Practice Tip: Minimizing Liability Exposure By Reporting Adverse Drug Experiences

In order to minimize potential product liability associated with pharmaceutical products, companies regulated by the U.S. Food and Drug Administration ('FDA') should be vigilant in ensuring that adverse drug experiences ('ADEs') are reported to the FDA in a timely and complete manner. FDA regulations contain extensive requirements regarding the reporting of ADEs for companies involved in the distribution chain, such as manufacturers and distributors. Failure to report, when required, can result in an FDA enforcement action and exacerbate liability exposure. A proactive ADE collection and reporting system will place a company in a better position to address unanticipated issues that may arise after full-scale commercial marketing has begun. Therefore, companies must know their regulatory responsibilities and implement procedures to ensure that ADEs are collected and reported, as required by law. This article covers only some of the re-quirements and issues to consider.

Regulatory Overview

What Types of Events Require Reporting?

The FDA defines an ADE as:

any adverse event associated with the use of a drug in hu-mans, whether or not cosid-ered drug related, including the following: an adverse event occurring in the course of the use of a drug product in professional practice; an adverse event occurring from drug overdose whether accidental or intentional; an adverse event occurring from drug abuse; an adverse event occurring from drug withdrawal; and any failure of expected pharmacological action. See 21 C.F.R. ”310.305(b), 314.80(b).

The definition of an adverse event is quite broad. In addition, the adverse event information to be reported can come 'from any source … including information derived from commercial marketing experience, post-marketing clinical investigations, post-marketing epidemiological/surveillance studies, reports in the scientific literature, and unpublished scientific papers.' See, e.g., 21 C.F.R. ”310.305(b), 314.80(b). (While the reporting obligations also apply to medical devices, biologics, and marketing prescription drugs without approved marketing applications, this article focuses on drugs approved under marketing applications.)

Who Must Report?

Entities that must report ADEs include the holder of the new drug application ('NDA'), the manufacturer, the packer, and the distributor, if their names appear on the label of the approved product. 21 C.F.R. '314.80(c)(1)(iii). In addition to the basic reporting requirements, these parties must proactively develop written procedures for the surveillance, receipt, evaluation, and reporting of adverse drug experiences to the FDA.

As soon as possible, but in no case later than 15 calendar days of the initial receipt of information, covered parties must report the occurrence of any serious, life-threatening, or unexpected adverse experience associated with a product when the experience occurs while the product is subject to that party's control. 21 C.F.R. '314.80(c)(1)(i). 'Life-threatening adverse drug experience' is defined as:

Any adverse drug experience that places the patient, in the view of the initial reporter, the investigating party, at immediate risk of death from adverse drug experience as it occurred, ie, it does not include an adverse drug experience that, had it occurred in a more severe form, might have caused death. 21 C.F.R. '314.80(a).

The FDA defines a 'serious adverse drug experience' as:

Any adverse drug experience occurring at any dose that results in any of the following outcomes: Death, a life-threatening adverse drug experience, inpatient hospitalization, or prolongation of existing hospitalization, a persistent or significant disability/incapacity, or a congenital anomaly/birth defect. Important medical events that may not result in death, be life-threatening, or require hospitalization may be considered a serious adverse drug experience when, based upon appropriate medical judgment, they may jeopardize the patient or subject and may require medical or surgical intervention to prevent one of the outcomes listed in this definition. 21 C.F.R. '314.80(a).

Finally, an 'unexpected adverse drug experience' is defined as 'Any adverse drug experience that is not listed in the current labeling for the drug product.' Id. 'Unexpected' means 'an adverse drug experience that has not been previously observed (ie, included in the labeling) rather than from the perspective of such experience not being anticipated from the pharmacological properties of the pharmaceutical product.' Id.

In addition to the reporting requirements for ADEs related to marketed drugs, similar requirements apply to drugs that are under clinical investigation. For example, clinical trial sponsors that hold investigational new drug ('IND') applications must submit routine and regular 'Safety Reports,' along with detailed follow-up reports, to the FDA and to all participating investigators. See 21 C.F.R. '312.32. The reports must summarize: 1) any adverse experiences associated with the use of the applicable drug that are both serious and unexpected; and 2) any finding from tests in laboratory animals that suggests a significant risk for human subjects. See Id. (The disclosure requirements that apply to sponsors specifically exclude any adverse experience associated with the use of a drug that is not from the applicable clinical study itself.) The Safety Reports must also contain a detailed self-analysis performed by the reporting sponsor evaluating the 'significance of the adverse experience in light of previous, similar reports.' 21 C.F.R. '312.32(c)(1)(ii).

