Following up on our first post in this year-end series that discussed medical device regulatory activities at the Food and Drug Administration (FDA), the Mintz FDA team’s second year-end post will provide an overview of 2019 with a focus on the drug, biologic, and regenerative medicine programs at the agency. In many ways, the past year could be called a “business as usual” year for the FDA’s drugs and biologics centers in that they continued to make progress on all of large-scale programs and priorities initiated by former-Commissioner Scott Gottlieb, who left the agency in April. FDA has been under the leadership of an Acting Commissioner since that time, although Texas radiation oncologist Dr. Stephen Hahn will be taking the reins soon following his confirmation by the full Senate in a 72-18 vote on December 12, 2019. (The Senate HELP Committee advanced the nominee on December 3, 2019; see our blog post just prior to that committee vote here.)

At the same time, however, the final months of 2019 have exposed several challenges for various FDA programs that operate under the extensive drug and biologic authorities contained in the Food Drug & Cosmetic Act (FD&C Act) and the Public Health Service Act (PHS Act), respectively. The agency will be forced to grapple with many of these issues directly and deliberately in 2020 as a result of deadlines of the agency’s own making as well as external pressures coming from other parts of D.C. and from the rapidly changing nature of the U.S. health care system.

“Business as Usual” When Getting New Drugs, Generic Drugs, and Biosimilars to Market and Promoting Competition under Various Action Plans – But Challenges Are Emerging Related to Accelerated Approval and Breakthrough Products

According to data presented by the Office of New Drugs in early December (see OND’s slides here), FDA had another extremely productive year when it comes to its approval of new molecular entities that address “a unique blend of therapeutic areas.” The agency approved 45 new molecular entities in FY 2019 (October 1, 2018 to September 30, 2019), of which 71%, or 32 products, received priority review status and 23 were designated as orphan drugs intended to treat rare diseases. As OND emphasized in the presentation, several of those new product approvals are notable for their uniqueness and therefore, in the agency’s view, 2019 reflects “not only quantity but [also] quality.” The OND presentation also highlights a significant amount of other information on new molecular entity approvals and may be of interest to those readers who want to take a deeper dive into the data.

In addition to advancing important new drugs and biologics to market, former Commissioner Gottlieb is well-known for having spearheaded to development of a Drug Competition Action Plan (DCAP) and a Biosimilars Action Plan (BAP) during his nearly two-year tenure as head of the agency. Some of our prior coverage of the DCAP and BAP is available here. In general terms, the DCAP encourages market competition for generic drugs and helps to bring greater efficiency and transparency to the generic drug review process; the BAP aims to achieve similar goals for biosimilar products as the agency continues its implementation of the 2010 Biologics Price Competition and Innovation Act (BPCIA), including the critical drug-to-biologic transition that will occur by operation of law in March of 2020.

FDA continued to make progress on its various goals under these two initiatives during 2019. Some examples of this progress can be captured with these two data points:

• FDA approved 1,171 generic drugs (935 full approvals and 236 tentative approvals) in the last fiscal year. Notably, 125 drug approvals were for first generics of medicines that had no direct generic competition. The agency released a report in October 2019 noting that generic drug approvals reached a record high in FY 2019 and also that several “complex” generic drug products had been approved for the first time. Under the DCAP, the agency has prioritized getting complex generic drug products to market with the goal of increasing competition and thereby reducing commercial prices for such products, which may be expensive due to difficult manufacturing processes.

• On December 6, 2019, FDA licensed its 26th biosimilar product since the BPCIA was enacted and the 10th biosimilar this year (Amgen’s Avsola (infliximab-axxq), which is a biosimilar to Remicade and the fourth Remicade biosimilar approved by the agency to date). Although thirteen of the previous 25 approved biosimilars have yet to launch due to ongoing patent litigation or for business reasons, the agency has continued to focus on positive developments in the still-nascent U.S. biosimilars market, including with the issuance of a public statement on November 15 in conjunction with approval of the 25th biosimilar (see here).

