FDA, Pharma and Health Care Fraud Blog -

Last month, the United States Court of Appeals for the District of Columbia Circuit ruled in favor of the FDA in denying the clearance of Cytori’s Celution 700 and StemSource 900. See Opinion Cytori Therapeutics, Inc. vs. FDA, 11-1268, 2013 WL 1164775 (D.C. Cir. March 22, 2013). There are two key observations in this ruling. First, Court of Appeals for the District of Columbia Circuit is a proper forum to directly challenge FDA’s final determinations on premarket device applications. Second, such Court defers to FDA’s scientific judgment on questions challenging FDA’s decision on safety and effectiveness of a medical device. 

By the way of background, Cytori, choosing the preapproval notification regulatory path, filed two 510(k) applications for two cell harvesting devices. One version for harvesting and preparing stem cells for clinical laboratory analysis. The other intended to harvest stem cells but for storage. Cytori claimed that the devices were substantially equivalent to currently marketed devices that harvest cells from blood and bone marrow. FDA denied substantial equivalency on the basis that "fat is not blood" and that the use of a certain enzyme that is used to separate the useful cells from other tissue can pose new safety questions based on its effect on the harvested cells. FDA concluded that Cytori’s devices would need to complete the more extensive premarket approval process.

At the Appeal level, Cytori alleged that the FDA acted unreasonably in rejecting Cytori’s applications and further mandating that Cytori’s devices undergo the premarket approval process.  FDA, on the other hand, challenged the jurisdiction of the Court asserting that the district court is the proper forum for the initial review of the issue. FDA added that relevant statute only provides for review of an affirmative order at the Court of Appeals level.

The Court disagreed with the FDA and observed that the 21 U.S.C. §360g(a) allows that “any person adversely affected by a specified regulation or order to file a petition in the U.S. Court of Appeals for the D.C. Circuit.” An “order” under APA is defined as “the whole or a part of a final disposition, whether affirmative, negative, injunctive or declaratory in form” 5 U.S.C. §551(6). Thus, any final non-equivalence determination, even if negative in nature is an “order” from the FDA and reviewable by the Court of Appeals.

On the question of substantial equivalency, the Court deferred to the FDA’s scientific judgment. under 21 U.S.C. § 360c(i), a device must meet two core criteria to be substantially equivalent to a currently marketed device. First, the device must have “the same intended use as the predicate device.” 21 U.S.C. § 360c(i)(1)(A). Second, the new device must also have “the same technological characteristics as the predicate device” or, if not, the submitted data must establish that the new device is both equally “safe and effective as a legally marketed device” and “does not raise different questions of safety and effectiveness than the predicate device.” Id. 

The Court in Cytori expressed that it “is ill-equipped to second-guess that kind of agency scientific judgment under the guise of the APA’s arbitrary and capricious standards.”  Thus, as long as FDA’s act appears reasonable, the Court would not likely challenge the FDA’s authority on interpreting the scientific evidence related to safety and effectiveness of a product.

In short, you may be able to take FDA’s negative determination of substantial equivalency directly to the Court of Appeals for the District of Columbia, but you may not find sympathy in challenging FDA’s scientific judgment.

Now that it is clear that the FDA is not seeking review of the 2^nd circuit decision at the Supreme Court level for the case of United States vs. Caronia, 2012 WL 5992141 (C.A.2 N.Y.), what is next in the debate of "off-label promotion"?  In Caronia, a pharmaceutical sales representative, Alfred Caronia, promoted a FDA approved drug, Xyrem for “off-label use,” that is, for a purpose not approved by the FDA. Following a jury trial, Caronia was found guilty of conspiracy to introduce a misbranded drug. The defendant appealed the case on the grounds that his conviction was in violation of his right of free speech under the First Amendment and the appellate court agreed.

In its Guidance issued in December 2011, the FDA had put the industry on notice that “statements that promote a drug or medical device for uses other than those approved or cleared by FDA may be used as evidence of a new intended use. Introducing a product into commerce for such a new intended use without FDA approval or clearance would, under these requirements, generally violate the law.” In Caronia, this position was tested. The FDA using the sales representative statements as evidence of a new unapproved intended use, charged the representative for conspiring to introduce and introducing a misbranded drug into interstate commerce in violation of 21 USC §§ 331(a) and (a)(2).

The 2^nd circuit disagreed with the FDA characterization of the statements and reasoned that even if speech can be used as evidence of a drug's intended use, the court could not “adopt the government's construction of the Food Drug and Cosmetic Act (FDCA) misbranding provisions to prohibit manufacturer promotion alone, as it would unconstitutionally restrict free speech.” 

Regardless, the decision can not be viewed as a free ticket for promoting off-label use of approved drugs nor should it be viewed for promotion of any unapproved drug or device products that need to undergo the FDA’s approval or clearance process.  The court explicitly stated that the decision prohibits the FDA from prosecuting pharmaceutical manufacturers and their representatives under the FDCA “for speech promoting lawful, off-label use of an FDA-approved drug.” That is manufacturers are still responsible for ensuring the accuracy and truthfulness of the statements made during the off label promotional activities of their products. (Also see our prior posting on this subject).

