Oops!… [FDA] Did It Again: Another Orphan Drug Act Loss for FDA Based on Unambiguous Statutory Text; 11th Circuit Rules that the Scope of Orphan Drug Exclusivity is Determined by the Rare Disease or Condition Designated, and Not the Indication Approved

October 5, 2021By Sara W. Koblitz & Kurt R. Karst

In the appellate courts lately, it’s been FDA “Against the Music.”  In yet another decision based on statutory interpretation, an appellate court has decided that FDA’s interpretation of the Federal Food, Drug, and Cosmetic Act (FDCA) is contrary to the plain text of the statute.  Earlier this year, the D.C. Circuit told FDA that it cannot regulate a device as a drug notwithstanding an overlap in the statutory definition of drug and device.  And just last year, the D.C. Circuit told FDA, for the second time, that the plain text of the Orphan Drug Act unambiguously required FDA to award orphan drug exclusivity to any orphan designated drug, even if that designation was based only on a “plausible hypothesis” of clinical superiority that ultimately could not be confirmed.  Now, the Eleventh Circuit has held that another FDA interpretation of the Orphan Drug Act violates the plain text of the statute, this time relating to the scope of Orphan Drug Exclusivity and the term “same disease or condition.”  As courts keep hitting the Agency “…Baby, One More Time,”  the appellate court these days seems Toxic for FDA.

In the case at issue now, Catalyst v. FDA, the Eleventh Circuit reversed a decision from the Southern District of Florida holding that the statutory phrase “same disease or condition” in the Orphan Drug Act is ambiguous.  As background, FDA approved Catalyst’s NDA for Firdapse (amifampridine) for the treatment of adult Lambert-Eaton myasthenic syndrome (LEMS) and, because the product had been designated an orphan drug, awarded Firdapse the statutory 7 years of orphan drug exclusivity expiring in November 2025.  Importantly, the orphan drug designation, awarded in 2009, had been for LEMS generally—not LEMS in adults.

FDA later approved another amifampridine NDA for the treatment of LEMS, called Ruzurgi and sponsored by Jacobus, but only for certain pediatric LEMS patients (i.e., 6 to less than 17 years of age).  Jacobus had applied for approval for all LEMS patients, but FDA “administratively divided” the Ruzurgi NDA into two parts: one for the treatment of LEMS in pediatric patients and other for adult patients “to allow for independent action in these populations.”  FDA argued that approving Ruzurgi for pediatric use did not violate Catalyst’s exclusivity because, even though LEMS for adults and pediatrics are a single disease, treatment of the pediatric population constituted a different “indication or use” from Firdapse’s indication of LEMS for adult patients, and thus fell outside of the scope of orphan drug exclusivity applicable to Firdapse.

Catalyst promptly sued FDA arguing (among other things) that, under the plain language of the Orphan Drug Act, FDA could not approve Ruzurgi because it is the “same drug” for the “same disease or condition” as Firdapse.  Catalyst also argued that the Firdapse labeling is false or misleading because it suggests that Ruzurgi can be used in adults—the patient population for which Firdapse has exclusivity.  A magistrate judge, and subsequently the District Court, determined that the phrase “same disease or condition” in the Orphan Drug Act is ambiguous, as the Orphan Drug Act is “unclear whether [the] phrase refers to the use for which the drug is approved after it submits its NDA.”  Because FDA’s interpretation of the phrase to mean “indication or use” was reasonable, both the Magistrate Judge and the District Court determined that FDA’s interpretation did not violate the FDCA.

And, with that “Boom Boom,” Catalyst appealed to the Eleventh Circuit.  Reviewing the decision de novo, the Eleventh Circuit determined that the definition of “same disease or condition” was not ambiguous merely because Congress did not provide an explicit definition in the statute.  Neither FDA (nor intervenor Jacobus) nor Catalyst disputed that LEMS is the “disease,” so the Court only needed to look to the definition of the word “same.”  Based on common definitions of the word “same,” the Court concluded that the term here means “being the one under discussion or already referred to.”  The only “disease or condition” previously referenced in the statutory provision is the “rare disease or condition” for which the drug was designated.  Thus, the Court concluded, the “same disease or condition” must mean the designated “rare disease or condition” and could not be interpreted by the Agency to mean the “indication or use.”  And, because the orphan drug exclusivity provisions preclude FDA from approving another application “for the same drug for the same disease or condition,” orphan drug exclusivity inherently applies to the entire designated disease or condition rather than the “indication or use.”

