Ohio Health Lawyer & Attorney : Jayne Juvan : Benesch Friedlander Law Firm : Serving Columbus, Cleveland, Cincinnati, Toledo, Akron, Dayton, Parma, Youngstown, Canton, and Lorain OH

If you are interested in tracking incidents involving counterfeit drugs, SafeMedicines.org covers international counterfeit drug developments.  For example, the site provides links to a Washington Post article covering China's attempts to strengthen safety controls, along with discussion of China's recent discovery of 18,000 fake Viagra pills and Health Canada's new anti-counterfeiting strategy launched in response, at least in part, to the death of a woman who took counterfeit anxiety drugs purchased online and the deaths of four Ontario residents who took counterfeit heart drugs.

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On Monday, the Food and Drug Administration ("FDA") advised consumers to refrain from purchasing prescription drugs over the internet, citing multiple safety concerns, including risks associated with improper labeling and packaging.  The press release warned consumers that certain drugs available online have been withdrawn by the FDA in response to safety and efficacy concerns and suggested that generic drugs may actually be cheaper than the costs charged online by internet sellers, as many national pharmacy chains offer drugs for $4 per prescription.   

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I have been on a short hiatus due to finishing major projects for clients and traveling to the east coast on business (special thanks to my friends at the New York City office of Crowell & Moring for their hospitality), but haven't stopped tracking developments on the drug counterfeiting front.  For my readers following these issues closely, if you haven't already done so, I would suggest that you review the posts listed below from two knowledgeable, savvy bloggers:

• Pfizer Questions RFID, published by Dr. Adam Fein, author of Drug Channels.  The post discusses an interview with John Theriault, Pfizer's vice president of global security, published by the Star Ledger.
• Counterfeit Drugs and the American Enterprise Institute, published by Eric Turkewitz of the Turkewitz law firm.  The post profiles an article entitled Bad Medicine in the Market written by Roger Bate and Kathryn Boateng. 

 

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"Unauthorized" or "secondary" wholesalers have continued to demonstrate their commitment to overcoming federal pedigree laws that impose an obligation on them to track the chain of custody of drugs back to the manufacturer.  An organized group of these parties recently filed an amicus curiae brief with the United States Court of Appeals for the Second Circuit, arguing that the law violates the United States Constitution for failing to place the same pedigree requirements on authorized distributors, or those distributors that have entered into distribution agreements with manufacturers.  The brief argues that the law would, in effect, put these companies out of business because compliance would be impossible. 

The National Coalition of Pharmaceutical Distributors, Inc. filed the brief.  Without going into too many of the legal arguments set forth therein, essentially, the brief elaborates on several of the points made in the plaintiffs' filings to date and argues that the injunction put into place by the district court that has temporarily prohibited the enforcement of the implementing regulations ought to remain in effect. 

For those readers who are unfamilar,  "amicus curiae"  is a latin phrase that means "friend of the court."   An amicus curiae brief allows a person who is not a party to a case to file a document that provides additional information on a point of law a court is considering in attempt to provide guidance.  Academics also may file treatises with a court that present an academic discussion.

While these secondary wholesalers have refused to back down, many supporting the "big three" authorized distributors have consistently argued that the secondary market poses the greatest risk to the safety of the supply chain and therefore ought to be subject to the most stringent requirements.     

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About a week ago, the Senate passed S.1082, which is also known as the Food and Drug Administration Revitalization Act (the "Act").  The following is a well done report posted by the RFID Law Blog that details a provision included in the Act that strikes a blow to the RFID industry.

Last week, the US Senate passed legislation that reauthorized the federal user fees on pharmaceuticals that help fund the FDA. Buried in the legislation was a provision -- posted earlier on this blog site -- authored by Senator Judd Gregg of New Hampshire, that would require Internet pharmacies selling to US citizens to use tracking technology to minimize the risk of counterfeiting.
An amendment to that language, offered by Senator Michael Enzi of Wyoming, legislates a specific technology solution - and it's not RFID. Indeed, it specifically excludes anti-counterfeiting technologies like RFID or barcodes that require readers, scanners or other devices to verify authenticity -- replacing the FDA's preferred tools with anti-counterfeiting technologies akin to those used on US currency.

