1. BUS 590 O: Biotech and Pharma Law Professor David Baumer Fall, 2006

2. History of Drug Regulation Drug regulation began in the U.S. because the consequences of the common law for the sale of goods were unacceptableDrug –Common law at the time was based loosely on caveat emptor, buyer beware There was very little protection for consumers of mislabeled or adulterated drugs It was virtually impossible to determine whether drugs were safe Effectively, the only redress for victims of mislabeled or adulterated drugs was to sue after the fact

3. Legal Definition of a Drug The Food Drug and Cosmetic Act Section 201(g)(1) defines drugs by their intended use: –(A) articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease, and –(B) articles (other than food) intended to affect the structure or any function of the body of man or other animals

4. History of Drug Regulation Common law remedies –CL Fraud—must prove intent Must prove that the def’s. drugs did the damage. –Breach of express warranties –Negligence—failure to adequately test Failure to inspect the product

5. History of Drug Regulation History of Drug Regulation Drug regulation was propelled by numerous catastrophes –State laws were ineffective because of jurisdictional limitations –First federal act was the Pure Food and Drugs Act of 1906 Based on the power of the fed. govt. to regulate interstate commerce Outlawed interstate sales of mislabeled drugs –Akin to outlawing fraudulent sales Also required dangerous drugs such as heroin and cocaine to be stated on drug labels

6. History of Drug Regulation The 1906 legislation did not require pre- market testing, for safety or effectiveness –Again, violations of the 1906 Act generally occurred when a person died unexpectedly after taking a drug Food and Drug Administration –Was created in 1927 –It is now the oldest federal Admin. Agency

7. History of Drug Regulation Major overhaul of drug regulation occurred in 1938 with the passage of the –Food, Drug, and Cosmetic Act New drugs had to obtain pre-market approval from the FDA Approval was based on safety The Kefauver Amendment of 1962 required that manufacturers prove both safety and efficacy –Since 1962 New Drug Approval (NDA) testing has lengthened to as much as 5 to 10 years

8. History of Drug Regulation Much of the recent legislation has been in response to perceived inefficiencies and deficiencies of the FD&CA –1984 Hatch-Waxman Act (HWA) Created Abbreviated NDA’s (ANDA) to make it easier for generics to be marketed after patents expire Allowed for patent extensions potentially equal to the time necessary to obtain FDA approval

9. History of Drug Regulation In 1988 Congress passed the Prescription Drug Marketing Act (PDMA) –Designed to regulate marketing practices of pharmaceutical companies and distributors –Basic idea is that prescriptions should be based on medical need, not pecuniary emoluments given to healthcare providers Banns sales, trades and purchases of samples by healthcare providers Mandates storage and accounting standards for drug samples Requires that drug wholesalers be licensed by the state Many of the regulations authorized by the PDMA have not been enacted by HHS

10. History of Drug Regulation In 1997 Congress passed the Food and Drug Administration Act (FDAMA) –Accelerated approvals for new drugs that had high potential for saving lives where there are no other alternatives

11. Drug Regulation In 1990 Congress passed the Nutrition Labeling and Education Act (NLEA) –Regulates claims made on labels of food manufacturers –The NLEA is triggered if the manufacturer either Makes nutritional claims about its products or Makes use of food additives or Fortifies a food product –The NLEA regulates food labels –Regulates language used by food sellers, such as “natural” “low fat” “jumbo”.

12. Drug Regulation In 1994 the Dietary Supplement Health and Education Act (DSHEA) was enacted –Regulates food labels and health claims made by sellers of dietary supplements –A dietary supplement is a product that Is intended to supplement the diet and bears or contains one or more ingredients: –Vitamins, minerals, herbs, amino acids…or combinations of these ingredients, –Is intended for ingestion in pill, tablet, or liquid form –Is labeled a dietary supplement

13. Drug Regulation DSHEA regulates labels and health claims –It is illegal to sell a dietary supplement as “curing cancer” –Appropriate health claims are authorized by the FDA Manufacturers must be able to substantiate the health claims they make –Dietary supplements must bear ingredient labeling –Must provide nutritional labeling

14. Drug Regulation Off-Label Prescriptions –FDA does not regulate the practice of medicine –Companies gain FDA approval for drugs for certain uses that generally appear on labels –Off-label prescriptions are legal, but promotion of off-label use by pharma companies is not

15. Drug Regulation Regulation of drug distribution is being challenged increasingly –Drug websites offer drugs and prescriptions Some patients prefer to deal with drug websites rather than their family doctor Prices are substantially lower at some drug websites based in Canada –Given statewide licensing of doctors and pharmacists, we are witnessing a return of caveat emptor through these gray markets

16. Regulation of Drug Distribution Websites offer patients opportunities to make medication decisions –Online prescriptions are just part of the story Drug addicts no longer have to go to fringy areas of town to feed their habits –The facilities (manufacturing, storage, and transportation) of drug websites are not inspected by the FDA

17. Regulation of Drug Distribution Note that state licensing requirements are so severe that few websites are legal –There are few websites that are legal under current laws To be VIPPS (Verified Internet Pharmacy Practice Sites) certified, a pharmacy must comply with the licensing and inspection requirements of their state and each state to which they dispense pharmaceuticals. In addition, pharmacies displaying the VIPPS seal have demonstrated to NABP compliance with VIPPS criteria including patient rights to privacy, authentication and security of prescription orders, adherence to a recognized quality assurance policy, and provision of meaningful consultation between patients and pharmacists.To be VIPPS (Verified Internet Pharmacy Practice Sites) certified, a pharmacy must comply with the licensing and inspection requirements of their state and each state to which they dispense pharmaceuticals. In addition, pharmacies displaying the VIPPS seal have demonstrated to NABP compliance with VIPPS criteria including patient rights to privacy, authentication and security of prescription orders, adherence to a recognized quality assurance policy, and provision of meaningful consultation between patients and pharmacists. –To date 12 websites qualify under VIPPS

18. Other Aspects of Drug Regulation The Health Insurance Portability and Accountability Act (HIPAA) of 1996 –Ensures that a person switching a job will not lose their health insurance and –Provides for privacy of medical information Basic provision of the HIPAA Privacy Rule is that there shall be no non-consensual secondary use of medical information –There are a number of exceptions but compared to the previous environment, which included various state laws, HIPAA is a large step forward for patient privacy HIPAA does not solve all the medical privacy issues –DNA, RFID reports of drug use

19. Product Liability Government regulation does not guarantee all drugs are safe –Further, FDA approval of drugs to does not eliminate possible liability for dangerous or defective drugs –There are a number of stages where sellers of drugs could be liable –Unlike some areas of law, the FD&CA does not preempt state law

20. Product Liability Law Even though a drug is approved for sale to the public by the FDA and the drug is being sold for uses described on the label –The seller could still be liable –A jury could decide that The seller was negligent in investigating unknown side effects –A company cannot totally rely on complying with the FD&CA as well as a shield from suit –On the other hand, a company is clearly liable if there is a link between violation of law and the pl.’s injuries

21. Product Liability Possible areas of liability for sellers of FDA approved drugs: –Product design—apply Learned Hand test –Violations of law Concealing adverse information Adulterated product –False Advertising –Inadequate Warnings Not making sure that instructions and warnings are received by users