Forest Pharmaceuticals To Plead Guilty For Food, Drug, And Cosmetic Act Violations

On September 15, 2010, the Food and Drug Administration (“FDA”) announced that Forest Pharmaceuticals (“Forest”) has agreed to plead guilty to two violations of the Food, Drug, and Cosmetic Act (“FDCA”). Forest has agreed to plead guilty to one count of distributing an unapproved drug in interstate commerce and one count of distributing a misbranded drug in interstate commerce. Additionally, Forest has agreed to plead guilty to one count of obstruction of justice. Charges stem from Forests marketing of two drugs, Levothroid and Celexa.

In 1997, the FDA announced that Levothroid, though already on the market, would be considered a new drug within the meaning of the FDCA. At that time, the FDA advised drug manufacturers that in order to continue to market Levothroid they would have seek new drug approval by the FDA. However, Forest failed to obtain drug approval, continued to market unapproved Levothroid, and disregarded an FDA warning letter ordering Forest to stop production and distribution. As a result of these actions, Forest was charged with distribution of an unapproved drug in violation of the FDCA.

U.S. authorities also charged Forest with distributing a misbranded drug based on its off-label marketing of Celexa to treat depression in children though the drug was only approved for use in adults. Prosecutors allege that Forest paid doctors to prescribe Celexa and failed to inform prescribing doctors of negative studies regarding the effects of Celexa on adolescents. Forest was also charged with obstruction of justice because of false statements made by employees during the FDA investigation.

As part of the plea agreement, Forest has agreed to plead guilty to all three counts and pay $164 million in criminal penalties. Additionally, Forest has agreed to resolve a civil complaint against it by paying $149 million in civil fines and entering into a Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services.

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

FDA Cracks Down On Nutrition And Health Claims By Green Tea Makers

The Food and Drug Administration has issued warning letters to two large producers of green tea drinks to discontinue unauthorized and unproven health and nutrient claims on their labels and websites. The warning letters were issued to the Dr. Pepper Snapple Group for its Canada Dry Sparking Green Tea Ginger Ale (“Canada Dry”) and to Unilever Inc. for its Lipton Green Tea 100% Naturally Decaffeinated product (“Lipton”). The warning letters are part of a larger campaign by the FDA to improve the accuracy and useful information of food labeling.

In its warning letter to Canada Dry, the FDA stated that the company’s sparkling green tea ginger ale made improper claims to be “enhanced” with antioxidants. Canada Dry’s label claims its green tea ginger ale is “enhanced with 200mg of antioxidants from green tea and vitamin C.” However, because Canada Dry is a carbonated drink, the FDA classifies it as a snack food. Current FDA policy does not consider it appropriate to fortify snack foods. As a result, Canada Dry cannot claim that its product is enhanced with antioxidants. Additionally, the FDA also warned Canada Dry that the ingredients claiming to contain antioxidants “are not nutrients with recognized antioxidant activity” under FDA regulations. As a result of these violations the FDA has found Canada Dry to be misbranded under the Food Drug and Cosmetic Act (“FDCA”).The full warning letter to Canada Dry can be read at: FDA Warning Letter To Canada Dry.

Unilever, the manufacturer of Lipton, was warned that its website for its Lipton product made misleading health claims and that Lipton’s antioxidant labeling did not follow FDA guidelines. In its warning letter, the FDA takes issue with Lipton’s website’s reference to four studies that showed a cholesterol-lowering effect of drinking green tea. The FDA found that the therapeutic claims are misleading because it suggests that Lipton is designed to treat or prevent disease. The FDA stated that these claims would result in Lipton being classified as a drug under the FDCA and subject Lipton to requirements for proving the safety and effectiveness of the cholesterol-lowering claims before the product could be legally marketed in the US. The FDA also stated that Lipton’s antioxidant labeling claims violate several federal guidelines. Due to these violations, the FDA has found Lipton to be misbranded under the FDCA.  A full copy of the FDA’s warning to Lipton can be read at: FDA Warning Letter To Lipton.

As the nutrient-enriched beverage market continues to grow into a multibillion dollar business, the FDA will continue its efforts to crack down on companies that overstate the benefits of their products. For more information on FDA regulation and labeling guidelines, please contact us at contact@fidjlaw.com.

