folder Filed in Legal, Policy
Dear FDA: You Can Do It! Here’s How. 
The Drug Price Competition and Patent Term Restoration Act
Sheila Gibson access_time 14 min read

Below is the comment Aura IP Law submitted to the FDA (with minor typographical errors corrected). It is a proposal for a “Cannabis Price Competition and Patent Equity Act” paired with a “Cannabis Supplement Model.“ A two-tiered model designed to balance all the interests in this unique situation, from big research companies to the pioneers who have sacrificed so much; from patients suffering from debilitating illnesses to the health conscious or casual consumer; and from those desiring access to those wanting or needing to avoid cannabis. Based on existing frameworks, we believe this proposal has the potential to jumpstart the conversation about a plausible cannabis framework.

Cannabis Patents - Hatch Waxman Act Model - The Drug Price Competition and Patent Term Restoration Act
Read my comment to the FDA below — a Hatch-Waxman Act Model

July 16, 2019

Re: Docket No. FDA-2019-N-1482 for “Scientific Data and Information about Products Containing Cannabis or Cannabis-Derived Compounds; Public Hearing; Request for Comments.”

To Whom It May Concern:

I am the founder of Aura IP Law, an intellectual property (“IP”) law firm in Long Beach, California and I work with cannabis companies to develop and protect their IP positions. I have 17 years of experience obtaining and protecting IP rights and prior to working with cannabis companies, I worked on IP matters for numerous companies that have dealings with the FDA under different FDA frameworks, including companies in the life science, biotech, pharma, diagnostic, medical device, nutraceutical, food supplement, food processing, agriculture, and cosmetic industries. I also have experience evaluating patents listed for approved drug products identified in the FDA “Orange Book” for generic pharmaceutical manufacturers seeking FDA approval to market generic versions of patented drugs via an Abbreviated New Drug Application (“ANDA”). Located in Los Angeles county, my practice is at one of the epicenters of the cannabis industry in the United States.

Health and Safety

I have listened to the public hearing to obtain scientific data and information about the safety, manufacturing, product quality, marketing, labeling, and sale of products containing cannabis or cannabis-derived compounds and poured through many of the public comments. It seems that the case for the public need has clearly been made and the health and safety risks have been addressed by many. The FDA is aware that until 1937, cannabis was widely used in America for the treatment of various ailments and in 1851 was included in the 3rd edition of the U.S. Pharmacopoeia, a book used to detail and standardize medical use of botanical drugs. It was removed from the U.S. Pharmacopoeia in 1942. It was raised during the public hearing that the United States of America as represented by the Department of Health and Human Services held U.S. Patent No. 6,630,507 drawn to various important health applications of cannabinoids, including CBD. This patent application claims the benefit of two U.S. provisional patent applications filed more than 20 years ago in 1998. References cited during prosecution of the application include a U.S. patent dated 1942 and an article disclosed in the patent itself as background to the invention is dated 1971. It is clear that the health benefits and safety of products containing cannabis and cannabis-derived compounds is well known and documented even by the U.S. government.

For these reasons and based on the numerous responses to the FDA queries regarding health and safety risks that I’ve personally read and heard, I am confident that the FDA has received the assurances it needs to acknowledge CBD as generally recognized, among qualified experts, as having been adequately shown to be safe under the conditions of its intended use.

Manufacturing and Quality

The more difficult issue pertains to whether and how the FDA should regulate products containing cannabis and cannabis-derived compounds. The FDA regulates a wide range of products— including some foods; human and veterinary drugs; vaccines and other biological products; medical devices intended for human use; radiation-emitting electronic products; cosmetics; dietary supplements, and tobacco products—and regulates them each differently without issue. The categories for the regulation of products containing cannabis and cannabis-derived compounds seem to be somewhere between the regulation of dietary supplements and the regulation of human and veterinary drugs. Between these two models, dietary supplements are considered safe until proven unsafe and largely unregulated other than disallowing claims as to health benefits. Contrast that with drugs, which are all—prescription or otherwise—considered unsafe until proven safe through elaborate, extensive, and expensive clinical trials performed under well-controlled conditions on human volunteers to show the drug is both safe and effective for each of its intended uses.

In the case of products containing cannabis and cannabis-derived compounds, neither model is a good fit.

