On October 24, 2013, Janet Woodcock, the U.S. Food and Drug Administration’s (“FDA”) Director for the Center for Drug Evaluation and Research (“CDER”),issued a statement explaining that the FDA will recommend that the U.S. Drug Enforcement Administration (“DEA”) reclassify hydrocodone combination products from Schedule III to Schedule II under the Controlled Substances Act (“CSA”). This statement comes ten years after the DEA first approached the U.S. Department of Health and Human Services (“HHS”) for a recommendation. The reclassification, however, will not go into effect unless the proposed change is approved and accepted by the DEA.

Regulatory Framework for Controlled Substances

Pursuant to the CSA, the DEA has regulatory authority over controlled substances, which are certain drugs that have potential for abuse and dependence. (For more information on the regulation of controlled substances, please read 21 U.S.C. § 801  et seq.  and the DEA’s Office of Diversion Control Controlled Substance Schedule, which can be accessed here.) Controlled substances are classified into five distinct categories, or schedules, depending on the drug’s acceptable medical use and potential for abuse or dependency.

Schedule I consists of the drugs with the highest potential for abuse and Schedule V represents the class of drugs with the lowest potential for abuse. Specifically, Schedule I drugs are defined as having “no currently accepted medical use,” lacking accepted safety for use under medical supervision, and carrying a high potential for abuse. Examples of Schedule I drugs are heroin, ecstasy, peyote, and marijuana. (To read our previous posts regarding the federal regulation of marijuana as a controlled substance, please click here, here, here and here.) Schedule II drugs are also considered dangerous but have a lower abuse potential than Schedule I drugs, with use potentially leading to severe psychological or physical abuse. Examples of current Schedule II drugs are methamphetamines and oxycodone. Schedule III drugs are defined as having a “moderate to low potential for physical and psychological dependence” and pose a higher abuse potential than Schedule IV drugs, which are defined as having a “low potential for abuse and low risk of dependence.” Carrying the lowest risk of drug abuse potential are Schedule V drugs, which usually consist of preparations containing limited quantities of certain narcotics, such as those used for antidiarrheal, antitussive, and analgesic purposes. (For more information about the scheduling of controlled substances, please visit the DEA’s website here.)

Proceedings to control, remove from control, or re-schedule a drug or substance may be initiated by the DEA, HHS, or by petition from any interested party, such as a drug manufacturer, medical society, public interest group, state agency, or individual. When a petition is received by the DEA, the agency begins its own investigation of the drug. Once the DEA has collected the necessary data, the DEA Administrator, by authority of the Attorney General, requests from HHS a thorough scientific and medical evaluation and recommendation “as to whether such drug or other substance should be so controlled or removed as a controlled substance.” See 21 U.S.C. § 811(b). Then, HHS solicits information from the FDA, the National Institute on Drug Abuse, and if it so chooses, the scientific and medical community. The scientific and medical matters contained in the recommendation “shall be binding on the Attorney General.” Id. Once the DEA has received the scientific and medical evaluation from HHS, the DEA will evaluate all available data and make a final decision. Section 811(c) of the Controlled Substances Act directs the DEA to consider the following factors:

1. Its actual or relative potential for abuse;
2. Scientific evidence of its pharmacologic effect, if known;
3. The state of current scientific knowledge regarding the drug or other substance;
4. Its history and current pattern of abuse;
5. The scope, duration and significance of abuse;
6. What, if any, risk there is to public health;
7. Its psychic or physiological dependence liability; and
8. Whether the substance is an immediate precursor of a substance already controlled under this subchapter.

Although the DEA works hand-in-hand with HHS with respect to controlled substances, the DEA has the ultimate decision-making authority to take

DEA Seeks Recommendation Regarding the Reclassification of Hydrocodone Combination Products

        FDA’s recent statement that it intends to formally recommend the reclassification of hydrocodone combination products comes after nearly ten years of debate. Back in 2004, the DEA asked the FDA to investigate and recommend whether to reclassify hydrocodone combination products from Schedule III to Schedule II. In response, the FDA concluded that hydrocodone combination products should remain a Schedule III drug because “hydrocodone combination products have a less potential for abuse than the drugs or other substances in Schedule II.” (For more information regarding the FDA’s scientific and medical investigation of hydrocodone, please click here.)