With the Court’s expansive interpretation of the term “disease or condition,” the Court determined that pediatric LEMS is the “same disease or condition” as adult LEMS and granted Catalyst’s Motion for Summary Judgment.  The Court explained, “[i]f Congress wanted to make the ‘use or indication’ inquiry relevant to a holder’s market exclusivity for an orphan drug, it could have done so by including such language in § 360cc(a). The fact that Congress did not include that language counsels against an interpretation that finds an ambiguity in § 360cc(a)’s language.”  Thus, the Court ruled:

Based on these undisputed facts and record evidence, the FDA’s approval of Ruzurgi was contrary to the unambiguous language of the Orphan Drug Act.  Catalyst Pharmaceuticals, Inc., held the exclusive right to market, Firdapse, an orphan drug, for a period of seven years in order to treat the rare autoimmune disease, LEMS.  Because it is undisputed that none of the statutory exceptions to Catalyst’s market exclusivity apply, the FDA was prohibited from approving for sale the same drug manufactured by Jacobus Pharmaceutical Company, Inc., to treat the same autoimmune disease during the period of Catalyst’s market exclusivity.  As a result, the FDA’s agency’s action was arbitrary, capricious, and not in accordance with law, and its approval of Ruzurgi must be set aside.

The Court’s ruling has the potential to make a “Circus” of orphan drug exclusivity.  It may lead to new litigation or call into question previous FDA awards of orphan drug exclusivity.  In some cases, particularly where drugs were designated and approved prior to this case, orphan drug exclusivity may now extend significantly farther than the approved indication for a product, leaving the drug “Overprotected” (and its sponsors “Lucky”) and the holder of another marketing application for the same drug for a different indication that reads on the same rare disease or condition in jeopardy of a challenge or FDA having to yank the approval.  (That is, a situation similar to the one with LEMS and amifampridine.)  In other cases, however, there may be challenges to FDA’s award of multiple periods of orphan drug exclusivity for the same drug for different indications of the same rare disease or condition.  That’s a topic we’ve discussed in previous posts (here and here).  As we previously noted, there are several instances in which FDA has granted multiple periods of orphan drug exclusivity based on the same original orphan drug designation, and where the drug’s sponsor obtains serial approvals for either different segments (i.e., indications) of the designated rare disease or condition, or where a drug’s indication evolves into something new, shedding and subsuming the previous indication statement (e.g., different disease stages or different lines of therapy).  With the Eleventh Circuit’s decision, companies (e.g., ANDA and 505(b)(2) NDA applicants) might consider challenging any FDA award of multiple orphan drug exclusivity periods as unauthorized or “Criminal”.  After all, the Court’s decision seems to support a “one and done” approach to orphan drug exclusivity.

This decision also provides incentives to FDA to narrow orphan drug designations.  The parameters of a given condition are at FDA’s discretion (which is how FDA has been able to consider classifications of certain diseases, like lymphoma, different conditions), so, in theory, FDA could subdivide a given condition into multiple conditions so that any awarded exclusivity is not too broad.  But that could encourage further attempts to salami slice rare disease populations and result in additional awards of orphan drug exclusivity where a condition may not otherwise meet the rare disease population threshold.  Alternatively, FDA could raise the burden for a sponsor to show a “scientific rationale” that the product will treat a given disease or condition.  But given that orphan drug designation is supposed to be granted liberally in an effort to encourage innovation, an increased burden could be considered contrary to congressional intent.  This decision, therefore, will force FDA to take a hard look at this approach to orphan drug designations, as it may find it difficult to develop a consistent rubric for evaluating orphan drug designation requests.

The Eleventh Circuit’s decision puts FDA at a “Crossroads.”  It’s going to be difficult for FDA to retool its orphan drug designation process to ensure that orphan drug development is properly incentivized while not providing a windfall to sponsors whose approved drug is not as helpful for a designated condition as hypothesized.  And of course, as companies implore FDA to “Gimme More,” FDA will need to consider the potential orphan drug gamesmanship that could arise.  Unless and until FDA or Congress implements a fix, this decision will undoubtedly drive the Office of Orphan Products Development “Crazy.”