Schrader Amendment to House UFA Package Creates New “Competitive Generic Therapy” Pathway and 180-Day Exclusivity

Earlier this week, the Subcommittee on Health of the House Energy and Commerce Committee held a mark-up session of several bills, including H.R. 2430, the FDA Reauthorization Act of 2017 (“FDARA”). (The Senate version of FDARA, S. 934, passed out of committee earlier this month.)  Initially proposed as a “clean” user fee bill, several riders were added to the bill during the mark-up session, including provisions concerning over-the-counter hearings aids, requiring risk-based device inspections, restricting drug imports . . . . and, of particular interest to this blogger, provisions creating a new class of competitive generic drugs, including associated 180-day exclusivity.

Introduced by Representative Kurt Schrader (D-OR), the amendment, which passed by voice vote, would amend the FDC Act to add Section 505H, titled “Competitive Generic Therapies.” As explained by Rep. Schrader in his opening remarks:

We know that when generic drugs compete in the market, drug prices come down dramatically. Although nine out of every ten prescriptions is for a generic drug, generic drugs only make up 28% of the total prescription drug spending in the United States.  Unfortunately, though, some drugs for small patient populations may not attract the same interest from generic drug manufacturers due to market and regulatory uncertainty.  This amendment takes many steps to encourage competition where there is none today.

First, the amendment requires greater communication between the FDA and manufacturers for these competitive generic products before and during the application process. We have seen great strides toward faster drug approvals in the brand drug breakthrough process, and this is modeled after that.

The amendment also creates an incentive for this select set of particular generic drugs to come to market by guaranteeing them the same six months of exclusivity that the vast majority of first generic drugs receive. Under current law, if a first generic drug challenges a patented drug, they get this treatment.  This would extend that treatment for new generic drugs competing with off-patent brand drugs where there is no competition.

The “competitive generic therapy” pathway described in the amendment is a new (and we think much improved) take on Rep. Schrader’s “Lower Drug Costs Through Competition Act” (H.R. 749), which was introduced earlier this year (see our previous post here).

Under the new pathway, a generic drug sponsor would request, either before or upon the submission of an ANDA, that FDA designate, within 60 calendar days of receipt of the designation request, a drug as a “competitive generic therapy.” The designation process would be described in draft guidance provided by FDA not later than 18 months after enactment of the provisions, and, if necessary, in new regulations.

A drug would be eligible for designation if FDA determines that there is “inadequate generic competition.” The term “inadequate generic competition” is defined in the bill to mean that:

there is not more than one approved drug product on the list of products described in section 505(j)(7)(A) (not including products on the discontinued section of such list) that is—

(A) the reference listed drug; or

(B) a generic drug with the same reference listed drug as the drug for which designation as a competitive generic therapy is sought.

In other words, there is “inadequate generic competition” if the “active” section of the Orange Book does not show generic competition for an NDA-approved RLD, or if there is a single ANDA approved (presumably identified as the “reference standard”) and the NDA RLD is no longer marketed (and identified in the “discontinued” section of the Orange Book).

Designation as a “competitive generic therapy” carries with it several benefits. FDA would be required to:

(1) Hold meetings with the sponsor and the review team throughout the development of the drug prior to submission of the application for such drug under section 505(j).

(2) Provide timely advice to, and interactive communication with, the sponsor regarding the development of the drug to ensure that the development program to gather the nonclinical and clinical data necessary for approval is as efficient as practicable.

(3) Involve senior managers and experienced review staff, as appropriate, in a collaborative, cross-disciplinary review, including with respect to drug-device combination products and other complex products.

(4) Assign a cross-disciplinary project lead for the Food and Drug Administration review team— (A) to facilitate an efficient review of the development program and application, including manufacturing inspections; and (B) to serve as a scientific liaison between the review team and the sponsor.

Rep. Schrader’s amendment would also incentivize competitive generic therapy development by creating a new 180-day exclusivity provision applicable to such drug products. Specifically, FDC Act § 505(j)(5)(B) would be amended to add the following:

(v) 180-DAY EXCLUSIVITY PERIOD FOR COMPETITIVE GENERIC THERAPIES.—

(I) EFFECTIVENESS OF APPLICATION.—If the application is for a competitive generic therapy, the application shall be made effective on the date that is 180 days after the date of the first commercial marketing of the competitive generic therapy.

The term “competitive generic therapy” in the exclusivity provision above is further defined to mean a drug “that is designated as a competitive generic therapy under section 506H,” and “for which there are no blocking patents or exclusivities” identified in the Orange Book.

As with the “standard” form of 180-day exclusivity, eligibility for competitive generic therapy 180-day exclusivity could also be forfeited . . . but only on a single “failure-to-market” basis:

(iv) SPECIAL FORFEITURE RULE FOR COMPETITIVE GENERIC THERAPY.—The 180-day exclusivity period described in subparagraph (B)(v) shall be forfeited by the holder of the approved abbreviated application for the competitive generic therapy involved if the holder fails to market the competitive generic therapy within 75 days after the date on which the approval of the application is made effective.

In addition to “clos[ing] a loophole and improv[ing] program integrity in the Tropical Disease priority review voucher program,” Rep. Schrader’s amendment would make other modifications intended to enhance ANDA review transparency and to study what can be done “to get more first-cycle approvals in the generic drug review program,” according to Rep. Schrader. For example, FDC Act § 505(j) would be amended to require FDA to provide ANDA applicants with application review updates:

Upon the request of an applicant regarding one or more specified pending applications under this subsection, the Secretary shall—

(A) by telephone or electronic mail, provide review status updates; and

(B) indicate in such updates the categorical status of the applications by each relevant review discipline.

Earlier this year, Office of Generic Drugs Director Dr. Kathleen (Cook) Uhl, during her keynote address at the annual meeting of the Association for Accessible Medicines, reported that for the Fiscal Year 2015 cohort of ANDAs covered under GDUFA, the rate of first cycle approval/tentative approvals was only 9%.  Rep. Schrader’s amendment would require the Government Accountability Office to study first-cycle approval rates under GDUFA and determine “whether there are ways the review process for generic drugs could be improved to increase the rate of first cycle approvals and tentative approvals for generic drug applications.”