I'd highly recommend that you check out the site to read the entire blog post.  RFID Update also offers interesting spin in its article New Law Serves as Warning to RFID Industry and cautions that the industry must take Washington and the lobbying scene very seriously if it intends to be a true player.  The article states, "While this internet pharmacy provision is unlikely to cause long-term detrimental harm to RFID adoption, it can be viewed as a lesson of what can happen if the industry does not more actively engage with Washington." 

The Act has yet to be considered by the United States House of Representatives.

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I have agreed to participate in a Q & A on drug pedigree laws sponsored by CIO Magazine and CSO Online.  Here's the description that has been published: 

Have a question about the legal requirements for RFID and e-pedigree in the pharmaceutical supply chain? Jayne Juvan, an attorney at Benesch Friedlander Coplan & Aronoff in Cleveland, is available to answer reader questions throughout May. Juvan specializes in the healthcare industry and represents pharmaceutical companies throughout the supply chain, as well as hospitals, physician groups and other related services.

 

 

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Ask James Christian from Novartis AG whether he believes that RFID is the "solution" to halting drug counterfeiting, and, based upon his remarks at the recent IQPC/Pharma IQ e-pedigree conference, I'd surmise that he'll likely question whether the word "solution" should be used at all.  Shay Reid chuckled as he introduced himself at the conference not long after Christian concluded his remarks, as he is AmerisourceBergen's vice president of integrated solutions. 

So, contrary to what Christian may contend, is RFID in fact the solution to the drug counterfeiting problem?  In CIO Magazine, Sarah Scalet, a senior editor for the publication, takes this question head on as she reveals the following five myths about RFID:

1. RFID tags are anticounterfeiting devices.  Wrong, she says, "[t]hey're made by semiconductor companies for inventory purposes," quoting Roger Johnston.
2. RFID technology is necessary to track the movement of legitimate drugs.  As explained by Reid both in the article and at the recent IQPC counterfeiting conference, RFID is only one small component of a strong anti-counterfeiting system.  ABC's track and trace pilot project incorporates many other technologies, including 2-D barcodes and VeriSign's authentication registry.
3. RFID technology can be used to mark pills, tablets and elixirs themselves.  Scalet cites to Christian in refuting this myth, who states that only the packaging is being tagged, not the pills.  What's more is that, because current regulations allow for repackaging, "[i]f a pharmaceutical company invests a great deal of money into putting security devices in packaging, the product could easily be transferred legally to a package with no security device."
4. RFID technology will let consumers verify that they have purchased legitimate products.  No one, including the FDA, has proposed a system that would allow consumers to ensure products they purchase are authentic, and privacy concerns are prompting the disabling of tags prior to dispensing the drugs to the end user.
5. The pharmaceutical industry is this close to widespread RFID adoption.  I'm not sure that the pharmaceutical industry is this close to anything when we're talking about pedigree.

Adam Fein, one of the leading authorities on pharmaceutical supply chain matters, has expounded on Scalets myths on his blog Drug Channels.  In addition to providing valuable comments on Scalet's article, Fein also exposes interesting inaccuracies contained in statements in a leading industry publication.

 

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The FDA has continued to aggressively fight the injunction issued by the District Court for the Eastern District of New York in Rx USA Wholesale v. Department of Health and Human Services, Food and Drug Administration.  The injunction issued in the case prohibits the FDA from requiring that secondary wholesale distributors of pharmaceuticals pass a pedigree that tracks each prior sale of a drug, a requirement that secondary wholesalers claim is impossible given that the statute and accompanying regulation do not impose a concomitant obligation on authorized distributors, or those distributors that have entered into an agreement with the manufacturers.

The FDA has appealed the lower court's ruling and most recently filed a brief urging the Second Circuit Court of Appeals to overturn the injunction.  The brief argues that (1) congressional intent is clear on the face of the statute that drug pedigrees must track the chain of custody back to the manufacturer, (2) the statute and regulations comport with the protections in the equal protection and due process clauses, as they are rationally related to Congress's desire to curtail pharmaceutical counterfeiting and consistent with Congress's findings that "non-authorized distributors were the avenue through which most diverted drugs entered the retail market and created public health dangers," and (3) the scope of the preliminary injunction is far too broad because it prohibits the FDA from requiring that drug pedigrees include the information set forth in subsections (1) through (5) of the regulation.  In the brief, the FDA states with respect to the latter argument that "Plaintiffs have not, and cannot, claim that it is impossible for them to supply this additional information, as it is readily apparent on the face of the drugs' labeling."

