FDA Delays Federal Menu Nutritional Labeling Guidelines

/0 Comments/in , /by

As we previously posted (here, here, and here), the Patient Protection and Affordable Care Act (“PPACA”) contains a provision that requires chain restaurants with at least 20 locations in the United States and vending machine operators who own or operate 20 or more vending machines to post calorie, fat, and other nutritional information of menu items. Last week, the U.S. Food and Drug Administration (FDA) was expected to present guidelines on new federal nutritional labeling requirements. However, as of Friday, the Agency was still working on the details. According to FDA spokesman Michael Herndon, “[w]e expect only a short delay, and it is a reflection of the complexity of this issue but most important an indication that the FDA is willing to work with all interested parties to ensure the best policy is presented.”

Currently, there are several different state and local menu-labeling laws, such as in New York City and California. The new federal nutritional labeling requirements will provide uniformity around the country. Many restaurant associations are backing the new menu labeling laws because it is easier to comply with one national standard than multiple state and local laws. At this point, affected parties are waiting for the FDA to announce the guidelines so they can review and respond to the FDA.

Fuerst Ittleman will continue to monitor the FDA for menu nutritional labeling guidelines. For more information on how this provision affects your business, please contact us at contact@fidjlaw.com.

Harsh sentences coming for strict liability FDA misdemeanor offense

/0 Comments/in , , /by

The FDA has recently expressed that it intends to bring more criminal prosecutions for strict liability offenses under the Food, Drug & Cosmetic Act (FDCA) under the “Park” Doctrine. As we previously discussed, the FDCA makes it a criminal misdemeanor to violate the FDCA even if a person had no knowledge of a violation, did not commit fraud, and did not intend to violate the law. This is known as a “strict liability” misdemeanor, as opposed to criminal offenses that require a defendant to knowingly commit an offense.

On January 19, 2011, the United States Sentencing Commission (The Commission) issued a Federal Register Notice regarding amendments to the Federal Sentencing Guidelines which would require many persons convicted and sentenced under the misdemeanor, strict liability provisions of the FDCA to be sentenced under more serious guidelines for fraud rather than for regulatory offenses. The impact of these proposed changes is that strict liability, or “Park” misdemeanor offenses could receive the same guideline score as a felony offense requiring intent to defraud, and consequently a similar sentence, i.e. prison terms. The Commission proposal would amend the Guidelines with regard to “persons convicted of Federal health care offenses involving Government health care programs.” As currently noticed, the proposal would not contain a limitation with regard to the health care offenses and government health care programs to which increased sentences would apply. Therefore, they would apply to strict liability misdemeanors under the FDCA that involve health care offense and government health care programs.

What is left open to debate is how directly connected to a government health care program a FDCA offense must be to trigger the proposed guidelines. As seen from recent “off-label” use cases, the Department of Justice believes that such uses implicate government health care programs. As such, a wide swath of proscribed conduct under the FDCA regarding manufacturing, adulteration and misbranding may come under the purview of the new proposed Guidelines. Under the current proposals, there may be considerable litigation regarding the applicability of the enhanced Guidelines to strict liability misdemeanors if there is not further clarification or amendment by the Commission after the comment period.

Lawyers at Fuerst Ittleman concentrate their practices on defending individuals and corporations accused of FDCA offenses in administrative, civil and criminal cases. If you are in need of legal advice regarding the FDCA, criminal investigations or prosecutions regarding the FDA or require guidance on complying with the FDCA, Fuerst Ittleman can assist you.

FDA Updates the Import Entry Review Process for Medical Devices

/0 Comments/in , /by

On March 24, 2011, the U.S. Food and Drug Administrations (FDA) Center for Devices and Radiological Health (CDRH) released a Letter to Industry regarding recommendations to improve medical device import entry review processes in an effort to expedite entry of foreign medical devices into the United States. The Letter to Industry states the Agencys concern with the increasing “number of imported medical devices that do not have sufficient entry data.” The lack of sufficient entry data means more review time for the FDA to make a decision about admissibility at the port of entry. Steven Silverman, Director of the Office of Compliance of CDRH states in the Letter that, “[t]hese recommendations will directly impact your companys ability to import medical devices, electronic product components, parts and finished product into the US.”

