Consumers Skeptical of “Natural” Products

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A recent poll found that consumers are skeptical of products that claim to be “natural.”  The survey, performed by Mango Sprouts Marketing, shows that consumers are dissatisfied with the unregulated use of the term “natural.”  Rather, as the study suggests, consumers would like to see a certification process much like the one required of products dubbed “organic.”

Currently, under the National Organic Program, which is overseen by the U.S. Department of Agriculture (USDA), there are several requirements for the use of the term “organic.”  This designation not only applies to conventional foods, but to cosmetics and dietary supplements as well.  In order for a product to be deemed “organic,” it must comply with federal regulations, including mandatory inspections, the implementation of an organic production and handling plan, as well as the payment of filing fees.

Unlike organic products, there is little certainty surrounding products deemed “natural,” as there is currently no certification process in place.  Although products must comply with the USDAs National Organic Program in order to be deemed organic, there is no such program for natural foods.  Rather, under the FDA policy, a natural food is simply one that does not contain synthetic or artificial ingredients.

For more information about food labeling or FDA regulatory compliance, please contact us at contact@fidjlaw.com.

House Turns its Attention to Drug Safety

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Now that food safety reform is underway, Congress has turned its focus to drug safety. House Democrats have recently introduced a Bill (H.R. 6543) that is expected to increase the FDAs enforcement power over both foreign and domestic drugs.

The Drug Safety Enhancement Act, like the recently-passed Food Safety Modernization Act, contains various provisions aimed at minimizing risks to consumers and increasing FDA oversight. Some of these provisions include: creating an updated registration process for both domestic and foreign facilities, prohibiting the entry of drugs coming from facilities that are noncompliant with FDA inspections or that otherwise lack safety documentation, and heightened enforcement powers, such as mandatory recall authority.

The sponsors of the Bill, Representatives John Dingell (Mich.), Henry Waxman (Cali.), Frank Pallone (N.J.) and Bart Stupak (Mich.), are all major players in FDA legislation. Together, they have been able to secure the passage of many proposals that they have initiated, and in doing so, have been able to expand the FDAs powers. Although the drug safety proposal comes at a time when House Democrats will soon lose majority status in the House, it is likely that the influential proponents of the Bill introduced the Act as a signal of things to come in 2011.

For more information regarding FDA regulatory compliance, please contact us at contact@fidjlaw.com.

FDA Targets Tainted Dietary Supplements

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Last week, the U.S. Food and Drug Administration (FDA) issued a letter to the dietary supplement industry, notifying companies of increased enforcement efforts and seeking cooperation from within the industry. The Letter, released on December 15, warns of products being marketed as dietary supplements that contain materials not qualified as dietary ingredients. The letter notes that, “FDA is very concerned about products marketed as dietary supplements that contain the same active ingredients as FDA-approved drugs, analogs of the active ingredients in FDA-approved drugs, or other compounds, such as novel synthetic steroids, that do not qualify as dietary ingredients.”

With this focus, the FDA indicated three distinct categories of products that the Agency believes are often marketed as dietary supplements but contain undeclared ingredients. These products include those that are marketed for: weight loss, sexual enhancement, and body building. Although these categories of products will receive “extra attention and scrutiny” from the Agency, all products will be subject to the increased enforcement measures. Finally, the letter makes it clear that enforcement will not only be focused on manufacturers and distributors of products but that parties at any stage in the supply chain may be liable for violations, as all are responsible for ensuring compliance with applicable law.

According to the letter, the FDA fears that tainted products may impact consumer safety in addition to undermining public confidence in products that are legitimately marketed as dietary supplements. To this end, the Agency outlined several measures to step up enforcement. For instance, noting that these ingredients often go undeclared in labeling, the Agency announced its intention to increase testing of dietary supplements. In addition to the FDAs traditional approach when violations are discovered, such as the issuance of warning letters, seizures and voluntary recalls, the FDA has established a RSS feed on its website. This new measure will be utilized by the FDA to alert consumers more quickly about dietary supplements that the Agency deems tainted. The FDA has also created a means for the industry to report suspected violations either via email or by anonymously reporting this information on the Agencys website.