With the hold on the federal drug pedigree regulations requiring secondary distributors to trace the chain of custody back to the manufacturer currently in place, the focus has shifted to the states.  Last week, I received a call from an individual from the Texas legislature informing me of progress of the Texas drug pedigree legislation.  For those who are interested in tracking the legislation on a state by state basis, you can follow the developments of the proposed Texas law on the state legislature web site.  

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Last week, I attended and presented at the Pharma IQ conference entitled "e-Pedigree and Business Strategies for Drug Supply Security" held in Philadelphia, Pennsylvania.  At the conference, Tim Marsh from Pfizer, Inc. discussed Pfizer's anti-counterfeiting strategies, Dennis Luken, a detective with the Warren county, Ohio drug task force and the National Treasurer of the National Association of Drug Diversion Investigators reviewed the problem of drug diversion and counterfeiting in 2007, while Jim Christian from Novartis AG emphasized that RFID and track and trace technologies are not "solutions" to the counterfeiting problem.  Shay Reid, Vice President from Amerisource Bergen Corp., discussed Amerisource Bergen's attempts to become compliant with California's pedigree laws by 2009, and Robert Drucker from Rx USA Wholesale informed the audience about events that caused him to sue the FDA to prohibit the enforcement of regulations requiring secondary wholesalers to provide pedigrees tracing back to the manufacturer that fail to impose a concomitant obligation on authorized distributors.  Attorney Michael Levine also discussed his involvement in the case and the status of the injunction.  For those of you who are following the case, if you haven't already, I urge you to review the Pharmaceutical Market Access and Drug Safety Act of 2007, which includes language that, if implemented, would require manufacturers and authorized distributors of pharmaceuticals to likewise pass a pedigree.

While I was away in Philadelphia, the following stories made headlines:

• CMS Issues Proposed Decision Memorandum for Medicare National Clinical Trial Policy.  CMS has proposed revisions to its coverage policy for items and services furnished in a clinical trial.  As stated in the press release, the changes would include the following:
  • Renaming the policy as the Clinical Research Policy; 
  • Adding FDA post-approval studies and coverage with evidence development (CED) to studies that would qualify under this policy;
  • Requiring all studies to be registered on the NIH ClinicalTrials.gov website before enrollment begins;
  • Requiring studies to publish their results;
  • Paying for investigational clinical services if they are covered by Medicare outside the trial or required under an CED through the NCD process; and
  • Expanding the “deeming” agencies to all DHHS Agencies, the Veterans Administration, or the Department of Defense.  Deeming agencies are agencies that can “deem” whether a trial has met the general standards outlined in the policy.

See also the Proposed Decision Memorandum, available on the CMS web site.

• Kaiser Family Foundation Reports that Health Care Has Become an Important Campaign Issue.  The Kaiser Family Foundation summarized articles in leading newspapers reporting that health care has become a focus on the 2008 presidential campaign trail.  I would also recommend that readers review the New York Times Article "For Democrats, Health Care is a Rite of Passage."  As the election nears, Juvan's Health Law Update will begin tracking the views of the candidates on both sides of the aisle.

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Welcome to daylight savings time, which has been moved up from April!  Hopefully, the extra sunshine will calm the nerves of those whose blackberries are still an hour behind and whose calendar appointments are incorrect.  My calendar, for example, has shifted all of my lunch appointments to 10:00AM--so I'll either be finding myself drastically early for lunch or having brunch with acquaintances whose calendars are likewise confused.  If only the weather in Cleveland could also be affected by the change and undergo an early 50 degree shift in temperature...

