UpcomingTown Hall Discussion with CDRH - May 5, 2011

By way of follow-up to our earlier post regarding changes to the 510k process, we wanted to make sure that those who are following us are aware of an upcoming town hall style discussion being held by the Director of CDRH.  This public meeting will be held on May 5, 2011 from 8 AM to 12 PM at the Sheraton Orlando Downtown Hotel.  The registration deadline is April 22, 2011.

FDA Releases Statement on Enforcement Discretion Regarding Makena

In early February of this year, FDA approved a drug to help prevent premature birth in women who have had at least one preterm delivery.  Manufactured by KV Pharmaceutical, which developed the drug with substantial assistance from the federal government, approval of the drug was long in coming and was much anticipated because of the rising rate of premature births within the United States.  The license granted to KV provided KV with exclusive rights to the drug in the US for seven years.  While FDA's approval of Makena was much anticipated,  there was just one small wrinkle - the drug had already been compounded  by pharmacists for years and had been sold for a price of $10-$20.  KV's price?  $1,500 per dose.  As the drug is generally prescribed for 20 week periods, the total cost for a course of treatment would reach approximately $30,000.  Quite a difference from the $200 to $400 price it had been offered for in the past.

Following FDA's approval, KV issued warnings to specialty pharmacies informing them that continued production of the compounded hydroxyprogesterone caproate  would be unlawful and that FDA would no longer exercise enforcement discretion regarding the product.  On March 30, FDA issued a release permitting pharmacists to continue compounding and selling the mixture to expectant mothers.  FDA explicitly stated that, at this time, it does not intend to take enforcement action against pharmacists who make and sell the drug.  FDA stressed that it may revisit its decision in the future, but that the instant situation presented unique circumstances. 

Considering the current economic and political climate and, particularly, the reality that public money will soon be supporting these subscriptions at a higher level than they would have in the past, FDA made the right decision here.  KV is certainly entitled to make a profit on their product and, it goes without saying, to cover the higher costs of performing the R&D and manufacturing a high quality sterile injectible.  However, consumers should also have the right to choose whether the benefits of using that product are worth the 7,500% price differential , particularly when a safe, effective product has been on the market for years.

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Follow-up on Senate Reform of Patent Laws

            The Senate is poised to have a final vote this Wednesday on the patent reform bill. As we discussed last week, this bill is designed to considerably revamp U.S. patent practice for the first time in almost 60 years.

            Senators began considering this bill on February 28, 2011, and have spent the last week debating a series of major and minor amendments. Specifically, some of the amendments made to the bill in the past week include:

 

·        correcting provisions related to the United States Patent and Trademark Office’s (“USPTO”) fee-setting authority;

 

·        ending diversion of patent fees;

 

·        creating a pilot program to examine business-method patents in the wake of the U.S. Supreme Court’s Bilski ruling;

 

·        amending the definition of a “microentity” and striking litigation-related provisions pertaining to damage calculations and venue selection;

 

·        authorizing the opening of three or more additional USPTO satellite offices around the country over the next year;

 

·        establishing a small-business ombudsman at the USPTO;

 

·        prioritizing the review of patent applications “important to the national economy's competitiveness”, such as applications for green energy inventions; and

 

·        requiring the USPTO to disclose the length of time between when it begins its post-grant review and when it completes the review.

 

In addition to what we discussed earlier, key components of the bill also include the following:

 

  • giving third parties the opportunity to submit information relating to a pending patent application to the examiner;
  • improving the current system for making administrative challenges to the validity of a patent throughout its life;
  • setting new fees for applicants who do not use electronic filing methods;
  • precluding individuals from filing lawsuits challenging the validity of patents on marked products; and
  • allowing the USPTO to offset costs by raising fees, resulting in a net increase in USPTO fee collections of about $1.7 billion between 2011 and 2016.

Now that the Senate is poised to pass its patent reform legislation, attention is shifting to the U.S. House of Representatives, which is in the process of developing its own version of the legislation.

Senate Considering Patent Reform

The Senate is taking up the Patent Reform Act, a bill sponsored by Judiciary Committee Chairman Senator Patrick Leahy, Senator Orrin Hatch, and Senator Chuck Grassley.  This legislation is designed to overhaul the U.S. patent system and bring the patent system in line with 21st century technology, such as biogenetics.

Among other things, the bill proposes to make the following controversial changes:

1.  Transition from a first-to-invent system to the first-to-file system used by the rest of the world;

2.  Create a nine-month, post-grant procedure that allows challenges to recently issued patents;

3.  Give the United States Patent Office the authority to set its fees at a level that will provide enough funds to reduce the backlog of its applications; and

4.  Create a “micro-entity” class which allows for a 75% reduction in fees for independent inventors who have not been named on five or more previously filed applications and have gross incomes less that 2.5 times the national average.

Senator Leahy’s office lists a growing number of supporters for the bill, including Pfizer and other major drug companies, IBM, and the Association of American Universities.  Opponents of the bill include the Coalition for Patent Fairness, a group of high-tech companies that would like to see more in the bill to “lessen the growing burden of abusive and unjustified patent infringement claims.”  Other opponents of the bill, including the American Innovators for Patent Reform and the U.S. Business and Industry Council, assert that the bill favors multinational and foreign firms over start-up companies entering the U.S. market for the first time.

Congress has been trying for over a decade to rewrite patent law, so only time will tell if this attempt will be successful.