DID - Dec. 18, 2009 Issue

Vol. 8 No. 245

FDA Gets New Chief Counsel as Enforcement Increases

Ralph Tyler is taking over in January as the FDA’s chief counsel at a time when the agency’s Office of Criminal Investigations is stepping up its fraud investigations.

He may be more aggressive in pursuing executives for violations of off-label marketing regulations and use the agency’s authority to levy civil monetary fines, Vernessa Pollard, a six-year veteran of the chief counsel’s office and healthcare attorney at Arnold & Porter, told DID Thursday.

The new chief counsel also might need to hire more lawyers to handle enforcement actions as part of the FDA’s ramped-up enforcement initiative. “They might have to prepare for more seizures, injunctions and criminal prosecutions,” Fred Branding, a partner with Reed Smith, told DID.

Tyler, who will leave his job as Maryland insurance commissioner to assume the FDA post Jan. 19, told DID his office will play a critical role in the agency’s increased emphasis on enforcement detailed by FDA Commissioner Margaret Hamburg in August (DID, Aug. 7).

The Office of Criminal Investigations, for example — which makes recommendations to the chief counsel on referrals of criminal cases to the Department of Justice for further investigation or prosecution — has increased its number of annual convictions from 196 in fiscal 2004 to 369 in fiscal 2008, according to the agency.

That focus may lead the chief counsel to hire staff experienced in developing such cases, Branding said, seeking employees from other federal agencies or Justice who can work up cases and present them to Justice for prosecution.

The duties of the FDA’s Office of Chief Counsel include:

  • Drafting or reviewing all proposed and final regulations and Federal Register notices prepared by the FDA;
  • Representing FDA in court proceedings and administrative hearings; and
  • Providing legal opinions on regulatory issues, actions and petitions submitted to the FDA.

Tyler’s resume is available at www.fdanews.com/ext/files/20091217_143731.pdf. — April Hollis


PhRMA Denies Deal to Increase Its $80 Billion Agreement

PhRMA is denying that its $80 billion deal with the White House to help finance healthcare overhaul legislation may be increased.

The trade group’s denial follows a statement from Sen. Byron Dorgan (D-N.D.) that an anticipated increase may have led senators to vote against his amendment allowing for the reimportation of prescription drugs.

“No one has asked us to date to provide any additional funding,” Ken Johnson, senior vice president at PhRMA, told DID Thursday. “We made an $80 billion ironclad commitment to help make healthcare reform a reality back in June, and we have never, at any time, retrenched from that position. That said, we will continue to keep an open mind as the Senate moves toward a final vote.”

Dorgan’s amendment to the Senate’s Patient Protection and Affordable Care Act, H.R. 3590, was defeated by a 51–48 vote Tuesday. It would have allowed U.S.-licensed pharmacies and drug wholesalers to import FDA-approved medications from Canada, Europe and other countries, and individual consumers to purchase prescription drugs from Canada.

If it had passed, Dorgan’s amendment could have caused PhRMA to withdraw its support for the Senate bill, Jack Calfee, an American Enterprise Institute economist who studies the drug industry and the FDA, told DID. “I think there’s at least a 50-50 chance that they would [have dropped] out of the coalition,” he said. “They would say, ‘We no longer trust the administration to stick with what they’ve said they will do, and there’s probably not much limit to how far this reform process could go in terms of doing harm to the industry.’”

The pharmaceutical industry could have delayed the amendment’s implementation by challenging it on a legal basis, Calfee said. It’s not clear whether Congress can require manufacturers to sell products at prices set in foreign countries, he added. “I think there’s probably a pretty good argument that that’s an unconstitutional taking of their property.”

Although the reimportation amendment failed, senators are considering other ways drugmakers might help fund healthcare overhaul beyond their $80 billion pledge — for example by giving greater or quicker discounts on brand drugs to close the Medicare doughnut hole.

PhRMA, however, has called an amendment advocated by Sen. Bill Nelson (D-Fla.) to phase out the hole quicker by expanding drugmaker-funded rebates to some Medicaid beneficiaries a “line-in-the-sand” issue (DID, Dec. 3). The amendment would require drugmakers to provide Medicare rebates that match Medicaid rebates for full-benefit, dual-eligible beneficiaries.

The Senate will resume debate on the healthcare overhaul legislation Friday and plans to vote on it before Dec. 25, an aide to Senate Majority Leader Harry Reid’s (D-Nev.) office said Thursday.

