Introduction

U.S. prescription drugs can broadly be divided into two categories: 1) small molecule drugs and 2) biologics. Small molecule drugs tend to be chemically synthesized and often have molecular weights under 1,000 Daltons. Contrastingly, biologic drugs are larger and more complex molecules, for example proteins, viruses, and living cells such as CAR-T cells.

The regulatory frameworks for small molecule drugs and biologics are separate, and these separate frameworks result in important differences to manufacturers. These differences include: 1) the types of regulatory exclusivities available and their lengths; 2) the litigation schemes under which generic and biosimilar applicants challenge, respectively, branded drug and biologic patents; 3) the location and degree of patent, therapeutic equivalents, and regulatory information available for each approved or licensed medication; and 4) the reviewing entity within the U.S. Food and Drug Administration (FDA).

For historical reasons, however, some drugs—which today would be biologics regulated under the biologics regulatory framework—were approved under the small molecule drug regulatory framework. In fact, there are about 100 medications (for example, pancrelipase and somatropin) that were approved under the small molecule drug framework, but nevertheless meet the legal definition of biologics (biologic products).

The Biologics Price Competition and Innovation Act (BPCIA) of 2009, and the Further Consolidated Appropriations Act, 2020, remedy this discrepancy by setting a date (March 23, 2020), on which biologics approved under the small molecule regulatory framework will transition to being regulated under the biologic regulatory framework. As March 23, 2020 is fast approaching, the FDA recently issued a guidance which provides the agency's current thinking on issues related to this transition. We highlight selected, relevant guidance provisions, and related information, below.

Has the determination of which proteins can qualify as biologics changed?

Yes. The BPCIA defined a biologic (biologic product) to include a "protein (except any chemically synthesized polypeptide) …" Further, earlier FDA final guidance clarified that a protein is "any alpha amino acid polymer with a specific defined sequence that is greater than 40 amino acids in size." Thus, initially, for a protein to be a biologic, it had to: 1) be greater than 40 amino acids in size; and 2) not be chemically synthesized. The Further Consolidated Appropriations Act, 2020, removes the chemically synthesized exclusion, thereby potentially increasing the number of proteins that can become biologics.

However, peptides—that is, amino acid polymers containing 40 or fewer amino acids—fall outside of the definition of protein for biologics determination purposes. Also, drug products that contain a protein as an inactive ingredient (for example, human serum albumin), will not be considered proteins for purposes of the statutory definition of "biological product" and the transition provision.

How the FDA will notify affected NDA holders of the transition?

As described in the guidance, the FDA intends to send a letter (on March 23, 2020) to holders of approved new drug applications (NDAs) for drugs subject to the transition that the "approved NDA was deemed to be a BLA (biologics license application) at 12:00 am Eastern Daylight Time (EDT) … and no longer exists as an NDA." The letter will inform the NDA holder that it has been "issued a license that authorizes … manufacture of the biological product … for introduction into interstate commerce." NDA holders will also need to update listing information in FDA's electronic Drug Registration and Listing System (eDRLS) by June 30, 2020, to reflect a change in the application number prefix (that is, from NDA to BLA). The application number that comes after the NDA or BLA prefix will not change. Application holders will not need a new National Drug Code (NDC) number with a new product code.

Will therapeutic equivalents for transitioned drugs still be listed in the Orange Book?

Orange Book listed drugs that are transitioned under the deemed license provision will be moved from the Orange Book to the Purple Book. But the guidance notes that therapeutic equivalence evaluations previously listed in the Orange Book for transitioned drugs will not be reflected in the Purple Book because the Purple Book "does not include therapeutic equivalence evaluations as reflected in the Orange Book."

Which litigation framework applies to transitioned drugs post-transition?

The FDA's guidance notes that NDAs for 505(b)(1) applications and for 505(b)(2) applications will be "deemed to be a 351(a) BLA on the transition date." Thus, any patent challenge litigation initiated after the transition will occur under the BPCIA framework as transitioned drugs are now deemed to be biologics.

My drug candidate is an antibody conjugated to a drug. How will the FDA regulate that product?

Applications for antibody-drug conjugates should be submitted as BLAs. The FDA considers these to be combination products "composed of a biological product constituent part and a drug constituent part."

Will deemed transition drugs that were reviewed and approved by CDER (the FDA's Center for Drug Evaluation and Research) remain within the same CDER review office/division after the transition?

The FDA notes that, in general, "approved NDAs that are deemed to be BLAs will remain within the same review office / division within CDER's Office of New Drugs (OND)." This pronouncement, however, is subject to "any reassignments related to CDER's OND."

What about drug labeling? Will I need to make changes?

Holders of deemed BLAs "will be required to revise the product labeling." This includes revising the drug's container labels, carton labeling, and prescribing information, to conform to biologics labeling requirements. However, the FDA understands that these revisions may take time, and "does not intend to object to … labeling of biological products marketed under a deemed BLA with labeling that does not conform to certain labeling requirements … until March 23, 2025." The guidance contains a table listing selected container label and carton labeling requirements.

I am a generic pharmaceutical company, or a 505(b)(2) applicant, that was going to file an NDA or an abbreviated new drug application (ANDA), in about six months, to one of the transitioning drugs. What do I do now?

After the transition, the transitioned drug will no longer be an Orange Book listed drug and cannot serve as a reference listed drug (RLD) for a 505(b)(2) NDA or an ANDA application. Thus, a different reference listed drug must be used, or you must file as a biosimilar (ABLA) or a BLA.

Can my first approved drug get additional years of biologics regulatory exclusivity after the transition? What if I have unexpired, five-year NCE exclusivity?

All expired exclusivity related to the approved NDA—other than orphan and pediatric exclusivity—will continue to be expired. Unexpired orphan drug exclusivity would continue to apply and can block the approval of a drug to be approved under e.g., an NDA or to be licensed under the BPCIA. Similarly, unexpired pediatric exclusivity will continue to apply to a deemed biologic, provided the conditions in section 351(m) of the Public Health Services Act are met. Finally, the transitioned, deemed biologics will not be eligible for 12 years of regulatory exclusivity.

Conclusion

Pharmaceutical companies whose drug(s) will be impacted by the deemed transition should take the appropriate steps, post transition, to meet the requirements and obligations associated with becoming a deemed licensed biologic. Generic pharmaceutical companies should consider the advantages and disadvantages of attempting to enter the U.S. market as biosimilar applicants instead of as generic drugs, including the BPCIA litigation framework.