FDLI Publications: Food and Drug Law Journal 51-3

Volume 51 Issue 3

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> Recent Developments Help the Defense of Drug Companies in 10b-5 Cases
> Legal Issues Concerning the Promotion of Pharmaceutical Products on the Internet to Consumers
> From Jim to Gene and Beyond: An Odyssey of Biologics Regulation
> The Ability of Current Biologics Law to Accommodate Emerging Technologies
> CBER’s Strategic Plan: Response from the Physician/Medical Community
> Ambiguities of the Dietary Supplement Health and Education Act of 1994
> FDA Reform: The Need for a Sound Science-Based Approach
> Food Industry Initiatives to Improve the FDA’s Food Ingredient Review Processes
> NAFTA Countries: Convergence and Fracture
> Global Customer Partnerships
> The Impact of the Patent Term Provisions of the 1994 Uruguay Round Agreements Act on the Drug Price Competition and Patent Term Restoration Act

Recent Developments Help the Defense of Drug Companies in 10b-5 Cases
Author: Alan N. Salpeter & Harley Hutchins
Issue: 51 Food and Drug Law Journal 345-354 (1996)

Drug companies frequently find themselves defending Rule 10b-5 securities fraud actions for failure to report adverse information about their products. Because drug companies routinely generate extensive documentation in connection with the testing and approval of their drugs, the record is rife with information to develop such a claim. This article discusses how recent developments in the courts, as well as the 1995 Private Securities Litigation Reform Act, provide effective and, in some cases, never-before-available defenses for drug companies.

Recent case law provides defendants with improved defenses (1) that the alleged misstatement or omission was not material, (2) that the defendant had no duty to speak, and (3) that the defendant did not have the necessary scienter. The new 1995 Reform Act has codified and added a number of other protections for drug company defendants. The Act provides a safe harbor for forward-looking statements, clarifies the scienter element of a 10b-5 claim, provides a potential cap on damages available to plaintiffs, stays discovery for defendants who file a motion to dismiss, and offers a number of other protections.

Legal Issues Concerning the Promotion of Pharmaceutical Products on the Internet to Consumer
Author: Peter S. Reichertz
Issue: 51 Food and Drug Law Journal 355-366 (1996)

The internet provides an additional avenue for the promotion of pharmaceutical products. At present, there is only a limited amount of pharmaceutical promotion on the internet. This is probably because the Food and Drug Administration (FDA) has yet to issue any draft guidance on the promotion of pharmaceutical and other FDA-regulated products on the internet, and because of other concerns, such as product liability. This article reviews the issues facing the FDA in its regulation of promotion on the internet, such as whether such promotions are advertising or labeling, how the agency will deal with the international nature of the internet, and FDA concerns about hypertext and links to home pages with information about unapproved uses. The article also discusses what other government and private regulatory agencies and bodies (such as the Federal Trade Commission, the Drug Enforcement Administration, and the Better Business Bureau’s National Advertising Division) are doing and saying about pharmaceutical promotion on the internet. Finally, it considers the product liability concerns that may make some companies reluctant to advertise on the internet.

From Jim to Gene and Beyond: An Odyssey of Biologics Regulation
Author: Philip D. Noguchi
Issue: 51 Food and Drug Law Journal 367-374 (1996)

The field of cell and gene therapies is one of the most rapidly expanding areas under the Food and Drug Administration’s (FDA’s) jurisdiction. While current federal authorities and regulations have proven useful for single-product therapeutics, current novel therapies employ a variety of technologies and products in combinations that were not feasible until a few years ago. This heralds a change from the traditional pharmaceutical model of single-product therapeutics to one that focuses on patient-centered therapies, in which each patient is treated with whatever is necessary to restore health. The FDA is exploring new ways to interact with industry, academia, and the public to meet the challenge of flexible regulation.

