device makers will eventually score a win at ECJ over the EMA transparency paradigm. In any event, Pari’s experience makes clear that nebulous arguments and better nebulizers won’t win the day at the European Union’s high court.

The Difference Between Faster and Earlier

To some, the term “regulatory harmonization” might suggest more or less simultaneous approvals across jurisdictions, but a recent study of drug approvals by three regulatory agencies hints that this dream is still just a dream. There are confounders in the latest study of drug approvals, however, including that the approved indications are anything but identical.

The Feb. 22 issue of the European Journal of Clinical Pharmacology states that the FDA, Swissmedic and the European Medicines Agency approved a total of 134 new drugs between 2007 and 2016. The FDA is credited with being the first to approve 66.4 percent of these, while the EMA was the first to approve nearly 31 percent, leaving Swissmedic with a paltry three percent first-to-approve rate.

While this report has gained some traction in the trade press, non-subscribers to the journal have only the abstract to rely on, which states that the approved indications were similar in only 23 percent of the drugs across all three agencies. The differences between the Swissmedic and EMA approvals were few, while the differences in labeled indications between the FDA and EMA were “significant.”

Obviously it is difficult to know what to make of this information without knowing how those labeled indications varied, but another absent piece of this puzzle is the total premarket review time for each drug at each agency. It’s one thing to say that agency A approved a product sooner than agency B, but it’s quite another to say the total review time was shorter. Without that context, this abstract has little to offer.

As might be expected, the total review time question has its own moving parts as this study in the New England Journal of Medicine suggests. The authors of this write-up from April 2017 indicate that cancer therapies and orphan drug applications moved more swiftly through the FDA premarket process than was seen in the EMA process, but that does not apply to all drug types or drug application types. The take-away from all this is that comparisons remain nettlesome and often are not particularly informative.

DoJ Revisits Standard for Qui Tam Dismissal

The Department of Justice has released a new memo addressing the standard for dismissal of relator lawsuits under the False Claims Act, and both the content and the tone of the memo are starkly different from what might have been expected under previous administrations. Precisely how this memo will change routine practice is “difficult to predict,” as the saying goes, but the memo is at the very least a suggestion that some of the less credible qui tam suits will have a very short shelf life, indeed.

Resources an Issue for DoJ                                                             

The DoJ memo says the annual total of qui tam actions has neared or exceeded 600 new matters in each of the past several years, a disclosure that might surprise no one, given the related provisions of the Affordable Care Act. However, the rate of federal interventions “has remained relatively static,” the memo stated, although the department must nonetheless expend resources to monitor cases in which the government ultimately does not intervene.

One might impute a number of motives for the memo overall, but one thing is clear: DoJ is seeking to economize when it comes to dealing with relator lawsuits, as demonstrated by the passage directing the reader’s attention to “the government’s limited resources.”

The memo points out that the department can dismiss an action over the relator’s objections, although that relator may be entitled to an appeal of that decision. DoJ lists seven factors that seem to have driven dismissals since 1986, including the curbing of meritless cases and prevention of relators who seek to piggyback onto an ongoing government investigation. Another factor would be whether the federal agency affected by the action expects the case to interfere with the policies and programs of that agency.

Standard for Dismissal Clarified

In addition to the factors cited above, the memo states that dismissal is an option to address a case pockmarked with “egregious procedural errors,” citing the case of Surdovel v. Digirad Imaging as an instance. This case was dismissed in 2013 after government attorneys determined that the relator had “failed to serve the United States with the complaint and disclosure of all material facts.” However, the memo indicated that federal attorneys should feel free to leverage both the unfettered discretion and the rational basis standards for dismissal.

As might be expected, the D.C. District Court is one jurisdiction where the unfettered discretion standard is at work, although the Ninth and Tenth Circuits have made use of the rational basis test. The memo argues that even the rational basis standard “was intended to be a highly deferential” standard, and the memo advises a federal attorney to notify the court as to the basis for a motion to dismiss in jurisdictions where a standard has not been identified.

The memo offers some tactical advice, suggesting for instance that prosecutors separately assert any alternative grounds for seeking dismissal, citing the bars on public disclosure and pro se relators as examples. This approach provides independent legal bases for dismissal, but partial dismissal is another tactic available to federal attorneys.