OFAC Begins Process Of Lifting Sanctions In Post-War Iraq

On September 13, 2010, the Office of Foreign Assets Control (“OFAC”) of the US Department of the Treasury announced the removal of the Iraqi Sanctions Regulations from the Code of Federal Regulations, 31 C.F.R. Part 575, and added the Iraq Stabilization and Insurgency Sanctions Regulations (“ISISR”) to the Code at 31 C.F.R. Part 576. The new regulations implement Executive Order 13350 terminating the national emergency declared in Iraq by the US in 1990 in Executive Order 12722.

Prior to the new regulations US law prohibited the importation of any goods or services from Iraq to the US and prohibited the exportation of goods, services, or technology from the US to Iraq. ISISR authorizes all transactions involving property and interests in property that were previously prohibited under Executive Order 12722. However, importers and exporters should be aware that certain transactions relating to Iraq remain subject to sanctions. OFAC announced that the removal of 31 C.F.R. Part 575 from the Code of Federal Regulations will neither affect ongoing enforcement proceedings nor prevent the initiation of enforcement proceedings where the statute of limitations has not run. A full copy of ISISR can be read in the Federal Register at: Federal Register Announcement.

For more information regarding OFAC and strategies on maintaining compliance with federal regulations, please contact Fuerst Ittleman at 305-350-5690 or contact@fidjlaw.com.

FDA Closer To Approving Genetically Modified Salmon

The Food and Drug Administration (“FDA”) has moved one step closer to approving the first genetically modified animal food for human consumption, genetically modified Atlantic salmon. The impending decision has caught the eye of investors, biotechnology companies, consumer groups and environmental organizations.

On September 3, 2010, a panel of scientists advised the FDA that AquaAdvantage salmon, a genetically modified version of Atlantic salmon, was safe to eat. The panel also found that genetically modified salmon have no biologically relevant differences from ordinary farm raised Atlantic salmon and both contain the same amount of nutrients.

The key difference between the genetically modified salmon and the ordinary salmon is its rate of growth. Normally, Atlantic salmon take close to 3 years to fully develop because its growth rate slows during cold weather. However, genetically modified Atlantic salmon have been modified by adding growth hormone genes from Chinook salmon and ocean pout, allowing these fish to grow to full size in only 18 months. The quicker growth rates allow farmers to increase production and yields.

The FDA is evaluating the genetically modified salmon as it does new veterinary drugs. As a result, much of the research and data gathered to determine the safety of these fish has been kept confidential. This has drawn criticism from consumer groups and independent labs concerned that an overworked and understaffed FDA may be missing something in its evaluation. Consumer groups are also concerned the genetically modified salmon could escape breeding tanks and breed with wild salmon. The FDA believes that genetically modified salmon will not pose a threat to the environment because 99% of all genetically modified salmon will be sterile and, unlike traditional farmed raised salmon which are raised in ocean based tanks, genetically modified salmon will be raised in inland tanks, minimizing the chances of escape.

An approval of genetically modified salmon for human consumption could open the door for other genetically modified animals to receive approval for human consumption. Currently, scientists are seeking FDA approval for a genetically modified hog, and are developing genetically modified cows that are resistant to mad cow disease.

The FDA is scheduled to hold public hearings on genetically modified salmon from September 19-21, 2010. The hearings will include discussions on the technology used to produce genetically modified animals and FDAs regulatory procedures for evaluating these animals, a discussion on the animal health, food safety, and environmental concerns associated with genetically modified salmon, and a discussion on potential labeling issues should the FDA approve genetically modified salmon for human consumption. More information regarding the upcoming hearings can be found on FDAs website at FDA Announces Public Meeting on Genetically Engineered Atlantic Salmon.

For more information regarding current FDA authority, procedure, or regulations please contact us at contact@fidjlaw.com.

FDA Begins Crackdown On E-Cigarette Industry Announces Intent To Regulate E-Cigarettes

On September 9, 2010, the Food and Drug Administration (“FDA”) announced its intent to regulate electronic cigarettes and issued warning letters to five e-cigarette manufacturers for violations of the Food, Drug, and Cosmetic Act (“FDCA”). Warning letters were issued for various violations of the FDCA including violations of good manufacturing practices, making unsubstantiated drug claims, and using the devices as delivery mechanisms for active pharmaceutical ingredients. A copy of the FDAs press release can be read here: FDA Acts Against E-Cigarette Distributors.