On a more serious note...Generics, Generics, Generics! Generics made news on several fronts last week.  First, on Wednesday, the Senate Committee on Commerce, Science and Transportation Subcommittee on Interstate Commerce, Trade and Tourism reviewed the safety of drug importation.  At the hearing, Billy Tauzin, President and CEO of PhRMA,  stated that the closed system that blocks importation is the only way to ensure a safe supply chain.  Tauzin also launched attacks against those who argue that the cost savings of importation benefits consumers when he stated that "[m]ost of the savings would likely go to third party payers, such as insurance companies and HMOs."  Likewise, Randall W. Lutter, Acting Deputy Commissioner for Policy at the Food and Drug Administration, stated that the risk of receiving counterfeits is drastically increased when drugs are purchased online and that drugs purchased from foreign markets often have similar names but different active ingredients.  So--how is this news item tied to generics?  In his testimony, Lutter emphasized that generics, not imports, are the answer to cost control. 

In related legislation, lawmakers are also continuing to consider whether to ban negotiations between generic drug companies and makers of brand name drugs that effectively delay or prohibit the entry of lower cost drugs to the market.  The details of the hearing are set forth more fully in the post linked to above. 

Finally, lawmakers considered a bill last week that would provide the FDA with the authority to approve generic forms of biotech drugs.  Currently, the FDA lacks this authority because of the difficulty of creating generic equivalents of these drugs, which are made with living organisms.  As reported by the Kaiser Family Foundation, the proposed legislation requires that the drugs be comparable or interchangeable and that the principal molecular features be highly similar to the brand name. 

Merger mania revived!  Caremark RX, Inc. and CVS inched forward toward completion of their merger plan last week when a new proposal offered to increase by an addition $1.50 a special cash dividend, bringing the total to $7.50 per share.  As reported by the Wall Street Journal, the company post-merger would also "commence a cash tender offer for 150 million, or 10% of outstanding shares at a fixed price of $35 each."  The Wall Street Journal views this new offer as bringing "the competing proposals largely in line on a dollar basis" and giving CVS "a significant advantage in its ability to close the deal quickly."  While rival company Express Scripts has also raised its offer, Express Scripts currently does not have regulatory approval of its proposed deal from the Federal Trade Commission. 

Interested in an update on the NLRB's Oakwood decision?  On March 7, the BNA Daily Labor Report, which discussed the early impact of the Oakwood decision, stated that the fallout has thus far not been quite as severe as would have been originally anticipated.  However, while management attorneys speaking at a conference held by the American Bar Association stated that the "decision has not had much impact on supervisory determinations," union attorneys speaking at the same conference claim "that the full impact has yet to be felt." 

As previously discussed on Juvan's Health Law Update,  the NLRB held in Oakwood that charge nurses employed by an acute care hospital executed supervisory authority within the meaning of Section 2(11) of the NLRA because they assigned responsibilities to other nurses and exercised independent judgment in making these assignments.  

 

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For those of you who are following closely the developments with respect to the PDMA, I wanted to alert your attention to an article by Pharmaceutical Commerce released in December that highlights developments in fifty states regarding drug pedigree requirements.  The article, entitled Red State, Blue State--and Green, Yellow and Orange Too,  provides the following fifty state summary: 

• Two states have passed legislation and approved regulations;
• Ten states are in the process of finalizing regulations;
• Five states have passed legislation but have not drafted regulations;
• Twelve states, including Ohio, have not approved such legislation; and
• Twenty-one states are at various other stages. 

As the article rightfully points out, "[f]or a pharma distributor intending to distribute to more than a few states, there's one word for the map: ugly.  The problem, basically, is that the number of variations for requirements are multiplying . . . ." 

As noted above, this article was released in December, and the current status of each state's legislation may not be accurately reflected.  Wholesalers should take care to comply with all applicable state and federal laws and regulations and to track developments closely.

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Yesterday, the FDA filed a notice of appeal in RX USA Wholesale, Inc. v. Department of Health and Human Services.  The measure seeks to have the United States Court of Appeals for the Second Circuit overturn the order issued by the United States District Court for the Eastern District of New York enjoining the FDA from implementing the pedigree requirements set forth in 21 C.F.R. section 203.50.

