Safety v. Innovation – How the European Commission’s Proposed Regulation Hopes to Strike the Right Balance

By Kathryn E. Balmford

Back in January, Jeff Shuren, M.D., the Director of the Center for Devices and Radiological Health at the U.S. Food and Drug Administration (FDA), made headlines when comparing the European Union’s (EU) regulation of medical devices to FDA’s.  When asked by a reporter whether proposed changes to FDA’s 510(k) premarket clearance system were aimed at lessening industry’s premarket burden (more consistent with the European approach), Dr. Shuren quoted a plastic surgeon as saying, “Under the EU system, the public are being used as guinea pigs.”  He then added, “we don’t use our people as guinea pigs in the U.S.”  While his remarks sparked outrage on the part of his European counterparts, Dr. Shuren’s point has not fallen on completely deaf ears across the pond.

On September 26th, the European Commission released its long-anticipated proposed regulation aimed at overcoming the flaws and gaps in the EU existing regulatory framework, the Medical Device Directive (MDD).  One of the system’s flaws stems from the lack of a centralized government approval process.  In the United States, if a company wants to bring a medical device to market, it must meet FDA’s requirements – including, in the case of most Class II and Class III devices, obtaining premarket clearance or approval from FDA that its device is safe and effective for its intended use.  Conversely, in the EU, if a company wants to bring a medical device to market, it pays a notified body (i.e., a private company certified by a European Member State) to conduct a conformity assessment and review documentation demonstrating the device’s safety and quality.

It is not so much that the company pays for the notified body’s services – as even in the US, companies have been paying user fees for FDA to review their applications for years – it is that notified bodies do not consistently interpret and apply the standards set forth in the MDD.  In addition, the competent authorities in each Member State are not necessarily aware that a device has received a CE-mark from a notified body before the product reaches their market.  If a safety concern arises once the device is on the market, a coordinated response across Member States is not easy to organize.

One of the benefits of the European regulatory framework is that notified bodies are numerous and, therefore, generally able to perform their premarket duties faster than FDA.  This fact, coupled with a lower approval standard for high risk devices, has led some to characterize the European system as more supportive of innovation and patient access to novel products.  However, according to FDA, there is a price to pay for faster approvals supported by less clinical data, and that price is paid by European patients.  See Unsafe and Ineffective Devices Approved in the EU that were Not Approved in the US, FDA (May 2012).

The European Commission’s proposed Regulation includes several features intended to further strengthen patient safety and respond to criticism of the current regulatory framework.  With respect to premarket requirements, several reforms have been proposed, including:

  • Stronger supervision of notified bodies by competent authorities;
  • Additional authority for notified bodies (e.g., unannounced facility inspections, sample testing);
  • Manufacturer submission of a safety and effectiveness summary to a public EU-wide database; and
  • Creation of a Medical Device Coordination Group (MDCG) authorized to review notified body preliminary conformity assessments for high-risk devices before such products receive a CE-mark and enter the market.

It is this last “scrutiny mechanism” that has the best chances of catching unsafe, high-risk devices before they harm patients.  While the proposal steers clear of creating a centralized government approval process, by establishing the MDCG, the European Commission has attempted to address potential safety concerns and increase collaboration among Member States.

Of course, that is only one side of the story.  According to industry, the scrutiny mechanism will only deter innovation and slow patient access to novel technologies.  As the proposed Regulation is just now entering the legislative phase with the European Parliament and Council, it remains to be seen how the EU will ultimately balance the safety of its patients with the concerns of its manufacturers.

Scaling Up African Agriculture

By Marshall L. Matz, as published in the October 3, 2012, issue of Agri-Pulse.

Last week in Arusha, Tanzania, former United Nations Secretary General Kofi Annan told 1,200 delegates attending the African Green Revolution Forum (AGRF) that “African agriculture is now accelerating beyond the tipping point” and is the long term solution to global food and nutrition security.  Mr. Annan is correct on both points. The African Green Revolution is now under way and it is the key to both African and global food security.

Agriculture development has long been viewed as the economic key to Africa, but it is not always recognized as the solution to global food security and our ability to feed nine billion people by 2050.  Africa has 60 percent of the underutilized agricultural land in the world and is, therefore, the key to global food security.

