FDA Revises Guidance on Marketed Unapproved Drugs – Enforcement Actions without Notice

This week, the Food and Drug Administration (FDA) announced a revision to its 2006 guidance titled “Marketed Unapproved Drugs– Compliance Policy Guide Sec. 440.100, Marketed New Drugs Without Approved NDAs or ANDAs” (CPG 440.100).

Revised CPG 440.100 clarifies that any unapproved new drug introduced onto the market after September 19, 2011 will be subject to immediate enforcement action, without prior notice and without regard to the enforcement priorities set out in CPG 440.100.

For unapproved drugs that are being commercially used or sold as of September 19, 2011, FDA will continue to apply the enforcement priorities established in 2006. These give a higher priority to enforcement actions involving drugs in certain high-risk categories, such as drugs that pose a potential safety risk or lack evidence of effectiveness.

The 2006 CPG 440.100 established an orderly approach for removing unapproved new drugs from the market. Unapproved new drugs, however, continue to come onto the market illegally for reasons addressed in FDA’s revised guidance.  Among these reasons are:

• Competition with other unapproved drugs that are already on the market, and not yet subject to a public FDA announcement regarding future enforcement actions.
• Increased market share opportunity is perceived following FDA actions that removed another unapproved drug from the market.

Although revised CPG 440.100 is being issued for immediate implementation, FDA welcomes public input on the revised guidance at any time.  Comments can be submitted electronically to http:/www.regulations.gov or in writing to the Division of Dockets Management (HFA-305), Food and Drug Administration, 5630 Fishers Lane, Rm. 1061, Rockville, MD  20852.  Below is a summary of the new guiadance.

Guidance for FDA Staff and Industry: Marketed Unapproved Drugs Compliance Policy Guide, Marketed New Drugs Without Approved NDAS or ANDAs

 

The Compliance Policy Guide (CPG) describes how FDA intends to exercise their enforcement discretion with regard to drugs marketed in the United States that do not have required FDA approval for marketing.  The guidance has been revised to state that the enforcement priorities and potential exercise of enforcement discretion discussed in the guidance apply only to unapproved new drugs (including new drugs covered by the Over-the-Counter (OTC) Drug Review), except for licensed biologics and veterinary drugs, that are commercially used or sold prior to September 19, 2011.

 

All unapproved drugs introduced onto the market after that date are subject to immediate enforcement action at any time, without prior notice and without regard to the enforcement priorities set forth below.

 

FDA noted that the goals of the guidance are to (1) clarify for FDA personnel and the regulated industry how we intend to exercise our enforcement discretion regarding unapproved drugs and (2) emphasize that illegally marketed drugs must obtain FDA approval.

 

Background

 

FDA estimated that in the United States today, perhaps as many as several thousand drug products are marketed illegally without required FDA approval.  The guidance document provides a detailed history of drug regulation and approval at the end of the document.

 

Once an illegally marketed product is identified, taking enforcement action against the product would typically involve one or more of the following:

·         Requesting voluntary compliance;

·         Providing notice of action in a Federal Register notice;

·         Issuing an untitled letter;

·         Issuing a Warning Letter; or

·         Initiating a seizure, injunction, or other proceeding.

Each of these actions is time-consuming and resource intensive. Recognizing that FDA is unable to take action immediately against all of these illegally marketed products and that FDA needs to make the best use of scarce Agency resources, the agency had to prioritize their enforcement efforts and exercise enforcement discretion with regard to products that remain on the market.

In general, in recent years, FDA has employed a risk-based enforcement approach with respect to marketed unapproved drugs. This approach includes efforts to identify illegally marketed drugs, prioritization of those drugs according to potential public health concerns or other impacts on the public health, and subsequent regulatory follow-up.

Some of the specific actions the Agency has taken have been precipitated by evidence of safety or effectiveness problems that has either come to our attention during inspections or been brought to our attention by outside sources.

FDA’s Enforcement Policy

Consistent with their risk-based approach to the regulation of pharmaceuticals, FDA intends to continue its current policy of giving higher priority to enforcement actions involving unapproved drug products in the following categories:

Drugs with potential safety risks. Removing potentially unsafe drugs protects the public from direct and indirect health threats.

Drugs that lack evidence of effectiveness. Removing ineffective drugs protects the public and depending on the indication, some ineffective products pose safety risks as well.

