HP&M Seeks Alternative Statutory Reading of BPCI Act “Deemed to be a License” Provision

May 9, 2016

By James E. Valentine & Josephine M. Torrente

In March, FDA published a draft guidance document that describes FDA’s approach to the implementation of the statutory provision in section 7002(e) of the Biologics Price Competition and Innovation Act of 2009 (BPCI Act) under which an application for a biological product, approved under section 505 the Federal Food, Drug, and Cosmetic Act (FD&C Act) on or before March 23, 2020, will be “deemed to be a license” for the biological product under section 351 of the Public Health Service Act (PHS Act) on March 23, 2020 (see our previous post here). On Friday, Hyman, Phelps & McNamara, P.C. (HP&M) formally commented on the draft guidance document, pointing to unanticipated consequences of its approach that would result in an undue burden on current sponsors, particularly sponsors of biological products who intend to submit applications for products under section 505(b)(2) of the FD&C Act prior to March 23, 2020.

FDA’s draft guidance suggests that FDA may interpret the “deemed to be a license” provision to mean that, on March 23, 2020, “applications for biological products that have been approved under section 505 of the FD&C Act will no longer exist as New Drug Applications (NDAs) (or, as applicable, Abbreviated New Drug Applications (ANDAs)) and will be replaced by approved Biologics License Applications (BLAs) under section 351(a) or 351(k) of the PHS Act, as appropriate.” FDA, Draft Guidance for Industry, Implementation of the “Deemed to be a License” Provision of the Biologics Price Competition and Innovation Act of 2009, 5 (Mar. 2016) (emphasis added). FDA then goes further, interpreting the provision to mean that “the Agency will not approve any application under section 505 of the FD&C Act for a biological product . . . that is pending or tentatively approved ‘on’ March 23, 2020, even though section 7002(e)(2) of the BPCI Act expressly permits submission of an application under section 505 of the FD&C Act ‘not later than’ March 23, 2020 . . . .” Id.

As a further result of these interpretations and extensions of the statutory language, the Agency intends to remove products that are deemed to have licenses as “listed drugs” in FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (the Orange Book) on March 23, 2020. As of that date, therefore, FDA’s findings of safety and effectiveness for such products may not be relied upon by a 505(b)(2) applicant for approval of a related product, even if that product’s NDA is under active review at the time. Id. at 6. Under FDA’s proposed interpretation, some sponsors who submit 505(b)(2) NDAs for biological products well in advance of March 2020 may nonetheless find themselves barred from the NDA pathway to market, and without sufficient data or basis to pursue a 351(a) or (k) BLA pathway.

HP&M’s comment discusses the predictable negative impacts on 505(b)(2) sponsors and the public health that would be caused by FDA’s proposed interpretation of the provision. The comment notes that FDA’s proposed interpretation would impact numerous ongoing development programs, causing irreparable financial harm, stifling innovation and availability of competition, and putting countless patients at unnecessary risk. To avoid these harms, HP&M requests that FDA adopt an alternative statutory reading that would allow 505(b)(2) NDAs submitted by March 23, 2020 to be eligible for review and approval under section 505 of the FD&C Act and, subsequently, deemed to be a license under section 351 of the PHS Act at the time of any approval. This view would preserve the value of investments already made by sponsors of timely submitted 505(b)(2) NDAs which, due only to the vagaries of NDA review (e.g., requests for Major Amendments, Complete Response actions, or unanticipated issues at a contract manufacturer) may not obtain approval by March 23, 2020.