Researchers in Hong Kong Report “Super Cancer Stem Cells” Discovery

Researchers in Hong Kong reported discovery of a type of “super cancer stem cells” last week. These stem cells are embedded in liver cancers and are resistant to chemotherapy allowing them to spread to other body parts even after they are surgically removed. The discovery was published in the journal Cell Stem Cell.

According to the study, these cancer stem cells have a unique surface protein called CD24 and patients with high counts of this protein have lower changes of survival. The animal study used in the research demonstrated that mice implanted with liver cancer enriched with CD24 cancer stem cells were resistant to chemotherapy.

Liver cancer stem cells are particularly troublesome because they are responsible for growing tumors. These tumors can spread and become drug-resistant which causes recurrence even after the tumors are removed surgically. According to a report in Reuters, there are 500,000 new cases of liver cancer worldwide every year and over 50 percent of those new cases occur in China.

Chinas regulation of stem cell research is relatively relaxed when compared to that of the United States. According to some experts in the industry, China has used its laws and policies to position itself to become a global leader in the stem cell research industry. Unlike the United States, which has created confusing, muddled policy on stem cell research and therapies, China seems to be embracing the technologies and treatments that can originate in stem cell research.

Fuerst Ittleman is well-equipped to assist members of FDA-regulated industry navigate the laws and regulations applicable to stem cell therapies and devices in the United States. For more information about the current regulatory framework surrounding stem cells or any other stem cell-related issues you may be facing contact us at contact@fidjlaw.com.

Sherley v. Sebelius: Briefs Argue Whether Federal Funds Incentivize Embryo Destruction

On June 24, 2011, supplemental briefs were filed by both sides in Sherley v. Seleblius, the landmark lawsuit challenging the legality of government funding for research of human embryonic stem cells (hESC). The supplemental briefs, filed with Chief Judge Royce Lamberth of the U.S. District Court for the District of Columbia, may be the parties final arguments.

The plaintiffs in this case, Dr. Sherley and Dr. Deisher, brought suit to enjoin the National Institute of Health (NIH) from funding research using hESCs pursuant to the NIHs 2009 Guidelines (the “Guidelines”). They assert that the Guidelines violated the 1996 Dickey-Wicker Amendment by funding hESC research projects. The Dickey-Wicker Amendment bans funding for research “in which a human embryo or embryos are destroyed.”

On August 23, 2010, the District Court granted the plaintiffs motion for a preliminary injunction which stopped the NIH from funding embryonic stem cell research. However, two weeks later, the Government won a temporary stay of the preliminary injunction from the Court of Appeals for the District of Columbia. See our previous report for more information on this decision.

The Court of Appeals overturned the preliminary injunction in April holding the plaintiffs were unlikely to prevail because the Dickey-Wicker Amendment is ambiguous, see our previous report here. The Court of Appeals remanded the case back to the District Court to be decided on the merits by Chief Judge Lamberth.

In their supplemental brief, the plaintiffs argued that “[t]he federally sponsored hESC research that the Guidelines support inevitably creates a substantial risk”indeed, a virtual certainty”that more human embryos will be destroyed in order to derive more hESCs for research purposes.”

The government, in anticipation of the plaintiffs theory, argued the Guidelines interpreted the Dickey-Wicker Amendment to permit the funding of hESC research but to forbid funding for the derivation of hESCs. The government further argued “that the Guidelines Ëœincentivize the donation of future embryos casts no doubt on whether NIH had reasonably interpreted the [Dickey-Wicker Amendment], both because future donors would not be engaging in Ëœresearch in which an embryo is subject to a risk of injury, and because it is not plausible to claim that NIH funded researchers Ëœknowingly create the incentive for future donation.”

Fuerst Ittleman will continue to closely monitor the progress of issues regarding funding for stem cell research. If you have any questions pertaining to new NIH guidelines, or the application process for receiving NIH grants, contact Fuerst Ittleman PL at contact@fidjlaw.com.

Brand-less Cigarette Labels in Australia

On April 28, 2011, the Australian government proposed legislation that will ban tobacco company logos, colors, imagery, or promotional text on cigarette packaging beginning in 2012. Anti-smoking advocates say plain, brand-less labeling will curb smoking by reducing the appeal of the packaging.

Surveys suggest that the Australian government anti-smoking initiatives have significantly reduced smoking rates over the past 30 years. Currently, Australian cigarette warning labels contain graphic depictions of the harmful effects of smoking. The Australian government has also banned the public display of tobacco products in retail stores.