Interestingly, the memo concludes with language suggestive of a view that the rate of meritless qui tam actions is on the rise, stating that relators have dismissed more than 700 actions since the beginning of 2012 when the department declined to participate. This more routine withdrawal of a qui tam, the memo states, “has significantly reduced the number of cases where the government might otherwise have considered seeking dismissal.”

FDA’s Intended Use Rule Back in Play

A number of regulatory and enforcement items have been up for grabs at the FDA over the past year, but few carry the weight of the agency’s review of the intended use rule. The FDA announced recently that it is suspending the implementation date for the rule, and is separating the tobacco-related portions of the rule from those governing drugs and devices. It’s a welcome step and one that is long overdue, but it is not clear yet where the agency will land on this matter.

Dexcom Warning Letter Pulled

To recap, this problem dates back to at least 2011, when Par Pharmaceutical Inc. sued the agency over the latter’s attempts to suppress Par’s on-label discussion of the company’s appetite stimulant, Megace ES, in a setting in which the drug was likely to be used off-label. Par agreed to pay a $45 million fine two years later, and the five-year corporate integrity agreement is finally set to expire later this year.

Glucose monitor maker Dexcom subsequently received an FDA warning letter alleging the device maker was aware that its devices had been sold for uses that fell outside the labeled indication, but the agency has since deleted that document from the warning letter database. The agency took an explicit approach to the issue in a Federal Register announcement in September 2015, a peculiar attempt to devise a rule that would cover tobacco products along with drugs, devices and biologics. The FDA said its intent was to clarify some of the related issues, but the 10-page draft included the curious observation that a lack of clarity might lead consumers to use tobacco products “in place of FDA-approved medical products.”

The final rule appeared in early 2017 and retained the plus-tobacco features of the proposed rule, but the document grew to 25 pages and included a more or less lengthy discussion of the Central Hudson test and other issues that came up in comments to the docket. However, the agency then delayed implementation of the final rule to March 21, 2017, and then to March 19, 2018, and FDA commissioner Scott Gottlieb said in the agency’s Jan. 12 statement that the final rule will be suspended yet again “until further notice.”

A Procession of Concessions Fails

The 2015 proposed rule rattled observers by stating that the agency’s determination of a product’s intended use “is not bound by” explicit claims made by the manufacturer, but can instead be inferred by “objective evidence,” including the circumstances “surrounding the distribution of the product or the context in which it is sold.” The FDA tried to assuage industry’s concerns by vowing that it would not act on distribution of a product “based solely on a firm’s knowledge” of off-label use, but this concession did little to mollify industry.

The agency took a somewhat different approach in the final rule, stating that “a totality of the evidence” would be employed to determine an intent to knowingly distribute a drug or device for off-label uses. However, the Advanced Medical Technology Association argued that an approach based on the totality of the evidence is “more outcome determinative than prescriptive,” and thus manufacturers would have little choice but to “curb important product-related communications.”

The intended use rule does not entirely capture the regulated speech problem, but it is a significant hazard, particularly since whistleblowers and the Department of Justice can readily avail themselves of fodder for prosecution. It is pertinent to note that the Par Pharma case involved multiple relators, who had netted more than $4 million when all was said and done.

States Moving Ahead

There are several questions looming for the FDA, but whether the agency is in a position to stand pat is not one of those questions. The State of Arizona passed a law last year that takes up the off-label communication issue, and there are indications that other states may soon follow suit. Gottlieb has already noted that the FDA must come to grips with recent jurisprudence on the off-label issue, and the agency can scarcely afford to be swamped by a pixelated map of state policymaking where commercial speech is concerned.

The easy answer to all this is that Gottlieb will scuttle the totality-of-evidence standard, but little beyond that is especially obvious. The FDA said it will take comment through Feb. 5 on this latest iteration of the intended use scrum, so there is still time to weigh in. Given that the docket for this issue already features nearly 2,000 comments, it’s clear that significant change is in the works.

Auld Acquaintance; 2017 Guidances and 2018 Enforcement

2017 is now a part of the past, and everyone has their own idea as to which were the most crucial developments of the year. Following is a nomination for two FDA guidances that are at least strong candidates for the title of the most important guidances of 2017, along with developments in two ongoing dramas that could prove pivotal in this new year.