        As a result of continued pressure from the public and industry organizations, the DEA collected and re-analyzed new data regarding the abuse of hydrocodone combination products in 2008. The following year, DEA submitted another request to FDA to reconsider moving all hydrocodone combination products to Schedule II. On January 24 – 25, 2013, the FDA’s Drug Safety and Risk Management Advisory Committee convened to discuss the public health benefits and risks of drugs containing hydrocodone, as well as the potential for abuse or dependency. (For a comprehensive review of the FDA’s recommendation, please read the FDA Briefing Document, Drug Safety and Risk Management Advisory Committee (DSaRM) Meeting 1 here and here.) At the culmination of this meeting, the FDA Advisory Committee voted 19 to 10 in favor of rescheduling hydrocodone combination products from Schedule III to Schedule II. (To read FDA’s Memorandum summarizing the events of this meeting, please click here.) Nine months later, the FDA announced its intention to formally recommend reclassifying hydrocodone combination products to Schedule II.

In light of the Advisory Committee’s decision in January 2013, the FDA’s statement that it intends “to recommend to HHS that hydrocodone combination products should be reclassified to a different and more restrictive schedule” comes as no surprise. (To read the FDA’s statement, please click here. For additional news coverage, please click here, here, here, and here.) The FDA’s recommendation to reclassify hydrocodone combination products could have a significant impact on how physicians prescribe these products. For instance, Schedule II drugs require patients to present a written prescription to the pharmacy, as physicians cannot call in a prescription for Schedule II drugs. Most notably, if the DEA accepts the FDA’s recommendation, hydrocodone combination products will be subject to stricter security controls, including a restriction on the amount of medication that a patient can be prescribed. If reclassified as Schedule II drugs, a physician would only be permitted to prescribe refills of hydrocodone combination products for up to three months, which is half the amount allowed for Schedule III drugs.

The FDA has not submitted a final recommendation package to HHS, but expects to do so by early December 2013. If this recommendation is accepted by the DEA, new regulations could go into effect as early as 2014. (For more information, please read the New York Times’s coverage here.)

Fuerst Ittleman David & Joseph, PL will continue to monitor the developments in the classification of hydrocodone combination products. For more information, please feel free to contact us by email at contact@fidjlaw.com or by phone at (305) 350-5690.

As we previously reported here, here, and here, consumer litigation challenging “natural” and Genetically Modified Organisms (“GMOs”) advertising and labeling claims has steadily been on the rise. In recent months, a number of class action lawsuits against major food corporations have alleged that the companies misled consumers by labeling products containing GMOs as “natural.” These cases highlight the confusion regarding the definition of the term “natural,” and raise questions about whether courts, in reviewing allegations for mislabeling and deception, should defer to the FDA”s specialized knowledge or expertise.

Regulatory Background: FDA”s Description of “Natural”

For the purposes of food labeling, the term “natural” has not been formally defined by any FDA statute or regulation. The FDA has made reference to “natural” labeling but has not offered a concrete definition of when the term may be used to describe a food product. In a non-binding guidance document, the FDA  described the term to mean that “nothing artificial or synthetic (including all color additives regardless of source) has been included in, or has been added to, a food that would not normally be expected to be in the food.” When pushed by industry and consumers for information regarding whether or not bioengineered ingredients or GMOs fit within the description above, the FDA failed to offer any useful clarification. Instead, the FDA responded by stating that it “does not require special labeling of bioengineered foods” because it is “not aware of any data or other information that would form a basis for concluding that the fact that a food or its ingredients was produced using bioengineering is a material fact that must be disclosed on food labels.” (To read the full text of the FDA”s guidance document, please click here.)

Primary Jurisdiction

Several of the consumer class action cases pending before district courts allege that a food product”s label is false, misleading and deceptive where the product is labeled as “Natural” or “All Natural” or “100% Natural” but also contains ingredients that are GMO. In order to persuade the courts to dismiss or stay the proceedings pending a referral of the issue to the FDA, the defendant food companies have invoked the doctrine of primary jurisdiction. Generally, the primary jurisdiction doctrine permits courts to stay proceedings or to dismiss a complaint without prejudice pending the resolution of an issue within the special competence of an administrative agency. When deciding whether to invoke the primary jurisdiction doctrine, a court weighs several factors, including the need to resolve the issue, whether the issue has been delegated by Congress to an administrative body, and whether the issue requires expertise or uniformity in administration.