The new legislation, if passed by Parliament, would require cigarettes labels to be dark-olive in color and carry public health warnings instead of company logos. Brand names must appear on the package in the same size and style of print as the health warnings. The proposed labeling has enraged tobacco companies who say it will reduce their profit margins and produce a flood of counterfeit products due to the ease of replication provided by the new labeling.

On June 27, 2011, Hong Kong-based Philip Morris Asia Limited (PMA), owner of the Australian affiliate company, Philip Morris Limited, announced it had served a notice of claim on the Australian government. PMA alleges the new legislation would violate Australias Bilateral Investment Treaty with Hong Kong, which was implemented to protect Hong Kongs investments in Australia. PMA says the treaty protects Hong Kong companies’ property, including intellectual property such as trademarks, and the plain packaging proposal severely diminishes the value of the company’s trademark. The notice of claim commences a three-month period during which the parties will attempt to negotiate an outcome. If there is no agreement, PMA stated it would seek compensation for projected losses.

The current graphics depicted on Australian cigarette packages are similar to those soon to be implemented in the U.S. See our previous report on U.S. graphic cigarette labels here. For more information on regarding the regulation of cigarette labeling, contact Fuerst Ittleman PL at contact@fidjlaw.com.

Bipartisan Support for Embryonic Stem Cell Legislation

On June 24, 2011, United States Representatives Diana DeGette (D-CO) and Charlie Dent (R-PA) introduced the bipartisan Stem Cell Research Advancement Act of 2011 (the “Bill”). The Bill would give legislative backing to President Obamas 2009 Executive Order allowing federal funding for medical research using discarded embryos from fertility clinics. Critics of the Bill argue, based on religious and moral grounds, that the research destroys viable embryos to harvest the stem cells. However, Representative Dent stressed that the Bill establishes important ethical criteria for stem cell research.

The Bill provides that in order to be eligible for federal funding, research must exclusively involve leftover embryos that would otherwise be discarded. Donors would also have to sign written consent forms and would be barred from receiving financial compensation. In addition, the Bill codifies the National Institutes of Health Guidelines (the “Guidelines”) for carrying out both embryonic and adult stem cell research.

Supporters of the Bill want to ensure that critical research can be conducted unimpeded by political interference. Currently, there are two human trials already underway for the treatment of spinal cord injuries and degenerative eye diseases using embryonic stem cells. See our previous reports here and here for more information on the embryonic stem cell trials.

Fuerst Ittleman will continue to monitor the Bill as it is up for vote in the House. 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.

Seven Major Pharmaceutical Companies File Citizen Petition Seeking FDA Guidelines Regarding Off-Label Information

On July 5, 2011, seven large pharmaceutical manufacturers filed a citizen petition with the U.S. Food and Drug Administration (FDA) asking the Commissioner to “clarify FDA regulations and policies with respect to manufacturer dissemination of information related to new uses of marketed drugs and medical devices.” This citizen petition is an effort by pharmaceutical companies to push the FDA to clarify unresolved issues related to requests for off-label information, use of third-party clinical guidelines, and communication about off-label uses. Allergan, Eli Lilly & Company, Johnson & Johnson, Novartis Pharmaceuticals, Novo Nordisk, Pfizer, and Sanofi-aventis U.S. all signed this citizen petition.

The lawyers representing these pharmaceutical companies explained that the “current state of regulatory guidance is not clear or comprehensive” and “places manufacturers at risk of criminal and civil sanctions if they cannot correctly guess where the government would draw a line [on information about off-label uses]”. The citizen petition claims that despite the industrys efforts to piece together the agencys position from Federal Register documents, guidance, letters, and similar pronouncements, the FDAs vague language continues to create significant obstacles for stakeholders. Absent clear guidance or rules from the FDA, individual manufacturers have had to resort to inferring operative law and “what they believe is the correct interpretation” from the Agencys materials. As a result, “each individual manufacturer may either over- or under-communicate clinically relevant information, with significant attendant consequences for the public health.”

The citizen petition requests the FDA accept the following proposals:

  • Manufacturer Responses to Unsolicited Requests”The FDA should promulgate binding regulations embodying the FDAs current policy on responses to unsolicited requests, assure the policy affords manufacturers a balance between prohibiting off-label promotion and allowing appropriate dissemination of information related to off-label uses, and clearly distinguish a non-promotional response to an unsolicited request from product promotion.
  • “Scientific Exchange””The FDA should clarify its position on scientific exchange. In particular, to qualify as a “scientific exchange” statements must 1) make clear that a use or product is not FDA-approved or FDA-cleared, 2) make no claims that a use or product has been proven to be safe or effective, and 3) be truthful and non-misleading when measured against available information on the use or product.
  • Interactions with Formulary Committees, Payors, and Similar Entities”The FDA should address whether, and to what extent, economic or other product-related information may be shared with payors.
  • Dissemination of Third-Party Clinical Practice Guidelines”The FDA should address whether, to what extent, and when a manufacturer can disseminate third-party clinical practice guidelines when the guidelines are 1) developed by nationally recognized scientific medical organizations or agencies, 2) reproduced in similar format as the original publication, 3) reproduced by the manufacturer to include all products with the same indication, and 4) accompanied y relevant disclaimers and disclosures.

