FDLI Publications: Food and Drug Law Journal 50-1

Volume 50 Issue 1

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> The Response to Heath Care Reform by the Pharmaceutical Industry
> The FDA's Regulation of Pharmaceutical Communications in the Context of Managed Care:
A Suggested Approach
> Direct-to-OTC Marketing of Drugs: Possible Approaches
>Lessons Learned from Good Manufacturing Practice Noncompliance
> Daubert v. Merrell Dow: Missed Opportunity
> Patient Package Inserts: The Proper Prescription?
> Prescription for the Orphan Drug Act: The Impact of the FDA's 1992 Regulations and the Latest Congressional Proposals for Reform
> Congressional Control Over Agency Rulemaking:
The Nutrition Labeling and Education Act's Hammer Provisions
> The Preemptive Scope of the Medical Device Amendments of 1976

The Response to Heath Care Reform by the Pharmaceutical Industry
Author: Andrew S. Krulwich
Issue: 50 Food and Drug Law Journal 1-22 (1995)

The prospect of health care reform has motivated the pharmaceutical industry to change their methods of operation in several ways. Pharmaceutical companies have formed alliances with pharmaceutical benefit plans, entered the generic drug field, and diversified into other areas of health care. These changes are primarily the result of market forces, not governmental intervention. This article identifies the forces behind these changes in the industry and discusses their legal implications.

The FDA's Regulation of Pharmaceutical Communications in the Context of Managed Care:
A Suggested Approach
Author: Bruce N. Kuhlik
Issue: 50 Food and Drug Law Journal 23-48 (1995)

The growth of managed care is the most important development in health care affecting the pharmaceutical industry. Manufacturers have responded by creating new arrangements with health care maintenance organizations, pharmaceutical benefit management companies, and other managed care entities. These changes are transforming the structure of the industry and the substance and form of communications regarding prescription drugs. The Food and Drug Administration (FDA) currently is examining these developments to determine how its drug labeling and advertising regulations apply in the new environment, and whether changes are needed. This article reviews the managed care arena and suggests principles to guide the FDA's approach to regulation in this area. The article concludes that the FDA should not regulate managed care communications as labeling or advertising if they are developed independently of the substantive influence of pharmaceutical manufacturer marketing organizations and are reviewed by outside experts. The article also suggests that, if it does regulate in this area, the FDA should do so comprehensively rather than imposing more restrictive rules on only a few types of arrangements.

Direct-to-OTC Marketing of Drugs: Possible Approaches
Authors: Stephen Paul Mahinka and M. Elizabeth Bierman
Issue: 50 Food and Drug Law Journal 49-63 (1995)

The ability of industry to bring new over-the-counter (OTC) drugs to market, whether through prescription-to-OTC switches or direct-to-OTC marketing, has for some time been enormously hampered by Food and Drug Administration regulatory rigidity and delays. During the past few years, prescription-to-OTC switches particularly have been subject to such regulatory difficulties. Establishment of the Office of OTC Drug Evaluation and the Nonprescription Drugs Advisory Committee in 1981 has not served to increase the flexibility and speed of agency OTC decisionmaking.

In view of competitive and other health care cost containment pressures, pharmaceutical companies can be expected to continue to consider mechanisms for OTC marketing for appropriate drug products. Rather than first obtaining approval to market drugs for prescription use and then attempting to switch them, however, companies may wish to consider seeking approval to market on an OTC basis directly. There are three mechanisms potentially available to establish direct-to-OTC drug marketing: (1) submission of a petition to amend or re-open an OTC drug monograph, (2) filing of a section 505(b)(2) application for a generic version of a new drug for OTC use, or (3) filing of a new drug approval application for marketing on an OTC basis. Significantly different advantages and disadvantages attend each of these three possible approaches to direct-to-OTC marketing of drugs.

Lessons Learned from Good Manufacturing Practice Noncompliance
Author: Michael P. Peskoe
Issue: 50 Food and Drug Law Journal 65-70 (1995)

In the highly-publicized case of United States v. Barr Laboratories, the Food and Drug Administration (FDA) obtained a largely favorable ruling on requirements for in-process and release laboratory testing of drug products. The district court judge's finding of facts in that case read as if they were general interpretations of the FDA's good manufacturing practice regulations, and the agency seems content to treat them as such. It remains to be seen, however, whether conclusions about regulatory requirements reached in a single enforcement matter are viewed properly as requirements of general applicability, absent traditional administrative procedures. This article recommends that the case be viewed as a starting point for the development of regulatory requirements, rather then as a fully-implemented "judicial amendment" to the agency's existing regulations.

