Food & Drug Law Institute Annual Conference Washington, D.C. April 22, 2009

1. Drug Safety –Perspectives on Industry’s Duties in the Post-Vioxx Age Food & Drug Law Institute Annual Conference Washington, D.C. April 22, 2009 Michael A. Swit, Esq.Vice President

2. Standard Disclaimers • Views expressed here are solely mine and do not reflect those of my firm or any of its clients. • This presentation supports an oral briefing and should not be relied upon solely on its own to support any conclusion of law or fact.

3. A New Paradigm? … or Is Ignorance Bliss? … A View on Safety & Corporate Duty • Has the “bar been raised” by what has been reported about corporate handling of drug safety since Sept. 30, 2004? • My view – YES. • A key issue today -- Do you have a duty to investigate even in the absence of any indicia of a problem? • Answer – Yes … and let me tell you why …

4. Duties Under the Federal Food, Drug, and Cosmetic Act • U.S. v. Park –responsible corporate agents in a position to prevent a violation can be criminally liable for FDA violations even w/o intent or knowledge. • “Positive” duty to seek out potential violations • “Positive” duty to implement measures to ensure violations will not occur

5. Duties Under General Corporate Law • Delaware law – must have an adequate compliance program to prevent violations and probe to ensure violations do not occur – Caremark (1996) • In considering a board’s potential liability for failure to monitor, the court emphasized the importance of a board exercising “a good faith judgment that the corporation’s information and reporting system is in concept and design adequate to assure the board that appropriate information will come to its attention in a timely manner as a matter of ordinary operations .”

6. Duties Under Corporate Law … • McCall (2001): Columbia/HCA shareholder derivative action against board members; • Directors lose protection of “business judgment” rule and are personally liable for failure to detect and correct violations • Board’s duty of care breached through nonfeasance: failure to investigate items from internal audit • Abbott– similar result relative to failure to act on GMP problems

7. Duties Under Sarbanes-Oxley • No overt duty to investigate corporate problems; however, under SOX, multiple duties on a company to have adequate procedures to ensure accuracy of public reports • Question – how can you know if your financial reports are accurate if you don’t know the status of the licenses – whether an NDA, BLA, ANDA, etc. – supporting your key products? • Answer – duty to probe into the future of those licenses

8. So, What Do You Do? Some Ideas

9. Not Recommended

10. A “Guidant” Style IndependentReview Group • Guidant’s Independent Panel – recommended a permanent outside panel to review adverse events • Does this create a new standard for corporate action? • Not clear, but do we want to have the plaintiffs bar cite its absence? • Look at your product line – if your products are such that failure is likely to trigger Class I recall, consider strongly

11. The Product Dossier & Development Audit • Comprehensive review of applications (pending or approved) –triaged on criteria based on risk • Goal – • What did we know? • When did we know it? • What did we do about it? • Was what we did about it consistent with benefit/risk? • Do we need to take additional action? • If so, what is best to protect public health?

12. Thoughts on Guidances &Other Actions FDA Should Takeon Drug Safety

13. Transparency on REMS – Continue to Disseminate Information on Approved REMS http://www.fda.gov/cder/drug/DrugSafety/REMS.htm

14. What FDA Can Do on Drug Safety • Inspect and Enforce • Put fear of Wiley in industry • Home and abroad • But, be careful in selecting borderline cases – Balanced and Consisten • Challenge – resources – human and financial • More guidance – are they needed? • Current “Drug Safety” Guidances: • Conducting a Clinical Safety Review of a New Product Application and Preparing a Report on the Review [HTML] or [PDF] Final 2/2005 • Drug-Induced Liver Injury:  Premarketing Clinical Evaluation [PDF] or [HTML] Draft 10/24/2007 • Drug Safety Information - FDA's Communication to the Public [PDF] or [HTML] Federal RegisterNotice [TXT] [PDF] Final 3/2/2007 • However – many other guidances clearly relate to Drug Safety

15. Lingering Questions • How will FDA communicate its views of appropriate Risk Management beyond publishing information on specific implemented REMS? • Where is FDA on fully implementing the CGMPs for the 21st Century Initiative? • How else can industry learn that vigorous compliance is the best insurance on drug safety issues and good business practices?

16. A Side Note on Products Liabilityand Drug Safety

17. Wyeth v. Levine • Take home message – “logical result” – any doubt, submit a Changes Being Effected (CBE) supplement • But – will that lead to over warning? • Are more warnings the answer? Do we have any empirical data that more warnings improve patient outcomes? • Boxed warnings? • Multiple warnings? • Access to Clinical Trial Results Databases • On latter, does it emasculate whatever is left of the Learned Intermediary Doctrine? • How possible – too much information to digest; physician can’t keep up; thus, less learned • Don’t know the answers, but these bear examination

18. Ancient Chinese Curse May You Live In Interesting Times … (possibly an ancient Chinese Curse)

19. Questions? Call, e-mail, fax or write: Michael A. Swit, Esq. Vice President The Weinberg Group Inc. 336 North Coast Hwy. 101 Suite C Encinitas, CA 92024 Phone 760.633.3343 Fax 760.454.2979 Cell 760.815.4762 michael.swit@weinberggroup.com www.weinberggroup.com

20. About your speaker… Michael A. Swit, Esq., is a Vice President 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 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.