January 6, 2021

Congress Enacts Amendments Affecting The Regulation Of Generic Drugs And Biosimilars

On December 27, 2020, the President signed into law the “Consolidated Appropriations Act, 2021” (the “Act”). Included within this omnibus legislation are several provisions (in Division BB, Title III, Subtitle C) that affect the regulation of generic drugs and biosimilar medicines by the U.S. Food and Drug Administration (FDA).

Generic Drug Labeling: The new Section 530D of the Federal Food, Drug, and Cosmetic Act (the “FD&C Act”), added in Section 324 of Division BB of the Act, creates a process by which the FDA may determine whether it would benefit the public health to update the generic drug labeling at any point after the brand reference-listed drug is withdrawn for reasons other than safety or efficacy (i.e., commercial reasons). In general, FDA can use this process for such drugs when (1) there is new scientific evidence available pertaining to new or existing conditions of use that is not reflected in the approved labeling; (2) the approved labeling does not reflect current legal and regulatory requirements for content or format; and/or (3) there is a relevant accepted use in clinical practice that is not reflected in the approved labeling. Although safety information can be considered as part of the updating process once the above criteria have been met, it cannot be the sole reason for initiating the process.

The Act establishes the following process for the FDA to identify when a labeling update is needed and to implement that update:

  • In order to determine whether labeling updates would provide a public health benefit, the Secretary may:

    • Enter into cooperative agreements or contracts with public or private entities to review the available scientific evidence concerning the drug; and/or
    • Seek public input on the drug, including input on whether there is a relevant accepted use in clinical practice that is not reflected in the approved labeling, or whether new scientific evidence is available regarding the conditions of use, by holding public meetings; opening a public docket for the submission of public comments; or pursuing other means that the Secretary deems appropriate.

  • Once information is received by the Secretary as set forth above, and if the Secretary determines that the available scientific evidence meets the standards under section 505 for adding or modifying information to the labeling or providing supplemental information to the labeling regarding the use of the drug, the Secretary may initiate the updating process as follows:

    • The Secretary shall provide notice to the holders of approved ANDAs that:

      • Summarizes the findings supporting the Secretary’s determination that the available scientific evidence meets the standards for adding or modifying information or providing supplemental information to the labeling of the drug;
      • Provides a clear statement regarding the additional, modified, or supplemental information for the labeling (including, as applicable, modifications to add the relevant accepted use to the labeling of the drug as an additional indication for the drug); and
      • Specifies whether the statement applies to the selected drug as a class of covered drugs or only to a specific drug product.

    • Within 30 days of receipt of this notification, the ANDA holder shall:

      • Agree to change the approved labeling to reflect the additional, modified, or supplemental information the Secretary has determined to be appropriate; or
      • Notify the Secretary that the ANDA holder does not believe that the requested labeling changes are warranted and submit a statement detailing the reasons why such changes are not warranted.

    • Upon receipt of the ANDA holder’s response, the Secretary shall promptly review each statement received and determine which labeling changes the Secretary still considers appropriate, if any.

      • If the Secretary disagrees with the reasons why such labeling changes are not warranted, the Secretary shall provide opportunity for discussions with the ANDA holders to reach agreement on whether the labeling should be updated to reflect available scientific evidence, and if so, the content of such labeling changes.

    • Once the Secretary orders the ANDA holders to make the labeling changes, the ANDA holders shall:

      • Update its paper labeling for the drug at the next printing of that labeling;
      • Update any electronic labeling for the drug within 30 days of such order; and
      • Submit the revised labeling through a “Supplement—Changes Being Effected” form.

    • Failure to make these updates can result in the Secretary deeming the drug misbranded. Any labeling change through this new process is deemed to satisfy the “sameness” requirements applicable to generic drugs and their labeling. However, no label changes made in this manner will be eligible for any exclusivity period.

