REMS and 180-Day Exclusivity Forfeiture – Some Interesting Disclosures to the SEC

By Kurt R. Karst –      

Company submissions to the Securities and Exchange Commission (“SEC”) can be a valuable source of information.  Consider, for example, a recent quarterly report from Celgene Corporation, which states with respect to Risk Evaluation and Mitigation Strategies (“REMS”) that:

In the fourth quarter of 2009, we received a civil inquiry and demand from the [Federal Trade Commission (“FTC”)].  The FTC requested documents and other information relating to requests by generic companies to purchase our patented REVLIMID® and THALOMID® brand drugs in order to evaluate whether there is reason to believe that we have engaged in unfair methods of competition.

The FTC inquiry, which is presumably broader than just Celgene, could very well be related to a June 2009 citizen petition in which the petitioner requested, among other things, that FDA “[r]efer to the FTC any complaints received from generic drug manufacturers alleging that the sponsor of a listed drug subject to an approved restricted distribution REMS has used such REMS in an anti-competitive manner to delay or block generic competition.”

Then there’s a recent quarterly report that Caraco Pharmaceutical Laboratories, Ltd. (“Caraco”), a subsidiary of Sun Pharmaceutical Industries Limited, submitted to the SEC raising an inquiry made to FDA about an interesting 180-day exclusivity forfeiture issue with respect to generic PRANDIN (repaglinide) Tablets.  According to the Caraco quarterly report:

The Company believes that it is the first to file an ANDA with a Paragraph IV certification for this drug product and it intends to defend this action vigorously to capitalize on the potential for obtaining 180 days exclusivity available for this product.  On May 26th, 2010, the Company received correspondence from the FDA forwarding a letter sent by Sandoz Inc. to the FDA challenging the Company’s 180 day exclusivity based on when the Company received tentative approval for its product.  The Company responded to the FDA on June 17, 2010.  On June 28th, 2010, Sandoz Inc. replied to the Company’s correspondence.  The Company issued a further letter to the FDA stating its position regarding the 180 day exclusivity on July 9, 2010.  The Company believes it received tentative approval timely, and that it has the potential to obtain 180 day exclusivity for this product.  It intends to defend that position vigorously.

Hmmmmm . . . . so what could this all mean?  We’ve previously discussed how different date calculation interpretations can lead to some interesting results.  The statements above seem to revolve around a similar issue. 

According to FDA’s Paragraph IV Patent Certification List, the first ANDA (presumably Caraco’s ANDA No. 77-571) for generic PRANDIN was submitted to FDA on February 10, 2005.  FDA granted tentative approval to Caraco for this application on August 10, 2007 – the date that is the 30-month anniversary from the date of submission of ANDA No. 77-571, depending on how you calculate 30 months (i.e., when do you begin and end counting).

Under FDC Act § 505(j)(5)(D)(i)(IV), which is one of the six 180-day exclusivity forfeiture provisions added to the FDC Act by the 2003 Medicare Modernization Act, 180-day exclusivity eligibility is forfeited if:

The first applicant fails to obtain tentative approval of the application within 30 months after the date on which the application is filed, unless the failure is caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed. [(Emphasis added)]

(And for completeness, the 2007 FDA Amendments Act clarified FDC Act § 505(j)(5)(D)(i)(IV), such that if “approval of the [ANDA] was delayed because of a [citizen] petition, the 30-month period under such subsection is deemed to be extended by a period of time equal to the period beginning on the date on which the Secretary received the petition and ending on the date of final agency action on the petition (inclusive of such beginning and ending dates) . . . .” (FDC Act § 505(q)(1)(G)).) 

So what does it mean to obtain tentative ANDA approval “within” 30 months after ANDA submission?  Does it mean that tentative approval is granted before the 30-month ANDA submission anniversary date or on the 30-month date (again, depending on when you begin and end counting)?  This would appear to be the issue in the ping-pong correspondence between Sandoz and Caraco.  The resolution of this issue will certainly be of intense interest to the generic drug industry, because FDA often grants tentative ANDA approval on the 30-month anniversary from the date of submission of an application. 

What does not appear to be at issue between Sandoz and Caraco is another issue that could come up in the future as a result of the recent decision concerning a Patent Term Extension (“PTE”) for a patent covering ANGIOMAX (bivalirudin).  In that case, Judge Claude Hilton of the U.S. District Court for the Eastern District of Virginia (Alexandria Division) ruled that a “next business day” interpretation of the PTE statute is reasonable, such that an after-hours approval of an NDA would not start the 60-day PTE application clock until the next business day.  In the case of generic PRANDIN, FDA’s tentative approval letter for ANDA No. 77-571 is date-stamped “8/10/2007 03:02:16 PM,” so it is not an after-hours tentative approval decision.  Nevertheless, it is not unusual for FDA to make such after-hours decisions, and it would not be surprising if someday someone were to argue that a “next business day” interpretation should be applied to FDC Act § 505(j)(5)(D)(i)(IV), such that tentative approval was not timely obtained.