Health fraud drugs. FDA defines health fraud as “[t]he deceptive promotion, advertisement, distribution or sale of articles . . . that are represented as being effective to diagnose, prevent, cure, treat, or mitigate disease (or other conditions), or provide a beneficial effect on health, but which have not been scientifically proven safe and effective for such purposes. Such practices may be deliberate or done without adequate knowledge or understanding of the article.” Of highest priority in this area are drugs that present a direct risk to health. Indirect health hazards exist if, as a result of reliance on the product, the consumer is likely to delay or discontinue appropriate medical treatment. Indirect health hazards will be evaluated for enforcement action. FDA’s health fraud CPG outlines priorities for evaluating regulatory actions against indirect health hazard products, such as whether the therapeutic claims are significant, whether there are any scientific data to support the safety and effectiveness of the product, and the degree of vulnerability of the prospective user group.

Drugs that present direct challenges to the new drug approval and OTC drug monograph systems. The drug approval and OTC drug monograph systems are designed to avoid the risks associated with potentially unsafe, ineffective, and fraudulent drugs. Targeting drugs that challenge the drug approval or OTC drug monograph systems buttresses the integrity of these systems and makes it more likely that firms will comply with the new drug approval and monograph requirements, which benefits the public health.

Unapproved new drugs that are also violative of the Act in other ways. The Agency also intends, in circumstances that it considers appropriate, to continue its policy of enforcing the preapproval requirements of the FD&C Act against a drug or firm that also violates another provision of the FD&C Act, even if there are other unapproved versions of the drug made by other firms on the market. For instance, if a firm that sells an unapproved new drug also violates current good manufacturing practice (CGMP) regulations, the Agency is not inclined to limit an enforcement action in that instance to the CGMP violations. Rather, the Agency may initiate a regulatory action that targets both the CGMP violation and the violation of section 505 of the FD&C Act (21 U.S.C. 355). This policy efficiently preserves scarce Agency resources by allowing the Agency to pursue all applicable charges against a drug and/or a firm and avoiding duplicative action. See United States v. Sage Pharmaceuticals, Inc., 210 F.3d 475, 479-80 (5th Cir. 2000).

Drugs that are reformulated to evade an FDA enforcement action. The Agency is also aware of instances in which companies that anticipate an FDA enforcement action against a specific type or formulation of an unapproved product have made formulation changes to evade that action, but have not brought the product into compliance with the law. Companies should be aware that the Agency is not inclined to exercise its enforcement discretion with regard to such products. Factors that the Agency may consider in determining whether to bring action against the reformulated products include, but are not limited to, the timing of the change, the addition of an ingredient without adequate scientific justification (see, for example, 21 CFR 300.50 and 330.10(a)(4)(iv)), the creation of a new combination that has not previously been marketed, and the claims made for the new product.

Notice of Enforcement Action and Continued Marketing of Unapproved Drugs

FDA is not required to, and generally does not intend to, give special notice that a drug product may be subject to enforcement action, unless FDA determines that notice is necessary or appropriate to protect the public health. The issuance of this guidance is intended to provide notice that any product that is being marketed illegally is subject to FDA enforcement action at any time. For example, FDA may take action at any time against a product that was originally marketed before 1938, but that has been changed since 1938 in such a way as to lose its grandfather status

The only exception to this policy is that generally, products subject to an ongoing DESI proceeding or ongoing OTC drug monograph proceeding (i.e., an OTC product that is part of the OTC drug review for which an effective final monograph is not yet in place) may remain on the market during the pendency of that proceedingand any additional period specifically provided in the proceeding (such as a delay in the effective date of a final OTC drug monograph).

However, once the relevant DESI or OTC drug monograph proceeding is completed and any additional grace period specifically provided in the proceeding has expired, all products that are not in compliance with the conditions for marketing determined in that proceeding are subject to enforcement action at any time without further notice.

FDA intends to evaluate on a case-by-case basis whether justification exists to exercise enforcement discretion to allow continued marketing for some period of time after FDA determines that a product is being marketed illegally. In deciding whether to allow such a grace period, FDA may consider the following factors:

·         The effects on the public health of proceeding immediately to remove the illegal products from the market (including whether the product is medically necessary and, if so, the ability of legally marketed products to meet the needs of patients taking the drug);

·         The difficulty associated with conducting any required studies, preparing and submitting applications, and obtaining approval of an application;

·         The burden on affected parties of immediately removing the products from the market;

·         The Agency’s available enforcement resources; and

–       Any special circumstances relevant to the particular case under consideration. However, as stated above, FDA does not intend to apply any such grace period to an unapproved drug that was introduced onto the market after September 19, 2011.

