Enforcing Post-Marketing Requirements

A recent Food and Drug Administration (FDA) Warning Letter suggests that the agency will not hesitate, when necessary, to exercise its power to enforce post-marketing requirements (PMRs) for approved drug products. (The Warning Letter is available at www.fda.gov/ICECI/EnforcementActions/WarningLetters/2012/ucm293490.htm. While the Warning Letter is available publicly, we will not disclose here the company that received the correspondence.) The Warning Letter states that the recipient company failed to submit a required study protocol and final study report, pursuant to the company's PMRs and, therefore, the drug products are misbranded under the Federal Food, Drug, and Cosmetic Act (FDCA) (21 U.S.C. ' 352(z)). The Warning Letter is significant, because it demonstrates that the agency will take enforcement action against a company for failure to comply with PMRs, creating yet another area of enforcement that can lead to cascading effects, such as increased product liability exposure, for the recipient company.

Drawing FDA reproach for failure to comply with the FDCA is bad enough, but, due to their public availability, FDA enforcement letters also increase a company's potential liability exposure. The FDA posts such enforcement letters on its website, which means that anyone, including would-be plaintiffs and their attorneys, may use the findings in the letter to bolster potential product liability claims against the recipient company. In light of the FDA's apparent readiness to issue such letters, companies should take extra care to comply with PMRs and other FDA requirements, both to enhance regulatory compliance and to reduce liability risk.

Background on the Warning Letter

The FDA's current authority to enforce post-market study requirements was initiated in 2007 under the FDA Amendments Act (known as FDAAA). (The applicable post-market study requirements are contained in Section 505(o) of the FDCA (21 U.S.C. ' 355(o). Section 505(o)(3) allows the FDA to “require a responsible person for a drug to conduct post-approval study or studies of the drug, or a post-approval clinical trial or trials of the drug, on the basis of scientific data deemed appropriate by the [agency], including information regarding chemically-related or pharmacologically-related drugs.”) Prior to the FDAAA, the agency required some companies, under limited circumstances, to meet certain mutually agreed-upon post-market commitments. FDAAA added new section 505(o) to the FDCA, which creates more sweeping PMR authority for the agency. Section 505(o)(3) authorizes the FDA to require post-marketing studies or clinical trials at the time of approval or after approval if it becomes aware of new safety information.

Citing this relatively new source of regulatory authority in its Warning Letter, the FDA explained that the company “did not provide a final protocol submission for a new study that would fulfill the PMRs, as requested ' [and] had not demonstrated good cause for failing to adhere to the agreed upon timeline for completion.” The FDA acknowledged that the company submitted information about an independently conducted investigator-initiated study, but the agency had not agreed that this study could be used to satisfy the PMRs. The FDA also stated that the data submitted from that study was not sufficient to constitute a final study report, as required by the PMRs. Thus, the FDA concluded that the company was more than 20 months late in submitting a final study protocol for a requested three-month study in rats, and more than eight months late in submitting a final study report that satisfies the originally agreed-upon PMR.

The Warning Letter concludes with a reminder that the agency may take additional enforcement action without further notice, including imposing civil monetary penalties up to a maximum of $250,000 per violation. The company now has a very tight timeline to respond to FDA's demand to comply with the PMRs; the Letter mandates a final study protocol within 30 days, and states that the agency expects the company to obtain agreement with FDA on an adequate study protocol and to have initiated the study within six months.

Other FDA Action on PMRs

As the first major enforcement action in a relatively new area of FDA regulation, this Warning Letter initially sent a shockwave through the pharmaceutical community. However, in hindsight, perhaps there were some subtle signals that the FDA was considering a greater focus on PMR enforcement. In April 2011, the FDA issued a guidance document, Postmarketing Studies and Clinical Trials ' Implementation of Section 505(o)(3) of the Federal Food, Drug, and Cosmetic Act. (available at www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/ucm172001.pdf.) The guidance document summarizes the new PMR requirements and reporting procedures, and has a section dedicated to enforcement. In that section, the FDA emphasizes the importance of compliance with the PMRs and its authority to take action when companies fail to comply:

[a]n applicant's failure to comply with the timetable, periodic report submissions, and other requirements ' will be considered a violation unless the applicant demonstrates good cause for the noncompliance ' . FDA is authorized to determine what constitutes good cause.