The question then becomes what is viewed as a scientifically truthful dissemination of information in promotion of “off-label” use of an FDA approved drug? The FDA is of the belief that the Caronia decision will not significantly affect the agency’s enforcement of the drug misbranding provisions of the FDCA.  Can the next challenge question the extent of scientific truthfulness needed to justify off-label promotion? 

In a recent court decision a pharmaceutical sales manager claimed that his employer’s actions violated the False Claims Act because off-label prescriptions were expected and intended.  The Fourth Circuit Court of Appeals disagreed, in U.S. ex rel. Noah Nathan v. Takeda Pharmaceuticals, Dkt. No. 11-2077 (January 11, 2013).

The plaintiff alleged that his employer had marketed drugs for off-label uses, in other words, beyond the drugs’ approved indications. He also alleged that the manufacturer was providing physicians with samples of a certain size dosage that must have resulted in prescriptions being written for off-label uses and, thereafter, claims for payment being presented to the government.

The case was dismissed, however, because the allegations did not relate to the specific presentation of a false claim submitted to the government for payment.  More specifically, even if the plaintiff’s allegations were true – about which the court made no specific finding – those allegations did not include any actual proof that certain prescriptions were written or that any claim for payment was presented to the government.  The allegations actually failed to even allege that the defendant manufacturer had intended there to be a submission for payment.  The mere fact that the actions could have led, but need not necessarily have led, to presentment of a claim for payment was found to warrant a dismissal of the case. 

Among other things, the court rested its holding on the False Claims Act’s requirement that knowledge or intent is a required element of proof. The Court also analyzed the federal “pleadings” standards and felt that the plaintiff had not met those standards – even though he had amended the complaint three times. 

This case provides some insight into off-label pharmaceutical marketing and its treatment by the courts in real-world situations – and how courts will approach alleged non-compliance.  Perhaps more importantly, because the plaintiff in this case was a whistle-blowing employee of the manufacturer, the case can also be seen as limiting the claims available to whistleblowers. 

The U.S. Food and Drug Administration issued the Final rules on the current good manufacturing practice (“cGMP”) requirements for combination products in the Federal Register Notice, 78 Fed. Reg. 4307, published Jan. 22, 2013 (the “Notice”). The Notice effectively clarifies which elements from cGMP regulations are necessary to ensure compliance for combination products. 

The cGMPs are regulations that the manufacturers of medical products must follow to avoid a charge of product adulteration. Adulteration is essentially a company’s failure in manufacturing its products in accordance with cGMP practice, regardless of whether the products are actually deficient in some respect. 21 C.F.R. §§ 210 and 211 describe the cGMP requirements for drugs. The Quality System Requirements for devices are codified in 21 C.F.R. 820. For biologics, the requirements are listed in 21 C.F.R. 600 through 680; and for human cells and tissues, the good tissue practice is articulated in 21 C.F.R. 1271, subpart D.

Combination products are defined in 21 C.F.R. § 3.2(e) as those that comprise two or more FDA regulated components. Manufacturers of such products must satisfy cGMP compliance for all of the components included in the product, whether the product is single entity or a co-packaged combination product. The Notice clarifies the mechanism of compliance with cGMP for combination products.  For example, when the first component of a combination product is a drug that complies with its respective cGMP requirements, the Notice provides clarification as to which regulations must further be complied with for the device component of such combination product and vice versa.  

Manufactures of combination products should carefully consider the newly finalized 21 C.F.R. 4.4(b)(2) during or before developing their cGMP compliance programs.

On January 15, 2013, the FDA announced the holding of a public hearing to seek input from interested parties in the public and the industry concerning a potential new pathway for approval of drugs shown to be safe and effective in a subpopulation of patients with serious or life- threatening conditions in which an unmet medical need exists. FDA is particularly interested in obtaining information and public comments on topics such as:

□ whether a new pathway increase the therapeutic options for serious or life-threatening conditions for which an unmet medical need exists in lieu of the existing pathways,

□ identifying serious or life-threatening conditions for which this approval pathway may benefit subpopulations of patients and the respective risk-benefit considerations,

□ approaches to monitor and enforce appropriate use of drugs approved under this pathway consistent with the terms of approval,

□ whether this pathway can address some of the current challenges in antibacterial drug development, particularly for serious or life threatening infections, and

□ determining the need for formal designation and the proper labeling of drugs approved under this pathway.

This proposed pathway was recommended by the President’s Council of Advisors on Science and Technology in their September 2012 ‘‘Report to the President on Propelling Innovation in Drug Discovery, Development, and Evaluation,’’ as a way to improve drug evaluation. The public hearing is scheduled for February 4 and 5, 2013.