Speculating About the Prospects of Exclusivity – A Potentially Risky Game

By Kurt R. Karst –   

Speculating about the prospects that FDA will grant a period of marketing exclusivity – 5-year New Chemical Entity (“NCE”) exclusivity, 3-year new clinical investigation exclusivity, 7-year orphan drug exclusivity, or any other type of exclusivity or add-on exclusivity – upon the approval of a marketing application can be a risky venture.  Just ask ViroPharma Incorporated (“ViroPharma”), which made certain statements about the prospect of FDA granting a period of 3-year exclusivity upon the December 14, 2011 approval of a supplemental NDA for VANCOCIN (vancomycin HCl) Capsules.  FDA denied 3-year exclusivity (see our previous post here) and ViroPharma quickly found itself embroiled in years-long class action securities litigation. 

Despite the risks of predicting whether or not FDA will grant marketing exclusivity (or a particular type of exclusivity), we still see investment groups and companies making predictions – some stronger than others.  Often these predictions aren’t accompanied by any legal analysis.  But, like tabloids, they’re interesting reading nevertheless.  As Sean Connery’s character William Forrester says to Rob Brown’s character Jamal Wallace in the 2000 film Finding Forrester “The Times is dinner, but The National Enquirer, that’s dessert.”

Take, for example, recent statements made by Flamel Technologies (“Flamel”) with respect to the company’s AKOVAZ (ephedrine sulfate) Injection, 50 mg/mL, which FDA approved on April 29, 2016 under NDA 208289 (a 505(b)(2) NDA) as a pressor agent to address clinically important hypotension in surgical settings.  Ephedrine sulfate has been marketed by Akorn Pharmaceuticals (“Akorn”), among others, for many years without approval of a marketing application.  According to a Flamel press release, AKOVAZ “is the first [NDA] to receive approval from the FDA for ephedrine sulfate.”  An investment note issued after the approval of AKOVAZ goes further (not “farther,” right Jamal?):

The FDA will need to address the marketing status of the [Akorn] grandfathered product and [Flamel] told us this morning the FDA will make a decision on Akovaz NCE (new chemical entity) status sometime this month.  In theory, NCE status would confer 5-yrs of regulatory exclusivity.  While [Flamel] mgmt has downplayed their ability to secure NCE status on Akovaz in the past, the mgmt team informed us it remains possible the molecule may be approved with NCE status or that a scenario may exist where [Flamel] and [Akorn] both get NCE status, e.g. shared NCE status that precludes other brands and generics from coming to market over the next 5-yrs.

At first blush, it might appear that AKOVAZ contains an NCE eligible for 5-year exclusivity.  After all, searches of Drugs@FDA and the Orange Book don’t show any FDA approval of a marketing application for a drug product containing “ephedrine” or “ephedrine sulfate” – just various NDAs and ANDAs for drug products containing some form of pseudoephedrine.  And although FDA has identified the AKOVAZ NDA as a “Chemical Type 7” NDA – i.e., “Drug already marketed without an approved NDA” – even that status is not an absolute indicator of NCE exclusivity eligibility.  FDA’s Manual of Policies and Procedures (“MAPP”) on NDA Classification Codes (MAPP 5018.2) explains that:

A Type 7 NDA is for a drug product that contains an active moiety that has not been previously approved in an application, but has been marketed in the United States. This classification applies only to the first NDA approved for a drug product containing this (these) active moiety(ies).

Type 7 NDAs include, but are not limited to:

(1) The first post-1962 application for an active moiety marketed prior to 1938.
(2) The first application for an active moiety first marketed between 1938 and 1962 that is identical, related or similar (IRS)6 to a drug covered by a Drug Efficacy Study Implementation (DESI) notice.
(3) The first application for an IRS drug product first marketed after 1962.
(4) The first application for an active moiety that was first marketed without an NDA after 1962.

An analysis of NCE exclusivity eligibility requires more than just consulting Drugs@FDA and the Orange Book, because those databases are are incomplete.  It requires, at the very least, a look-back at all NDAs approved by FDA under FDC Act § 505 since the FDC Act was signed into law by President Roosevelt on June 25, 1938, including those many, many NDAs whose approvals were withdrawn in the early 1970s under FDA’s NDA “clean-up initiative” (35 Fed. Reg. 11,929 (July 24, 1970)). 

That’s where FDA’s so-called “Ever-Approved List” comes in handy.  It’s a list of drug products purported to have been approved by FDA since 1938 under a marketing application submitted pursuant to FDC Act § 505.  The “Ever-Approved List” is not readily available, but fortunately, we have a copy of the list.  A review of that list shows that FDA has approved many NDAs, starting in 1938, for drug products containing “ephedrine” and “ephedrine sulfate.”  Consider, for example:

• NDA 000016 for 3M Pharmaceuticals Inc.’s RINOFEDS Capsules, which FDA approved on March 16, 1939, and that contains atropine, ephedrine, and phenobarbital (approval withdrawn on 1/30/1973);
• NDA 000212 for Glaxo Wellcome Inc.’s VAPOROLE Nasal Spray, which FDA approved on December 14, 1938, and that contains ephedrine 1% (approval withdrawn on August 6, 1971);  
• NDA 000029 for Reese Chemical Co.’s BLUE Tablets, which FDA approved on September 20, 1938, and that contains calcium lactate, ephedrine sulfate, and iodobenzoic acid (approval withdrawn on July 24, 1970);
• NDA 002441 for Smith Miller and Patch Inc.’s Tablet dosage form drug product approved on May 4, 1940, and that contains ephedrine sulfate, phenobarbital, and potassium chloride;
• NDA 003167 for PHD Laboratory Inc’s DEX-O-FED Oral Drops, which FDA approved on Decemner 13, 1940, and that contains chlorobutanol 30% and ephedrine sulfate 50% (approval withdrawn on July 24, 1970); and, more “recently”;
• NDA 011768 for Roerig’s (a Division of Pfizer Inc.) MARAX Tablets, which FDA approved on May 27, 1959, and that contains ephedrine sulfate, hydroxyzine HCl, and theophylline (approval withdrawn on August 7, 1998; 63 Fed. Reg. 36,923 (July 8, 1998)); and
• NDA 012879 for Roerig’s (a Division of Pfizer Inc.) MARAX and MARAX-DF Oral Syrup, which FDA approved on August 21, 1961 and May 24, 1963, respectively, and that contain ephedrine sulfate, hydroxyzine HCl, and theophylline (approval withdrawn on August 7, 1998; 63 Fed. Reg. 36,923 (July 8, 1998)).

Given these previous NDA approvals (as well as several more not listed here), it’s difficult to understand how AKOVAZ could contain an NCE that should be awarded 5-year exclusivity.  But that’s a determination FDA has to make.  How FDA’s determination ends up squaring with predictions made about the drug remains to be seen, but we will likely know in the coming weeks or months.