For more information on FDA enforcement measures or regulatory compliance, please contact us at contact@fidjlaw.com.

Embryonic Stem Cell Research Largely Funded by States

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Researchers from the Georgia Institute of Technology have published a study shedding some light on the source of funding for embryonic stem cell research. According to the study, most of the research using human embryonic stem cells has been funded by states, rather than the federal government, even though federal spending for stem cell research is higher overall.

While the findings suggest that the federal government is focusing its funds on different types of stem cell research, the current state of the law does not preclude federal funding of embryonic stem cell research. Aaron Levine, an Assistant Professor at Georgia Tech and author of the study, suggested that the disparity in the funding may be due in part to state-adopted programs that incentivize scientific study using human embryonic stem cells.

According to the study, it is likely that these state-initiated incentives were developed to promote research during the Bush Administration, when federal funding for much of this research was eliminated. Although many of these state-led programs may have developed to fill the void by providing a means of funding research that was ineligible for federal funds, Levine found that most of the research being performed during the Bush era was actually eligible for federal assistance. However, it remains unclear whether this disparity reflects the different priorities of the federal government or lack of information regarding the eligibility of federal funds for this type of research.

For more information about the regulatory framework surrounding stem cells or any other stem cell-related issues you may be facing contact us at contact@fidjlaw.com.

Dannon Agrees to Settle Advertising Dispute with the FTC

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The Federal Trade Commission (FTC) has announced that Dannon, the makers of Activia and DanActive, has agreed to stop making certain claims about its products. In addition to its settlement with the FTC, Dannon has agreed to pay $21 million to resolve state-led investigations pertaining to its advertising.

Dannons troubles with the FTC began in October, when the Agency filed a complaint against the company. The Complaint specifically alleged that Dannon violated the FTC Act by making certain unsubstantiated claims about its probiotic products. The substance of these claims was that: (1) “drinking DanActive reduces the likelihood of getting a cold or the flu,” and (2) “eating one serving of Activia daily relieves temporary irregularity and helps with slow intestinal transit time.”

The Settlement prohibits Dannon from advertising that its probiotic products reduce the likelihood of cold or flu unless these health claims are first approved by the U.S. Food and Drug Administration (FDA). While the FTCs Announcement notes that “companies usually do not need FDA approval of their health claims in order to comply with the FTC Act,” the Agency insisted on this as a term of the settlement to ensure Dannons compliance with the agreement. In addition, Dannon may not advertise that its probiotic products relieve temporary irregularity or slow intestinal transit unless the company possesses two well-controlled human clinical studies that substantiate these claims.

While the terms of this settlement may be stringent, they are becoming more common as the FTC has targeted other makers of probiotic drinks this year. For instance, the FTC entered into a settlement with Nestle HealthCare Nutrition, Inc., the makers of BOOST Kid Essentials, in May of this year. Although the claims that Nestle made about its product differed from those made by Dannon, namely that BOOST reduced the duration of acute diarrhea in children, the terms of the companys settlement with the FTC were essentially the same. Found here, the Agreement prohibits Nestle from making these types of claims about its products unless otherwise approved by the FDA and backed by two well-controlled human clinical studies.

In addition to targeting advertisements of probiotic drinks, the FTC has launched an attack against claims touting the efficacy of pomegranate in its battle with POM Wonderful. In September, the FTC filed a complaint against the pomegranate juice maker for allegedly making several false and unsubstantiated claims in advertising. Found here, the Complaint sets forth various claims that offended the FTC, including that the pomegranate juice was effective in decreasing blood pressure and the risk of heart disease. Additionally, the Complaint contains a proposed order that contains essentially the same terms as the Dannon and Nestle Agreements. However, POM Wonderful has yet to reach a settlement with the Agency, and as POM has brought its own suit against the FTC, in a matter previously reported in our blog, it is likely that this embroiled battle will continue well into the New Year.