With all of these “wins,” however, FDA still faces its fair share of challenges related to its expedited drug and biologic programs, especially as it appears to have accelerated its review of products intended for diseases with an unmet need to “breakneck speed.” Indeed, the OND presentation from early December also added that for FY 2020 and as of November 21, 2019, the agency had already approved 13 such drugs, suggesting that next year could be a record-breaking one in terms of innovative drug product approvals. A recent Bloomberg Law article (available here) used the phrase “breakneck speed” to describe the agency’s actions in this space based on several recent FDA approvals of new molecular entities that have come months in advance of their assigned target dates. The Bloomberg Law article highlights that in response to FDA’s speediness in reaching approval decisions on new drugs and biologics for diseases with unmet needs, patient advocates and, increasingly, insurers that have to pay for those treatments are starting to raise concerns that these products lack sufficient safety or effectiveness data.

Relatedly, there has been increasing pressure on FDA to remove certain accelerated approval drugs from the market following a failure by the drug product sponsor to confirm the efficacy or clinical benefits of the product in the required post-marketing confirmatory clinical trial. The most visible example of this regulatory challenge came in October 2019 when FDA convened an advisory committee to recommend whether it should withdraw accelerated approval from hydroxyprogesterone caproate injection (marketed under the brand name Makena for the prevention of preterm birth in pregnant women). FDA’s Bone, Reproductive and Urologic Drugs Advisory Committee voted 9-7 to withdraw approval, with the dissenters favoring leaving Makena on the market while requiring the sponsor to conduct a new confirmatory trial. (Notably, no one voted for the option of leaving it on the market without requiring a new confirmatory trial.) Among the concerns of some members who voted to leave the product on the market with a new clinical trial obligation was that the drug’s withdrawal would leave no safe treatment options for pregnant women at high risk of preterm birth. FDA will have to make a final decision regarding what to do about Makena in 2020, and it undoubtedly will face intense criticism (and potentially legal challenge) no matter what route it chooses to take for this public health quandary in which it finds itself.

In a similar vein, FDA official Dr. Richard Pazdur participated in a Senate briefing on December 10, 2019, in which he and other speakers defended the Breakthrough Therapy Designation program. FDA insisted again that the designation was intended to let the agency have earlier interactions with drug sponsors and that it was not meant to be an early “rating system” for drugs or a signal of how they might do commercially. Given that the Breakthrough program was created in 2012 and is considered to be wildly successful, some speakers at the briefing expressed surprise that there was still any confusion about its purpose and function. Whether Congress picks up any of these emerging areas for consideration as part of FDA’s 2022 user fee reauthorization packages remains to be seen as those negotiations will begin in earnest after the New Year, but the issues certainly are complex enough to allow for robust policy discussions to occur. 

Finally, there are expected to be bumps in the road with the upcoming March 2020 “transition” of proteins previously approved under New Drug Applications (NDAs) to Biologics License Applications (BLAs) for which FDA only finalized its guidance for industry last year. The March 2020 transition date was established under the BPCIA and the agency does not have discretion in getting the transition done (only in how it handles the logistical and administrative issues created by transitioning approved products in this way). Check out our prior blog post on the final “deemed to be a license” transition guidance.

“Business as Usual” with the Rapid Pace of FDA’s Issuance of Agency Guidance – But Challenges Are Emerging Related to Judicial Deference to FDA Decision-Making

FDA guidance documents for all regulated product categories continued to be released on a regular basis this year, including several related to areas of agency priorities under the DCAP and BAP including the final biosimilar interchangeability guidance issued in May (see our blog post here) and a draft guidance on insulin interchangeability issued in November 2019. The latter also relates to the March 2020 “NDA-to-BLA transition,” as insulins are one of the largest class of products that will be transitioning into regulation as biologics, making them open to what is expected to be more efficient competition through the BPCIA’s biosimilar pathway than what was possible in the past as “insulin NDAs.”

Despite the accelerated pace of the issuance of Agency guidance, however, FDA is beginning to face more challenges related to its decision-making and the scope of its exercise of agency discretion. In particular, a significant District Court for the District of Columbia ruling issued on December 6, 2019, Genus Medical Technologies, LLC v. FDA, provides hints of a potential shift in judicial deference to certain agency actions. The court vacated FDA’s classification of a medical imaging liquid as a drug rather than as a device after determining that FDA did not have discretion to decide how to regulate a product merely because the definitions of drug and device overlap in the FD&C Act.

