Citizen Petition Requests Rulemaking Process for 505(b)(2) NDA Therapeutic Equivalence Rating Decisions

By Kurt R. Karst –    

A recent Citizen Petition submitted on behalf of Abbott Laboratories (“Abbott”) calls into question FDA’s authority for granting Therapeutic Equivalence (“TE”) ratings (i.e., “A” ratings) for drug products approved pursuant to FDC Act § 505(b)(2).  Specifically, Abbott’s petition requests that FDA refrain from granting a TE rating to any 505(b)(2) application approved version of ANDROGEL (testosterone gel) until FDA has conducted a rulemaking under the Administrative Procedure Act (“APA”) “to modify the procedures that apply to such ratings.”  That rulemaking, says Abbott, “should establish procedures for (1) FDA’s assignment of TE ratings to drugs that are the subject of [505(b)(2) drugs] and (2) FDA’s public listing of such ratings in [the Orange Book].”  At a minimum, FDA’s new regulations should “characterize FDA’s assignment and listing of TE ratings for § 505(b)(2) drugs as either orders or substantive rules for purposes of the APA, describe what legal process is available to interested parties for commenting on or challenging a proposed listing, and establish a coherent set of standards governing such a listing.” 

The submission of 505(b)(2) applications for certain versions of transdermal testosterone gel drug products – specifically ANDROGEL and TESTIM – was the subject of two FDA Citizen Petition responses (here and here).  In each case, FDA determined that proposed generic transdermal testosterone gel drug products containing new or different inactive ingredients must conduct skin transfer, hand-washing, and possibly showering studies, and that such studies are outside the scope of an ANDA submission. 

Although “A” TE codes are typically associated with generic versions of a brand-name drug approved under an ANDA, a drug product approved under a 505(b)(2) application may also be assigned an “A” rating to a listed drug (which was  approved either under a “full” 505(b)(1) NDA or a 505(b)(2) application).   Some examples of A-rated 505(b)(2) drug products from the current edition of the Orange Book include Pamidronate Disodium (NDA No. 021113), Fluorescein Sodium (NDA No. 022186), Nicardipine HCl (NDA No. 022276), and Azithromycin (NDA No. 050809).

Much has changed in the world since FDA’s 1980 final rule (45 Fed. Reg. 72,582 (Oct. 31, 1980) amending 21 C.F.R. § 20.117(a)(3) to make available “a list of FDA-approved prescription drug products, together with therapeutic equivalence evaluations of products in the List that are available from more than one source” (i.e., the Orange Book).  Too much, in fact, according to Abbott. 

Back in 1979 when FDA proposed the Orange Book (44 Fed. Reg. 2932 (Jan. 12, 1979)), which was preceded by a December 1978 lawsuit challenging FDA’s authority to issue the Orange Book (Pharm. Mfrs. Ass’n v. Kennedy, 471 F. Supp. 1224 (D. Md. 1979)), and again in the 1980 final rule establishing the Orange Book, FDA took the position that TE ratings are “nonregulatory” (and therefore not rules or orders subject to APA rulemaking) because they are solely advisory and that they entail only the application of FDA’s TE criteria (i.e., pharmaceutical equivalence, bioequivalence, adequate labeling, and cGMP compliance) to information that is already in FDA’s files that the Agency gathers as part of the approval process.  For example, FDA, in rejecting the proposition that the Orange Book “constitute[s] an order or a rule as defined in the [APA],” commented in the preamble to the 1980 final rule that:

the List neither determines nor adjudicates the legal rights of any drug manufacturer or distributor; it does not impose any requirement or restriction upon any person; it does not interpret or apply the act in a manner that creates any obligation on any person; it makes no recommendation as to which products persons should purchase, prescribe, or dispense, or conversely, which products should be avoided.

Moreover, FDA says in the preamble to the final rule that:

To the extent that the List sets forth FDA's evaluations of the therapeutic equivalence of drug products that have been approved, it contains FDA’s advice to the public and to the States regarding an important public health matter. These evaluations do not constitute determinations that any products are in violation of the act or that any products are preferable to others. These are nonregulatory evaluations that are based on the application of certain criteria to information contained in FDA files. Most of the reasons cited by the comments for demanding an evidentiary hearing (for example, determinations of effectiveness and bioequivalence) concern determinations that were made by FDA in clearly defined proceedings when there existed the right to an evidentiary hearing. Thus, the notice and comment procedure used in adopting this List is sufficient.

According to Abbott, “[e]ven if this reasoning was correct” a few decades ago, it is no longer correct today, “at least as applied to § 505(b)(2) drugs,” for two primary reasons:

First, TE listings are now far more than advisory.  They have been expressly incorporated into state pharmacy practice statutes that control which drug products pharmacists may dispense and, therefore, which drug products patients receive when filling prescriptions at the pharmacy.  TE listings also directly affect federal, state, and private insurance reimbursement schemes, and are expressly relied upon in Medicare Part B, among other federal laws.  These listings materially impact the economic rights of competing drug sponsors.  Thus, TE listings have automatic and significant binding legal consequences under state and federal law.

Second, TE listings for § 505(b)(2) drugs can in no way be characterized as merely the product of information already “contained in FDA files” that is based upon findings made in the course of the § 505(b)(2) approval process.  The Agency can perhaps make a plausible case for characterizing TE listings for duplicate drugs approved under abbreviated new drug applications, or “ANDAs,” as merely a summary of the statutory findings that FDA makes in approving such drugs under § 505(j)(1) of the FDCA.  But even if so, FDA cannot make the same case for § 505(b)(2) drugs because the elements of a TE evaluation cannot be found in § 505(b)(2) (or any other statutory provision applicable to § 505(b)(2) drugs).

Among other things, Abbott relies on the 2001 decision of the U.S. Court of Appeals for the District of Columbia Circuit in Tozzi v. U.S. Dep’t of Health & Human Servs., 271 F.3d 301 (D.C. Cir. 2001) for the proposition that there is precedent establishing that TE listings have a binding legal effect.  In that case, concerning HHS’s decision to change the carcinogenic status of dioxin in a report, the Court explained that “[r]eviewability under the APA hinges upon whether the listing has ‘legal effect, which in turn is a function of the agency’s intention to bind either itself or regulated parties.’”  Similarly, says Abbott, “FDA’s listing of TE ratings for particular drugs, like the Secretary of HHS’s decision to classify substances as known or suspected carcinogens in the Report, ‘triggers obligations’ under federal and state law.  Under the reasoning of Tozzi, therefore, that listing has ‘binding [legal] effect’ for APA purposes.”  Moreover, according to Abbott, “Tozzi demonstrates that it is no longer the case, if it ever was, that FDA’s listing of TE ratings can be characterized as purely informational and advisory – and thus without regulatory effect.”

Abbott’s Citizen Petition is not the first time TE ratings with respect to 505(b)(2)-approved drug products have caused controversy.  In May 2009, FDA, in responding to a Citizen Petition, affirmed its decision to grant an AP rating for Nicardipine HCl (NDA No. 022276).  Several years ago, FDA also had to address TE ratings with respect to Levothyroxine Sodium drug products approved under FDC Act § 505(b)(2).