The Patient Protection and Affordable Care Act can be found at www.democrats.senate.gov/reform/patient-protection-affordable-care-act.pdf. — David Belian


Merck Settles Three Whistle-Blower Lawsuits for $69 Million

Merck has agreed to a $69 million civil settlement of state and federal investigations of Medicaid pricing for Schering-Plough brand drugs and Warrick generic drugs.

The cases stem from lawsuits originally filed by a whistle-blower, Ven-A-Care of the Florida Keys, on behalf of the federal government and the states of California and Florida. The settlement covers all Schering-Plough brand drugs and generics made by its Warrick Pharmaceuticals subsidiary, Merck spokesman Ron Rogers told DID Thursday.

As part of the settlement negotiated with Merck, which recently acquired Schering-Plough, the company will pay California $21.3 million to resolve charges that it overstated the average wholesale prices of its albuterol asthma medication and other drugs, causing the state’s Medi-Cal program to spend too much on pharmacy reimbursements, according to State Attorney General Edmund Brown.

Merck agreed to pay the federal government $44.5 million, Brown said. The amount to be paid to Florida has not been disclosed.

Merck made no admission of wrongdoing and said that Schering-Plough believes its sales and pricing policies and practices were in line with applicable regulations and contracts.

In Re: Pharmaceutical Industry Average Wholesale Price Litigation was filed in the U.S. District Court for the District of Massachusetts. — Meg Bryant


Medicines Company Recalls Cleviprex After Finding Particulates

The Medicines Company is voluntarily recalling 11 lots of the hypertension drug Cleviprex after finding particulate matter in some vials during a routine inspection.

The annual inspection revealed inert stainless steel particles of roughly 2.5 microns in some vials of Cleviprex (clevidipine butyrate), the company said. Particles of that size are not known to pose a health hazard in the small amount seen during the inspection, the drugmaker added.

The cause of the contamination is being investigated, company spokeswoman Mary Frances Harmon told DID Thursday.

Aggregates of the particulates have not been observed, the company said. However, if the particles were to aggregate, or if larger particles were present, they could reduce blood flow in capillaries, damage tissues or set off acute or chronic inflammatory reactions.

The drugmaker said it was cooperating with the FDA on the recall. — April Hollis


Merck Reaches Agreement to Acquire Avecia Biologics

Merck has entered into an agreement to acquire Avecia Biologics, a supplier of microbial-based biologics.

The drugmaker will acquire all assets of Avecia Biologics, including its process development and scale-up, manufacturing, quality and business support operations in Billingham, UK, Merck said Thursday.

The transaction is expected to close early next year, Ian McConnell, a Merck spokesman, told DID. Financial terms were not disclosed.

Avecia Biologics has invested $150 million in manufacturing facilities from its base in Tees Valley, UK, over the past five years, according to the company’s website. — Owen Skoler


Study: Roche Weekly Diabetes Drug Not Inferior to Daily Competitor

Roche’s weekly diabetes treatment taspoglutide showed noninferiority to Sanofi-Aventis US’ once-daily Lantus in a head-to-head Phase III trial, according to Roche.

Taspoglutide is a human glucagon-like peptide-1 (GLP-1) hormone analog in clinical testing to treat Type 2 diabetes.

One of the two studies found the drug, as an adjunct to metformin, was not inferior to Lantus (insulin glargine) at lowering patients’ HbA1c levels — an indicator of blood-sugar level control — at 24 weeks, the company said Thursday. The trial, called T-emerge 5, randomized 1,049 patients into three arms: taspoglutide 10 mg once weekly, taspoglutide 20 mg once weekly and Lantus once daily with an average final dose of 37 units.

In the T-emerge 7 trial — there are eight in all —subcutaneous weekly taspoglutide with metformin showed superiority in the HbA1c marker compared with placebo in 305 patients with a high body mass index, the company said.

The most frequently reported adverse events among patients treated with taspoglutide in both trials were nausea and vomiting, Roche said.

Roche’s T-emerge Phase III clinical trial program is conducting multicenter, multicountry, randomized, controlled, double-blind and open studies of over 6,000 patients. In addition to insulin glargine, other active comparators include exenatide, sitagliptin and pioglitazone. 

In 2006, Roche exercised its licensing option for taspoglutide from Ipsen and acquired exclusive worldwide rights to develop and market the drug, except in Japan where rights are shared with Teijin and in France where Ipsen may elect to retain co-marketing rights, according to Roche. — Owen Skoler

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