FDA's New Interpretation of the Five-Year NCE Exclusivity Provisions of Federal Food, Drug, and Cosmetic Act

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The U.S. Food and Drug Administration (FDA) recently published its response to three citizen petitions and its draft Guidance for Industry relating to the determination of the five-year new chemical entity (NCE) exclusivity for fixed-combination drugs.

The Hatch-Waxman Amendments to the Federal Food, Drug, and Cosmetic Act (FDCA) provide some incentives to New Drug Application (NDA) sponsors, including at least two exclusivity provisions that would delay competition from Abbreviated New Drug Applications (ANDA) and 505(b)(2) applications. These exclusivity provisions include (1) an "eligibility clause" and (2) a "bar clause." The first provision provides a five-year NCE exclusivity if the application is to "a drug, no active ingredient (including any ester or salt of the active ingredient) of which has been approved in any other" 505(b) application and bars the submission of any ANDA or 505(b)(2) application referring to that NCE. The second provision provides a three-year period of exclusivity for "a drug which includes an active ingredient (including any ester or salt of the active ingredient) that has been approved in another application," as long as there are "reports of new clinical investigations (other than bioavailability studies) essential to the approval of the application and conducted or sponsored by the applicant." This three-year exclusivity provision provides a bar to the approval of an ANDA or 505(b)(2) application referring to that drug.

Historically, the FDA has interpreted the term NCE to be "a drug product that does not contain a previously approved active moiety." According to the FDA's Exclusivity Summary checklist for a fixed-combination product, if "'any one of the active moieties in the drug product' has been previously approved," the three-year exclusivity checklist applies and the drug product is not eligible for the five-year NCE exclusivity. In other words, if "the combination contains one never-before-approved active moiety and one previously approved active moiety," it does not meet the criteria for five-year NCE exclusivity. However, under the FDA's "umbrella policy," if the drug product is eligible for five-year NCE exclusivity, then "drug products subsequently developed that contain the same active moiety would also benefit from the original product's 5-year NCE exclusivity until the exclusivity period for the original product expired."

The FDA admits that the term "drug" as used in the statute and FDA regulations is ambiguous. "FDA has recognized, and courts have accepted, that 'drug' can be interpreted narrowly to mean 'drug product' or more broadly to mean 'drug substance.'" In fact, under the historic and current interpretation of the five-year NCE exclusivity provision, the term "drug" in the eligibility clause of the five-year NCE exclusivity provision means a "drug product," while, at the same time, the FDA's umbrella policy adopts the broader definition in order to "preserve the incentive to innovate and improve upon the initially approved product during the exclusivity period."

In addition to this ambiguity, the FDA has concluded "that recent changes in drug development, particularly in the field of fixed-combination development in the last 20 years, and the importance of fixed-combinations to key therapeutic areas — such as HIV, cardiovascular disease, tuberculosis, and cancer — warrant revisiting [its] current policy." The FDA recognizes that fixed-combination drug products "can simplify regimens to allow easier distribution and improved patient adherence," as well as provide "real clinical benefits, including potential increases in efficacy … reductions in adverse events and the development of resistance to antimicrobial treatments." As such, the current FDA approach may be "suboptimal from a public health perspective" and "may place undue importance on the order in which [] two NDAs are approved." The FDA also admits that there may be instances where filing a single-entity drug product may not be feasible and developing a fixed-combination drug product is preferable to having to cross-label a new single-entity drug product with other drug products.

In order to incentivize the development of fixed-combination products, this month the FDA has issued a draft Guidance for Industry that proposes the term "drug" in these provisions should be interpreted to mean "drug substance" or "active ingredient." Under this definition, the "5-year NCE exclusivity determination will be made for each drug substance in a drug product, not for the drug product as a whole." Therefore, a drug product would be "eligible for a 5-year NCE exclusivity, provided that it contains a drug substance that meets the definition of new chemical entity, regardless of whether that drug substance is approved alone or in a fixed combination." The FDA has determined that if this change is adopted, it would only apply prospectively and, therefore, would not apply to any products that have already been approved.

Topics:  Exclusive Dealing Agreements, FDA, FDCA, Prescription Drugs

Published In: Administrative Agency Updates, Health Updates, Science, Computers & Technology Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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