B-B-B-B-Bad to the Bone? The Brought Back BLOCKING Act: Better, But Still Bad for Business and Buyers

On the day I was born
The nurses all gathered ‘round
And they gazed in wide wonder
At the joy they had found
The head nurse spoke up
Said, “Leave this one alone”
She could tell right away
That I was bad to the bone

As we noted in our post yesterday, on May 2nd, the U.S. Senate Committee on Health, Education, Labor and Pensions (“Senate HELP”) is scheduled to discuss in an Executive Session various pieces of FDA legislation.  Among those pieces of legislation—all intended to shield FDA from litigation in some way, shape, or form—is the latest version of the “Bringing Low-cost Options and Competition while Keeping Incentives for New Generics Act,” which is better known as the “BLOCKING Act,” and that would significantly alter the ANDA Paragraph IV 180-day exclusivity incentive.  This time, however, it is called the “Expanding Access to Low-Cost Generics Act of 2023” (S. 1114).

The BLOCKING Act has been floating around as a legislative proposal since February 2018 when it appeared in the Trump Administration’s Proposed Fiscal Year 2019 Budget (pages 22 and 51).  It has drawn this blogger’s ire in prior blog posts (here, here, here, and here) and in Congressional testimony as antithetical to a primary goal of the Hatch-Waxman Amendments: getting high quality, low-cost generic drugs into the hands of consumers—fast.  It made some headway last year as as part of the Senate HELP-passed S.4348, the “Food and Drug Administration Safety and Landmark Advancements Act of 2022” (Section 515), but ultimately was not enacted.  Then earlier this year, the BLOCKING Act reappeared as a proposal in FDA’s Summary of FY 2024 Legislative Proposals:

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

FDA is proposing that the FD&C Act be revised to specify that 180-day patent challenge exclusivity for generic drugs does not block approval of subsequent applications from other generic drug manufacturers until a first applicant begins commercially marketing the drug; this revision should ensure that the exclusivity period 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 (i.e., while the first applicant is eligible for 180-day exclusivity prior to commercial marketing in addition to the 180-day period itself). 180-day patent challenge exclusivity is intended to provide an incentive and a reward to the first generic drug applicant(s) to submit a substantially complete application with a certification that a patent listed for its reference listed drug is invalid, unenforceable or not infringed by the ANDA, and thus expose themselves to the risk of patent litigation. Forfeiture provisions, under which a first applicant may lose its eligibility for this exclusivity, also seek to motivate first applicants to begin marketing quickly in order to reap the benefits of this marketing exclusivity. In practice, however, the framework has not been operating to encourage early generic entry. First applicants often “park” their eligibility for this exclusivity either by declining to begin marketing their product for extended periods of time after ANDA approval, or by delaying receipt of final approval of their ANDAs for extended periods of time, while avoiding a forfeiture. FDA’s 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).

The current iteration of the BLOCKING Act that is the “Expanding Access to Low-Cost Generics Act of 2023” (S. 1114) and that Senate HELP will discuss on May 2nd would, like its progeny, further dilute the 180-day exclusivity incentive by amending the Paragraph IV 180-day exclusivity statutory provisions at FDC Act § 505(j)(5) to place new conditions on when a subsequent Paragraph IV ANDA can be approved notwithstanding a first applicant’s eligibility for 180-day exclusivity.  But unlike its progeny, S. 1114 includes a new proviso that is intended to guard against a subsequent Paragraph IV ANDA gutting the exclusivity incentive, and would thus somewhat blunt the negative effective of the proposal.  Below is the relevant text from the bill with proposed additions to FDC Act § 505(j)(5)(B)(iv) identified in red, italicized, bold typeface:

(iv) 180-DAY EXCLUSIVITY PERIOD.—

(I) EFFECTIVENESS OF APPLICATION.—Subject to subparagraph (D) and subclause (III), 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 or an applicant whose application was approved pursuant to subclause (III). If an applicant described in subclause (III) is eligible for effective approval on the same day a tentatively approved first applicant who has requested final approval is determined by the Secretary to be eligible for effective approval by meeting all the approval requirements of this subsection, such applicant described in subclause (III) may not receive effective approval until 180 days after the first applicant begins commercial marketing of the drug. . . .

(III) APPLICANT APPROVAL.—The Secretary may approve an application containing a certification described in paragraph (2)(A)(vii)(IV) that is for a drug for which a first applicant has submitted an application containing such a certification, notwithstanding the eligibility of a first applicant for the 180-day exclusivity period described in subclause (II)(aa), if each of the following conditions is met:

(aa) The approval of such application could be made effective, but for the eligibility of a first applicant for 180-day exclusivity under this clause.

(bb) The applicant of such application has submitted a certification to the abbreviated new drug application that there are no conditions that would prevent the applicant from commercial marketing within 75 days after the date of approval and that the applicant intends to so market the drug.

(cc) At least 33 months have passed since the date of submission of an application for the drug by at least one first applicant.

