District Court Decision Opens Door to Five-Year NCE Exclusivity for Single Components of Previously FDA-Approved Multi-Component Mixtures
June 2, 2015
On May 28, 2015, the U.S. District Court for the District of Columbia vacated and remanded the U.S. Food and Drug Administration's (FDA) administrative decision denying five years of new chemical entity exclusivity for Amarin Pharmaceutical's recently approved drug, Vascepa.1 With the caveat that the district court's holding is subject to a potential appeal, Amarin is an important case for innovator pharmaceutical companies that are developing drugs which contain, as their sole active ingredient, a single component of a previously FDA-approved active ingredient multi-component drug mixture.
In the U.S., there are two primary ways that drugs can be protected from generic competition: 1) patents; and 2) FDA market exclusivities. For small molecule drugs, the FDA typically grants (upon approval of a new drug application, or NDA) either five-year new chemical entity (NCE) market exclusivity, or three-year exclusivity for a new indication, dosage regimen, or dosage form for a previously approved drug where clinical data is used as the primary basis for the approval.2 Although the difference between three and five years seems small at first glance, it is not.
If a drug is granted NCE exclusivity, an abbreviated new drug application, or ANDA, for a generic version of the drug cannot be approved by the FDA—and therefore cannot be legally marketed—during the five-year exclusivity period.3 In addition, absent a paragraph IV certification,4 the FDA cannot even accept a generic drug manufacturer's ANDA until the five-year NCE exclusivity period has expired. After an ANDA is filed, the average time to FDA approval is 35 months.5 Thus, even without any patents, a drug having five-year NCE exclusivity should enjoy about eight years of market exclusivity.
Conversely, for a drug that has been granted three-year market exclusivity, the FDA can accept an ANDA from a generic manufacturer anytime within the three-year exclusivity period. Thus, a generic drug manufacturer who submits its ANDA one day after the FDA grants three years of market exclusivity for the reference listed drug could potentially have its generic drug on the market the day after the three-year exclusivity expires.6 Thus, in practice, the difference between three year exclusivity and five-year NCE exclusivity can actually amount to a difference of five years of market exclusivity—not two years.
Amarin initiated development of eicosapentaenoic acid ethyl ester (EPAe) for the reduction of triglyceride levels in adults with severe hypertriglyceridemia. Amarin sought to get five-year NCE exclusivity for EPAe in view of an earlier approved drug, Lovaza.
In the Hatch-Waxman Act, Congress provided that drugs with new active ingredients would be entitled to receive five-year NCE exclusivity. In 2004, the FDA approved Lovaza—whose active ingredient was a mixture of omega-3 esters, including EPAe. Although "portions of Lovaza's label refer to the specific components of the mixture, there is no dispute that its sole 'active ingredient' is the mixture as a whole."7 Supporting the proposition that Lovaza's mixture-equals-active-ingredient, the FDA, in a recent citizen petition response, "explained that because the Lovaza mixture has not been 'fully characterized', the FDA has identified the 'entire fish oil mixture as the active ingredient of Lovaza."8 The agency also explained that "when naturally derived mixtures are not sufficiently characterized to precisely identify every molecule that meaningfully contributes to the activity of the mixture it is difficult to define the active ingredient in terms of the specific components of [the] mixture."9
Based on its reading of the statute (and the FDA's regulations), Amarin contended that EPAe had never been previously approved by the FDA as an active ingredient. Amarin argued that Lovaza's mixture-as-active-ingredient was different from EPAe as a sole active ingredient for purposes of determining exclusivity. Amarin therefore concluded that if it received EPAe approval from the FDA, its EPAe drug should be entitled to five-year NCE exclusivity.
Months after Amarin's EPAe was approved as the drug Vascepa, the FDA denied NCE exclusivity based on a new 'one-to-many' framework analysis.10 This one-to-many framework, used without previous notice and comment rule making or guidance, did not perform the 'active ingredient' to 'active ingredient' comparison as required by statute. Instead:
Under that [one-to-many] framework, the FDA "generally" considers component molecules of a mixture to be previously approved "active moieties for purposes of determining a subsequent drug's eligibility for five-year exclusivity where (1) specific molecules in the mixture have been identified; (2) those specific molecules are "consistently present in the mixture"; and (3) those molecules are "responsible at least in part for the physiological or pharmacological action of the mixture, based on a finding that they make a meaningful contribution to the activity of the mixture." The determination of whether a particular molecular component of a previously approved mixture meets these criteria is based on "technological tools and scientific concepts available" at the time the FDA evaluates the exclusivity of a new drug – not the understanding that the FDA had when it approved the mixture in the first place.11
Chevron (and APA) Analysis
Amarin appealed the FDA's administrative decision. On appeal, the district court analyzed the FDA's regulations under two well-known tests: the Chevron12 standard, and the Administrative Procedure Act's (APA) "arbitrary, capricious, abuse of discretion, or otherwise not in accordance with the law"13 standard.
The district court found that the FDA's one-to-many interpretation failed both tests for a variety of reasons, including three violations of basic rules for interpreting statutes, and because the FDA's actions were not reasonable (e.g., they were arbitrary and capricious). Quoting the district court: the "problems with the FDA's decision are characterized as failures under Chevron step one, step two, or the APA's requirement of reasoned decision making, [and] the [a]gency's decision must be set aside."14
In light of Amarin, innovators developing single compounds that are components of previously approved mixtures or combination products might consider seeking five-year NCE exclusivity. In doing so, innovators may encounter problems with the FDA, and should be prepared to address these problems. Because five-year NCE exclusivity is highly valuable, innovators should take proactive steps to secure this exclusivity.
For help with any exclusivity question, please contact Vern Norviel, David Hoffmeister, Doug Carsten, or any member of patents and innovation strategies or life sciences practices at Wilson Sonsini Goodrich & Rosati.
Charles Andres contributed to the preparation of this alert.