This Cannot Stand, Man! The BLOCKING Act of 2019 Would Unnecessarily Reform 180-Day Generic Drug Exclusivity
February 1, 2019Over the 12 years that we’ve been doing this blogging gig, we’ve never before drawn inspiration for a post from Lebowski Pony – a.k.a. “the Dude” – that iconic character from the 1998 film The Big Lebowski, written and directed by Joel and Ethan Coen. (By the by, “the Dude” is supposed to be making an appearance in a Super Bowl commercial on Sunday.) But the Dude came to mind while cogitating on a bill – the Bringing Low-cost Options and Competition while Keeping Incentives for New Generics Act, or “BLOCKING Act” (H.R. 938) – introduced on January 31, 2019 by Representatives Kurt Schrader (D-OR) and Earl L. “Buddy” Carter (R-GA) to amend the FDC Act’s 180-day exclusivity provisions. Well, as the Dude says, “[t]his will not stand, ya know, this aggression will not stand, man.”
We would normally give you a lot of background on the issue at this point in our post, but channeling our inner Dude, we’ll just say: “This is a very complicated case, Maude. You know, a lotta ins, lotta outs, lotta what-have-you’s. And, uh, lotta strands to keep in my head, man. Lotta strands in old Duder’s head. Luckily I’m adhering to a pretty strict, uh, drug regimen to keep my mind, you know, limber.”
Well, on second thought, we may need a little more here than the Dude’s script can offer. (Ha! Get it?) . . . .
Last February, the Trump Administration released a proposed Fiscal Year 2019 Budget. Tucked into the Proposed Budget are provisions concerning 180-day generic drug exclusivity billed as an incentive to increase generic drug competition. But as we noted in a post at the time, the Budget Proposal could have exactly the opposite effect. Here’s a small taste of how the 180-day exclusivity provisions are described in the Budget Proposal:
The proposal ensures that first-to-file generic applicants who have been awarded a 180-day exclusivity period do not unreasonably and indefinitely block subsequent generics from entering the market beyond the exclusivity period. Under this proposal, when a first-to-file generic application is not yet approved due to deficiencies, FDA would be able to tentatively approve a subsequent generic application, which would start the 180-day exclusivity clock, rather than waiting an indefinite period for the first-to-file applicant to fix the deficiencies in its application.
In short, the concern the Trump Administration appears to want to address is a first applicant’s ability to “park” 180-day exclusivity eligibility because of alleged “deficiencies” (e.g., unresolved cGMP concerns) that prevent FDA from granting final ANDA approval and commercial marketing under that application (thus triggering 180-day exclusivity) while subsequent ANDA applicants otherwise ready for approval are blocked from obtaining final approval solely because of a first applicant’s continuing eligibility for exclusivity. (Perhaps the most prominent examples of the occurrence of this scenario concerned Ranbaxy Laboratories. Ranbaxy, which was a first applicant eligible for 180-day exclusivity on several blockbuster drugs – e.g., valsartan, esomeprazole magnesium, and valganciclovir HCl – entered into a Consent Decree with FDA and the Department of Justice in January 2012, and was placed on FDA’s Application Integrity Policy List because of alleged fraudulent activity in connection with ANDA submissions. Those concerns and allegations prevented FDA from granting final ANDA approval, and resulted in “parked” 180-day exclusivity until an alternative basis for forfeiture of 180-day exclusivity was found by FDA.)
The Fiscal Year 2019 Budget did not include draft language to implement the proposal discussed above. That task became FDA’s (HHS’s) responsibility, and draft language was eventually forwarded to Capitol Hill. Now that draft language has made its way into a bill: the BLOCKING Act.
The BLOCKING Act would amend FDC Act § 505(j)(5)(B)(iv), titled “180-day exclusivity period,” to place some new conditions on when a subsequent Paragraph IV ANDA can be approved, and thus, when 180-day exclusivity is triggered. Below is the relevant text from the bill with proposed additions identified in red, italicized, bold typeface:
(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 earlier of—
(aa) the date of the first commercial marketing of the drug (including the commercial marketing of the listed drug) by any first applicant; or
(bb) the applicable date specified in subclause (III).
