Keeping pace with the ever-changing life sciences industry, Morrison Foerster stays on top of the trends and political, legal, and economic drivers to support striking the balance between innovative discovery and purposeful business planning to assure our clients continued success. MoFo Life Sciences shares timely legal and business insights and in-depth analyses on trends and the complex technologies at the heart of the global pharmaceutical, biotechnology, diagnostics, medical devices, digital health, and AgTech fields.Learn more about our <a href="https://www.mofo.com/capabilities/life-sciences-healthcare" target="_self">Life Sciences practice</a>.<h2 dir="ltr">ABOUT MORRISON FOERSTER</h2>Morrison Foerster is a leading global law firm that transforms complexity into advantage for its clients. Our clients include some of the largest financial institutions, banks, consulting and accounting firms, and Fortune 100, technology, and life sciences companies. Highlighting the firm’s commitment to client service, leadership in market-changing deals and impact litigation, and values-based culture, Morrison Foerster has been repeatedly recognized as one of the top 10 firms on The American Lawyer’s A-List. Year after year, the firm receives significant recognition from Chambers and The Legal 500 across their various guides, including Global, USA, Asia‑Pacific, Europe, UK, Latin America, and FinTech Legal. Our lawyers passionately care about delivering legal excellence while living our values. Morrison Foerster has a long-standing commitment to creating a culture that respects and celebrates differences, while providing an inclusive environment. The firm has achieved Mansfield Certification Plus since 2018 as a result of successfully reaching at least 30 percent women, communities of color, and LGBTQ+ lawyer representation in a notable number of current leadership roles and committees. The firm also has a long history of commitment to the community and society through providing pro bono legal services, including litigating for civil rights and civil liberties, improving public education and fostering the wellbeing of children, advocating for veterans, promoting international human rights, enforcing the right to asylum, and safeguarding the environment.

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Dr. Meghan Poon counsels clients on patent preparation and prosecution, portfolio strategy, and IP due diligence in the areas of biotechnology and biologics. She has significant experience in diverse technologies including antibodies, cell therapies, gene therapies, diagnostics, and gene-edited plants. She represents clients ranging from large international pharmaceutical companies to midsized companies, startups, and universities.Meghan has filed numerous Patent Term Extension applications to secure additional term for her clients’ patents, which cover FDA-approved products. In addition, Meghan has extensive experience addressing complex obviousness-double patenting and subject matter eligibility issues impacting her clients’ patent portfolios. Meghan also represents clients in both investor-side and target-side due diligence, in deals from seed funding to initial public offerings.Prior to law school, Meghan attended graduate school at the University of California, Los Angeles, where she received a Ph.D. in biological chemistry based on her work on protein-protein and protein-DNA interactions at a molecular level. Meghan is the author of several scientific publications and has presented her research at international conferences.Meghan received her J.D. from the University of Southern California Law School and spent a year as a visiting student at Santa Clara University, where she focused on intellectual property.

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Dr. Meghan Poon counsels clients on patent preparation and prosecution, portfolio strategy, and IP due diligence in the areas of biotechnology and biologics. She has significant experience in diverse technologies including antibodies, cell therapies, gene therapies, diagnostics, and gene-edited plants.

Meghan Poon

Wolfgang advises clients on contentious and non-contentious matters involving their most valuable intellectual property assets in life sciences, digital, and high-tech industries.His subjects of focus include research and development collaborations, complex licensing agreements, and other technology transactions, as well as know-how protection strategies, and employee invention law. He also has substantial experience in litigating patents, trademarks, and other intellectual property assets, often in a multijurisdictional context. In addition, Wolfgang and his team frequently clear trademarks and ad campaigns and prosecute trademark applications.Wolfgang is co-editor of our <a href="https://lifesciences.mofo.com/" dir="ltr" target="_blank">MoFo Life Sciences Blog</a>.Wolfgang is a partner of Morrison Foerster based in our German office in Berlin.<h4 dir="ltr">Representative Transactional Matters</h4><ul dir="ltr"><li>U.S.-based BioTech fund on various research collaborations and other transactions with German start-ups or research institutions.</li><li>Negotiate multimillion-euro strategic partnership between two AgTech leaders concerning the development and commercialization of pest-resistant transgenic traits.</li><li>Craft global multi-million collaboration regarding AI-powered robotic MaaS.</li><li>UK-based digital health company on product roll-out of RPM applications in Germany; coordinate international expansion.</li><li>Advise numerous German start-ups on their U.S. expansion.</li><li>Draft diverse global patent and know-how license agreements in the areas of AgTech and life sciences—including gene licensing and licensing of genome editing technologies (e.g., CRISPR)—and medical devices; draft correlating supply and distribution agreements.</li><li>Structure IP rights in connection with joint ventures and other M&A transactions, including the carve-out of a patent-heavy semiconductor business comprising nine jurisdictions into a German–U.S. joint venture.</li><li dir="ltr">Advise on government-funded, multi-partner R&D projects and/or R&D projects with academic institutions, as well as on employee invention law.</li></ul><h4 dir="ltr">Representative Contentious IP Matters</h4><ul dir="ltr"><li>Lead counsel in an international dispute between software companies on rights and obligations following termination of a multi-million licensing and distribution arrangement; coordinate local counsel.</li><li>Defend Japanese chip manufacturer in high-profile SEP-litigation; advise on global settlement arrangement.</li><li>Represent leading internet retailer in patent infringement and concurrent invalidity proceedings in the context of a multijurisdictional dispute concerning touch-screen technology.</li><li>Represent diverse pharmaceutical and life sciences companies in national and cross-border patent infringement proceedings and other technology-related disputes, including preliminary injunctions as well as pre‑trial discovery and inspection proceedings, concerning, inter alia, drug-coating technologies, toner cartridges, medicinal gases, transgenic plants, and vaccines.</li><li dir="ltr">Conduct trademark, copyright, and false advertising litigation, including, most notably, a high-profile trademark litigation for a German bank, and a nine-country cross-border trademark litigation involving a famous pharmaceutical brand.</li></ul>

