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FDA LIMITS ON DUAL TRADEMARKS
TREAD ON PATIENT SAFETY AND LAW
On April 19, 2001, in a typical example of FDA “podium policy,” Jerry Phillips, FDA’s Associate Director for Medications Error, took the microphone during the Annual Meeting of the Food and Drug LawInstitute. He announced that there were too ma ny “unne cessar y” drug trademarks. The FDA Center for DrugEvaluation and Research (“CDER”) would now “strongly discourage” the use of multiple trademarks by thesame company for the same active ingredient. FDA had sparingly allowed their use particularly when a stigmaexisted to discourage an important new use of an existing drug.1 A well known case involved the anti-depressant Prozac® (fluoxetine) to treat pre-menstrual dysforic disorder (“PMDD”) under the trade nameSarafem.® Phillips announced that this new policy directive would be included in draft guidance and in arevision to CDER’s Manual on Po licy and Procedu re (“MaPP”). Neither the guidance or the MaPP provision,if drafted, has been publicly released.
On August 15, 2002, the FDA Center for Biologics Evaluation and Research (“CBER”) did release a new procedure related to its review of dual trademarks. In the CBER Manual of Standard OperatingProcedures (SOPPs) related to “Review of CBER Regulated Product Proprietary Names,” it stated that aproprietary name will not be accepted if the name is a different name for an essentially identical product for adifferent indication. CBER SOPP 8001.4 (Aug. 15, 2002). CBER expressed concern about double dosingwhere practitioners and patients may not understand or realize that two products with different names may bethe same. It also speculated that the use of different names for the same product may pose problems in thecollection and management of adverse drug reaction reports. There was no public input into preparation of thisSOPP, or substantiation for the concerns expresse d. Below is an analysis of the legal and policy implications if FDA decides to prohib it dual trademark s de facto (in-fact, even if official policy has not been developed). The de facto prohibition is inflexible, u nwise,detrimental to public health and safety and is not substantiated by any relevant evidence. Finally, the decision 1 Other examples of the use of FDA approved dual trademarks by the same manufacturer for two products with the same active ingredient include: triamcinolone (Nasacort (allergies) and Azmacort (asthma)) (1991); bupropion (Wellbutrin (depression)and Zyban (smoking cessation)) (1997); finasteride (Propecia (male pattern baldness) and Proscar (benign prostatic hyperplasia))(1997), budesonide (Pulmicort (asthma) and Entocort and Rhinocort (allergy)) (2001); and tazarotene (Tazorac (acne) and Avage(facial wrinkling)) (2002).
Marc J. Scheineson is a partner in the law firm of Reed Smith, LLP in Washington, D.C. wher e he heads
the firm’s food and drug practice. Mr. Sch eineson is a form er FDA Associate C ommission er for Legislative Affairsand is Chair of the American Bar Association Business Law Section Committee on Food Drug and Cosmetic Law.
is arguably illegal both under the process provisions of the Adm inistrative Procedure Act (“APA”) that requirepublic input, and base d on First Amendm ent comme rcial free speech protec tions. Background. In July 2000, prior to announcing the chilling message that any use of the dual trademark
would be “strongly discouraged,” Mr. Phillips published an article in Pharmacuetical Executive magazine. He
detailed the criteria that would be used by that office to evaluate proposed Rx drug trade names (trademarks).
Mr. Phillips explained that the Office of Post-Marketing Drug Risk Assessment (“OPDRA”), despite limited
resources at FDA, would institute its own testing to review trademarks. OPDRA would provide a uniform
consultative safety risk assessm ent and make recom mend ations . The pr imary d ecision on the suitability of
proprietary names would rest with the responsible reviewing division director or director of the Office of Drug
Evaluation. Decisions could be appealed through CDER’s formal dispute resolution procedures. The dominant
focus would be reducing the potential for medication errors associated with look-alike or sound-a like names.
CDER has since established an Office of Drug Safety (“ODS”) and transferred review of drug trademarks to
the ODS Division of Medication Errors and Technical Services (“DMETS”), for which Mr. Phillips is Director.
