Reshaping 180-Day Exclusivity: The FAIR Generics Act Returns as the Expanding Access to Low Cost Generic Drugs Act

Early each morning, when most folks are still sleeping (or perhaps just getting up to have their first cup of coffee and read the newspaper), this blogger is usually already in the office poring over FDA-related news, citizen petitions, and new legislation to update the FDA Law Blog trackers (here, here, and here) and to rev up the @FDALawBlog Twitter feed. One day last week, as we were looking at new legislation, one bill in particular caught our attention.  The bill carried the following title: “A bill to amend the Federal Food, Drug, and Cosmetic Act to ensure that valid generic drugs may enter the market.”

Hmmm . . . . What could that mean? Perhaps a bill to implement the Trump Administration’s recent budget proposal that we think would cheapen 180-day exclusivity (see our previous post here)?  Or maybe something entirely different?  We went on a mission to find out.  And when we finally did obtain a copy of the bill several hours later and took a look through the text, we were struck with a case of déjà vu.

The bill, S. 2476, is called the “Expanding Access to Low Cost Generic Drugs Act” and was introduced by Senator Tina Smith (D-MN) on February 28, 2018.  Although S. 2476 is styled as the “Expanding Access to Low Cost Generic Drugs Act,” it’s really just a new name for nearly identical bills introduced in 2011 (S. 1882) and 2015 (S. 131) as the “Fair And Immediate Release of Generic Drugs Act, or the “FAIR GENERxICS Act” (and even before that in another form in 2009 as S. 1315, the “Drug Price Competition Act of 2009” – see our previous post here).  As we noted back in 2011 when the “FAIR Generics Act” was introduced by Senators Jeff Bingaman (D-NM), David Vitter (R-LA), Sherrod Brown (D-OH), and Jeff Merkley (D-OR), the bill is pretty complex, but essentially concerns parked 180-day exclusivity.  According to a summary of the bill made at that time:

The legislation would prevent “parked exclusivities” from delaying full, fair, and early generic competition by:

• Granting the right to share exclusivity to any generic filer who wins a patent challenge in the district court or is not sued for patent infringement by the brand company.
• Maximizing the incentive for all generic challengers to fight to bring products to market at the earliest possible time by holding generic settlers to the deferred entry date agreed to in their settlements.
• Creating more clarity regarding litigation risk for pioneer drug companies and generic companies by requiring pioneer companies to make a litigation decision within the 45 day window provided for in the Hatch-Waxman Act.

The same summary applies to S. 2476, the current version of the “FAIR Generics Act.” But let’s take a closer look at the current bill.  Here’s how it would amend the FDC Act’s 180-day exclusivity provisions, and other portions of the FDC Act and the patent laws (additions in bold red typeface and deletions in bold strikethrough typeface).

FDC Act § 505(j)(5)(B)(iv) (AMENDED)

(iv) 180-DAY EXCLUSIVITY PERIOD.—

(I) EFFECTIVENESS OF APPLICATION.—Subject to subparagraph (D), if the application contains a certification described in paragraph (2)(A)(vii)(IV) and is for a drug for which a first applicant has submitted an application containing such a certification, the application shall be made effective on the date that is 180 days after the date of the first commercial marketing of the drug (including the commercial marketing of the listed drug) by any first applicant.

(II) DEFINITIONS.—In this paragraph:

(aa) 180-DAY EXCLUSIVITY PERIOD.—The term “180-day exclusivity period” means the 180-day period ending on the day before the date on which an application submitted by an applicant other than a first applicant could become effective under this clause.

(bb) FIRST APPLICANT.—As used in this subsection, the term “first applicant” means an applicant that, on the first day on which a substantially complete application containing a certification described in paragraph (2)(A)(vii)(IV) is submitted for approval of a drug, submits a substantially complete application that contains and lawfully maintains a certification described in paragraph (2)(A)(vii)(IV) for the drug.

(cc) (bb) SUBSTANTIALLY COMPLETE APPLICATION.—As used in this subsection, the term “substantially complete application” means an application under this subsection that on its face is sufficiently complete to permit a substantive review and contains all the information required by paragraph (2)(A).

