Editor: Jim, tell us how you developed an interest in regulatory law practice and your current practice.
Czaban: I first developed an interest in FDA regulatory law while working with Dick Merrill, the former FDA Chief Counsel and Dean of the University of Virginia School of Law. Dick is one of the coauthors of the leading treatise on food and drug law and I served as his editorial assistant. In the years since then, I've been a coauthor for several other treatises in Food & Drug Law and have taught courses in it as well, so I've managed to maintain an academic presence in this area.
My practice focuses on governmental regulation of pharmaceutical, biotechnology, food, medical device and healthcare related companies. This includes counseling clients on complex regulatory strategies and compliance matters and representing clients in administrative and judicial enforcement actions and other proceedings involving the FDA, FTC, DEA, DOJ and other federal and state agencies.
A particularly rewarding part of my practice is the challenge of navigating the myriad interrelated legal, regulatory and policy issues implicated by competitive pressures within the pharmaceutical industry. I provide counseling on the Hatch-Waxman Amendments and the legal and regulatory strategies available to innovator and generic drug companies. The law in this area is dense and often highly ambiguous, and I have been lead counsel in several cases in which the courts have overturned FDA's initial regulatory policies governing pharmaceutical exclusivity rights.
Editor: FDA has always had a high profile with the general public. How has this influenced the agency under the Obama administration?
Czaban: The public's opinions about FDA and the agency's reputation have always been rather schizophrenic. Many people believe that FDA does far more in terms of actual product testing and oversight than it is actually authorized to do. For those people, there's often overconfidence in the safety of the nation's drug and food supplies. They think that FDA ensures that everything is perfectly safe when in fact that is not, and could never be, the case. Thus, when a high-profile food or drug safety crisis arises, there is often misguided outrage directed at the FDA. Other people believe that the agency has been far too aggressive in regulating industry, especially with regard to the burdens of the drug approval process, advertising and promotional oversight, and in restricting access to investigational new drugs and dietary supplements.
Under President Obama, the new leadership of the FDA is making a concerted effort to boost its approval ratings with the general public, and in part this is being done by criticizing the policies and practices of the FDA during the prior administration for not placing enough emphasis on compliance and enforcement. In the long run I'm afraid that this approach will be counterproductive because it will invite similar criticisms of the Obama FDA when new crises and controversies arise, which they unavoidably will.
Editor: What have been the most significant FDA events in 2009?
Czaban: The new FDA leadership has placed very visible emphasis on heightened enforcement activity. In a speech that Commissioner Hamburg gave shortly after being confirmed, she fired a shot across the bow of regulated companies. She warned that the FDA was going to be much more aggressive in its enforcement activities and that the regulated industries needed to get their acts together with respect to compliance issues, and this warning has been reinforced by a number of high-profile enforcement actions.
Editor: Have those enforcement actions been successful?
Czaban: Well, FDA has gotten its way in those matters for the time being, but some people have seen FDA's early efforts more of a shoot first and ask questions later type approach. I can give you a couple of examples of that.
In the spring, there was a recall of pistachios based on reports of possible salmonella contamination. In an unprecedented move, FDA announced the recall in a press conference in which it warned consumers not to eat any pistachios until further notice. It turned out that the situation had been blown way out of proportion, but the damage done to the industry was enormous.
In April, the FDA's Division of Drug Marketing, Advertising, and Communications (DDMAC) issued warning letters to 14 drug companies objecting to their use of "sponsored links" on Google. These links would pop up with brief information about a drug when certain disease or medical terms were used in a Google search. The FDA found the links to be unlawful because they named a drug in connection with a disease but did not contain all of the detailed risk information relating to that drug, a requirement that is impossible to meet in the context of the limited space of a sponsored link. Many in industry feel that FDA just doesn't "get it" with respect to the sharing of information in the digital age and that the agency's position unnecessarily restricts free speech without adding any patient safety benefit. This controversy was highlighted at a contentious public hearing FDA held later in the year on promotional issues and social media, but DDMAC has continued to issue warning letters at a much higher rate than in recent years.
On the legal front an important development in 2009 was the Supreme Court decision in Wyeth v. Levine . In that case, the question considered by the Court was whether FDA labeling requirements preempted decisions of state courts with respect to the adequacy of labeling. The Supreme Court held that there was no preemption. This puts drug makers in an untenable position of having to guess what a jury might decide is required in a drug label, while at the same time being restricted by FDA in what changes they can make to the label.