To read the article in its entirety, click here.

POM Wonderful vs. FTC: The Epic War Continues

By Tish Eggleston Pahl

There are some spectacles we geeks in the food and drug bar follow as avidly as any mini-series. The epic, two-year battle between POM Wonderful (producer of pomegranate products) and the Federal Trade Commission (FTC) is almost as addictive as HBO’s “Game of Thrones” – only without all the beheadings.

Though POM Wonderful extols the health benefits of pomegranates and their juice, the FTC insists that the company’s product claims are not substantiated by competent and reliable scientific evidence, in violation of the FTC Act.  Last week, the FTC won a round when U.S. District Court Judge Richard Roberts dismissed POM Wonderful’s complaint against the FTC.  POM Wonderful LLC v. The Federal Trade Commission, Civil Action No. 10-1539 (RWR) (Sept. 30, 2012).

Battle lines were drawn in 2010 when the FTC entered into orders with Iovate Health Sciences and Nestle HealthCare Nutrition.  The FTC required both of those companies to possess two adequate and well-controlled human clinical studies to support their product health claims; FDA also had to pre-approve any disease claims for Nestle products.

In September 2010, POM Wonderful launched the first salvo when it sued the FTC, alleging that the agency imposed these new substantiation requirements unlawfully.  POM Wonderful was prescient, because two weeks later the FTC counter-attacked.  It filed an administrative complaint, challenging the company’s health claims for its pomegranate products.  This administrative complaint was eventually followed by a 345-page decision by the FTC’s Administrative Law Judge (ALJ).

The ALJ decision was a draw for Pom Wonderful and FTC staff.  The ALJ found some of POM Wonderful’s claims to be false and misleading, but also rejected the FTC’s demands that POM Wonderful obtain FDA pre-approval and conduct two clinical studies.  Appeals followed, with oral argument before the FTC Commissioners in August.  A decision is expected by December 2012.

With the Commission decision pending, the combatants turned to the federal district and, this time, POM Wonderful lost.  Judge Roberts found that POM Wonderful’s preemptive filing two weeks before the FTC’s administrative suit left “the disfavored appearance that POM hastily filed the instant case, in part, to secure tactical leverage from proceedings in this forum.”  In light of the advanced administrative proceeding, allowing the case to proceed in federal court would not help resolve the matter and so Judge Roberts dismissed Pom Wonderful’s complaint.

The adversaries withdraw for now and await the full Commission’s ruling. However, POM Wonderful can return to federal court by appealing any final FTC judgment against it. The battle may be over, but the war promises to continue.

OFW Law’s John Block Participates in Panel of Former USDA Secretaries

By John R. Block, Secretary of the U.S. Department of Agriculture from 1981-1985

Recently, I had the pleasure of joining three other former Secretaries of Agriculture at the University of Nebraska for a lively and informational discussion to celebrate the 150th anniversary of the Morrill Act, which created the land grant college system back in 1862. When I get the opportunity to spend time with Dan [Glickman], Clayton [Yeutter] and Mike [Johanns], it’s always a great evening. We discussed the challenges and opportunities for the American agriculture industry and took questions from students.  Ronnie Green, one of the moderators of the event and Vice President of the University, shared his hope that, in the audience of 1500, there might be one or two future Secretaries of Agriculture.   I hope so, too.

You can read more about the event in the Lincoln Journal Star by clicking here.

Deadly Meningitis Outbreak Linked To Compounded Steroid— The Tipping Point For Compounders?

By Tish Eggleston Pahl

CDC (as of Oct. 4, 2012)

Five people are dead and another 35 are very ill due to a fungal meningitis outbreak in six states.  The Centers for Disease Control and Prevention (CDC) and U.S. Food and Drug Administration (FDA) have traced the outbreak to the New England Compounding Center Inc.  Media sources report that over 17,000 vials of the epidural steroid in three lots were distributed to 75 healthcare facilities in 23 statesThe CDC and FDA warn that this outbreak will likely spread before being contained.

This follows on the heels of other serious outbreaks also linked to pharmacies that compounded contaminated drugs:

  • 33 people in 7 states suffered vision loss and blindness due to a fungal endophthalmitis outbreak linked to an injectable dye produced by Florida compounder Franck’s Lab.