When an imported product arrives in the United States, the importer, usually through import personnel (e.g. a broker or filer), must submit certain information electronically to U.S. Customs and Border Protection (CBP). For products regulated by the FDA (or that may be regulated by the FDA), CBP sends the import entry information to the FDA for verification the products meet FDA statutes and regulations. When the information is not submitted correctly or is insufficient, the FDA must initiate a manual review of each line of the entry, which is time consuming and usually leads to delays in entry into the United States.

The FDA is attempting to expedite the admissibility process of imports with the correct Affirmations of Compliance (AofC) and other requested data. Failure to provide adequate AofC data results in manual reviews of product entries. The FDA has published new AofC codes and revised old AofC codes that are to be used when transmitting entries of imported medical devices. Each entry line should contain an AofC code for the following:

¢ Device Foreign Manufacturer (DEV) or Device Foreign Exporter (DFE)
¢ Device Listing (LST)
¢ Device Initial Importer (DII)
¢ Premarket Application (PMA) (can be a PMA, a Humanitarian Device Exemption (HDE), or a Product Development Protocol (PDP) number), a Premarket Notification Number (PMN), or an Investigational Device Exemption (IDE).

The use of AofC codes affirms to the Agency that the product identified in the import entry meets FDAs requirements specific to the product. The AofC codes and their associated descriptions and qualifiers for medical devices can be found in the Appendix to the Letter to Industry. The FDA will provide additional AofC codes as necessary.

The use of AofC codes is voluntary. However, use of the codes will help expedite the entry review process and increase the likelihood that your product is processed on import system screening and not manually.

A second letter will be issued in the future about the import entry review process for radiation-emitting medical electronic devices, such as x-rays, medical lasers, etc. Fuerst Ittleman will continue to monitor the FDA for this announcement.

For information on how Fuerst Ittleman can assist your firm with navigating the import entry review process through CBP and the FDA, please contact us at contact@fidjlaw.com.

US Government Audit Reveals Government Waste in Catfish Regulation

/0 Comments/in , , /by

In 2008, the U.S. catfish industry convinced Congress to require tougher federal inspections on just one species of fish”catfish”by transferring regulation of domestic and imported catfish from the Food & Drug Administration (FDA) to the Department of Agriculture (USDA). The U.S. catfish industry supported these tougher inspections by the USDA not because it supported tougher regulation on catfish, but because it believed they would be a roadblock to imports from Vietnam and other countries.

Now, a recent government audit has cited the catfish program and its $30 million price tag as a prime example of government waste and duplication. It turns out that when the regulation of catfish, one of the most popular fish in the U.S., was transferred to USDA, the legislation did not clarify that FDA was relieved of any duties regarding the inspection of catfish. As such, there are now two federal agencies responsible for inspecting the same type of fish. The big difference, however, is that while the FDA usually inspects only about 2 percent of the fish imported into the U.S. through spot checks and sampling, the USDA also requires inspection on-site of production facilities. This would require the foreign producers of catfish to create and implement an equivalent inspection system and that could take years.

In the meantime, a Final Rule on implementation of the provision has yet to be issued by USDA. As such, the inspection regime by USDA has not been implemented despite millions already having been spent to implement the legislation.

Given what was stated to be government waste and duplication by the recent audit, Sen. John McCain has taken up the cause of repealing the provision, which was buried in the 2008 Farm Bill. McCain has stated that the provision is “nothing more than a protectionist tactic funded at taxpayers expense” to help special interests, here the U.S. catfish industry. McCain introduced legislation to repeal the provision, stating that “if implemented, the proposed USDA regulations will lead to a duplicative, costly and complex overseas inspection programs that serves no real purpose but to protect American catfish growers from competition while forcing American consumers to pay more for fish.”