Dr. Wolfgang Schönig berät Mandanten zum Schutz des geistigen Eigentums sowohl in streitigen als auch nichtstreitigen Angelegenheiten, mit einem besonderen Fokus auf die IP-rechtliche Beratung von Unternehmen aus den Bereichen Life Sciences, Digitalwirtschaft und High-Tech.Zu seinen Beratungsschwerpunkten gehören Forschungs- und Entwicklungskooperationen, komplexe Lizenzvertragsgestaltungen und andereTechnologie-Transaktionen, sowie Know-how-Schutz-Strategien und das Arbeitnehmererfinderrecht. Er verfügt zudem über umfangreiche Prozesserfahrung zur Durchsetzung von Patenten, Marken- und anderen IP-Rechten, häufig auch in einem grenzüberschreitenden Kontext. Darüber hinaus bewertet Dr. Wolfgang Schönig zusammen mit seinem Team regelmäßig die Rechtskonformität von Werbekampagnen, prüft die Verfügbarkeit von Marken und entwickelt entsprechende Anmeldestrategien.Dr. Wolfgang Schönig ist Co-Editor des Life Sciences Blogs von Morrison Foerster.Er hat seinen Doktortitel an der Heinrich-Heine-Universität Düsseldorf und seinen LL.M. an der Fordham School of Law in New York erworben, jeweils mit Schwerpunkt im gewerblichen Rechtsschutz. Seinen MBA-Abschluss erhielt er von der European University in Barcelona.Dr. Wolfgang Schönig ist Partner des deutschen Büros von Morrison Foerster in Berlin.<h4 dir="ltr">Repräsentative Transaktionen</h4><ul><li dir="ltr">BioTech-Fonds mit Sitz in den USA bei verschiedenen Forschungskooperationen und anderen Transaktionen mit deutschen Start-ups oder Forschungseinrichtungen</li><li dir="ltr">Verhandlung einer hochvolumigen strategischen Partnerschaft zwischen zwei Technologieführern im Bereich Crop Science betreffend der Entwicklung und Kommerzialisierung von bestimmten Resistenzen</li><li dir="ltr">Gestaltung einer globalen Multi-Millionen-Zusammenarbeit für KI-gestützte Roboter</li><li dir="ltr">Ein in Großbritannien ansässiges Unternehmen für digitale Gesundheit bei der Markteinführung von RPM-Anwendungen in Deutschland; Koordination der internationalen Expansion</li><li dir="ltr">Beratung zahlreicher deutscher Start-ups bei deren US-Expansion</li><li dir="ltr">Strukturierung und Verhandlung diverser Patent- und Know-How-Lizenzen in den Bereichen Ag Tech und Life Sciences – einschließlich Fragen zu genome editing wie CRISPR-Medizingeräte, sowie Gestaltung von Softwarelizenzverträgen und Erstellung korrespondierender Liefer- und Vertriebsvereinbarungen</li><li dir="ltr">Strukturierung von IP-Rechten im Zusammenhang mit Joint Ventures und anderen M&A-Transaktionen, darunter die Koordination eines neun Länder umfassenden IP Carve-Outs im Rahmen eines Halbleiter-JVs</li><li dir="ltr">Beratung zu staatlich geförderten Multi-Partner F&E-Projekten und/oder F&E-Projekten mit akademischen Einrichtungen sowie zum Arbeitnehmererfindungsrecht</li></ul><h4 dir="ltr">Repräsentative IP-Streitigkeiten</h4><ul><li dir="ltr">Lead Counsel in einem internationalen Rechtsstreit zwischen Softwareunternehmen über Rechte und Pflichten nach Beendigung einer millionenschweren Lizenz- und Vertriebsvereinbarung; Koordinierung der lokalen Anwälte</li><li dir="ltr">Verteidigung eines japanischen Chipherstellers in einem prominenten Streitfall bezüglich Standardessentieller Patente (SEP); Beratung zu einer globalen Vergleichsregelung</li><li dir="ltr">Verteidigung einer führenden Internetplattform gegen Ansprüche eines Patenttrolls wegen vermeintlicher Verletzung von Patent bezüglich Touchscreen-Technologie sowie korrespondierende US-Streitigkeiten</li><li dir="ltr">Vertretung von Pharma- und Life Science-Unternehmen in nationalen und grenzüberschreitenden Patentverletzungsverfahren und anderen technologiebezogenen Streitigkeiten, einschließlich einstweiliger Verfügungsverfahren und vorprozessualer Beweissicherungs- und Besichtigungsverfahren, unter anderem in Bezug auf Arzneimittelbeschichtungstechnologien, Tonerkartuschen, medizinische Gase, transgene Pflanzen und Impfstoffe</li></ul>