Franck’s Lab has been embroiled in litigation with FDA since compounding a product that killed 21 polo horses in April 2009.  The scope of FDA’s authority over compounding of drugs for non-food animals has been fully briefed and will be argued before the 11th Circuit Court of Appeals on November 1, 2012 in US. v. Franck’s Lab, Inc., et al. (11th Cir. No.11-15350).  In May 2012, Franck’s ceased compounding and distributing its sterile preparations because they might not have actually been sterile.

I discussed this unfolding tragedy with my colleagues Arthur Tsien and Steve Terman and we wonder if, in a few years, we’ll look back on this as a turning point in the regulation of compounding pharmacies.  On the one hand, FDA defers to State Boards of Pharmacy to regulate traditional compounding practice where a pharmacist mixes-to-order drugs (like the enrofloxacin I must administer to my disapproving rabbit via a syringe).  On the other hand, FDA’s Compliance Policy Guide describes what activities could turn a compounding pharmacy into a commercial-scale drug manufacturer.  FDA has long pursued pharmacies it believes are unlawful drug manufacturers.

Patient deaths have historically spurred Congressional action.  After over 100 deaths due to Elixir of Sulfanilamide, Congress passed the 1938 Food, Drug, and Cosmetic Act, requiring manufacturers to show a drug’s safety prior to marketing. Next week marks the 50th anniversary of the Kefauver-Harris Amendment, enacted in response to the thalidomide tragedy in Europe, in which Congress required FDA to approve drugs before marketing and demand greater proof of safety and efficacy.

Maybe 2012 and compounded steroids will be the tipping point in stricter oversight of compounders.

FDA has now updated its webpage with information on the outbreak here.

California’s Prop 37 — A Prop Too Far?

By Robert A. Hahn

On election day, California voters will decide on another food labeling ballot initiative, one that is being watched intently by the food industry.  If it passes, the California Right to Know Genetically Engineered Food Act, popularly known as “Prop 37” (short for Proposition 37), would require genetically engineered foods to be labeled as such.

Specifically, Prop 37 would:

  • Require genetically engineered raw agricultural commodities to be labeled “genetically engineered” on the front label;
  • Require processed foods with genetically engineered ingredients to be labeled “[May be] partially produced with genetic engineering” on the front label;
  • Prohibit any processed food from being labeled “natural,” even if the food is not genetically engineered;
  • Exempt several categories of foods, including restaurants foods, alcoholic beverages, and meat and poultry, from the labeling requirement; and
  • Authorize private plaintiffs to sue to enforce the law.

Putting aside the question of whether Prop 37 is sound public policy, there is a good chance it will be struck down as unconstitutional if it passes, and the entire exercise will have been a waste of time and money.

While other constitutional challenges to Prop 37 (e.g., dormant Commerce Clause) are possible, a lawsuit alleging that Prop 37 violates the First Amendment appears all but certain.  Generally, a law that seeks to regulate (i.e., restrict or compel) commercial speech must pass the test enunciated by the U.S. Supreme Court in Central Hudson Gas & Elec. Corp. v. Public Service Commission, 447 U.S. 557 (1980).  Under the Central Hudson test, a law compelling commercial speech must involve a substantial government interest, must directly advance that government interest, and must be no more extensive than is necessary.  If the Central Hudson test is applied to Prop 37, it’s difficult to see how a court could find it constitutional.

(1)  Is there a substantial government interest in mandatory labeling of genetically engineered foods?

The proponents of Prop 37 say that there is a consumer “right to know” which foods are genetically engineered.  The Statement of Purpose in section 2 of Prop 37 states that its purpose is “to create and enforce the fundamental right of the people of California to be fully informed about whether the food they purchase and eat is genetically engineered.”  Is satisfying that consumer right to know a substantial government interest?