Catfish have been a subject of much political debate in Washington. In 2002, legislation backed by the U.S. catfish industry was passed mandating changes in labeling so that Vietnamese catfish could not be imported into the U.S. under the name “catfish”; instead it was mandated that Vietnamese catfish be labeled “pangasius”. Vietnam has considered such restrictions to be trade barriers and has hinted at trade retaliation. In any event, Vietnamese exports of “pangasius” to the U.S. boomed.

Seafood labeling fraud on the other hand, is a serious problem. A February, 2009 General Accounting Office report to Congress found the most common types of Seafood fraud are: Transshipping through a third country to avoid duty; adding water or ice to seafood to increase its weight; substituting one species for another one listed on the label; and less seafood in the package than shown on the label. The Department of Justice takes this kind of fraud seriously; criminal prosecutions have resulted in recent months, as can be seen here. With the passage of the new Food Safety Modernization Act, which became law in January, regulation of seafood will inevitably skyrocket, with the FDA receiving new inspection and recall powers, and Customs implementing restrictions at the border.

U.S. Supreme Court Rules That Drug Companies Must Report Adverse Events To Shareholders, Rejects “Statistically Significant” Risk Argument

/0 Comments/in , , /by

On March 22, 2011, the Supreme Court ruled in a unanimous decision that publicly traded drug companies are required to disclose adverse drug events to shareholders in order to comply with their reporting requirements under 10(b)(6) of the Securities Exchange Act. In so ruling, the High Court rejected Matrixx Initiatives, Inc.s (“Matrixx”) argument that publicly traded drug companies need only report adverse events to their shareholders when there is a “sufficient number of reports to establish a statistically significant risk that the product is in fact causing the event.” A copy of the full opinion of Matrixx Initiatives, Inc. v. Siracusano can be read on the Supreme Courts website here.

This case stems from reported adverse effects of Zicam, a cold remedy which Matrixx manufactured until 2009. The suit alleged that for a five year period between 1999 and 2004, Matrixx received numerous reports from medical professionals and researchers describing more than ten patients who lost their sense of smell, a condition known as anosmia, after using Zicam nasal spray and gel. However, Matrixx failed to disclose these reports to its shareholders and instead made claims that the company was poised for growth. In 2004, ABC reported the link between Zicam and the loss of sense of smell. As a result of the report, Matrixxs stock price plummeted. Ultimately, in 2009, the FDA issued a warning to Matrixx that Zicam posed a threat to consumers and Matrixx recalled the product.

The plaintiffs in this case filed suit for securities fraud for failing to disclose material facts and information about the company. Section 10(b) of the Securities Exchange Act, 15 U.S.C. § 78j(b), makes it unlawful for any person to “use or employ, in connection with the purchase or sale of any security . . . any manipulative or deceptive device or contrivance in contravention of such rules and regulations” as prescribed by the Commissioner of the SEC. Under 17 CFR §240.10b“5(b), publicly traded companies may not omit or fail to disclose “material facts” and information which would influence the purchase or sale of securities. Matrixx argued that the materiality requirement for reporting adverse drug incidents can only be satisfied when a sufficient number of reports establish that there is a “statistically significant risk” from the use of a drug product.

In rejecting this argument, the Supreme Court found that the materiality standard announced by the Court in Basic Inc. v. Levinson, 485 U. S. 224 (1988) controlled. In Basic, the Court held that the materiality requirement is satisfied when there is “a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the total mix of information made available.” Id., at 231“232. Justice Sotomayor, writing for the Court, found that determining materiality of an adverse event report is a “fact specific inquiry” and that, while “the mere existence of reported events” will not in and of itself be sufficient to satisfy the materiality requirement, “the source, content, and context of the reports” must be analyzed determine whether any particular adverse report is sufficiently material as to require disclosure. The Court further stated that “[a] lack of statistically significant data does not mean that medical experts have no reliable basis for inferring a causal link between a drug and adverse events. As Matrixx itself concedes, medical experts rely on other evidence to establish an inference of causation.” Here, given that the plaintiffs alleged that Matrixx received reports from medical professionals regarding at least 10 patients suffering from adverse effects, the Court found that plaintiffs had sufficiently alleged that “Matrix received information that plausibly indicated a reliable causal link between Zicam and anosmia.”