In addition, only a few days after the Warning Letter was issued, the agency added a Notice to Industry on its website, explaining that the “FDA intends to vigorously enforce requirements that sponsors conduct post-market studies and clinical trials.” (The Notice to Industry is available at www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/ucm292758.htm.) The agency's messaging at this stage certainly suggests that companies should be prepared for future enforcement for non-compliance with PMR obligations. It is also noteworthy that, in January 2011, the FDA issued a Warning Letter to a medical device company that failed to comply with post-market study requirements, thereby making the device misbranded. (The Warning Letter issued to the medical device company is available at www.fda.gov/ICECI/EnforcementActions/Warningletters/2011/ucm239848.htm.)

Potential Increase in Liability Exposure

An FDA enforcement letter is not something that any drug company wants to receive for a number of regulatory reasons, least of which is incurring the FDA's scrutiny and reprisal. Enforcement letters may also result in increased liability exposure. The FDA makes enforcement correspondence publicly available on its website, and trade publications will subsequently publish the letters for all to view. The widespread availability of FDA enforcement letters creates a potential opportunity for injured parties and counsel to portray a non-compliant drug company as negligent and careless. In other words, an aggrieved party might contend that: 1) a company and the FDA agreed to a PMR to ensure patient safety; 2) the company failed to keep its end of the agreement; 3) such failure led to an FDA enforcement Letter, due to non-compliance with the FDCA; 4) such non-compliance demonstrates that the company has not provided required safety information to FDA; and 5) an injury occurring from the drug product might have been prevented if the company had met its regulatory obligation.

Conclusion

Compliance with PMRs is a legal requirement. If FDCA compliance is not a sufficient incentive, increased liability exposure should serve as an extra reminder that failure to follow through on a PMR commitment can have serious repercussions.

Alan Minsk, a member of this newsletter's Board of Editors, is a partner and practice leader of the Food & Drug Practice Team of Arnall Golden Gregory LLP. He advises pharmaceutical and medical device companies on all legal and regulatory matters relating to the FDA and DEA. He also conducts in-house training on FDA- and fraud and abuse-related topics. Diana Rusk Cohen is an associate in the Healthcare and Food and Drug Practice Groups and focuses her practice on regulatory compliance issues for healthcare providers, pharmaceutical companies and medical device manufacturers.

A recent Food and Drug Administration (FDA) Warning Letter suggests that the agency will not hesitate, when necessary, to exercise its power to enforce post-marketing requirements (PMRs) for approved drug products. (The Warning Letter is available at www.fda.gov/ICECI/EnforcementActions/WarningLetters/2012/ucm293490.htm. While the Warning Letter is available publicly, we will not disclose here the company that received the correspondence.) The Warning Letter states that the recipient company failed to submit a required study protocol and final study report, pursuant to the company's PMRs and, therefore, the drug products are misbranded under the Federal Food, Drug, and Cosmetic Act (FDCA) (21 U.S.C. ' 352(z)). The Warning Letter is significant, because it demonstrates that the agency will take enforcement action against a company for failure to comply with PMRs, creating yet another area of enforcement that can lead to cascading effects, such as increased product liability exposure, for the recipient company.

Drawing FDA reproach for failure to comply with the FDCA is bad enough, but, due to their public availability, FDA enforcement letters also increase a company's potential liability exposure. The FDA posts such enforcement letters on its website, which means that anyone, including would-be plaintiffs and their attorneys, may use the findings in the letter to bolster potential product liability claims against the recipient company. In light of the FDA's apparent readiness to issue such letters, companies should take extra care to comply with PMRs and other FDA requirements, both to enhance regulatory compliance and to reduce liability risk.

Background on the Warning Letter

The FDA's current authority to enforce post-market study requirements was initiated in 2007 under the FDA Amendments Act (known as FDAAA). (The applicable post-market study requirements are contained in Section 505(o) of the FDCA (21 U.S.C. ' 355(o). Section 505(o)(3) allows the FDA to “require a responsible person for a drug to conduct post-approval study or studies of the drug, or a post-approval clinical trial or trials of the drug, on the basis of scientific data deemed appropriate by the [agency], including information regarding chemically-related or pharmacologically-related drugs.”) Prior to the FDAAA, the agency required some companies, under limited circumstances, to meet certain mutually agreed-upon post-market commitments. FDAAA added new section 505(o) to the FDCA, which creates more sweeping PMR authority for the agency. Section 505(o)(3) authorizes the FDA to require post-marketing studies or clinical trials at the time of approval or after approval if it becomes aware of new safety information.

