While the Orphan Battles Wage, Jazz Takes a Loss

The fight between Jazz, Avadel, and FDA over narcolepsy drug sodium oxybate has been a long and arduous one.  Starting in 2022 with a patent certification requirement, both Jazz and Avadel have sued FDA over this drug, with Jazz most recently bringing suit challenging FDA’s decision that Avadel’s Lumryz (sodium oxybate) is clinically superior to Jazz’s Xywav (sodium oxybate) in 2023.  After more than a year of briefing, the District Court for the District of Columbia finally made its decision, upholding that FDA’s decision that Lumryz and Xywav are not the same drug because Lumryz is clinically superior to Xywav.

As the Court explains, an orphan drug may not be the “same drug” as the same active moiety under the Orphan Drug Act and FDA’s longstanding implementing regulations if one is “clinically superior” than the other by way of greater efficacy, greater safety, or major contribution to patient care (“MC-to-PC”).  In this case, because Lumryz is dosed once-nightly while Xywav requires a second dose in the middle of the night, FDA determined that Lumryz was clinically superior based on an MC-to-PC, as it does not disrupt the sleep cycle.  For that reason, FDA determined that the Orphan Drug Act did not bar it from approving Lumryz during the orphan drug exclusivity period for Xywav, and FDA awarded Lumryz its own period of seven years of orphan drug exclusivity.  This case followed.

Jazz argued that FDA’s determination was a violation of the Administrative Procedure Act on several fronts.  First, Jazz challenged whether FDA has authority to approve Lumryz during Xywav’s unexpired exclusivity period.  Second, Jazz contended that FDA departed from a longstanding agency policy requiring a clinically superior drug to have a “comparable safety” profile to the previously approved drug to obtain approval; because Lumryz has far more sodium and presents a health risk to narcolepsy parties, all parties admitted that Lumryz “presents a greater health risk to all narcolepsy patients.”  Finally, Jazz argued that FDA’s clinical superiority determination was arbitrary and capricious because FDA failed to follow its internal dispute resolution procedures and the Agency’s findings were inconsistent with scientific literature.  Avadel intervened, and both FDA and Avadel refuted these assertions.  As the Court explained, the case effectively boiled down to whether 21 U.S.C. § 360cc(a) “authorize[s] FDA to conclude that two orphan drugs are not the ‘same’ based on the second drug’s ‘clinical superiority’ over the first, even though the two drugs share the same active moiety and are used for the same disease or condition?”  The Court held that it does.

The Court looked to the “statute’s  words, structure, and historical context” and found that they “establish that, when Congress amended the [Orphan Drug Act] in 2017, it ratified and incorporated the existing regulatory definition of ‘same drug’ into the statute.”  Congress was “plainly [ ] aware” of FDA’s definition of “same drug” when it revised the Orphan Drug Act in 2017, which is “evidence that Congress intended to ratify the regulatory definition of ‘same drug’ in § 360cc(a).”  This, explained the Court, is further supported by the history and purpose of the 2017 amendments, which were passed to supersede another case, Depomed v. HHS, and which rejected FDA’s regulations requiring a demonstration of “clinical superiority” to secure orphan drug exclusivity after approval of an orphan-designated drug.  Indeed, said the Court, “Congress’s clear purpose in enacting the 2017 amendments was to supersede Depomed and to codify the agency’s authority to make ‘clinical superiority/ determinations.”  And “it would be an odd result for Congress to have codified only the FDA’s discretion as to exclusivity periods, but not approvals.”  Thus, when FDA determined that Lumryz was not the “same drug” as Xywav because its single-dose formula was clinically superior to Xywav, the Court held that “FDA did not exceed its statutory authority under § 360cc by comparing the clinical benefits of the two drugs in deciding whether to approve Lumryz during Xywav’s unexpired exclusivity period.”

With the statutory question out of the way, the Court looked at Jazz’s three allegations that FDA acted arbitrarily and capriciously when it departed from the “comparable safety” requirement; when it failed to comply with internal dispute resolution policies; and when it acted inconsistently with prior FDA clinical superiority determinations and scientific literature.  The Court found them all unpersuasive.

First, the Court concluded that FDA never had a “comparable safety” policy—neither the Orphan Drug Act, agency regulations, nor precedent require such a showing.  In fact, the Court stated that “there is not a single example of the FDA rejecting a new orphan drug approval based on a major contribution because the drug’s sponsor failed to establish comparable safety to an approved drug.”  Absent such a policy, the court did not deviate from that policy without adequate explanation when approving Lumryz and therefore did not act arbitrarily and capriciously.

Next, while the Review Division initially declined to find that Lumryz was “clinically superior,” the Office of Orphan Product Development (“OOPD”) sought opinion from FDA’s Sleep Team experts (housed in the Center for Devices and Radiological Health) causing the Review Division to change its earlier position.  Though Jazz alleged that the Sleep Team consultation departed from OOPD’s standard operating procedures, the Court found this unsupported by the Administrative Record.  It found that the Review Division’s initial decision was “preliminary.”  Further, the Court explained that “it is always within the discretion of . . . an administrative agency to relax or modify its procedural rules adopted for the orderly transaction of business before it when in a given case the ends of justice require it” (quoting Am. Farm Lines v. Black Ball Freight Serv., 397 U.S. 532, 539 (1970) (cleaned up).

Finally, the Court declined to question FDA on the science, noting that “these are challenges to an ‘area of special expertise’ of the FDA” to which the court “owes the agency the ‘most deferential review.’”  Indeed, FDA found that the benefit of once-nightly dosing outweighs the risk of increased sodium intake because the second dose disrupts sleep and required labeling warnings about the high sodium content.  Accordingly, FDA “provided a rational explanation of the differences between ordinary brief arousals and a prolonged sleep disruption caused by a second dosing of medication.”  And, the Court said, Jazz’s critiques of FDA’s findings do not “rise[] to arbitrary and capricious agency decision-making.”

As of now, FDA’s approval of Lumryz stands, as does its authority to abrogate an orphan exclusivity period when a follow-on product is clinically superior.  But the fight between Jazz and Avadel (and FDA) may not be over.  We’ll have to wait to see if Jazz appeals this decision, so we’ll be watching.  And, as this is only one of a several orphan drug cases pending right now, the fight over orphan drug exclusivity wages on.