The Promoting Life-Saving New Therapies for Neonates Act of 2015: A New Twist on Transferable Vouchers

September 20, 2015

By Kurt R. Karst

Finding new ways to incentivize and reward drug development for particular therapeutic needs is all the rage these days.  Over the past few years we’ve seen several new incentives incorporated (and proposed for incorporation) into the FDC Act.  These new incentives are quite different from the standard grants of patent and non-patent marketing exclusivities, including incentives that merely stack exclusivity periods upon one another, such as 6-month pediatric exclusivity (FDC Act § 505A) or 5-year Generating Antibiotic Incentives Now Act exclusivity (FDC Act § 505E) or other proposals under consideration (see our previous posts here and here).  Take, for example, the Rare Pediatric Disease Priority Review Voucher (“Pediatric PRV”) program (FDC Act § 529) and the Tropical Disease PRV (“TD PRV”) program (FDC Act § 524), added to the law in 2012 by the FDA Safety and Innovation Act and in 2007 by the FDA Amendments Act, respectively.  Both PRV programs, which provide for a transferable voucher allowing for a standard 10-month application review to become a 6-month priority review, have been tremendously successful, with several new drug and biologic approvals and PRV sale tags going through the roof (see our previous post here).  There’s also the concept of so-called “wildcard exclusivity” proposed in one version of the 21st Century Cures Act.  A provision in the bill would allow a sponsor to convey a portion of its exclusivity to apply with respect to one or more other drugs (see our previous post here).  Such conveyance could include the sale of exclusivity from one company to another company and would also apply to Orange Book-listed patents.

The latest incentive proposal from Congress comes from Senator Robert Casey (D-PA) in the form of S. 2041, the Promoting Life-Saving New Therapies for Neonates Act of 2015.  If enacted, the bill would amend the FDC Act to add Section 530 to create a transferable “Neonatal Drug Exclusivity Voucher.”  The voucher is kind of a combination of the recent PRV programs and efforts to create “wildcard exclusivity.”  And it’s an idea the President’s Council of Advisors on Science and Technology (“PCAST”) proposed in a September 2014 report as part of a broader initiative announced by The White House to address the growing challenges posed by antibiotic resistance.  In the report, PCAST recommended consideration of a tradable exclusivity voucher to reward successful antibiotic development.  As we noted in a post when the PCAST report was published, “there seems to be a growing chorus of support for wildcard exclusivity that may mean it will gain traction among legislators and find its way into the FDC Act.”  Clearly, momemtum is building for transferable wildcard exclusivity. 

S. 2041 would allow the sponsor of a 505(b)(1) NDA for a new chemical entity or the sponsor of a BLA for a new biological entity intended for the prevention or treatment of a disease or condition of a preterm or full-term neonate (as specificed on a Priority List of Critical Needs for Neonates created under the bill), and that “relies on clinical data derived from studies examining a neonatal population and dosages of the drug intended for that population,” to obtain a “Neonatal Drug Exclusivity Voucher” upon approval of its application.  A “Neonatal Drug Exclusivity Voucher” is defined in the bill to mean:

a voucher issued by [FDA] to the sponsor of a neonatal drug application that entitles the holder of such voucher to one year of transferable extension of all existing patents and marketing exclusivities, including any extensions, for a single human drug with respect to an application submitted under section 505(b)(1) or for a single human biologic product with respect to an application submitted under section 351(a) of the Public Health Service Act, including the 6-month period described in section 505A, the 4- and 5-year periods described in subsections (c)(3)(E)(ii) and (j)(5)(F)(ii) of section 505, the 3-year periods described in clauses (iii) and (iv) of subsection (c)(3)(E) and clauses (iii) and (iv) of subsection (j)(5)(F) of section 505, the 7-year period described in section 527, the 5-year period described in section 505E, and the 12-year period described in section 351(k)(7).  [(Emphasis added)]

The bill includes some provisos on voucher transferability and use.  For example, a voucher “may not be transferred to, or used for, a drug with respect to which all patents and cxclusivities have expired as of the date of the transfer.”  In addition, each person to whom a voucher is transferred must notify FDA of the change in ownership not later than 30 calendar days after the transfer.  A sponsor intending to use a voucher would be required to notify FDA not later than 15 months prior to loss of patent and exclusivities on the drug to which the voucher would apply, and FDA would then be required to notify the sponsor of its eligibility to redeem a voucher for the intended drug within 30 days of notice of intent to use.  Also, FDA would be able to revoke a voucher if the neonatal drug product for which the voucher was awarded is not marketed in the United States within 365-days from the date of the approval of the neonatal drug.  And, in a change from the current PRVs programs, FDA would be prohibited from assessing a fee  for the exercise of a Neonatal Drug Exclusivity Voucher.

S. 2041 also includes certain limitations on voucher eligibility and use.  For example, a Neonatal Drug Exclusivity Voucher would only be available to a sponsor that submits a marketing application after the enactment of S. 2041.  In addition, the bill provides that FDA “shall limit grants of exclusivity under [proposed FDC Act § 530] to drugs that are not required to complete neonatal studies under section 505B,” the Pediatric Research Equity Act.  And in case anyone thinks about “voucher stacking” (i.e., combining a PRV with a Neonatal Drug Exclusivity Voucher), think again.  S. 2041 says that “ [a] sponsor may not use a neonatal exclusivity voucher on a product for which the sponsor also intends to use a voucher obtained or purchased pursuant to section 524 or section 529.”

As one person (likely Pablo Picasso) once said: “Good artists copy, great artists steal.”  That’s a nice way to characterize the Promoting Life-Saving New Therapies for Neonates Act of 2015.  Senator Casey has taken a pinch of the PRV and a pinch of the concepts underlying “wildcard exclusivity,” mixed them together, and came up with something new. 

S. 2041 has been referred to the Senate Committee on Health, Education, Labor, and Pensions.  Perhaps we’ll see the bill resurface soon as part of the Senate’s counterpart to the House-passed 21st Century Cures bill.  We’re already seeing an uptick in FDA-related legislation introduced in the Senate, perhaps paving the way for the introduction of a larger FDA-related bill (or the release of a draft bill) in the coming weeks.  In addition to the Promoting Life-Saving New Therapies for Neonates Act of 2015, we’ve also seen the recent introduction of the Advancing Targeted Therapies for Rare Diseases Act of 2015 (S. 2030), a bill addressing  national health security (S. 2055), and legislation addressing drug affordability (S. 2023).