Court imposes 10-month deadline for pre-market tobacco applications

A federal district court in Maryland has set a deadline of 10 months for tobacco product manufacturers to submit pre-market applications and a one year deadline for FDA approval. The court previously concluded that the FDA violated the Administrative Procedure Act (APA) when it released guidance in 2017 extending the compliance deadline for the “Deeming Rule” which brought new tobacco products under the purview of the Family Smoking Prevention and Tobacco Control Act. Rather than remanding the issue to the FDA to determine a timeline for compliance or accepting the plaintiffs’ request of a four-month deadline for applications, the court accepted the FDA’s recommendation of a 10-month deadline. The court found that it has the authority to impose such a deadline under the extraordinary circumstances of the case, in which prompt action is necessary to combat the public health crisis caused by the rise in youth e-cigarette use (American Academy of Pediatrics v. FDA, July 12, 2019, Grimm, P.).

FDA tobacco rule compliance extensions

On May 10, 2016, the FDA issued the “Deeming Rule,” bringing approximately 25,000 new tobacco products, including various cigars, e-cigarettes, pipe tobacco products, and hookah within the purview of the Family Smoking Prevention and Tobacco Control Act. The Deeming Rule went into effect 90 days after its publication (see FDA clears the air, ‘deems’ e-cigarettes, hookah tobacco, cigars worthy of regulation, Health Law Daily, May 10, 2016). In May 2017, the FDA extended the compliance deadline by three months. In August 2017, the FDA extended the timelines to submit tobacco product review applications for deemed tobacco products that were on the market as of August 2016. In May 2019, the district court ruled that the FDA’s August 2017 compliance deadline extension violated the Administrative Procedure Act, as it was done without following notice and comment requirements. The court vacated the August 2017 Guidance and asked the parties to brief the court on potential remedies, given that the application deadlines in the Deeming Rule and May 2017 Guidance had passed.

Remedy

The court concluded that the case presented “extraordinary circumstances” that called for more than simply vacating the guidance and remanding the issue to the FDA (as was requested by manufacturers). It imposed a 10-month deadline for submissions and a one-year deadline for approvals, as suggested by the FDA. The plaintiffs had requested a four-month deadline for submissions, but the court rejected that solution because of the record from the FDA demonstrating that a four-month deadline would prevent them from timely approving or denying applications and could clear the market of e-cigarette products, thus creating a risk that adult smokers would switch from e-cigarettes to combustible tobacco products. The FDA also presented evidence that it plans to accelerate the premarket review requirements for the products that are most attractive to youth, such as flavored products.

The court concluded that without a deadline for filing, manufacturers would be unlikely to move forward with applications, because the record showed a purposeful avoidance by the industry of complying with the premarket requirements despite entreaties from the FDA that it can do so, and it establishes a shockingly low rate of filings.

Trader Joe’s enjoys sweet victory, dismissal of honey labeling case

A putative class action involving allegations related to Trader Joe’s Manuka Honey has been dismissed after a California federal district court granted Trader Joe’s motion to dismiss without leave to amend. The consumers alleged that Trader Joe’s mislabeled and falsely advertised its manuka honey as “pure” when it was allegedly adulterated. In dismissing the complaint, the court concluded that plaintiffs could not plead sufficient facts to support their adulteration theory since their theory involved the bee’s mixing of pollen and not the manufacturer intentionally mixing manuka honey with non-manuka honey. Since the consumers admitted they could not plead enough facts to support their adulteration claims, the court also dismissed the breach of warranty and fraud claims. The product labeling is accurate and, therefore, not misleading. Finally, the state law claims are preempted (Moore v. Trader Joe’s Company, June 24, 2019, Westmore, K.).

Trader Joe’s (manufacturer) markets and sells “Trader Joe’s Manuka Honey.” Plaintiffs (consumers) allege that two representations contributed to their alleged injuries. On the front label, the product states “100% New Zealand Manuka Honey” or “New Zealand Manuka Honey. The ingredient statement lists “manuka honey” as the only ingredient. The consumers allege that the product testing they purchased showed that approximately 57 and 62 percent of the pollen in the tested honey was from the manuka flower; the remaining pollen was from other floral sources. The consumers allege that Trader Joe’s sales and marketing violate consumer protection laws because the honey is mislabeled and falsely advertised as pure manuka honey, but it should be labeled as “Manuka-based.” Trader Joe’s filed a motion to dismiss.