(dd) Approval of an application for the drug submitted by at least one first applicant is not precluded under clause (iii).

(ee) No application for the drug submitted by any first applicant is effectively approved on the date that the conditions under items (aa), (bb), (cc), and (dd) are all met and maintained.

New to the above calculus included in prior versions of the BLOCKING Act is the addition of a “tie-goes-to-the-runner” provision at proposed FDC Act § 505(j)(5)(B)(iv)(I), a longer (i.e., 33-month instead of 30-month) period under proposed FDC Act § 505(j)(5)(B)(iv)(III)(cc) to account for longer ANDA approval times, and an additional criterion at proposed FDC Act § 505(j)(5)(B)(iv)(III)(bb) requiring a subsequent Paragraph IV applicant to certify that “there are no conditions that would prevent the applicant from commercial marketing within 75 days after the date of approval and that the applicant intends to so market the drug.”  (We previously analyzed the other criteria in proposed FDC Act § 505(j)(5)(B)(iv)(III), which appeared in prior versions of the BLOCKING Act.)

The new certification criterion is further laid out and explained in a special approval status rule for certain subsequent applicants at proposed FDC Act § 505(j)(5)(D)(v):

(v) SPECIAL APPROVAL STATUS RULE FOR CERTAIN SUBSEQUENT APPLICANTS.—An application that is approved pursuant to subclause (III) of subparagraph (B)(iv) is deemed to be tentatively approved and to no longer have an effective approval pursuant to such subclause (III) on the date that is 76 days after the date on which the approval has been made effective pursuant to such subclause (III) if the applicant fails to commercially market such drug within the 75-day period after the date on which the approval is made effective. If the applicant of an application approved pursuant to such subclause (III) submits a notification that it can no longer commence commercial marketing within 75 days after the date of approval, as required under subparagraph (B)(iv)(III)(bb), its application is deemed to be tentatively approved and to no longer be effectively approved on the date that such a notification is received. If an applicant does not commence commercial marketing within the 75-day period, it shall not be eligible for a subsequent effective approval for the application under subclause (III) of subparagraph (B)(iv) unless, in addition to meeting each of the conditions in such subclause (III), it submits a certification to its abbreviated new drug application that an event that could not have been reasonably foreseen by the applicant prevented it from commencing commercial marketing and that it has fully resolved this issue. The applicant shall submit notification to the abbreviated new drug application confirming that such applicant has commenced commercial marketing of the drug not later than one business day after commencing such marketing.

Under this special rule, a what we’ll coin as a “Special Subsequent Paragraph IV Applicant” that makes a certification under proposed FDC Act § 505(j)(5)(B)(iv)(III)(bb) and that does not commercially market within the certified-to 75-day period has its final ANDA approval converted to (or deemed) a tentative approval.  If the stars line up again for that Special Subsequent Paragraph IV Applicant, it cannot be once again be eligible for approval under proposed FDC Act § 505(j)(5)(B)(iv)(III) unless “it submits a certification to its [ANDA] that an event that could not have been reasonably foreseen by the applicant prevented it from commencing commercial marketing and that it has fully resolved this issue.”

The exception provision above is intended to be narrow so that the exception does not swallow the “one-shot-deal” rule.  And whoever it was who drafted this provision clearly had something in mind: the “event that could not have been reasonably foreseen” language parallels language in FDA’s MAPP 5240.3 (Rev. 6), titled “Prioritization of the Review of Original ANDAs, Amendments, and Supplements,” concerning priority review for certain ANDA supplements under 21 C.F.R. § 314.70(b)(4).  Under MAPP 5240.3 (Rev. 6), FDA states:

Supplements for which a priority review is requested under 21 CFR 314.70(b)(4)

Under 21 CFR 314.70(b)(4), an applicant may ask FDA to grant a priority review to “a supplement for public health reasons or if a delay in making the change described in [the supplement] would impose an extraordinary hardship on the applicant.”  Under this factor, “extraordinary hardship on the applicant” will be interpreted to include the following:

• Catastrophic events such as explosion, fire, or storm damage to manufacturing facilities.
• Events that could not have been reasonably foreseen by the applicant and for which the applicant could not have planned. Examples include:
  • An abrupt discontinuation of the supply of an active ingredient, packaging material, or container closure system.
  • The relocation of a facility or a change in an existing facility because of a catastrophic event.

The proposed new certification requirement and accompanying special rule provision are significant improvements to prior iterations of the BLOCKING Act.  That being said, it’s kind of like putting lipstick on a pig.  In the end, the “Expanding Access to Low-Cost Generics Act of 2023” (S. 1114) is still the BLOCKING Act, and it is still bad to the bone.  As we’ve said before, 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?  More ANDA approvals does not necessarily translate into more launches.  Over time, a new exclusivity regime for Paragraph IV ANDAs may mean fewer ANDA approvals and launches.  And that ultimately means more drug shortages of critical medicines, fewer choices for consumers, and higher costs to the U.S. healthcare system.