What’s Old is New (yet) Again

The FDA’s Center for Devices and Radiological Health had little to offer in the way of guidances in the first half of 2017, but the center made up for that in a big way in the latter part of the year. CDRH issued 19 draft and final guidances in the last three months of the year, but the month of September was a busy one, too.

Still, the most important guidances might not have been the most widely discussed. The October final guidance for 510(k) changes and the companion software 510(k) changes final guidance might not have the splash value of the agency’s moves in the digital health realm, but it’s easy to forget how long the 510(k) changes controversy has strained relations between the FDA and industry.

Thinking back to the legacy K97 guidance of 1997, this discussion has been the subject of formal regulatory interest for only 20 years despite that the Medical Device Amendments were added to the statute more than 40 years ago. The agency took a stab at rewriting K97 in 2011, but that attempt proved futile thanks to the opposition it triggered.

Traditionally, the estimates of the number of 510(k) clearances each year is somewhere between 3,500 and 4,000, a much greater number than the volume of original PMAs, which hasn’t hit 100 in recent memory, if ever. Are digital health guidances “hotter” in terms of novelty and hence media coverage?

Apparently, but make no mistake: The 510(k) program and the agency’s overarching administration thereof is easily the most important regulatory development in calendar year 2017, particularly given that the new med tech regulations in Europe could drive a lot of traffic back to American shores.

2018: Commercial Speech Comes of Age?

2017 was a regulatory banner year for med tech, thanks to the 21st Century Cures Act and the provisions of the fourth device user fee agreement, so it’s difficult to see how 2018 can measure up. Still, this new year has at least one blockbuster story in store if recent remarks by FDA commissioner Scott Gottlieb are any indication.

Gottlieb said the agency needs “a legally enforceable set of rules” where commercial speech is concerned, a nod to recent court losses, such as Caronia. Hence, Gottlieb’s said the FDA “can’t be operating from a platform where our regulations might be perpetually in conflict with the courts.”

The agency’s January 2017 draft guidance for payer communications is still in draft form, but that’s to be expected with the change in the commissioner’s office, particularly a commissioner with Gottlieb’s views on the commercial speech question. Another consideration is that a payer communication framework might be the lowest hanging of the several commercial speech questions, and there was little indication at the time that the FDA had adopted a less restrictive approach to off-label communications to physicians.

Gottlieb’s comments from September 2017 suggest he wants the agency to provide industry with some rules of the road for the entirety of the commercial speech problem, but the agency’s chief counsel, Rebecca Wood, avoided the subject in her prepared remarks to a gathering of the Food and Drug Law Institute in early December 2017. The net effect is something of a black box inside which the regulatory version of Schrödinger’s cat awaits our collective scrutiny, but Gottlieb seems determined to settle this matter by one means or another, even if there is some understandable skepticism as to the durability of any resolution. This is a matter worth watching as we move into 2018.

Yates Memo; Up for Grabs?

On the other hand, those who are concerned about a hangover from the Yates memo might be encouraged by the fact that FDA’s Woods conceded that it is time for the FDA to revisit the question of vicarious criminal liability in Park doctrine cases. The question here is whether the agency and the Department of Justice are on the same page, given that these two parties have not necessarily agreed on these issues in the past.

The corporate liability question seems ripe for review if only because Sally Quillian Yates is no longer at the Department of Justice, but deputy attorney general Rod Rosenstein acknowledged that the Yates memo is under review in a speech to the Heritage Foundation in September 2017. Although he offered no details other than to affirm that prosecution of individuals is still seen as important as a deterrent, he stated, “I do anticipate that we may in the near future make an announcement about what changes we are going to make to corporate fraud principles.”

Rosenstein confirmed in an October 2017 speech to New York University that the memo is still in play, explaining that any changes “will reflect our resolve to hold individuals accountable for corporate wrongdoing.” However, Rosenstein also said federal attorneys will not be permitted to “use criminal authority unfairly to extract civil payments.”