When to Report and How

The FDA's regulations describe the format and substantive requirements associated with all Safety Reports, Alert Reports, and Periodic Reports, along with the time periods within which the reports are to be made. See 21 C.F.R. '314.80(c). The Safety Reports and Alert Reports discussed above are generally required within 15 calendar days following the disclosing parties' initial receipt of the information regarding the ADE. See 21 C.F.R. '314.80(c)(1)(ii). All related follow-up reports must be submitted within 15 days following the receipt of any new information. See Id. At a minimum, Applicants must file Periodic Reports quarterly for 3 years from a drug's approval and then annually for the life of the product (unless otherwise indicated by the FDA). 21 C.F.R. '314.80(c)(2)(i). Notwithstanding the prescribed requirements, the format, timing, and frequency of all of the reporting requirements discussed in this article may be modified at the discretion of the FDA, any of which changes may be initially requested by a covered party. 21 C.F.R. ”312.32(3) (Safety Reports) and 314.80(c)(2)(i) (Periodic Reports).

Is Reporting a Liability Trap?

The disclosure requirements may appear to significantly increase the exposure of reporting parties. Indeed, on the surface, the requirements seem to compel an admission of fault in some instances and, thus, may tempt covered parties not to comply with the requirements. This course of action is not recommended. In fact, a failure to comply will likely increase, not decrease, a company's liability. For instance, violating the FDA's reporting requirements may invoke the doctrine of negligence per se in the course of any common law or statutory legal action, thereby imputing a presumption of negligence. Another possible consequence of not strictly complying with the reporting requirements for ADEs is that a plaintiff may argue to a jury that a company was seeking to hide relevant safety information. In such a situation, a judge and jury might be more sympathetic to an injured party than to a company, which might be perceived to put profit over patient safety or ethical conduct.

In addition to the possible consequences in a lawsuit for noncompliance with ADEs reporting requirements, a robust ADE collection and reporting system within a company may enable a company to take proactive steps to pre-empt or minimize potential legal liability. The tracking and reporting of ADEs associated with a product are intended to alert a company to possible issues with a drug product. When potential problems are detected and addressed in a proactive, rather than reactive, manner a potential safety issue's impact on a company will be minimized.

Further, reporting ADEs associated with a product is not an admission of fault. Each disclosure of an ADE should be accompanied by the disclaimer contained in the regulations. In pertinent part, the disclaimer states that information regarding ADEs:

does not necessarily reflect a conclusion by the applicant or FDA that the report or information constitutes an admission that the drug caused or contributed to an adverse effect. An applicant need not admit, and may deny, that the report or information submitted under this section constitutes an admission that the drug caused or contributed to an adverse effect. 21 C.F.R. '314.80(k).

The disclaimer operates to encourage open disclosure by limiting liability that many might infer from an ADE report. In order to ensure that ADEs are collected and reported in accordance with FDA regulations, companies must have a standard written procedure for the collection, follow up, and reporting of ADEs. For marketed drugs, such a system must include other parties within the distribution and manufacturing chain. Qualified persons from regulatory and medical affairs should be involved in the drafting of such procedures and should ensure that the procedures are being adhered to. Training must follow, as well as the establishment of a monitoring and auditing system to ensure compliance.

Management must be kept informed of the collection and reporting of ADEs to ensure that a company is not blindsided by ADEs associated with a product. At the same time, management must act on the information contained in ADEs. Com-panies that establish and maintain an advanced ADE collection and reporting system can turn a seemingly negative and onerous regulation into an effective tool for minimizing potential common law liability.

Alan Minsk is a partner and chair of the Food and Drug Practice Team at Arnall Golden Gregory LLP, based in Atlanta. David Hoffman is an associate in that group. They can be reached at [email protected] and [email protected]. The authors acknowledge the assistance of Matthew Wilson, another associate at the firm.