E-cigarettes are battery-powered devices that allow users to inhale vaporized liquid nicotine instead of tobacco smoke. As these devices have become more popular, the FDA has become increasingly concerned with the safety and effectiveness of these devices as smoking cessation aids. In July, the FDA issued a press release expressing its concerns with the e-cigarette stating that because e-cigarettes have not been submitted to the FDA for evaluation or approval, the levels of nicotine and other chemicals that the products deliver to its users are unknown. The press release regarding safety concerns with the e-cigarettes can be read at FDA Warns of Health Risks Posed by E-Cigarettes.

In a letter to the Electronic Cigarette Association on September 8, 2010, the FDA advised the e-cigarette industry of its intent to regulate e-cigarettes. The FDA has determined that e-cigarettes “meet the definitions of both a drug and a device under the [FDCA] and the definition of a combination product in 21 C.F.R. Part 3, with a drug primary mode of action.” A full copy of the FDAs letter to the Electronic Cigarette Association can be read at FDAs Letter to the E-Cigarette Association.

As a result of this new classification by the FDA, e-cigarette manufacturers will have to comply with the FDCA and numerous regulations regarding the marketing and approval of drugs. Under the FDCA, a company must demonstrate that a drug is safe and effective for its intended use before that product will gain FDA approval. This will require e-cigarette manufacturers to provide proof that e-cigarettes safely and effectively reduce its users dependence on nicotine. Additionally, manufacturers must demonstrate that its manufacturing practices preserve the strength, quality, and purity of the drug. The FDCA also prohibits a company from claiming that a drug can treat or mitigate a disease, including nicotine addiction, unless the drugs safety and effectiveness has been proven.

For more information regarding current FDA authority, procedure, or regulations please contact us at contact@fidjlaw.com.

Phone Companies Urge US Government To Loosen Telecommunications Regulations For Cuba

Several of the largest telecommunications companies in the United States including AT&T, Verizon, and Nokia are urging the US government to ease regulations which currently prevent them from operating in Cuba. The regulations stem from the 47 year old trade embargo the US has enforced against Cuba due to the oppressive Castro regime. AT&T and Verizon are seeking a loosening of regulations to make it easier for telecommunications companies to directly connect calls to and from Cuba, while Nokia, the worlds largest mobile-phone manufacturer, is urging Washington to ease the embargo so it can export mobile-phone accessories from its US locations.

Under current rules, the Federal Communications Commission (“FCC”) has established a rate cap on the fee telecoms can pay the Cuban government for direct calls to Cuba which hampers the telecommunications industrys ability to do business in Cuba. Currently, US providers are only allowed to pay the Cuban government a fee no higher than 19 cents per call, however, Cuba demands 84 cents a call.

In June, Verizon wrote the FCC asking it to grant requests by others in the telecom industry for the FCC to waive its maximum rate cap rules. A copy of Verizons comments can be read at: Verizons reply to the FCC.

US telecoms are also interested in establishing roaming services on the island for US customers who visit the island as a first step to expanding cell phone services. Analysts believe that the mobile phone market in Cuba has the potential to be profitable given the islands population, 11.4 million, and the relative few between, 10 and 20 percent, who currently use mobile phone services.

The telecoms requests for greater access to Cuba come several months after the idea was first presented by the Obama administration. On April 13, 2009, President Obama issued a memorandum to the Secretaries of State, Treasury, and Commerce entitled “Promoting Democracy and Human Rights in Cuba” in which the President said that increased contacts between Cuba and the outside world would reduce Cubans dependency on the Castro regime. President Obama directed his Secretaries to take such actions as necessary to authorize US telecommunications providers to enter into agreements to establish fiber-optic cable and satellite telecommunications facilities linking the US and Cuba and to license US telecom service providers to enter into and operate roaming services agreements with Cubas telecommunications service providers. The Presidents full memorandum can be read at: White House Memo on Promoting Democracy and Human Rights in Cuba.

However, while an easing of telecommunications regulations may be in the near future, US companies looking to do business in Cuba still risk violating sanctions still in place, such as the Cuban Democracy Act of 1992 that prohibits investment in Cubas telecommunications network.