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Wolfgang Schönig is a partner of Morrison Foerster (International) LLP based in our German office in Berlin. His practice specialty is advising on IP aspects relative to transactions in, among others, the life sciences, AgTech and pharmaceuticals industry, as well as legal representation in IP disputes. Wolfgang is specialized in research and development collaborations, complex licensing agreements, technology acquisitions, know-how protection strategies, and employee invention law.

Wolfgang Schönig focuses his practice on IP aspects relative to transactions in the digital, telecoms, high tech, life sciences, and pharmaceuticals industry, as well as legal representation in IP disputes.

Wolfgang Schönig advises clients on IP aspects relating to transactions in, among others, the life sciences, AgTech and pharmaceuticals industry, as well as legal representation in IP disputes. His additional focus areas include research and development collaborations, complex licensing agreements, technology acquisitions, know-how protection strategies, and employee invention law.

Wolfgang Schönig

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Our earlier posts (<a href="http://lifesciences.mofo.com/topics/2019-FDA-enforcement-related-litigation-trends.html" title="2019 FDA Enforcement and Related Litigation Trends (Part 1)" target="_blank">part 1</a> and <a href="http://lifesciences.mofo.com/topics/2019-FDA-enforcement-related-litigation-trends-part-2.html" title="2019 FDA Enforcement and Related Litigation Trends (Part 2)" target="_blank">part 2</a>) looked at a few overall trends at FDA as well as the impact of consent decrees issued in 2019. Today we will highlight some enforcement trends at the Department of Justice.Department of Justice Enforcement TrendsIn 2019, the Department of Justice (DOJ) increased its enforcement on opioid manufacturers, distributors, and pharmacies.  On February 8, 2019, the DOJ announced the issuance of a temporary restraining order to stop two Tennessee pharmacies, their owner, and three pharmacists from dispensing controlled substance medications, including opioids.  The complaint alleged that the pharmacies and pharmacists were dispensing and billing Medicare for prescriptions in violation of the Controlled Substances Act and False Claims Act, and that the unlawful dispensing of opioids was tied to the deaths of at least two people and numerous other serious overdoses.  Specifically, the complaint alleges that defendants dispensed controlled substances while ignoring signs of abuse, and falsely billed Medicare for illegally dispensed prescriptions.On April 9, 2019, a grand jury in Virginia indicted Indivior Inc. (formerly known as Reckitt Benckiser Pharmaceuticals Inc.) for engaging in an illicit nationwide scheme to increase prescriptions of an opioid drug used in the treatment of opioid addiction.  The indictment alleges that Indivior promoted its drug without regard for safety concerns and risk of abuse.  Principal Deputy Associate Attorney General Jesse Panuccio noted that “The Department of Justice intends to hold accountable those who are in position to know the harm opioid abuse inflicts, but instead choose to profit illegally from the pain of others.  Manufacturers, distributors, pharmacies, and doctors should all be on notice that they must follow the law and act responsibly.”  On July 11, 2019, Reckitt Benckiser Group agreed to pay $1.4 billion to resolve these claims, including $647 million in forfeiture of proceeds, $700 million for false claims to government healthcare programs, and $50 million to resolve claims with the FTC for unfair methods of competition.  Acting Commissioner Sharpless stated, “Opioid addiction and abuse is an immense public health crisis and taking steps to address it is one of the FDA’s highest priorities . . . .  We also are particularly concerned with schemes to game the drug approval process to prevent generic competition for important medicines.  The FDA, including criminal investigators in our Office of Regulatory Affairs and the lawyers in our Office of Chief Counsel, will continue to work with the Department of Justice to investigate and hold accountable those who devise and participate in schemes to the detriment of the public health.” The DOJ also brought several actions against companies offering copay support to patients through donations to independent charitable foundations.  The focus on independent charitable foundations may be related to the government’s general concern for drug pricing, as press releases related to settlements for independent charitable foundation cases frequently noted that these copay foundations were seen as schemes to support elevated drug prices.  For example, on April 4, 2019, the U.S. Attorney’s Office announced that three pharmaceutical companies – Jazz Pharmaceuticals, Lundbeck, and Alexion Pharmaceuticals – agreed to pay a total of $122.6 million to resolve allegations that they paid kickbacks to Medicare and Civilian Health and Medical Program patients through purportedly independent charitable foundations, violating the False Claims Act.  While announcing the settlement, United States Attorney Andrew E. Lelling stated, “We are committed to ensuring that pharmaceutical companies do not use third-party foundations to pay kickbacks masking the high prices those companies charge for their drugs . . . .  This misconduct is widespread, and enforcement will continue until pharmaceutical companies stop circumventing the anti-kickback laws to artificially bolster high drug prices, all at the expense of American taxpayers.”Paid physician speaker programs and other payments to physicians also continued as a focus for the DOJ in 2019 through Anti-Kickback Statute and False Claims Act claims.  For example, on September 26, 2019, the DOJ announced that Avanir Pharmaceuticals agreed to pay $95,972,017 to resolve allegations under the False Claims Act arising from the company providing remuneration in the form of money, honoraria, travel, and food to certain physicians to induce them to write prescriptions for Nuedexta, and specifically, payment to healthcare professionals for speaker programs based on their willingness to prescribe the product.  Enforcement for these types of programs has been prevalent over the past couple of years, and there have been no signals that we should expect anything different in 2020. ConclusionOverall, it has been a year of continuing trends, with a few new areas of focus dispersed throughout the year for FDA.  We look forward to seeing what 2020 brings, especially under the new leadership and priorities of Commissioner Stephen Hahn.