As a result of the Courts decision, the class action suit brought against Matrixx Initiatives, Inc. will proceed. For more information on the effect of this decision on your business, please contact us at contact@fidjlaw.com.

Senators Urge the Federal Trade Commission to Examine Price Gouging of Drug for Pre-Term Labor Drug

/0 Comments/in , /by

On March 17, 2011, U.S. Senators Amy Klobuchar (D-MN) and Sherrod Brown (D-OH) wrote to Federal Trade Commission (FTC) Chairman Jon Leibowitz urging the Agency to investigate the potentially anti-competitive behavior of KV Pharmaceutical after the price of a pre-term labor prevention drug for expectant mothers drastically increased. The drug is a weekly injection of progesterone to prevent pre-term labor that has been produced by compounding pharmacies for years and sold at a cost of between $10 and $20 per injection. After KV Pharmaceutical was granted orphan status for its version of the drug, Makena, the cost rose to $1,500 per injection, or a 14,900 percent price increase.

At a Senate Appropriations Hearing on Thursday, Senator Brown grilled U.S. Food and Drug Administration (FDA) Commissioner Margaret Hamburg over the outrageous price increase of this drug. In the letter to the FTC (see full text here), the Senators raise their concern that by gaining FDA approval of Makena and orphan drug determination, KV Pharmaceutical is taking advantage and “leading to a monopolization of treatments to address preterm labor.” The fear is that this monopoly “will result in diminished access to appropriate health care for women and result in increased preterm births.”

Senators Klobuchar and Brown concluded their letter as follows: “In additional to significant costs to individuals, this price increase will place a heavy burden on state Medicaid programs, which cover a majority of high-risk pregnancies. I am extremely concerned that KV Pharmaceuticals actions will result in diminished access to appropriate health care for women and result in increased preterm births.” Thus, given the fact that tax dollars actually funded the first clinical trial in 2003 through the National Institute of Child Health and Human Development (NICHD) at the National Institutes of Health (NIH) and partially funded subsequent clinical trials, the price increase is particularly troubling.

Fuerst Ittleman will monitor the FTC and FDA review of the allegedly anti-competitive behavior of KV Pharmaceutical. For more information, please contact us at contact@fidjlaw.com.

FDA’s Tobacco Products Scientific Advisory Committee Says Ban on Menthol Cigarettes Would Benefit Public Health

/0 Comments/in , /by

As we previously reported, with the passage of the Family Smoking Prevention and Tobacco Control Act of 2009, the FDA has been mandated by Congress to study the impact of the use of menthol in cigarettes on public health. On March 17 and 18, the Tobacco Products Scientific Advisory Committee (“Tobacco Advisory Committee”) in advance of the release of its full report and recommendations, met to announce its recommendations to the FDA.

Over the past year, the Tobacco Advisory Committee has met ten times to consider the public health effect of menthol cigarettes, evaluate how menthol cigarettes are marketed, discuss the appeal of menthol cigarettes to young people, and study their physiological effects on smokers. During its most recent meeting on March 17, the Tobacco Advisory Committee announced its recommendation that the “removal of menthol cigarettes from the marketplace would benefit public heath in the United States.” However, the committee stopped short of recommending that the FDA take any specific action such as restricting the amount of menthol in cigarettes or even a full ban on the use of menthol. As a result of the committees findings but lack of an outright call for a menthol ban, the FDA may consider alternatives to banning menthol cigarettes, such as limits and restrictions on marketing and increased labeling regulation. A copy of the Tobacco Advisory Committees draft report is available here.

