Today’s guest post is by Howard Dorfman, a old friend of the Blog, who is now continuing to think important thoughts as an Adjunct Professor at Seton Hall Law School. This post concerns potential product liability implications of the FDA’s decision to release so-called “complete response letters (“CRLs”), apparently as a matter of future routine. We hadn’t written about that topic, and were more than pleased when Prof. Dorfman indicated his interest in doing so. As always, our guest posters deserve all the credit (and any blame) for their work.
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On September 4, the Food and Drug Administration (FDA) announced its intention to release future Complete Response Letters (CRLs) “promptly” following their being sent to drug sponsors. That day, the agency also released 89 previously unpublished CRLs issued from 2024 to the present related to pending or withdrawn New Drug Applications (NDAs) and other drug filing applications. According to the FDA, each of released CRLs details specific deficiencies in the drug filings relating to safety and efficacy identified by the agency that prevented approval of the application.
At the same time, the FDA released 89 new CRLs, adding to the more than 200 CRLs that were previously made public in July, ostensibly designed to allow third parties greater access to the reasoning behind the agency’s review process. However, the previous release of CRL letters only included rejection letters for drugs that were eventually approved. The September release represented the first time the agency had released such documents for non-approved drug submissions. Further, the FDA indicated it would henceforth release CRLs as they are issued, that is at the same time sent to the drug sponsors.
The September 4 pronouncement was not the first time FDA expressed its intentions regarding release of CRLs. On July 10, the agency announced its intention to embrace what it referred to as “radical transparency” by publishing more than 200 CRLs issued to a sponsor when it does not approve a New Drug Application, Abbreviated New Drug Application or Biologics License Application.
CRLs are official documents issued by the FDA to sponsors when the agency does not approve their submitted drug/biologic applications. It is important to recognize that a CRL is an intermediate step, not representing an outright rejection of the application. Rather, the CRL provides detailed feedback, often regarding safety, efficacy, or manufacturing issues, focusing the applicant’s attention on the application’s shortcomings and highlighting what would be needed for eventual approval.
CRLs often contain confidential and critical information regarding the feasibility of drug development, clinical trials, or manufacturing issues, including details that many companies choose not to publicly disclose. While the FDA touted its publication as a major “transparency” initiative, the 200 published letters did not reveal much to the public because they were for drugs that had already been approved. As a result, the relevant approval packages — including CRLs — were already publicly available and, in the end, only 22 of the 200 letters had not actually been published previously.
In the abstract, it is difficult to argue against greater transparency into government activities, particularly as pertaining to deliberations and decisions made that affect the availability of prescription drugs and biologics. However, the expansion of the process whereby CRLs are released has gone from limiting the release to CRLs for products that eventually obtained approval by the agency to those issued for submissions that have not yet been approved, including CRLs relating to applications that are voluntarily withdrawn or even abandoned. These latter documents had not previously been released by the agency, as it left to the discretion of the sponsor whether to communicate about rejected applications, including to indicate the reasons given for the rejection. Pharmaceutical companies generally release such information through press releases and/or in SEC-mandated filings.
It is well-established that pharmaceutical companies’ press releases can significantly increase their product liability exposure, particularly if the information can be characterized as false and misleading or failing to disclose important information. Historically, press releases have been considered a form of promotion and are subject to the same strict standards imposed by FDA regulations pertaining to promotional oversight by FDA for prescription drugs.
The most significant issue impacting pharmaceutical companies’ liability is that immediate and unrestricted FDA release of all categories of CRLs is that the applicants have no time to react to the deficiencies that the FDA identifies. A successful regulatory response requires a thorough analysis of the FDA’s stated reasons presented for denial of marketing approval. Such responses rarely can be developed and submitted to the agency within a relatively short period of time. In the interim, the CRL has been made public, where it can serve as an unwarranted imprimatur of FDA support for unsubstantiated causation allegations in future or current product liability litigation. The letters have the potential to serve as a source of expert opinion alleging product defect or company failure to undertake adequate clinical trials in support of their drug applications.
As recent litigation has shown, a CRL from the FDA can be a potent piece of evidence for plaintiffs’ experts in product liability litigation. By detailing what the FDA sees as deficiencies in an application, a CRL can support claims that a manufacturer failed to ensure a product was safe, effective, or properly manufactured before bringing it to market. Historically, plaintiffs’ experts have relied upon CRLs as a component of their testimony in litigation brought against a drug or biologic manufacturer.
Establishing evidence of a manufacturer’s negligence: Because CRLs frequently address deficiencies in the drug manufacturer’s manufacturing process, plaintiffs’ experts often use CRLs to make arguments that the manufacturer was aware of the product’s safety, efficacy, or quality issues and, despite this knowledge, continued to develop and sought regulatory approval. Moreover, an expert could compare the deficiencies cited in the CRL with the company’s public statements to investors in the form of press releases or in SEC-required disclosure documents or in its promotional materials and claim supposed discrepancies that in their opinion suggest negligence or fraudulent conduct.
Establishing causation: If a CRL documents a specific safety concern, identifies a problem in a clinical trial (such as criticizing its statistical analysis or sample size) or indicates the need to develop a robust Risk Evaluation and Mitigation Strategy (REMS) program, the applicant can expect to see expert reports parroting those statements as opinions that the individual or collective failures cited in the CRL were the most likely cause of the resulting injury.
Manufacturing defects: CRLs frequently cite deficiencies related to “Current Good Manufacturing Practices” (CGMPs), such as insufficient process validation or problems at a manufacturing facility. Even when such problems have been corrected, an adverse manufacturing expert witness can be expected to reference these findings to support a claim that the product was negligently made, which could have led to contamination or other harmful issues.
Labeling and “Failure to warn” claims: Labeling issues are frequent reasons for a CRL. A plaintiff-side expert will utilize labeling issues in a CRL to make claims that the manufacturer’s initial labeling was inadequate and failed to provide proper warnings about the product’s potential risks. The failure to warn allegations would no doubt follow the drug, beginning with approval process through marketing and throughout the product’s life cycle.
Of course, the defense will counter that notwithstanding statements made in a CRL, the most significant and definitive response to any allegations made by the plaintiff’s expert remains the fact that the reasons for the CRL were fixed, as demonstrated by the FDA’s eventual approval of the application. Final FDA approval, after any CRL problems were corrected, provides the most definitive evidence that the product is indeed safe and effective. Nonetheless, plaintiffs can – and do − point to the existence of a CRL to raise questions regarding the agency’s initial concerns with the product’s application and the approved product, thereby indicating that the company’s initial submission upon which the subsequent filing was based, was flawed and open the application and the approval process to scrutiny and remains relevant.
It is impossible to foresee how a trial or appellate court will view these arguments at the pretrial, trial and appellate levels – but the ongoing Fosamax litigation underscores how different courts have reached different conclusions about the same CRL.
Summary
Transparency appears to be the new “mantra” for FDA as demonstrated by the updated and expanded policies developed pertaining to the CRL process. While most of the discussion has focused on the impact on its impact on SEC disclosures and SEC litigation implications, an overlooked and equally important consideration for pharmaceutical companies is the potential impact on product liability litigation. In these circumstances, mere disclosures already part of SEC disclosure obligations may be insufficient in mitigating liability exposure for the pharmaceutical developer. As “radical” disclosure expands, companies will have to focus on existing policies and procedures in numerous aspects of the internal drug review and approval process to limit, if not to avoid, this increased risk.