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2019 FDA Enforcement and Related Litigation Trends (Part 3)

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Our earlier posts (part 1 and part 2) looked at a few overall trends at FDA as well as the impact of consent decrees issued in 2019. Today we will highlight som

2019 FDA Enforcement and Related Litigation Trends (Part 3)

<a href="http://lifesciences.mofo.com/topics/2019-FDA-enforcement-related-litigation-trends.html" title="2019 FDA Enforcement and Related Litigation Trends (Part 1)" target="_blank">Yesterday</a>, we covered some 2019 stats regarding FDA’s inspections and Warning Letters, and discussed a few specific trends we saw last year. In Part Two of our series, we look at the specifics of FDA’s 2019 consent decrees. FDA Consent DecreesFDA published press releases about six consent decrees in 2019.  As discusssed in Part One, compounding facilities were a focus of FDA enforcement in 2019, and this focus included entering consent decrees, with four of the six consent decrees in 2019 entered against compounding facilities.On February 6, 2019, the U.S. District Court for the Western District of Pennsylvania entered a consent decree between the United States and Ranier’s Rx Laboratory Inc., and owner Francis H. Ranier for manufacturing purportedly sterile drug products in insanitary conditions.  When announcing the consent decree, then-Commissioner Gottlieb stated, “We continue to see concerning activity when it comes to some compounded drugs, including problems related to the conditions under which compounded sterile medicines are made, which can raise significant risks to patients.  This is an area of intense focus for FDA.  We’re committed to making sure that compounded drugs are made under appropriate production standards and, when necessary, taking enforcement actions against compounders who fail to produce sterile drugs in compliance with the law.”   On March 12, 2019, the U.S. District Court for the Northern District of Texas entered a consent decree against Guardian Pharmacy Services and owner Jack Munn.  When announcing the consent decree, Commissioner Gottlieb again confirmed FDA’s enforcement focus on compounding facilities, stating, “Although compounded drugs can serve an important role for certain patients whose medical needs cannot be met by an FDA approved drug product, compounded drugs can also pose unique risks.  They’re not FDA approved and do not undergo premarket review for safety, effectiveness or quality.  All drug compounders must comply with certain requirements, which can include current good manufacturing practice requirements, to avoid product quality problems and potential patient harm.”  According to the complaint, Guardian manufactured and distributed purportedly sterile drug products that were manufactured under insanitary conditions.  Additionally, Guardian’s labels were false or misleading and did not include adequate directions for patient use. On May 22, 2019, the U.S. District Court for the Southern District of Texas entered a consent decree against Pharm D Solutions, LLC, and owners Luis R. De Leon and Juan C. De Leon.  When announcing the consent decree, Acting Commissioner Sharpless stated, “We understand that compounded drugs can be important for patients whose medical needs cannot be met by FDA-approved drug products, and we’re continuing efforts to advance policies to help further improve the quality of compounded products. . . .  These drugs are not approved by the FDA and have not been evaluated for safety or efficacy, so when they’re not appropriately compounded, they have the potential to cause patients harm.  We’ll continue taking enforcement actions, like the one we’re taking today, to ensure that these companies and products do not put patient health at risk.”  According to the complaint, Pharm D Solutions manufactured and distributed drugs that were made under insanitary conditions, had strengths different from what they were represented to possess, and did not include adequate directions for use. Also on May 22, 2019, the U.S. District Court for the Northern District of Illinois entered a consent decree against PharMedium Services and president and vice president Scott Aladeen and Warren Horton for violations at multiple facilities including manufacturing drugs under insanitary conditions and failing to include adequate directions for use.  When announcing the consent decree, Acting Commissioner Sharpless stated, “We will continue to take appropriate actions when compounding pharmacies and outsourcing facilities produce drugs under substandard conditions or use inappropriate practices that could lead to serious harm to patients.”The other two consent decrees were entered on July 18, 2019 and September 3, 2019, respectively, against an Arkansas food and medical product grocery warehouse, J and L Grocery, LLC, for insanitary conditions, and Tennessee drug, dietary supplement, and device distributors Basic Reset and Biogenyx, for distributing unapproved drugs and devices, failing to comply with CGMPs for dietary supplements, and distributing dietary supplements with incomplete labeling. Check back tomorrow for Part Three of our series, where we’ll take a look at some of the Department of Justice enforcement trends in 2019.