(dd) (cc) TENTATIVE APPROVAL.—

(AA) IN GENERAL.—The term “tentative approval” means notification to an applicant by the Secretary that an application under this subsection meets the requirements of paragraph (2)(A), but cannot receive effective approval because the application does not meet the requirements of this subparagraph, there is a period of exclusivity for the listed drug under subparagraph (F) or section 505A, or there is a 7-year period of exclusivity for the listed drug under section 527.

(BB) LIMITATION.—A drug that is granted tentative approval by the Secretary is not an approved drug and shall not have an effective approval until the Secretary issues an approval after any necessary additional review of the application.

FDC Act § 505(j)(5)(B)(v) (NEW)

(v) FIRST APPLICANT DEFINED.—As used in this subsection, the term “first applicant” means an applicant—

(I)(aa) that, on the first day on which a substantially complete application containing a certification described in paragraph (2)(A)(vii)(IV) is submitted for approval of a drug, submits a substantially complete application that contains and lawfully maintains a certification described in paragraph (2)(A)(vii)(IV) for the drug; and

(bb) that has not entered into a disqualifying agreement described under clause (vii)(II); or

(II)(aa) for the drug that is not described in subclause (I) and that, with respect to the applicant and drug, each requirement described in clause (vi) is satisfied; and

(bb) that has not entered into a disqualifying agreement described under clause (vii)(II).

FDC Act § 505(j)(5)(B)(vi) (NEW)

(vi) REQUIREMENT.—The requirements described in this clause are the following:

(I) The applicant described in clause (v)(II) submitted and lawfully maintains a certification described in paragraph (2)(A)(vii)(IV) or a statement described in paragraph (2)(A)(viii) for each unexpired patent for which a first applicant described in clause (v)(I) had submitted a certification described in paragraph (2)(A)(vii)(IV) on the first day on which a substantially complete application containing such a certification was submitted.

(II) With regard to each such unexpired patent for which the applicant described in clause (v)(II) submitted a certification described in paragraph (2)(A)(vii)(IV), no action for patent infringement was brought against such applicant within the 45-day period specified in clause (iii); or if an action was brought within such time period, such an action was withdrawn or dismissed by a court (including a district court) without a decision that the patent was valid and infringed; or if an action was brought within such time period and was not withdrawn or so dismissed, such applicant has obtained the decision of a court (including a district court) that the patent is invalid or not infringed (including any substantive determination that there is no cause of action for patent infringement or invalidity, and including a settlement order or consent decree signed and entered by the court stating that the patent is invalid or not infringed).

(III) If an applicant described in clause (v)(I) has begun commercial marketing of such drug, the applicant described in clause (v)(II) does not begin commercial marketing of such drug until the date that is 30 days after the date on which the applicant described in clause (v)(I) began such commercial marketing.

FDC Act § 505(j)(5)(B)(vii) (NEW)

(vii) AGREEMENT BY FIRST APPLICANT TO DEFER COMMERCIAL MARKETING; LIMITATION ON ACCELERATION OF DEFERRED COMMERCIAL MARKETING DATE.—

(I) AGREEMENT TO DEFER APPROVAL OR COMMERCIAL MARKETING DATE.—An agreement described in this subclause is an agreement between a first applicant and the holder of the application for the listed drug or an owner of one or more of the patents as to which any applicant submitted a certification qualifying such applicant for the 180-day exclusivity period whereby that applicant agrees, directly or indirectly, (aa) not to seek an approval of its application that is made effective on the earliest possible date under this subparagraph, subparagraph (F) of this paragraph, section 505A, or section 527, (bb) not to begin the commercial marketing of its drug on the earliest possible date after receiving an approval of its application that is made effective under this subparagraph, subparagraph (F) of this paragraph, section 505A, or section 527, or (cc) to both items (aa) and (bb).

(II) AGREEMENT THAT DISQUALIFIES APPLICANT FROM FIRST APPLICANT STATUS.—An agreement described in this subclause is an agreement between an applicant and the holder of the application for the listed drug or an owner of one or more of the patents as to which any applicant submitted a certification qualifying such applicant for the 180-day exclusivity period whereby that applicant agrees, directly or indirectly, not to seek an approval of its application or not to begin the commercial marketing of its drug until a date that is after the expiration of the 180-day exclusivity period awarded to another applicant with respect to such drug (without regard to whether such 180-day exclusivity period is awarded before or after the date of the agreement).