For more information regarding the FTC regulations and substantiation requirements for advertising, please contact us at contact@fidjlaw.com.

Key Elements of the Food Safety Modernization Act of 2010

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The Food Safety Modernization Act (the Act) contains various sweeping provisions that will expand the FDAs power to regulate food facilities. With provisions for a more stringent registration process, the Act provides for increased oversight by the FDA. In addition to the registration process, another feature added by the Act requires food facilities to formulate and implement various procedures to combat risks that may otherwise lead to contamination. The Act also provides for the regulation of produce safety, which calls for the FDA to engage in rulemaking to establish standards for the production and harvesting of fruits and vegetables. Finally, and most troubling to some, is the power the Act gives to the FDA to issue mandatory recalls. Although many of the provisions in the Act contain exemptions, they are very restricted and only the smallest of businesses and farms may apply.

A. Changes to the Registration Process

Several changes are made to the food facility registration process by the Act. First, the Act contains a provision that requires all registrants to renew their registration every two years, regardless of whether any problems have occurred in connection with their facility. Second, greater detail is provided which will aid in determining whether the primary function of an establishment is retail-based, as opposed to being a food facility. Third, the Act contains provisions for suspension of registrations by the Agency, which can be implemented immediately by the issuance of an order.

1. Biennial Registration of Food Facilities

The Act provides for the mandatory renewal of registration with the FDA every two years for registered food facilities. However, there will be an abbreviated renewal process where a registrant “. . . has not had any changes to such information since the registrant submitted the preceding registration or registration renewal for the facility involved.” While the Act does not contain the substance of this abbreviated process, the Secretary is authorized to formulate this process under the Act.

Mandatory biennial registration renewal alters the current framework, as the FD&C Act does not mandate renewal once the registration process is complete. Additionally, it must be noted that this requirement is not restricted to those who have gotten into trouble with the Agency. Rather, this provision applies to all registrants under the Act.

2. Changed Definition of “Retail Food Establishment”

The Act clarifies definition of “retail food establishment”, to guide the Agency in determining whether an establishments primary function may be properly called a “food facility.” Under the FD&C Act, retail food establishments are not considered “facilities” for the purposes of registration.

While the Act does not change this exemption, it explicitly lists three types of sales that would be considered activities undertaken by retail food establishments. First, when considering the primary function of an establishment, the direct sale of food to consumers at roadside stands or farmers markets is considered an activity of a retail food establishment. Second, the sale and distribution of food through a community supported agricultural program is considered an activity of a retail food establishment. Finally, the Act provides a catch-all exemption to any other direct platform for sale and distribution of food that the Secretary deems proper.

3. Suspension of Registration

The Act authorizes the Agency to suspend the registration of a food facility if the food manufactured, processed, packed, or held by the facility has a “reasonable probability” of causing serious adverse health consequences or death to humans or animals. If registration is suspended, no one may import or export food to or from the United States from such facility, or otherwise introduce food into commerce.

Under this provision, the Agency can suspend the registration of a facility by order, in certain enumerated circumstances. First, registration may be suspended it is determined that the facility “created, caused, or was otherwise responsible. . .” for the reasonable probability of serious adverse health consequences. Second, a facility may have its registration suspended where the facility: 1. either “knew of, or had reason to know of, such reasonable probability, and” 2. “packed, received or held such food.”

Once an order for the suspension of registration has been issued, the Act further provides the registrant an opportunity for an informal hearing. However, this hearing may not be held more than 2 business days after the issuance of the order, unless otherwise agreed by both parties. The substance of the hearing is to concern “. . . the actions required for reinstatement of registration and why the registration that is subject to suspension should be reinstated.” “The Secretary shall reinstate a registration if the Secretary determines, based on evidence presented, that adequate grounds do not exist to continue the suspension of the registration.” Additionally, it must be noted that the Act prohibits the delegation of authority to suspend or vacate an order of suspension to anyone other than the Commissioner.