In the closest precedent available, the consumer’s right to know was held not to be a substantial government interest.  In 1994, the State of Vermont enacted a law mandating labeling of milk produced from cows treated with recombinant bovine growth hormone (rbGH), also knows as recombinant bovine somatotropin (rbST).  In International Dairy Foods Association v. Amestoy, a case brought by a dairy industry trade association, the Second Circuit Court of Appeals held that the Vermont labeling requirement violated the First Amendment.  The court acknowledged a strong interest in this information among Vermont consumers, but held that “consumer concern is not, in itself, a substantial interest.”  According to the Second Circuit, “were consumer interest alone sufficient, there is no end to the information that states could require manufacturers to disclose about their production methods.”

The U.S. Food and Drug Administration’s (FDA) position also undercuts any argument that there is a substantial government interest in labeling genetically engineered foods.  FDA considered requiring special labeling of all bioengineered foods, but decided against it.  The agency concluded that the fact that a food has been genetically engineered is not a material fact.  If the genetically engineered food is significantly different from its traditional counterpart (e.g., in terms of nutritional value, safety, or functionality), then it must be labeled to indicate the difference, but the fact that a food was produced using bioengineering, by itself, is not a material fact.  The American Medical Association has similarly stated that there is no scientific justification for special labeling of biotech foods.

(2)  Does mandatory labeling of genetically engineered foods directly advance that government interest?

Even if there is a substantial government interest in labeling all foods produced using genetic engineering, Prop 37 arguably fails to directly advance that government interest, because it exempts so many categories of food from its labeling requirement.  Exempt categories include all foods served in restaurants and other food facilities primarily engaged in sale of food for immediate consumption; food derived entirely from animals such as meat, poultry, and milk (unless the animal itself has been genetically engineered); and alcoholic beverages.  Prop 37 also contains a large loophole: a food is exempt if there is a sworn statement from the food’s supplier that it has not been knowingly or intentionally genetically engineered or commingled with genetically engineered foods.  Even if there is a substantial government interest in satisfying the consumer right to know which foods are produced using biotechnology, with so much of the food supply exempt from its labeling requirement, it is not clear that Prop 37 would directly advance that government interest.

(3)  Is a law mandating labeling of genetically engineered foods more extensive than is necessary to advance the government interest?

Stated otherwise, is there a way to advance the consumers’ right to know which foods are genetically engineered without mandating a new labeling requirement?  A reasonable case could be made that there is, and it is already in place.  It’s called the National Organic Program, administered by the U.S. Department of Agriculture.  The right to know which foods have been genetically engineered is clearly motivated by a desire to avoid those foods.  Consumers who want to avoid genetically engineered foods can already do so by purchasing certified “organic” foods, which are prohibited from using genetic engineering.  If a food is not labeled “organic” and it contains ingredients derived from corn, soybeans, or other crops commonly known to be genetically engineered, an educated consumer can assume it has genetically engineered ingredients.

If the ballot initiative passes, the battleground will shift to the courts.  It will no doubt be intensely fought.

Mirror, Mirror on the Wall: Nothing Magical about FDA Warning Letters for Cosmetics with Age-Related Claims

By Tish Eggleston Pahl

The evil queen sucks the life out of young maidens to sustain her flawless complexion in the movie Snow White and the Huntsman.  If you are wondering how the U.S. Food and Drug Administration (FDA) might regulate the claims for a product with such regenerative properties (minus the grisly maiden death), look no further.

Source: Snow White and the Huntsman Official Site

In early September 2012, FDA posted a warning letter to Lancôme USA and yesterday posted warning letters to Andes Natural and Janson Beckett Inc.   In all three letters, FDA objected to anti-aging claims that (magically) turned these cosmetic products into unapproved new drugs in violation of the Federal Food, Drug and Cosmetic Act (FDC Act).

Objectionable claims on the companies’ respective websites included:

  • “[B]oosts the activity of genes and stimulates the production of youth proteins” (Lancôme USA);
  • “[U]nique R.A.R.E. oligopeptide helps to re-bundle collagen”  (Lancôme USA);
  • “Alpha Lipoic Acid, the most potent antioxidant on the market today, helps repair aged skin while preventing future damage” (Janson Beckett);
  • “[H]elps to protect against and repair environmental skin damage and signs of aging while stimulating collagen synthesis” (Janson Beckett);
  • “[S]timulate collagen growth and cellular regeneration thereby improving … sagging, reduction of imperfections and blemishes … ” (Andes Natural); and
  • “Stimulates the formation of glycosaminoglycans … helps to thicken the dermis resulting in a lessening of sagging and less fine lines and wrinkles”  (Andes Natural).