With respect to drugs, the Federal Food Drug and Cosmetic Act (FD&C Act) and FDA regulations define the term “drug,” in part, by reference to its intended use, as “articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease.” Under this definition, almost any ingested or topical or injectable product that, through its label or labeling (including internet websites, promotional pamphlets, and other marketing material), is claimed to be beneficial for such uses is regulated by FDA as a “drug.”

However, continuing with this definition of “drug” in this instance where the “drug” has already been widely and extensively used for these purposes could result in cost-prohibitive and unnecessary regulation of products containing cannabis and cannabis-derived compounds. And yet regulating as a “dietary supplement” is not feasible because even by the U.S. government’s own admission in its patent applications, products containing cannabis and cannabis-derived compounds are beneficial for use in the cure, mitigation, treatment, or prevention of a number of diseases.

It is my firm belief that cannabis innovation, such as the work done by the U.S. government, should be fostered so that we can uncover further healing properties of cannabis. It is also my belief that safe products containing cannabis and cannabis-derived products should be made accessible both in terms of cost and access to those who seek it as an alternative to traditional pharmaceutical drugs. I believe these goals can be accomplished through a regulatory framework that would balance fostering innovation with providing increased availability of safe products containing cannabis and cannabis-derived compounds.

A “Hatch-Waxman Act” Model

A framework that involves regulating drugs in a manner that encourages increased availability of consumer options (i.e., the approval process is not cost-prohibitive) by relying on established findings of safety and efficacy of a “drug” is one the FDA has previously implemented via the Drug Price Competition and Patent Term Restoration Act, also known as the Hatch-Waxman Act of 1984. Under this act, generic pharmaceutical manufacturers seeking FDA approval to market a generic version of a patented drug may submit an Abbreviated New Drug Application (“ANDA”) whereby applicants are not required to undergo the extensive animal and clinical and bioavailability studies required for New Drug applicants and can instead establish chemistry, manufacturing, controls, labeling, testing, and bioequivalence.

For a drug that was previously widely used in America for the treatment of various ailments and even included in the U.S. Pharmacopoeia as early as 1851, and for which the FDA has been provided extensive patient testimony and safety data from the public, this seems to be a viable model for a new regulatory framework for cannabis. Moreover, an abbreviated application seems much more appropriate for a plant versus the full application for a synthetic, artificially created “drug.”

For any products containing cannabis and cannabis-derived compounds that are deemed to be covered by patents, such patents can be identified in the “Orange Book” or an equivalent (“Green Book”?) so that Applicants believing any patents to be invalid in view of the long history of cannabis as medicine can seek to invalidate such patents and enjoy a short period of exclusivity for their efforts before other brands are allowed to compete as prescription drug generics.

One key advantage of a system set up in this way is that much like generic drugs, products containing cannabis and cannabis-derived products approved through an abbreviated application would be covered by health insurance in the same way generic pharmaceutical drugs are covered, thereby increasing consumer treatment options and access.

It is in the public interest that both price competition and true innovation are encouraged when resetting an established industry. It is also in the public interest that invalid patents, resulting from the fact that prior art available for patent examiners to evaluate during prosecution is sparse, not be allowed to unduly limit patient access. Congress recognized these and other important issues when it provided protection for drug innovators while facilitating and providing various incentives for companies to file ANDAs via the Hatch-Waxman Act.

A “Nutraceutical/Certification Mark” Model

The issue with regulating products containing cannabis and cannabis-derived compounds as dietary supplements is that it has been established that products containing cannabis and cannabis-derived compounds are useful in the cure, mitigation, treatment, or prevention of various diseases, and therefore cannot be appropriately regulated using the current “dietary supplement” framework. Further thwarting the viability of the current “dietary supplement” framework is that dietary supplements are largely unregulated by the FDA.

Presently, in the absence of any regulatory framework, states and counties are creating their own regulatory frameworks that are each completely unique and constantly evolving, making it overly cumbersome if not actually impossible for manufacturers, distributors, and retailers to have a cohesive compliance approach. The industry would benefit from a uniform approach to regulation. In addition, the “green rush” mindset has resulted in some bad actors hoping to cash in on the hype largely without regard to safety or compliance. These issues were raised at the hearing and they must be addressed.

