THE REGULATORY HORIZON

1. THE REGULATORY HORIZON Pharmaceutical Education Associates Ophthalmic Drug Delivery Conference San Diego, California September 10, 2007 Michael A. Swit, Esq.Vice President, Life Sciences

2. ANCIENT CHINESE CURSE May You Live in Interesting Times … 2

3. THESE ARE INTERESTING REGULATORY TIMES • September 30, 2004 – the beginning of the current era of drug regulation • Vioxx • SSRI’s and suicidal ideation • Since then: • Tysabri • Avandia • New Lynchpin of Regulatory Process – Drug Safety 3

4. INTERESTING REGULATORY TIMES … • FDA Leadership • Top -- In disarray • 2004 -- McClellan left to go to CMS; Crawford interim Commissioner • Summer 2005 – Crawford confirmed by Senate • Sept. 2005 – Crawford abruptly resigns • 2006 – Andrew von Eschenbach becomes acting • December 2006 – von Eschenbach confirmed • Sept. 2007 – General Counsel resigns • Deputies & Associates – many leave at end of 2006 4

5. The Perfect Storm? • The Current FDA Regulatory Equation -- (Drug Safety Lynchpin) + (Leadership Vacuums) = an approval process mired in uncertainty, fear and decision paralysis PLUS • A Democratic Congress PLUS • September 30, 2007 – Deadline Day • PDUFA Reauthorization Sunsets • Pediatric Exclusivity and Pediatric “Rule” Sunsets EQUALS • Congress in driver’s seat to drive change?? • But, still have 2 more years of Bush 5

6. The Result – FDA-x-x • Senate – FDARA -- “The Food & Drug Administration Revitalization Act” – S. 1082 • House – FDAAA -- Food and Drug Administration Amendments Act of 2007 -- H.R. 2900 • S. 1082 • Introduced in Senate in April – Jointly by Kennedy (D-MA) and Enzi (R-WY) • Passed Senate on May 9 – Vote: 93-1 • H.R. 2900 – • Introduced in House on June 28 by John Dingell • Passed House on July 16 • Conference Compromise – not yet done; if not by Sept. 30 … CDER shut-down? 6

7. Key Provisions for Drug Industry • PDUFA Reauthorization • Prescription Drug Advertising Review Fees • Drug Safety Provisions • Clinical Trials Registry & Results Data Base • Critical Path Initiative – Reagan-Udall Foundation • Antibiotic Development Incentives (no slide later) • Pediatric Exclusivity and Pediatric “Rule” Reauthorization • Tropical Disease Incentives (no slide later) • Citizen Petitions – limits FDA authority to delay approvals • DTC Advertising Penalties • Drug Importation • Biosimilars – 7

8. PDUFA Reauthorization – Title I • Goals • Expedite drug development process • Expedite application review process • Postmarket Drug Safety • Gross Fees • $392 MM annually in User Fees • Drug Safety Fees for 5 Years • House -- $215 MM • Senate -- $150 MM 8

9. Prescription Drug Advertising “Advisory” Review Fees • Must pay if you submit a TV ad for “advisory review” (but, don’t have to submit for review) • “Advisory review” = “reviewing and providing advisory comments regarding compliance of a proposed advertisement • If required to submit, you do not have to pay, unless you say it’s for “advisory review” • No separate authority given FDA to require submission • Annual Fees Generated Under DTC Review Authority -- $6 MM • FY 2008 – maximum fee is $83,000 per ad submission • Note – does not create an affirmative “safe harbor” • Sunsets – October 1, 2012 9

10. Drug Safety – Phase IV Studies • FDAAA Section 901 – adds power of FDA to require post-approval studies 10

11. Drug Safety • Risk Evaluation and Mitigation Strategies (“REMS”) • Section 202 of FDARA -- adds in a new clause in Federal Food, Drug, and Cosmetic Act (“FFDCA”) – Section 505(o) • Section 901 of FDAAA – adds a new Section 505-1 to FFDCA -- • If a REMS is OK’d for an application, must follow it • You can voluntarily submit a REMS • FDA may require if viewed • as needed to assess a safety signal or to mitigate it (FDARA) • ensure benefits of drug outweigh risk (FDAAA) • Decision to require a REMS must be made at or above the division director level in CDER 11

