The Brand-Name Side of the Exclusivity Equation; Exclusivity Under Fire

September 10, 2012

By Kurt R. Karst –   

In the world of Hatch-Waxman, disputes over 180-day generic drug exclusivity have been commonplace for well over a decade now.  Indeed, in 2012 alone there have already been a few lawsuits filed against FDA concerning generic ACTOS and generic PROVIGIL (see, e.g., here and here, and also here for FDA’s recent Motion to Dismiss/Motion for Summary Judgment in the ACTOS litigation), and some citizen petitions of interest . . . and there are still a little less than four months left in the year.  Disputes over brand-name drug exclusivity, such as 5-year New Chemical Entity (“NCE”) and 3-year new clinical investigation exclusivity, were more common in the first decade or so following the 1984 enactment of the Hatch-Waxman Amendments (see, e.g., Glaxo, Inc. v. Heckler, 623 F. Supp. 69 (E.D.N.C. 1985); Abbott Labs, Inc. v. Young, 920 F.2d 984 (D.C. Cir. 1990); Mead Johnson Pharm. Group v. Bowen, 838 F.2d 1332 (D.C. Cir. 1988); Upjohn Co. v. Kessler, 938 F. Supp. 439 (W.D. Mich. 1996); Bristol-Myers Squibb Co. v. Shalala, 91 F.3d 1493 (D.C. Cir. 1996); Zeneca, Inc. v. Shalala, 1999 U.S. Dist. LEXIS 12327 (D. Md. Aug. 11, 1999), aff’d, 213 F.3d 161 (4th Cir. 2000)), but then tailed off . . . . until the relatively recent flurry of lawsuits and FDA exclusivity decisions.  (Disputes over 7-year orphan drug exclusivity have been uncommon since the 1983 Orphan Drug Act, but also seem to be on the rise as well as companies increasingly focus on orphan drug development – see, e.g., here, here, and here).

Although NCE exclusivity disputes have cropped up on and off over the past decade – for example in the context of hyaluronidase and pancreatic enzyme products (see our previous post here) – the recent spate of disputes over NCE exclusivity seems to have started in earnest with the February 2009 lawsuit against FDA over the Agency’s decision to grant NCE exclusivity for VYVANSE (lisdexamfetamine dimesylate) Capsules.  That lawsuit was stalled while FDA considered the exclusivity granted for VYVANSE.  FDA ultimately issued a letter decision affirming the grant of NCE exclusivity.  In that letter decision, FDA articulated a structure-centric interpretation of “active moiety” (rather than an activity-based interpretation) under which a drug is classified as an NCE regardless of which portions of the active ingredient contribute to the overall therapeutic effect of the drug.  The lawsuit against FDA progressed after the Agency issued its VYVANSE letter decision, and both the DC District Court and the DC Circuit Court ruled in FDA’s favor – see Actavis Elizabeth L.L.C. v. FDA, 689 F.Supp. 2d 174 (D.D.C. 2010) and Actavis Elizabeth L.L.C. v. FDA, 625 F.3d 760 (D.C. Cir. 2010).

In connection with FDA’s evaluation of the grant of NCE exclusivity for VYVANSE, the Agency also took a closer look at a previous decision to grant 3-year exclusivity for EMEND (fosaprepitant dimeglumine) for Injection, which is a pro-drug of the previously-approved active ingredient, aprepitant (see our previous post here).  Relying on the structure-centric interpretation of active moiety discussed in the VYVANSE letter decision, the Agency determined in a separate letter decision that fosaprepitant dimeglumine should have been classified at the time of approval as an NCE and awarded 5-year exclusivity instead of 3-year exclusivity.

Also wrapped up in the VYVANSE NCE exclusivity dispute was an issue we posted on in July 2009 concerning GlaxoSmithKline’s (“GSK’s”) corticosteroid drug VERAMYST (fluticasone furoate) Nasal Spray, which FDA approved on April 27, 2007 (NDA No. 022051).  According to documents contained in the VERAMYST Summary Basis of Approval, GSK requested that FDA grant NCE exclusivity for the drug notwithstanding the Agency’s previous approval of drug products containing fluticasone propionate, bececause fluticasone furoate “is a unique molecular entity that exhibits distinctive functional characteristics of clinical significance that are directly attributable to the continuing presence of the furoate ester group at the local site of drug action,” and that “the furoate group remains an integral part of this [NCE] while exerting therapeutic activity at the site of action, and reviewers should appreciate that neither fluticasone furoate nor fluticasone pripionate is ever metabolized to fluticasone.”  In other words, GSK contended that VERAMYST contains a “stable ester” eligible for NCE exclusivity.

Years ago, prior to FDA promulgating regulations implementing the Hatch-Waxman exclusivity provisions, the Agency had on at least one occasion determined that a “stable ester” – i.e., an ester that is stable, both in vitro and in vivo – is an NCE eligible for 5-year exclusivity because the “stable ester” is considered to be the active moiety.  FDA applied this policy in the context of organic nitrates.  Specifically, FDA approved ISMO (isosorbide mononitrate) on December 30, 1991 (NDA No. 019091) and granted NCE exclusivity despite the previous approval of products containing isosorbide dinitrate. 