However, I do not believe the answer lies in forcing all cannabis companies to compete at the prescription drug level. Such a model would destroy the industry as it currently stands at the expense of the pioneers of the industry who have sacrificed so much to create it. The social injustices we are already seeing in states that have legalized, whereby those who have suffered devastating effects of prohibition are not the ones able to excel in a newly legal market, would be further exacerbated by not regulating products containing cannabis and cannabis-derived compounds in two or more tiers of goods. Regulating prescription and “over-the-counter” products containing cannabis and cannabis-derived compounds using separate regulatory frameworks would promote price competition and access, in particular for products that are already established in the industry.

I believe the creation of a new category of goods that is between an unregulated dietary supplement and highly regulated drug is the answer. Rather than disallowing claims and not regulating this new category, the category could be appropriately regulated through the use of certification marks.

A certification mark is a type of trademark registered through the United States Patent and Trademark Office. Specifically, it is a type of trademark that is used to show consumers that particular goods and/or services, or their providers, have met certain standards. Certification marks can be used to regulate source, quality, materials, or how goods are manufactured, for example. The certifying organization that owns the certification mark controls who can use the mark, but the certifying organization generally does not use the certification mark with the goods or services. The certifying organization will let providers use its certification mark only if the goods, services, or their providers meet the organization’s standards.

It is not uncommon for a government body to control use of a certification mark. For example, the certification mark “ENERGY STAR” is used to denote a voluntary U.S. Environmental Protection Agency (EPA) program that delivers environmental benefits and financial value through superior energy efficiency. It is also not uncommon for a plant product, including a psychoactive plant product distributed and sold in the United States, to be regulated through the use of a certification mark. The mark “TEQUILA” is owned by the Tequila Regulatory Council (“CRT”), a Mexican non-profit civil association that includes agave producers, producers/manufacturers, bottlers and distributors of tequila, and representatives of the Mexican government. The mark “TEQUILA” may only be used following proof of compliance with CRT’s standards for using the mark, namely, (1) that the goods are manufactured in Mexico from a specific variety of the blue agave plant grown in certain regions of Mexico as defined by Mexican law and standards; (2) the goods are manufactured in Mexico in compliance with Mexican law and standards including fermentation, distillation, aging, the percentage of blue agave sugars and physical-chemical specifications; and (3) the finished product is or contains within it the goods manufactured in accordance with (1) and (2) above.

Certification marks provide a less cumbersome framework for uniformly regulating standardized terms that the FDA identifies through this process and that consumers will look for, such a, for example, but not limited to, “broad spectrum,” “full spectrum,” “isolate,” “extract,” etc. A new category of “Cannabis nutraceuticals” that is regulated through the use of certification marks is an ideal model for products containing cannabis and cannabis-derived compounds that can be purchased without a prescription.

Manufacturing, Labeling, and Sales

Regarding the concerns raised and issues needing to be addressed with manufacturing, labeling and sales, it is important to note the current state of tracking and labeling technology. In particular, it is presently possible to track marijuana from seed to sale using immutable transactions to prevent fraud and to provide such information via QR codes on the packaging that is readable by any cell phone or QR code reader. It is also possible to provide product information, counteractions, dosing, etc. using these QR codes. Still further, an exemplary technology company I recently came across, CannaMarkUSA’s, indicates on its website that they have a patent pending ERP based service product “designed for infused products to perform both before and after the external packaging is removed.” https://www.cannamarkusa.com/

Thus, the FDA should be aware that concerns and issues raised with respect to labeling, sales, and consumer protection can be addressed using technology that is already available.

Thank you for providing a forum by which you are able to factor the issues, concerns, and current state of the cannabis industry into your decision regarding how to regulate products containing cannabis and cannabis-derived compounds. It is my sincere hope that I have provided ideas for effective frameworks that would balance all of the interests. I look forward to the day where Americans are provided safe and ample access to products containing cannabis and cannabis-derived goods and able to evaluate all treatment options available in managing their healthcare. Should you have any questions about any of the suggestions or information provided herein, please contact me.

Sincerely,

Sheila Gibson
Aura IP Law
Founder, Patent and Trademark Attorney
info@auraiplaw.com
562-380-2872