By Kurt R. Karst –      

Last week marked the 5th anniversary of the March 23, 2010 enactment of the Affordable Care Act (“ACA”).  Title VII of the ACA, the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”), amended the Public Health Service Act (“PHS Act”) to create an abbreviated licensure pathway for biological products that are demonstrated to be “biosimilar” to or “interchangeable” with an FDA-licensed reference biological product.  Over the past few years, much of industry’s focus has been on FDA’s creation and implementation of the biosimilar pathway (see our previous posts here, here, and here), and on the legal battles over the “patent dance ” provisions (see our previous posts here and here).  But there’s another set of provisions in the BPCIA that folks have begun eyeing with increased interest: the so-called “transition provisions.”  And a new bill introduced last week by Representative Michael Burgess (R-TX), the “Generic Complex Drugs Safety and Effectiveness for Patients Act of 2015” (H.R. 1576), seeks to get the Government Accountability Office (“GAO”) involved in evlauating the provisions before they come into play. 

The transition provisions are at Section 7002(e) of the BPCIA and account for a change made to the statutory definition of “biological product” at PHS Act § 351(i) to include a “protein (except any chemically synthesized polypeptide).”  That change brings into the fold of biologics (and thus biosimilars) regulation a larger grous of products, including several natural source proteins like insulin, hyaluronidase, menotropins, and human growth hormones, that have been regulated as drugs under the FDC Act.  Specifically, BPCIA § 7002(e) states:

(e) PRODUCTS PREVIOUSLY APPROVED UNDER SECTION 505.—

(1) REQUIREMENT TO FOLLOW SECTION 351.—Except as provided in paragraph (2), an application for a biological product shall be submitted under [PHS Act § 351] (as amended by this Act).

(2) EXCEPTION.—An application for a biological product may be submitted under section [FDC Act § 505] —

(A) such biological product is in a product class for which a biological product in such product class is the subject of an application approved under such section 505 not later than the date of enactment of this Act; and

(B) such application—

(i) has been submitted to the Secretary of Health and Human Services (referred to in this subtitle as the “Secretary”) before the date of enactment of this Act; or

(ii) is submitted to the Secretary not later than the date that is 10 years after the date of enactment of this Act.

(3) LIMITATION.—Notwithstanding paragraph (2), an application for a biological product may not be submitted under [FDC Act § 505] if there is another biological product approved under [PHS Act § 351(a)] that could be a reference product with respect to such application (within the meaning of such section 351) if such application were submitted under [PHS Act § 351(k)].

(4) DEEMED APPROVED UNDER SECTION 351.—An approved application for a biological product under [FDC Act § 505] shall be deemed to be a license for the biological product under such section 351 on the date that is 10 years after the date of enactment of this Act. 

Thus, an application for a biological product must be submitted under PHS Act § 351 subject to the exceptions at BPCIA § 7002(e)(2) during the 10-year transition period that ends on March 23, 2020. 

The “Generic Complex Drugs Safety and Effectiveness for Patients Act of 2015” is, at least in part, an effort to get ahead of the curve before BPCIA § 7002(e) comes into play by asking the GAO to study some of the unique challenges presented by FDA’s evaluation of generic versions of complex drug products.  The bill sets out two broad questions for the GAO to consider:

1. With respect to nonbiologic complex drug products that have not been fully characterized . . . , whether the listing of such drugs as reference products in generic drug applications presents unique challenges in meeting approval standards that are significantly different than the challenges presented by generic drug applications that list small-molecule reference products.
2. With respect to biological products that are within the scope of the exception under section 7002(e)(2) of Public Law 111-148 (relating to temporary authority for the approval of biological products under [FDC Act § 505], whether the listing of such biological products as reference products in generic drug applications presents unique challenges in meeting approval standards that are significantly different than the challenges presented by generic drug applications that list small-molecule reference products.

The term “complex drug products that have not been fully characterized” is further defined in the bill to mean a drug for which: (1) the active ingredient has molecular diversity; (2) scientific analytic methodologies are unable to fully identify the molecular structures and physiochemical properties of the active ingredient; and (3) the nature of the active ingredient is not understood sufficiently to identity both the the molecular components of the drug that are involved in producing the therapeutic effect, and the mechanisms of action that produce such effect.

If the GAO determines, after consulting with FDA and “appropriate public and private entities,” that the answer to the questions above is that “significantly different challenges are presented for patients when reference products are nonbiologic complex drug products that have not been fully characterized or when reference products are biological products that are within the scope of the exception under [BPCIA § 7002(e)(2)],” then that determination triggers a series additional considerations, including:

1. What degree of characterization of the proposed generic version and the reference product should be required in order to determine the safety and effectiveness of the generic version;
2. What degree of similarity should be required to deem that the active ingredient of the proposed generic version is the same as the active ingredient of the reference product;
3. What types of evidence should be required to demonstrate that the proposed generic version is bioequivalent to the reference product;
4. What requirements should be established with respect to the comparability of the manufacturing process for the proposed generic version and the manufacturing process for the reference product;
5. Whether and to what extent clinical evidence is needed to demonstrate that there is no difference in immunogenicity between the proposed generic version and the reference product; and 
6. Whether and to what extent other clinical evidence is needed to demonstrate that the proposed generic version is as safe and effective for patients as the reference product.

Ultimately, consideration of these questions is intended to address whether FDC Act § 505(j) (concerning ANDAs) needs to be amended “to establish provisions that expressly address the approval of copy versions of nonbiologic complex drug products that have not been fully characterized, provisions that expressly address the approval of copy versions of biological products that are within the scope of the exception under [BPCIA § 7002(e)(2)], or both,” whether other changes to the law (i.e., FDC § 505(b)(2) and PHS Act § 351) need to be made, and whether FDA should develop a policy document “providing a comprehensive statement of general principles on the evidence that is necessary to obtain the approval of such Administration for proposed generic versions of reference products that are nonbiologic complex drug products that have not been fully characterized or that are biological products.”  The GAO report addressing each of these issues would be due not later than two years after the enactment of the “Generic Complex Drugs Safety and Effectiveness for Patients Act of 2015.”

With or without the passage of H.R. 1576, we’re likely to see some interesting questions and controversies crop of with the BPCIA’s transition provisions.  For instance, what happens if FDA approves an A-rated generic version of a biological product that come March 2020 will be deemed a license under the PHS Act?  Does that A-rating transition into an interchangeable biological product or not given the statutory requirements for interchangeability?  And what about the applicability of pediatric exclusivity to patents currently listed in the Orange Book for biological products that will be deemed licensed under the PHS Act?  Does that exclusivity simply disappear given the BPCIA's pediatric exclusivity limitation and lack of a patent listing mechanism?  Also, how will FDA treat any ANDAs or 505(b)(2) applications pending review on March 23, 2020? 

Hyman, Phelps & McNamara, P.C., the nation’s largest boutique food and drug regulatory law firm, seeks a junior to mid-level associate with substantive experience in medical devices and other areas of food and drug law and regulation to assist with a growing practice.  Strong verbal and writing skills are required.  Compensation is competitive and commensurate with experience.  HP&M is an equal opportunity employer.

Please send your curriculum vitae, transcript, and a writing sample to Jeffrey N. Wasserstein (jwasserstein@hpm.com).  Candidates must be members of the DC Bar or eligible to waive in.

By James C. Shehan –

Events keep on coming at a furious pace in the biosimilar world, with two new developments in the battle between Amgen and Sandoz over the latter’s hopes to launch its recently approved Zarxio, a biosimilar version of the former’s Neupogen (filgrastim). 

On March 25, 2015 FDA denied an Amgen Citizen Petition that requested FDA to require biosimilar applications to include certifications that applicants will timely comply with section 351(1)(2)(A) "by providing the reference product sponsor with a copy of the biosimilar application and information that describes the process(es) used to manufacture the biosimilar product that is the subject of that application.”  This petition was filed in October 2014 (see our previous post here) and Momenta’s comments opposing it (cited by FDA) were filed the following month.  As summarized by FDA, Amgen’s position largely flows from its interpretation of the statute as making the patent dance a mandatory process, while Momenta’s position is based on interpreting the patent dance as optional.