Insufficient facts to support adulteration

The court granted the manufacturer’s motion to dismiss without leave to amend because the consumers confirmed they could not plead sufficient facts to support the adulteration theory.

The consumers’ theory of adulteration is that bees visit different floral sources and return to the hive, which lowers the manuka pollen count; their theory was not that the manufacturer purposefully mixed manuka honey with non-manuka honey. The FDA’s industry guidance on honey labeling, which was referenced by both parties, only discusses adulteration with non-honey sources and not mixing high-value honey with less expensive honey. Further, the guidance does not address whether the mixing would constitute adulteration.

The court concluded that to constitute adulteration, the manufacturer would have to purposefully mix manuka and non-manuka honey. In this case, all the involved honey is technically manuka honey with varying pollen counts—there is no adulteration in violation of the FDC Act.

Since the consumers could not demonstrate adulteration, the court also dismissed the breach of warranty claim and fraud claim. The fraud claim is not actionable because it is predicated on adulteration whereby the manufacturer (not bees) purposefully mixed manuka and non-manuka honey; the consumers have no facts to support that theory.

Product labeling is accurate and not misleading

The court concluded that product label is accurate because the consumers cannot allege adulteration, honey is a single ingredient food, and the chief floral source is manuka. Furthermore, since the label is accurate, a reasonable consumer cannot find it misleading. Trader Joe’s product is accurately labeled as 100 percent manuka honey.

FDA considers a benefit-risk assessment for opioid analgesics

The FDA issued a draft guidance for the pharmaceutical industry when providing information in a new drug application (NDA) for opioid analgesic drugs. The FDA assesses risks and benefits of all drugs in the context of their labeled uses when reviewing NDAs. However, because of the widespread abuse of opioids the FDA will also consider the broader public health effect, including the risks related to misuse, abuse, opioid use disorders, accidental exposure, and overdoses for patients and others. The guidance details what data is required for the FDA to complete their benefit-risk analysis after receiving an NDA (Notice, 84 FR 29211, June 21, 2019).

Patient benefits. For the FDA to analyze patient benefits, pharmaceutical companies submitting opioid NDAs should show the efficacy and safety of the drug when used for its proposed indication. The NDA should provide a body of evidence supporting a finding of drug efficacy, what patient population was used and why, and a proposed duration of use for each proposed indication. In addition to efficacy, the companies should show the safety of the drug when used for its proposed use. The NDA should show drug safety by submitting supporting data of drug characteristics that mitigate adverse events associated with opioids, such as respiratory depression, sedation, and constipation. The FDA would also need data supporting any drug characteristics that mitigate risks of opioid use disorder.

Patient risks. In addition to the already known risks of opioids, the FDA will also consider questions about the risks to patients who are prescribed the drug and use it as labeled and directed by their physicians. The NDAs should provide data to support the answers to the following questions:

  • Does the drug have any risks not normally associated with opioid use? How serious are these risks, and can they be mitigated? Are the risks reversible?
  • Does the drug formulation cause any risks such as tablets that swell in the GI tract or stick to mucous membranes? For drugs formulated with abuse-deterrent properties, are there any risks associated with formulation?
  • Does the drug have characteristics that increase or decrease the risks of respiratory depression, sedation, or development of opioid dependence? Can packaging particulars or storage and disposal conditions mitigate the risks?
  • Is there evidence that typical adverse events associated with opioids occur at a higher rate?

Effectiveness and safety. The FDA considers the benefits and risks relative to other available treatment options for the prescribed condition. The comparative data of the drug to other treatment options is valuable, but the FDA notes, it is not required to be found superior to other options, to be approved for an ANDA. The FDA will consider the following questions when determining the effectiveness and safety of drugs in ANDAs:

  • Does efficacy data exist comparing the drug with other opioids or nonopioids for the condition? Does the drug have any advantages compared to other treatment options?
  • Does comparative safety data exist with other treatment options? Are there any safety advantages or disadvantages compared to other options?
  • What is the anticipated benefit-risk balance compared to other treatment options?
  • Does the drug have any other safety advantages over other treatment options?

