Ensuring Innovation Act Alters Eligibility for New Chemical Exclusivity

Locke Lord LLP

Locke Lord LLP

On April 23, 2021, President Biden signed into law The Ensuring Innovation Act (S. 415), which amends the requirements for New Chemical Entity (NCE) and Orphan Drug (ODE) exclusivities under the Federal Food, Drug, and Cosmetics Act (FDCA).  The Ensuring Innovation Act exchanges the term “active ingredient” with the term “active moiety” in sections of the FDCA governing NCE and ODE.

The five-year NCE exclusivity provision contained in the FDCA states in part:

If an application submitted under subsection (b) for a drug, no active ingredient (including any ester or salt of the active ingredient) of which has been approved in any other application under subsection (b), is approved after September 24, 1984, no application may be submitted under this subsection . . . before the expiration of five years from the date of the approval of the application under subsection (b) . . . .

21 U.S.C. § 355(j)(5)(F)(ii) (emphasis added).  Ever since the Drug Price Competition and Patent Term Restoration Act (informally known as the Hatch-Waxman Act) established the five-year NCE exclusivity in 1984, the FDA has been fighting New Drug Application (NDA) holders over its interpretation of “active ingredient” as requiring a new “active moiety.”

This change gives effect to the FDA’s interpretation of the NCE and ODE provisions as applying to only “active moieties” overturning several successful challenges by NDA holders to FDA’s exclusivity policies based on use of “active ingredient” in the statute.  See Abbott Labs. v. Young, 920 F.2d 984 (D.C. Cir. 1990) (rejecting FDA’s interpretation of NCE provision as “active moiety” when addressing exclusivity of divalproex sodium based on ambiguity in statute); Amarin Pharms. Ireland Ltd. v. Food & Drug Admin., 106 F. Supp. 3d 196 (D.D.C. 2015) (rejecting FDA’s evaluation of NCE eligibility for icosapent ethyl using “active moiety” as inconsistent with use of “active ingredient” in the statute).

The FDA originally adopted its interpretation of NCE as requiring a different “active moiety” in an effort to prevent innovators from obtaining additional five-year exclusivity based on minor modifications that do not change the basic chemical identity of an already marketed drug.  As amended, FDCA will now specifically incorporate the definition of “active moiety” set forth in the FDA’s regulations, as captured in 21 C.F.R. § 314.3.  Under this provision, “active moiety” is defined as:  

the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or coordination bonds), or other noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule, responsible for the physiological or pharmacological action of the drug substance.

21 C.F.R. § 314.3(b). 

This change specifically excludes “appended portions of the molecule that cause the drug to be an ester, salt . . . or other noncovalent derivative” eliminating the possibility that a new salt form or ester prodrug would be eligible for NCE (or ODE) exclusivity.  Id.  Therefore, making substantive changes to a drug is necessary to meet the requirements of the definition to be a new “active moiety.”

This change in exclusivity requirements is designed to restore some balance to the Hatch-Waxman Act by accelerating the ability of generic pharmaceutical manufacturers to enter the market with respect to NCEs by preventing NDA holders from making an intervening product switch to an insubstantially different active moiety which is then protected by additional exclusivities. 

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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