2019 FDA Enforcement and Related Litigation Trends (Part 2)

Yesterday, we covered some 2019 stats regarding FDA’s inspections and Warning Letters, and discussed a few specific trends we saw last year. In Part Two of our 

2019 FDA Enforcement and Related Litigation Trends (Part 2)

The year 2019 was one of uncertainty for FDA, as former Commissioner Scott Gottlieb announced his departure in March, ultimately stepping down in April.  For the bulk of the year, FDA was led by Acting Commissioner, Ned Sharpless, until Brett Giroir took over in November, and ultimately, Stephen Hahn was sworn in as the 24th Commissioner of Food and Drugs on December 17, 2019.  In this three-part series, we’ll take a look back at FDA’s enforcement actions over the past year, discuss trends and focuses, and look forward to what we might be able to expect from FDA in 2020. The BasicsFDA conducted a total of 18,034 inspections in FY 2019, 14,377 of those being domestic inspections.  This is a decrease from FY 2018, when there were 21,343 inspections, with 17,330 being domestic inspections. The following shows the breakdown of the different kinds of firms undergoing inspections:As has been the case in previous years, the majority of inspections resulted in a classification of No Action Indicated (NAI). FDA issued a total of 15,015 Warning Letters in FY 2019, which is a slight increase over 2018, but still below the total for 2017.In FY 2019, 14,929 Warning Letters were sent to domestic firms, and 88 were sent to foreign firms.  In FY 2018, 14,358 Warning Letters were sent to domestic firms, and 131 Warning Letters were sent to foreign firms.  The following shows the Warning Letters sent broken down by product type, comparing 2019 to 2018:FDA continued its trend of increasing the number of import alerts, publishing 98 import alerts in 2019, a significant increase over 2018, when 23 import alerts were published, and 2017, when 10 import alerts were published.  The increased number of import alerts corresponds with a decreased number of injunctions and seizures – while in 2017 there were 10 injunctions and two seizures, and in 2018 there were seven injunctions and one seizure, in 2019, there was one injunction and zero seizures – showing FDA’s preference for earlier preventive measures over later involvement.  Specific Trends in 2019Enforcement Specific to Drug Manufacturers An analysis of 483s provided to drug manufacturers in FY 2019 shows that manufacturers continue to struggle with the same themes.  §211.22(d), “Procedures applicable to the quality unit shall be in writing and shall be followed,” was the most frequently cited regulation in 483s sent to drug manufacturers in FY 2019; it was the second most frequently cited regulation in FY 2018.  The frequency of the appearance of this regulation may be explained by FDA’s focus on over-the-counter manufacturers, which often lack formalized quality units.  While the frequency of §211.113(b), “Control of microbiological contamination” dropped consistently from FY 2015 through FY 2018, it increased significantly in FY 2019.  Additionally, §211.160(b), “Lab controls should include scientifically sound specifications” fell from first place in FY 2018 to fourth place in FY 2019. A total of 81 Warning Letters were issued to finished product manufacturers in FY 2019, the highest number since FY 2015.  Warning Letters issued to API manufacturers, however, continued to drop after peaking in FY 2017.  The highest number of Warning Letters were issued to domestic firms, followed by firms in India and China.  The most frequently cited regulation in the Warning Letters issued to drug manufacturers was §211.22, “Responsibilities of the quality control unit” (41 Warning Letters), followed by §211.100, “Written procedures; deviations” (31 Warning Letters).  As mentioned above, FDA continued to focus on over-the-counter drug manufacturers, and Warning Letters to these firms in FY 2019 focused on four main themes: documented adherence to relevant regulations and standards; establishment and suitability of analytical and microbial testing and validation methods; nonconformance management; and the roles, responsibilities, and authority of the quality unit. Homeopathic MedicineOn October 24, 2019, Acting Commissioner Ned Sharpless announced that the Agency was withdrawing Compliance Policy Guide (CPG) 400.400, entitled “Conditions Under Which Homeopathic Drugs May Be Marketed.”  In his announcement Sharpless noted that, “Since the issuance of CPG 400.400 in 1988, the FDA has encountered multiple situations in which homeopathic drug products posed a significant risk to patients, even though the products, as labeled, appeared to meet the conditions described in CPG 400.400.  However, CPG 400.400 is inconsistent with our risk-based approach to regulatory and enforcement action generally and therefore does not reflect our current thinking.”  By withdrawing CPG 400.400, FDA ended its previous exercise of enforcement discretion for the marketing of homeopathic drugs without FDA approval.  In the announcement, Sharpless also noted that FDA had issued more than ten Warning Letters to companies for violations concerning homeopathic products, including to four companies that had manufactured and packaged eye drops in non-sterile conditions.  With the withdrawal of CPG 400.400, FDA also revised its 2017 draft guidance to expand upon the details of FDA’s risk-based enforcement policy, and asked for public input on the revised draft.  The comment period closes on January 23, 2020, and as such, it is likely that we will see continuing trends of enforcement against unproved homeopathic drugs in 2020. Stem CellsAs we head into the last year of FDA’s three-year period of enforcement discretion towards certain regenerative medicine products, which ends in November 2020, it is important to look back at FDA’s related activities in 2019.  Early in the year, on January 15, 2019, Commissioner Gottlieb reinforced the Agency’s focus on stem cell and gene therapies in a statement that noted that FDA anticipates that by 2020, it will receive more than 200 investigational new drug applications per year, building on the more than 800 active investigational new drug applications already on file with FDA.  