Physicians’ Ties With Pharmaceutical Companies: Down, but not out

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Medical doctors relationships with pharmaceutical industry representatives are insidious. Industry representatives seek to induce physicians to prescribe certain drugs through the use of free samples, sponsored lunch programs, educational symposiums, gifts, reimbursements, payments, and sales calls whereby representatives are armed with detailed prescribing data. Although this interaction remains highly pervasive, a number of attempts have been made to control the situation and offset the rising prescription drugs costs in the United States. First, Individual states have tried to legislatively bar the sales of prescribing data mined from pharmacy records to drug companies. Second, institutions such as hospitals and doctors offices have created policies targeted at lessening the interaction between physicians and pharmaceutical companies. And most recently, Senator Grassley helped push Congress to pass the “Physician Payments Sunshine Act” as part of the health care reform package, requiring drug companies to report and record physician payments to a searchable database. PhRMA, the industry lobby association, has responded to the pressure, revising its marketing code for drug companies to no longer distribute non-educational items (readno more drug pens and pads)!

To assess the impact of this sea of change, researchers at Massachusetts General Hospital, The University of Massachusetts at Boston, and Harvard Medical School conducted a study comparing the physician-industry relationship to a similar study conducted five years earlier. The findings, published in the November 8, 2010 Archives of Internal Medicine, reveal that physicians still have considerable interaction with industry representatives, although to a lesser extent than five years earlier. Of almost 3,000 physicians surveyed in 2009, 83.8% reported some interaction with industry representatives, compared to 94% five years earlier. 14.1% received industry payments in 2009 (compared with 28% five years earlier) and 70.8% received gifts (down from 83% five years earlier). All these findings represent a statistically significant and important decline. In short, pharmaceutical representatives still employ an armamentarium targeted at physicians, although most recently, policy holders are gaining a foothold in the battle. The impact of this change on drug costs and patient safety are uncertain, although, by most accounts, it is a positive influence on an important and timely medical, legal, and social issue.

Recent Action Against Caffeinated Alcoholic Beverage Manufacturers Highlights The Dual Jurisdiction Of FDA and TTB In Federal Labeling Issues

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On November 17, 2010, the FDA issued warning letters to four companies that manufacture caffeinated alcoholic beverages. The FDA declared that the caffeine added to the companies malt alcoholic beverages is an “unsafe food additive” and therefore their products are considered adulterated under section 402(a)(2) of the Food, Drug, and Cosmetic Act (“FDCA”), 21 U.S.C. § 342(a)(2). A copy of the FDA press release can be read at: FDA press release on caffeinated alcoholic beverages.

As a result of this determination, the Alcohol and Tobacco Tax and Trade Bureau (“TTB”) of the U.S. Department of the Treasury, formerly known as the ATF, announced on November 18th that the caffeinated alcoholic beverages were also mislabeled under the Federal Alcohol Administration Act (“FAAA”). These recent actions highlight the interrelated roles and dual jurisdiction of the FDA and TTB in the regulation of alcoholic beverages.

TTB is tasked with enforcing the labeling provisions of the Federal Alcohol Administration Act found at 21 U.S.C. § 205(e). However, while TTB regulates the labeling of alcoholic beverages, it is the FDAs responsibility to evaluate the safety of ingredients added to alcoholic beverages, pursuant to the FDAs authority under the FDCA. Therefore, while a manufacturer may receive a certificate of label approval (“COLA”) from the TTB for its alcoholic beverage, a COLA does not constitute a determination that the product complies with the FDCA, including a determination of whether the product is adulterated because it contains an unapproved food additive.

The dual relationship between the FDA and TTB in regards to alcoholic beverages stems from a 1987 Memorandum of Understanding entered into by both agencies that is still in effect today. Under the Memorandum of Understanding, TTB is the agency with regulatory control over alcoholic beverages but FDA has authority regarding determinations of the safety of food additives used in making alcoholic beverages. The FDA also has the power to determine whether an alcoholic beverage is adulterated. A copy of the Memorandum of Understanding is available on TTBs website at: TTB-FDA Memorandum of Understanding.