Having laid out these opposing views, FDA declines to require the certification requested by Amgen while refusing to endorse either interpretation.  Instead, the Agency makes plain that it has no intention of getting involved in a fight that it believes it can avoid.

FDA’s reasoning starts with the wording of the statute itself: “Neither section 351(k) nor section 351(1) requires FDA to impose a certification requirement as part of the biosimilar review process.”  The agency highlights that in this respect the BPCIA is “in contrast” to the Hatch-Waxman Act “Section 505(b) requires new drug application sponsors to identify certain patents for listing by FDA.  Consistent with section 505(b)(1), FDA publishes these lists in its Approved Drug Products With Therapeutic Equivalence Evaluations (the Orange Book). Sections 505(b)(2)(A) and 505(j)(2)(A)(vii) of the FD&C Act require 505(b)(2) and ANDA sponsors, respectively, to certify each patent submitted for the listed drug referenced in the Orange Book.  Because of this contrast, FDA concludes that imposing a certification “is a matter of regulatory discretion and not compelled under the PHS Act.”  For good measure, FDA asserts that the Amgen petition “implicitly acknowledges” that this is a matter of FDA discretion.

In support of its conclusion, FDA characterizes the patent dance procedures as “parallel to, but separate from, the FDA review process.”  As further support, the Agency notes that the BPCIA “generally does not describe any FDA involvement in monitoring or enforcing the information exchange by creating a certification process or otherwise,” although it does acknowledge grudgingly in a footnote that it has a duty to receive and publish certain patent infringement lawsuit complaints in the Federal Register.  Tying up with a bow its determination to stay clear of patent dance fights to the extent possible, FDA consigns the issue to the judicial system “These competing interpretations of section 351(1) are the subject of litigation that may clarify how section 351(1) should be interpreted.”

Speaking of that litigation (see our posts here, here, and here), Amgen has now filed an appeal to the Federal Circuit of the lower court’s denial of its request for a preliminary injunction to block the launch of Zarxio.  The parties have requested an expedited schedule for the appeal with oral argument projected for June.  Amgen has also requested an injunction during the pendency of the appeal.  Sandoz has agreed to not launch Zarxio until the earlier of May 11th or a Federal Circuit ruling on Amgen’s request for an injunction pending appeal. 

During the long five years between BPCIA passage and Zarxio’s approval, long stretches could pass without significant developments in the US biosimilar world.  It seems that those days are past.

By Alexander J. Varond –

On March 23, Representative G.K. Butterfield (D-NC) introduced H.R. 1537, the “Advancing Hope Act of 2015.”  The Advancing Hope Act would reauthorize the rare pediatric disease priority review voucher (“Pediatric Voucher”) program, which is slated to sunset in March 2015.  Rep. Butterfield’s press release can be found here.  We discussed the Pediatric Voucher program and its sunset clause here.  The bill would also amend the tropical disease priority review voucher (“Tropical Disease Voucher”) program.

The Advancing Hope Act would modify the definition of “rare pediatric disease” to specifically include “any form of sickle cell disease” and “any pediatric cancers.”  This appears to be in response to various requests for the inclusion of sickle cell disease submitted to FDA’s docket for its Draft Guidance on the Pediatric Voucher program and efforts by Kids v. Cancer.  We discussed the Draft Guidance here.  The Advancing Hope Act would also eliminate the possibility of receiving a Pediatric Voucher after a Tropical Disease Voucher was issued for the same drug or biological product.

The Advancing Hope Act also addresses the Tropical Disease Voucher program and would exclude drugs that have been “approved for commercial marketing for any tropical disease indication by a government authority outside of the United States for more than 24 months before the application is submitted.”  Such a limitation, however, could prove problematic for a number of reasons.  We discuss two of these reasons below.

First, the World Health Organization’s Prequalification Programme relies on regulatory findings from a select number of regulatory agencies (e.g., FDA, EMA, Health Canada).  WHO’s website explains:

The Prequalification Programme, set up in 2001, is a service provided by the World Health Organization (WHO) to facilitate access to medicines that meet unified standards of quality, safety and efficacy for HIV/AIDS, malaria and tuberculosis.  From the outset, the Programme was supported by UNAIDS, UNICEF, UNFPA and the World Bank as a concrete contribution to the United Nations priority goal of addressing widespread diseases in countries with limited access to quality medicines.

Prequalification was originally intended to give United Nations procurement agencies, such as UNICEF the choice of a range of quality medicines. With time, the growing list of products (i.e. medicines) that have been found to meet the set requirements has come to be seen as a useful tool for anyone bulk purchasing medicines, including countries themselves and other organizations.  For instance, the Global Fund to Fight AIDS, Tuberculosis and Malaria disburses money for medicines that have been prequalified by the WHO process.

Eliminating incentives for sponsors to seek FDA approval would likely slow WHO’s efforts to prequalify medicinal products and, therefore, could have a significant impact on global health.

Second, adding this exclusion to the Tropical Disease Voucher program would remove incentives for sponsors to further develop, manufacture, and seek U.S. approval of drugs that, at some point, were approved outside of the United States but are no longer manufactured.  FDA’s Draft Guidance on the Tropical Disease Voucher program addresses a variety of reasons the program was enacted.  Among these is the concern that “[a]lthough these tropical diseases are rare in the United States, intercontinental jet transport, immigration, tourism, and military operations are increasing the direct impact these diseases have on the health of Americans.”  Without these incentives, it is unlikely sponsors would seek approval in the United States.  If confronted with a health emergency for a tropical disease in the United States, stocks of a drug approved outside the United States might be unavailable.  Even if they were available outside the United States, they would not have been determined to be safe or effective in the United States.

By Kurt R. Karst –   

Does FDA has the authority to approve a new indication for an approved drug when that new indication has not been shown to be safe and effective by adequate and well-controlled studies submitted by the sponsor of the application?  And under what circumstances can FDA omit from generic drug labeling protected pediatric information included in the labeling of a Reference Listed Drug approved for multiple indications?

Those are the two core questions posed in a lawsuit Otsuka Pharmaceutical Co., Ltd., Otsuka Pharmaceutical Development & Commercialization, Inc., and Otsuka America Pharmaceutical, Inc. (collectively, “Otsuka”) filed earlier this week against FDA in the U.S. District Court for the District of Maryland concerning the atypical antipsychotic blockbuster drug ABILIFY (aripiprazole).  ABILIFY is approved under several NDAs (NDA 021436, NDA 021713, NDA 021729, and NDA 021866) in various dosage forms (tablets, oral solution, orally disintegrating tablets, and injection) for:

1. the treatment of schizophrenia;
2. the acute treatment of manic and mixed episodes associated with bipolar I disorder;
3. the maintenance treatment of bipolar I disorder;
4. use as an adjunctive therapy to antidepressants for the treatment of major depressive disorder;
5. the treatment of irritability associated with autistic disorder;
6. the acute treatment of agitation associated with schizophrenia or bipolar disorder (manic or mixed); and . . . most recently and most importantly for the issues at hand . . .
7. the treatment of Tourette’s disorder (or is it, as discussed below, the treatment of pediatric patients with Tourette’s Disorder?). 

Each version of ABILIFY is listed in the Orange Book with several patents expiring years from now; however, it was widely expected that FDA might approve ANDAs for generic versions of ABILIFY come April 20, 2015 when the period of pediatric exclusivity associated with U.S. Patent No. 5,006,528 (listed in the Orange Book as a drug product, drug substance, and method-of-use patent) expires.  But that shouldn’t happen says Otsuka in the company’s March 24, 2015 Complaint and Motion for Summary Judgment.  And a decision needs to be made soon to avoid irreparable harm, according to Otsuka’s Motion to Expedite the court proceedings. 