FDC Act § 505(j)(5)(B)(viii) (NEW)

(viii) LIMITATION ON ACCELERATION.—If an agreement described in clause (vii)(I) includes more than 1 possible date when an applicant may seek an approval of its application or begin the commercial marketing of its drug—

(I) the applicant may seek an approval of its application or begin such commercial marketing on the date that is the earlier of—

(aa) the latest date set forth in the agreement on which that applicant can receive an approval that is made effective under this subparagraph, subparagraph (F) of this paragraph, section 505A, or section 527, or begin the commercial marketing of such drug, without regard to any other provision of such agreement pursuant to which the commercial marketing could begin on an earlier date; or

(bb) 180 days after another first applicant begins commercial marketing of such drug; and

(II) the latest date set forth in the agreement on which that applicant can receive an approval that is made effective under this subparagraph, subparagraph (F) of this paragraph, section 505A, or section 527, or begin the commercial marketing of such drug, without regard to any other provision of such agreement pursuant to which commercial marketing could begin on an earlier date, shall be the date used to determine whether an applicant is disqualified from first applicant status pursuant to clause (vii)(II).

FDC Act § 505(j)(5)(B)(ix) (REDESIGNATED)

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

FDC Act § 505(j)(5)(D)(i)(IV) (AMENDED)

(IV) FAILURE TO OBTAIN TENTATIVE APPROVAL.— The first applicant The first applicant, as defined in subparagraph (B)(v)(I), fails to obtain tentative approval of the application within 30 months after the date on which the application is filed, unless the failure is caused by a change in or a review of the requirements for approval of the application imposed after the date on which the application is filed.

FDC Act § 505(j)(14) (NEW)

(14)(A) The holder of an abbreviated application under this subsection shall submit to the Secretary a notification that includes—

(i)(I) the text of any agreement entered into by such holder described under paragraph (5)(B)(vii)(I); or

(II) if such an agreement has not been reduced to text, a written detailed description of such agreement that is sufficient to disclose all the terms and conditions of the agreement; and

(ii) the text, or a written detailed description in the event of an agreement that has not been reduced to text, of any other agreements that are contingent upon, provide a contingent condition for, or are otherwise related to an agreement described in clause (i).

(B) The notification described under subparagraph (A) shall be submitted not later than 10 business days after execution of the agreement described in subparagraph (A)(i). Such notification is in addition to any notification required under section 1112 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003.

(C) Any information or documentary material filed with the Secretary pursuant to this paragraph shall be exempt from disclosure under section 552 of title 5, United States Code, and no such information or documentary material may be made public, except as may be relevant to any administrative or judicial action or proceeding. Nothing in this paragraph is intended to prevent disclosure to either body of the Congress or to any duly authorized committee or subcommittee of the Congress.

FDC Act § 301(e) (AMENDED) (Prohibited Acts)

(e) The refusal to permit access to or copying of any record as required by section 412, 414, 417(j), 416, 504, 564, 703, 704(a), 760, or 761; or the failure to establish or maintain any record, or make any report, required under section 412, 414(b), 417, 416, 504, 505 (i) or (k) 505 (i), (j)(14), or (k), 512(a)(4)(C), 512 (j), (l) or (m), 572(i), 515(f), 519, 564, 760, 761, 909, or 920 or the refusal to permit access to or verification or copying of any such required record; or the violation of any recordkeeping requirement under section 204 of the FDA Food Safety Modernization Act (except when such violation is committed by a farm).

35 U.S.S. § 271(e)(7) (NEW)

(7) The exclusive remedy under this section for an infringement of a patent for which the Secretary of Health and Human Services has published information pursuant to subsection (b)(1) or (c)(2) of section 505 of the Federal Food, Drug, and Cosmetic Act shall be an action brought under this subsection within the 45-day period described in subsection (j)(5)(B)(iii) or (c)(3)(C) of section 505 of the Federal Food, Drug, and Cosmetic Act.

 We’re still in the process of sorting out how all of these new and amended provisions would operate. And not all of them seem to make complete sense (e.g., How can an agreement described in the proposed text control when an applicant may seek an approval of its ANDA? Isn’t that really an FDA decision?)  In any case, whether renewed interest in changes to the statutory 180-day exclusivity provision, as a result of the Trump Administration’s recent budget proposal, will lead to passage of the “Expanding Access to Low Cost Generic Drugs Act” or another bill remains to be seen.