On April 3, 2019, then-Commissioner Gottlieb released another statement, this one focused on firms illegally manufacturing, selling, and promoting stem cell therapy products.  He noted specifically that contrary to certain industry belief, products originating from the same person they are given back to are still subject to FDA regulation.  In his statement, Commissioner Gottlieb stated that as the Agency comes to the end of the period of enforcement discretion, it may “take additional steps to delineate an efficient development path for promising products that pose lower risk to patients and that are being developed by sponsors who’ve engaged the regulatory process in a responsible manner by filing INDs,” but for products with significant potential risks and that are being developed by sponsors who have not engaged in the regulatory process, the FDA plans to step up its oversight.  The same day, FDA issued twenty-one enforcement letters to manufacturers and health care providers offering unapproved stem cell products.  As we approach November 2020, we expect to see this enforcement trend to continue. CompoundingIn 2019, FDA continued to focus on improving the quality of compounded drugs.  Days before stepping down, Commissioner Gottlieb released a statement on new 2019 efforts to improve the quality of compounded drugs, in which he shared FDA’s 2019 compounding priorities.  Commissioner Gottlieb noted that the Agency would focus on compliance with good manufacturing practice requirements by outsourcing facilities, helping compounders identify insanitary conditions, and performing risk-based inspection and other enforcement efforts to identify compounders producing drugs under substandard conditions.  Additionally, Commissioner Gottlieb stated that the Agency would focus on the inappropriate use of bulk drug substances in compounding, including developing the 503A and 503B lists of appropriate bulk drug substances, and compounding performed by hospitals and health systems.  As noted below, FDA’s stated priority of enforcement against inappropriate compounding conditions held true, with at least four permanent injunctions entered against compounding companies operating under conditions identified as risks to public health and safety in 2019. Dietary SupplementsOn February 11, 2019, Commissioner Gottlieb released “a plan for policy advancements with the goal of implementing one of the most significant modernizations of dietary supplement regulation and oversight in more than 25 years.”  Commissioner Gottlieb noted that while scientific advancement has led to new opportunities for consumers to improve their health, there has also been an increase in the number of adulterated and misbranded products “including those spiked with drug ingredients not declared on their labels, misleading claims, and other risks.”  On the same day, FDA issued twelve Warning Letters and five online advisory letters to companies illegally marketing unapproved drugs claiming to prevent, treat, or cure Alzheimer’s disease and other serious health conditions.  In his statement, Commissioner Gottlieb also highlighted actions taken against dietary supplement manufacturers claiming to prevent, treat, or cure other serious conditions such as cancer and opioid addiction.  One month later, on March 11, 2019, FDA issued a Warning Letter to Nutra Pharma Corp., noting its distribution of new unapproved drugs claiming treatment of cancer, arthritis, and opioid addiction. Throughout 2019, FDA took a particular interest in athletic performance enhancing dietary supplements and probiotic dietary supplements.  For example, on March 13, 2019, six people and two Florida corporations were charged in an indictment for their roles in a scheme to distribute hundreds of thousands illegal products, including anabolic steroids, claiming that the products were high-quality, legal dietary supplements.  Additionally, at the May 14, 2019 Dietary Supplement Regulatory Summit, FDA speakers focused on probiotic labeling, specifically, controversy over the listing of the quantity of colony-forming-units (CFUs) to indicate strength and effectiveness. On May 16, 2019, Steven Tave, FDA Director of the Office of Dietary Supplement Programs, highlighted significant non-compliance by the supplement industry with the FDA’s requirement for Premarket Notification for New Dietary Ingredients (NDIs), estimating that the number of premarket notifications for supplements containing new dietary ingredients submitted is less than 25% of where the Agency expects it should be.  It appears as though FDA will continue more aggressively enforcing the NDI notification requirement in 2020. Electronic Nicotine Delivery SystemsThroughout 2019, FDA stepped up its highly publicized enforcement of Electronic Nicotine Delivery Systems (ENDS) manufacturers and distributors, especially related to marketing practices directed towards children.  On September 9, 2019, FDA issued a Warning Letter to JUUL Labs Inc. for selling and distributing modified-risk tobacco products without an FDA order that permits such sale or distribution.  The Warning Letter highlighted FDA’s concern about JUUL’s claims that their products are safer than cigarettes, and that these claims were made directly to children in school: “Our concern is amplified by the epidemic rate of increase in youth use of ENDS products, including JUUL’s products, and evidence that ENDS products contribute to youth use of, and addiction to, nicotine, to which youth are especially vulnerable.”  Just a few days ago, FDA released its “Enforcement Priorities for Electronic Nicotine Delivery Systems (ENDS) and Other Deemed Products on the Market Without Premarket Authorization” guidance document, indicating that FDA intends to prioritize enforcement against flavored, cartridge-based ENDS products, and products that are either targeted to minors or for which the manufacturer has failed to take adequate measures to prevent minors’ access to the products.  With the release of this document, it is clear that FDA will continue to take enforcement actions against ENDS manufacturers and distributors in 2020. Come back tomorrow for Part Two of our 2019 FDA recap, where we will review last year’s six Consent Decrees.