In order to minimize potential product liability associated with pharmaceutical products, companies regulated by the U.S. Food and Drug Administration ('FDA') should be vigilant in ensuring that adverse drug experiences ('ADEs') are reported to the FDA in a timely and complete manner. FDA regulations contain extensive requirements regarding the reporting of ADEs for companies involved in the distribution chain, such as manufacturers and distributors. Failure to report, when required, can result in an FDA enforcement action and exacerbate liability exposure. A proactive ADE collection and reporting system will place a company in a better position to address unanticipated issues that may arise after full-scale commercial marketing has begun. Therefore, companies must know their regulatory responsibilities and implement procedures to ensure that ADEs are collected and reported, as required by law. This article covers only some of the re-quirements and issues to consider.

Regulatory Overview

What Types of Events Require Reporting?

The FDA defines an ADE as:

any adverse event associated with the use of a drug in hu-mans, whether or not cosid-ered drug related, including the following: an adverse event occurring in the course of the use of a drug product in professional practice; an adverse event occurring from drug overdose whether accidental or intentional; an adverse event occurring from drug abuse; an adverse event occurring from drug withdrawal; and any failure of expected pharmacological action. See 21 C.F.R. ”310.305(b), 314.80(b).

The definition of an adverse event is quite broad. In addition, the adverse event information to be reported can come 'from any source … including information derived from commercial marketing experience, post-marketing clinical investigations, post-marketing epidemiological/surveillance studies, reports in the scientific literature, and unpublished scientific papers.' See, e.g., 21 C.F.R. ”310.305(b), 314.80(b). (While the reporting obligations also apply to medical devices, biologics, and marketing prescription drugs without approved marketing applications, this article focuses on drugs approved under marketing applications.)

Who Must Report?

Entities that must report ADEs include the holder of the new drug application ('NDA'), the manufacturer, the packer, and the distributor, if their names appear on the label of the approved product. 21 C.F.R. '314.80(c)(1)(iii). In addition to the basic reporting requirements, these parties must proactively develop written procedures for the surveillance, receipt, evaluation, and reporting of adverse drug experiences to the FDA.

As soon as possible, but in no case later than 15 calendar days of the initial receipt of information, covered parties must report the occurrence of any serious, life-threatening, or unexpected adverse experience associated with a product when the experience occurs while the product is subject to that party's control. 21 C.F.R. '314.80(c)(1)(i). 'Life-threatening adverse drug experience' is defined as:

Any adverse drug experience that places the patient, in the view of the initial reporter, the investigating party, at immediate risk of death from adverse drug experience as it occurred, ie, it does not include an adverse drug experience that, had it occurred in a more severe form, might have caused death. 21 C.F.R. '314.80(a).

The FDA defines a 'serious adverse drug experience' as:

Any adverse drug experience occurring at any dose that results in any of the following outcomes: Death, a life-threatening adverse drug experience, inpatient hospitalization, or prolongation of existing hospitalization, a persistent or significant disability/incapacity, or a congenital anomaly/birth defect. Important medical events that may not result in death, be life-threatening, or require hospitalization may be considered a serious adverse drug experience when, based upon appropriate medical judgment, they may jeopardize the patient or subject and may require medical or surgical intervention to prevent one of the outcomes listed in this definition. 21 C.F.R. '314.80(a).

Finally, an 'unexpected adverse drug experience' is defined as 'Any adverse drug experience that is not listed in the current labeling for the drug product.' Id. 'Unexpected' means 'an adverse drug experience that has not been previously observed (ie, included in the labeling) rather than from the perspective of such experience not being anticipated from the pharmacological properties of the pharmaceutical product.' Id.

In addition to the reporting requirements for ADEs related to marketed drugs, similar requirements apply to drugs that are under clinical investigation. For example, clinical trial sponsors that hold investigational new drug ('IND') applications must submit routine and regular 'Safety Reports,' along with detailed follow-up reports, to the FDA and to all participating investigators. See 21 C.F.R. '312.32. The reports must summarize: 1) any adverse experiences associated with the use of the applicable drug that are both serious and unexpected; and 2) any finding from tests in laboratory animals that suggests a significant risk for human subjects. See Id. (The disclosure requirements that apply to sponsors specifically exclude any adverse experience associated with the use of a drug that is not from the applicable clinical study itself.) The Safety Reports must also contain a detailed self-analysis performed by the reporting sponsor evaluating the 'significance of the adverse experience in light of previous, similar reports.' 21 C.F.R. '312.32(c)(1)(ii).