The manufacturers argue that in addition to helping pharmaceutical companies in their day-to-day decision-making, clearer guidelines would help to better safeguard the public health. These guidelines would help manufacturers better understand how to provide physicians information about risks of medical product use, which would help guide physicians in their treatment of patients. By filing this petition, “we think [it] is an important step in making the marketing rules more transparent” and “[e]nhanced transparency will be helpful to all stakeholders,” said one of the lawyers who worked on the petition.

Fuerst Ittleman will continue to monitor the progress of the FDAs response to concerns regarding off-label use. For more information, contact us at contact@fidjlaw.com.

IRS Sets Partnership, Estate and Trust Filing Extension at 5 Months

The IRS recently released final regulations reducing the filing extension from six months to five months for certain pass-through entities, including most partnerships, estates, and trusts. Under these new regulations, the extended returns and Schedules K- for partners and beneficiaries will generally be due September 15. TD 9531 also finalized an automatic six-month extension for pension excise returns.

Before 2005, pass-through entities were entitled to an automatic three-month extension of time to file certain returns and could also request an additional three-month extension of time to file. In 2005, the IRS issued temporary regulations in TD 9229 simplifying the extension process by allowing most taxpayers, including pass-through entities, to obtain an automatic six-month filing extension. In 2008, the IRS released final and temporary regulations in TD 9407 granting an automatic six-month filing extension for non-pass-through entities and reducing the 2005 automatic filing extension for certain pass-through entities from six months to five months.

Recognizing the inherent conflict between providing sufficient time for pass-through entities to prepare returns and ensuring that owners and beneficiaries receive timely information returns for their own filings, the 2008 regulations requested comments on whether a five-month extension of time to file for pass-through entities might increase or reduce overall taxpayer burden. The IRS received approximately 70 comments.

The comments proposed a broad range of solutions, including moving the individual taxpayer return due date to April 30 or allowing individuals and corporations a seven-month filing extension. Some commentators suggested moving up the filing date for pass-through entities to March 15, which would allow such entities a full six-month extension to file by September 15 while providing timely information for individual taxpayers to prepare their own returns. However, tax return due dates are set by statute and IRC § 6081 bars extensions greater than six months. Thus, absent legislative action, none of the above comments are viable options for a regulation. Nevertheless, the majority of commentators agreed that an extension for pass-through entities shorter than six-months would reduce overall taxpayer burden, although there was no consensus as to the optimal extension period.

Many commentators expressed concern that corporate taxpayers with ownership interests in pass-through entities would see no relief with the proposed extension. They projected that the five-month extension period would simply align the extended due date for pass-through entities with the extended due date for corporate returns. The resulting delay to corporate owners would greatly increase the need for filing amended returns.

Ultimately, the IRS believes that a five-month automatic extension “reduces the overall burden on taxpayers and strikes the most reasonable balance for all affected taxpayers” and thus finalized the temporary regulations without change.

The attorneys at Fuerst Ittleman, PL have the requisite knowledge and experience to handle the most complex regulatory and compliance matters. You can reach an attorney at contact@fidjlaw.com.

House Representatives Propose New Safe Cosmetics Act

On June 24, 2011, three members of the House of Representatives announced their support of the Safe Cosmetics Act of 2011 (the “Act”), which calls for stricter FDA oversight of cosmetic products. The Act is similar to a previous bill proposed in 2010 but has been modified in response to concerns from small businesses. The main proponents of this proposed legislation are Representatives Jan Schakowsky of Illinois, Ed Markey of Massachusetts, and Tammy Baldwin of Wisconsin.

The Act aims to curb use of harmful ingredients in cosmetics products by establishing stringent labeling requirements and authorizing the FDA to oversee the registration and regulation of cosmetics companies. While the FDA does have regulatory authority over cosmetic products and cosmetic ingredients, the FDA does not pre-approve these products or ingredients before they are placed on the market. The FDA only requires premarket approval for color additives. Cosmetic companies may voluntarily enroll in the FDAs Voluntary Cosmetic Registration Program, a post-market reporting system, but are not otherwise required to register their products with the FDA. Even though the FDA does not issue premarket approvals for cosmetic products, the FDA may pursue enforcement action against products or firms that violate the law.