The exclusivity entry in the Orange Book for the VERAMYST NDA remained blank as FDA mulled over the exclusivity issue.  In a recent letter decision issued more than 5 years after the approval of VERAMYST, however, FDA finally determined that fluticasone furoate is not an NCE and is not entitled to 5-year exclusivity.  In explaining its decision, FDA once again relied on the structure-based interpretation of active moiety discussed in the VYVANSE letter decision.  FDA also rejected GSK’s “stable ester” argument, stating in the May 29, 2012 letter decision:

We also reject the contention that the fact that FDA granted NCE exclusivity to a stable ester in 1991 constitutes “precedent.”  First, that approval occurred before FDA finalized the applicable regulation. Second, as the Agency’s response to the Vyvanse matter demonstrates, FDA has since adhered to its structure-based approach that does not evaluate the activity of a molecule.

On the same day FDA issued its VERAMYST exclusivity letter decision, the Agency made another determination concerning NCE exclusivity.  This time, the drug at issue was Pfizer, Inc.’s (“Pfizer’s”) TORISEL (temsirolimus) Injection, which FDA approved on May 30, 2007 (NDA No. 022088).  As opposed to VERAMYST, where FDA did not make an exclusivity decision and post it in the Orange Book, FDA had previously determined that temsirolimus is an NCE eligible for 5-year exclusivity.  Generic drug manufacturer Sandoz (represented by HP&M) asserted that TORISEL contains a previously approved active moiety because it is an ester of sirolimus, a previously approved active moiety, and argued that FDA erroneously granted NCE exclusivity when the Agency approved TORISEL.  Pfizer disagreed and argued, among other things, that TORISEL is a “stable ester.” 

Ultimately, FDA determined in a May 29, 2012 letter decision that the Agency incorrectly granted NCE exclusivity and rescinded it.  In doing so, FDA once again relied on its VYVANSE decision, and stated:

Pfizer’s focus on Torisel’s alleged unique properties is irrelevant to the Agency’s categorical exclusion of esters from the types of modifications that are considered to result in a different active moiety.  Actavis demanded the same activity-based consideration from FDA with respect to Vyvanse, but the Agency declined, noting that the parties made conflicting claims about the scientific data. After a full and reasoned discussion, FDA affirmed its chemical-structure based interpretation of the applicable statutory and regulatory provisions.  The same considerations that resulted in the rejection of Actavis’s arguments regarding Vyvanse apply with full force here.

On first blush, both the VERAMYST and TORISEL exclusivity decisions, because they were issued after or almost after 5 years from the date of NDA approval, may seem irrelevant.  But on closer examination, there are benefits that accrue to some affected parties from FDA’s decisions.  For example, the FDC Act provides that in the context of an ANDA or 505(b)(2) application submitted to FDA during the so-called “NCE-1” period containing a Paragraph IV certification to a patent listed in the Orange Book for an NCE, and if there is a patent infringement lawsuit, the 30-month litigation stay is extended to 7.5 years after the NCE NDA approval.  A drug product not granted 5-year exclusivity does not get the 30-month stay extension. 

Turning to 3-year exclusivity, 2012 has already seen its share of controversy.  FDA is currently embroiled in lawsuits involving two drugs – SEROQUEL (quetiapine fumarate) Tablets and VANCOCIN (vancomycin HCl) Capsules.

In July, after a court battle with FDA that started around mid-March when AstraZeneca Pharmaceuticals LP (“AstraZeneca”) sought to enjoin FDA from granting final ANDA approvals for generic SEROQUEL following FDA’s denial (without comment) of two citizen petitions AstraZeneca submitted to FDA last year concerning labeling carve-out issues, the U.S. District Court for the District of Columbia granted FDA’s Motion for Summary Judgment and denied AstraZeneca’s Cross-Motion for Summary Judgment (see our previous post here).  At the heart of the case is a dispute over the applicability and scope of 3-year exclusivity based on FDA’s simultaneous approval of supplemental NDAs that contained information on pediatric uses of quetiapine and that made changes to the drug’s labeling to add information regarding “general safety information that is not indication-specific.”  AstraZeneca has appealed the DC District Court’s decision to the DC Circuit (Court of Appeals Docket No. 12-5227).

One particularly enlightening document that has come out of the SEROQUEL litigation is FDA March 27, 2012 letter decision, which lays out FDA’s approach to 3-year exclusivity.  The letter decision discusses the scope of 3-year exclusivity as it relates to the scope of new clinical investigations conducted by the NDA sponsor.  According to FDA, the FDC Act sets up a “logical relationship between the change in the product for which the new clinical investigations were essential to approval of the supplement, and the scope of any resulting three-year exclusivity.” 

Litigation between FDA and ViroPharma Incorporated (“ViroPharma”), the holder of the NDA for VANCOCIN, has been going on for years.  But it was not until the past year that the issue of 3-year exclusivity came into play.  As we’ve previously discussed (here, here, and here), ViroPharma sued FDA after the Agency denied a March 17, 2006 petition for stay of action and approved ANDAs for generic VANCOCIN.  Among other thing, ViroPharma alleged that FDA impermissibly interpreted the FDC Act when the Agency denied the company 3-year exclusivity for an NDA supplement approved in December 2011.  FDA’s rationale for denying exclusivity is discussed in the Agency’s 87-page petition response, as well as in a memorandum prepared by FDA’s newly established CDER Exclusivity Board.

In April, the DC District Court denied ViroPharma’s Motion for Preliminary Injunction on the basis that the company had not demonstrated a likelihood of success on the merits of the exclusivity claim (as well as another claim concerning bioequivalence).  In July, ViroPharma filed a Motion for Summary Judgment urging the court to “depart from the preliminary view of the merits expressed in its earlier order and hold invalid” FDA’s action.  Last week, FDA and the generic drug manufacturer intervenors (one of which is represented by HP&M) filed briefs (here and here) opposing ViroPharma’s motion and requesting that the court dismiss the case (or grant summary judgment).