Adoption of different trademarks by different innovator and generic companies for drugs with the same active ingredient has generally been acceptable to FDA. However, use of more than one trademark by the samecompany for drugs with the same active ingredient, in FDA’s view, unduly proliferates trademarks, raising theprobability of product mix-ups. It may cause confusion among patients and health care providers leading todouble dosing. FDA’s view can be summarized as; if it is the same stuff, it should have the same name, evenif it is a different dose, mode of administration or different indication. Man ufacturers generally favor the useof dual trademarks because they: (1) help market products in different therapeutic classes to differentconsumers; and (2) avoid discouraging a drug’s use if its other uses carry some social stigma (e.g., depression, urinary dysfunction, HIV or other sexually transmitted disease).
The Patent and Trademark Office (“PTO”) has generally taken the position that a trademark is a valuable commercial right with an exclusive use in the owner. Use of this commercial property should not beinhibited unless the name is likely to cause confusion, merely descripti ve of good s or servi ces, pri maril y asurname, or is immoral, decep tive, etc. 15 U.S.C. § 1052. While FDA reportedly recognizes th at mostproprietary names have completed a registration review by PTO, it believes that PTO and FDA serve twofundamentally different purposes. FDA “cann ot base its safety risk assessment only on the issue of confusingsimilarity that PTO addresses,” according to Mr. Phillips. OPDRA assessment is based on “the clinical contextin which the produc t will be used.” Phillips, Pharmaceutical Executive, July 2000, at 66, 68.
Basis of FDA Re gulatory Authority. FDA’s regulatory authority over the review of drug proprietary
names is limited. Generally, a product is “misbranded,” and, therefore, illegally marketed, if its trademark, orother labeling, is “false or misleading in any particular.” 21 U.S.C. § 352(a). According to FDA, the labelingof a drug may be misleading by reason (among others) of: The employment of a fanciful proprietary name for the dru g or ingred ient in such a manneras to imply that the drug or ingredient has some unique effectiveness or composition when,in fact, the drug or ingredient is a common substance…” Designation of a drug or ingredie nt by a pro prietary nam e that, bec ause of sim ilarity inspelling or pronunciation, may be confu sed with the proprietary name or the establishedname of a d ifferent drug or ing redient. 21 C .F.R. §2 01.10(c)(3 ), (5).
In the context of dual trademarks, FDA has taken the concept of “confusion” beyond its statute and regulations to determine independently whether a prescriber or consumer could be confused by two drugs madeby the same com pany which contain the same active ingred ients, but have different nam es. These drugs,however, can have different doses, different dosage forms and are often used for dramatically differentindications. Prohibition on the use of dual trademarks was made with no referenced substantive survey dataor other quantitative evidence of potential medical mistakes, no public input, and in a marketplace where tensof thousands of trade nam es and line extension s operate autonom ously by manufacturer. Legal Authority. It is arguably illegal for FDA to take the de facto blanket position that it will not
Copyright 2003 Washington Legal Foundation allow, or will “strongly discourage,” the use of more than one trademark by one manufacturer for productscontaining the same active ingredients. The basis of this legal conclusion is summarized below. Otherarguments and legal theories exist. Only a summary legal analysis is provided.
Dual Trademarks are Not Misleading. In denying a sponsor the use of a trademark, FDA has the
burden to substantiate its position if challenged. The regulations only specify that a name that implies someunique effectiveness, or is similar in spelling or pronunciation to another marketed drug, is misleading. FDAconducts testing to eliminate any of these risks before a proprietary drug name is approved. FDA assumes thattrademarks have no real value; that dual trademarks are unnecessary and more trademarks increase the potentialfor medication errors; and that dual trademarks will lead to increased risk of double dosing. At a minimum, inorder to meet its burden, if challe nged, FDA would like ly be required to show that th ere exists a significantnumber of reports of me dical errors caused by the d ual trade name s.