A recent string of decisions suggest that district courts disagree on the issue of whether courts should refer the task of defining what constitutes “natural” to the FDA. In Cox v. Gruma, the plaintiffs alleged that the labels on Gruma”s food products stating that the products are “all natural” were false and misleading because the products contain GMOs. Judge Rogers in the United States District Court for the Northern District of California issued an Order which stayed the proceedings for six months and referred to the FDA the question of whether and under what circumstances food products containing GMOs may or may not be labeled “Natural,” “All Natural,” or “100% Natural.” The Order stated that “deference to the FDA”s regulatory authority is the appropriate course” because doing otherwise would risk “usurp[ing] the FDA”s interpretive authority” and “undermining, through private litigation, the FDA”s considered judgments.” (For more coverage on the Cox v. Gruma case, please click here and here.)

One week later, Magistrate Judge Watanabe of the United States District Court for the District of Colorado issued an Order in a similar case, Van Atta v. General Mills. The Order recommended that the case be stayed pursuant to the primary jurisdiction doctrine “pending action by the FDA with respect to the referral made by Judge Rogers in Cox v. Gruma.” The Order explained that the “issues of fact in this matter are not within the conventional experience of judges” because the FDA has regulatory authority to oversee food labeling. (For more coverage on the Van Atta v. General Mills case, please click here.)

Next, in Parker v. JM Smucker Co., the plaintiffs alleged that the labeling of multiple Crisco products is false and misleading because the products are made with bioengineered corn and are highly processed. (To read additional coverage about Parking v. JM Smucker, please click here.) The presiding judge, Judge Conti, was not convinced that the court should defer to the FDA”s expertise and regulatory authority. In his Order, Judge Conti reasoned that the primary jurisdiction argument was unpersuasive because “various parties have repeatedly asked the FDA to rule on “natural” labeling, and the FDA has declined to do so because of its limited resources and preference to focus on other priorities.” Therefore, he concluded, “referring the matter to the FDA would do little more than protract matters.”

Six days later, a federal judge in New York presiding over a multi-district lawsuit against Frito-Lay North America, Inc. (“Frito-Lay”) reached the same conclusion as Judge Conti. (To read additional coverage regarding In re Frito Lay North America, Inc., please click here.) Interestingly, Judge Mauskopf”s Order frames the case as “far less about science than it is about whether a label is misleading.” In the Order, she explains that Frito-Lay”s reasons for invoking the primary jurisdiction doctrine were unpersuasive because “the reasonable-consumer inquiry upon which some of the claims in this case depends is one to which courts are eminently well suited, even well versed.” The Order acknowledged that the Cox and Gruma Courts recently agreed to stay cases involving similar labeling concerns, but ultimately concluded that the judiciary”s undertaking of this decision-making process “would not “risk usurping the FDA”s interpretive authority” or undermine its “considered judgments.”” Furthermore, Judge Mauskopf reasoned that her rejection of Frito-Lay”s arguments was proper, to the extent that “numerous district courts have declined to invoke primary jurisdiction in state-law consumer protection cases so that the FDA may pass on whether a food may properly be labeled “natural.””

In addition to the reasons for denying Frito-Lay”s primary jurisdiction argument, Judge Mauskopf was not persuaded that FDA”s defining of the term “natural” would resolve the issues presented in similar consumer protection cases. She explained that the “FDA is unlikely to respond in a timely manner to any referral from this Court,” and offered, as an example, the fact that the FDA took nine years to define the requirements for “gluten-free” labeling. For these reasons, she stated that “[t]here is no telling, if it even chose to respond with any directive to the Court”s referral, how the FDA would define the term, and whether its definition would shed any further light on whether a reasonable consumer is deceived by the “All Natural” food label when it contains bioengineered ingredients.”

The Uncertain Future of “Natural” Labeling

Even though industry and consumers continue to pressure the FDA to provide guidance regarding “natural” and GMO labeling, it remains unclear whether the FDA will actually accept the courts” invitations to clarify the term”s definition and use. However, given the FDA”s funding and staffing constraints, we doubt that FDA will offer any new, helpful information to help courts decide the issues in these consumer cases. As a result, it seems probable that consumers will continue to challenge the use of ill-defined terms, like “natural,” on food product labeling.