***
(III) APPLICABLE DATE.—The applicable date specified in this subclause, with respect to an application for a drug described in subclause (I), is the date on which each of the following conditions is first met:
(aa) The approval of such an application could be made effective, but for the eligibility of a first applicant for 180-day exclusivity under this clause.
(bb) At least 30 months have passed since the date of submission of an application for the drug by at least one first applicant.
(cc) Approval of an application for the drug submitted by at least one first applicant would not be precluded under clause (iii).
(dd) No application for the drug submitted by any first applicant is approved at the time the conditions under items (aa), (bb), and (cc) are all met, regardless of whether such an application is subsequently approved.
Let’s take a closer look at the proposed (III) conditions – all of which must be in place for 180-day exclusivity to be triggered – one at a time . . .
Condition “(aa)” assumes a “but for” world in which a subsequent Paragraph IV ANDA could be approved if no first applicant were eligible for 180-day exclusivity. In the “real world” this means that a subsequent Paragraph IV ANDA can only be tentatively approved because of a first applicant’s eligiblity for 180-day exclusivity.
Condition “(bb)” seems to assume – at least when read in connection with condition “(dd)” – that if a first applicant is unable to secure final ANDA approval within 30 months of ANDA submission, then there must be problems (i.e., deficiencies) with the application. In fact, in a case where there are multiple first applicants, all it takes under the language of the bill is any one of those first applicants to reach the 30-month mark without approval. We note in passing that FDA’s Fiscal Year 2019 Justification of Estimates for Appropriations Committees says that the “Median Review Time from ANDA Receipt to Approval” was 37.26 months (FY 2017 Actual), is 37.00 months (FY 2018 Annualized CR), and is estimated to be 36.75 months (FY 2019 President’s Budget). Those figures are alarming when matched up with the 30-month provision in the bill (i.e., condition “(bb)”).
Condition “(cc)” – again referring to “at least one first applicant” – says that ANDA approval would not be precluded under FDC Act § 505(j)(5)(B)(iii). That provision governs 30-month patent infringement litigation stays. In other words, if at least one first applicant no longer has a 30-month litigation stay in effect (perhaps because of a license agreement and dismissal of litigation) or there is no court-ordered preliminary injunction, then this condition goes into effect. We note that in cases in which a company with a pending ANDA amends (or supplements) that application to include a Paragraph IV certification to newly-listed patent information, the statute precludes the imposition of a 30-month litigation stay on ANDA approval. Thus, in cases in which all ANDA applicants qualify as a first applicant by virtue of a Paragraph IV amendment to newly-listed patent information, this condition would not apply.
Finally, condition “(dd)” says that regardless of what may happen in the future with respect to first applicant approval, 180-day exclusivity is triggered, perhaps as early as the date that is 30 months after the first ANDA submission (regardless of whether or not that initial ANDA was later amended to contain a Paragraph IV certification), because no first applicant ANDA is approved at the time a subsequent Paragraph IV ANDA is tentatively approved (because of a first applicant’s eligiblity for 180-day exclusivity), and there is no 30-month stay or preliminary injunction in effect for at least one first applicant.
There’s a lot to object to in this proposal to amend and augment the FDC Act’s 180-day exclusivity provisions. But first off . . . is a legislative change even necessary?? After all, FDA already has sufficient statutory and regulatory authority to determine that a first applicant has forfeited eligibility for 180-day exclusivity because of ANDA “deficiencies” preventing final approval.
First, there’s the “withdrawal of application” forfeiture provision at FDC Act § 505(j)(5)(D)(i)(II). That provision states that eligibility for 180-day exclusivity is forfeited under either of the following circumstances:
(II) WITHDRAWAL OF APPLICATION.—The first applicant withdraws the application or the Secretary considers the application to have been withdrawn as a result of a determination by the Secretary that the application does not meet the requirements for approval under paragraph (4).
FDA briefly discussed this forfeiture provision in January 2017 draft guidance document, stating:
The withdrawal of application provision provides for forfeiture under two conditions: (1) if the first applicant withdraws the application or (2) if FDA considers the application withdrawn for failure to meet the various general requirements for approval laid out in section [FDC Act § 505(j)(4)]. A first applicant’s affirmative withdrawal of its ANDA would meet the first condition, resulting in a forfeiture under this provision. FDA has not yet considered a forfeiture under the second condition.