B. Hazard Analyses and Risk-Based Preventive Controls

The Act requires owners, operators, or agents in charge of facilities to formulate and implement various procedures to deal with problems that may arise during the course of business. These procedures include things like: developing a written hazards analysis, implementing preventive controls and a means of monitoring these preventive measures, a planned course of corrective action to take if the preventive measures are faulty, etc. Further, the Act provides that the person “. . . in charge of a facility shall prepare a written plan that documents and describes the procedures used by the facility to comply with [these requirements].”

These provisions apply to facilities where food is manufactured, processed, packed, or held. However, there are provisions under the Act to allow flexibility for small businesses. “A qualified facility . . . shall not be subject to the requirements under subsections (a) through (i) and subsection (n) in an applicable calendar year.” If qualified under this provision, these facilities do not need to comply with a number of requirements, but must still file documentation to show that the facility has identified hazards and is in compliance with other (non-federal) law.

To be considered a “qualified facility” under the Act, there are two separate routes that a facility may take. The first means of qualification is to be deemed a “very small business,” which Congress has mandated the Secretary define no later than 18 months after the enactment of the Act. Second, a facility may qualify if it has only a limited monetary value of sales, which requires two conditions be met. First, during the three-year period preceding the applicable calendar year, the average annual monetary value of the food sold directly to qualified end-users must be greater than the value sold to all other purchasers during the period. Second, the annual average monetary value of food sold during the period must be less than $500,000 (adjusted for inflation).

C. Standards for Produce Safety

The Act contains provisions requiring the FDA to promulgate standards to ensure the safe production and harvest of fruits and vegetables. As required in the Act, within one year from the date of enactment, the Secretary “. . . shall publish a notice of proposed rulemaking to establish science-based minimum standards for the safe production and harvesting of those types of fruits and vegetables, including specific mixes or categories of fruits and vegetables, that are raw agricultural commodities [which are determined by the Secretary to minimize health risks].”

This Section also provides the FDA with the express authority to exempt small businesses and very small businesses from the promulgated standards where these businesses produce and harvest fruits and vegetables that the FDA determines to be low risk. The FDA may also modify the rules applicable to these businesses under this Section. The Act also expressly exempts produce produced by individuals for their personal consumption from the requirements of this Section.

Additionally, the Act contains an exemption for direct farm marketing if two conditions are met. First, “the average annual monetary value of food sold by such farm directly to qualified end-users. . .” must exceed the average annual value of the food sold to all other buyers during the period. Under the Act, “qualified end users” are either consumers (not businesses) or restaurants or retail food establishments. However, in order for a restaurant or retail food establishment to be considered a qualified end user, the establishment must be located within the same state as the farm that produced the food or within 275 miles from the farm. Second, the average annual monetary value of all food sold must be less than $500,000 (adjusted for inflation).

D. Mandatory Recall Authority

The Act provides the FDA with the authority to issue a mandatory recall authority where the FDA determines there is a reasonable probability that a food is adulterated or misbranded and exposure to the article will cause serious adverse health consequences to humans or animals and the parties do not voluntarily cease distribution of the food. Before issuing a mandatory recall, “the Secretary shall provide the responsible party with an opportunity to cease distribution and recall such article.” However, if the responsible party does not voluntarily comply, the Agency may, by order, require the party to immediately cease distribution of the article and may notify all persons involved in the manufacturing, distribution, importing, packing, etc., and require these persons to cease distribution of the article. 

Conclusion

In sum, the Food Safety Modernization Act sets forth a number of important changes to the current framework. Because of these changes, it may be seen as a sweeping piece of legislation that increases the FDAs authority in a number of areas. While some of the Acts provisions are aimed at providing greater detail to the current framework, several sections break new ground and delve into new areas that the FDA had yet to regulate.

