Under the compromise reached in the Hatch-Waxman Amendments to the Federal Food, Drug, and Cosmetic Act that created the Abbreviated New Drug Application (ANDA) process that spawned today’s generic drug industry, Congress provided the innovative pharmaceutical industry with several rewards for their efforts. While perhaps the foremost of these is the ability to get patent extension on a new chemical entity (“NCE”), the Hatch-Waxman Act also created several different types of non-patent market exclusivity enforced by FDA. Of these, the most important is the five-year exclusivity period that applies to an NCE. Indeed, under the five-year exclusivity, not only is FDA precluded from approving an ANDA, but an ANDA applicant is not even allowed to submit an ANDA during the five-year period. There is an exception to the bar on submission if the generic applicant, in conjunction with its ANDA filing, challenges an otherwise valid patent that the innovator company has listed in FDA’s Orange Book. In that case, an ANDA applicant can submit after four years of the NCE exclusivity have elapsed (sometimes referred to as the “NCE-1” date).
Past Policy on Exclusivity for Combinations
Since 1984, when Hatch-Waxman was enacted, FDA consistently had interpreted the exclusivity provisions to preclude awarding five-year exclusivity if an NDA approval covered a combination drug in which one (or both) of the active ingredients was not a new chemical entity. Many in industry had criticized this position, especially because the development of combination products has become particularly important for treating such conditions as HIV and cancer, but patent protection may not always be available for the combinations. Indeed, several companies had filed petitions that were still pending with the agency seeking to reverse this position.
The New Draft Guidance
FDA has answered the prayers of the brand drug industry – at least partially -- because the agency earlier this month issued a draft guidance in which it announced that it was revising its position on five-year exclusivity for combination drugs. The agency will now award five-year exclusivity to a combination drug product if one -- or both -- of the active ingredients is an NCE. However, under the draft guidance, FDA would not award five-year exclusivity if both ingredients were previously approved.
The new policy clearly will be welcomed by the innovative research community. For generic companies, however, the policy means -- if the policy is not successfully challenged in court -- that they will be unable to file an ANDA until at least four years of the NCE exclusivity awarded to the combination has elapsed (assuming there is a listed patent that they can challenged). Previously, the best a combination drug could expect in the way of exclusivity was three-year exclusivity under Hatch-Waxman which, unlike with NCE exclusivity, does not prohibit the submission of an ANDA during any part of the exclusivity term.
