AMERICAN THERAPEUTICS CLAIMS RESCISSION OF CHLORZOXAZONE ANDA IS ILLEGAL IN LETTER TO FDA; AGENCY REVOCATION OF ANDAs DOES NOT PROVIDE FOR "DUE PROCESS"

FDA's rescission of American Therapeutic's approved ANDA for generic chlorzoxazone is "an illegal action in violation of the FD&C Act, the Administrative Procedures Act, and [the company's] fundamental due process rights guaranteed by the U.S. Constitution," the generic firm maintained in an Aug. 9 letter to FDA. FDA had revoked both American Therapeutics' and Par's chlorzoxazone ANDAs in Aug. 3 letters to the firms ("The Pink Sheet" Aug. 7, p.3). In a recent memo to HHS Secretary Sullivan, FDA Commissioner Young indicated that the actions are intended to be punitive. Both Par and American Therapeutics have been named in charges involving illegal gratuities to FDA generic staff. Par has halted distribution of its product and says it is currently in the process of preparing a response to FDA. American Therapeutics' product, approved June 23, has not yet been launched. By finally taking administrative action against companies involved in the generic scandal, FDA appears to be seeking a clarification of its legal authority in such cases. Some industry observers speculate that because the rescissions deny the companies due process, FDA may be hoping for a lawsuit, which if lost, would give FDA grounds for asking Congress for legislation. FDA Commissioner Young emphasized the need for new legislation giving the agency more authority to take punitive action against firms charged with bribery or fraud at a July 11 hearing of Rep. Dingell's (D-Mich) Energy & Commerce/Oversight Subcommittee and in the memo to Sullivan. FDA revoked the American Therapeutics and Par ANDAs on grounds that the firms were not in compliance with good manufacturing practice regs. In its response to FDA's rescission, American Therapeutics' counsel (Washington law firm of Olsson, Frank and Weeda) maintained that the discovery of GMP difficulties after the approval would be grounds for ANDA "withdrawal" under the Act, which would provide the firm with notice and opportunity for hearing, but would not be grounds for rescission. "The FD&C Act sets forth specific grounds on which the approval of an ANDA can be withdrawn . . . [but] does not provide for 'rescission' of a legally granted ANDA approval under any circumstances, even for a purported 'mistake,'" the letter states. "Because the Aug. 3 letter purported to 'rescind' approval of [the] ANDA, rather than proceeding through the statutorily required administrative process to withdraw approval, it is illegal and without the force and effect of law." The "purported rescission," the letter continues, also "ignores the safeguards guaranteed by the Administrative Procedures Act and constitutes a deprivation of property without due process." The letter also argues that even if ANDA rescission was permitted under the law, American Therapeutics' GMP deficiencies would not warrant such a response. The firm maintained that only five of the 33 problems detailed in FDA's June FDA-483 related to GMP problems. "A review of these five observations readily discloses that they involve, at most, minor deficiencies that do not, whether taken alone or collectively, lead to the conclusion that American Therapeutics is out of compliance with the GMP regulations," the letter states.