By way of background – and we’ll try to keep things as simple as possible (ha-ha!) – FDA, on January 25, 2006, designated Otsuka’s ABILIFY as an orphan drug for the “[t]reatment of Tourette’s syndrome.”  Meanwhile, Otsuka conducted Phase 3 clinical trials of aripiprazole in pediatric patients with Tourette’s Disorder demonstrating that the drug is safe and effective for use in pediatric patients.  In February 2014, Otsuka submitted Supplemental NDAs to FDA seeking approval for the treatment of pediatric patients with Tourette’s Disorder.  On December 12, 2014, FDA approved the Supplemental NDAs stating, among other things, that “[t]hese ‘Prior Approval’ supplemental new drug applications provide for labeling revisions based upon two adequate and well-controlled trials that demonstrate the efficacy for the new indication in pediatric patients with Tourette’s Disorder.”  Not long after that, FDA’s Orphan Drug Designations and Approvals database was updated to show the “Orphan Approval Status” as “Approved for Orphan Indication,” and the “Approved Labeled Indication” as “Treatment of pediatric patients with Tourette’s.”  FDA’s Orange Book (Cumulative Supplement No. 2, Feb. 2015) was then updated to reflect the addition of a period of orphan drug exclusivity expiring on December 12, 2021.      

So far, so good; just the typical approval and outcome you’d expect.  But then things got interesting. . . really interesting . . . .   

As stated in Otsuka’s court filing:

Counsel for Otsuka thereafter wrote to FDA’s Chief Counsel setting forth the company’s position that FDA’s approval of Abilify of an orphan indication for treatment of pediatric patients with Tourette’s Disorder meant that FDA was precluded from approving an ANDA for a generic version of Abilify for any indication pending the expiration of Otsuka’s statutory seven-year period of orphan drug market exclusivity for the new indication.  Id. ¶ 22, Att. E.  As counsel’s letter explained, none of the narrow exceptions to the general “same labeling rule” that requires generic drugs to contain the same information on their labels as their respective brand-name predicate (or reference listed) drug were applicable and, therefore, the general “same labeling rule” controlled.  Id. Att. E. [(Emphasis added; copies of the various attachments referenced are available here.)]

The position set forth by Otsuka’s counsel concerns FDC Act § 505A(o), which is part of the Best Pharmaceuticals for Children Act.  The provision, titled “Prompt approval of drugs under section 355(j) when pediatric information is added to labeling,” states:

(1) General rule – A drug for which an application has been submitted or approved under section 355(j) of this title shall not be considered ineligible for approval under that section or misbranded under section 352 of this title on the basis that the labeling of the drug omits a pediatric indication or any other aspect of labeling pertaining to pediatric use when the omitted indication or other aspect is protected by patent or by exclusivity under clause (iii) or (iv) of section 355(j)(5)(F) of this title.

(2) Labeling – Notwithstanding clauses (iii) and (iv) of section 355(j)(5)(F) of this title [(concerning 3-year new clinical investigation exclusivity)0, the Secretary may require that the labeling of a drug approved under section 355(j) of this title that omits a pediatric indication or other aspect of labeling as described in paragraph (1) include—

(A) a statement that, because of marketing exclusivity for a manufacturer—

(i) the drug is not labeled for pediatric use; or

(ii) in the case of a drug for which there is an additional pediatric use not referred to in paragraph (1), the drug is not labeled for the pediatric use under paragraph (1); and

(B) a statement of any appropriate pediatric contraindications, warnings, or precautions that the Secretary considers necessary.

This section of the law has come up in the past.  It has been used as a basis to delay approval of competing products until the expiration of exclusivity (see here), but it also facilitated ANDA approvals with pediatric information (e.g., sildenafil).

According to Otsuka, because FDC Act § 505A(o) refers only to protected pediatric labeling information protected by patent or 3-year exclusivity, “[t]he statute undeniably does not allow the omission of pediatric information protected by orphan drug exclusivity, which is granted pursuant to Section 527 of the FDCA (21 U.S.C. § 360cc).”

After receiving the above-referenced correspondence from Otsuka’s counsel, FDA changed course, alleges Otsuka, for an “improper extra-legal reason”: to prevent a result that would bar generic competition.  According to Otsuka:

On February 24, 2015, FDA sent Otsuka a letter, informing Otsuka that “as the first sponsor of [aripiprazole] to obtain marketing approval for this indication, [Otsuka] is entitled to seven years of orphan-drug exclusive approval . . . for treatment of Tourette’s disorder.”  Id. ¶ 23, Att. F.  That same day, FDA sent Otsuka a “corrected” approval letter, in which FDA went further and, without explanation or elaboration, advised that its earlier December 12, 2014, approval letter “contained an error in the ‘indications’ section,” an “error” FDA purported to change unilaterally by changing (broadening) the approved indication from treatment “in pediatric patients with Tourette’s Disorder” to treatment of “patients with Tourette’s Disorder.”  Id. ¶ 23, Att. A. [(Emphasis in original)]

Feeling forced into a corner, and with the threat of generic competition right around the corner, Otsuka sued, alleging violations of the Administrative Procedure Act (“APA”) and the FDC Act by FDA stemming from the Agency’s “corrected” approval.  Specifically, Otsuka alleges first that FDA violated the APA by abusing its discretion and by acting in an arbitrary and capricious manner that is contrary to the law when the Agency reversed its original approval decision:

This claim rests firmly on three closely related contentions.  First, when FDA approved a broader indication that that which Otsuka requested and when this broader indication was not supported by Otsuka’s adequate and well-controlled studies, FDA acted well outside its authority under the FDCA.  Second, FDA’s broadened approval is arbitrary and capricious because it is without factual or evidentiary support.  Otsuka conducted clinical trials with pediatric patients only and FDA does not conduct its own independent clinical trials to determine the safety and efficacy of a requested new indication.  Third, FDA “corrected” and broadened its original approval for a legally impermissible reason. FDA’s “corrected” its decision for reasons altogether unrelated and extraneous to the proper use of Abilify in the treatment of Tourette’s Disorder. Instead of operating within the boundaries of the FDCA’s approval provisions, FDA acted – and improperly so – in an effort to seek to deny Otsuka the rights and benefits to which it is entitled under the Orphan Drug Act.

Otsuka’s first contention is particularly interesting to us.  Indeed, we’ve seen at least one recent instance in which FDA decided on its own to broaden the indication for a drug over the objection of the NDA sponsor.  That happened with the August 13, 2013 approval of NDA 204308 for EPANED (enalapril) for oral solution, 1 mg/mL, for the treatment of hypertension (see here). The sponsor had pursued approval (and obtained orphan drug designation) for the treatment of hypertension in pediatric patients; however, FDA refused to approve the drug for anything less that treatment of hypertension in adults and children. 

Otsuka, in Count Two of the company’s Complaint, assumes (without conceding) the validity of FDA’s “corrected” (and broadened) approval and alleges that FDA is precluded from approving any generic versions of ABILIFY on April 20, 2015 based on FDC Act § 505A(o) and the fact that ABILIFY’s labeling is “loaded with pediatric information.”  “FDA is barred from omitting from the generic’s label the ample and multiple pediatric references in the FDA-approved Abilify label for the broadened population at large indication,” says Otsuka.  “Those references are protected by orphan drug exclusivity, and pediatric information pertaining to orphan drug exclusivity is not a category of information that Congress permitted to be omitted.”

Given the intense interest in the drug and what is likely a long line of ANDA applicants for generic ABILIFY, we’ll probably see some interventions in the case.  A conference call between the parties and the court was held on Wednesday, March 25, 2015 at 3:00 PM.  Afterwards, the court issued a Scheduling Order setting a hearing on April 14, 2015 at 10:00 AM for Otsuka's Motion for Summary Judgment and any cross-motions.

By Riëtte van Laack & Ricardo Carvajal - 

By Alexander J. Varond & Josephine M. Torrente –

On March 17, 2015 FDA approved Cholbam (cholic acid) for pediatric and adult patients with bile acid synthesis disorders due to single enzyme defects, and for patients with peroxisomal disorders.  In approving Cholbam, FDA also issued the third rare pediatric disease priority review voucher (“Pediatric Voucher”), triggering the Pediatric Voucher program’s 1-year sunset clause in Section 529(b)(5) of the FD&C Act. 

Recall that a Pediatric Voucher is a voucher issued to the sponsor of a “rare pediatric disease product application” that entitles the holder of such voucher to priority review (instead of a longer standard review) of a single NDA or BLA after the date of approval of the rare pediatric disease product application.  A qualifying rare pediatric disease product application is an NDA or BLA for a drug or biologic intended to prevent or treat a rare pediatric disease.  Such drug or biologic may not contain any active ingredient (including any ester or salt of the active ingredient) previously approved in any drug or biologic application.  The application must also be deemed eligible for priority review and rely on clinical data derived from studies examining a pediatric population and dosages of the drug intended for that population.  A sponsor cannot seek an adult indication as part of a rare pediatric disease application.