Public Input Is Required through Level I Guidance or Informal Rulemaking. FDA has been
vulnerable to criticism that it used illegal informal administrative mechanisms to expand or interpret itsauthority.2 For this reason, on February 14, 2000, it proposed a more formalized process to adopt informalguidance and seek public input. On September 19, 2000, a final rule was published that added new regulationsrelated to good guidance practices. 65 Fed. Reg. 56468 (Sept. 19, 2000) added 21 C.F.R. § 10.115. Throughoutthis rulemaking, FDA agreed to observe a new process defined in its administrative regulations. Level 1guidance would require public input before changes in Agency policy were enforced. Level 1 guidance wasdefined as including guidance documents that set forth changes in interpretation or policy that are of more thana minor nature. 21 C.F.R. § 1 0.115(c)(1)(ii). It also included h ighly controversial issues. Id. at (iv). G enera lly,policy changes that affected more than one individual sponsor, or class of sponsors, and had general applicationwere classified as Level 1. Here, in its “podium policy” on du al trademarks, FDA seems to have fallen into itsold ways of adopting policy changes without the benefit of public input or an administrative record, and withoutgoing through an established procedural framework. At a minimum, a view that dual trademarks are misleadingand will no longer be approved, falls within the definition of a change in interpretation or policy that shouldrequire Level 1 guidance before implementation.
A strong argument also exists under the APA as applied to FDA that an outright de facto ban on dual trademarks is a substantive rule3 that requires notice and comment rulemaking and not m erely guidance. Alarge body of law exists to determine what actions constitute interpretative rules which can be adopted thro ughFDA guidance versus substantive rules requiring informal notice and comment rulemaking. A complex five-factor test is generally used to determine if agency action is “substantive.” Many of these factors apply here.
In particular, if a genuine ground for difference of opinion on the wisdom of a policy exists, or if the rule resultsin a deprivation of preexisting rights, the notice and com ment rulema king procedure is a “meaningful andimportant requirement.” St. Francis Mem. Hospital v. Weinberger, 413 F. Supp. 323 (N.D. Cal 1976) (holdingthat a regulation requiring the ca pitalization of interest expenses rather than expensing constituted a substantiverule, and failure to comply with the notice and comment procedures of the APA rendered it invalid). Here, dualtrademarks that were granted previously will no longer be granted. Sponsors have been deprived of animportant property right. Notice and comment rulemaking is required.
Trademarks are Protected Commercial Speech. Washington Legal Foundation and others opposing
FDA’s heavy-handed approach to speech refined the application of commercial free speech rights to drugproducts through a line of cases includ ing WLF v. Henney, 56 F. Supp. 2d 81 (D.D.C. 1 999); 202 F.3d 331(D.C. Cir. 2000); Pearson v. Shalala, 130 F. Supp.2d 105 (D.D.C. 2001); and Thompson v. Western States 2 Section 105 of the FDA Modernization Act of 1997 (P .L. 105-1 15) add ressed this co ncern. It add ed Sectio n 701(h) to the FDCA (21 U.S.C. § 371(h)) which provided that for guidance documents which set forth changes in interpretation or policythat are of more than a minor nature, complex scientific issues or highly controversial issues, FDA shall insure public participationprior to implementation of guidance docum ents, unless FDA determines that such public participation is not feasible orappropriate, in which case public comment shall be provided for upon implementation and taken into account. § 701(h)(1)(C).
3 A “rule” is defined as an agency statement of general or particular ap plicability and fu ture effect desig ned to implemen t, interpret or prescribe law or policy. 5 U.S.C. § 551(4).
Copyright 2003 Washington Legal Foundation Medical Center, 122 S. Ct. 1457 (2002). Th e courts in all those cases adopted the four-prong test which wouldapply to FDA actions on dual trademarks in Central Hudson Gas & Electric Corporation v. Public ServiceCommission, 447 U.S. 557, 566 (1980 ). The first test is whether dual trademarks are lawful activities that arenot false or misleading. It is likely that the court would view dual trademarks as lawful and not misleadingsince FDA approved at least six of them. They are not expressly prohibited by the Food, Drug, and CosmeticAct or its implementing regulations. FDA would have the burden of demonstrating that provider confusion ormedical errors rendered such trade marks mislead ing. In the absence of hard data compiled from adverse eventreports, it is unlikely that FDA could sustain this evidentiary burden.
