Exclusivity Creep: OPEN ACT Would Open Up Hatch-Waxman and the BPCIA to Add a 6-Month Extension to Existing Exclusivities

December 5, 2014

By Kurt R. Karst –       

As we draw closer to the expected January 2015 release of a discussion draft of legislation marking a high point in the 21st Century Cures Initiative, which was launched earlier this year by Representatives Fred Upton (R-MI) and Diana DeGette (D-CO), we’re likely to see a significant uptick in ideas floated to and by Members of Congress on ways to accelerate and incentivize the development and approval of therapies.  Indeed, we’ve already started to see some suggestions.  In September 2014, we posted on a suggestion to create “[t]radable vouchers to extend patent life or market exclusivity of another drug” (i.e., “wildcard exclusivity”).  Now there’s a proposal to create a new 6-month exclusivity extension for “rare disease and condition repurposing” applicable to certain drug and biological products.  

Representative Gus Bilirakis (R-FL) recently announced the introduction of H.R. 5750, the Orphan Product Extensions Now Accelerating Cures & Treatments (“OPEN ACT”).  The bill, which is supported by the EveryLife Foundation, is clearly modeled after – and draws inspiration from – both the Best Pharmaceuticals for Children Act (“BPCA”) (FDC Act §  505A) and the Generating Antibiotic Incentives Now Act (“GAIN Act”) (FDC Act § 505E).  Both of those laws extend certain patent and/or non-patent exclusivities provided for under the FDC Act (and the PHS Act, in the case of the BPCA as amended by the Biologics Price Competition and Innovation Act of 2009). 

According to Rep. Bilirakis, “The OPEN ACT will incentivize drug makers and innovators to ‘repurpose’ major market drugs for life-threatening rare diseases and pediatric cancers, which opens the door to the development of hundreds of safe, effective, and affordable treatments for rare disease patients.”  “Repurposing,” which was the subject of another piece of legislation earlier in 2014 targeting patent term extensions (see our previous post here), is apparently gaining greater attention in the drug and biotech industries – particularly the repurposing of well-established drugs for rare (i.e., “orphan”) diseases and conditions.  Indeed, in 2010 FDA’s Office of Orphan Products Development unveiled the Rare Disease Repurposing Database, which “offers sponsors a useful tool for finding special opportunities to develop niche therapies that are already well-advanced through development,” according to FDA.

The OPEN ACT would amend the FDC Act to add Section 505F, titled “Extension of Exclusivity Periods For A Drug Approved For A New Indication For A Rare Disease Or Condition,” to authorize FDA to designate a drug (including a biological product) “as a drug approved for a new indication to prevent, diagnose, or treat a rare disease or condition,” provided, among other things, that “prior to approval of an application or supplemental application for the new indication, the drug was approved or licensed for marketing under [FDC Act § 505(c)] or [PHS Act § 351(a)], but was not so approved or licensed for the new indication.”  The term “rare disease or condition” is already defined under the Orphan Drug Act (FDC Act § 526(a)(2) to mean “any disease or condition which (A) affects [(i.e., has a prevalence of)] less than 200,000 persons in the United States, or (B) affects more than 200,000 in the United States and for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales in the United States of such drug.”  The designation of a drug under proposed FDC Act § 505F(a), which designation would be public, could not be revoked “for any reason,” except if the application resulting in the designation contained an untrue statement of material fact.

The designation of a drug approved for a new indication for a rare disease or condition would result in a 6-month extension of various exclusivities provided for under both the FDC Act and the PHS Act, including 5-year New Chemical Entity exclusivity, 3-year New Clinical Investigation exclusivity, 7-year Orphan Drug exclusivity, and 12-year Reference Product exclusivity for biological products.  In addition, patents listed in the Orange Book for a drug approved under the FDC Act would get a 6-month extension (though not a true patent term extension). 

Importantly, the 6-month addition under the OPEN ACT is additive to any extensions granted under the BPCA and the GAIN Act.  Thus, for example, a drug approved with 7-year orphan drug exclusivity, that has a 5-year GAIN Act extension, and a 6-month pediatric exclusivity extension, could apparently get another 6-months if designated under the OPEN Act, resulting in 13 years of marketing exclusivity.  On the patent exclusivity side of the equation, an Orange Book-listed patent apparently could get up to an additional year through the application of two 6-month periods – one under the BPCA and another under the OPEN ACT.