The Food and Drug Administration (FDA) recently released a draft guidance entitled "Implementation of the 'Deemed to be a License' Provision of the Biologics Price Competition and Innovation Act of 2009". The guidance takes the surprising step of limiting innovator exclusivities as part of 'deeming' products to be licensed as biologics under Section 351 of the Public Health Service Act.

Background

The Biologics Price Competition and Innovation Act has modified the definition of 'biological product' to include any "protein (except any chemically synthesized polypeptide)".(1) As a result of this amended definition, certain products that were previously approved under the new drug application (NDA) or abbreviated new drug application (ANDA) pathways of the Federal Food, Drug and Cosmetic Act are now considered 'biological products'. For clarity, this update refers to these products as 'FDCA biological products'.(2)

Transitional provisions

The Biologics Price Competition and Innovation Act includes transitional provisions addressing FDCA biological products and proposed follow-on versions of such products. The act provides that FDCA biological products will be deemed to have biologics licence applications (BLAs) on March 23 2020.(3) Further, it provides that before March 23 2020, a proposed follow-on of an FDCA biological product may be submitted under the Federal Food, Drug and Cosmetic Act if no other biological product is licensed under a BLA that could be a "reference product".(4) According to the draft guidance, FDCA biological products "will no longer exist as [NDAs or ANDAs] and will be replaced by approved [BLAs] under section 351(a) or 351(k)" of the Public Health Service Act on March 23 2020.(5)

The draft guidance states that such products will thus be removed from the Orange Book; however, there is no mention of how and when they will be included in the FDA's Purple Book, applicable to biological products. With little explanation, the draft guidance states that "any unexpired periods of exclusivity associated with a [FDCA biological product] (e.g., five-year exclusivity, three-year exclusivity, or paediatric exclusivity) would cease to have any effect" as of March 23 2020.(6) Because orphan exclusivity applies to products approved under the Federal Food, Drug and Cosmetic Act and the Public Health Service Act, any pending orphan drug exclusivity would be unaffected by this transition.

Rescinding Federal Food, Drug and Cosmetic Act-based exclusivity with one hand, the draft guidance refuses to give Public Health Service Act-based exclusivity with the other. It states that FDCA biological products will be ineligible for exclusivity under the Biologics Price Competition and Innovation Act(7) because the Public Health Service Act exclusivity provisions apply to 'approved' licences, not 'deemed' licences. Further, the draft guidance states:

"Nothing in the Biologics Price Competition and Innovation Act suggests that Congress intended to grant [FDCA biological products] – some of which were approved decades ago – a period of exclusivity upon being deemed to have a [BLA]."(8)

The draft guidance appears not to have considered an alternative solution to the perceived problem: granting 12-year Section 351(k)(7) exclusivity to FDCA biological products based on its date of approval. This approach could allay the FDA's concerns about Federal Food, Drug and Cosmetic Act biological products "approved decades ago" while protecting the exclusivities of recently approved FDCA biological products.

Comment

Sponsors of recently approved FDCA biological products stand to lose valuable exclusivities on March 23 2020, with nothing to show in return. Given the value of product exclusivities, such sponsors will have a strong incentive to challenge the FDA's draft guidance.

For further information on this topic please contact Emily Marden at Sidley Austin LLP's Palo Alto office by telephone (+1 650 617 3400) or email (emarden@sidley.com). Alternatively, contact Peter S Choi or Sean Griffin at Sidley Austin's Washington DC office by telephone (+1 202 736 8000) or email (peter.choi@sidley.com or sgriffin@sidley.com). The Sidley Austin website can be accessed at www.sidley.com.

Endnotes

(1) See Public Health Service Act, Section 351(i)(1).

(2) The draft guidance includes an appendix identifying certain Federal Food, Drug and Cosmetic Act biological products.

(3) See Biologics Price Competition and Innovation Act, Section 7002(e)(4).

(4) See Biologics Price Competition and Innovation Act, Section 7002(e)(2).

(5) See draft guidance at 5. It notes that future guidance will address whether a Federal Food, Drug and Cosmetic Act biological product will be deemed licensed under Section 351(a) or 351(k) of the Public Health Service Act. See draft guidance at 5 Note 7. This question will be of particular importance for Federal Food, Drug and Cosmetic Act biological products approved under the Federal Food, Drug and Cosmetic Act's 505(b)(2) pathway.

(6) See draft guidance at 6.

(7) See Section 351(k)(7) of the Public Health Service Act, which provides for 12 years of exclusivity for products approved under Section 351(a).

(8) See draft guidance at 7.

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