Orphan Drug Clarification: Section 323 of Division BB clarifies the application of the clinical superiority requirement codified in the FDA Reauthorization Act of 2017 (“FDARA”) governing orphan drug exclusivity. Under its regulations, FDA has long taken the position that it will not grant orphan exclusivity to a drug product with the same active moiety as a previously approved product that has an orphan designation for the same use unless the sponsor shows the new product is “clinically superior” to the existing product. But courts interpreted the pre-FDARA statutory language in the Orphan Drug Act to preclude FDA’s approach, holding that the agency was required to grant automatic orphan exclusivity to the sponsor of an approved drug product with an existing orphan designation. See Eagle Pharmaceuticals, Inc. v. Azar, 952 F.3d 323 (D.C. Cir. 2020) (interpreting the pre-FDARA version of the statute).

In FDARA, Congress responded to adverse judicial decisions by embracing the FDA’s clinical superiority requirement. But questions were raised about FDARA’s application based on its “Rule of Construction,” which specified that the Act would not apply to designations made under the Orphan Drug Act before FDARA’s enactment. In particular, it was disputed whether the clinical superiority requirement under FDARA would apply in cases in which the FDA had made an orphan designation for a drug before FDARA, but the new product was approved after FDARA. See, e.g., Braeburn Inc. v. FDA, 389 F. Supp. 3d 1, 17 (D.D.C. 2019 (identifying this issue without resolving it). The 2021 Appropriations Act amendment definitively resolves this question and provides that FDARA’s clinical superiority requirement does apply in this circumstance—i.e., to drugs receiving orphan drug designation pre-FDARA but approved for marketing post-FDARA.

Biosimilar Provisions: The Act includes two provisions relevant to applications to license biosimilar products.

  • Section 322 of Division BB permits but does not require aBLAs to include information to show that the biosimilar’s conditions of use are the same as conditions of use approved for the reference product.
  • Section 325 of Division BB, entitled “Biological Product Patent Transparency,” requires additional disclosures of information related to biological products in the FDA’s “Purple Book.” Specifically, the Act requires that within 180 days (i.e., by June 2021), FDA will create a searchable, electronic list of licensed biologics (including “deemed” biologics under the transition provision of the Biologics Price Competition and Innovation Act of 2009); to update that list monthly; and to include in it exclusivities and patent information included on 42 U.S.C. § 262(l)(3)(A) lists, which every reference product sponsor that sends a (3)(A) list to a biosimilar applicant must now share with FDA within 30 days after sending it to the biosimilar applicant. As a result of this amendment, disclosures of patent information made in the “patent dance” that were previously private will now become publicly available in the “Purple Book.” But in contrast to the “Orange Book” for drug products, there remains no obligation for a reference product sponsor to list patents associated with a biological product in the absence of a “patent dance.”

In parallel to the Act, Congress also recently enacted the “Orange Book Transparency Act,” which became effective on January 5, 2021. The Orange Book Transparency Act modifies Orange Book disclosures in the following ways:

  • The Act amends the language of Section 505(b)(1) and (c)(2) of the FD&C Act, regarding the patent information that a brand manufacturer must provide. The changes in language appear intended for clarification and to codify current practice regarding when a patent must be listed. The Act requires the submission of information for patents that claim the drug substance (active ingredient), the drug product (formulation or composition), or a method of use that is included in the application.
  • The Act directs FDA to specify any exclusivity period that is applicable for a listed drug. Notably, this includes the 180-day exclusivity period for first-to-file generic applications. Such information has not previously been publicly disclosed by FDA, sometimes leaving companies uncertain about which ANDA filers had the potential for exclusivity. This new provision will provide increased transparency on that issue.
  • The Act codifies and clarifies requirements for delisting a patent that has been invalidated. Specifically, the Act provides that the NDA holder must notify FDA within 14 days of a final decision by the Patent Trial and Appeal Board (“PTAB”) to cancel or invalidate any claim of a listed patent or by a court decision that is not subject to appeal in order to request delisting or amendment of the relevant patent information.

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Collectively, Congress’ recent amendments to FDA authorities push in the direction of increased transparency, both for consumers and for other market participants. In particular, the new requirements should provide greater clarity regarding the competitive landscape for generic and biosimilar manufacturers when assessing both litigation risks and the regulatory exclusivities held by competitors.