12. Drug Safety … • Required Elements of a REMS • Labeling • Timetable for submitting assessments of ongoing strategy • FDARA • NCE – no less frequently than 18 mos. and 3 years post-OK • Non-NCE – at frequency determined by FDA • FDAAA • Not related to NCE status • No less frequently than annually; an assessment after 7 years • Risk Evaluation Strategies • Post-approval studies (other than clinicals) • Post-approval clinical trials 12

13. Drug Safety … • Elements of a REMS … may include: • Communication Elements – such as: • Medguide – 21 CFR 208 • Patient Package Insert • Communication Plan – to health care providers (e.g., via letters) • Pre-review of advertising – may be required by FDA if determined needed to ensure “fair balance” • FDAAA – specifically says TV ads • FDA may order certain disclosures added to ads • Patient Registries 13

14. Drug Safety … • Elements of a REMS … may include …: • Patient monitoring • Certification of prescribers, pharmacies or health care settings • Restriction of dispensing to certain health care settings • Condition dispensing based on certain test results • Failure to “knowingly” comply • Drug misbranded • Civil Penalties -- $15M to $250M per violation to a cap of $1 MM per violations determined in a single adjudication • Applies to Biologics approved under Public Health Service Act 14

15. Drug Safety … • Duty on application holders to notify FDA of “new safety information” holder “believes should be included in the labeling” – and vice-versa (FDA to application holder) • Holder and FDA shall initiate discussions on labeling changes • FDA may request a supplement be submitted 15

16. Critical Path Initiative – Reagan-Udall Foundation • Section 221 of FDARA; Sec. 601 of FDAAA – similar provisions • Not part of U.S. Government, but funded in part by FDA budget • “To advance mission of FDA to modernize medical, veterinary, food, food ingredient, and cosmetic product development, accelerate innovation, and enhance product safety.” • Promote research into unmet needs in those areas 16

17. Expanded Clinical Trials Registry Data Bank • FDARA – Section 231; FDAAA – Section 801 • 18 months after enactment, regulations required to require submission of “clinical trial information” on any drug or biologic in a Phase 2 or above study • Information – consistent with that required by WHO, plus: • Contact information • Information on whether “expanded access” possible 17

18. Clinical Trial Results Database • Applies to • Senate: clinical studies “forming the primary basis” for an efficacy claim or conducted after approval (specifically excludes Phase 1 studies) • House: broader; test “safety or effectiveness,” although there are some exclusions for certain targeted safety studies • Required info includes: • Any FDA advisory committee deliberations • FDA Action Package on NDA/BLA • Links to Medline data 18

19. Pediatric Research Provisions • “Reauthorizes” the Best Pharmaceuticals in Children Act (“BPCA”) through FY 2012 – Section 505A of the FFDCA • FDA may request preclinical studies • Exclusivity changes: • SENATE -- 3 months limit if annual U.S. sales > $1 billion • NOT IN HOUSE BILL • No exclusivity grant if less than 9 months (Senate) or 12 months (House) left on existing exclusivity • FDA must disclose detailed reviews of the studies 19

20. Pediatric Research Provisions … • Versions: • Senate: “Pediatric Research Improvement Act” – Section 411 of FDARA • House: Pediatric Research Equity Act of 2007 – Section 402 of FDAAA • Reauthorizes the 2003 Pediatric Research Equity Act (PREA) through FY 2012 • FDA to establish an internal committee for evaluating actions including requests by FDA for pediatric assessments and deferral/waiver requests by industry • Pediatric labeling supplements deemed “priority” reviews • “Meaningful therapeutic benefit” standard (relates to waivers) changed • FDA must “determine” – was “estimate” • Drug “could” (was “would”) represent a significant improvement over existing labeled therapies • Caution – don’t promise the sun, start with a few meteors (e.g., PK studies) 20

21. Citizen Petitions • Adds a new Section 505(s) to the FFDCA • FDA cannot delay approval based on a citizen petition unless FDA determines, within 25 business days of receipt, that a delay in necessary to protect the public health • If FDA so determines, must: • Put detailed statement of reasons on FDA website • Must give 505(b)(2) or generic applicants chance for a meeting – send notice of chance for meeting within 10 days of making determination • Petition decisions must be made in 180 days unless delay needed to protect public health 21

