Veloxis Pharms. Inc. v. U.S. Food and Drug Admin., (D.D.C. June 12, 2015)

The Food and Drug Administration Modernization Act of 1997 granted antibiotics approved after its effective date three years of marketing exclusivity. The Qualifying Individual (QI) Program Supplemental Funding Act of 2008 (QI Act) extended the three-year exclusivity to old antibiotics for which a Section 505(b) new drug application (NDA) was submitted after October 8, 2008.

Astellas Pharma US, Inc. submitted in 2005 a 505(b)(1) NDA for Astagraf XL®, a once-daily, extended-release capsule of the old antibiotic tacrolimus for the prophylaxis of organ rejection. Astellas withdrew its NDA in 2009, and then submitted a new NDA for the same product in 2012. The U.S. Food and Drug Administration (FDA) approved Astagraf XL for the prophylaxis of organ rejection in patients receiving de novo kidney transplants. De novo refers to the initial period after the transplant surgery where an optimum balance between the efficacy and toxicity of the immunosuppressive regimen is determined. The FDA determined that Astagraf XL should receive three years of marketing exclusivity, set to expire in July 2016 which would result in the expiration of exclusivity.

Plaintiff Veloxis submitted a Section 505(b)(2) NDA for its own once-daily, extended-release tablet version of tacrolimus called Envarsus XR®. The FDA tentatively approved Envarsus XR for the prophylaxis of organ rejection in both de novo and conversion patients. Conversion patients are on the maintenance immunosuppressive regimen that was optimized during the de novo period. One of the drugs in the regimen can be discontinued and replaced with another drug in conversion patients. However, the FDA determined that it could not finally approve Envarsus XR in view of Astagraf XL’s marketing exclusivity. As a compromise, the FDA proposed to approve Envarsus XR for conversion patients only. Veloxis elected not to accept the FDA’s proposed compromise, and sought judicial review of the FDA’s decision that it would not approve Envarsus XR until Astagraf XL’s exclusivity expired.

Applying a Chevron framework, the U.S. District Court for the District of Columbia upheld the FDA’s decision. Veloxis Pharms. Inc. v. U.S. Food and Drug Admin., 2015 WL 3750672 (D.D.C. June 12, 2015) (Walton, D.J.). First, the district court found that it was reasonable for the FDA to grant exclusivity to Astagraf XL even though the original NDA was submitted in 2005, before the critical October 8, 2008, date of the QI  Act granting exclusivity to old antibiotics like tacrolimus because it was withdrawn and then resubmitted in 2012.

Second, the court found the FDA “may not approve a second-in-time NDA that shares ‘conditions of approval’ with the first-in-time 505(b) drug,” regardless of whether the second NDA “relied on” clinical investigations from the first NDA. The court elaborated that “[e]xclusivity under 21 U.S.C. § 355(c)(3)(E)(iii) is triggered by an overlap in the conditions of approval between the first-in-time 505(b) drug and the second-in-time 505(b)(2) NDA, and not an overlap between the ‘new clinical investigations’ supporting the first-in-time 505(b) NDA and the second-in-time 505(b)(2) NDA.” (emphasis original) 

The court agreed with the FDA that the “conditions of approval” (and thus limits of exclusivity) for Astagraf XL were the innovations that distinguished it from the prior twice-daily immediate-release tacrolimus product Prograf®, namely, that it is once-daily extended-release formulation for the prophylaxis of organ rejection in de novo kidney transplant patients. Therefore, because Envarus XR is a once-daily extended-release formulation of the same antibiotic for the same indication as Astagraf XL, it shared conditions of approval and was subject to the marketing exclusivity granted to Astagraf XL.