On December 19, 2017, FDA approved the gene therapy Luxturna (voretigene neparvovec-rzyl), developed by Spark Therapeutics, to treat children and adults with biallelic REP65 mutation-associated retinal dystrophy, an inherited disease of the eye. Luxturna is the United States’ first approved gene therapy for treatment of an inherited disease, and its approval comes ahead of the January 2018 target date set by FDA when it granted Priority Review for Spark Therapeutics’ Biologics License Application in July 2017. The agency’s announcement also follows FDA’s approval of two other gene therapy products earlier this year, each to treat a certain form of cancer: Novartis’ Kymriah (tisagenlecleucel), approved on August 30, 2017, and Gilead Sciences’ Yescarta (axicabtagene ciloleucel), approved on October 18, 2017. Gene therapy has arrived, and FDA is regulating these products as biologics, giving them twelve-year non-patent exclusivity.

Luxturna targets retinal dystrophy that is caused by a defective RPE65 gene. Normally, the REP65 gene encodes an enzyme, located in retinal cells, that facilitates the process by which light is transformed into the electrical signals that transmit to the brain and enable a person to see. Persons born with a faulty RPE65 lack that enzyme and, over time, experience vision loss which may lead to total blindness.

A physician administering Luxturna injects a solution containing billions of viruses filled with functioning RPE65 genes into a patient’s retina; once in the eye, the virus transports the curative DNA to retinal cells which then begin producing the crucial enzyme. Clinical trials showed that gradually, following treatment, patients’ vision was significantly improved.

Luxturna differs from Kymriah (developed to treat a form of pediatric leukemia) and Yescarta (developed to treat a form of lymphoma), both of which are CAR T-cell based gene therapies. CAR T-cell therapy does not involve injecting DNA directly into a patient. Rather, white blood cells called T-cells are collected from the patient’s body and then modified with a protein-encoding gene. The protein causes the cell to find and kill cancer cells that have a certain kind of antigen on their surface (“CAR” stands for “chimeric antigen receptor”). The modified white blood cells are reintroduced into the patient, where they get to work attacking cancerous cells.

Regardless of the mechanism used, however, these newly approved treatments represent innovative milestones. Gene therapy offers exciting possibilities but it is also expensive. Some analysts expect Luxturna to carry a $1 million price tag, although Kymriah and Yescarta have marketed their treatments for $475,000 and $373,000, respectively—lower than analysts originally predicted.

Gene therapy developers are surely relying on the non-patent exclusivity afforded to them by the Biologics Price Competition and Innovation Act of 2009 (“BPCIA”). The BPCIA amended the Public Health Service Act (“PHSA”) to grant biologic innovators exclusivity for a twelve-year period before competing biosimilars can be marketed. 42 U.S.C. § 262(k)(7)(A). FDA has regulated gene therapies like other biologic products, includes gene therapy in its own definition of “biologics,” and has already listed Yescarta and Kymriah in the so-called Purple Book, FDA’s compilation of products it has licensed under the PHSA.

The PHSA does not explicitly list gene therapy as a biologic product. It defines “biological product” as any “virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, protein (except any chemically synthesized polypeptide), or analogous product, or arsphenamine or derivative of arsphenamine (or any other trivalent organic arsenic compound), applicable to the prevention, treatment, or cure of a disease or condition of human beings.” 42 U.S.C. § 262(i)(1). The scope of this definition has not been subject to much litigation. One case that has addressed the definition, however, shows that it may be construed broadly. In United States v. Regenerative Sciences, LLC, Regenerative Sciences challenged an FDA enforcement action against it related to a stem cell treatment it had developed and administered, arguing that the treatment was neither a drug nor biologic and thus not subject to FDA regulation. 878 F. Supp. 2d 248, 251-52 (D.D.C. 2012). The court agreed with FDA that the treatment constituted a biologic under the PHSA because the treatment’s curative stem cells were “derived from a patient’s bone marrow” and thus constituted a “blood, blood component or derivative, . . . or analogous product.” Id. at 257.

According to Regenerative Sciences and the statute’s text, the newly approved gene therapies also are likely to meet the statutory definition of biologics: Kymriah and Yescarta involve the manipulation of cells removed from and reinserted into a person’s blood, and Luxturna relies on a virus to serve as a DNA transporter. FDA is regulating these products as biologics and courts are likely to agree with its interpretation. But for these and other gene therapies, it is the genetic material that “prevent[s], treat[s], or cure[s]” the targeted disease. And genetic material—central to FDA’s definition of “gene therapy,” see 66 Fed. Reg. 4688 (Jan. 18, 2001) and the quintessential biologic product—is absent from the PHSA’s enumeration of biologic products. Though FDA’s interpretation is likely to prevail, it is possible that some companies may challenge it.

The BPCIA’s twelve years of non-patent exclusivity is undoubtedly important to the burgeoning gene therapy industry. Certain innovators may be choosing to develop gene therapies relying on the protections of the BPCIA and FDA’s regulation of gene therapy as a biologic. Biosimilar makers also are likely to embrace FDA’s regulation of gene therapy as a biologic product since it permits them to obtain approval of gene therapy products using an abbreviated regulatory pathway.