FDA defines a “rare pediatric disease” similar to that as a “rare disease,” but in pediatric patients.  That is, a “rare pediatric disease” is a disease that affects fewer than 200,000 individuals primarily aged from birth to 18 years in the U.S.  The definition also extends to diseases that affect more than 200,000 individuals primarily aged from birth to 18 years in the U.S. but for which no drug or biologic treatments are available because a company cannot reasonably expect to recover the costs of developing and marketing such products.  We blogged about FDA’s recently released Draft Guidance on the Pediatric Voucher program here.

Specifically, Section 529(b)(5) states:

TERMINATION OF AUTHORITY.—The Secretary may not award any priority review vouchers under paragraph (1) after the last day of the 1-year period that begins on the date that the Secretary awards the third rare pediatric disease priority voucher under this section.

Because the sunset clause was triggered on March 17, 2015, FDA will not issue Pediatric Vouchers to drugs approved after March 16, 2016.  We note that, depending on FDA’s calculations, March 17, 2016 may actually be the applicable date.

The triggering of the sunset clause also means that the General Accountability Office will be required to submit a report to Congress on the program within a year.  Independent of GAO’s report, the triggering of the sunset clause will certainly attract attention from Congress.  It may spur legislation to reauthorize the program, either as stand-alone legislation or as part of the 21st Century Cures legislation currently being discussed.  We discussed the 21st Century Cures legislation here, here, here, and here.

As a recap:

• BioMarin received the first Pediatric Voucher on February 14, 2014 for Vimizim (elosulfase alfa) for Mucopolysaccharidosis Type IVA (Morquio A syndrome).  We blogged about it here.

• United Therapeutics received the second Pediatric Voucher on March 10, 2015 for Unituxin (dinutuximab) for the treatment of pediatric patients with high-risk neuroblastoma who achieve at least a partial response to prior first-line multiagent, multimodality therapy.  We blogged about it here.

Other Priority Review Voucher Developments

It is at least somewhat ironic that–as the Pediatric Voucher program begins to wind down (unless it is reauthorized)–only 3 months ago, the tropical disease priority review voucher (“Tropical Disease Voucher”) program received a major boost.  This boost happened on December 16, 2014 when President Obama signed the Adding Ebola to the FDA Priority Review Voucher Program Act (“Adding Ebola Act”). We previously discussed the Tropical Disease Voucher program here and here.

The Adding Ebola Act added Filoviruses, including Ebola, to the list of tropical diseases eligible for Tropical Disease Vouchers.  It also brought several of the Tropical Disease Voucher program’s features in line with the newer Pediatric Voucher program.  These changes are listed below:

Perhaps the most important change made in the Adding Ebola Act was that FDA is now able to add diseases to the list of eligible diseases by order, rather than rulemaking.  This makes it substantially easier for FDA to respond to emergencies and add diseases that have long been discussed as being good candidates for addition to the list (e.g., Chagas disease).

By Allyson B. Mullen –

On March 17, 2015, CDRH released the final guidance entitled “Reprocessing Medical Devices in Health Care Settings:  Validation Methods and Labeling.”  The draft guidance was issued in May 2011 and is now being finalized on the heels of highly publicized outbreaks of hospital acquired infections associated with Endoscopic Retrograde Cholangiopancreatography (ERCP) Duodenoscopes.  In a safety alert from last month, FDA indicated that “the complex design of duodenoscopes . . . causes challenges for cleaning and high-level disinfection [such that] effective cleaning of all areas of the duodenoscope may not be possible.”  Finalizing this guidance is one of the steps FDA is taking in order “to reduce the risk of infection from reprocessed reusable devices.”   

This guidance applies to those devices that are intended to be reprocessed (cleaned, disinfected and/or sterilized) in health care facilities or by patients prior to first use and/or prior to subsequent uses.  This guidance does not apply to, among other things, reprocessing of single use devices.  Also, the guidance notes that this guidance does not apply to any processes intending to remove or inactivate transmissible spongiform encephalopathy (TSE) agents because as of the date of this guidance, CDRH has not approved or cleared medical devices for this specific intended use.

This guidance provides helpful recommendations for manufacturers manufacturing devices within the scope of the guidance.  We discuss a few of the more interesting points in the guidance below.

Focus on Labeling Comprehension.  The guidance provides a great deal of detail around labeling content.  However, the guidance makes it clear that the reprocessing instructions in the labeling must not only meet the content requirements, but users must be able to understand and follow the instructions.  The guidance recommends that manufacturers consider using standardized reprocessing instructions (format, methods, cycles) to make the process easier for users to follow.  The guidance goes on to indicate that for devices subject to design controls, the manufacturer should validate the reprocessing instructions.  This testing is essentially described as a human factors study for the reprocessing instructions.  The manufacturer should perform a study with actual users performing actual or simulated reprocessing of the device following the draft reprocessing instructions and solicit feedback regarding the instructions.  This appears to be a new requirement for reprocessed devices.  It is unclear if this information will be reviewed as part of the premarket submissions for reprocessed devices or reviewed as part of the design history file during inspections.  Either way, it will be interesting to see how CDRH implements and enforces this aspect of the guidance.

Validation Guidance.  The guidance also provides numerous recommendations for manufacturers to follow when validating its reprocessing methods.  None of these recommendations appear to be new, and manufacturers in this space are likely already familiar with them.  For example, cleaning should be validated under worst case conditions, artificial soils should be clinically meaningful, and validation process parameters use the shortest time, lowest temperature and weakest dilutions.  This guidance should serve as a good resource when drafting reprocessing validation protocols to ensure that all factors have been appropriately considered.

Premarket Submission Content.  All premarket submissions need to contain adequate labeling describing the reprocessing instructions.  In addition, the guidance states that PMAs, HDEs, De Novos and IDES will all need to contain protocols and full test reports demonstrating that the reprocessing instructions have been validated.  As noted above, it is unclear if this means that the reprocessing cycle described in the instructions has been validated or that the instructions themselves have been validated through the human-factor like test discussed above.

With regard to 510(k) submissions, most reprocessed device 510(k)s will not need to include protocols and full test reports demonstrating that the reprocessing instructions have been validated.  This approach is consistent with the 510(k) Refuse-To-Accept Checklist (the RTA Checklist), which states that only a summary of the sterilization validation is needed, if a device is end-user sterilized.  The guidance goes on to note that CDRH may request such data during the 510(k) review process.

For a subset of 510(k) devices (those identified in Appendix E of the guidance), CDRH has determined that the risks of microbial transmission and infection are high enough to warrant requesting protocols and full test reports demonstrating that the reprocessing instructions have been validated in the 510(k) submissions.  The list of devices in Appendix E generally include various types of scopes and accessories that are inherently difficult to clean because of their design (e.g., they include lumens, channels and/or hinges).  This list is not surprising given the recent activities that prompted finalization of this guidance.

Moreover, we understand that it has been industry practice to include this information as part of 510(k) submissions for a number of the devices listed in Appendix E to date.  Therefore, we do not expect this requirement to come as a surprise to industry.  However, since this new requirement appears to conflict with the current RTA Checklist, we are curious to see if it will prompt FDA to update its checklist.

In sum, the final guidance document provides a consolidated list of the labeling, validation and premarket submission information for reprocessed reusable devices. 