For guidance on how your import/export business, or related business, can take advantage of the surging trade economy while maintaining strong regulatory compliance, contact Fuerst Ittleman at 305-350-5690 or contact@fidjlaw.com.

Distinguished Orthopaedic Surgeon Joins NeoStem’s Medical Advisory Board

NeoStem, Inc. (“NeoStem”) recently announced the appointment of Thomas Einhorn, M.D., Chairman of Orthopaedic Surgery at Boston University to its Medical Advisory Board. NeoStem is an international biopharmaceutical company that is engaged in the development of stem cell-based therapies and building a network of adult stem cell collection centers in the United States and China that allow people to donate and store their own stem cells for their personal use in the event of a future medical need. Dr. Einhorns professional focus has been on the repair and regeneration of bone and cartilage using autologous adult stem cells, reconstructive surgery of the hip and knee, and the treatment of metabolic bone disease making him an excellent addition to NeoStems Medical Advisory Board.

Dr. Einhorn is Chairman of the Department of Orthopaedic Surgery and Professor of Orthopaedic Surgery, Biochemistry and Biomedical Engineering at Boston University. To date, he has authored over 200 peer-reviewed articles during his career. Dr. Einhorn has a distinguished career which includes serving as Chairman and President of numerous orthopaedic research societies and foundations. In addition, he has won numerous awards and served as Deputy Editor for Current Concepts Reviews for The Journal of Bone and Joint Surgery, and on the Editorial Boards of The Journal of Bone and Mineral Research, Journal of Orthopaedic Research and Bone.

Wayne A. Marasco, M.D., Ph.D., Chairman of NeoStems Advisory Boards, stated, “We are extremely pleased to have Dr. Einhorn join our medical advisory board. His in-depth understanding of orthopaedic injuries and the use of adult stem cells to regenerate damaged bone and cartilage will be a tremendous asset in our development of applications of adult stem cells for orthopedic injuries.”

Dr. Einhorn stated, “I am excited to join the Medical Advisory Board of an innovative, forward-looking company like NeoStem and be part of the team of experts to help advance stem cell technologies in the field of orthopaedics and assist in developing VSEL┞¢ Technology applications for orthopaedic disease. Not only has [NeoStem] put together a promising base of technologies for future stem cell treatment in orthopaedics, cardiac, skin rejuvenation and the treatment of wounds but it continues to partner with experts in other areas to facilitate meaningful [Research and Development]. This should encourage people to collect, process, and store their stem cells through NeoStems existing network of collection centers in anticipation of a variety of future personalized medicine applications.”

FDA Busy Crafting Calorie Court Regulations

The FDA has begun the process of establishing regulations to implement recent federal law that mandates calorie information be posted at many chain restaurants and vending machines throughout the United States. The mandate was signed into law on March 23, 2010, as part of the Patient Protection and Affordable Care Act, (“PPACA”) and requires that all restaurants with 20 or more locations post calorie counts of their products on menus, menu boards, and drive-through menus. Other nutritional information, including amounts of sodium, saturated fats and cholesterol must be made available to consumers in written form upon request. Additionally, all chain restaurants must include on their menus the Secretary of the Department of Health and Human Services statement on suggested daily calorie intake.

The PPACA requires chain restaurants to label the calorie content for standard menu items and self-service foods, such as buffets and salad bars. However, foods that are daily specials, limited-time offerings, or seasonal items are exempt from the calorie count legislation. Also, vending machines must display calorie disclosures for each item offered for sale unless the Nutritional Facts panel for a food is available for the customer to view prior to purchasing.

The federal calorie count legislation is intended to create a uniform national policy on nutritional information available on chain restaurant menus. PPACA is similar in design and purpose to several state laws and local ordinances requiring calorie count displays at chain restaurants. New York City currently has such a calorie count display law in effect. The National Restaurant Association supported the implementation of a federal guideline as an alternative to numerous labeling schemes that could vary from state to state.

The FDA has until March 2011, one year from the passage of the PPACA, to develop and implement regulations to enforce the calorie count mandate. Once implemented, the FDA will be in charge of enforcement and penalties for violations. On July 7, 2010, the FDA began receiving public comments on how to implement section 4205 of the PPACA. The comment period runs for 60 days and will close on September 5, 2010.