2019 FDA Enforcement and Related Litigation Trends (Part 1)

The year 2019 was one of uncertainty for FDA, as former Commissioner Scott Gottlieb announced his departure in March, ultimately stepping down in April.  For th

2019 FDA Enforcement and Related Litigation Trends (Part 1)

In 2017, the Commission on the Theft of American Intellectual Property issued a report to Congress estimating that the theft of trade secrets could cost the United States economy as much as $600 billion annually. In the years following, news reports indicate that alleged instances of corporate espionage and the theft of trade secrets continue at a rapid pace. But sometimes trade secret assertions can be overbroad, vague, and anticompetitive. Many commentators have cautioned that trade secret assertions should not be used improperly to inhibit employee mobility.In a recent example of corporate espionage and theft of trade secrets, on November 21, 2019, the United States Department of Justice (DOJ) announced that Haitao Xiang, a Chinese national who had previously worked for the Monsanto Company (now a part of Bayer AG), and its subsidiary The Climate Corporation, had been indicted by a federal grand jury on one count of conspiracy to commit economic espionage, three counts of economic espionage, one count of conspiracy to commit theft of a trade secret, and three counts of theft of a trade secret.

Seagen Inc. v. Daiichi Sankyo Co. Ltd. et al. (AAA Arbitration, Eastern District of Texas, District of Delaware, and Patent Trial and Appeal Board)

Evolve BioSystems, Inc. v. Abbott Laboratories (Northern District of Illinois)

Driscoll’s, Inc. v. California Berry Cultivars, LLC (Eastern District of California)

Bayer CropScience LP v. Tenfold Tech., LLC (Eastern District of Texas)

The Regents of the University of California v. California Berry Cultivars, L.L.C. et al.  (California Superior Court and Northern District of California)

Arch Development Corp. v. Genentech, Inc. (Northern District of Illinois, Patent Trial and Appeal Board, and Federal Circuit)

Phigenix, Inc. v. Genentech, Inc. (Northern District of California and Federal Circuit)

Phigenix, Inc. v. Genentech, Inc. and ImmunoGen, Inc. (Patent Trial and Appeal Board and Federal Circuit)

Focal Therapeutics, Inc. v. Senorx, Inc. (Patent Trial and Appeal Board)

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Matthew protects his clients’ intellectual property and defends his clients wrongly accused of infringement. His hearing and trial experience is extensive. Whether exploring complex technical issues regarding a biologic drug, or digging into the finer points of patent law, he excels at keeping his opponents on their toes.