By Kurt R. Karst –      

Hopes for a victory were running high among folks in the blossoming biosimilars industry after Judge Richard Seeborg of the U.S. District Court for the Northern District of California indicated at a hearing last Friday (March 13th) that he wasn’t inclined to grant a Motion for a Preliminary Injunction filed by Amgen Inc. (“Amgen”) in litigation with Sandoz Inc. (“Sandoz”) over a biosimilar version of Amgen’s NEUPOGEN (filgrastim) and concerning the applicability and interpretation of various provisions of the the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”).  FDA approved Sandoz’s Section 351(k) biosimilar application – the first – under BLA 125553 as ZARXIO (filgrastim-sndz) (a placeholder non-proprietary name) on March 6, 2015 and promptly added it to the Purple Book.  ZARXIO is not yet marketed because of the pending litigation in California; however, in a court filing last month, Sandoz said that company “will not launch its biosimilar filgrastim product in the United States until the earlier of April 10, 2015, or a ruling in Sandoz’s favor on Amgen’s Motion [for a Preliminary Injunction].”  Well, that ruling has now come out.  And Sandoz scored a total knockout!  In a 19-page decision, Judge Seeborg denied Amgen’s Motion for a Preliminary Injunction, as well as an earlier filed Motion for Judgment on the Pleadings or, in the Alternative, Motion for Partial Summary Judgment.  Judge Seeborg also granted certain patent-related counterclaims filed by Sandoz.  Although an appeal – perhaps along with a request for emergency relief in the form of an injunction – seems likely, the victory scored by Sandoz, if upheld, could forever alter the biosimilars landscape in the U.S. by affirming that the complex patent resolution procedures under the BPCIA (which some might say are a disincentive to seeking approval of a highly similar biosimilar or interchangeable biosimilar biological product) are not the only game in town. 

The March 19th decision stems from a Complaint Amgen lodged last October alleging that Sandoz unlawfully refused to follow certain procedures created by the BPCIA (see our previous posts here and here).  In particular, Amgen alleged that Sandoz unlawfully opted out of the information and patent exchange procedures (i.e., the “patent dance”) at PHS Act § 351(l)(2)-(8), and that despite Sandoz’s assertions that the company already provided 180-day notice of commercial marketing to Amgen required under PHS Act § 351(l)(8)(A), such notice cannot be provided until at least FDA approval of a Section 351(k) application.  In making these allegations, Amgen asserted several causes of action, including unfair competition under Cal. Bus. & Prof. Code § 17200 et seq., conversion, and infringement of U.S. Patent No. 6,162,427 (“the ‘427 patent”) covering a method of using NEUPOGEN to treat a disease requiring peripheral stem cell transplantation in a patient in need of such treatment.  Sandoz filed various counterclaims, including seeking declarations that the ‘427 patent is invalid and not infringed by Sandoz.  Amgen later argued that the ‘427 patent counterclaims are barred because PHS Act § 351(l)(9)(C) mandates that only Amgen (and not Sandoz) may file a declaratory judgment action at this stage in the process. 

The dispute spilled over to FDA in the form of a Citizen Petition (Docket No. FDA-2014-P-1771), in which Amgen asks FDA to adopt policies and procedures to require biosimilar applicants – before their applications are accepted for review by FDA – to certify to the Agency that they will comply with PHS Act § 351(l)(2)(A) by providing the reference product sponsor with a copy of the Section 351(k) application “and such other information that describes the process or processes used to manufacture the biological product that is the subject of such application” within 20 days after FDA informs the biosimilar applicant that its 351(k) application has been accepted for review (see our previous post here).  FDA has not yet ruled on that petition. 

In his March 19th decision, Judge Seeborg, ruling on the mandatory or discretionary nature of the patent dance provisions, said that although the BPCIA repeatedly uses the word “shall” to describe the parties’ obligations under the disclosure and negotiation  procedures, Sandoz’s interpretation of the statute as permissive is more persuasive.  According to Judge Seeborg:

While Amgen correctly notes that subsection (l) uses the word “may” in certain paragraphs, thereby suggesting that the use of “shall” in others implies an action is required, several countervailing factors reflect otherwise.  First, that an action “shall” be taken does not imply it is mandatory in all contexts.  It is fair to read subsection (l) to demand that, if both parties wish to take advantage of its disclosure procedures, then they “shall” follow the prescribed procedures; in other words, these procedures are “required” where the parties elect to take advantage of their benefits, and may be taken away when parties “fail.”

That compliance allows an applicant to enjoy a temporary safe harbor from litigation and, potentially, to resolve or narrow patent disputes outside court proceedings, bolsters this reading.  Subparagraphs (l)(9)(B) and (C) contemplate the scenario in which an applicant does not comply at all with disclosure procedures, or fails to follow through after having begun the process.  They allow the reference product sponsor to commence patent litigation immediately in either instance—removing (or precluding) availability to the applicant of a litigation safe harbor.  Congress took the additional step in the BPCIA to amend 35 U.S.C. § 271(e) to add that an applicant’s failure to disclose information regarding a potentially infringed patent under subsection (l)’s requirements is immediately actionable, making it clear that such a dispute is ripe for adjudication. . . . 

Further, while Amgen contends persuasively that use of subsection (l)’s procedures can serve important public interests, including potential reduction of patent litigation and protection for innovators, nowhere does the statute evidence Congressional intent to enhance innovators’ substantive rights.  In contrast to numerous other federal civil statutes which offer a claim for relief and specify remedies, here Congress did more than remain silent—it expressly directed reference product sponsors to commence patent infringement litigation in the event of an applicant’s non-compliance.  Even in subsection (l) itself, subparagraph (l)(8)(B) is clear in providing the remedy of a preliminary injunction for failure to give the 180-day notice required in (l)(8)(A).  It is therefore evident that Congress intended merely to encourage use of the statute’s dispute resolution process in favor of litigation, where practicable, with the carrot of a safe harbor for applicants who otherwise would remain vulnerable to suit.  The statute contains no stick to force compliance in all instances, and Amgen does not identify any basis to impute one.

Furthermore, wrote Judge Seeborg, the decision not to comply with the information exchange and patent dance procedures reflects how the BPCIA’s overall scheme operates in a way to promote prompt resolution of patent disputes.  “An applicant who values expedience over risk mitigation may believe that the disclosure and negotiation process would introduce needless communications and delay,” wrote Judge Seeborg.  “Such an applicant may have good reason to believe that no unexpired relevant patents relate to its biosimilar, and that it is likely to prevail if challenged with an infringement suit.”  As such, a Section 351(k) applicant “may, in such an instance, opt to forego its ability to bring certain types of declaratory actions and receive information about potentially relevant patents from the reference product sponsor, and instead commence litigation immediately.” 

With respect to the 180-day notice provision at PHS Act § 351(l)(8)(A), which states that a Section 351(k) applicant “shall provide notice to the reference product sponsor not later than 180 days before the date of the first commercial marketing of the biological product licensed under subsection (k),” Judge Seeborg also handed Sandoz a victory.  Amgen argued that the word “licensed” in the provision means that a Section 351(k) applicant cannot provide notice until FDA approves a Section 351(k) application.  Accepting this interpretation would, of course, result in a de facto 6-month period of marketing exclusivity.  In his decision, Judge Seeborg found Amgen’s interpretation unworkable and problematic:

[T]he more persuasive interpretation accounts for the fact that FDA approval must precede market entry.  It would be nonsensical for subparagraph (l)(8)(A) to refer to a biosimilar as the subject of a subsection (k) application because upon its “first commercial marketing” a biosimilar must, in all instances, be a “licensed” product. “Before” modifies “first commercial marketing”; “licensed” refers only to “biological product”—not the appropriate time for notice.

Even more problematic with Amgen’s reading is the impact it would have on the overall statutory scheme.  Because the FDA cannot license a biosimilar until twelve years after approval of a reference product, Amgen’s reading would tack an unconditional extra six months of market exclusivity onto the twelve years reference product sponsors already enjoy under 42 U.S.C. § 262(k)(7)(A).  Had Congress intended to make the exclusivity period twelve and one-half years, it could not have chosen a more convoluted method of doing so.  Moreover, Congress presumably could have been far more explicit had it intended for infringement suits to commence only once a biosimilar receives FDA approval.  It was, therefore, not wrongful for Sandoz to give Amgen its 180 days’ notice prior to first commercial marketing pursuant to subparagraph (l)(8)(A) in July 2014, in advance of receiving FDA approval.

As a result of his decisions on the patent dance and notice provisions, Judge Seeborg dismissed with prejudice Amgen’s state-law unfair competition and conversion claims. 