According to the district court judge, FDA was not interpreting the drug/device definitions in the statute properly, and Congress did not intend to allow the agency unfettered discretion to pick between the two categories. Rather, the court found that the text of the definitions are clear and do not create a gap or any ambiguity for FDA to fill with an exercise of agency discretion. This recently issued decision may indicate a potential shift in how courts are going to apply long-standing precedents related to judicial deference to agency decisions. If FDA decides to appeal the Genus ruling, it may end up at the Supreme Court as one of many expected challenges to the doctrines that established our current framework for judicial deference of an administrative agency’s interpretation of an ambiguous statute.

“Business as Usual” with FDA’s Comprehensive Regenerative Medicine Framework and Stepped up Enforcement Against Stem Cell Clinics Offering Unlawful Products – But What Happens in November 2020 When the Enforcement Discretion Period Ends?  

One of the first FDA press releases for 2019 was co-authored by former Commissioner Gottlieb and Center for Biologics Evaluation and Research (CBER) Director Peter Marks and was focused on the agency’s new policies aiming to advance the development of safe and effective cell and gene therapies. In the press release, the agency leaders predicted that by 2020, FDA would receive more than 200 Investigational New Drug Applications (INDs) for cell and gene therapies each year. The agency has continued to work diligently to increase its staff in CBER to conduct clinical reviews for such INDs and to try to keep pace with the industry’s development of these innovative technologies.

As we discussed in our update on FDA’s Comprehensive Regenerative Medicine Policy Framework earlier this year, the agency is prioritizing two parallel goals: (1) clarifying the regulatory criteria for product marketing and providing support and guidance to legitimate product developers; and (2) removing unapproved, unproven, and potentially unsafe products from the U.S. market. The second prong of this comprehensive plan for regenerative medicine products was the topic of one of Dr. Gottlieb’s very last statements as Commissioner before he left the agency, issued on April 3, 2019 in conjunction with CBER Director Dr. Marks, indicating how important this area is to the agency’s current public health priorities.

In the April 2019 statement, Drs. Gottlieb and Marks acknowledged FDA’s challenges and efforts to stop stem cell clinics and manufacturers from marketing unapproved products that put patients at risk, citing several Warning Letters issued to manufacturers that violated current good manufacturing practices (CGMPs) for human cells and tissue products. They noted that it was of particular concern given that the industry was nearly “halfway through the period during which the FDA intends to exercise enforcement discretion for certain regenerative medicine products” with respect to INDs and premarket approval requirements. Now that it is December 2019, that deadline is even closer with less than one year left. November 2020 is the end of the three-year period of enforcement discretion announced by FDA when it first articulated the policies and goals of this comprehensive framework in 2017. See our prior posts on the topic here and here.

Under the Comprehensive Regenerative Medicine Policy Framework, FDA appears to have stepped up the pace of issuing Warning and Untitled Letters to sellers of unapproved stem cell products during the second half of 2019. In conjunction with a Warning Letter issued on December 5, 2019 to two related companies for processing and marketing unapproved umbilical cord blood-derived cellular products, Dr. Marks of CBER reiterated the agency’s concerns about safety and reminded the public of the upcoming compliance deadline: “As evidenced by the number of actions that the agency has taken this month alone, there are still many companies that have failed to come into compliance with the [FD&C Act] and FDA’s regulations.”

Dr. Marks was referring to two Untitled Letters that were issued to stem cell product distributors on November 20 and November 25, 2019, respectively. The press release cited above also added that the agency had also “recently sent 20 letters to manufacturers and health care providers noting that it has come to [FDA’s] attention that they may be offering unapproved stem cell products, reiterating the FDA’s compliance and enforcement policy.”

FDA also prevailed this year in the U.S. District Court of the Southern District of Florida against a stem cell clinic charged with violating the FD&C Act and the PHS Act. In June 2019, the court held that the defendants adulterated and misbranded a stem cell drug product made from a patient’s adipose tissue without FDA approval and for significant deviations from CGMPs, issuing a permanent injunction as requested by the Department of Justice on FDA’s behalf. The agency’s statement on that important court win by the government is available here.