Special Circumstances — Newly Approved Product

Sometimes, a company may obtain approval of an NDA for a product that other companies are marketing without approval.  For example, at the Agency’s discretion, FDA may provide for a shorter grace period if an applicant seeking approval of a product that other companies are marketing without approval agrees to publication, around the time it submits the approval application, of a Federal Register notice informing the public that the applicant has submitted that application.

A shortened grace period may also be warranted if the fact of the application is widely known publicly because of applicant press releases or other public statements. Such a grace period may run from the time of approval or from the time the applicant has made the public aware of the submission, as the Agency deems appropriate.

FDA wants to encourage this type of voluntary compliance with the new drug requirements because it benefits the public health by increasing the assurance that marketed drug products are safe and effective — it also reduces the resources that FDA must expend on enforcement. Thus, because they present a direct challenge to the drug approval system, FDA is more likely to take enforcement action against remaining unapproved drugs in this kind of situation.

However, FDA intends to take into account the circumstances once the product is approved in determining how to exercise our enforcement discretion with regard to the unapproved products. In exercising enforcement discretion, FDA intends to balance the need to provide incentives for voluntary compliance against the implications of enforcement actions on the marketplace and on consumers who are accustomed to using the marketed products.

When a company obtains approval to market a product that other companies are marketing without approval, FDA normally intends to allow a grace period of roughly 1 year from the date of approval of the product before it will initiate enforcement action (e.g., seizure or injunction) against marketed unapproved products of the same type.

To assist in an orderly transition to the approved product(s), in implementing a grace period, FDA may identify interim dates by which firms should first cease manufacturing unapproved forms of the drug product, and later cease distributing the unapproved product.

Companies should be aware that a Warning Letter may not be sent before initiation of enforcement action and should not expect any grace period that is granted to protect them from the need to leave the market for some period of time while obtaining approval. Companies marketing unapproved new drugs should also recognize that, while FDA normally intends to allow a grace period of roughly 1 year from the date of approval of an unapproved product before it will initiate enforcement action (e.g., seizure or injunction) against others who are marketing that unapproved product, it is possible that a substantially shorter grace period would be provided, depending on the individual facts and circumstances.

Firms are reminded that this CPG does not create any right to a grace period; the length of the grace period, if any, is solely at the discretion of the Agency. For instance, firms should not expect any grace period when the public health requires immediate removal of a product from the market, or when the Agency has given specific prior notice in the Federal Register or otherwise that a drug product requires FDA approval.

The shorter the grace period, the more likely it is that the first company to obtain an approval will have a period of de facto market exclusivity before other products obtain approval. For example, if FDA provides a 1-year grace period before it takes action to remove unapproved competitors from the market, and it takes 2 years for a second application to be approved, the first approved product could have 1 year of market exclusivity before the onset of competition.

If FDA provides for a shorter grace period, the period of effective exclusivity could be longer. FDA hopes that this period of market exclusivity will provide an incentive to firms to be the first to obtain approval to market a previously unapproved drug.  The Agency understands that, under the Act, holders of NDAs must list patents claiming the approved drug product and that newly approved drug products may, in certain circumstances, be eligible for marketing exclusivity.

Listed patents and marketing exclusivity may delay the approval of competitor products. If FDA believes that an NDA holder is manipulating these statutory protections to inappropriately delay competition, the Agency will provide relevant information on the matter to the Federal Trade Commission (FTC). In the past, FDA has provided information to the FTC regarding patent infringement lawsuits related to pending abbreviated new drug applications (ANDAs), citizen petitions, and scientific challenges to the approval of competitor drug products.

Regulatory Action Guidance

District offices are encouraged to refer to CDER for review (with copies of labeling) any unapproved drugs that appear to fall within the enforcement priorities. Charges that may be brought against unapproved drugs include, but are not limited to, violations of 21 U.S.C. 355(a) and 352(f)(1) of the FD&C Act. Other charges may also apply based on, among others, violations of 21 U.S.C. 351(a)(2)(B) (CGMP), 352(a) (misbranding), or 352(o) (failure to register or list).