22. DTC Advertising – Civil Penalties • Adds Section 303(g) to FFDCA – civil penalties for false or misleading DTC ads for a prescription drug (not a device) • Penalty – • Up to $150,000 on first offense in a 3-year period • Up to $300,000 on later offenses • FDA must give a chance for a hearing • Not in House bill 22

23. Three slides left … 23

24. Drug Importation • “Pharmaceutical Market Access and Drug Safety Act of 2007” – adds Section 804 to FFDCA • Allows importation under limited circumstances • Drug must be identical to an approved U.S. drug (API, dosage form, etc.); excludes: • Controlled substances • Biologics • Infused, injected or sterile ophthalmic drugs • Listed drug for which there are 2 approved ANDAs in U.S. • For personal use • For commercial use • By “registered importers” • From “registered exporters” • Directly obtained from the make and made in registered facilities • From a “permitted country” – Australia, Canada, Japan, New Zealand, Switzerland, most EU countries, and other countries cleared by FDA • Not in House bill 24

25. Biosimilars – “Sense of Senate” Endorsement • Section 504 of FDARA; not in FDAAA • Legislation should be enacted • to give FDA authority and flexibility to approve biopharmaceuticals subject to an abbreviated approval pathway • ensure patient safety remains paramount • establish a pathway that is “efficient, effective and scientifically-grounded and includes measures to ensure timely resolution of patent disputes • provides appropriate incentives for R&D of biopharmaceuticals • Current “conventional wisdom” – not likely to be in FDA-x-x 25

26. Stay Tuned … • If not passed by end of September, FDA may start the 2008 Fiscal Year in one big mess • We are in interesting times …. 26

27. No slides left … 27

28. Questions? Call, e-mail, fax or write: Michael A. Swit, Esq. Vice President, Life Sciences THE WEINBERG GROUP INC. 336 North Coast Hwy. 101 Suite C Encinitas, CA 92024 Phone 760.633.3343 Fax 760.633.3501 Cell 760.815.4762 D.C. Office 202.730.4123 michael.swit@weinberggroup.com www.weinberggroup.com 28

29. About your speaker… Michael A. Swit, Esq., is Vice President, Life Sciences at THE WEINBERG GROUP, where he develops and ensures the execution of a broad array of regulatory and other services to drug and biologics clients seeking to market products in the United States. His expertise includes FDA and CMS development strategies, compliance and enforcement initiatives, recalls and crisis management, submissions and related traditional FDA regulatory activities, labeling and advertising, and clinical research efforts. Mr. Swit has been addressing critical FDA legal and regulatory issues since 1984. His multi-faceted experience includes serving for three and a half years as corporate vice president, general counsel and secretary of Par Pharmaceutical, a prominent, publicly-traded, generic drug company and, thus, he brings an industry and commercial perspective to his work with FDA-regulated companies. Mr. Swit then served for over four years as CEO of FDANews.com, a premier publisher of FDA regulatory newsletters and other specialty information products for the FDA-regulated community. His private FDA regulatory law practice has included service as Special Counsel in the FDA Law Practice Group in the San Diego office of Heller Ehrman White & McAuliffe and with the Food & Drug Law practice at McKenna & Cuneo, both in the firm’s Washington office and later in San Diego. He first practiced FDA regulatory law with the D.C. office of Burditt & Radzius.Mr. Swit has taught and written on a wide variety of subjects relating to FDA law, regulation and related commercial activities, including, since 1989, co-directing a three-day intensive course on the generic drug approval process and editing a guide to the generic drug approval process, Getting Your Generic Drug Approved. A former member of the Food & Drug Law Journal Editorial Board, he also has been a prominent speaker at numerous conferences sponsored by such organizations as RAPS, FDLI, and DIA. A magna cum laude graduate of Bowdoin College, he received his law degree from Emory University Law School and is a member of the California, D.C. and Virginia bars. 29

30. For more than twenty years, leading companies have depended on THE WEINBERG GROUP when their products are at risk. Our technical, scientific and regulatory experts deliver the crucial results that get products to market and keep them there. Washington, D.C. ♦ San Francisco ♦ Brussels ♦ Edinburgh 30