This morning, when I read a Decision and Order issued by the United States Court of Federal Claims regarding a motion that was granted in part, denied in part, and filed on behalf of a pharmaceutical company and the FDA, the hair on the back of my neck stood on end. Now, I must state up front that I am no attorney (though you know that) but reading the case (which is about a “takings” argument under the Fifth Amendment of the Constitution) with regard to dissolution specifications proposed by the FDA and adopted by the innovator, as well as questioning generic manufacturers about the impurity profile and micronization that were at issue in two NDA products, has raised my concern about the potential broader implications. According to the decision, the question is whether the FDA’s disclosures to third-party generic manufacturers concerning these issues might raise the “takings” argument and how this could affect future FDA communications with industry.

This “takings” issue (which is much broader than it may appear) is something that has troubled me since the early days of Hatch-Waxman. Should the court ultimately decide that the FDA’s actions constitute a “taking” of confidential, commercial trade secret information, even though the FDA provided recommended dissolution test specifications to the innovator and simply questioned the generic companies about the impurity and micronization issues, it could cause an instant problem for the FDA but a much wider issue relative to how the FDA provides information or questions applicants regarding issues in their applications.

Think about how the FDA performs its new drug application reviews as well as generic drug reviews. The reviews are not done in a vacuum. Take ANDAs, for instance, where a number of firms submit a new ANDA on the same day (not uncommon when there is new chemical entity exclusivity for the RLD as applicants are allowed to submit their applications one year before NCE expiry if the ANDA is challenging a patent) and, if the product presents new challenges with regard to complex issues, the Agency will typically learn about the product in the course of evaluating the multiple applications that move through the review process. The FDA will ask questions of the applicants in Information Requests, Discipline Review Letters, or Complete Response Letters. The FDA will then assimilate what it learns about how the firms are approaching product development and manufacture as well as how its proposed specifications comport with what the FDA has learned. It is likely that the FDA will ask the same questions to multiple ANDA applicants. It is this iterative process that will conclude with ANDA approvals for firms that can successfully respond to the Agency’s questions and provide specifications that are somewhat consistent with other similarly situated applications. Let’s not forget that the FDA publishes a database of recommended dissolution methods and specifications, product-specific guidances on bioequivalence, and guidance documents that all incorporate learnings from the data, studies, specifications, and responses that the FDA gathers from the entirety of the applications that it may be reviewing for the same or similar products.

Now, think of the implications of stopping these iterative, scientific communications of these collective learnings to applicants so that the FDA can ensure that products have the same safety and efficacy profile as the reference listed drug to which they refer to in their applications. There is pending legislation that would permit the FDA to provide information on the quantitative and qualitative (Q1/Q2) nature of formulations (see previous post here). Most firms consider the Q1/Q2 formulations of their products to be proprietary or a trade secret. If the FDA then provided this information directly to applicants, even under the yet-to-be-passed legislation, how would that square with a Fifth Amendment “takings” argument? I’m glad that smarter minds than mine will be at work figuring this one out. But you see how such a ruling could create a scenario that inadvertently stifles internal FDA communications among staff who are working on the same or similar applications.

Could the FDA put up so-called “Chinese walls” like law firms and consulting firms do? I guess it could, but the Agency would need a lot more staff to ensure that the same people are not working on similar applications. And then how could a supervisor review multiple individual reviewers’ work on the same or similar products without being able to bring the best questions raised by different reviewers to multiple applicants? It would be a disservice to the American public if the same questions were not asked of all applicants as the FDA’s approval decision must be based on the acceptability of the firms’ answers to those questions for similar products.

Just saying, this case could turn the Agency’s review and approval process on its head. Read the opinion and decision at the link provided in the beginning of this post for a perspective on the impact that a “takings” argument could have on the Agency. This case is not over by any means as the toughest and possibly the most influential or disruptive part of the court decision is a bit further down the judicial road.