Vanda Case Could Produce Legislation: Report

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The Congressional Research Service (CRS) says a recent Court of Federal Claims ruling in a case brought by Vanda Pharmaceuticals against FDA raises issues of interest to Congress that could result in new legislation. In a Legal Sidebar, CRS describes the case in which Vanda claimed that FDA violated its 5th Amendment rights by a taking of the confidential information and/or trade secrets it provided to the agency as part of the approval process for its Fanapt (iloperidone), used to treat schizophrenia, and Hetlioz (tasimelteon), indicated to treat a type of sleep disorder.

Vanda says that when the agency was considering ANDAs for its drugs, it improperly disclosed to the generic drug companies information about the drugs it had obtained from Vanda.

In its 1/18 decision, the Court of Federal Claims denied in part the government’s motion to dismiss the Vanda suit, allowing the takings claim to proceed but dismissing the company’s breach of an implied-in-fact contract claim. CRS says the court concluded that Vanda had sufficiently presented its takings claim to warrant further proceedings, although it is still unclear whether the company will ultimately prevail on the merits of its case.

CRS says the final resolution of the case “could affect the manner in which FDA communicates with generic drug manufacturers during the ANDA process. If the court ultimately decides that FDA did violate Vanda’s 5th Amendment rights, it could constrain FDA’s communication with generic drug manufacturers during the drug approval process, impacting its ability to ensure generic drugs are safe, effective, and eligible for approval…. If the court ultimately holds that FDA did not unlawfully take Vanda’s property, there could be a chilling effect on drug manufacturers’ willingness to fully disclose confidential information to FDA.”

CRS says Congress may want to clarify how trade secrets and other confidential information should be handled in connection with FDA’s review of ANDAs and communications with generic competitors. It says potential legislation could clarify the confidentiality protections existing in current regulations or modify the manner in which any data submitted by a drug manufacturer may be used.

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