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FDA RESCINDS PAR, AMERICAN THERAPEUTICS CHLORZOXAZONE ANDA APPROVALS IN FIRST PUNITIVE ACTION TAKEN BY AGENCY VS. GENERIC FIRMS; MANUFACTURING PROBLEMS CITED

Executive Summary

FDA revoked Par and American Therapeutics' approved ANDAs for generic chlorzoxazone in letters received by the two companies on Aug. 3. Both ANDAs were approved while Par and American Therapeutics were being investigated for giving illegal gratuities to FDA officials. Par's ANDA was approved June 5 and American Therapeutics received its approval on June 23. Par said it has discontinued distribution of chlorzoxazone and has initiated a recall. In a July 28 memorandum to HHS Secretary Sullivan, FDA Commissioner Young outlined the agency's interest in exercising punitive powers in order to combat illegal industry wrongdoings. The rescission of the two ANDAs could be read as a first step towards that goal. At a July 11 hearing before Rep. Dingell's (D-Mich.) House and Energy Commerce/Oversight Subcommittee, Young was questioned repeatedly by Dingell and other members of the panel about the agency's unwillingness to take punitive action against companies accused of bribery and fraud. For example, referring to the recent chlorzoxazone approvals granted to Par and American Therapeutics, Dingell questioned the rationale for "affording clearances for drugs to this kind of firm which has been implicated through its officers and through its behavior." At the hearing, Young justified FDA's inaction by pointing out that the agency's legal authority for such action was unclear. "If an application comes in . . . and does not have any criminality in it," Young told the subcommittee, FDA is "trying to find out" how it can refuse approval "and under what legal authority can we bring the hammer down." In the July memo to Sullivan, however, Young takes a much stronger tone. "As a result of the fraudulent and illegal activities engaged in by certain generic drug firms, FDA has come under increasing pressure to take punitive actions," the commissioner said. "By so doing, the agency could send a powerful message that any effort to subvert the generic review system will not be tolerated and might possibly help to equalize the economic losses purportedly experienced by competitor firms." Speaking directly to the Par/American Therapeutics ANDA rescissions, Young told Sullivan that, "in retrospect, these approvals should have been held in abeyance." Young explained that at the time the approvals were granted, FDA was conducting "for cause" inspections of the two companies, which later "revealed significant manufacturing problems." However, the commissioner also noted that FDA was going ahead with the ANDA "despite the risk of ensuing litigation." Young outlined two possible approaches that would give explicit authority to FDA to punish generic firms for illegal activities. On the administrative level, the commissioner proposed that FDA publish in the Federal Register "the commencement of administrative actions to void certain generic drug approvals granted during specified time periods." Young pointed out that firms could then submit comments challenging the proposed action, "thereby preserving due process." The commissioner also offered a second approach whereby the Administration could submit legislation to grant FDA punitive powers. "It may be desirable for the Administration to submit new legislation to clarify and specifically deal with FDA's authority to debar drug companies, contract laboratories and individuals found guilty of [criminal activity] from receiving product review and approval services from FDA," Young said. He added that such legislation would expand the agency's current statutory authority to revoke approvals "when it can be shown that agency approvals were the result of corruption, bribery, etc." Dingell had suggested during the July 11 hearing that FDA pursue such an approach. The memo to Sullivan also outlines changes in FDA's generic drug review organizational structure. Young said the agency is creating and staffing a new Office of Generic Drugs that will include "an internal quality control function." FDA is also "intensifying our field surveillance and inspectional program for generic drug manufacturers," as well as creating an ombudsman in the commissioner's office to mediate between FDA-regulated firms and product reviewers ("The Pink Sheet" July 31, p. 13). The creation of the new generics office was formalized in an Aug. 3 Federal Register notice, which proposes that the functions related to the review of ANDAs be transferred from the Office of Drug Standards to the "newly established Office of Generic Drugs." * Young noted that the ongoing generic investigation is sapping resources away from both generic and new drug reviews. "As an aside, I should point out that approvals of generic drugs have already been slowed dramatically, as has the rate of new drug approvals," Young said. "The latter is the result of our having to divert resources normally employed for new drug reviews and other important activities to the conduct of focused retrospective reviews of marketed generic drugs." The commissioner added: "It is likely that further diversions of resources from other critical programs may be necessary." Commenting on other trouble spots in the agency, Young noted that Center for Drug Evaluation and Research Director Carl Peck, MD, and Deputy Director Gerald Meyer's interim responsibility for ANDA approvals "has detracted from their overall management responsibilities." He noted that "specially targeted" inspections of generic drug firms have also required reallocation of resources. Young said FDA is taking the remedial actions to "rightfully restore public confidence in the generic drug industry." Such trust is essential to department programs and budget, he added. "It is important not to lose sight of the fact that should this situation become even worse, there is a real possibility that the generic drugs industry may be totally discredited. In turn, this would have serious implications for the Medicare and Medicaid programs and adversely affect the department's budget." Young urged Sullivan to act promptly: "Unless the Administration moves swiftly and decisively to safeguard the generic drug review system, the potential for a loss in public trust in generic drugs may be realized."
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