Moving on to Sandoz’s counterclaims for non-infringement and invalidity of the ‘427 patent and Amgen’s contention that PHS Act § 351(l)(9)(C) bars those counterclaims, Judge Seeborg turned to the statutory text, which states that where a Section 351(k)  applicant has not provided its biosimilar application and manufacturing process information to the reference product sponsor, “the reference product sponsor, but not the subsection (k) applicant, may bring an action under section 2201 of title 28, United States Code, for a declaration of infringement, validity, or enforceability of any patent that claims the biological product or a use of the biological product.”  Noting that “[a]sserting a counterclaim is not the equivalent of commencing a lawsuit,” Judge Seeborg ruled that Sandoz’s ‘427 patent counterclaims are not barred by the BPCIA:

The BPCIA addresses only an applicant’s ability to “bring an action,” not to assert a counterclaim if placed in a position to defend against an infringement suit.  Furthermore, as Sandoz’s counterclaims arise from the same transaction or occurrence that is the subject of Amgen’s claim—the validity and relevance of Amgen’s ’427 patent—they are compulsory, and would be waived if not asserted.  Barring such claims in particular raises “real due process concerns.”

Given his decision concerning each of the issues above, Judge Seeborg saw no basis to grant Amgen’s request for a preliminary injunction, and wrote that the path seems to be  clear for Sandoz to begin marketing ZARXIO:

As the twelve-year exclusivity period for Neupogen long ago expired, there exists no substantive bar to market entry for Sandoz’s biosimilar filgrastim—and, consequently, no basis on which Amgen is entitled to injunctive relief or other remedies for disadvantages it may suffer due to market competition from Sandoz.

Judge Seeborg’s decision might also help clear the path for marketing another biosimilar biological product (provided it clears the FDA approval hurdle): Celltrion, Inc.’s and Hospira, Inc.’s biosimilar version of Janssen Biotech, Inc.’s (“Janssen’s”) REMICADE (infliximab).  Earlier this month, Janssen filed a Complaint in the U.S. District Court for the District of Massachusetts alleging, among other things, that Celltrion and Hospira unlawfully circumvented the patent dance procedures and provided ineffective notice of commercial marketing.

By Ricardo Carvajal & JP Ellison - 

On March 9, the Supreme Court handed down a decision in Perez v. Mortgage Bankers Association that does away with what we’ll refer to in this posting as the Paralyzed Veterans doctrine, after an appellate court decision by that same name.  The Paralyzed Veterans doctrine was established by the D.C. Circuit in 1997 in the Paralyzed Veterans case and reiterated repeatedly in D.C. Circuit decisions regarding agency rules.  Because so many administrative law cases are litigated in Washington, D.C., the Paralyzed Veterans doctrine was, until recently, the law of the land.  That doctrine held that an agency must use notice-and-comment procedures as required under the Administrative Procedure Act (APA) when the agency wishes to significantly change its previous interpretation of a regulation, even if the original regulation was not one for which notice-and-comment rulemaking was required.  The Supreme Court was unanimous in holding that the doctrine is not consistent with the APA:

The Paralyzed Veterans doctrine is contrary to the clear text of the APA’s rulemaking provisions, and it improperly imposes on agencies an obligation beyond the “maximum procedural requirements” specified in the APA.

*          *          *

The text of the APA answers the question presented.  Section 4 of the APA provides that “notice of proposed rule making shall be published in the Federal Register.”  When such notice is required by the APA, “the agency shall give interested persons an opportunity to participate in the rule making.”  But § 4 further states that unless “notice or hearing is required by statute,” the Act’s notice-and-comment requirement “does not apply…to interpretive rules.”  This exemption of interpretive rules from the notice-and-comment process is categorical, and it is fatal to the rule announced in Paralyzed Veterans.

*          *          *

Because an agency is not required to use notice-and-comment procedures to issue an initial interpretive rule, it is also not required to use those procedures when it amends or repeals that interpretive rule.

(Emphasis added; citations omitted.) 

With respect to how FDA conducts business, it would seem that the Perez decision is unlikely to have an immediate, significant impact.  FDA’s issuance of guidance documents is governed by the agency’s Good Guidance Practices regulation, which generally requires notice-and-comment for guidance documents of significance.  Nonetheless, it would be surprising if FDA isn’t giving careful thought to how the Perez decision might be helpful in defense of existing and future challenges to changes in the agency’s interpretations of its regulations.

For those lamenting the demise of the Paralyzed Veterans doctrine, there’s a potential salve in the concurring opinions of Justices Alito, Scalia, and Thomas, who signal an inclination to reconsider Auer v. Robbins, in which the Court held that an agency’s interpretation of its own ambiguous regulations is entitled to deference (a holding that relies on the Court’s pre-APA decision in Bowles v. Seminole Rock & Sand Co.).  It’s not readily apparent that an additional two Justices are similarly inclined.  Nonetheless, we expect that it won’t be long before counsel in an appropriate case takes up the invitation to put Auer in play.

By John A. Gilbert –

On March 16th, the U.S. House of Representatives passed by voice vote H.R. 639, the Improving Regulatory Transparency for New Medical Therapies Act, which would amend the Federal Food, Drug & Cosmetic Act (FD&C Act) and the Controlled Substances Act (CSA) to expedite scheduling of new chemical entities (“NCE”).  As reported in related blog postings (here, here, and here), this legislation is intended to address issues where the marketing of certain drugs approved by the Food and Drug Administration (FDA) have been delayed while waiting for Drug Enforcement Administration (DEA) scheduling action.  

The final version of H.R. 639 that passed is significantly different than the version introduced on February 2, 2015.  The final version amends not only the CSA, but also the FD&C Act and patent term extension laws.  In doing so, this legislation more directly addresses the crux of the issue, ensuring that companies do not lose patent or non-patent exclusivity on newly approved drugs because of drug scheduling delays.  If enacted, the bill would presumably moot pending litigation Eisai initiated against FDA concerning the triggering of NCE exclusivity for a controlled substance (see our previous post here).

H.R. 639 amends the FD&C Act in cases where HHS has recommended scheduling under the CSA by timing the effective date of FDA approval, conditional approval or indexing, as appropriate, for a drug, biological product, or animal drug to the DEA’s issuing of the interim final rule scheduling the product.  The bill also amends the CSA to require DEA to issue an interim final rule controlling a drug no later than 90 days after either: (1) when DEA has received the HHS scientific and medical evaluation and recommendation (commonly known as the “Eight Factor Analysis”) or (2) DEA is notified by HHS of the approval of the drug, biological product or animal drug.  The bill requires DEA to make the interim final rule effective immediately without having to show good cause. 

H.R. 639 also amends the patent term extension statute (35 U.S.C. § 156) by defining the “covered date” for products recommended for scheduling as the later of either approval by FDA or the issuing of the interim final rule scheduling the drug by DEA.

Finally, H.R. 639 promotes research and development of NCE’s or any drug by expediting registration for manufacturers of clinical trial material.   Generally, neither the CSA nor DEA regulations place a deadline on DEA to decide on any application for a DEA registration (e.g., manufacturer, distributor, pharmacy, etc.).  However, in the case of a Schedule I or II drug, this legislation would require DEA to publish a notice of application for such a manufacturer registration within 90 days of receipt and then issue the registration or a show cause to deny the registration, within 90 days of the close of the comment period.  In the case of manufacturer registration for use of a Schedule III-V drug in a clinical trial, the DEA must grant the registration or issue a show cause denying the application within 180 days after receipt of such application.  It is worth noting that the difference in these approval procedures is because the CSA otherwise requires that applications for bulk manufacturers of a Schedule I or II controlled substances must be published in the Federal Register.

By Kurt R. Karst –      

Nothing lasts forever in our mortal world, though some things try to come close: Wonka’s Everlasting Gobstoppers, The NeverEnding Story, Doctor Who, the Energizer Bunny . . . . and perhaps one day in the not too distant future, the Everlasting Patent will be added to the list.  What’s that you say?  A patent term is only 20 years from the filing date of the earliest U.S. application to which priority is claimed (excluding provisional applications).  While that’s generally true (minus any extensions, for example, a patent term extension under Title II of the Hatch-Waxman Amendments), there’s a provision buried in the nearly 400-page discussion draft of the 21st Century Cures Act that was released earlier this year (see our previous post here) that seems to create the possibility of essentially limitless term extensions for a patent (as a helpful reader pointed out to us). 