Three Pharmaceutical Manufacturers Agree To Pay $421.2 Million In False Claims Act Settlement

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On December 7, 2010, the United States Department of Justice announced that it had reached a $421.2 million settlement agreement with three pharmaceutical manufacturers for alleged violations of the False Claims Act. The violations stem from allegations that the drug manufacturers published false and inflated prices of numerous medicines to defraud Medicare and Medicaid. A copy of the Department of Justice press release can be read here.

Authorities allege that the manufacturers, Abbott Laboratories, Inc., Roxane Laboratories, Inc., and B. Braun Medical, Inc., falsely published inflated average wholesale prices of numerous pharmaceuticals in an effort to market, promote, and sell the drugs to existing and potential customers. According to the Department of Justice, the scheme involved an agreement between healthcare providers and the manufacturers to falsely adjust the “spread” on the price of pharmaceuticals in order to create larger profits for the healthcare providers. The “spread” is the difference between the inflated published price, which the government reimburses at, and the actual price paid by the healthcare provider for drugs. The larger the “spread” the more profit the healthcare provider makes in reimbursements from the federal government.

Authorities alleged that providers would purchase pharmaceuticals from the companies at prices lower than the reported average wholesale price. Medicare and Medicaid would then reimburse healthcare providers at those higher prices and the providers would pocket the difference. The scheme was designed to allow the healthcare providers to make more profits and for the drug manufacturers to retain the providers as customers for the future. As a result of the scheme, federal healthcare programs paid millions more too healthcare providers than they would have had the manufacturers been truthful.

Under the settlement agreements, though each company denied wrongdoing, Roxane will pay $280 million, Abbott will pay $126.5 million, and B. Braun Medical will pay $14.7 million in civil fines. The settlements resolve allegations brought by a whistleblower under the qui tam provisions of the False Claims Act.

The False Claims Act allows for private persons to file suits to provide the government information about wrongdoing. Under the statute, if it is established that a person has knowingly submitted or caused others to submit false or fraudulent claims to the United States, the government can recover treble damages and $5,500 to $11,000 for each violation of the statute. If the government is successful in resolving or litigating its claims, the whistle blower who initiated the action can receive a share of between 15 percent to 25 percent of the amount recovered. In this case, the False Claims Act suits were brought by Ven-A-Care, a Florida home infusion company. As a result of its whistle blowing efforts, Ven-A-Care will receive approximately $88.4 million.

If you have any questions regarding qui tam actions, or for information about Fuerst Ittlemans experience litigating white collar criminal cases, please contact us at contact@fidjlaw.com.

FDA Publishes Agenda for Upcoming Guidance Documents

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The FDA has recently issued its annual guidance document agenda. The Annual Guidance Agenda details the topics that the Agency intends to focus on in the upcoming year. While the agenda includes a wide-range of topics, like “Use of Dietary Guidance Statements” and “Promotion of Prescription Drug Products Using Social Media Tools”, the Agency is not bound by this list of topics. The agenda does not constitute a comprehensive list of topics that the Agency intends to focus on in the near future, but it does give some indication of the FDAs plans for the coming year. As always, we will keep our eye on the FDA and update this blog as often as possible.

For more information on FDA guidance documents, please contact us at contact@fidjlaw.com.

McNeil Brings Failure-to-Warn Preemption Issue to Supreme Court

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McNeil, the manufacturer of Tylenol Cold, has asked the U.S. Supreme Court to decide whether federal law, which imposes certain requirements for labeling on makers of over-the-counter (OTC) drugs, preempts state law thereby precluding product liability actions for failure-to-warn. The case originated in 1999, when sixteen year old Armando Valdes suffered a heat stroke during a roller hockey game after ingesting McNeils product, along with a caffeinated beverage, earlier that morning. Having suffered permanent disability in connection with this incident, the Valdes family brought suit against McNeil under a state law failure-to-warn theory.
The suit alleged that McNeil was negligent and/or strictly liable for failing to warn of the increased risks involved with taking the product when ingested with caffeinated drinks and coupled with strenuous physical activity. While the Miami-Dade County Circuit Court granted summary judgment in favor of McNeil, finding federal law impliedly preempted state law products liability actions in this context, the Third District Court of Appeal reversed this ruling. Found here, the Third District found that the Federal Food, Drug, and Cosmetic Act (the FDCA) neither expressly nor impliedly preempted state law and that the Supreme Courts recent decision in Wyeth v. Levine was controlling.

