FDA User Fee Package Includes “Technical Corrections” to Address Orphan Drug Clinical Superiority

Earlier this week, the U.S. Senate Health, Education, Labor, and Pensions (“HELP”) Committee released a “Manager’s Amendment” to S. 934, the FDA Reauthorization Act of 2017 (“FDARA”). The 171-page Manager’s Amendment, which is slated for a HELP Committee vote later this week, includes several riders to the “clean” UFA (User Fee Act) package introduced last month. The package of riders includes provisions addressing drug importation and counterfeiting, device accessory classification, over-the-counter hearing aids, risk-based device inspections, generic drug product-specific bioequivalence guidance, real-world evidence, and pediatric drug development, among other things. But the rider that really caught our attention is Section 608 of the package.  Titled “Technical Corrections,” Section 608 would amend provisions added to the FDC Act by the Orphan Drug Act and that are the topic of current litigation.

Here’s what Section 608 of the Manager’s Amendment says:

SEC. 608. TECHNICAL CORRECTIONS.

Section 527 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360cc) is amended—

(1) in subsection (a), in the matter following paragraph (2), by striking “such drug for such disease or condition” and inserting “the same drug for the same disease or condition”;

(2) in subsection (b)—

(A) in the matter preceding paragraph (1), by striking “If an application” and all that follows through “such license if” and inserting “During the 7-year period described in subsection (a) for an approved application under section 505 or license under section 351 of the Public Health Service Act, the Secretary may approve an application or issue a license for a drug that is otherwise the same, as determined by the Secretary, as the already approved drug for the same rare disease or condition if”;

(B) in paragraph (1), by striking “notice” and all that follows through “assure” and inserting “of exclusive approval or licensure notice and opportunity for the submission of views, that during such period the holder of the exclusive approval or licensure cannot ensure”; and

(C) in paragraph (2), by striking “such holder provides” and inserting “the holder provides; and

(3) by adding at the end the following:

(c) CONDITION OF CLINICAL SUPERIORITY.—

“(1) IN GENERAL.—If a sponsor of a drug that is designated under section 526 and is otherwise the same, as determined by the Secretary, as an already approved or licensed drug is seeking exclusive approval or exclusive licensure described in subsection (a) for the same rare disease or condition as the already approved drug, the Secretary shall require such sponsor, as a condition of such exclusive approval or licensure, to demonstrate that such drug is clinically superior to any already approved or licensed drug that is the same drug.

“(2) DEFINITION.—For purposes of paragraph (1), the term ‘clinically superior’ with respect to a drug means that the drug provides a significant therapeutic advantage over and above an already approved or licensed drug in terms of greater efficacy, greater safety, or by providing a major contribution to patient care.

“(d) REGULATIONS.—The Secretary may promulgate regulations for the implementation of subsection (c). Until such time as the Secretary promulgates regulations in accordance with this subsection, any definitions set forth in regulations implementing this section that were promulgated prior to the date of enactment of the FDA Reauthorization Act of 2017 shall continue to apply.”.

And here’s how those proposed changes would appear in the statute if enacted (deletions shown in strikethrough typeface and additions in bolded and italicized red typeface):

PROTECTION FOR DRUGS FOR RARE DISEASES OR CONDITIONS

SEC. 527. [21 U.S.C. 360cc] (a) Except as provided in subsection (b), if the Secretary—

(1) approves an application filed pursuant to section 505, or

(2) issues a license under section 351 of the Public Health Service Act

for a drug designated under section 526 for a rare disease or condition, the Secretary may not approve another application under section 505 or issue another license under section 351 of the Public Health Service Act for such drug for such disease or condition the same drug for the same disease or condition for a person who is not the holder of such approved application or of such license until the expiration of seven years from the date of the approval of the approved application or the issuance of the license.  Section 505(c)(2) does not apply to the refusal to approve an application under the preceding sentence.

