The U.S. Food and Drug Administration (FDA) recently released draft guidance (Draft Guidance), entitled “Implementation of the ‘Deemed to be a License’ Provision of the Biologics Price Competition and Innovation Act of 2009.” It 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 (PHSA).
By way of background, the Biologics Price Competition and Innovation Act (BPCIA) 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 (FDCA) are now considered “biological products.” For clarity, we refer to these products as FDCA Biological Products.2
The BPCIA includes transitional provisions addressing FDCA Biological Products and proposed follow-on versions of such products. The BPCIA provides that FDCA Biological Products shall be “deemed” to have biologics license applications (BLAs) on March 23, 2020.3 In addition, the BPCIA provides that prior to March 23, 2020, a proposed follow-on of a FDCA Biological Product may be submitted under the FDCA if there is no other biological product licensed under a BLA that could be a “reference product.”4 According to the Draft Guidance, FDCA Biological Products “will no longer exist as [NDAs or ANDAs] and will be replaced by approved [BLAs] under section 351(a) or 351(k)” of the PHSA on March 23, 2020.5
The Draft Guidance states that such products will thus be removed from the Orange Book; there is no mention, however, of how and when they will be included FDA’s Purple Book applicable to biological products. With little explanation, the Draft Guidance states further that “any unexpired periods of exclusivity associated with a [FDCA Biological Product] (e.g., five-year exclusivity, three-year exclusivity, or pediatric exclusivity) would cease to have any effect [as of March 23, 2020].”6 Because orphan exclusivity applies to products approved under both the FDCA and the PHSA, any pending orphan drug exclusivity would be unaffected by this transition.
Rescinding FDCA-based exclusivity with one hand, the Draft Guidance refuses to give PHSA-based exclusivity with the other. The Draft Guidance states that FDCA Biological Products will not be eligible for exclusivity under the BPCIA (PHSA Section 351(k)(7))7 because the PHSA exclusivity provisions apply to “approved” licenses, not “deemed” licenses. Further, FDA states that “[n]othing in the BPCIA 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 does not appear to have considered an alternative solution to the perceived problem: granting 12-year Section 351(k)(7) exclusivity to FDCA Biological Products based on the date of approval for the FDCA Biological Product. This approach could allay FDA’s concerns about FDCA Biological Products “approved decades ago” while protecting the exclusivities of recently approved FDCA Biological Products.
Sponsors of recently approved FDCA Biological Products stand to lose valuable exclusivities on March23, 2020, with nothing to show in return. Given the value of product exclusivities, such sponsors willhave strong incentive to challenge FDA’s Draft Guidance.