The Ability of Current Biologics Law to Accommodate Emerging Technologies
Author: Martha J. Carter
Issue: 51 Food and Drug Law Journal 375-380 (1996)

This article examines the existing regulatory framework for biotechnology products and its relevance to emerging technologies. The Food and Drug Administration’s (FDA’s) approach to regulating biotechnology products dates back to a policy statement issued in 1986 that stated that existing laws and regulations were adequate to address the agency’s regulatory needs for such products. Requirements for biotechnology products were embodied in guidelines called “Points to Consider” documents, which were published without notice-and-comment rulemaking. This has created some unusual situations; for example, manufacturers essentially are prevented from using the abbreviated new drug application mechanism for “me-too” recombinant drug products because a Points to Consider document requires safety and efficacy studies.

While it may not be desirable to alter the current regulatory structure, there may be ways to improve the application of extant laws and regulations to emerging technologies that do not easily fit the traditional paradigm. Greater use of advisory committees in the development of guidelines is suggested, as is a more pragmatic approach to determining whether safety and efficacy per se must be demonstrated prior to licensure. Ultimately, the agency should use a thoughtful, balanced approach to regulate products derived from emerging technologies, drawing on authorities that provide the most rational pathway to meeting society’s needs.

CBER’s Strategic Plan: Response from the Physician/Medical Community
Author: Paul D. Parkman
Issue: 51 Food and Drug Law Journal 381-382 (1996)

Catching the attention of the medical community generally, and convincing it that the Center for Biologics Evaluation and Research’s strategic plan is making appropriate changes and producing desired results, will require effective and repeated communication and continued confirmation. The best approach is through evolutionary improvements rather than risking an entirely new, untried system. Neither the agency nor its critics can ignore the need for the continuing services of a wide range of high-quality professional employees; these should include laboratory scientists. CBER’s strategic plan seems sound and deserves the support of the medical community.

Ambiguities of the Dietary Supplement Health and Education Act of 1994
Author: Robert G. Pinco & Paul D. Rubin
Issue: 51 Food and Drug Law Journal 383-406 (1996)

This article reviews many of the ambiguities of the Dietary Supplement Health and Education Act of 1994 (DSHEA). The discussion focuses on the distinction between dietary supplement statements of nutritional support and drug claims, and the resulting implications for the Over-the-Counter (OTC) Drug Review. The article concludes that statements of nutritional support authorized by DSHEA should not be characterized by the Food and Drug Administration (FDA) as drug claims, and that certain OTC drug monographs therefore no longer may be applicable to dietary supplement products.

This article reviews the dietary supplement definition, food additive exclusion, and labeling exemption established by DSHEA. Federal preemption issues and FDA/Federal Trade Commission (FTC) substantiation requirements also are addressed. Finally, the article considers the FTC’s regulation of dietary supplement advertising and discusses the potential need for clarifying legislation.

FDA Reform: The Need for a Sound Science-Based Approach
Author: John Cady
Issue: 51 Food and Drug Law Journal 407-412 (1996)

The scientific community, regulated industries, consumer groups, and even the Food and Drug Administration (FDA) itself agree that FDA reform is not only desirable, but necessary. Disagreement occurs when the discussion moves to what reforms are needed and how to achieve them. A consensus on reform can be achieved by acknowledging that sound science must be the criterion for all FDA reform proposals, and that such proposals should aim to strengthen food safety, protect food quality, and make the agency more effective.

The National Food Processors Association (NFPA), the scientific voice of the food industry, supports science-based FDA reform to permit companies to seek approval of food additives through qualified third-parties; to reform the Delaney Clause of the Federal Food, Drug, and Cosmetic Act; to improve the process for approval of health claims on food labels; and to establish national uniformity for food laws. While some of this can be done by the agency — such as the FDA’s positive response to NFPA’s petition on health claim and nutrient content claim policy — the agency lacks authority to make a number of the reforms supported by the food industry. Therefore, FDA reform legislation is necessary. FDA reform bills, supported by NFPA and the food industry, are being considered by both the U.S. Senate and the House of Representatives.

Food Industry Initiatives to Improve the FDA’s Food Ingredient Review Processes
Author: Stuart M. Pape
Issue: 51 Food and Drug law Journal 413-422 (1996)

The Food and Drug Administration’s (FDA’s) program for reviewing food ingredients is a failure. It receives little attention from senior officials, and is short of resources and expertise. The procedures for review, combined with a culture of excessive caution among reviewers, lends itself to indefinite delay. At the same time, petitions have become increasingly complex, requiring more attention and skill than in the past. No one can predict how long the review of a petition will take.

