Gary C. Messplay and Colleen Heisey01.22.10
At the beginning of each year, industry keenly waits to evaluate the number of new drug applications approved by the FDA over the past year, which is one metric by which to evaluate the industry's health and opportunity for success in the new year. To that end, 2009 saw FDA approve 26 NDAs compared to 25 in 2008, which may seem a slight advance unless one takes into account the time spent in transition between administrations, in which case the slight advance appears more significant. Also significant is FDA's effort to enhance product safety. In addition to conducting several public and advisory board hearings on specific products or product classes, FDA added 31 new or updated black box warnings to previously approved pharmaceutical products in 2009. FDA added or updated 56 such warnings in the previous year. While these numbers suggest a robust level of activity in the review divisions, it is undeniable that the Agency, under the direction of Dr. Margaret Hamburg, has also increased its activity elsewhere, most noticeably in enforcement actions.
In 2009, the Center for Drug Evaluation and Research (CDER) released 108 warning letters to companies, hospitals, and individuals, issued by its Office of Compliance (41), Division of Drug Marketing, Advertising, and Communica-tion (36), Division of Scientific Investigations (18), Division of Manufacturing and Product Quality (7), and Division of New Drugs and Labeling Compliance (6). This is more than twice as many as in 2008, when CDER issued a total of 43 warning letters. In 2009, the products or issues cited by the Agency on its web-page compiling these enforcement actions, included the marketing of an unapproved drug product (42), alleged improper pharmaceutical promotion (38), issues in the conduct of clinical investigations (with clinical investigators or institutional review boards) (17), and violations of current good manufacturing practices (8), among others. The Center for Biologics Evaluation and Research (CBER) also issued 13 letters. While this may seem scant compared to the quantity of letters posted by CDER, it is important to compare CBER's 2009 enforcement actions with those of the previous year. In 2008, CBER issued a single warning letter. CBER cited the following topics for its 13 letters, including promotion of an unapproved product (5), an aspect of clinical investigation (4), non-conformance with good manufacturing practices or good laboratory practices (3), or violations of the drug promotion rules (1).
Highlights of the issues addressed via warning letters in 2009 include:
The newly created Center for Tobacco Products established its enforcement presence shortly after its inception by issuing 17 letters over a span of three months. It began issuing warning letters against illegally marketed flavored cigarettes, which were banned beginning September 22, 2009 under the Family Smoking Prevention and Tobacco Control Act. The enforcement actions - warning letters issued for misbranded or adulterated tobacco products - are intended to aid FDA's actions to remove cigarettes containing certain candy or fruit flavors from the marketplace.
With respect to the office specifically designed to conduct and coordinate criminal investigations, OCI was also busy, participating in a number of investigations that culminated in actions against individuals and corporations, spanning all regulatory jurisdictions. Examples of such cases include:
The Departments of Justice (DOJ) and Health and Human Services (HHS) also undertook or finalized several notable cases. In September, the DOJ announced that Pfizer Inc. and its subsidiary Pharmacia & Upjohn had agreed to pay $2.4 billion to resolve criminal and civil liability arising from the illegal promotion of certain drug products. The settlement was the largest healthcare fraud settlement in the history of the DOJ. Under the settlement, Pfizer also agreed to enter an expansive corporate integrity agreement (CIA) with the Office of Inspector General (OIG) of HHS, which provides for procedures and safeguards to be put in place to avoid and promptly detect illegal promotion of drugs.
During presentations given since the September announcement, the DOJ has highlighted what it considers unique aspects of the Pfizer CIA. For example, the CIA authorizes the company compliance officer to report directly to the company's chief executive, making direct reports to the board of director's audit committee. Additionally, the compliance position is not to be subordinate to the general counsel or chief financial officer. It also heightens the board of directors' responsibility for compliance at the company, giving it direct involvement in oversight of the compliance program and requiring certification of the same. The CIA calls for annual certifications not only by the board but also sub-certifications by individuals in top managerial positions at the company. The CIA also contains enhanced transparency provisions, including requiring the company to send a letter to healthcare professionals briefly describing the terms of the agreement and to publicly post information regarding payments to healthcare professionals. The CIA incorporates vigorous risk assessment and mitigation requirements to facilitate the proactive identification of potential risks, and involves both compliance and business personnel in implementing steps designed to identify and minimize potential risks.
