Legislation to Ban Authorized Generics During 180-Day Exclusivity Period Makes a Comeback in Congress

By Kurt R. Karst –      

Last week, substantively identical legislation was introduced in both the U.S. House of Representatives and in the U.S. Senate to amend the FDC Act to prohibit the manufacture, marketing, sale, or distribution of an authorized generic version of an NDA-approved drug until any period of 180-day exclusivity associated with an ANDA for a generic version of that NDA-approved drug has expired or has been forfeited.  The Senate version of the bill, S. 373, is titled the “Fair Prescription Drug Competition Act.”  The bill was introduced by Sen. John Rockefeller (D-WV), and is co-sponsored by Sens. Daniel Inouye (D-HI), Patrick Leahy (D-VT), Charles Schumer (D-NY), Jeanne Shaheen (D-NH), and Debbie Stabenow (D-MI).  The House version of the bill, H.R. 741, was introduced by Rep. Jo Ann Emerson (R-MO).  The bills introduced in the 112th Congress to ban authorized generics during the pendency of 180-day exclusivity are the latest iterations of legislation that dates back to at least the 110th Congress, when Rep. Emerson and Sen. Rockefeller introduced H.R. 806 and S. 438, respectively – see our previous post here.

Both S. 373 and H.R. 741 would amend FDC Act § 505 to add new subsection (w) – “Prohibition of Authorized Generic Drugs” – to state:

(1) IN GENERAL- Notwithstanding any other provision of this Act, no holder of a new drug application approved under [FDC Act § 505(c)] shall manufacture, market, sell, or distribute an authorized generic drug, directly or indirectly, or authorize any other person to manufacture, market, sell, or distribute an authorized generic drug.

(2) AUTHORIZED GENERIC DRUG- For purposes of this subsection, the term ‘authorized generic drug’ –

(A) means any version of a listed drug (as such term is used in [FDC Act § 505(j)]) that the holder of the new drug application approved under FDC Act § 505(c)] for that listed drug seeks to commence marketing, selling, or distributing, directly or indirectly, after receipt of a notice sent pursuant to [FDC Act § 505(j)(2)(B)] with respect to that listed drug; and

(B) does not include any drug to be marketed, sold, or distributed –

(i) by an entity eligible for 180-day exclusivity with respect to such drug under [FDC Act § 505(j)(2)(B)(iv)]; or

(ii) after expiration or forfeiture of any 180-day exclusivity with respect to such drug under [FDC Act § 505(j)(5)(B)(iv)].

S. 373 would also make a technical, conforming change with respect to the applicability of the definition of “authorized generic drug” at FDC Act § 505(t)(3).  FDC Act § 505(t) – “Database for Authorized Generic Drugs” – was added to the law by Section 920 of the 2007 FDA Amendments Act and requires FDA to compile and publish a complete list of all authorized generic drugs identified in annual reports submitted to the Agency since January 1, 1999.  On July 28, 2009, FDA issued final regulations implementing FDC Act § 505(t) – see our previous post here.  FDA also maintains an online database of authorized generic drugs. 

According to Sen. Rockefeller, “the 180-day exclusivity incentive to launch a patent challenge [created by the Hatch-Waxman Act] is being widely undermined by authorized generics,” which are “becoming even more prevalent as patents on some of the best-selling brand name pharmaceuticals expire.”  Passage of the Fair Prescription Drug Competition Act would, according to Sen. Rockefeller, “revitalize and protect the true intent of the 180-day marketing exclusivity period created in the Hatch-Waxman Act.”

The issue of marketing an authorized generic during the pendency of an ANDA sponsor’s 180-day exclusivity has touched each branch of the federal government.  (See an article we published on the topic a few years ago in RAPS Focus.)  In July 2004, FDA denied two citizen petitions (Docket Nos. FDA-2004-P-0400 and FDA-2004-P-0146) challenging the marketing of authorized generics.  FDA concluded, in part, that “[t]he marketing of authorized generics during the 180-day exclusivity period is a long-standing, pro-competitive practice, permissible under the [FDC Act].”  FDA’s petition decisions were challenged in court, but the Agency ultimately prevailed.  (FDA has not yet substantively responded to a third petition – Docket No. FDA-2004-P-0401.)

In June 2009, the Federal Trade Commission (“FTC”) announced the publication of an interim report, titled “Authorized Generics: An Interim Report,” presenting the first set of results from an FTC study conducted at the request of several members of Congress to examine the short-term and long-term effects of authorized generics on competition in the prescription drug marketplace – see our previous post here.  According to the report, “drug prices are lower when authorized generics are marketed against a single generic drug than when they are not.”  The FTC has not yet issued a more comprehensive report on the topic.