June 2009

I. Agency-wide Developments

President signs tobacco products regulatory bill
President Barack Obama on June 22, 2009, signed into law a bill would recognize the FDA as the primary authority on regulation of tobacco products. Introduced by Representative Henry Waxman (D-Calif.) and Senator Edward Kennedy (D-Mass.) in the U.S. House of Representatives and Senate, respectively, the "Family Smoking Prevention and Tobacco Control Act" (Public Law 111-31) amends the FDC Act to provide the FDA with regulatory power on the manufacture, marketing, and distribution of tobacco products. The FDA is tasked with creating an appropriate center to promulgate regulations in accordance with the Act. Tobacco products will include all cigarettes, cigarette tobacco, roll-your-own tobacco, smokeless tobacco and any other tobacco products that the FDA by regulation deemed under its discretion.
The Act also permits the FDA authority to set national standards controlling the manufacture of tobacco products and the identity, public disclosure, and amount of ingredients used. The Act requires health warnings to cover the top 50 percent of the front and rear panels of the package and prohibits the use of descriptors, such as "light," "mild," and "low" on labels or in advertising. The Act bans the addition of artificial or natural flavorings (other than tobacco or menthol) or herbs or spices in tobacco products, such as strawberry, grape, clove, cinnamon, vanilla, coconut, coffee, or cherry.

The new law also bans, effective June 22, 2010, all tobacco advertising within 1,000 feet of schools and playgrounds; all remaining tobacco-brand sponsorships of sports and entertainment events; and free giveaways of non-tobacco related products with the purchase of a tobacco product. The bill also requires the use of color graphics depicting the negative health consequences of smoking to accompany labels within 24 months of enactment. The FDA now has full discretion in revising aspects of labeling requirements, including text and format size. Family Smoking Prevention and Tobacco Control Act (Public Law 111-31), ¶2006.

A new explanation section highlighting important measures in the Act, as well as two additional federal laws related to the Act, will be made available in the Food, Drug, Cosmetic, Laws Reporter for subscribers.

II. Drug and Biologics Developments

Pharmaceutical drug and biologic developments have merited interest from both Congress and various federal agencies in the past month, especially regarding “pay-for-delay” settlements between brand name and generic drug manufacturers.

FTC: Banning pay-for-delay agreements would save billions
At a hearing before the U.S. House Judiciary Committee’s Subcommittee on Courts and Competition Policy, Bureau of Competition Director Richard A. Feinstein testified on behalf of the Federal Trade Commission (FTC), stating that anti-competitive patent settlements in the U.S. pharmaceutical industry delay consumer access to lower-cost generic drugs, and impose “enormous costs” on consumers, employers, federal, state and local governments, and the nation’s health care system. The FTC noted that congressional action to prohibit “pay-for-delay” agreements, settlements of patent litigation in which a brand-name drug manufacturer pays its potential generic competitor to abandon a patent challenge and delay entry to the market, would help contain spiraling health care costs. The FTC also affirmed its strong support for the “Protecting Consumer Access to Generic Drugs Act of 2009” (H.R. 1706, ¶200,145), which would prohibit these anti-competitive settlements.

Similarly, on June 23, 2009, in a speech before the Center for American Progress in Washington, D.C., FTC Chairman Jon Leibvowitz reported that internal FTC analysis projects that stopping collusive “pay-for-delay” settlements between brand and generic pharmaceutical firms would save consumers $3.5 billion a year and also reap significant savings for the federal government. Because the federal government currently pays about one-third of the nation’s $235 billion prescription drug bill, prohibiting such anticompetitive settlements could save the government roughly $1.2 billion a year, or $12 billion over 10 years. Chairman Leibvowitz remarked that while the FTC successfully stopped such payments earlier this decade, recent appellate court decisions, beginning in 2005, have supported these anticompetitive settlements. FTC News Release

Generic biologics would improve competition
Legislation creating an abbreviated FDA approval process of follow-on-biologics (FOBs) would be an efficient way to bring FOBs to market, according to the Federal Trade Commission (FTC). The agency noted in a report on FOBs that aside from a time and cost savings an FOB process would promote competition by spurring biologic innovation. FOB competition with a pioneer biologic drug would likely resemble current brand-to-brand competition among biologics and any provisions that would delay FOB entry would not benefit consumers by restricting competition. A 12- to 14-year exclusivity period, as suggested by pioneer biologics drug manufacturers, would depart sharply from a public policy standpoint because the lengthy exclusivity period would not spur the creation of a new biologic drug or indication. Pioneer biologic drug manufacturers, according to the FTC, would continue to earn substantial revenues even after the entry of FOBs because the FOBs would have difficulties in rapidly growing their market shares. FOBs would be less prone to introduce their products at price discounts beyond 10 to 30 percent. The biologic drug development would have already been incentivized through patent protection and market-based pricing. Biologics manufacturers would be more inclined to invest research money into over-developed areas if a lengthy exclusivity period were implemented. Patent protection and market-based pricing in a 12- to 14-year regulatory exclusivity period, thus, would be too long to promote innovation. FTC Report, ¶400,300

Legislation would define “first applicant” to aid generic drug makers
On June 22, 2009, Senator Bill Nelson (D-Fla.) introduced in the Senate a bill to define the term “first applicant” for the purposes of filing an abbreviated new drug application (ANDA) to give generic drug manufacturers challenging brand name patents an opportunity at receiving 180-day market exclusivity. Titled “Drug Price Competition Act of 2009,” the bill would amend the FDC Act to allow a generic drug manufacturer that currently is considered a subsequent applicant subject to a brand-name drug manufacturer's 180-day exclusivity eligibility to qualify as a “first applicant.” The generic drug manufacturer would be permitted to obtain approval and avail itself of the 180-day exclusivity benefit given to all first applicants if: (1) there was no timely filed patent infringement lawsuit arising from its ANDA paragraph IV certification, or (2) there was a timely filed lawsuit and a court decision, including a district court decision, of patent invalidity, non-infringement, or no cause of action was rendered. The bill, in effect, would provide for a shared exclusivity to a generic drug manufacturer who, although not first to file a paragraph IV certification, is first to succeed in addressing the brand name drug manufacturers listed patents. The bill was referred to the Committee on Health, Education, Labor and Pensions. S. 1315, 111th Cong. 1st Sess.

III. Food Developments

Reportable food registry implementation delayed
A draft guidance announced the delay of the implementation of the Reportable Food Registry (Registry) until September 8, 2009, in order to assist the food industry in complying with registry requirements. Titled “Questions and Answers Regarding the Reportable Food Registry as Established by the Food and Drug Administration Amendments Act of 2007,” the draft document assists those complying with the registry, which was created to provide a reliable mechanism to track patterns of adulteration in food to target limited inspection resources to protect the public health. The draft guidance explains the use of the registry's electronic portal, and it defines key terms and answers questions regarding information entry into the registry. FDA Notice, ¶41,931