With respect to medical device actions, in December, Boston Scientific agreed to pay $22 million to resolve allegations that Guidant (which Boston Scientific acquired after the alleged conduct) paid kickbacks to doctors so they would use their heart devices, including paying physicians who tended to favor competitor products $1,000- $1,500 to participate in four studies. In addition to the monetary penalty, Boston Scientific entered into a CIA with OIG, which, among other things, requires heightened assessment of financial agreements with healthcare providers.
The DOJ also announced that Spectranetics Corporation agreed to pay $4.9 million in civil damages along with a $100,000 forfeiture to resolve claims against the medical device manufacturer arising from allegations it had illegally imported unapproved medical devices, conducted a clinical study that did not meet federal regulations, and promoted its products for uses for which the company had not received approval or clearance. With respect to the clinical trial activities, Spectranetics had failed to meet its reporting obligations to the FDA regarding its "Coronary Graft Results after Atherectomy with Lasers" (CORAL) study, according to the non-prosecution agreement. As part of the non-prosecution agreement, Spectranetics took responsibility for its conduct, instituted remedial measures to prevent recurrence, and agreed to continue cooperating in the ongoing criminal investigation.
While increased enforcement action was anticipated with the new administration, the scope of activities and the public nature of the government's actions are noteworthy, particularly the surge in activity seen as the new administration gained traction in office, which is indicative of the direction it will likely take in 2010.
In 2009, the Center for Drug Evaluation and Research (CDER) released 108 warning letters to companies, hospitals, and individuals, issued by its Office of Compliance (41), Division of Drug Marketing, Advertising, and Communica-tion (36), Division of Scientific Investigations (18), Division of Manufacturing and Product Quality (7), and Division of New Drugs and Labeling Compliance (6). This is more than twice as many as in 2008, when CDER issued a total of 43 warning letters. In 2009, the products or issues cited by the Agency on its web-page compiling these enforcement actions, included the marketing of an unapproved drug product (42), alleged improper pharmaceutical promotion (38), issues in the conduct of clinical investigations (with clinical investigators or institutional review boards) (17), and violations of current good manufacturing practices (8), among others. The Center for Biologics Evaluation and Research (CBER) also issued 13 letters. While this may seem scant compared to the quantity of letters posted by CDER, it is important to compare CBER's 2009 enforcement actions with those of the previous year. In 2008, CBER issued a single warning letter. CBER cited the following topics for its 13 letters, including promotion of an unapproved product (5), an aspect of clinical investigation (4), non-conformance with good manufacturing practices or good laboratory practices (3), or violations of the drug promotion rules (1).
Highlights of the issues addressed via warning letters in 2009 include:
- In November, CDER issued a series of 22 letters to the operators of 136 Web sites that seemed to be engaged in the illegal sale of unapproved or misbranded drugs to people in the U.S. The action was taken in collaboration with the FDA's Office of Criminal Investigations (OCI) and the Office of Regulatory Affairs, Office of Enforcement, and included not only directly addressing the operators but also notifying their respective Internet service providers and domain name registrars of the violations.
- In one of its first major actions to address certain promotions of drug products on the Internet, CDER sent warning letters to 14 major pharmaceutical companies regarding 48 drugs including 19 that carry black box warnings. The warnings referenced sponsored links that are generated when a consumer types a disease state or product name into a search engine. The Agency warned that such promotions were misleading because they did not include risk information.
- With consumers worried about insufficient vaccine supplies at the start of flu season, FDA partnered with the U.S. Federal Trade Commission to issue a joint warning letter to a website that was marketing fraudulent supplements claiming to prevent the spread of the H1N1 flu. In the same press release announcing the action, FDA released its own H1N1 flu fraud widget to allow consumers to receive information about potentially deceptive products and to report suspected criminal activity.
The newly created Center for Tobacco Products established its enforcement presence shortly after its inception by issuing 17 letters over a span of three months. It began issuing warning letters against illegally marketed flavored cigarettes, which were banned beginning September 22, 2009 under the Family Smoking Prevention and Tobacco Control Act. The enforcement actions - warning letters issued for misbranded or adulterated tobacco products - are intended to aid FDA's actions to remove cigarettes containing certain candy or fruit flavors from the marketplace.
With respect to the office specifically designed to conduct and coordinate criminal investigations, OCI was also busy, participating in a number of investigations that culminated in actions against individuals and corporations, spanning all regulatory jurisdictions. Examples of such cases include:
- Biologics: The former chief executive officer of InterMune was convicted of wire fraud for the creation and dissemination of false and misleading information regarding the company's Actimmune (Interferon gamma-1b) product for the treatment of idiopathic pulmonary fibrosis, a fatal disease, despite its lack of approval for such indication. Evidence at trial included his involvement in the company's issuance of a press release touting the success of the protein in substantially reducing mortality in a clinical trial; the clinical trial had in fact failed.
