Prescription Drug User Fees Ex-PAND-ed to PANDAs (PANDA-monium Part II)

June 2, 2022By Sara W. Koblitz

A little less than a year ago, it was PANDA-monium at FDA when the Agency created a new category of drug applications called the PANDA—or the Pre-Hatch-Waxman Abbreviated New Drug Application—which referred to abbreviated drug applications submitted and approved prior to the enactment of the modern-day abbreviated new drug application (ANDA) as part of the Hatch-Waxman Amendments in 1984.  Since 1984, generic drugs have been approved under ANDAs pursuant to section 505(j) of the Federal Food, Drug, and Cosmetic Act (FDCA); before 1984, no formal mechanism for an ANDA existed so FDA used sections 505(b) and 505(c) to approve follow-on drugs based on the Agency’s previous findings of safety and efficacy.  The Hatch-Waxman Amendments essentially codified FDA’s existing practices but follow-on products approved before 1984 technically are not called ANDAs.

Until August 2021, the pre- and post-1984 ANDA was a distinction without a difference: FDA treated the pre-1984 follow-on applications as ANDAs and listed them in the Orange Book as ANDAs even though they technically are NDAs.  However, with the 2017 revision to the Orange Book, which added a distinction between Reference Standards (RS) and Reference Listed Drugs (RLD), the pre-1984 ANDAs led to confusion, as they are RSs without RLDs.  In reinventing the pre-1984 ANDA as a PANDA, FDA has now decided to designate the pre-1984 ANDA as RLDs and treat them as 505(b) NDAs.  To implement this change, FDA solicited comments in a Federal Register Notice in August 2021 (which, to be clear, was not a rulemaking).

Notably, back in 1984, Congress contemplated PANDAs and instructed FDA to treat PANDAs as ANDAs.  Indeed, Congress expressly authorized FDA to continue approving ANDA products under its pre-Hatch-Waxman ANDA regulations even after Hatch-Waxman’s passage—and made clear that such applications should be treated no differently from 505(j) applications even after the Hatch-Waxman Amendments took effect.  See Pub. L. 98-417 § 105(b).  To that end, recognizing that PANDAs and ANDAs are essentially the same, Congress exempted PANDAs from prescription drug user fees in 1997, specifically listing as an exception to prescription drug user fee requirements “the same product as another product that was approved under an abbreviated new drug application pursuant to regulations in effect prior to the implementation of the Drug Price Competition and Patent Term Restoration Act of 1984.”

In the upcoming reauthorization of the User Fee Acts (here and here), however, the PANDA exception has been quietly removed from the prescription drug user fee provisions.  In so doing, is FDA signaling its intent to change the regulatory treatment of PANDAs from ANDAs to NDAs by essentially erasing PANDAs from the FDCA?  FDA’s quite clear position in the Federal Register Notice was that it will start treating PANDAs as NDAs, despite the Agency’s long history of treating PANDAs “similarly to 505(j) ANDAs . . . over the decades after the enactment of the Hatch-Waxman Amendments.”  But FDA only recently requested comments on the transition of PANDAs from 505(j) treatment to 505(b) treatment and has neither published its findings related to PANDAs.  Nor has FDA initiated a rulemaking to implement its changes to the regulatory scheme governing PANDAs. For that reason, this change seems a bit premature.

It is important to note that the change from treating PANDAs as ANDAs to NDAs is not insignificant.  It gives FDA authority to impose post-marketing requirements on PANDA holders, and it could expose them to state tort liability by removing them from the Pliva v. Mensing protections from which post-1984 ANDAs benefit.  Both of these consequences may be enough to push PANDA sponsors out of the market given the low volume of sales for many of these products, and that unavailability would preclude follow-on versions of these products.  But if that were not enough, FDA is now imposing hundreds of thousands of dollars annually of user fees on PANDA holders with little fanfare.  Given that some PANDA sponsors may now be paying both PDUFA fees and GDUFA fees depending on their product portfolios, removing the exemption from prescription drug user fees could be the final nail in the coffin for many PANDA sponsors.