While there are few tea leaves to work with, the statement about the use of criminal authority to extract civil payments is at the very least some indicator as to where DoJ may be headed. On the other hand, there are those who worry that the prison sentences handed down in the case of Jack De Coster and Peter De Coster could be part of an emerging pattern despite that the De Costers’ egg businesses routinely and egregiously ran afoul of the law over a period of decades. The corporate prosecution story is clearly another story worth tracking as we work through this new year.

Conte on Steroids — The California Supreme Court Finds that Novartis Can Be Liable for a Drug It Hasn’t Made in Years

Jordan Lipp | Partner, Davis Graham & Stubbs LLP

 

A basic premise of product liability law is that it is the manufacturer of a product, not its competitors, is the sole entity liable for the harm caused by its own defective product.  This issue is of particular importance in the context of brand name versus generic drug manufacturers.  Courts throughout the nation have faced the question of whether the manufacturer of a name brand version of a drug is liable to a plaintiff who only took the generic version of the same drug.  The overwhelming precedent, with a handful of exceptions, has been that a name brand manufacturer cannot be liable if the plaintiff consumed a generic version of the drug.  One of those handful of exceptions was Conte v. Wyeth, a 2008 decision from the California Court of Appeals, which held that a brand name drug manufacturer has a duty to warn the prescribers of the generic versions of their drug.

On December 21, 2017, the California Supreme Court rejected the overwhelming precedent from other states, and following the Conte decision.  It held that brand name drug manufacturers have a duty to warn about their drugs, regardless of whether the plaintiff used the brand-name or generic version of the drug, so long as the plaintiff relied upon the brand name drug manufacturer’s warning.

Perhaps even more surprising was the California Supreme Court’s holding that the brand-name manufacturer’s sale of the rights to the drug did not terminate its liability.  The case, T.H. v. Novartis Pharmaceuticals Corp., — P.3d —,  2017 WL 6521684 (Cal. 2017), arose from a claim by two children (through their guardian ad litem) that their developmental delays and autism were caused by their mother’s use of terbutaline in 2007 during her pregnancy with them.  The brand name version of terbutaline is Brethine, which was manufactured by Novartis until 2001.  In 2001, six years before the generic version of the drug was actually used, Novartis sold its rights to the brand name drug to another drug company.

In spite of the facts that (1) the plaintiffs’ mother took the generic drug, not the brand name drug, and (2) when the mother took the generic drug, Novartis no longer held the rights to the brand-name equivalent, the California Supreme Court still found that Novartis could be liable.  On the first issue, the California Supreme Court held that “Because the same warning label must appear on the brand-name drug as well as its generic bioequivalent, a brand-name drug manufacturer owes a duty of reasonable care in ensuring that the label includes appropriate warnings, regardless of whether the end user has been dispensed the brand-name drug or its generic bioequivalent.”  On the second issue, the Court found that “If the person exposed to the generic drug can reasonably allege that the brand-name drug manufacturer’s failure to update its warning label foreseeably and proximately caused physical injury, then the brand-name manufacturer’s liability for its own negligence does not automatically terminate merely because the brand-name manufacturer transferred its rights in the brand-name drug to a successor manufacturer.”

Well aware that this decision runs contrary to the great weight of authority in other states, the California Supreme Court ended its opinion stating: “We do not doubt the wisdom of crowds in some settings. But the value of an idea conveyed by or through a crowd depends not on how loudly it is proclaimed or how often it is repeated, but on its underlying merit relative to the specific issue at hand.”  With this decision, California will continue to be a hotbed for pharmaceutical litigation for years to come.

Digital Desires; the FDA’s December Guidance Trove

The end of the year is a time for reflection and maybe even gratitude, but as we can all testify, holiday shopping can be an irritating experience. The FDA got an early start on its holiday shopping list in the first week of December with the publication of several guidances as part of the overhaul of its approach to digital health. As might be expected, though, the experience is a decidedly mixed bag of items, one of which seems likely to be returned for exchange.

SaMD Final: A Leaner, Nicer Approach

On the positive side, the final guidance for software as a medical device (SaMD), the draft of which was written by the International Medical Device Regulators Forum, eliminates some of the seemingly compulsory tone of the draft. Nonetheless, the FDA went to some lengths to emphasize in the final that industry should not read too much into the use of words such as “requirements,” explaining that related provisions fall into the category of recommendations. Given the recent congressional emphasis on the least burdensome standard, the agency perhaps had little choice but to make such a conciliatory gesture.