The provision at issue is in Section 1222 (titled “Capturing Lost Opportunities and Creating New Cures for Patients”) of Subtitle M (titled “Dormant Therapies”).  It states:

(C) EXTENSION OF PATENTS.—

    (i) IN GENERAL.—Unless the Director has notified the Secretary of a determination under subparagraph (B)(ii) [(concerning failure to provide documentation of waiver of patent rights)], for each patent identified in a submission pursuant to subparagraph (B)(i) [(concerning the listing of patents that may be reasonably construed to provide protection for the medicine)], and for each patent issuing based upon an application for patent so identified, the Director shall, within the 3-month period beginning on the date of the submission, extend the patent to expire at the end of the protection period for the dormant therapy, if the patent would otherwise expire before the end of the protection period.  If the Director has so notified the Secretary under subparagraph (B)(ii), the Director shall extend one such patent, selected by the sponsor, for the period that would have been applicable had an application for extension been filed under section 156 of title 35, United States Code, with respect to such patent.

    (ii) APPLICATION OF CERTAIN PROVISIONS.—During the period of an extension under clause (i)—

    (I) the rights under the patent shall be limited in the manner provided under section 156(b) of title 35, United States Code; and

    (II) the terms “product” and “approved product” in such section 156(b) shall be deemed to include forms of the active moiety of the dormant therapy and highly similar active moieties that might be approved or licensed by the Secretary based upon an application filed under section 505(b)(2) or 505(j) of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)(2), (j)) or under section 351(k) of the Public Health Service Act (42 U.S.C. 262(k)) that references or otherwise relies upon the dormant therapy.

(D) INTERIM PATENT EXTENSIONS.—Notwithstanding any provision of title 35, United States Code, with respect to any patent listed (or patent issuing on an application listed) under subsection (b)(1) that would otherwise expire before the sponsor could make a submission under subparagraph (B), the Director, upon application of the patentee, shall grant to the patentee an interim extension of such patent, subject to the limitations in section 156(d)(5)(F) of such title 35, for such period as may be necessary to permit the sponsor to submit the listing under subparagraph (B) and, if the patent is therein listed, to extend the patent as provided under subparagraph (C).  The Director may require, for any patent extended under this subparagraph, that the sponsor of the dormant therapy to which the patent relates provide periodic certifications that development of the dormant therapy is continuing.  The Director may terminate any interim extension for which a required certification has not been made.

(E) NOTICE OF EXTENSION.—For each patent that is extended under this paragraph, the Director shall publish a notice of such extension and issue a certificate of extension described in section 156(e)(1) of title 35, United States Code.

(F) NOTICE OF WAIVER.—For each patent identified in a submission under subparagraph (B)(i), and each patent issuing based upon an application for patent so identified, that expires after the end of the protection period for the dormant therapy, the Director shall publish a notice that the patent is subject to the limited waiver of the right to enforce described in subsection (c)(1).

As we previously noted, Subtitle M is modeled after the Dormant Therapies Act of 2014 (S. 3004), which Senator Orrin Hatch (R-UT) introduced in December 2014.  A press release from Senator Hatch last year noted that the Dormant Therapies Act “will remove the ‘ticking patent clock’ conundrum that forces companies to prioritize research based on which compounds can be brought quickly to market.”  The Dormant Therapies Act is a redo of the Modernizing Our Drug & Diagnostics Evaluation and Regulatory Network Cures Act (“MODDERN Cures Act”), which was introduced in 2013 (H.R. 3116) and 2011 (H.R. 3497). 

Subtitle M would create a new guaranteed 15-year “protection period” for certain drug and biological products designated and approved as “dormant therapies” – that is, a “medicine [that] is being investigated or is intended to be investigated for an indication to address one or more unmet medical needs,” among other designation requirements.  Specifically, during the 15-year “protection period,” FDA would be prohibited from approving an ANDA, 505(b)(2) application, or 505(b)(1) NDA for a drug product containing the same active moiety as in the dormant therapy, and would be prohibited from licensing a Section 351(k) biosimilar or a Section 351(a) BLA for a biological product containing an “active moiety that is highly similar” to that of the dormant therapy, unless, in the case of a 505(b)(1) NDA or Section 351(a) BLA, “the information provided to support approval of such application is comparable in scope and extent . . . to the information provided to support approval of the application for the qualifying medicine . . . .”  That’s pretty significant protection; however, as part of the deal, companies must agree to waive certain patent rights.  But they get other patent rights as noted in the provisions quoted above. 

The removal of the “ticking patent clock” for dormant therapies Sentaor Hatch referred to in a press release may be more than what some in industry were expecting, but exactly what it says, leading to a patent that could go on, and on, and on.  Here’s how that would work under one reading of the proposed statutory text . . . . 

The choice and nature of the patent selected for extension is not limited to a patent on a new dormant therapy use of the drug or biologic.  The proposed statutory text could allow for extension of any patent reasonably related to the drug or biologic that has not expired (or that is the subject of an interim patent term extension) selected from a list of all patents on the product by the applicant.  That patent, once selected, would run until the expiration of the “protection period.”  That’s just 15 years, right?  But hold on . . . .

What if a sponsor obtains multiple dormant therapy designations and approvals for the same drug or biologic or a related product to which the same patent is reasonably related?  It certainly seems possible that the sponsor could select the same patent over and over again for extension.  This would result in cascading protection periods for a single patent – as well as “for each patent issuing based upon an application for patent so identified” –  that extend for decades, thus creating the everlasting patent.  Of course, the “fix” to this issue is to prohibit the same patent from being selected more than once.  But such a limitation is not in the proposed text.  Perhaps that issue will be addressed in version 2.0 of the 21st Century Cures Act, which is rumored to be in the works. 

Update:

We received a comment from one blog reader we thought deserved posting and that provides an alternative view of the proposed statutory change.  Enjoy.

A post in this blog dated 13 March 2015 entitled The Everlasting Patent: Is it Hiding in Plain Sight in the 21st Century Cures Act? offers an opinion on the 21st Century Cures Act discussion draft that the provisions of Sections 1221-1223 of Subtitle L (titled “Dormant Therapies”) could lead to “evergreening” of patents.  Specifically, the blog opined that multiple extensions of the same patent under this Act could lead to multiple exclusivity extensions for the same dormant therapy.  In fact, under the Act a dormant therapy can benefit from one and only one protection period which is measured from the first day of the first approved indication for a therapy and cannot be further extended.  As a result of this and other limitations in the Act, any such “evergreening” is impossible.  Unlike the “everlasting gobstopper” to which these provisions were referred in the earlier post, an applicant looking for exclusivity beyond the protection period will be met with Gene Wilder’s famous line from the same movie, “you get nothing, you lose, good day sir!”

Two particular provisions in this Act that ensure this result are:

• Section 1221(6)(A) measures the “protection period” from the date that FDA “first approves” the dormant therapy (DT) for “any indication”.  Similar to the “first licensure” limitation in the exclusivity provisions of the BPCIA, the exclusivity and patent extension resulting from any subsequent dormant therapy designation that an applicant attempts to apply to a previously-designated dormant therapy – or a dormant therapy with the same active moiety – could not possibly extend the overall 15 year period, because subsequent extensions for the same therapy or moiety would always relate back to the first approval date for any indication.
• In the case the same patent were ever to be extended a second time because a second DT were approved based upon a different active moiety, the Hatch-Waxman limitations on the enforcement of the patent during each of the extended patent terms would apply.  This is set out in section 4(e)(2)(C)(ii) of Section 1222.  The most critical limitation on extended terms is in 35 U.S.C. § 156(b)(1)(B), which would operate to limit a second extension to the uses approved on or after the FDA approval of the second DT, “in the case of a patent which claims a product, [the extension is] limited to any use approved for the product … on or after the expiration of the regulatory review period upon which the extension of the patent was based.”  The second extension of the patent would not afford rights to enforce the patent against the earlier-approved DT. 

Thus, for multiple extensions of the same patent under this Act, each such extension is exclusively forward-looking never covering a previously approved use for a drug or biologic.

In a new Legal Backgrounder published by the Washington Legal Foundation, Hyman, Phelps & McNamara, P.C.’s James P. Ellison, Anne K. Walsh, and Andrew J. Hull* write a “Warning Letter” to FDA-regulated drug establishments regarding FDA’s inspection practices.  We have written on FDA’s inspection authority in the past (see here and here), and this article addresses FDA’s aggressive position on that inspection authority. 