In Wyeth, the Court found that the FDCAs provisions for prescription drugs did not preempt state law failure-to-warn claims because Congress did not expressly preempt such claims in the revisions to the Act. The Supreme Court reasoned that because Congress expressly provided for such preemption in the case of medical devices, any failure to include the same for other types of products was not due to oversight. This is the reasoning that the Third District used in reaching its decision concerning preemption and OTC drugs.

In its recent petition for certiorari filed with the Supreme Court, the drug manufacturer argues that the Third District Court of Appeal erred in failing to consider that the product in Wyeth was a prescription drug. Rather, McNeil argues that Wyeth is distinguishable because McNeils product, Tylenol Cold, is an OTC drug and thus subject to different provisions under the FDCA. As McNeil argues, the granting of its petition would enable the Supreme Court “to resolve the overbroad and conflicting application of Wyeth” and decide whether Congress, by adopting less stringent processes for OTC drugs when compared to prescription drugs, intended to preempt state law failure-to-warn claims.

For more information on FDA regulation and labeling guidelines, please contact us at contact@fidjlaw.com.

FDA Clearance of New Embryonic Stem Cell Clinical Trials and Upcoming Arguments in Federal Court of Appeals

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Earlier this week, the U.S. Food and Drug Administration (FDA) cleared a human clinical trial using embryonic stem cells. This clinical trial will examine the effects of the stem cells on a rare disease causing serious vision loss, Stargardts Macular Dystrophy. The approval of the trial marked only the second time human trials involving embryonic stem cells have been cleared by the U.S. government.

The California biotech company, Advanced Cell Technology (ACT), expects to begin the research in early 2011. The ACT announcement follows just months after the approval by the FDA of Geron Corp.s clinical trials of a treatment for spinal cord injuries through the injection of cells derived from embryonic stem cells. Our original report on the August approval of the Geron Corp. trials can be found here.

The timing of the FDA clearance of these clinical trials coincides with the ongoing law suit in the U.S. Court of Appeals for the D.C. Circuit regarding federal funding of human embryonic stem cell research. In that case, Sherley v. Sebelius, former MIT professor James L. Sherley is suing the National Institutes of Health alleging that embryonic stem cell research violates federal law. The federal district court had issued a preliminary injunction in the case blocking federally-funded human embryonic stem cell research, but the appeals court temporarily blocked that injunction pending the outcome in the case. Oral arguments are to take place in that case next month.

With the FDA clearance of these embryonic stem cell trials, the Department of Justices fight against government funding of human embryonic stem cell research, and the on-going controversy surrounding stem cell research and lack of clear government regulation or policy on the industry, it seems like the embryonic stem cell debate could be reaching a boiling point.

This week, John Gearhart, head of the University of Pennsylvania’s Institute for Regenerative Medicine and one of the first two scientists to isolate human embryonic stem cells, told the Philadelphia Inquirer that a clear policy on the subject is required. “We need a comprehensive national policy on all human embryo research with appropriate, unequivocal laws,” he said last week. “Congress has no stomach to take this up.” Click here to read the Philadelphia Inquirer article.

Fuerst Ittleman is watching these developments with a keen eye. As a firm with a practice area dedicated to the legal issues surrounding human cellular tissue-based products (HCT/Ps), and as frequent contributors to the debate on the use of adult stem cells, we are anxious to see how the legal issues surrounding the use of embryonic stem cells play out.

For more information on Fuerst Ittlemans experience handling the FDA regulatory framework regarding stem cells, drugs, and biologics, please contact us at contact@fidjlaw.com.