TE Codes 101: FDA Guidance Teaches Basics of Therapeutic Equivalence Codes

July 24, 2022By Sara W. Koblitz

The Orange Book’s Therapeutic Equivalence Codes (TE Codes) play a critical role in our drug distribution and payment system.  All states have “automatic substitution” laws that require prescriptions to be filled using a generic where available (unless otherwise ordered by the physician), and those substitutions are based on the TE Codes that FDA assigns to ANDAs, and where appropriate, 505(b)(2) NDAs.  Details explaining the assignment and meaning of the TE Codes are published in the Preface of the hard copy (or now, the online PDF copy) of the Orange Book.  But even after studying that Preface, interpreting TE Codes can be challenging.  Have no fear though—FDA is here to help!

In recently published guidance document, titled “Evaluation of Therapeutic Equivalence,” FDA explains the evaluation and assignment of TE Codes for therapeutically equivalent products.  TE Codes, FDA explains, are assigned for multisource prescription products based on pharmaceutical equivalence, bioequivalence, and product safety and efficacy profile for the conditions of use specified in the labeling.  FDA goes through each of the relevant terms and the therapeutic equivalence requirements.  Ultimately, FDA explains, the therapeutic equivalence evaluations tell the public that FDA believes those products rated as therapeutically equivalent “can be substituted with the full expectation that the substituted product will produce the same clinical effect and safety profile as the prescribed product when administered to patients under the conditions specified in the labeling.”  Evaluation of therapeutic equivalence is product-specific.

The Guidance explains that only certain drug products are evaluated for therapeutic equivalence.  Specifically, stand-alone NDAs—those submitted in 505(b)(1) NDAs and approved under 505(c) of the FDC Act—are not assigned TE Codes.  Instead, they are typically designated as Reference Listed Drugs (RLDs) upon which other applicants can rely for approval.  But 505(b)(2) NDAs, also approved under 505(c) but rely on studies not conducted by or for the applicant for which the applicant has no right of reference, may be evaluated for a TE Code; usually this is done upon request in a Citizen Petition.  Traditional ANDAs (as opposed to a Petitioned ANDA submitted pursuant to a Suitability Petition) are automatically assigned a TE Code at approval since they must be therapeutically equivalent to secure that approval.

TE Codes are assigned using a multi-letter system with the first letter representing the therapeutic equivalence determination and the second (and sometimes third) the dosage form or additional information.  If the first letter of the TE code is an “A,” the products are therapeutically equivalent; if the first letter is a “B,” there are bioequivalence questions that are unresolved.  A traditional ANDA typically has an A-rating while a 505(b)(2) NDA or a Petitioned ANDA may have either.  FDA may and does revise the TE Code if appropriate.

The back half of the Guidance takes the now familiar Question and Answer approach, addressing both simple and more complex questions about TE Codes.   In response to questions about ANDA TE Codes, FDA explains that an ANDA will be assigned a TE Code upon approval, but certain ANDAs, such as discontinued or withdrawn ANDAs, ANDAs that become single-source, or Petitioned ANDAs, will not have a TE Code.  A 505(b)(2) may not have a TE Code if there are no therapeutically equivalent products in the Orange Book or because the application holder has not requested a therapeutic equivalence evaluation in a Citizen Petition.  Additionally, tentatively approved products or repackaged products do not receive TE Codes either.

The Questions and Answers portion also addresses specific situations that may arise.  For example, the Guidance explains that products that require reconstitution, dilution, or other manipulation are considered a different dosage form than the same drug product in a ready-to-use solution and therefore are not pharmaceutically equivalent—and accordingly not therapeutically equivalent—products.  Drug products in different packaging may be therapeutically equivalent, but it depends on whether the packaging has an effect on the clinical or safety profile of the product.  And skinny-labeled drugs can be therapeutically equivalent to their RLDs even if certain conditions of use or carved-out from the labeling.  ANDAs with different inactive ingredients than their RLDs are also therapeutically equivalent, but 505(b)(2) NDAs with such differences may not be because those differences may influence the bioequivalence, route of administration, dosage form, or labeled indications of the drug products.

In probably the most informative part of this Guidance for those of us already familiar with the Orange Book Preface and the 1980s Federal Register Notices establishing the Orange Book, FDA addresses therapeutic equivalence for drug-device combination products.  Because a device is not required to be identical to the RLD for an ANDA to be approved, the concept of therapeutic equivalence may be a little trickier.  In this guidance, FDA makes clear that it assesses combination product ANDAs just like any other ANDA.  Like other ANDAs, a generic combination product must produce the same clinical effect and safety profile as the RLD under the conditions specified in the labeling to be considered therapeutically equivalent.  However, a proposed combination product and its RLD do not “need to be identical in all respects.”  An identical device design may not be feasible, and an ANDA can be approved with a different user interface than the RLD.  That said, FDA requires an analysis and scientific justification of the differences in device design and labeling for ANDA approval, which will be evaluated on a case-by-case basis to ensure that the differences do not affect substitution.  Once the combination product ANDA is approved, it should be approved and assigned an “A” TE Code like any other ANDA.

In short, the Guidance isn’t groundbreaking and may be redundant for experienced Orange Book reviewers.  That said, it is incredibly helpful to those of us that may be learning how to use the Orange Book because, as much as it is a critical tool in follow-on product development, the Orange Book can be a bit challenging to use.  TE Codes are complicated and this Guidance goes a long way to making the Orange Book more approachable.  No one can complain about having all the information one might need to understand the TE Code in one place.  Kudos to FDA!