In a special edition newsletter posted November 18, 2010, TTB described the inter-agency relationship in regards to alcoholic beverages as follows:

This topic highlights the fact that FDA does have jurisdiction over certain aspects of alcohol beverages. TTB enforces the provisions of the Federal Alcohol Administration Act. Under this authority, TTB regulates the labeling and advertising of alcohol beverages to ensure that labels and advertisements provide consumers with adequate information about the identity of the product and to prevent consumer deception. TTB also enforces provisions of the Internal Revenue Code of 1986 related to the production and taxation of distilled spirits, wines, and beer. Under these authorities, TTB reviews formulations for various alcohol beverages and nonbeverage products that contain alcohol. FDA enforces the provisions of the Federal Food, Drug, and Cosmetic Act (FFDCA). The definition of “food” under the FFDCA includes “articles used for food or drink” and thus also includes alcohol beverages. Under this law FDA is responsible for determining the safety of food products and additives used in the production of alcohol beverages and nonbeverage products that contain alcohol including authority over adulterated alcohol beverages.

The TTB newsletter can be read in full at: TTB November 18 Newsletter.

For more information on labeling issues under the FDCA or the FAAA, please contact us at contact@fidjlaw.com.

FDA Releases Detained Shipment After Company Brings Suit

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November 18, 2010

Last week, Amphastar filed a Notice of Withdrawal, voluntarily dropping its Motion for a Preliminary Injunction in the Companys suit against the FDA. The Motion, which was filed just eight days earlier, concerned the detention of two shipments from Amphastars foreign-manufacturer. The two shipments detained by the FDA contained semi-purified heparin, an intended starting material, for which the Company needs to complete the FDAs qualification process. To secure approval from the FDA, the Company must get the raw material and its source approved before they are able to move forward. Because Amphastar needed these materials released in order to ultimately gain FDA approval, the Company sought injunctive relief to secure the release of the shipments.

The Motion raised serious issues as to the appropriateness of the detention. According to the Motion, while the first shipment was initially released by an FDA Customs Officer after samples had shown no contamination, the FDA rescinded the release. Citing a “mistake,” the Agency reopened its investigation and again detained the shipment. The FDAs basis for detaining the heparin was two-fold. First, the FDA notified Amphastar that the heparin was misbranded because the packaging lacked “adequate directions for use.” Second, the FDA informed the Company that the foreign-manufacturer of the heparin was not registered with the Agency
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While Amphastar refuted these allegations in the Motion, the FDA soon responded by releasing the detained materials. Because Amphastar obtained the relief they were ultimately seeking, the Company voluntarily withdrew their motion. Interestingly, this is not the first time the FDA has released shipments after legal action has been taken against them. Rather, it is becoming more common to see the Agency release shipments after the legality of their detentions are challenged in court.

Last year, as lead counsel for Seagate, we successfully obtained the release of detained shipments by bringing suit and challenging the legality of the FDAs actions. Under circumstances similar to Amphastars situation, the FDA detained a series of shipments being imported into the country without alleging that the specific products were contaminated. After several unsuccessful communications with the FDA, the company attempting to import the products decided to pursue legal action. As Seagates lead counsel, we brought suit against the FDA, challenging the legality of the detention and seeking injunctive relief. Just weeks after the suit was filed, the Agency “voluntarily” released the detained shipments and removed the Import Alert that it placed on these products. For more details about this suit, the Complaint can be found here.

