FDA in the Multiverse of 180-Day Exclusivity Madness: Is an “Incursion” in the Cards for our “Exclusivity Earth-616”?

Thanks to years of watching @eavoss of New Rockstars, we have a pretty good handle on the Marvel Cinematic Universe (“MCU”).  We know that Earth-199999, known in-universe as Earth-616, is the designated universe number for the main MCU; that there are a multitude of other universes (such as Earth-838 where the Illuminati reside . . . or resided at least); and that so-called “incursions” occur when two MCU universes collide with one another, resulting in the complete destruction of either one or both of them.

The mind-bending Multiverse has been on this blogger’s mind as of late.  You see, we are fortunate enough to often get our hands on pieces of draft legislation thought up by folks – like FDA – who peddle ideas on how to change the law.  Some of those ideas are pretty interesting (even if not yet fully baked).  For example, there’s the draft legislation we saw (and understand FDA put together) that would create a 505(b)(2) NDA-type of submission and approval pathway for certain biological products under the Public Health Service Act).  But other ideas are . . . well . . . destructive.  They may exist on another Earth in the Multiverse, but bringing them into our “Exclusivity Earth-616” would result in an incursion.

And that brings us to FDA’s draft legislation to make reality one of the Legislative Proposals the Agency included in its Fiscal Year 2023 Budget Justification.  As we noted in a previous post, FDA’s first (of fourteen) legislative proposal targets 180-day generic drug exclusivity, stating:

Amend the 180-Day Exclusivity Provisions to Encourage Timely Marketing of First Generics

In practice, 180-day patent challenge exclusivity is not operating as expected to encourage early generic entry, because this exclusivity is often “parked” by first applicants who either receive approval but do not begin marketing for extended periods of time following approval, or by first applicants who delay receiving final approval of their ANDAs for extended periods of time.  This proposal would substantially increase the likelihood that generic versions of patent-protected drugs will come into the market in a timely fashion, and that multiple versions of generic products will be approved quickly (leading to significant cost savings).  FDA is proposing to amend sections 505(j)(5)(B)(iv) and (D)(i)-(iii) of the FD&C Act, which govern the 180-day patent challenge exclusivity provisions, to specify that FDA can approve subsequent applications unless a first applicant begins commercial marketing of the drug, at which point approval of subsequent applications would be blocked by 180 days, ensuring that the exclusivity actually lasts 180 days (i.e., from the date of first commercial marketing by a first applicant until 180 days later) rather than for multiple years, as can occur under current law.

We also commented at length about this proposal in our previous post stating:

If the scent of this proposal smells vaguely familiar, it is.  It’s regime change!  It’s an effort to rework the current and longstanding ANDA Paragraph IV 180-day exclusivity incentive regime by replacing it with a new 180-day exclusivity regime modeled after the Competitive Generic Therapy (“CGT”) 180-day exclusivity regime created with the passage of the FDA Reauthorization Act of 2017 for drugs for which there is inadequate generic competition and for which there are no unexpired patents or exclusivities listed in the Orange Book at the time of original submission of an ANDA.

And we went on to comment – without the benefit of any proposed legislative language – how such an exclusivity system would be disastrous:

While the CGT 180-day exclusivity regime has operated quite well for drugs with inadequate generic competition and for which there are no unexpired patents or exclusivities listed in the Orange Book (as evidenced by the 130 CGT approvals thus far), using it as a blueprint for the approval of generic versions of brand-name drugs with dense patent thickets makes no sense.  What generic drug companies would be willing to invest millions of dollars in generic drug development and patent challenges for the potential of a hollow exclusivity incentive?  That is, because patent challenges often result in patent settlements that allow for generic competition (i.e., launch) prior to patent expiration, a CGT-like exclusivity regime that triggers the exclusivity only upon launch—which may occur years after ANDA approval—means that by the time launch occurs and exclusivity is triggered there will be no further approvals to which the exclusivity would apply.

Now that we have our hands on FDA’s draft legislative language, also titled “Amend the 180-Day Exclusivity Provisions to Encourage Timely Marketing of First Generics,” we can say this: We were correct . . . and it’s perhaps even worse than we thought!  (Though, on the bright side – at least for FDA – it would make the Agency’s job of implementing 180-day exclusivity almost effortless . . . and maybe that’s the point!)

The draft legislation would amend FDC Act § 505(j)(5)(B)(iv) as follows (with additions and deletions in red 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 and has commenced commercial marketing, the application shall be made effective on the date that is 180 days after the earliest 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 starting on the earliest date of first commercial marketing of the drug (including the commercial marketing of the listed drug) by any first applicant. During the 180-day exclusivity period, an application submitted by an applicant other than a first applicant may not be made effective. The 180-day exclusivity period does not affect an application submitted by an applicant other than a first applicant that received effective approval before the period started. ending on the day before the date on which an application that was submitted by an applicant other than a first applicant and that did not receive effective approval before a first applicant commenced commercial marketing could become effective under this clause.

The draft legislation would also amend FDC Act § 505(j)(5)(D)(i) to remove two of the six current 180-day exclusivity forfeiture provisions – the “failure-to-market” (FDC Act § 505(j)(5)(D)(i)(I)) and “failure-to-obtain-timely-tentative-approval” (FDC Act § 505(j)(5)(D)(i)(IV)) forfeiture provisions – while maintaining the remaining four forfeiture provisions (though renumbering them).  Coincidentally (yeah, right!), both of the forfeiture provisions that would be removed are the two most difficult and controversial provisions for FDA to administer.

Turning back to the amendments that would be made to FDC Act § 505(j)(5)(B)(iv), FDA’s proposal would put a first applicant’s 180-day exclusivity into effect to prevent approval of a subsequent Paragraph IV ANDA only once commercial marketing by a first Paragraph IV applicant has commenced.  Before the time 180-day exclusivity is triggered, a first applicant’s eligibility for 180-day exclusivity would have . . . you got it . . . zero benefit.  That point is explicit in the proposed statutory change: “During the 180-day exclusivity period, an application submitted by an applicant other than a first applicant may not be made effective.  The 180-day exclusivity period does not affect an application submitted by an applicant other than a first applicant that received effective approval before the period started.”

FDA’s proposal sets up the scenario where not only would eligibility for 180-day exclusivity have zero benefit, but the exclusivity, once triggered, could also have zero benefit, as any subsequent Paragraph IV ANDAs may already have been approved by the time a first applicant is able to commercially launch.  That’s ridiculous!  It makes all the more relevant our prior commentary that such an exclusivity regime for Paragraph IV ANDAs means “fewer ANDA approvals and launches,” which “ultimately means fewer choices for consumers and higher costs to the U.S. healthcare system.”  In other words . . . an incursion for “Exclusivity Earth-616.”