The final SaMD guidance is 15 pages leaner than the draft (30 pages rather than 45), and large portions of the draft have either slimmed down or disappeared entirely. Definitions have become less descriptive, thus lending an unmistakable air of flexibility to the document. Whereas the draft commits page after page to discussions of generating evidence for scientific and analytical validity, the final guidance offers mere paragraphs for considerations such as analytical and technical validation.

The net effect is that of a high-level document that avoids the quagmire associated with the fine details of product development and testing. Whether this is the last word for some time on SaMD is difficult to forecast, but the reader will note that the agency took the unusual step of announcing the final guidance in the Federal Register, complete with the associated docket number.

The Risk of Saying Nothing About Risk

Conversely, the draft guidance for clinical decision support (CDS) systems presents the reader with a decidedly different dilemma, although it offers some useful content. The draft includes a section spelling out instances in which a CDS would not fall under FDA regulations, such as software that provides recommendations as to the use of a drug within the labeled indication. This document also provides a number of examples of uses of a CDS that would qualify the item as a device, but Bradley Merrill Thompson of Epstein Becker Green had a few choice words regarding the draft.

Thompson, who serves as the general counsel for the CDS Coalition, said the CDS draft lacks clarity on the point of how a vendor might determine how the risks associated with that product’s use might push the CDS into the agency’s regulatory territory. Thompson said this is particularly problematic given the recent and coming advances in artificial intelligence, although others indicated some relief that patient use of CDS was written into the document.

One way of looking at the risk question in this guidance – or more properly, the failure of the draft to directly address the risk question – is that the agency believes it might be a more economical use of its time to draw feedback from stakeholders before committing anything to ink. The docket is open for only sixty days, however, and it seems fairly plausible that the Feb. 6, 2018 deadline for comment will be extended if indeed the FDA intends to provide at least some discussion of risk. After all, the agency’s device center has expended a considerable amount of effort to talk about benefits and risks, including the final guidance on how the FDA will handle the hazards of dealing with problematic devices that may or may not warrant withdrawal.

The last of the three guidances released by the FDA on Dec. 7 was the draft guidance dealing with policy changes to four existing guidances, including the guidance for medical device data systems (MDDS). The agency’s proposal to regulate such software in 2011 sparked a lot of pushback from stakeholders with a lot of bandwidth on Capitol Hill, and the agency walked back from several major features of its early proposals several years ago. This guidance will be substantially revamped, although in its current form it is apparently not operational, as the saying goes.

The general wellness app guidance is also scheduled for a thorough rewrite, as are the guidances for mobile medical applications and off-the-shelf software used in medical devices. Device makers have the 21st Century Cures Act to thank for much of this, but the agency’s latest commissioner, Scott Gottlieb, might have pushed for many of these changes even without the help of the Cures Act. All in all, Dec. 7 was not a bad start to the holiday season, even if one or two items will eventually be re-gifted to the giver.

FDA Issues New Guidance on 3D Printing of Medical Devices

Jordan Lipp, Esq. | Partner, Davis Graham & Stubbs

Today, the FDA issued new guidance for the industry on 3D printing of medical devices, entitled “Technical Considerations for Additive Manufactured Medical Devices.”  Considering the recent advances in 3D printing technology, especially with anatomically-matched devices that are built for individual patients, FDA guidance on this issue is welcome.  The guidance provides the FDA’s current thinking on the myriad of issues from material controls, process validation, and device testing, to cybersecurity.

This guidance also provides information on labeling considerations involving 3D printed medical devices.  With regards to patient-matched device, the FDA recommends that additional labeling be provided with:

  • patient identifier,
  • use (e.g., left distal femoral surgical guide), and
  • final design iteration or version used to produce the device.

Also, with regards to labeling, the FDA recommends both reviewing whether the expiration date is the same as the typical shelf life for a non-patient-matched device and including a precaution that the patient should be surveyed for potential anatomical changes prior to the procedure.

The newly issued guidance is just a stepping stone.  As the FDA noted in its press release, “our recommendations are likely to evolve as the technology develops in unexpected ways.”  And, of course, as this is a guidance document, so it is nonbinding.