This pattern of detention and release upon being challenged in court is not new. As far back as 2007, while serving as lead counsel for Allied, we were able to secure the release of detained entries by bringing action against the FDA. Allied sought our help after several of its shrimp entries were detained upon arrival and the FDA refused to release the shipments. Despite receiving test results showing the shipments were not contaminated and were compliant with FDA standards, the Agency would not budge until formal action was brought to challenge their practices. However, after we brought suit to challenge the detention, the FDA quickly released the shipments. The Complaint can be accessed here. Because a trend has developed with the FDA releasing detained products as a response to being challenged in court, it appears that the Agency is more willing to cooperate with companies after formal action is taken against them.

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

Pharmaceutical Company Lawyer Indicted For Obstructing FDA Investigation Into Promotions of Unapproved Uses of Prescription Drug

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An in-house counsel for a large pharmaceutical company was indicted for obstruction of justice and making false statements in relation to an FDA investigation into promotions of “off-label” uses of the companys prescription drugs. According to the indictment, the in-house counsel sent a series of letters to the FDA in response to FDA inquiries that falsely denied that the company had promoted the drug for “off-label” uses, even though the attorney knew that the company had sponsored numerous such promotions. The lawyer also knew that the company had paid physicians to give promotional talks that included information about unapproved uses of the drug. One physician had been paid to speak at more than 500 promotional events and another at 488 such events.

The indictment also alleges that the lawyer did not provide the FDA with certain slides used by the physicians in their presentations even though the FDA specifically requested them. With knowledge that the slide sets contained incriminating evidence, the lawyer wrote the FDA, and instead of producing the slide sets, informed FDA that the responses made to FDA were “final” and “complete”. According to the U.S. Attorney for the District of Massachusetts, “there is a difference between legal advocacy based on the facts and distorting the facts to cover up the truth. Federal agencies such as the FDA cannot protect the public health if the entities and individuals they regulate provide false information and conceal the true facts”.

Each of the obstruction of justice charges carry a maximum penalty of 20 years imprisonment upon conviction. Each of the false statement charges carry a maximum penalty of 5 years imprisonment. The pharmaceutical company for whom the lawyer worked was not charged with a crime and was not identified in the indictment.

Whistleblower Lawsuit Results in $750 million Settlement for GlaxoSmithKline

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Facing criminal and civil charges relating to the manufacturing and distribution of certain adulterated drugs made at its Cidra Manufacturing Plant in Puerto Rico, GlaxoSmithKline (GSK) has pleaded guilty and agreed to pay the United States $600 million in settlement of criminal charges and $150 million for civil violations.

The Cidra Manufacturing Plant had been cited by the FDA for manufacturing violations as early as 2002. GSK had instructed Cheryl Eckard and a team of scientists to fix these manufacturing violations. According to Eckards lawyers, she and her team found additional problems than those already cited by the FDA, including mixed-up products, contaminated water systems, and air-handling systems that misdirected the flow of product powder. She recommended GSK shut down the plant, advice which GSK ignored. Her lawyers indicate that she was fired in 2003 after she had, on numerous occasions, requested GSK to address the problems at the Cidra Manufacturing Plant.

Eckard then instituted a qui tam lawsuit in federal court in the District of Massachusetts under the False Claims Act in 2004. The qui tam, or whistleblower, lawsuit permits private citizens to bring suits on behalf of the United States and share in any recovery. In a press release dated October 26, 2010, the Justice Department discussed the effectiveness of the False Claims Act in cases involving fraud against federal health care programs, indicating total recoveries since January 2009 of $5.4 billion. The whistleblower in this case, Cheryl Eckard, will receive approximately $96 million as her share of the settlement amount.

Among the drugs manufactured at the closed Cidra facility were Kytril, a sterile anti-nausea medicine, and Bactroban, a topical anti-infection ointment. The criminal information alleges that GSK failed to ensure that these products were free of contamination from microorganisms. Additionally, it is alleged that manufacturing deficiencies resulted in Paxil CR, a two-layer tablet which is the controlled-release formulation of the popular anti-depressant drug, Paxil, to split apart. Also, Avandemet, a combination Type II Diabetes drug, allegedly was not always composed of the FDA approved mix of active ingredients, and potentially contained too much or too little of the ingredient with the therapeutic effect. The Cidra facility also allegedly suffered numerous product mix-ups.