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On January 10, Senators Dorgan (D-ND) and Snowe (R-ME) and Representatives Emerson (R-MO) and Emanuel (D-IL) introduced the Pharmaceutical Market Access and Drug Safety Act (the "Act"), drafted to allow the importation of drugs from FDA registered and approved pharmacies abroad.  The news release issued by Senator Dorgan indicated more than thirty groups support the move (including the AARP) and that savings that could total up to $50 billion dollars in the next ten years.

Making the case for the proposal, the findings in Section 2 claim that

• Americans pay the highest price in the world--up to five times the price that consumers worldwide pay--for prescriptions;
• A drug is neither nafe nor effective if an individual cannot afford the cost; and
• Allowing the importation of drugs would promote competitive pricing, result in savings, and make for greater access to therapy.

The Act allows for the importation of certain "qualifying drugs" in which there is a "U.S. Label Drug" equivalent.  Such drugs may be imported not only from exporters in Canada, but also from other countries as designated by Secretary of the Department of Health and Human Services.

Commenting on the Act, Dorgan stated, "Currently, the big drug manufacturers can monopoly price their medicines here and, as a result, American consumers pay the highest prices in the world for prescription drugs.  The fact is, miracle drugs perform no miracles for people who can't afford them."  Likewise, Senator Snowe stated, "This legislation leaves no stone unturned to assure that the importation of prescription drugs will be safe and meet the requirements of the Food and Drug Administration, while delivering real savings to American consumers." 

Others have criticized the Act, however.  Dr. Adam Fein of the hit blog Drug Channels, in his article "Real News About Fake Drugs," references prior articles covering the dangers of reimportation and states that he finds "it highly ironic that the proposed legislation includes 'drug safety' in its title."   

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Last week, the National Association of Independent Pharmaceutical Wholesalers (NAIPW) and the Association of Independent Pharmaceutical Wholesalers of America (AIWPA) issued recommendations for national pedigrees.  The NAIPW and the AIWPA were both founded by Robert C. Drucker, President and CEO of RX USA Wholesale, Inc. and Mark S. Scovotti. 

Continue Reading...

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Recently, the Department of Health and Human Services filed its Answer in RxUSA Wholesale, Inc. v. Department of Health and Human Services.  The FDA has also issued industry guidance about the injunction, a brief description of which is contained in this article.

Continue Reading...

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Jayne E. Juvan will be speaking at the upcoming seminar entitled "Anti-Counterfeiting Business Strategies for Pharmaceuticals." The seminar will take place in Philadelphia, Pennsylvania from April 11, 2007 through April 13, 2007. 

At the seminar, Juvan will offer a special feature presentation: "Understand The Case That Kept The Stay on the PDMA to Best Prepare for Upcoming Regulations." Following Juvan's presentation will be a Q&A with Robert Drucker, President and CEO, RxUSA Wholesale.  Here's the description of Juvan's speech:

As the pharmaceutical industry prepared for what was surely to be a historic moment of lifting the stay on 1987s Prescription Drug Marketing Act, several wholesalers were preparing for a win of monumental proportions: to stop the industry in its tracks by suing the FDA. In this session, attorney Jayne E. Juvan will cover:

          *The details of the case

          *The meaning of Judge Seybert's ruling for the industry's future

          *What this means for your company when preparing for future federal and state regulations

For more information about the conference, including registration information, visit http://www.iqpc.com/cgi-bin/templates/genevent.html?topic=237&event=12172&. 

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The FDA has published its interpretation of the preliminary injunction ordered on December 5, 2006 by the Eastern District of New York in RX USA Wholesale, Inc. v. HHS.  A brief analysis of this guidance will follow in a subsequent post.  See also the FDA's Backrounder re: RX USA Wholesale, Inc. v. HHS.

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Today, RFID Update announced that the injunction issued in RX USA Wholesale, Inc. v. Department of Health and Human Services could "slow momentum for RFID e-pedigrees."  The author notes that, "[w]hile RFID had not been a requirement for the pedigrees, industry observers agreed that pedigree enforcement generally was a positive step toward the ultimate adoption of RFID-based e-pedigrees . . . . [W]ith the FDA pedigree requirement now postponed, momentum behind RFID e-pedigree adoption may be slowed."  The article also quotes yours truly in a section discussing the legal analysis of the case.