Daubert v. Merrell Dow: Missed Opportunity
Author: Kimberly A. Jackson
Issue: 50 Food and Drug Law Journal 71-93 (1995)

The decision in Daubert v. Merrell Dow did not change significantly the way courts analyze the admission of scientific evidence. This article looks at the evaluation of scientific evidence in terms of three different, but related, tests: a qualified expert and helpfulness test, a balancing test with an emphasis on methodology, and a modified general acceptance test. All three of these approaches were used by courts prior to Daubert, were utilized by the Supreme Court in Daubert, and have been used since that decision. While lower courts appear to be employing these three approaches more consistently after Daubert, they are not being applied in exactly the same manner. The Supreme Court's decision did not provide them with enough concrete guidance. The Daubert decision was a compromise between the competing goals of excluding "junk science" and of employing a standard flexible enough to adjust to progress. As a result, the Supreme Court missed an opportunity to create a consistent standard for the admission of scientific evidence.

Patient Package Inserts: The Proper Prescription?
Author: Howard M. Rowe
Issue: 50 Food and Drug Law Journal95-124 (1995)

The late 1960s witnessed the emergence of the patient package insert (PPI). This article traces the history of PPIs, in light of recent calls to expand their usage and to be included in all prescription drugs. A review of the literature reveals that PPIs do comport with rationales given for their use, namely informed consent and patient education. The article concludes, however, that these rationales for PPIs strain rationales used to justify the prescription status of some drugs.

Prescription for the Orphan Drug Act:
The Impact of the FDA's 1992 Regulations and the Latest Congressional Proposals for Reform
Author: David B. Chissold
Issue: 50 Food and Drug Law Journal 125-147 (1995)

This article traces the history of the Orphan Drug Act and identifies some of its deficiencies, including the issue of excessively profitable orphan drugs. It also discusses some of the development disincentives faced by manufacturers of orphan drugs. In its 1992 regulations, the Food and Drug Administration (FDA) clarified the procedures by which the agency determines whether a compound or biological is the "same drug" as an already-approved drug, thus removing a significant barrier to orphan drug research.

This article explores the 1989 report of the National Commission on Orphan Diseases and other reports that preceded or accompanied recently proposed amendments to the Act. Amendments before the 1994 congress (H.R. 4160 and S. 1981) are analyzed, and their concept of "shared exclusivity" and the designation of a more powerful federal office to coordinate orphan drug research and set policy are reviewed as welcome modifications. These bills, however, neglect to define "excessively profitable" orphan drugs, and inappropriately shift this burden to the Department of Health and Human Services. The article concludes with some suggestions for further reforms, including expansion of the Act's tax incentives.

Congressional Control Over Agency Rulemaking:
The Nutrition Labeling and Education Act's Hammer Provisions
Author: M. Elizabeth Magill
Issue: 50 Food and Drug Law Journal 149-190 (1995)

Two of the key provisions of the Nutrition Labeling and Education Act of 1990 (NLEA) included "hammer" provisions that dictated the pace of the Food and Drug Administration's (FDA's) rulemaking. These provisions were instruments designed to put teeth into the NLEA's statutory deadlines. This article examines the origin and impact of the hammer, an innovative tool of congressional control. First, the hammer will be placed in the context of a growing congressional tendency to exert influence over the regulation writing process of executive agencies. Then, the article briefly examines the way the hammer influenced the NLEA rulemaking process, with the aim of drawing broader lessons for other uses of such legislative pace-controlling mechanisms.

The Preemptive Scope of the Medical Device Amendments of 1976
Author: Paul H. Sunshine
Issue: 50 Food and Drug Law Journal 191-212 (1995)

This article examines recent judicial decisions holding that the preemption provision of the Medical Device Amendments preempts all state law claims, including fraud. It concludes that courts have extended the scope of the provision beyond its express meaning and congressional intent. Legal and equitable principles dictate that the preemption provision should not apply where there is sufficient evidence of a manufacturer's fraud in obtaining approval from the Food and Drug Administration (FDA).

The article then analyzes the discrepancy between drugs and devices regarding federal preemption of state law claims. Devices are subject to statutory preemption, whereas there is no equivalent preemption provision for drugs, and FDA approval of a new drug has no preemptive effect. This discrepancy is problematic because the approval standards for new drugs tend to be more stringent than for devices. Moreover, the process by which the FDA distinguishes between drugs and devices is often arbitrary. This article argues that the degree of preemption should be equivalent for devices and drugs, and that Congress should enact a preemption provision for drugs, albeit one that expressly creates an exception for fraud.