Once the bona-fide nature of the practice was established, the other elements of the Central Hudson analysis would include: (1) does a substantial government interest exist in prohibiting the speech; (2) does theban on dual trademarks directly advance that interest; and (3) is the ban more extensive then necessary toachieve the given objective? FDA ’s weakest link in this cha in of proof, which it has the burden to establish,is demonstrating that its ban directly advances a legitimate government interest. FDA may have an interest inpreventing prescriber confusion and medical errors. The Agency would be required to prove, however, that dualtrademarks cause medical errors and misprescribing. To meet this burden, mere conjecture is insufficient. FDAmust offer concrete proof that the “the harms it recites are rea l and th at its res trictio n will in fact [sub stantia lly]alleviate them.” Even if it presents credible evidence, FDA will have to demonstrate that a total ban isnecessary to eliminate me dical errors. In the past, the courts have disfavored total bans on protected speech andsuggested creative alterna tives that are less burdensom e. Impermissible Taking Under Fifth Amendment. A credible argument also exists that prohibiting use
of a dual trademark constitutes an impermissible taking of the sponsor’s property without just compensationin violation of the Fifth Amendment of the U.S. Constitution. The courts have held that trademarks constituteproper ty, and that analogous property is protected by the takings clause of the Fifth Amendmen t. See MaltinaCorp. v. Cawy Bottling C o., 462 F.2d 1021, 1027 (5th Cir. 1972) (trademarks are treated as property under thelaws and policy of the U.S. including the Constitution); Ruckelhaus v. Monsanto, 467 U.S. 986, 1003-04 (1984)(trade secret property is protected by the takings clause of the Fifth Amendment).
Arbitrary and Capricious Agency Action. The APA provides that FDA action may be set aside if it
is “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with the law .” 5 U.S.C. §706(A)(2). Many actions taken by FDA have been challenged using this standard of proof. Generally, thecourts shift the burden in such cases to the administrative agency to demonstrate at least “a rational connectionbetween the facts found and the choice made” by the regulator. Motor Vehicle Mfrs. Ass’n v. State Farm Mut.
Auto Ins. Co.
, 463 U.S. 29, 43 (1983). In this case, FDA established no administrative record or basis for itsprohibition on dual trademarks. An argument that dual trademarks are misleading or cause medication errorshas not been substantiated. The reverse is likely true. Different names for different indications likely allowprescribers and their patients to use the co rrect drug in the correct do se and dosage form with fewer prescribingerrors. The court would likely consider two facts. First, the MedWatch adverse event reports attributable toexisting dual trademarked drugs are likely no higher than single trademark drugs, and may even be lower.
Second, FDA permitted du al trademarks in lim ited circumstanc es until 2002. It would be arbitrary andinconsistent to revoke that policy without a sufficient administrative record to support the new policy. FDAalso continues to allow proliferating generic products with the same ingredients to use different trademarksrather than merely the generic name of the active ingredient(s), as we ll as over-the-counter dru g line extensions.
Recommendations. FDA should allow dual trademarks using its current strict review process applied
to all drug trademarks based on a proper ap plication of the false or misleading labeling standard. If FDA hassignificant data suggesting that double dosing has been more than a theoretical concern in this area, allcompanies submitting trademarks for FDA’s review would likely benefit from official Level 1 guidance fromthe agency. That guidance could describe the procedure and considerations used in evaluating drug tradem arks.
It should list the circumstances under which dual trademarks would, and would not, be appropriate, as well asrisk mitigation techniques that could be employed by manufacturers (e.g. disclosure on labeling and promotionmaterials linking the two tradem arks). In this case, these alternatives might include, among others: (1)disclosure on labeling linking the two brands (e.g., Zyban and Wellbutrin contain the same active ingredient);or (2) limited use of dual trademarks under designated criteria (e.g., social stigma, or if dosage, dosage formor indications are sufficiently differentiated to prevent medical error, etc.). Copyright 2003 Washington Legal Foundation

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