The Campaign for Safe Cosmetics claims that over 12,500 unique chemical ingredients are used in personal care and cosmetics products, many of which have not been required to undergo any type of formal safety assessments. Supporters of the new Act believe the $50 billion industry needs to be held accountable to the public for the products they release into the market. “The growing number of reports of serious health problems arising from the use of dangerous chemicals in personal care products show a need to update our laws and protect men, women, and children from harmful exposure,” said Representative Schakowsky.
The main provisions in the Safe Cosmetics Act of 2011 are as follows:

  • Post Market Testing: the Secretary of Health and Human Services would be required to institute procedures for post market testing.
  • Registration of Cosmetic Companies and Registration Fee: Cosmetic companies would be required to register with the FDA and pay a registration fee based on annual gross receipts or sales.
  • Cosmetic and Ingredient Testing and Safety: the FDA would establish a list of prohibited ingredients for use in cosmetic products.
  • Market Restrictions: the FDA would be granted authority to recall products that are misbranded, adulterated, or otherwise fail safety requirements.
  • Mandatory Reporting of Adverse Health Effects: the cosmetic industry would be subject to mandatory reporting of adverse health effects.
  • Worker Issues: products for salon use would be required to indicate any related health hazards.
  • States Rights: states would have authority to set more stringent standards.

“The Safe Cosmetics Act will close a gaping hole in the federal law that allows potentially toxic chemicals to remain in the cosmetic products we use every day,” said Representative Markey. According to the Campaign for Safe Cosmetics, Americans use an average of 10 personal care products each day, which results in exposure to approximately 126 unique chemicals. The Act seeks to protect the publics health and safety by preventing products with unsafe ingredients from entering the market or granting the FDA authority to order manufacturers to cease production. In light of the growing number of reports about unsafe cosmetic products, supporters of the new legislation hope that this Act will provide the necessary steps to secure the publics safety against cosmetic products on the market.
Fuerst Ittleman will continue to monitor the progress of the Safe Cosmetics Act of 2011. For more information, please contact us at contact@fidjlaw.com

FDA to Hear Avistan’s Appeal Regarding Proposed Revocation of Drug Approval

On June 28 – 29, 2011, Genentech appeared before the U.S. Food and Drug Administration (FDA) asking the Agency to reconsider its proposal to revoke Avastins approval for use in the treatment of breast cancer patients. The FDA approved Avastin three years ago through an accelerated approval process because Avastin is used to treat serious diseases and fills an unmet medical need. This accelerated approval process provides patients access to promising new drugs for treatment of serious or life-threatening conditions while awaiting the results of phase IV confirmatory clinical trials. If subsequent clinical trials fail to confirm the drugs clinical benefit, the FDA may take action to remove the drug from the market, see 21 C.F.R. § 314, subpart H. This marked the first time the FDA has held a hearing to consider a companys appeal of such a decision.

In February 2008, the FDA granted accelerated approval of Avastin for treatment of patients with breast cancer. The results of the initial clinical trial showed that patients treated with both Avastin and paclitaxel (chemotherapy) had a five and a half-month delay in the growth of their tumors when compared to patients who received paclitaxel alone. In spite of the fact that the clinical trial failed to provide evidence of prolonged life expectancy, the FDA granted drug approval.

Since then, the makers of the drug have conducted at least four clinical trials using Avastin in conjunction with other chemotherapy drugs. The results of these trials showed a much smaller delay in tumor progression, ranging from less than one month to approximately three months, and virtually no improvement in survival. In addition to the minimal improvement in a patients prognosis, Avastins side effects include bowel perforation, hemorrhaging, and organ damage or failure. Concerned that the drugs risks outweighed its benefits, the FDA convened the Oncologic Drugs Advisory Committee last year to vote on whether Avastins drug approval should be revoked. By a vote of 12 to 1, the panel moved to revoke Avastin’s approval for use in breast cancer treatment.

The FDAs decision has been a controversial one. Avistan is the worlds best-selling cancer drug, with revenues as high as $7 billion a year. Without FDA approval for use in treatment of breast cancer, Genentech could lose as much as $1 billion in annual sales. Even if Avastin loses its FDA approval here, the drug will continue to remain on the market because it is approved for treatment of other types of cancer and physicians can continue to prescribe Avastin off-label for breast cancer patients.