For more information regarding current FDA authority, procedure, or regulations please contact us at contact@fidjlaw.com.

Drug Recalls Increase 309% in 2009

August 19, 2010

The U.S. Food and Drug Administration (FDA) reported more than 1,742 prescription and over-the-counter (OTC) drug recalls in 2009. That number is a huge increase from the 426 recalls reported in 2008 and the 391 recalls reported in 2007. With the spike in the number of drug product recalls, product and manufacturing quality is being called into question in the media and in the public.

Recalls are actions taken by a drug manufacturer, repackager, or distributor to remove a drug from the market. Recalls may be conducted on a firm’s 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 increase in drug recalls has continued into 2010 with 296 recalls reported in the months of January through June. This rapid increase in drug recalls likely prompted two bills that have been introduced this year in Congress that would impose stricter regulations on the drug industry (see here and here). The bills would also give the FDA authority to mandate drug recalls.

Recent recalls of drug products by Tylenol and McNeil Consumer Healthcare, a Johnson & Johnson unit, (see here and here) have brought concerns regarding manufacturing and product quality to the publics attention. The quality of raw materials used in manufacture as well as contamination and faulty labeling and packaging could be to blame for the lack of manufacturing quality. This lapse in quality could be credited to the fierce competition in the drug manufacturing industry. Drugmakers are cutting costs and cutting back on manufacturing investments to stay competitive.

The generic drug market also fuels the competition in the industry. Generic drugs muake up approximately 75% of all prescription drug sales. The rush by generic drug manufacturers to be the first to market a generic version of a drug after the drug loses patent protection can create a deficit in manufacturing quality.

Advantage Dose, a drug repackager, accounted for more than 1,000 of the reported recalls in 2009. Repackagers that relabel drugs into smaller resale units have also drawn attention for increased recalls due to flawed labeling and packaging.

In an industry that is already rife with competition, drugmakers must be conscientious of quality control. In light of the new attention given to manufacturing quality by the public, policy makers and the media, drugmakers, more than ever, must ensure they are producing compliant, quality products.

For information on how Fuerst Ittleman, PL can help your company with issues surrounding drug manufacturing, repackaging, importing, and distribution, contact us at contact@fidjlaw.com.

Pistachios in a Pinch

Tougher Sanctions Close Pipeline for Trade in Food, Carpets and Financial Transactions from Iran

On August 16, 2010, the Department of Treasurys Office of Foreign Assets Control (OFAC) promulgated new regulations to implement the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA).  President Obama signed CISADA into law on July 1st with the goal to enforce U.N. Security Council sanctions and “to protect the international financial system from abuse by Iran,” according to OFAC Director Adam Szubin.

American financial institutions operating correspondent accounts or payable-through accounts for foreign financial institutions as well as companies currently importing food and carpets from Iran must take note of these provisions, which go into effect on September 29, 2010.

Before these implementing regulations, there was a “general license” issued by OFAC authorizing the importation of certain foodstuffs (like caviar and pistachios) and carpets from Iran into the United States.  However, the new regulations eliminate the general license and prohibit all such imports beginning on September 29, 2010.  OFAC has also indicated that it will no longer issue specific licenses for such products after that date.  Therefore, according to the OFAC guidance, “any such goods for commercial importation into the United States must be entered for consumption before that date.”

For financial institutions, the new regulations either outright prohibit, or impose strict conditions on, the opening or maintaining of a U.S. correspondent account or payable-through account for a foreign financial institution that the government finds have knowingly aided or facilitated certain activities benefitting the Government of Iran, Iran’s Islamic Revolutionary Guard Corps (IRGC), or Iranian financial institutions.  CISADA also makes it easier for state and local governments to prohibit investments of public funds in companies which are investing in Iran.

The penalties for institutions or companies found violating these new regulatory provisions are severe.  Civil penalties may be imposed up to $250,000 or twice the value of the transaction involved.  In addition, criminal penalties for willful violations of the law include fines of up to $1 million and prison sentences of up to 20 years.

One key provision of CISADA is the civil and criminal liability for parent companies for acts by subsidiaries that the parent had “reason to know” could lead to a violation of the law.  This is an attempt by the government to close one of the many loopholes which have allowed U.S. companies to benefit for years from trade with Iranian which arguably violated previous sanctions.