Citing this relatively new source of regulatory authority in its Warning Letter, the FDA explained that the company “did not provide a final protocol submission for a new study that would fulfill the PMRs, as requested ' [and] had not demonstrated good cause for failing to adhere to the agreed upon timeline for completion.” The FDA acknowledged that the company submitted information about an independently conducted investigator-initiated study, but the agency had not agreed that this study could be used to satisfy the PMRs. The FDA also stated that the data submitted from that study was not sufficient to constitute a final study report, as required by the PMRs. Thus, the FDA concluded that the company was more than 20 months late in submitting a final study protocol for a requested three-month study in rats, and more than eight months late in submitting a final study report that satisfies the originally agreed-upon PMR.

The Warning Letter concludes with a reminder that the agency may take additional enforcement action without further notice, including imposing civil monetary penalties up to a maximum of $250,000 per violation. The company now has a very tight timeline to respond to FDA's demand to comply with the PMRs; the Letter mandates a final study protocol within 30 days, and states that the agency expects the company to obtain agreement with FDA on an adequate study protocol and to have initiated the study within six months.

Other FDA Action on PMRs

As the first major enforcement action in a relatively new area of FDA regulation, this Warning Letter initially sent a shockwave through the pharmaceutical community. However, in hindsight, perhaps there were some subtle signals that the FDA was considering a greater focus on PMR enforcement. In April 2011, the FDA issued a guidance document, Postmarketing Studies and Clinical Trials ' Implementation of Section 505(o)(3) of the Federal Food, Drug, and Cosmetic Act. (available at www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/ucm172001.pdf.) The guidance document summarizes the new PMR requirements and reporting procedures, and has a section dedicated to enforcement. In that section, the FDA emphasizes the importance of compliance with the PMRs and its authority to take action when companies fail to comply:

[a]n applicant's failure to comply with the timetable, periodic report submissions, and other requirements ' will be considered a violation unless the applicant demonstrates good cause for the noncompliance ' . FDA is authorized to determine what constitutes good cause.

In addition, only a few days after the Warning Letter was issued, the agency added a Notice to Industry on its website, explaining that the “FDA intends to vigorously enforce requirements that sponsors conduct post-market studies and clinical trials.” (The Notice to Industry is available at www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/ucm292758.htm.) The agency's messaging at this stage certainly suggests that companies should be prepared for future enforcement for non-compliance with PMR obligations. It is also noteworthy that, in January 2011, the FDA issued a Warning Letter to a medical device company that failed to comply with post-market study requirements, thereby making the device misbranded. (The Warning Letter issued to the medical device company is available at www.fda.gov/ICECI/EnforcementActions/Warningletters/2011/ucm239848.htm.)

Potential Increase in Liability Exposure

An FDA enforcement letter is not something that any drug company wants to receive for a number of regulatory reasons, least of which is incurring the FDA's scrutiny and reprisal. Enforcement letters may also result in increased liability exposure. The FDA makes enforcement correspondence publicly available on its website, and trade publications will subsequently publish the letters for all to view. The widespread availability of FDA enforcement letters creates a potential opportunity for injured parties and counsel to portray a non-compliant drug company as negligent and careless. In other words, an aggrieved party might contend that: 1) a company and the FDA agreed to a PMR to ensure patient safety; 2) the company failed to keep its end of the agreement; 3) such failure led to an FDA enforcement Letter, due to non-compliance with the FDCA; 4) such non-compliance demonstrates that the company has not provided required safety information to FDA; and 5) an injury occurring from the drug product might have been prevented if the company had met its regulatory obligation.

Conclusion

Compliance with PMRs is a legal requirement. If FDCA compliance is not a sufficient incentive, increased liability exposure should serve as an extra reminder that failure to follow through on a PMR commitment can have serious repercussions.

Alan Minsk, a member of this newsletter's Board of Editors, is a partner and practice leader of the Food & Drug Practice Team of Arnall Golden Gregory LLP. He advises pharmaceutical and medical device companies on all legal and regulatory matters relating to the FDA and DEA. He also conducts in-house training on FDA- and fraud and abuse-related topics. Diana Rusk Cohen is an associate in the Healthcare and Food and Drug Practice Groups and focuses her practice on regulatory compliance issues for healthcare providers, pharmaceutical companies and medical device manufacturers.