Many who oppose the FDAs decision are not placated by this alternative because insurance companies are unlikely to cover the costs of off-label prescriptions. For breast cancer patients who wish to continue using Avastin, these out-of-pocket costs could reach as high as $90,000 per year. Some even claim that the FDAs action may be the beginning of a slippery slope toward rationing of medication. FDA-supporters, however, are lobbying their concerns for public safety. Patient advocates assert that the FDA has a responsibility to remove Avistan from the market because cancer patients should only receive drugs that are proven effective for treatment.

Upon completion of the two-day hearing on June 29, 2011, the Oncologic Drugs Advisory Committee unanimously voted to revoke Avastins FDA approval for breast cancer treatment. The advisory committee also rejected Genentechs proposed compromise to keep the drug on the market while the company completes another phase IV clinical trial, which could take several years to complete. Genentech argued that despite the decrease in the delay of tumor growth exhibited in the clinical trials, Avastin still positively benefits breast cancer patients. After reviewing the data derived from these trials, however, the advisory committee was unconvinced that the drug significantly prolonged womens lives or improved the quality of their lives. Even though the committees decision is not final, the unanimous vote makes it seem more likely that FDA Commissioner Margaret Hamburg will move to rescind Avistans FDA approval. A final decision will not be made until after July 28, 2011, the close of the public comment period.

Fuerst Ittleman will continue to monitor developments in the FDAs regulation of drugs. For more information, contact us at contact@fidjlaw.com.

Strategies for Resolving Uncertain Tax Positions

As the deadline nears for reporting Uncertain Tax Positions (“UTPs”) to the IRS, practitioners and organizations continue to protest the lack of guidance on various disclosures. Speaking in a webcast on June 28, a PricewaterhouseCoopers representative relayed that the firm is specifically concerned with what it means to record a reserve and how to treat non-GAAP taxpayers. Similarly, the Tax Executives Institute recently called on the IRS to address issues like filing requirements and transfer pricing. Amid all of this uncertainty, we present pre-filing strategies”as suggested by BNA”for resolving future uncertain tax positions.

Read our recent posts here and here for a full explanation of what it means to have a reportable “uncertain tax position.”

Ideally, a company achieving greater tax certainty will benefit from resolving issues more efficiently and by recording lower unrecognized tax benefit liability, which translates into less accrued interest expense. A company under the watch of the IRSs Large Business and International Division has a number of pre- and post-filing tools available to settle UTP issues expediently.

Pre-filing options include:

  • Industry Issue Resolutions (IIR). This program presents an opportunity for business taxpayers, industry associations, and other interested parties to negotiate with the IRS for over a frequently disputed or burdensome tax issue. Upon reaching a resolution, the IRS will typically issue formal guidance memorializing it as such.
  • Pre-Filing Agreements (PFA). Eligible taxpayers can use the PFA program to request that the IRS examine a completed transaction or event that has not yet been reported. The underlying issue must be primarily factual rather than legal.
  • Advance Pricing Agreements (APA). These binding agreements between a taxpayer and the IRS are targeted at resolving complex transfer pricing issues. Read more about recent APA initiatives here.
  • Compliance Assurance Programs (CAP). Under this growing program, participants work with IRS coordinators to review transactions occurring throughout the year, conferring more certainty about their tax returns before filing.

Post filing programs are referred to in the Internal Revenue Manual (IRM) as “alternative dispute resolution programs.” The developing programs are designed to ease the examination process by using collaborative procedures, limiting examinations to narrow issues, where possible, and to fast-track the settlement and resolution processes. According to the IRM, these post-filing methods will be considered in all examinations and implemented where appropriate.

The attorneys at Fuerst Ittleman are experts at resolving complex tax and regulatory issues. If you have a taxing matter on your hands, email us at contact@fidjlaw.com.

Robert Becerra Presentation to National Assocation of Purchasing Management

On June 30, 2011, Fuerst Ittleman lawyer Robert Becerra gave a presentation on “Criminal Prosecution in the International Trade Arena: Conducting Business While Staying Out of Jail” to the National Association of Purchasing Management, South Florida Chapter and the Association of Operations Management. The presentation was featured at the National Association of Purchasing Managements installation dinner for its officers for the 2011-2012 year. Robert Becerra concentrates his practice on white collar criminal defense, grand jury investigations, regulatory proceedings, civil forfeitures, corporate compliance and internal investigations, among other areas. He is “AV” rated by the Martindale Hubbell Law Directory, rated a “Top Lawyer” by the South Florida Legal Guide, and as “Superb” by the lawyer rating website www.Avvo.com.