A Hole in One? Eagle Sues FDA Over BENDEKA Orphan Drug Exclusivity in Depomed-like Lawsuit

By Kurt R. Karst –

On April 27, 2016, Eagle Pharmaceuticals, Inc. (“Eagle”) filed a Complaint in the U.S. District Court for the District of Columbia alleging that FDA violated the Administrative Procedure Act (“APA”) when the Agency refused to grant periods of 7-year orphan drug exclusivity upon the December 7, 2015 approval of Eagle’s 505(b)(2) NDA 208194 for BENDEKA (bendamustine HCl) Injection, 100 mg/4 mL (25 mg/mL) for both the treatment of patients with Chronic Lymphocytic Leukemia (“CLL”) and for the treatment of patients with indolent B-cell Non-Hodgkin Lymphoma (“NHL”) that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen.  We suspected that a lawsuit against FDA might be in the works when Eagle announced in late March 2016 that FDA refused to grant orphan drug exclusivity for BENDEKA and that the company was “evaluating all options to challenge the FDA’s decision.”

The story of BENDEKA follows a path similar to that of Depomed Inc.’s (“Depomed’s”) GRALISE (gabapentin) Tablets (NDA 022544), and it raises for a second time in court the issue of whether FDA can lawfully require a company to demonstrate “clinical superiority” to obtain orphan drug exclusivity. 

FDA designated BENDEKA as an orphan drug on July 2, 2014 for both the treatment of CLL and NHL. Because FDA had previously approved Bendamustine HCL for these two uses – specifically, Teva Pharmaceutical Industries Ltd.’s (“Teva’s”), TREANDA (bendamustine HCl) for Injection, for Intravenous Infusion (NDA 022249) – FDA required that Eagle provide a plausible hypothesis of clinical superiority to obtain orphan drug designation. As a ready-to-dilute concentrate solution for injection administered by infusion over 10 minutes after dilution in 50 mL of sodium chloride or a saline/dextrose mixture, FDA accepted Eagle’s hypothesis that the lower volume could provide a benefit to CLL and NHL patients. 

Fast-forward to December 7, 2015. Although Teva’s orphan drug exclusivity (as extended by pediatric exclusivity) for TREANDA for the treatment of CLL expired on September 20, 2015, orphan drug exclusivity for TREANDA for the treatment of NHL (as extended by pediatric exclusivity) remains in effect until May 01, 2016.  (As an aside, we note that after determining in response to a Citizen Petition [Docket No. FDA-2015-P-3980] that generic drug applicants could omit information on the protected NHL use, on March 24, 2016, FDA approved two ANDAs for generic TREANDA for the treatment of CLL [i.e., ANDA 204771 and ANDA 205476].)  As a result of a licensing agreement between Teva and Eagle, however, Teva agreed to waive unexpired orphan drug exclusivity with respect to BENDEKA.  That waiver paved the way to the December 2015 approval of BENDEKA without Eagle having to “break” Teva’s unexpired orphan drug exclusivity for TREANDA for the treatment of NHL by demonstrating “clinical superiority” over TREANDA.  But the issue of “clinical superiority” remained an issue in FDA’s mind for Eagle to be granted orphan drug exclusivity.

FDA’s orphan drug regulations define a “clinically superior” drug as “a drug . . . shown to provide a significant therapeutic advantage over and above that provided by an approved orphan drug (that is otherwise the same drug)” in one of three ways: (1) greater effectiveness as assessed by effect on a clinically meaningful endpoint in adequate and well controlled trials; (2) greater safety in a substantial portion of the target population; or (3) demonstration that the drug makes a major contribution to patient care. (For a list of clinical superiority precedents, see our previous post here.)  As FDA explained in a 2012 petition response concerning orphan drug exclusivity for WILATE (von Willebrand Factor/Coagulation Factor VIII Complex (Human)) (see our previous post here), as well in the preambles to FDA’s 2011 proposed rule and 2013 final rule amending the Agency’s orphan drug regulations (see our previous posts here and here), where clinical superiority is concerned, FDA says that the standard for obtaining designation is different from the standard for obtaining exclusivity:

Though the sponsor of a subsequent orphan drug must set forth a plausible hypothesis of clinical superiority over the previously approved drug at the designation stage, such a sponsor faces a higher standard at the time of approval. At approval, the sponsor of a drug which was designated on the basis of a plausible hypothesis of clinical superiority must demonstrate that its drug is clinically superior to the previously approved drug.  Should the sponsor fail to do so, then the subsequent drug will be considered to be the same drug as the previously approved drug, and will not be able to gain marketing approval if the previously approved drug’s orphan-drug exclusive approval period is still running.  Once this exclusivity has expired, the subsequent drug may be approved . . . , but it will not be eligible for orphan-drug exclusivity because the same drug has already been approved for the same orphan indication.