Public health effects. The FDA proposed in the guidance that it would consider the greater public health effects of new opioids including patients and nonpatients. Nonpatients can be members of patient’s households, visitors to patient’s households and others. The risks are those related to misuse, abuse, opioid use disorder, accidental exposure, and overdose. The FDA will consider the following when analyzing public health effects:

  • Are there characteristics of the drug that increase or decrease risk of accidental exposure to children?
  • Are there characteristics of the drug that increase risk of misuse, abuse, and related adverse outcomes? Can the risks be mitigated?
  • Are there risks with the method of delivery?
  • Are there any potential unintended adverse consequences?
  • Safety of unintended routes of administration such as intravenous, intranasal, or inhalation
  • Discussion of anticipated use-specific subpopulations such as teens or patients with mental health disorders and how to mitigate such risks

Risk management. The FDA determined that there is a risk evaluation and mitigation strategy necessary for all opioid drugs intended for outpatient use to make sure the benefits outweigh the risks. The mitigation strategy requires training for all health care providers involved in the treatment of pain. To meet this requirement drug companies with approved opioid NDAs must provide grants to continuing education providers for development of these training courses. Any NDA must include any risk evaluation and mitigation strategies thought to be necessary to make sure the benefits outweigh the risks of the opioid drug.

U.S. pays nearly twice as much for drugs compared to other countries

A recent HHS analysis revealed that prices charged by drug manufacturers to wholesalers and distributors in the United States are 1.8 times higher than in other countries for the top drugs by total expenditures separately paid under Medicare Part B. U.S. prices were higher for most of the drugs included in the analysis, and U.S. prices were more likely to be the highest prices paid among the countries in the study (ASPE Report, October 25, 2018).

Medicare Part B

Drugs typically administered to patients by healthcare practitioners are covered and paid under Medicare Part B, which is part of the fee for service traditional Medicare benefit. Under Part B, providers buy and bill for these drugs. Medicare pays suppliers and providers based upon the Average Sales Price (ASP) for each product, as reported by manufacturers to CMS. Physician offices that buy and bill Part B drugs are paid 106 percent of the drug’s ASP, and hospitals are reimbursed either at 106 percent or 77.5 percent of ASP, depending on the hospital outpatient department’s participation in a safety net drug pricing program. Spending on Part B drugs has doubled since 2006.

The analysis and results

Data was compiled on the top drugs based on total Medicare reimbursement to either physician offices, hospital outpatient departments, or overall under Medicare Part B in 2016. Countries included in the analysis included: the United States, Austria, Belgium, Canada, Czech Republic, Finland, France, Germany, Greece, Ireland, Italy, Japan, Portugal, Slovakia, Spain, Sweden, and the United Kingdom. The analysis identified thirty two Medicare Part B drugs among the top twenty drugs in spending for each setting. These thirty two drugs accounted for $18 billion in spending, out of a total $27 billion on Part B drugs across these settings. The main analysis reports on twenty seven Part B Drugs.

Across the twenty seven drugs in the study, the U.S. ex-manufacturer prices were 1.8 times than average international ex-manufacturer price. There was not any one country that consistently had the highest or lowest prices compared to the U.S. for twenty of the drug products; U.S. prices exceeded the average international price by more than twenty percent. In addition, for nineteen of the twenty seven products the U.S. prices were higher than any other country. Excluding the U.S., Germany and Canada had the highest prices for six drugs and Japan for five drugs. France and the United Kingdom had the lowest prices for four drug products. Japan, Sweden and Slovakia had the lowest prices for three drug products each. Finally, the analysis calculated that the Medicare program and its beneficiaries spent an additional $8.1 billion (47 percent more) on these twenty seven products that it would have, if payments based upon ASP were scaled by the international price ratios.

Overall, prices and reimbursement rates for Part B drugs are significantly higher for the U.S. providers than purchasers outside the U.S., except for a few outlier cases. The amount by which U.S. prices exceeded those of international comparators varied significantly by product, and there was no clear pattern as to which countries were consistently paying lower prices. The analysis suggests that Medicare Part B could achieve significant savings if prices in the U.S. were similar to those of other large market based economies.