- Dietary supplements: A Florida man was convicted for his role in a scam that defrauded more than a hundred thousand consumers across the U.S. out of more than $16 million. The man, along with several colleagues, sold a dietary supplement they touted as promoting large weight loss without diet or exercise, inviting consumers to participate in a "restricted nationwide test" of the product, and going so far as to create a mail order house called the Licoban Clinic, assign test participants subject numbers, and include a medical insignia on mailings from the purported medical director of the clinic.
- Drugs: A doctor in Virginia was sentenced for, among other things, introducing misbranded drugs into interstate commerce. The doctor was convicted of writing prescriptions over the Internet for people he had not met and had not examined. The government argued that the drugs were misbranded as a matter of law because they were dispensed without a valid prescription. The doctor, who did not examine or meet with the individuals to whom he provided a prescription, issued 50,000-100,000 prescriptions for a muscle relaxant between 2004 and 2007 based solely on brief forms completed online by individuals for Internet pharmacies. The Internet pharmacies paid him $5-7 for each prescription he wrote based on the forms.
- Human tissue: A California man was sentenced to eight years in prison for activities related to the recovery and sale of human tissue for medical implantation, including the falsification of medical history reports regarding the medical histories of the donors from whom the tissue was harvested so that it would not be rejected by tissue banks. Additionally, the man resubmitted previously rejected tissue under false donor names and with blood samples from different donors for tissue he knew would otherwise be rejected.
The Departments of Justice (DOJ) and Health and Human Services (HHS) also undertook or finalized several notable cases. In September, the DOJ announced that Pfizer Inc. and its subsidiary Pharmacia & Upjohn had agreed to pay $2.4 billion to resolve criminal and civil liability arising from the illegal promotion of certain drug products. The settlement was the largest healthcare fraud settlement in the history of the DOJ. Under the settlement, Pfizer also agreed to enter an expansive corporate integrity agreement (CIA) with the Office of Inspector General (OIG) of HHS, which provides for procedures and safeguards to be put in place to avoid and promptly detect illegal promotion of drugs.
During presentations given since the September announcement, the DOJ has highlighted what it considers unique aspects of the Pfizer CIA. For example, the CIA authorizes the company compliance officer to report directly to the company's chief executive, making direct reports to the board of director's audit committee. Additionally, the compliance position is not to be subordinate to the general counsel or chief financial officer. It also heightens the board of directors' responsibility for compliance at the company, giving it direct involvement in oversight of the compliance program and requiring certification of the same. The CIA calls for annual certifications not only by the board but also sub-certifications by individuals in top managerial positions at the company. The CIA also contains enhanced transparency provisions, including requiring the company to send a letter to healthcare professionals briefly describing the terms of the agreement and to publicly post information regarding payments to healthcare professionals. The CIA incorporates vigorous risk assessment and mitigation requirements to facilitate the proactive identification of potential risks, and involves both compliance and business personnel in implementing steps designed to identify and minimize potential risks.
With respect to medical device actions, in December, Boston Scientific agreed to pay $22 million to resolve allegations that Guidant (which Boston Scientific acquired after the alleged conduct) paid kickbacks to doctors so they would use their heart devices, including paying physicians who tended to favor competitor products $1,000- $1,500 to participate in four studies. In addition to the monetary penalty, Boston Scientific entered into a CIA with OIG, which, among other things, requires heightened assessment of financial agreements with healthcare providers.
The DOJ also announced that Spectranetics Corporation agreed to pay $4.9 million in civil damages along with a $100,000 forfeiture to resolve claims against the medical device manufacturer arising from allegations it had illegally imported unapproved medical devices, conducted a clinical study that did not meet federal regulations, and promoted its products for uses for which the company had not received approval or clearance. With respect to the clinical trial activities, Spectranetics had failed to meet its reporting obligations to the FDA regarding its "Coronary Graft Results after Atherectomy with Lasers" (CORAL) study, according to the non-prosecution agreement. As part of the non-prosecution agreement, Spectranetics took responsibility for its conduct, instituted remedial measures to prevent recurrence, and agreed to continue cooperating in the ongoing criminal investigation.
While increased enforcement action was anticipated with the new administration, the scope of activities and the public nature of the government's actions are noteworthy, particularly the surge in activity seen as the new administration gained traction in office, which is indicative of the direction it will likely take in 2010.