FDA’s heightened standard for demonstrating clinical superiority to obtain orphan drug exclusivity was at the heart of Depomed’s September 2012 lawsuit against FDA (see our previous post here).  Depomed prevailed in the lawsuit.  In a September 2014 Memorandum Opinion, Judge Ketanji Brown Jackson of the U.S. District Court for the District of Columbia decided the case on Chevron Step 1 grounds, finding that “the plain language of the Orphan Drug Act requires the FDA to recognize exclusivity for Gralise” (see our previous post here).  The court stated that the statute:

employs the familiar and readily diagrammable formula, ‘if x and y, then z.’ Congress has crafted its command to the Secretary of the FDA in a manner that sets forth two circumstances – a drug that has been designated for a rare disease or condition, and the FDA’s approval of a marketing application for that drug – that, if present, result in a particular consequence: a seven-year period of abstinence regarding marketing approval for other such drugs.

FDA decided not to appeal Judge Jackson’s decision. Instead, FDA published in the December 23, 2014 Federal Register a “clarification of policy” notice in which the Agency addresses the effects of the Depomed court decision (see our previous post here).  In that notice, FDA “double-downed” on the Agency’s pre-Depomed regulations.  In short, FDA says that Judge Jackson’s decision is limited to GRALISE, and that the Agency will continue to apply its clinical superiority regulatory paradigm insofar as orphan drug exclusivity is concerned.  Specifically, FDA states:

In consideration of any uncertainty created by the court’s decision in Depomed, the Agency is issuing this statement. It is the Agency’s position that, given the limited terms of the court’s decision to GRALISE, FDA intends to continue to apply its existing regulations in part 316 to orphan-drug exclusivity matters.  FDA interprets section 527 of the FD&C Act and its regulations (both the older regulations that still apply to original requests for designation made on or before August 12, 2013, as well as the current regulations) to require the sponsor of a designated drug that is the “same” as a previously approved drug to demonstrate that its drug is “clinically superior” to that drug upon approval in order for the subsequently approved drug to be eligible for orphan-drug exclusivity.

At the time, we commented that FDA’s out-of-left-field-strategy might be a way for the Agency to draw out another lawsuit from an affected sponsor so that FDA could have another crack to relitigate the issue in court. That appears to almost have happened in the case of another Eagle drug – RYANODEX (dantrolene sodium) for Injectable Suspension – where Eagle issued what we termed a “Depomed Threat.”  But in that case, FDA ultimately granted Eagle orphan drug exclusivity after finding a basis on which to find that clinical superiority was demonstrated (see our previous post here).  No “Depomed Threat” deterred FDA in the case of BENDEKA, so we’re off to court where FDA will once again attempt to defend the Agency’s interpretation of the statute to require a demonstration of clinical superiority for a company with orphan drug designation to obtain orphan drug exclusivity.

Citing and quoting from what appears to be a rather lengthy March 24, 2016 FDA letter ruling, Eagle says in the company’s Complaint that “FDA denied Bendeka exclusivity . . . taking essentially the same position it took in Depomed”:

First, the letter ruling explained FDA’s position that Depomed was wrongly decided. Id. at 39 (“[T]he Depomed court erred in not deferring to FDA’s statutory interpretation ….”); id. at 32 (“We are not bound to follow the Depomed decision, and we do not believe that the Depomed court’s conclusion is compelled by the statute ….” (internal citation omitted)); id. at 9 (“Because FDA concluded that the decision was inconsistent with FDA’s clinical superiority framework and the important policy interests at stake, the Agency has continued to implement its long-standing clinical superiority framework for designation and exclusivity decisions.”).

Second, FDA defended its regulatory scheme: FDA acknowledged that it had indeed granted orphan drug designation for Bendeka, but argued that Congress’s exclusivity incentive for orphan drugs is not particularly important compared to other incentives in the statute. See id. at 10, 34. Thus, FDA argued that, despite granting orphan drug designation, the agency was free to deny exclusivity at the end of the process. Id. at 32-40.

Third, despite FDA’s conclusion when it designated Bendeka as an orphan drug that Bendeka presented a plausible hypothesis of clinical superiority over a similar drug named Treanda, FDA reversed course in 2016. FDA now concluded that, although Bendeka is safe and effective, Eagle had not proffered sufficient evidence that Bendeka is in fact clinically superior to Treanda under the regulatory requirement this Court found unlawful in Depomed. Id. at 32.

“Had FDA respected Judge Jackson’s [Depomed] ruling in 2014,” says Eagle, “this case would not be necessary.  Unfortunately, FDA’s defiance of this Court’s prior order leaves Plaintiff no choice but to file this suit.”

Eagle is seeking both declaratory and injunctive relief. Eagle wants, among other things, a declaration that FDA’s refusal to grant orphan drug exclusivity to Eagle for Bendeka violates the APA, that Eagle is entitled to orphan drug exclusivity, and that FDA’s orphan drug regulations at 21 C.F.R. §§ 316.3(b)(12), 316.31(a), 316.34(a), (c) are invalid under the FDC Act, insofar as they purport to permit FDA to not recognize orphan drug exclusivity for BENDEKA; and injunctive relief “effectuating Eagle’s orphan drug exclusivity by enjoining [FDA] from approving any other drug covered by Eagle’s exclusivity for the treatment of CLL or indolent B-cell NHL until December 7, 2022.”  The case has been assigned to Judge Gladys Kessler.