Lastly, on December 6, 2019, FDA issued a “Public Safety Notification on Exosome Products.” The safety notification informed the public of multiple recent reports of serious adverse events experienced by patients in Nebraska who were treated with unapproved products marketed as containing exosomes, which came to FDA’s attention through the Centers for Disease Control and Prevention, the Nebraska Department of Health and Human Services, and others. There are currently no FDA-approved exosome products and, to be honest, we are not even sure what such a product would be since an “exome” consists of all the sequenced exons within a single human genome after the introns are removed. (So were the clinics administering complete exomes to patients? that seems unlikely.) But what we found noteworthy about this public safety notice is the forceful and direct language FDA used when describing the unscrupulous conduct of the sellers of these products:

“Certain clinics across the country, including some that manufacture or market violative ‘stem cell’ products, are now also offering exosome products to patients. They deceive patients with unsubstantiated claims about the potential for these products to prevent, treat or cure various diseases or conditions. They may claim that they these products do not fall under the regulatory provisions for drugs and biological products – that is simply untrue. As a general matter, exosomes used to treat diseases and conditions in humans are regulated as drugs and biological products under the [PHS Act] and the [FD&C Act] and are subject to premarket review and approval requirements.

The clinics currently offering these products outside of FDA’s review process are taking advantage of patients and flouting federal statutes and FDA regulations. This ultimately puts at risk the very patients that these clinics claim to want to help, by either delaying treatment with legitimate and scientifically sound treatment options, or worse, posing harm to patients, as evidenced by these recent reports of adverse events.”

As we enter the final year of FDA’s enforcement discretion period, perhaps these public notices and Warning/Untitled Letters will become even more frequent and the agency will become even more frustrated by the ongoing violations and medical practitioners who “flout” federal law. This area will see substantial activity in 2020 and we will be watching closely to see what changes, if anything, about FDA’s approach in November when the deadline to come into compliance ends. Will there be widespread FBI raids on stem cell clinics engaged in this kind of bad behavior? Only time will tell.  

Final Thoughts: A Few Other “Business as Usual” Activities in the Therapeutic Product Areas and Prescription Drug Advertising Enforcement

Although we have highlighted what we view as some important challenges for the FDA to address in the coming months, other areas continue to be “business as usual” without anything very new to report. FDA continues to invest significant resources into improving the quality of compounded drugs and ensuring compliance with Sections 503A and 503B of the FD&C Act. Drug compounding was another topic of one of Dr. Gottlieb’s very last statements as Commissioner on April 3, 2019, in which he laid out the 2019 compounding priorities that included maintaining quality manufacturing and compliance and regulating compounding from bulk drug substances.

Notwithstanding all the efforts by FDA and State regulators in this area over the past several years, the agency continues to see concerning activity when it comes to compounded drugs, such as problems related to the condition under which compounded sterile medicines are made, which raise significant risks to patients. As a result, FDA has made it an intense area of focus to take enforcement actions against compounders who fail to produce sterile drugs in compliance with the law. During the past year, for example, FDA has won at least four permanent injunctions against various compounders after the agency identified behavior that posed a significant risk to public health and safety.

In addition, in 2019 FDA also increased its activities towards reducing and mitigating the impact of drug shortages on the health care system. See our prior blog post on Drug Shortages.

Finally, after a fairly slow year of enforcement in the prescription drug advertising space, the last two months of 2019, at least as of December 12th, have given us three (!) letters – two untitled and one warning – from the FDA’s Office of Prescription Drug Promotion (OPDP). Most interestingly, the Warning Letter issued on December 2, 2019 for “omitting warnings about the most serious risks associated with [a medication-assisted treatment] drug from promotional materials” was announced to the public via FDA press release, which is not a typical action for normal-course OPDP letters to industry. The drug in question, approved for the prevention of relapse to opioid dependence following opioid detoxification, is associated with several significant risks including potential opioid overdose. Given the country’s public health emergency that is the opioid epidemic, FDA appears to have felt the need to make the deficiencies in the advertisement and those risks more widely publicized. So another thing we will be watching for in the New Year is whether this OPDP action represents the beginning of a new trend by the agency to publicize these Warning Letters more directly, or whether its advertising enforcement activities may be picking up due to industry’s evolving approaches to promoting therapeutic products.