Arnall Golden Gregory LLP's Food and Drug Newsletter is a monthly update of legal and regulatory issues that affect the FDA-regulated community, including regular updates on legislative initiatives from AGG’s Washington, DC office, and articles from members of AGG outside the Food and Drug Practice.

In this Issue

• Get by with a Little Help from My Friends (Maybe Not): FDA Reiterates Reliance on Others Doesn’t Ensure Regulatory Compliance 
• Don’t Forget Your FDA Valentine 
• United Therapeutics Enters False Claims Act Settlement Pertaining to Patient Assistance Program 
• Homeopathic Regulation Has Come to Stay
• Drug Pricing Continues to be a Hot Topic for State Legislatures
• HHS OCR Announces a $2.3 Million HIPAA Settlement Bringing the Agency’s Settlement Total for 2017 to Over $19 Million 
• A Review of the DOJ/FTC’s Antitrust Guidance for Human Resource Professionals
• A Fine Line Between Prescription and Under a Doctor’s Supervision: The Case of Medical Foods and First Databank’s Classification
• Labeling and Manufacturing Compliance for Dietary Supplements is About More than Avoiding Characterization as a Drug
• Industry Activities and Recognition 

 Industry Insights

PHARMACEUTICALS

Get by with a Little Help from My Friends (Maybe Not): FDA Reiterates Reliance on Others Doesn’t Ensure Regulatory Compliance
By: Alan G. Minsk

Here we go again. The Food and Drug Administration issued a Warning Letter on December 13, 2017, to a Korean pharmaceutical company for non-compliance with current Good Manufacturing Practice requirements. What caught our eye was yet another FDA reference to the use of contract manufacturers and quality agreements. We wrote recently about similar enforcement actions that mentioned quality agreements and delegation of authority. The reliance on contract manufacturers, and FDA’s admonition about abdication of regulatory responsibility, seems to be of continued concern to the agency. More >

Don’t Forget Your FDA Valentine
By: Deborah L. Livornese

In addition to reauthorizing various user fee programs, the FDA Reauthorization Act of 2017 (FDARA), which was enacted last summer, added a one-time marketing status reporting requirement for holders of new drug applications (NDAs) and holders of abbreviated new drug applications (ANDAs). Specifically, new section 506I of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. § 356i) provides, among other things, that all NDA and ANDA holders must submit a one-time report to FDA stating whether the holder’s drugs listed in the active section of the publication, Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as the Orange Book) are available for sale. Additionally, approved application holders must provide a list of any NDAs or ANDAs that are currently listed in the active section of the Orange Book that have been withdrawn from sale or have never been available for sale. More >

United Therapeutics Enters False Claims Act Settlement Pertaining to Patient Assistance Program
By: Jennifer Downs Burgar and Elizabeth A. Mulkey

On December 20, 2017, United Therapeutics Corporation, a Silver Spring, Maryland-based pharmaceutical company that manufactures and sells a number of drugs to treat pulmonary arterial hypertension (PAH), agreed to pay $210 million to resolve allegations under the False Claims Act (FCA). According to the Department of Justice (DOJ), United Therapeutics allegedly used a charity, Caring Voice Coalition (CVC), as an illegal “conduit” to cover the copays of Medicare patients taking its PAH drugs, in violation of the Anti-Kickback Statute (AKS). The AKS makes it a crime for pharmaceutical companies to pay remuneration to induce Medicare beneficiaries to purchase (or their physicians to prescribe) drugs that are reimbursed by Medicare. Claims submitted to Medicare in violation of the AKS automatically constitute false claims for purposes of the FCA. More >

Homeopathic Regulation Has Come to Stay
By: Deborah L. Livornese and Kalie E. Richardson

FDA closed out 2017 with a brief, but long-awaited, draft guidance on Drug Products Labeled as Homeopathic (Homeopathic Guidance), which lays out FDA’s new regulatory strategy for these products. Under the Federal Food, Drug, and Cosmetic Act (FDCA), a “drug” is defined to include homeopathic drugs which are products listed in the Homeopathic Pharmacopeia of the United States (HPUS). Homeopathy is an alternative medical practice originating from the 1700s that is based on two main principles. More > 