On March 23, 2011, the Tobacco Advisory Committee will release its full report and recommendations. However, the FDAs receipt of the final report and recommendations does not have a direct and immediate effect on the availability of menthol products in the marketplace. The FDA will consider the report and recommendations of the Committee, the industry perspective document, and continue to review all of the available science concerning menthol cigarettes prior to acting. The FDA will then make a determination about what future regulatory action(s), if any, are warranted.

The Tobacco Control Act does not set a required deadline or timeline for the FDA to act on the recommendations provided by the Committee in the report. Any future action(s) taken by the FDA to regulate the sale or distribution of menthol cigarettes or establish a tobacco product standard for menthol cigarettes will require rule making that includes public notice and the opportunity for public comment. However, the FDA intends to provide its first progress report on the review of the science in approximately 90 days from the Tobacco Advisory Committee report due date.

An overview of the effect of the Tobacco Advisory Committees recommendation is available at FDA’s website here. Fuerst Ittleman will continue to watch the developments on menthol cigarettes with a keen eye. If you have questions pertaining to the FDCA or the Tobacco Act or how to ensure that your business maintains regulatory compliance at both the state and federal levels, contact Fuerst Ittleman PL at contact@fidjlaw.com.

FDA/McNeil Consent Decree Highlights Increased Government Efforts At Regulating Drug Recalls

/0 Comments/in , /by

As we previously reported, on March 10, 2011, the FDA in cooperation with the Department of Justice announced that a consent decree has been filed against McNeil, PPC, a division of Johnson & Johnson, for failing to comply with current good manufacturing practice (“cGMP”) regulations. The consent decree comes as both Congress and the FDA look improve public confidence in the pharmaceutical industry and combat questionable recall efforts by drug manufacturers.

Drug recalls are actions taken by a drug manufacturer, repackager, or distributor to remove a drug from the market. Recalls may be conducted on a firms own initiative, by FDA request, or by FDA order under statutory authority. The FDA publishes information regarding recalls, market withdrawals, and safety alerts here. The McNeil recalls came at a time when the FDA reported a spike in the volume of drug product recalls by the pharmaceutical industry. Our previous report on these increased drug recall efforts is available here.

Prior to the consent decree, McNeils cGMP violations resulted in it issuing extensive product recalls for the over-the-counter drugs its plants produced, including Tylenol, Motrin, and Benadryl in May 2010. As previously reported, the handling of these recalls by both McNeil and Johnson & Johnson led to increased scrutiny of the current drug recall process by the FDA and Congress.

Congress was particularly concerned with Johnson & Johnson and McNeils efforts to postpone recalling its products through the use of a “phantom recall.” A “phantom recall” occurs when a drug manufacturer hires contractors to go into stores and purchase its products rather than conducting a widespread and highly public voluntary recall. In essence, a “phantom recall” is an attempt by a drug manufacturer to purchase its entire possibly tainted product off the market in order to prevent a danger to consumers. However, “phantom recalls” are problematic because they allow drug manufacturers to escape formal voluntary recall efforts and leave suspected goods that were already purchased in the hands of the consumer.

In February, Fuerst Ittleman reported that Senator Charles Schumer (D-NY) introduced a bill aimed at limiting the options manufacturers may pursue in the event of a product recall. If passed, the Consumer Recall Protection Act (“CRPA”) will prohibit manufacturers from selling recalled products to consumers until the defect prompting the recall is remedied.

However, the CRPA does not directly prevent or prohibit “phantom recalls” from occurring because the act would only prevent companies from selling products to consumers once a formal recall has already been initiated. As a result, the “phantom recall” loophole will remain a viable option for drug manufacturers faced with the possible of having to engage in recall efforts.

If you have questions pertaining to the FDCA or cGMP regulations or how to ensure that your business maintains regulatory compliance at both the state and federal levels, contact Fuerst Ittleman PL at contact@fidjlaw.com.

