The PATIENT Act’s Proposed Exclusivity-Stacking Two-Year Extension: Is it an Incentive, a Reverse Incentive . . . or Both?

By Kurt R. Karst –      

Over the past few months we’ve seen various pieces of the 21st Century Cures Initiative discussion draft released as stand-alone bills in both the U.S. House of Representatives and the U.S. Senate (see our FDA Legislation Tracker).  One section of the discussion draft that caught our attention was Section 1241 (on pages 118-122), titled “Extended Exclusivity Period For Certain New Drug Applications and Abbreviated New Drug Applications.”  As we noted back in January 2015 (see our previous post here), Section 1241 would continue a trend of “exclusivity stacking” started in 1997 with the creation of 6-month pediatric exclusivity by extending a period of 3-year new clinical investigation exclusivity by two years if the NDA sponsor provides certain information. 

Section 1241 recently emerged from the House as a stand-alone bill with a sponsor and a name.  Earlier this month, Rep. Gus Bilirakis (R-12) introduced H.R. 1353, the “Promoting Access for Treatments Ideal in Enhancing New Therapies Act of 2015” (or “PATIENT Act of 2015”).  The PATIENT Act of 2015 is substantively identical to Section 1241 of the 21st Century Cures Initiative discussion draft.  We’re not sure if it will be included in the much-anticipated Version 2.0 of the 21st Century Cures Initiative, but we thought it would be worth taking a closer look at the bill. 

H.R. 1353 is relatively straightforward.  It would amend the statutory sections governing the period of 3-year new clinical investigation exclusivity created by the Hatch-Waxman Amendments, which are found in both the ANDA (FDC Act § 505(j)(5)(F)(iii)-(iv)) and 505(b)(2) application (FDC Act § 505(c)93)(E)(iii)-(iv)) provisions, to add new clauses.  Those proposed clauses state that 3-year exclusivity is extended by two years if the NDA sponsor provides documentation to FDA demonstrating either that the new clinical investigations conducted or sponsored by the NDA applicant and determined by FDA to be essential to the approval of the NDA (or Supplemental NDA) support the approval of a new indication or use for the NDA’d drug, or that the drug that is the subject of the NDA (or Supplemental NDA) has been reformulated or redesigned so that the drug can reasonably (as determined by FDA in consultation with the applicant) be expected:

1. to promote greater patient adherence to an approved treatment regime relative to the previously approved formulation or design of the drug;
2. to reduce the public-health risks associated with the drug relative to the previously approved formulation or design of the drug;
3. to reduce the manner or extent of side effects or adverse events associated with the previously approved formulation or design of the drug;
4. to provide systemic benefits to the health care system relative to the previously approved formulation or design of the drug; or
5. to provide other patient benefits that are comparable to the benefits described in items 1 through 4 above.

Not later than 180 days after the enactment of the PATIENT Act of 2015, FDA would be required to promulgate final regulations to implement the Act, including regulations establishing a process under which FDA would consult with NDA sponsors who claim eligibility for the 2-year extension based on one of the five items noted above.

Though the first provision extending exclusivity by two years based on the approval of a new indication or use of a previously approved drug would cover a lot of changes, it is the second provision concerning drugs reformulated or redesigned that really seems to be the focus of the PATIENT Act of 2015. 

There are a lot of changes that can be placed into the reformulation and redesign buckets identified in the bill, including, for example, the development of abuse-deterrent opioid formulations, and the change in or elimination of an excipient.  But does the added incentive proposed by the PATIENT Act of 2015 also create a reverse incentive?  That is, with the possibility of added exclusivity, is there an incentive for companies to start at the bottom and work their way to the top, obtaining multiple approvals and periods of exclusivity along the way for product improvements?  And to the extent an older version of a drug is determined by FDA to have been withdrawn for reasons of safety or effectiveness, that drug would no longer be available as a listed drug for ANDA or 505(b)(2) submission purposes.  Perhaps those types of issues would be part of the proposed FDA consultation process, but the PATIENT Act of 2015 seems to envision a process in which FDA is confined to consider a new drug vis-à-vis the previously approved formulation or drug design.