In light of the courts” inconsistent decisions regarding the application of the primary jurisdiction doctrine, it is difficult to speculate how these consumer lawsuits will unfold. If courts ultimately decide in favor of consumers, the issue of “natural” labeling could have a considerable impact on the future of the food industry”s marketing strategies and revenues. Therefore, in the absence of a uniform definition for the term or clear parameters regarding the term”s use, industry should be aware of the risks associated with the continued use of “natural” labeling and be prepared for the possibility of litigation.

Fuerst Ittleman David & Joseph, PL will continue to monitor any developments in the regulation of “natural” and GMO food product labeling. Our attorneys are knowledgeable and experienced in handling issues related to the regulation of foods. For additional information or any questions, please contact us by email at contact@fidjlaw.com or by telephone at (305) 350-5690.

On July 16, 2013, the Federal Trade Commission (“FTC”) announced that it entered into settlement agreements with Chemical Free Solutions LLC and Dave Glassel (collectively “Cedarcide Defendants”), the marketers of bed bug and head lice products. The parties agreed to these settlements after nearly a year of litigation regarding allegedly false and unsubstantiated claims about the ability of the product, BEST Yet!, to stop and prevent head lice and bed bug infestations. (To read more about the FTC’s 2012 complaint, please click here.) The settlements prohibit the use of allegedly deceptive claims and require pre-approval from the U.S. Food and Drug Administration (“FDA”) prior to making any treatment claims.

Settlement Orders

The settlement orders prohibit the Cedarcide Defendants from claiming that their BEST Yet! products by themselves are effective in stopping or preventing bed bug infestations, more effective than other products or services at stopping and preventing bed bug infestations, or any other representation about the product’s performance or efficacy without “competent and reliable scientific evidence” to support the claim. (To read the full text of the settlement orders, click here and here.) Furthermore, the Cedarcide Defendants are also barred from claiming that the product is effective in treating head lice infestations unless the claims are non-misleading and they obtain FDA’s approval of a new drug application or the product properly conforms to an existing over-the-counter (“OTC”) drug monograph. The settlement orders also prohibit the Cedarcide Defendants from marketing, promoting, or misrepresenting, either expressly or by implication, that the BEST Yet! product is endorsed or approved by a government entity or third-party organization. The agreed-upon settlement orders impose a $4.6 million judgment against Glassel, who is facing bankruptcy, and an $185,206 judgment against Chemical Free Solutions, LLC, which will be suspended due to the party’s inability to pay. By agreeing to the Stipulated Orders for Permanent Injunction and Monetary Judgment, the Cedarcide Defendants are legally obligated to abide by the terms contained therein, and the penalties associated with violating such orders can be severe.

FTC Commissioners’ Statements

At present, the FTC is headed by four Commissioners, who act as the final decision makers in FTC enforcement actions. These Commissioners review and vote on all cases prior to filing suit in federal court or taking any action in an administrative proceeding. After reviewing the case against the Cedarcide Defendants, the Commissioners voted 3-1 to approve the proposed settlements described above. The Commissioners released statements explaining their individual decisions on this matter. In their statements, the Commissioners primarily focused on the provisions in the Stipulated Order requiring FDA pre-approval, and for that reason alone the statements are worthy of further examination.

FTC Chairwoman Edith Ramirez and Commissioner Julie Brill entered a joint statement in support of requiring the Cedarcide Defendants to obtain FDA pre-approval prior to making any representations that the product can stop, prevent, or treat bed bug or head lice infestations. (To read the full text of the Ramirez and Brill joint statement, please click here.) The joint statement supports the FTC’s decision, “notwithstanding the Commission’s recent decision in POM Wonderful, LLC (“POM Wonderful”) in which [the FTC] declined to impose an FDA pre-approval requirement for the food products in question.” The joint statement clarifies that head lice infestation, or “pediculosis,” is a medical condition; therefore, any product that claims to treat it is subject to FDA regulations and the federal Food, Drug, and Cosmetics Act (“FDCA”). The joint statement goes on to explain that “requiring the defendants to have FDA pre-approval as substantiation for future claims is particularly appropriate as it harmonizes their obligations under the FDCA and the FTC Act.” Accordingly, Chairwoman Ramirez and Commissioner Brill’s joint statement asserts that the defendants “should not be permitted to skirt a well-established regulatory scheme for demonstrating the efficacy and safety of head lice treatments,” especially when the cost of complying with the FDA regulatory scheme is not prohibitive for companies seeking to market such treatments.