Commenting on the settlement, Mark Dragonetti, Special Agent in Charge of the FDA New York Field Office, stated:

FDA expects pharmaceutical companies to abide by these manufacturing standards and correct deficiencies in an expedited manner. FDA and its law enforcement partners will continue to aggressively pursue those companies that place the public health at risk by distributing products that do not comply with all FDA requirements.

U.S. Attorney Carmen Ortiz expressed his views that the industry must comply with all of the rules and regulations or face these severe consequences. “To do less erodes public confidence and compromises patient safety.”

If you have any questions regarding qui tam actions, FDA manufacturer requirements or any other FDA regulations, please contact Fuerst Ittleman, PL at contact@fidjlaw.com.

FDA Releases Guidance for Cellular Therapy Sponsors

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The U.S. Food and Drug Administration (FDA) have recently published its guidance document, entitled “Guidance for the Industry: Cellular Therapy for Cardiac Disease.” Found here, this document finalizes and incorporates various comments from last years draft guidance entitled “Guidance for Industry: Somatic Cell Therapy for Cardiac Disease.”  The newly-released guidance is intended for sponsors who are in the process of developing cellular therapies for cardiac disease. 

This Guidance provides various recommendations regarding the design of pre-clinical and clinical studies.  In addition, the document suggests what information the FDA will consider when an Investigational New Drug (IND) application is submitted.  Although the suggestions in this document are non-binding, compliance with these procedures may facilitate the path to FDA approval.

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

Mitchell Fuerst Featured Speaker at Upcoming Stem Cell and Age Management Medicine Conference and Meeting

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Fuerst Ittlemans Managing Partner, Mitchell S. Fuerst, Esq., is a featured speaker and participant at a series of upcoming meetings and conferences focused on stem cell medicine and age management medicine.

Fuerst will be speaking on the "Practice of Medicine “ Physicians, Stem Cells and the Current Regulatory Environment" at the annual conference of the Age Management Medicine Group (AMMG) in Las Vegas, NV, on November 11, 2010.  The conference, entitled "Clinical Applications for Age Management Medicine," brings together leading healthcare professionals, physicians, researchers and others to provide education and information on the preservation of optimum human function and quality of life making every effort to modulate the process of aging prior to the onset of degenerative aging.

In addition to traditional medicine, alternative medicine therapies, and general health and nutritional régimes, age management medicine focuses on regenerative and stem cell therapies.  The leading professional, non-profit organization devoted to researching, promoting and safeguarding stem cell therapies and its related research, the International Cellular Medicine Society (ICMS), will be holding its annual membership meeting and congress concurrent with the AMMG conference.

The 2nd Annual International Congress on Regenerative and Cell Based Medicine, sponsored by ICMS and Fuerst Ittleman, will bring together medical practitioners from dozens of countries to discuss the latest developments in cell-based medical therapies and will feature presentations on the therapeutic use of platelet rich plasma, adipose tissue, bone marrow, and peripheral blood.  As one of the foremost authorities on the governmental regulation of stem cell therapies and medical professionals who practice in the field, Mitchell Fuerst is featured at the Congress as a faculty member.

In addition to its Congress, ICMS will also be conducting its annual general membership meeting, at which Mr. Fuerst will serve as a panel member discussing "Severe Adverse Events and Cell Based Medicine."  The panel is expected to discuss FDA regulation over stem cell therapies and the various ways in which the FDA could attempt investigation and enforcement actions regarding the practice of that particular form of medicine.

For more information on Fuerst Ittlemans experience in the legal aspects of stem cell therapies, age management medicine, food and drug law in general, and FDA regulatory and enforcement actions, please visit our Food, Drug and Cosmetic Law practice page.