The biggest legislation news of 2009 was the passage of legislation giving FDA authority to regulate tobacco products. FDA is now in the process of creating and staffing a whole new Center and developing regulations and Guidances to implement the numerous restrictions of the new law.
Editor: What developments do you foresee in 2010?
Czaban: I expect a continuing emphasis on enforcement by FDA with increasing focus on manufacturing, international oversight, and import issues. Indeed, the recent appointment of Ralph Tyler as FDA Chief Counsel reinforces this expectation, as he is reputed to be a very aggressive, litigation-oriented regulator, albeit with no prior background in FDA law. A common theme in enforcement will be safety of both foods and drugs. For example, FDA is developing guidance on the implementation of Risk Evaluation and Mitigation Strategies, or "REMS," which were authorized by the Food and Drug Administration Amendments Act of 2007. REMS have become a major sticking point in the drug approval process, and it remains to be seen whether FDA can achieve a REMS policy that strikes an appropriate balance between enhanced safety and the pressing need for prompt patient access to promising new therapies.
Another big issue on the legislative front involves follow-on biologics which are competing versions of branded biotech products. Because these are complex cell-based products that differ from conventional small molecule drugs, and are not subject to the same approval process as conventional generic drugs, creating an expedited "generic" approval process is complex and has been further complicated by debate over the length of marketing exclusivity to be given to the original innovator versions of such products.
Editor: How is the industry reacting to the new FDA?
Czaban: With trepidation. Many regulated companies are very concerned that FDA will go too far in emphasizing enforcement, not because they want to evade the law, but rather because the law is so broad and amorphous that it is hard to predict where and when FDA will crack down next.
Understandably, companies are taking a hard look at their own compliance status across the board from product development and testing to manufacturing and marketing. They have engaged consultants and regulatory attorneys, including our firm, to help them understand not only what the current requirements are, but to see around the corner to anticipate new regulatory and enforcement initiatives that the FDA is likely to launch. To the extent they do this successfully, they will have a competitive advantage by being able to be compliant before the FDA comes knocking at the door issuing warning letters or taking them to court. Companies that believe it's business as usual are going to get burned.
Editor: The conventional wisdom is that more regulation is bad for business. Is that true for FDA-regulated companies?
Czaban: It depends on the context but for the most part, yes. Having to jump through more hoops and comply with an ever-increasing regulatory burden is costly and time consuming. It's harmful to businesses and it's harmful in many ways to patients who need new therapeutic products that cannot be marketed until they complete the costly and lengthy FDA approval process.
However, to the extent more regulation and enforcement weeds out the bad actors it can level the playing field and offer some benefit to compliant companies. Companies that have anticipated changes in regulatory or enforcement priorities are increasingly seeking to level the playing field by complaining to FDA about the noncompliant activities of their competitors. Because FDA still has limited resources for enforcement, the key to getting action on your complaint is not only to show the FDA that the competitor is noncompliant, but even more importantly to show why an effective response by the FDA can achieve the FDA's own goals and have a magnified impact on what it is trying to achieve.
Editor: Can companies fight back against unreasonable FDA decisions or policies? What's the best approach?
Czaban: There are many examples where companies have pushed back against FDA positions or enforcement actions and have done so successfully. There are even more examples where they push back unsuccessfully - but it's not an impossible situation. Companies have to pick their battles and they have to pick their theories for fighting back. Most fights with FDA are carried out behind the scenes, but more visible citizen petitions and lawsuits can also serve companies' strategic goals. For many disputes, the science will be tantamount, so companies need a very solid and persuasive scientific position, coupled with strong policy-based arguments. For some disputes, especially in the Hatch-Waxman area, the issue often revolves around the proper interpretation of the statutory language, and in these types of cases FDA's track record is far from perfect.
Editor: What other government agencies do FDA-regulated companies need to worry about?
Czaban: They've got a whole alphabet soup of agencies they need to worry about, plus state agencies and attorneys general. In addition to FDA, the FTC, DOJ, DEA, Homeland Security/Customs and Border Protection, and the SEC all play important regulatory roles that affect companies' business operations and bottom line. In our practice we always take a holistic view of our client's problems with respect to all of these sources of government regulation and seek solutions that address all relevant issues.
Published January 5, 2010.