In 1995, a food industry coalition brought attention to these problems and suggested improvements. For the first time in forty years, Congress held hearings on the food ingredient review process. The food industry coalition’s proposal recommends comprehensive reform to speed approval time without sacrificing safety. It would revise the review process to ensure firm dates for decisions and allow the FDA to utilize outside expertise through independent review organizations. The proposal also calls for further congressional oversight of the FDA’s compliance with timetables. So far, the FDA reform legislation remains stalled in Congress. The House of Representatives has adopted much of the industry coalition’s proposal, but the Senate has not. The form that the legislation ultimately will take remains to be seen.

NAFTA Countries: Convergence and Fracture
Author: Katharine E. Gourlie
Issue: 51 Food and Drug law Journal 423-436 (1996)

Global and regional trade agreements are affecting trade flows and regulatory activities within participating countries. 1995 trade figures released by the World Trade Organization show significant increases in export trade over 1994 for the three North American Free Trade Agreement (NAFTA) partners (the United States, Canada, and Mexico). The regulatory control authorities in these three countries increasingly are becoming interconnected, and there is considerable activity in both Canada and Mexico as they consider harmonizing their food regulatory systems with that of their U.S. partner. The uniqueness of certain aspects of U.S. food law, however (as reflected in the Nutrition Labeling and Education Act and the Dietary Supplement Health and Education Act), presents a conundrum for Canada and Mexico because both countries also support the elaboration and adoption of world-wide food standards under the Codex Alimentarius Commission. The convergence of food regulation among the three NAFTA partners may be affected by future Codex decisions regarding nutritional labeling, nutrient content and health claims, and the labeling of novel foods. Whatever differences may remain, there is significant opportunity for U.S. marketers in both Canada and Mexico, provided those regulatory differences are respected.

Global Customer Partnerships
Author: Sergio M.A. Lecchini
Issue: 51 Food and Drug Law Journal 437-444 (1996)

Even the largest company often finds that, to withstand the increasing number of competitive threats to which it is subjected, it may have to enter a number of strategic alliances. One type of strategic alliance is between a customer and supplier. Many synergies are possible in creating such partnerships, particularly when these are global partnerships. To fuel a beneficial relationship with its customers, a supplier needs to focus on operational excellence and its ability to offer a steady flow of innovation. This, in turn, requires institutional clarity of thought and a ready supply of trained minds that can work as a seamless unit. The key is to be able to shape present activities, not by the events of the past, but by the potential of the future.

The Impact of the Patent Term Provisions of the 1994 Uruguay Round Agreements Act on the Drug Price Competition and Patent Term Restoration Act
Author: Michelle S. Marks
Issue: 51 Food and Drug Law Journal 445-470 (1996)

Transitional provisions within the 1994 Uruguay Round Agreements Act (URAA) apply the new twenty-year patent term to certain existing patents. Three recent decisions from the Court of Appeals of the Federal Circuit have looked at the effect that URAA's transitional provisions have on components of the Drug Price Competition and Patent Term Restoration Act of 1984 (DPC-PTRA).

In DuPont Merck Pharmaceutical Co. v. Bristol-Myers Squibb Co., the Federal Circuit court construed the URAA as having no effect on (1) an act of infringement under 35 U.S.C. section 271(e)(2)(A); (2) the Food and Drug Administration’s (FDA's) ability to suspend approval of an abbreviated new drug application (ANDA) containing a paragraph IV certification;, and (3) the injunctive relief provided in 35 U.S.C. section 271(e)(4). The URAA's silence with regard to the ANDA approval process was interpreted by the appellate court in Bristol-Myers Squibb Co. v. Royce Laboratories, Inc. to ratify the generic drug approval provisions of 21 U.S.C. section 355(j) and 35 U.S.C. section 271(e). In Merck & Co., Inc. & MSD v. Kessler, the court construed how 35 U.S.C. section 156 is to be interpreted when it interfaces with the URAA. Patents that were in force on June 8, 1995, only because of a restoration extension may not add a restoration extension to a twenty-year patent term. All other pre-June 8, 1995, patents are entitled to add a section 156 extension to a twenty-year patent term.