The FDA also took Andes Natural to task for products bearing acne claims which either must be subject to New Drug Applications under section 505 of the FDC Act, or must be labeled and formulated consistent with the final monograph for over-the-counter acne drugs.

It is sometimes a murky line between drugs that affect the structure or function of the body and cosmetics that alter appearance.  Cosmetics cannot make structure/function claims under the FDC Act.   Longstanding FDA policy classifies moisturizers as cosmetics, even though they arguably achieve their purpose by affecting the structure or function of the body.  As any woman of a certain age knows (of whom I am one) anti-aging claims are very common in the cosmetics aisle.  FDA issued an import alert for cosmetics making anti-aging claims in 1988.  Signaling that it was becoming impatient with the continued aggressive marketing, FDA began steadily adding companies to its watch list in 2009 and 2010, and finally re-issued the import alert in March 2012.  The warning letters seem to be another step in the agency’s efforts to make the claims on cosmetic moisturizers a little less magical.

Class Action Consumer Litigation: A Rising Enforcement Risk for Aggressive Food Labeling Claims

By Michael J. O’Flaherty

The number of class action lawsuits targeting food labeling claims has risen dramatically over the past few years.  These are cases alleging that a food product’s labeling (and/or advertising) violates state consumer protection laws.  As a result, when a food company now considers whether to include an aggressive claim in commercial marketing, it should consider not only the risk of enforcement action by a federal or state regulatory authority (i.e., the Food and Drug Administration (FDA), the Federal Trade Commission (FTC), state counterparts, state Attorneys General) and the possibility of proceedings instituted by competitors (i.e., Lanham Act lawsuits, challenges before the National Advertising Division (NAD)), but also the potential for a class action lawsuit by a consumer(s) and/or consumer group.

The Center for Science in the Public Interest (CSPI), a consumer group headquartered in Washington, DC, is involved in some, but not all, of these recent class action lawsuits.  CSPI began its “litigation project” in 2004 to assist and supplement federal regulators in their enforcement activities at a time when it viewed federal consumer protection to be at a “shameful” low point.  See generally https://www.cspinet.org.litigation.  The director of CSPI’s litigation project, Stephen Gardner, formerly was an Assistant Attorney General in New York and Texas.  The National Consumers League (NCL), founded in 1899 and America’s pioneer consumer organization, also has initiated litigation against major food companies.  Consumer groups are not the only instigators of class action lawsuits against food companies, however.  The plaintiffs bar, which a decade ago won record settlements from tobacco companies, now has a new focus—food labeling.

The Federal Food, Drug, and Cosmetic Act (FFDCA) provides no private right of action for its violation.  This being the case, a private plaintiff cannot sue a food company for allegedly violating the FFDCA and/or FDA’s implementing food labeling regulations.  Additionally, while not privately enforceable, the FFDCA nevertheless is federally preemptive of state and local laws with respect to certain aspects of food labeling, including common or usual names, ingredient declarations, Nutrition Facts labeling, nutrient content claims, health claims, and prominence of label information.   Plaintiffs’ attorneys have gotten around this by alleging that non-preempted food labeling (and advertising) claims are false or deceptive in violation of state consumer protection laws.

Companies that decide to “push the envelope” with aggressive claims in labeling or advertising should consider the risk of litigation as part of their risk/benefit analysis before they proceed.

The overwhelming majority of states have consumer protection statutes intended to protect against false advertising and other unfair commercial practices.  These laws can vary greatly from state to state.  Certain states (e.g., California, New Jersey, and Massachusetts) have particularly broad consumer protection laws and, at times, sympathetic forums to hear subject cases and, therefore, tend to be the first choice for class action plaintiff attorneys.   In California, a popular venue for recent class action lawsuits against food companies, consumer litigation has been premised on, for example, the alleged violation of state laws pertaining to unlawful, unfair, or fraudulent business acts and practices;  misleading and deceptive advertising and methods of competition;  unjust enrichment; and breach of an implied warranty of merchantability.