Stem Cell Research Flourishes Abroad

/0 Comments/in , /by

Outside the United States, stem cell research is thriving, in part due to the availability of government funding. As reported here, the stringent requirements for obtaining federal funding for stem cell research in the U.S. may have unintended consequences, such as the migration of research abroad. Unlike the hurdles faced in the U.S., scientists abroad encounter fewer restrictions when trying to obtain government funding for stem cell research.

With the ongoing debate over the availability of federal funds for embryonic stem cell research having no end in sight, publicly-funded research in the United States has been constrained. As we previously reported, much of the public funding for this type of research has been from the individual states, even though the federal government provides greater funding for stem cell research overall. Certain restrictions on the availability of federal funding for embryonic stem cell research have stalled advancement in this area, forcing private companies to the forefront of innovation.

The National Institute of Health (NIH) is the agency responsible for overseeing medical research and funding on behalf of the U.S. government. Because NIH is bound by restrictions in federal law, the Agency cannot approve funding for research that may destroy a human embryo. As we previously reported, the details and interpretation of this law have led those opposing human embryonic stem cell research to bring suit against the NIH. While the meaning of this provision is being actively litigated, NIH is unable to approve government grants for research that involves microscopic embryos, as small as eight-cells in size.

With advances in embryonic stem cell research being slowed from the lack of government funding, private companies in the United States are taking the lead in this area. Because the research and development of embryonic stem cell lines by these companies is privately funded, the issues obstructing researchers that depend on government grants have become less consequential.

While pending legal battles largely centered on moral debates have suspended efforts to reform the availability of federal funding in the U.S., other countries are forging ahead by considering the future advantages that development in research may bring. Where the lack of public funding has stalled efforts in the U.S., there has been a surge in government-sponsored stem cell research in this area abroad.

Fuerst Ittleman has been engaged to draft a variety of statutes on behalf of foreign governments pertaining to stem cell regulation. Covering issues pertaining to stem cell therapy, protection of the practice of medicine, and other research-related issues and protocols, we are currently in the process of helping two countries in the western hemisphere develop the statutory schemes necessary to advance in this area. For more information about the current regulatory framework surrounding stem cells or any other stem cell-related issues you may be facing contact us at contact@fidjlaw.com.

Movie Theaters and Grocery Stores fight Calorie Disclosure Rule

/0 Comments/in , /by

Movie theater chains and grocery stores may have to disclose the nutritional content of their prepared foods. As we previously posted (here and here), the Patient Protection and Affordable Care Act (“PPACA”) contains a provision that requires chain restaurants with at least 20 locations in the United States to post calorie, fat, and other nutritional information of menu items. Movie theater chains and grocery stores are currently fighting and lobbying the U.S. Food and Drug Administration (FDA) to avoid having to disclose the nutritional content of their prepared foods.

Movie theater chains argue that Congress did not mention theaters in the law and the idea of regulating movie theater chains never came up in legislative hearings. Like theaters, grocery stores are also arguing that Congress never intended to regulate supermarkets and the nutritional disclosure requirements should not apply to grocery stores. Theater chains are recommending the FDA exempt companies that get less than 35 percent of gross revenue from food sales.

Rep. Rosa DeLauro (D-Conn.) disagrees with movie theater lobbyists and insists that movie theater chains were supposed to be targeted by the mandate. Rep. DeLauro, who sponsored a food-labeling bill in the House that was incorporated into the health-care law, stated that the requirement “is meant to let people know what it is that theyre consuming.” Echoing that sentiment, Sen. Tom Harkin (D-Iowa) wanted a broad definition of retail food operations to include movie theaters and grocery stores because people often buy prepared foods at the these establishments.

The FDA is expected to issue proposed rules for nutritional disclosure in the near future. Fuerst Ittleman will continue to monitor the FDAs progress. For more information on how the nutritional disclosure rule applies to your business, please contact us at contact@fidjlaw.com.