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As promised, the following are a few pertinent points from the order issued by Judge Seybert today:

• Irreparable Harm.  The court rejected the Defendants' argument disputing that the Plaintiffs will suffer irreparable harm by denial of the injunction because their argument "is circuitous."  Instead of disputing the Plaintiffs' arguments, the court stated that the Defendants actually acknowledged that the Plaintiffs will suffer irreparable harm and only disputed the source of the harm.
• Likelihood of Success on the Merits--Applicable Standard.  The court clarified that the law does not require a finding that the Plaintiffs will, with "absolute certainty," succeed on the merits of their claims.  Instead, a party "need only make a showing that the probability of [the party's] prevailing is better than fifty percent.  There may remain considerable room for doubt."  Accordingly, a finding that the Plaintiffs have overcome their burden with respect to the rational basis test at this juncture only serves to demonstrate that the Plaintiffs are slightly more likely than not to succeed on their claims.
• PDMA Rational Basis Review.  The court rejected the portion of the Report and Recommendation finding that there was no rational basis for the PDMA.  Nevertheless, the court also rejected the Defendants' arguments on this point, stating, "This entire regulatory scheme and anomalous result that would occur if the Rule went into effect appears arbitrary in light of the FDA's previous position and interpretation of the PDMA. . . . [N]one of the drugs ultimately going to the American consumer would contain pedigree information because the drugs would be provided solely through authorized distributors who are exempt from the pedigree requirement."
• Public Interest Analysis.  In the final decision, the court included an analysis of the effect granting the injunction would have on the public, an analysis the Report and Recommendation failed to include.  Such an analysis makes not only good legal sense, but also good logical sense.  Essentially, the court stated that, when a preliminary injunction has an effect on the public interest, a court should balance the interests involved.  In a statement that gets at the heart of the decision, Judge Seybert wrote, "By granting Plaintiffs' motion for the preliminary injunction, this Court simply maintains the status quo and the current practice in the industry."  Alternatively, if the court were to deny the Plaintiffs' motion, (1) many unauthorized distributors could go out of business, leading to underserved markets, and (2) only authorized distributors, who are not covered by the pedigree requirement, would be supplying information.  Maintaining the status quo, however, would not prejudice the Defendants' rights, as the Defendants have waited for twelve years to implement the rule.

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A party related to RX USA Wholesale v. Department of Health and Human Services kindly forwarded to me this morning the pdf of Judge Seybert's Order Adopting Report and Recommendation.   According to the source, the decision was handed down on Friday evening and was filed on the Court's electronic filing site at 10:17 AM EST this morning.  I will update this post later this evening with an analysis of the decision and will continue to track developments in the case.

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On Monday, December 4, 2006, Judge Joanna Seybert adopted in part the Report and Recommendation of Magistrate Judge Kathleen Tomlinson issued only days earlier on November 30 in RX USA Wholesale v. Dep't of Health & Human Services and granted the preliminary injunction requested by the Plaintiffs.  The lawyers had only one day to scramble to file their objections to Magistrate Judge Tomlinson's decision, but nevertheless zealously advocated for their positions.  Adam J. Fein of Drug Channels has covered the impact the injunction will have on manufacturers and wholesalers.  For those following the case, a brief legal analysis of the Report and Recommendation, along with a discussion of the arguments of the parties in response, is set forth below.

Continue Reading...

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I highly recommend that readers of this blog interested in the pharmaceutical industry visit Drug Channels, a blog hosted by Adam J. Fein, founder and president of Pembroke Consulting, Inc. based in Philadelphia.   Fein includes incisive commentary about the pharmaceutical industry, including most recently unique perspectives on the profitability of generics and Wal-Mart's $4 generic program.  The following is a list of recent posts:

• The Attack on Generic Profits in Drug Channels;
• Wal-Mart Raises the Stakes; and
• New York Times Editors Read This Blog.

While he certainly seems to be an expert in the field, Fein is as humble as they come, stating at the end of one post, "Hey, I'm just one voice out there, so please don't forget Newton's Second Law of Consulting: For every expert, there is an equal and opposite expert."

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