2,923 Small Biotechnology Companies to Receive $1 Billion in New Therapeutic Discovery Project Credits and Grants

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On November 3, the Secretary of the Treasury, the Secretary of Health and Human Services, and the National Institute of Health Director announced recipients of the $1 billion in new therapeutic discovery project credits and grants created by the Affordable Care Act. The 2,923 small companies receiving awards specialize in biotechnology and medical research and are located in 47 states and the District of Columbia.

The purpose of the program is to assist biotech companies in producing new, cost-effect technologies, create jobs, and increase the competitiveness of the United States in the global biotechnology industry, specifically in the filed of life, biological, and medical sciences. The program is meant to target projects showing significant potential to produce new therapies, address unmet medical needs, reduce long-term growth of health care costs, or advance the goal of curing cancer within the next 30 years. The biotechnology industry is growing rapidly and currently employs approximately 1.3 million workers.

The new therapeutic discovery project credit covers up to half of the cost of qualifying biomedical research. The credit is only available to firms with fewer than 250 employees.

For more information on tax and regulatory issues influencing the biotechnology industry, please contact us at contact@fidjlaw.com.

FDA Embarks on New “Swift and Aggressive” Enforcement Approach

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The FDA has recently published its Strategic Priorities document on its website. Found here, the draft document outlines the Agencys goals for the years 2011-2015. According to the document, a variety of new programs will be instituted by the FDA in order to “sharpen the effectiveness and timeliness of its regulatory, compliance, and enforcement systems.” Reinforcing its commitment to “swift, aggressive enforcement actions to protect public health,” the goals contained in this document mirror those found in the Agencys recent Enforcement Strategy document.

Found here, the Enforcement Strategy document may be seen as a marked shift to more vigorous enforcement efforts by the FDA. Howard Sklamberg, Director of the Office of Enforcement at the Agency, has confirmed that the FDA is looking to step up its enforcement efforts. Referencing this newly-published document and other newly-published information on the Agencys website, Sklamberg noted that the FDA will no longer be extending warning letters to those deemed “repeat offenders.” Sklamberg suggested that this new “swift and aggressive” strategy will further the overall goals of the Agency, noting that its enforcement measures are designed to deter noncompliance. To this end, the “FDA will use any and all available enforcement tools, as appropriate, based on the facts of the case and the nature and seriousness of the violation.”

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

FTC maintains momentum in dietary supplement regulation

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The FDA and FTC have recently issued another joint warning letter, this time to Telledent, LLC, a dietary supplement manufacturer in Miami, Florida. In the letter, FDA and FTC cite Telledent for unlawful promotion involving treatment for Herpes, Epilepsy, Diabetes, Gonorrhea, Syphilis and Chlamydia. While it is certainly not groundbreaking news when companies get cited by the FDA or FTC for health claims, typically in these situations, the FDA targets enforcement of the FDCA and the FTC targets violations of the FTC Act under separate cover.  What is interesting here is the joint enforcement by FDA and FTC and the cross-organizational targeting implicit in the letter.

Additionally, the FTC appears to be gaining momentum in the regulation of dietary supplements.  Just recently, the FTC appears to have developed a new standard for claims associated with dietary supplements requiring, “competent and reliable scientific evidence, including, when appropriate, well-controlled human clinical studies, substantiating that the claims are true at the time they are made.”  This is an important departure from the previous FTC benchmark imposed over the last twenty years.  Current litigation, as previously addressed in our blog, is targeting the FTCs authority to institute such a benchmark and the application of this new standard to practice.  

Also, the warning letter states that “Violations of the FTC Actmay require (the company) pay back money to consumers.” The FDA is unable to take such an enforcement approach as it is not within its jurisdiction to do so.  Accordingly, this warning letter represents an important enforcement tool for the government and may provide the FTC with even greater momentum in the regulation of dietary supplements and an important complement to the FDA. 

For information on FTC regulations and substantiation requirements, please contact us at contact@fidjlaw.com.