FDA Regulatory, Policy, and Enforcement Development Key Trends in 2015

1. FDA Regulatory, Policy, and Enforcement Development Key Trends in 2015 Debra S. Dunne, R.Ph., Esq.Partner | ddunne@shb.com Shook, Hardy & Bacon | 2001 Market Street, Suite 3000 | Philadelphia, PA 19103

2. Life Sciences Growth in 2015 • Aging Population • Chronic Diseases • Emerging Market Expansion • Treatment and Technology Advances

3. Outlook for 2015: Era of Transformation • 21st Century Cures Initiative • Precision Medicine Initiative • Drug Quality & Security Act • Enforcement • BioSimilars • Personalized Medicine • Telemedicine/Digital Health Today, Think About Transformation …

5. 2015’s Era of Transformation: Will Once Again Test Our Ability to Adapt “It’s Not Just You: FDA Regulatory Requirements Really Are Increasing” Guidance Documents, Pre-Inspection Preparedness, Inspections, Post-Inspections Think about……. Changing Regulatory and Risk Environment Impact On Your Business…Will You Be Ready

6. 21st Century Cures Initiative Initiated in 2014 by House of Representatives--bipartisan examination of areas in which legislation may be needed to accelerate the development of new medicines. Legislation expected in 2015 may include: • Efforts to increase efficiency and reduce burdens in clinical research • Accelerate validation of biomarkers for effectiveness used in drug development • Expand funding for Alzheimer’s Disease research • Expand exclusivities in areas of unmet need as a way to increase development • Changes to FDA’s approach to limiting the dissemination of off-label scientific information • Enhancing availability of telemedicine/digital health, reducing restrictions and enhancing coverage

7. Obama Administration “Precision Medicine Initiative President has his own plan…what can we expect? State of the Union address, “The country that eliminated polio and mapped the human genome to lead a new era of medicine-one that delivers the right treatment at the time,” noting “launching a new Precision Medicine Initiative to bring us closer to curing diseases like cancer and diabetes-and to give all of the access to the personalized information we need to keep ourselves and our families healthier.”

8. Relentless Pressure: Drug Manufacturing • Current Good Manufacturing Practices - FFDCA § 501 • Automatic adulteration if fail to comply • Implementation of oversight and controls over manufacturing - Selected Regulations • 21 C.F.R. § 200.10 (b) (Contract manufacturers an extension of manufacturer's own facility) • 21 C.F.R. § 211.22 (Quality unit ultimate authority for product quality) • 21 C.F.R. § 200.84 (Incoming inspection and testing) • 21 C.F.R. § 211.84 (Component records)

9. Drug Quality and Security Act: Implementation Continues • Some Requirements more administrative/procedural • Record Keeping and information transfer • Product Identifier • Authorized trading partners • Other requirements related to supplier quality • Suspect and illegitimate product identification, investigation, quarantine, and notification • Request for information • Returned products

10. Realties of Working with a Third Party • A company retains accountability for the acts or omissions of the third party. - Despite the fact that control has been surrendered to the third party - Only the third party has the direct access to the contracted activity • A company has limited monitoring and influence

12. Potential Regulatory Consequences • Adverse Inspectional findings • Warning Letters • Product Recalls • Cessation of Manufacturing • Seizure • Injunction • Criminal Actions • False Claims Act Actions

13. Cause/Effect Paradigm Shift • “Our Suppliers Are Causing Problems” • “We Are Causing Problems” Key Takeaway: Disciplined Process Will Focus on True Root Cause

14. Enforcement: Department of Justice • Healthcare fraud continues to be an enforcement priority for Obama Administration • Approximately $6 Billion was recovered by DOJ in fiscal year 2014 • $2.3 Billion in healthcare fraud recoveries - Pharmaceutical industry accounted for substantial part of the $2.3 Billion in health care fraud recovery • Whistle blowers credited with recoveries of nearly $3 Billion - $435 million paid out under qui tam provisions • 1987/30 qui tam complaints vs. 2013/500 qui tam complaints • 95% of the new qui tam cases coming from whistle blowers

15. Enforcement: FDA Warning Letters • Greer Laboratories (4/21/2014) • Failure to establish reliability of supplier’s certificate of testing through validation • Sanquin Plasma Products (8/29/2013) • Failure to perform incoming testing on supplier components • Jabones Pardo S.A. (8/22/2013) • Failure to perform incoming testing, failure to establish reliability of supplier’s analyses, failure to conduct identity test when relying on supplier analyses

16. Enforcement: New Focus on Data Integrity • Trifarma S.P.A. (7/7/2014) • Failure to maintain complete data • Failure to prevent unauthorized access or change to data/prevent data omission • Tianjin Zhongan Pharmaceutical Co, Ltd (6/10/2014) • Failure to maintain appropriate documentation to record manufacturing operations performed on individual pieces of equipment

17. FDA Regulatory, Policy, and Enforcement Development Key Trends in 2015 Debra S. Dunne, R.Ph., Esq.Partner | ddunne@shb.com Shook, Hardy & Bacon| 2001 Market Street, Suite 3000 | Philadelphia, PA 19103