FDA’s position was most recently set forth in FDA’s Guidance for Industry: Circumstances that Constitute Delaying, Denying, Limiting, or Refusing a Drug Inspection (2014), published to interpret section 707 of the 2012 Food and Drug Administration Safety and Innovation Act (“FDASIA”).  This section states that a drug stored in an FDA-regulated facility is deemed adulterated under the Federal Food, Drug, and Cosmetic Act (“FDCA”) when the facility “delays, denies, or limits an inspection, or refuses to permit entry or inspection.”  As such, FDA’s interpretation of its lawful inspection activities could have draconian effects on those who are unprepared for the positions that FDA may assert during an inspection.

For instance, the authors analyze the agency’s questionable position that facilities must allow FDA inspectors to take photographs as part of an inspection.  The authors argue that this and other FDA inspection practices may well fall outside the inspection authority granted to FDA by Congress.

The authors conclude the article by writing:

Because of unresolved questions regarding FDA’s inspection authority and aggressive inspection practices, a company must be aware of the agency’s expectations during an inspection.  Without forethought and internal policies in place specifically contemplating the issues discussed in [the article], a company runs the risk of being caught off-guard by an inspector’s requests and possibly providing FDA with evidence beyond FDA’s inspection authority.  A company could be handing FDA evidence and information to which it would not otherwise be entitled, absent a subpoena, warrant, or other lawful process. 

* Admitted only in Virginia.  Work supervised by the Firm while D.C. application pending.

By Jay W. Cormier & Alan M. Kirschenbaum –

The stage is set for yet another court ruling in the battle between the Health Resources and Services Administration (HRSA) and the Pharmaceutical Research and Manufacturers of America (PhRMA) over HRSA’s implementation of the 340B Orphan Drug Rule.  As we have related in prior posts (the most recent being here), HRSA asserts that the statutory orphan drug exclusion from the 340B drug discount program, under which certain 340B covered entities are not eligible for 340B pricing for orphan drugs, only applies to orphan drugs when used for the orphan-designated indications but not when used for other indications.  This position was first incorporated into a regulation issued pursuant to notice-and-comment rulemaking.  PhRMA successfully sued in the U.S. District Court for the District of Columbia, obtaining a ruling that HRSA was not authorized by statute to issue regulations in this area.  So, HRSA promulgated a second rule, which was virtually identical to the first, except that HRSA labeled it an “interpretive” rule.  PhRMA challenged the latter rule in the same proceeding, but the  Court agreed with HRSA that the second rule was a separate matter that required a new lawsuit.  PhRMA brought the new lawsuit last October. 

Both sides have now filed motions for summary judgment.  HRSA has argued that the court lacks jurisdiction to review the interpretive because it is not a final agency action.  According to HRSA, the new rule does not confer any rights or obligations, nor do legal consequences result from it.  HRSA states that no enforcement action can be taken under the new rule.  Rather, any legal action against a manufacturer for charging excessive prices for orphan drugs prescribed for non-orphan indications will flow from the statutory provisions rather than the new regulation.  HRSA claims that voluntary compliance with the new HRSA rule by a large number of orphan drug manufacturers “does not transform the interpretive rule into a binding rule.”

In its Opposition filed on February 25, PhRMA argues that the new rule, like any executive regulation, confers legal obligations on orphan drug manufacturers, and plainly sets forth HRSA’s interpretation of the statutory orphan drug exclusion — an interpretation that will be the basis for enforcement actions.  PhRMA further points out that, lest there be any doubt with respect to HRSA’s intention to enforce the new rule, the agency has sent letters to over 50 manufacturers ordering them to comply with the new rule and threatening enforcement for non-compliance, and has posted on its website a list a list of manufacturers who are allegedly noncompliant.

Hopefully, the Court will be persuaded that the rule is reviewable, and the merits of HRSA’s interpretation of the orphan drug exclusion will finally be adjudicated.  If not, manufacturers of orphan drugs with additional non-orphan indications will be faced with the unusual prospect of an agency taking action to enforce an interpretation that it insists is not legally binding.

By Alexander J. Varond –

Evidence from recent approvals of breakthrough therapy-designated products suggests that, for some time now, FDA has been operating under accelerated review timelines for certain drugs with breakthrough therapy designation.  Recently, FDA confirmed this and stated that it has been informally instituting a policy to expedite the review of certain breakthrough therapy-designated applications for the past several months.  FDA’s informal policy has now found its way into a Manual of Policies and Procedures entitled “Good Review Practice: Review of Marketing Applications for Breakthrough Therapy-Designated Drugs and Biologics That Are Receiving an Expedited Review.” 

Put simply, FDA’s MAPP establishes an “expedited review” pathway for certain breakthrough therapy-designated drugs.  Under this pathway, FDA review teams are instructed to plan to act at least one month prior to the Prescription Drug User Fee Act (PDUFA) goal date. 

FDA’s MAPP states that breakthrough therapy-designated drugs eligible for “expedited review” should have the following characteristics:

• Preliminary review of results from clinical trials must indicate that the drug has demonstrated substantial improvement over existing therapies;
• The marketing application must be designated as a priority review; and
• The review team must have determined that a first cycle approval is likely.

As background, Section 902 of Food and Drug Administration Safety and Innovation Act (FDASIA) provides that

[FDA should] expedite the development and review of [a breakthrough therapy-designated] drug if the drug is intended, alone or in combination with 1 or more other drugs, to treat a serious or life-threatening disease or condition and preliminary clinical evidence indicates that the drug may demonstrate substantial improvement over existing therapies on 1 or more clinically significant endpoints, such as substantial treatment effects observed early in clinical development.

While FDA’s May 2014 guidance entitled, “Expedited Programs for Serious Conditions – Drugs and Biologics,” which we blogged about here, provided several clues regarding how the development of breakthrough designated drugs might be expedited, the method by which FDA would expedite the “review” of applications was not clear.  FDA’s new MAPP, therefore, is intended to provide clarity on this topic.

FDA was careful to state that not all breakthrough therapy-designated drugs will receive expedited review.  Instead, decisions are made on a case-by-case basis.  The MAPP details examples of factors that FDA will weigh when considering whether to designate an application for expedited review:

• Resources to expedite the review are not available because of competing public health priorities (e.g., anthrax, Ebola, influenza);
• An advisory committee meeting is needed for reasons such as clinical trial results or safety issues;
• An unanticipated safety issue is identified that requires a risk evaluation and mitigation strategy (REMS) with elements to ensure safe use; or
• Manufacturing issues are identified.

The MAPP describes the timing and process for these expedited reviews and notes that expedited review does not change PDUFA review performance goals.  The MAPP also explains that CDER review teams can determine that an expedited review is no longer appropriate and change the review to the default priority review timeline.  If this happens, FDA will communicate its decision to the sponsor within three days.  Instances in which the CDER review team may determine that an expedited review is no longer appropriate include, if:

• Unexpected application deficiencies are found;
• The marketing application is of poor quality;
• The sponsor fails to engage in collaborative communications (e.g., failure to respond to information requests);
• There is a need to hold an advisory committee meeting;
• Unanticipated review issues arise; or
• The review team experiences an unexpected shift in work priorities or team staffing.

FDA has frequently exceeded its PDUFA goal dates for breakthrough therapy-designated applications.  One notable example came on December 22, 2014 when FDA approved Opdivo (nivolumab), a therapy for melanoma,‎ three months ahead of its PDUFA date. 

Additional examples show that even breakthrough therapy designations granted mid-review have helped to speed FDA’s review of those applications.  Roche’s idiopathic fibrosis (IPF) drug, Esbriet (pirfenidone), and Boehringer Ingelheim’s IPF drug, Ofev (nintedanib), are two examples:

• Esbriet’s resubmission was submitted on May 23, 2014, was granted breakthrough therapy designation on July 17, 2014, and was approved on October 15, 2014, ahead of its November 23, 2014 PDUFA goal date. 
• Ofev’s application was submitted on July 2, 2014, granted breakthrough therapy designation on July 15, 2014, and was approved on October 15, 2014, ahead of its January 2, 2015 PDUFA goal date.

Notably, FDA’s previously released MAPP entitled, “Good Review Practice: Management of Breakthrough Therapy-Designated Drugs and Biologics” is still applicable and covers FDA’s actions from time of designation until marketing application has been submitted.