(b) If an application filed pursuant to section 505 is approved for a drug designated under section 526 for a rare disease or condition or if a license is issued under section 351 of the Public Health Service Act for such a drug, the Secretary may, during the seven-year period beginning on the date of the application approval or of the issuance of the license, approve another application under section 505 or issue a license under section 351 of the Public Health Service Act, for such drug for such disease or condition for a person who is not the holder of such approved application or of such license if During the 7-year period described in subsection (a) for an approved application under section 505 or license under section 351 of the Public Health Service Act, the Secretary may approve an application or issue a license for a drug that is otherwise the same, as determined by the Secretary, as the already approved drug for the same rare disease or condition if—

(1) the Secretary finds, after providing the holder notice and opportunity for the submission of views, that in such period the holder of the approved application or of the license cannot assure of exclusive approval or licensure notice and opportunity for the submission of views, that during such period the holder of the exclusive approval or licensure cannot ensure the availability of sufficient quantities of the drug to meet the needs of persons with the disease or condition for which the drug was designated; or

(2) such holder provides the holder provides the Secretary in writing the consent of such holder for the approval of other applications or the issuance of other licenses before the expiration of such seven-year period.

(c) CONDITION OF CLINICAL SUPERIORITY.—

(1) IN GENERAL.—If a sponsor of a drug that is designated under section 526 and is otherwise the same, as determined by the Secretary, as an already approved or licensed drug is seeking exclusive approval or exclusive licensure described in subsection (a) for the same rare disease or condition as the already approved drug, the Secretary shall require such sponsor, as a condition of such exclusive approval or licensure, to demonstrate that such drug is clinically superior to any already approved or licensed drug that is the same drug.

(2) DEFINITION.—For purposes of paragraph (1), the term ‘clinically superior’ with respect to a drug means that the drug provides a significant therapeutic advantage over and above an already approved or licensed drug in terms of greater efficacy, greater safety, or by providing a major contribution to patient care.

(d) REGULATIONS.—The Secretary may promulgate regulations for the implementation of subsection (c). Until such time as the Secretary promulgates regulations in accordance with this subsection, any definitions set forth in regulations implementing this section that were promulgated prior to the date of enactment of the FDA Reauthorization Act of 2017 shall continue to apply.

The changes above would reflect FDA’s current and long-standing interpretation of the statute – that to obtain a period of orphan drug exclusivity for a drug that is otherwise the “same drug” as a previously approved drug (i.e., a drug containing the same active moiety and that is for the same orphan disease or condition), the sponsor must demonstrate that its product is clinically superior (by showing greater efficacy, greater safety, or by providing a major contribution to patient care) to the previously approved drug – but they would also legislatively undo a September 2014 court decision.

As we previously posted, in a September 2014 Memorandum Opinion, Judge Ketanji Brown Jackson of the U.S. District Court for the District of Columbia ruled against FDA in a case brought by Depomed Inc. (“Depomed”) challenging the Agency’s refusal to grant Depomed a period of orphan drug exclusivity for the company’s orphan drug-designated GRALISE (gabapentin) Tablets (NDA 022544) because the company did not demonstrate the clinical superiority of GRALISE vis-à-vis NEURONTIN (gabapentin). Judge Jackson 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.”

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.

But then another similar lawsuit was filed in April 2016 by Eagle Pharmaceuticals, Inc. (“Eagle”) alleging that FDA violated the Administrative Procedure Act when the Agency refused to grant periods of 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 and for the treatment of patients with indolent B-cell Non-Hodgkin Lymphoma that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen (see our previous post here).  FDA previously approved TREANDA (bendamustine HCl) for Injection, for Intravenous Infusion (NDA 022249) for these same orpan diseases and determined that Eagle did not demonstrate the clinical superiority of BENDEKA vis-à-vis TREANDA.  Eagle says in the company’s Complaint that “FDA denied Bendeka exclusivity . . . taking essentially the same position it took in Depomed,” and that “[h]ad FDA respected Judge Jackson’s [Depomed] ruling in 2014, 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.”  Both parties have filed Motions for Summary Judgment (here and here).  A decision in Eagle’s case is still pending.