Drug Pricing Continues to be a Hot Topic for State Legislatures
By: Jeffrey S. Jacobovitz and Kalie E. Richardson

Due to the recent significant increases in certain drug prices that have led to allegations of “price gouging” and antitrust violations, several state legislatures have enacted new laws aimed at controlling prescription drug prices. California is the most recent state to enact such a law, which applies to manufacturers of prescription drugs that are purchased or reimbursed by the state of California, licensed health care service plans, health insurers, or pharmacy benefit managers. The scope of the law likely encompasses the vast majority of pharmaceutical manufacturers. The law itself does not place any direct limitations on prescription drug prices, but requires reporting of certain pricing information. Manufacturers of drugs with a wholesale acquisition cost (WAC) greater than $40 for a course of therapy must notify purchasers of the product if the WAC will increase more than 16%. “Course of therapy” under this law us a 30 day supply of the recommended daily dosage as per the FDA-approved prescribing label, or for a smaller supply if the normal course of treatment if less than 30 days. The 16% increase threshold encompasses both the proposed increase and the cumulative increases that occurred within the last two calendar years prior to the current years. The Pharmaceutical Research and Manufacturers of America (PhRMA), a major pharmaceutical industry trade group, is challenging the law in court. PhRMA asserts that the law is unconstitutional because it is a violation of interstate commerce, free speech, and due process. More > 

HHS OCR Announces a $2.3 Million HIPAA Settlement Bringing the Agency’s Settlement Total for 2017 to Over $19 Million
By: Kevin Coy

On December 28th, the Department of Health and Human Services Office of Civil Rights (OCR) announced a $2.3 million settlement with 21st Century Oncology Inc. (21st Century) to settle potential violations of the HIPAA privacy and security rules. The settlement, the ninth settlement announced by OCR in 2017, was the first settlement announced by OCR since May. The 21st Century settlement brings OCR’s settlement total for 2017 to more than $19 million. More > 

A Review of the DOJ/FTC’s Antitrust Guidance for Human Resource Professionals
By: Jeffrey S. Jacobovitz and Samuel M. Shapiro

In October 2016, the Antitrust Division of the Department of Justice (DOJ) and the Federal Trade Commission (FTC) issued an eleven-page joint guidance document entitled “Antitrust Guidance for Human Resource Professionals” (the Guidance). Directed at human resource (HR) professionals, the Guidance reaffirms the two antitrust agencies’ stance that the antitrust laws apply with equal force to firms that compete to recruit and retain the same employees, irrespective of whether those firms compete in the same product or service market. In pertinent part, the Guidance asserts that “naked” agreements (i.e., facially anti-competitive agreements that lack pro-competitive justifications) between competitors in an employment market to fix wages or to not “poach” employees from one another constitute per se violations of the antitrust laws. Importantly, in a significant policy shift, DOJ announced its intention to prosecute such per se violations criminally. More >

FOOD

A Fine Line Between Prescription and Under a Doctor’s Supervision: The Case of Medical Foods and First Databank’s Classification 
By: Alan G. Minsk

In the 1984 movie, “This is Spinal Tap,” one of the characters utters, “It’s such a fine line between clever and stupid.” This classic line comes to mind as we review an issue involving First Databank Inc.’s (FDB’s) decision to include medical foods as over-the-counter drugs in its database. More >

Labeling and Manufacturing Compliance for Dietary Supplements is About More than Avoiding Characterization as a Drug 
By: Deborah L. Livornese

We are all accustomed to seeing Warning Letters issued by the Food and Drug Administration for products marketed as dietary supplements that make claims that the Agency believes cause the product to be an unapproved new drug or that contain ingredients that are banned or otherwise inappropriate for dietary supplements. The manufacturer of several dietary supplements recently received a Warning Letter that contained neither of those allegations, but focused, instead, on failures to follow current Good Manufacturing Process (cGMP) requirements and label omissions and errors. The Warning Letter reinforces the point that dietary supplement manufacturers must comply with all FDA requirements, not only those related to promotion. More >