Second, FDA’s ANDA regulations (at 21 C.F.R. § 314.107(c)(3)) have for decades allowed the Agency to conclude that 180-day exclusivity will not be awarded to a first applicant that does not diligently pursue ANDA approval: “If FDA concludes that a first applicant is not actively pursuing approval of its ANDA, FDA may immediately approve an ANDA(s) of a subsequent applicant(s) if the ANDA(s) is otherwise eligible for approval.” In promulgating this regulation (59 Fed. Reg. 50,338, 50,354 (Oct. 3, 1994)), FDA commented that:
For purposes of this rule, the phrase “actively pursuing approval” is intended to encompass a drug sponsor’s good faith effort to pursue marketing approval in a timely manner. In determining whether a sponsor is actively pursuing marketing approval, FDA will consider all relevant factors, such as the sponsor’s compliance with regulations and the timeliness of its responses to FDA’s questions or application deficiencies during the review period. [(Emphasis added)]
Despite FDA’s apparent hesitance to make a determination under either FDC Act § 505(j)(5)(D)(i)(II) or 21 C.F.R. § 314.107(c)(3) that a first applicant has forfeited or otherwise lost 180-day exclusivity, the Agency has clear authority to make such a determination. In particular, FDC Act § 505(j)(5)(D)(i)(II), by virtue of its internal reference to FDC Act § 505(j)(4), gives FDA broad discretion to determine if an ANDA is considered withdrawn. Among other things, FDC Act § 505(j)(4) provides that FDA will not approve an ANDA because of certain cGMP and bioequivalence deficiencies.
If the intent of the BLOCKING Act is to address a first applicant’s ability to “park” 180-day exclusivity eligibility because of alleged “deficiencies” that prevent FDA from granting final ANDA approval and commercial marketing under that application while subsequent ANDA applicants otherwise ready for approval are blocked from obtaining final approval solely because of a first applicant’s continuing eligibility for exclusivity, then the BLOCKING Act doesn’t quite hit the mark. It would punish ANDA applicants eligible for 180-day who are diligently pursuing final application approval, and would further dilute and cheapen the 180-day exclusivity incentive Congress created in the Hatch-Waxman Amendments.
After reading and re-reading the BLOCKING Act – and now at 2:32 AM in the morning – we have some initial specific concerns with the bill. First, the BLOCKING Act is immensely and unnecessarily complex and becomes more complex with the addition of each variable (e.g., multiple first applicants). Enactment of the proposed language would almost certainly lead to costly and time-consuming litigation. Second, the BLOCKING Act makes 180-day exclusivity eligibility unpredictable for ANDA applicants. Factors that can lead to the triggering of exclusivity under the proposed legislative language are not readily available (or are not immediately available) to the public, such as the time of a subsequent applicant’s tentative approval and the date of submission of an ANDA. (Indeed, FDA may not update the Agency’s Drugs@FDA website for several days after tentatively approving an ANDA. Moreover, the basis of such tentative approval is not known because FDA does not regularly post tentative approval letters.)
Moreover, the BLOCKING Act could allow for myriad other circumstances outside of alleged ANDA “deficiencies” to trigger 180-day exclusivity. Some potential examples include:
- New bioequivalence or other required testing (e.g., elemental impurity testing or new or updated USP standards) that a first applicant is working diligently to complete;
- A pending Citizen Petition specific to a first applicant’s ANDA (e.g., formulation-specific) that has not been resolved at the time FDA grants tentative approval to a subsequent applicant’s ANDA; and
- Circumstances outside of an applicant’s control, such as: (a) the need to repeat bioequivalence studies, re-assay biostudy samples, or commission a scientific audit by a qualified independent expert because of concerns raised by FDA about the validity of reported studies conducted by a contract research organization (e.g., MDS Pharma Services); (b) catastrophic events such as explosion, fire, storm damage to manufacturing facilities; and (c) events that could not have been reasonably foreseen, and for which the applicant could not plan (e.g., abrupt discontinuation of supply of active ingredient, packaging material, or container closure system, or relocation of a facility or change in an existing facility because of a catastrophic event).
Although “the Dude abides” in The Big Lebowski, this FDA Law Blog dude does not and cannot abide with the BLOCKING Act.