Matthew Chivvis

Matthew A. Chivvis

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Striking the Balance in Trade Secret and Corporate Espionage Disputes

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In 2017, the Commission on the Theft of American Intellectual Property issued a report to Congress estimating that the theft of trade secrets could cost the Uni

Striking the Balance in Trade Secret and Corporate Espionage Disputes

FIRRMA directed the U.S. Department of the Treasury (“Treasury”), as the chair of CFIUS, to issue regulations that, among other things, address national security concerns arising from foreign investment in U.S. businesses with critical technologies, critical infrastructure, and personal data (referred to in the proposed regulations as “TID U.S. businesses”). The proposed CFIUS regulations implement these provisions of FIRRMA by (i) defining what constitutes a TID U.S. business and (ii) expanding CFIUS’s jurisdiction to include not only transactions that result in control of a TID U.S. business, but also “covered investments” that give a foreign person certain rights with respect to a TID U.S. business (together referred to as “covered transactions”). Life Sciences businesses who maintain or collect, directly or indirectly, sensitive personal data of U.S. citizens might fit the definition of a TID U.S. business and will benefit from learning more about these regulations.The major takeaways from the proposed TID U.S. business regulations are:<ul><li dir="ltr">Risk-Based Analysis: Long-time CFIUS practitioners have heard the refrain that CFIUS undertakes a risk-based analysis of transactions presented for review, examining the threat, vulnerabilities, and consequences to U.S. national security of a particular action. The proposed regulations now articulate these specific elements of the analysis that form the basis for CFIUS’s review of a notified transaction.</li><li dir="ltr">CFIUS Filings Mandatory for Some But Not All TID U.S. Business Covered Transactions: The CFIUS pilot program that became effective in November 2018 requires the submission of a declaration (or full CFIUS notice) for covered transactions involving pilot program U.S. businesses, and this program will remain in effect at least until the final FIRRMA-implementing regulations are published. The proposed regulations do not impose a mandatory CFIUS filing for a covered transaction involving a TID U.S. business (outside the current pilot program’s requirements), unless a foreign government has a “substantial interest” in the acquiring party (more to come on this issue in the next alert in our series). </li><li dir="ltr">Critical Technologies Definition Unchanged: The proposed regulations contain the same definition for critical technologies in effect under the current pilot program. A key component of the critical technologies definition will take effect once the U.S. Department of Commerce (“Commerce”) issues regulations defining the scope of “emerging and foundational technologies.” Commerce took the first step in this process in November 2018 by issuing an Advanced Notice of Proposed Rulemaking identifying and requesting comments on the categories of emerging technologies to be covered. Commerce officials’ most recent informal statements indicate that proposed new regulations may be forthcoming before year-end.</li><li dir="ltr">Critical Infrastructure for Covered Investments Defined by Form and Function: Appendix A to the proposed regulations sets forth 28 categories of critical infrastructure (Column 1) and specific functions related to each critical infrastructure category (Column 2). Only a U.S. business that performs one of the specified functions listed in Column 2 of Appendix A with respect to the infrastructure listed in Column 1 is a TID U.S. business for purposes of a critical infrastructure covered investment.</li><li dir="ltr">Expanded (and Evolving) Definition of Sensitive Personal Data: FIRRMA expands CFIUS’s jurisdiction to include covered investments by a foreign person in a U.S. business that maintains or collects sensitive personal data of U.S. citizens that “may be exploited in a manner that threatens to harm national security.” To implement this provision, the proposed rule sets forth a detailed definition of “sensitive personal data” that includes not only traditional personal information (e.g., name, address, telephone number), but also health, financial, behavioral, and genetic information. The proposed regulations note that CFIUS anticipates periodically revising this definition (along with other aspects of the regulations). </li></ul>

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Charles Capito is a partner in both Morrison Foerster’s National Security and Government Contracts + Public Procurement practices.
In the National Security space, he has significant experience couns

Charles L. Capito

Charles Capito

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Senior Advisor, National Security

Joseph Benkert is a senior advisor  in Morrison & Foerster’s National Security practice group. He advises  clients on critical national security matters pertaining to the Committee on  Foreign Investm

Joseph Benkert

Joseph A. Benkert

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Foreign Investment 2020: CFIUS Spotlight on “TID” U.S. Businesses

China’s new administrative regulations on human genetic resources as applied to foreign persons

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Foreign Investment 2020: CFIUS Spotlight on “TID” U.S. Businesses