Every Day Counts for PTE: Court Finds FDA’s Reinterpretation of Testing Phase Arbitrary and Capricious

In the world of patent term extensions, every day considered part of the regulatory review period is important, as that day—either in whole or in part—gets added back to the patent upon approval of the product.  In the veterinary world, where rolling applications are common, the testing phase is usually particularly important because the review phase, which starts only when the last component of the rolling New Animal Drug Application (NADA)—called the Administrative NADA—is submitted, is short, typically around 60 days.  So to maximize patent term restoration, the earlier the start of the testing phase, the better.

As background, under the PTE statute at 35 U.S.C. § 156(g), certain patents covering animal drugs are eligible for a PTE if patent life was lost during a period when the product was undergoing regulatory review.  As with other FDA-regulated products, such as human drugs and medical devices, the “regulatory review period” is composed of a “testing phase” and a “review phase.”  For animal drugs approved under FDC Act § 512, the “testing phase” begins on the earlier of the effective date of an Investigation New Animal Drug (“INAD”) exemption or the date a major health or environmental effects test on the drug was initiated and ends on the date a NADA is “initially submitted” to FDA under FDC Act § 512(b).  The “review phase” is the period between the initial submission and approval of the NADA.  FDA’s PTE regulations at 21 C.F.R. § 60.22(f) clarify that a marketing application “is initially submitted on the date it contains sufficient information to allow FDA to commence review of the application.”  FDA guidance has been clear that that point for rolling submissions is when the last component has been submitted.

Since 1991, FDA has taken the position that the testing phase starts when the sponsor submits a request to Center for Veterinary Medicine to establish an INAD file and ends when an NADA is submitted.  In February 2018, however, FDA issued a PTE decision determining that the testing phase for a NADA starts only once a Notice of Claimed Investigational Exemption (“NCIE”)—a written notification to FDA under an INAD of the sponsor’s intent to ship an investigational new animal drug—has been submitted.  In that PTE decision, this made a difference of over a year (which could result in an additional 6 months added back onto the patent).  The NADA applicant requested reconsideration, but FDA refused to set the testing phase at the INAD opening and instead used the date that a major health or environmental effects test on the drug was initiated.

In response,  Nissan Chemical Corporation, Intervet, and Merck Sharp & Dohme collectively sued FDA in June 2022 under the Administrative Procedure Act alleging that FDA’s determination of the regulatory review period for its approved NADA for BRAVECTO was arbitrary and capricious and violated due process principles because FDA changed its methodology for determining a drug’s regulatory review period without acknowledging the change or providing fair notice.  In February 2010, an oral formulation of BRAVECTO, a medication to treat and prevent fleas and tick infestation in dogs, was the subject of an INAD submitted to the Agency.  Plaintiffs performed the necessary studies on BRAVECTO and filed an NADA on April 8, 2014; FDA approved the NADA on May 15, 2014.  As required by law, Plaintiffs submitted a request for PTE within 60 days of approval, claiming that the regulatory testing phase began on February 19, 2010, the date in which the INAD was assigned number 11-903 for the investigation of the oral formulation of BRAVECTO.  When the U.S. Patent and Trademark Office consulted with FDA on the appropriate timelines, FDA claimed that the INAD, and thereby the testing phase, was not effective until August 4, 2011 because no NCIE was submitted until then.  After a Request for Reconsideration, FDA determined that the study actually began on June 28, 2011, but rejected the February 2010 date stating that “an INAD file was established when we received the first NCIE” and that the opening of the INAD file on February 19, 2010 was merely a “housekeeping matter” and thus the testing phase did not begin in February 2010.  While Nissan et al. sued FDA, at FDA’s request, the Court remanded the decision back to the Agency, but it came to the same conclusion.  Nissan thus filed an Amended Complaint and each party filed Motions for Summary Judgment.

The District Court for the District of Columbia determined that “the key question at issue in this case” is the appropriate start of the testing phase: February 2010 or June 2011.  The Court pretty quickly determined that “FDA acted arbitrarily and capriciously when applying [the PTE statute] to BRAVECTO because the FDA did not provide fair notice or an adequate explanation of its shift in methodology.”  FDA, since 1991, had publicly signaled that the opening of an INAD file starts the testing phase for a new animal drug.  FDA explicitly said as much in the 1991 preamble accompanying proposed patent restoration regulations.  FDA also consistently interpreted it that way between 1990 and 2007. While FDA had acknowledged this approach, in its 2022 remand decision FDA said that such approach was an “improper application” of the regulation and that the Agency started differentiating the opening of the INAD file from submission of an NCIE in 2009.  Thus, the Agency concluded, the June 2011 date should stand.

On August 8, 2024, the Court granted Nissan et al.’s Motion for Summary Judgment finding that FDA failed to provide fair notice to plaintiffs of the need to submit an NCIE rather than an INAD to trigger the start of the testing phase.  The Court explained that “FDA never publicly acknowledged that it was changing course.”  “It was not until the FDA’s 2022 remand decision that the agency publicly acknowledged these past mistakes and clarified its methodology for determining the testing phase start date.”  FDA was required to provide fair notice that it would no longer use the INAD date to start the testing phase.  The appropriate inquiry was “whether, as of February 2010, plaintiffs would have been ‘able to identify, with ‘ascertainable certainty,’ the standards with which the agency expect[ed] parties to conform’ in order to trigger the start of the testing phase for BRAVECTO.”  Because the Agency did not repudiate its prior contradictory statements and precedents until 2022, “FDA’s regulations, decisions, and statements did not provide fair notice to plaintiffs of the actions they were required to take in order to trigger the start of the testing phase for BRAVECTO, and the FDA’s actions therefore violated the APA.”

With this decision, the testing phase for BRAVECTO began on February 19, 2010, giving Plaintiffs an additional year to be included in its testing phase calculations.  It’s a clean win for the Plaintiffs and yet another hit to FDA’s court losses.  More important for industry, however, is that the case affirmatively puts every NADA filer on notice: the NCIE is now what triggers the start of the testing phase—not opening the INAD.