A class action consumer lawsuit against a food company can arise without any precedential enforcement activity by a federal regulatory authority.  Nevertheless, it also may follow upon the heels of an FDA Warning Letter, an FTC consent decree, the filing of a Lanham Act lawsuit, or an NAD decision.  It appears that class action plaintiff attorneys are monitoring these venues, looking for their next targets.  A lawsuit filed by the NCL in the Superior Court of the District of Columbia (DC) for misleading claims about the drug-like benefits of Cheerios® toasted whole grain oat cereal followed a May 5, 2009 Warning Letter,  issued by the FDA’s Minneapolis District Office, in response to a complaint that NCL itself had submitted.  Similarly, NCL’s earlier lawsuit in the DC Superior Court about misleading claims for Frosted Mini-Wheats cereal followed an April 2009 FTC settlement of charges that ads for the cereal were false.

Class action lawsuits have been filed against major food companies, including, for example,  Chobani Inc., Ferrero USA, Inc., Genral Mills, Inc., Kellogg Company, McNeil Nutritionals, LLC, and The Coca-Cola Company.  Ferrero USA, for example, in January 2012, entered into settlement agreements, resolving class action lawsuits in the U.S. District Court for the Southern District of California and the U.S. District Court for the District of New Jersey, which alleged that promotional claims for its Nutella® chocolate-hazelnut spread were false or misleading.  The company will pay approximately $3.05 million as part of the settlement.

This consumer class action lawsuit trend, albeit relatively new, is now so prevalent and significant that the food industry should not ignore it.

A Double Espresso Morning

By Tish Eggleston Pahl

It’s a busy day here and I’m wishing for an IV espresso drip and a neural Twitter implant.  I’m following the Federal Trade Commision (FTC) Pet Meds webcast and the Food and Drug Law Institute (FDLI) Advertising and Promotion Workshop while my colleague, Katie Balmford, is in New York at the NAD Conference.  During breaks, Katie and I will be reviewing the FTC’s revised Green Guides, issued yesterday.

We’ve already made note of the FTC’s cautioning that broad, unqualified claims like “eco-friendly” are probably misleading because they cannot be substantiated.  The FTC also provides guidance on degradable and source reduction claims, clarifying expectations with regard to popular claims like “recyclable” and “compostable.”

The Green Guides add new sections on:

  • certifications and seals of approval
  • carbon offsets
  • free-of claims
  • non-toxic claims
  • made with renewable energy claims
  • made with renewable materials claims.

The FTC, however, is not providing guidance on claims such as, “organic,” “natural,” and “sustainable” in order to avoid duplicating or contradicting the guidance/requirements of other agencies—or because it lacks sufficient basis to provide meaningful guidance.  For instance, organic claims are regulated by the U.S. Department of Agriculture’s National Organic Program.

You can follow my multitasking on Twitter at @Tish_OFW

Stay tuned for our thoughts on these important developments!

Veterinary Drug Distribution

By Tish Eggleston Pahl

As I write this, my Labrador is gutting a stuffed mouse at my feet.  I’ll need to take the toy from her shortly to avoid her enthusiastic consumption of the squeaker within (and what I know, from experience, can be a very costly aftermath of emergency veterinarian care, x-rays, hospitalizations, and medication).  According to the Federal Trade Commission (FTC), I represent one of the 62 percent of American households that owns pets and spends $7 billion a year in medicines to keep those pets healthy.

This week, the FTC’s Bureau of Competition is convening a workshop on veterinary drug distribution, prescribing and dispensing practices.  The FTC is looking at the unique issues that arise when veterinarians prescribe and dispense the drugs our pets need.  The FTC wonders, especially in this time of $4 generic drugs, whether traditional practices lead to higher prices for consumers.  FTC’s interest stems from the its work to make eyewear prescriptions more portable.  The agency also is interested in veterinary drug distribution practices and issues of diversion, counterfeiting, and authenticity.

The FTC agenda for the October 2 event is available online.  There will be a live webcast, and we will all be able to follow the event on Twitter, using the hashtag #FTCpets.  FTC also extended the comment period until November 1, 2012, so that stakeholders can listen to the workshop and review the written comments.

I’ll be listening to the webcast and following the Tweets on October 2.