In a separate opinion, Commissioner Joshua D. Wright wrote that “[a]s a general matter, I believe that FDA pre-approval provisions should play a very limited role in FTC orders and that the conditions under which they are appropriate are fairly narrow.” Nevertheless, Commissioner Wright voted in support of the FTC’s decision to require FDA pre-approval in this settlement. (To read the full text of Commissioner Wright’s statement, please click here.)

Commissioner Maureen K. Ohlhausen issued a dissenting statement that raises thoughtful questions about the boundaries of inter-agency cooperation and each agency’s standards for substantiation. In her dissent, Commissioner Ohlhausen stated that she voted against the settlements in this case because:

the requirement that defendants obtain FDA preapproval prior to making head lice treatment claims is inconsistent with Commission precedent and that imposing such a high bar for these types of claims in general may ultimately prevent useful information from reaching consumers in the marketplace.

(To read the full text of Commissioner Ohlhausen’s statement, please click here.) These settlements, she argued, are a departure from the FTC’s two most recent decisions regarding deceptive health claims, wherein the FTC determined that requiring FDA pre-approval was unnecessary because the FTC’s standard of requiring competent and reliable scientific evidence was sufficient to substantiate that a representation is true.

In a footnote, Commissioner Ohlhausen pointedly explained why she believes requiring FDA pre-approval is at odds with FTC’s policies. An important distinction between the FDA and FTC’s substantiation policies is that the FDA views safety and efficacy as “fundamentally linked” for the purpose of drug approval, meaning that the FDA’s approval standards are “more stringent than FTC substantiation standards.” More specifically:

Under the FTC Act, it is not our mission to police drug safety or efficacy directly. Advertisers are liable to substantiate material claims that products are safe, just as they are liable to substantiate material claims that products are efficacious. But they are not liable to substantiate claims that they do not make or imply. If an advertiser makes an efficacy claim, but not a safety claim, there are two related reasons why FDA approval standards would be more stringent than FTC substantiation standards. First, FDA approval requires testing two properties (efficacy and safety). Second, FDA approval requires sufficient testing to consider each of these two properties in view of the other.

Commissioner Ohlhausen reasoned that requiring defendants to undergo FDA’s review process is unnecessary because the FTC has the capability to “impose directly by order the type of substantiation that experts in the field believe is reasonable.”

In her dissent, Commissioner Ohlhausen also expressed her concern that industry would interpret these settlements as the FTC adopting or aligning with the FDA’s substantiation standard, which would send “the wrong signal to parties trying to ascertain the level of substantiation required to make health-related claims.”  Such an interpretation could have a significant impact on regulated industry, as it could “potentially chill health-related claims and deprive consumers of useful information.” Furthermore, her statement emphasized that she dissented from the majority decision because the FTC’s responsibility is “limited to requiring adequate substantiation based on [the FTC’s] enabling statute and relevant precedent” and not to ensure that advertisers comply with their obligations under the FDCA.

What This Means

The FTC’s settlements with the Cedarcide Defendants highlight certain issues that can arise as a result of the relationship between the FTC and the FDA. Commissioner Ohlhausen’s dissent offers insight into how the FTC’s regulation of any advertising and promotion of FDA-regulated products can create a complex and oftentimes confusing regulatory framework for industry. Here, it is especially interesting that the FTC required FDA pre-approval for purported head lice and bed bug treatments, when it did not require such a high standard for purported treatments involving cancer or heart disease in its decision in POM Wonderful. (To read our coverage regarding the FTC’s decision in POM Wonderful, please click here, here, here, and here.) From the industry’s perspective, the FTC’s settlement agreements with the Cedarcide Defendants further blurs the line between the FTC and FDA’s substantiation standards. Without clearer guidance regarding the application and interpretation of the FTC and FDA’s separate substantiation standards, industry is forced to guess how its products will be regulated and which standards it must meet to be compliant with federal laws and regulations.

The attorneys at Fuerst Ittleman David & Joseph, PL have extensive experience working with regulated industry to ensure that products are marketed and advertised in compliance with all FTC and FDA laws and regulations. If you have any questions, please contact us by email at contact@fidjlaw.com or telephone at (305) 350-5690.