When to Report and How

The FDA's regulations describe the format and substantive requirements associated with all Safety Reports, Alert Reports, and Periodic Reports, along with the time periods within which the reports are to be made. See 21 C.F.R. '314.80(c). The Safety Reports and Alert Reports discussed above are generally required within 15 calendar days following the disclosing parties' initial receipt of the information regarding the ADE. See 21 C.F.R. '314.80(c)(1)(ii). All related follow-up reports must be submitted within 15 days following the receipt of any new information. See Id. At a minimum, Applicants must file Periodic Reports quarterly for 3 years from a drug's approval and then annually for the life of the product (unless otherwise indicated by the FDA). 21 C.F.R. '314.80(c)(2)(i). Notwithstanding the prescribed requirements, the format, timing, and frequency of all of the reporting requirements discussed in this article may be modified at the discretion of the FDA, any of which changes may be initially requested by a covered party. 21 C.F.R. ”312.32(3) (Safety Reports) and 314.80(c)(2)(i) (Periodic Reports).

Is Reporting a Liability Trap?

The disclosure requirements may appear to significantly increase the exposure of reporting parties. Indeed, on the surface, the requirements seem to compel an admission of fault in some instances and, thus, may tempt covered parties not to comply with the requirements. This course of action is not recommended. In fact, a failure to comply will likely increase, not decrease, a company's liability. For instance, violating the FDA's reporting requirements may invoke the doctrine of negligence per se in the course of any common law or statutory legal action, thereby imputing a presumption of negligence. Another possible consequence of not strictly complying with the reporting requirements for ADEs is that a plaintiff may argue to a jury that a company was seeking to hide relevant safety information. In such a situation, a judge and jury might be more sympathetic to an injured party than to a company, which might be perceived to put profit over patient safety or ethical conduct.

In addition to the possible consequences in a lawsuit for noncompliance with ADEs reporting requirements, a robust ADE collection and reporting system within a company may enable a company to take proactive steps to pre-empt or minimize potential legal liability. The tracking and reporting of ADEs associated with a product are intended to alert a company to possible issues with a drug product. When potential problems are detected and addressed in a proactive, rather than reactive, manner a potential safety issue's impact on a company will be minimized.

Further, reporting ADEs associated with a product is not an admission of fault. Each disclosure of an ADE should be accompanied by the disclaimer contained in the regulations. In pertinent part, the disclaimer states that information regarding ADEs:

does not necessarily reflect a conclusion by the applicant or FDA that the report or information constitutes an admission that the drug caused or contributed to an adverse effect. An applicant need not admit, and may deny, that the report or information submitted under this section constitutes an admission that the drug caused or contributed to an adverse effect. 21 C.F.R. '314.80(k).

The disclaimer operates to encourage open disclosure by limiting liability that many might infer from an ADE report. In order to ensure that ADEs are collected and reported in accordance with FDA regulations, companies must have a standard written procedure for the collection, follow up, and reporting of ADEs. For marketed drugs, such a system must include other parties within the distribution and manufacturing chain. Qualified persons from regulatory and medical affairs should be involved in the drafting of such procedures and should ensure that the procedures are being adhered to. Training must follow, as well as the establishment of a monitoring and auditing system to ensure compliance.

Management must be kept informed of the collection and reporting of ADEs to ensure that a company is not blindsided by ADEs associated with a product. At the same time, management must act on the information contained in ADEs. Com-panies that establish and maintain an advanced ADE collection and reporting system can turn a seemingly negative and onerous regulation into an effective tool for minimizing potential common law liability.

Alan Minsk is a partner and chair of the Food and Drug Practice Team at Arnall Golden Gregory LLP, based in Atlanta. David Hoffman is an associate in that group. They can be reached at [email protected] and [email protected]. The authors acknowledge the assistance of Matthew Wilson, another associate at the firm.