Health Law Daily Court reverses prior decision, grants 5 years of market exclusivity
Tuesday, September 13, 2016

Court reverses prior decision, grants 5 years of market exclusivity

By Harold Bishop, J.D.

A new drug applicant will be granted five years of exclusivity for its colonoscopy drug under a new FDA policy controlling how much exclusivity multiple-ingredient drugs with only some new ingredients are entitled to. The district court reversed its March 2016 decision in favor of the FDA, saying the new drug applicant proved the government’s decision not to extend the new drug’s exclusivity to five years was "arbitrary and capricious" (Ferring Pharmaceuticals, Inc. v. Burwell, September 9, 2016, Contreras, R.).

Background. The new drug applicant is Ferring Pharmaceuticals, Inc. (Ferring), a manufacturer of Prepopik®, a fixed-dose combination drug product that contains three drug substances: sodium picosulfate, magnesium oxide, and anhydrous citric acid. When it submitted it new drug application (NDA) to the FDA, Ferring sought a five-year period of marketing exclusivity because one of the drug substances, sodium picosulfate, had never previously been approved in a NDA. Because Prepopik’s other two active ingredients had previously been approved for market, the FDA applied its then-existing interpretation of the Food Drug & Cosmetic Act (FDC Act) and determined that Prepopik was not entitled to a five-year period of marketing exclusivity because the finished "drug product" included active ingredients that had previously been approved in other drug products.

Citizen Petition. Ferring filed a Citizen Petition challenging the FDA’s interpretation and, in response, the FDA, acknowledging the policy concerns Ferring and two other pharmaceutical companies raised regarding the agency’s interpretation, concluded that the FDC Act could reasonably be read to refer to "drug substances" (the individual active ingredients of the drug). As such, the FDA announced that it would change its interpretation and permit five-year exclusivity for fixed-combination drug products that contained a novel drug substance, even if that drug product also contained other previously approved drug substances. But the FDA also concluded that it would apply its interpretation only prospectively and declined to alter its exclusivity determination for Prepopik.

Prior court action. Ferring challenged the FDA’s prior interpretation in federal district court as contrary to the plain language of the FDC Act, or an unreasonable interpretation of statutory ambiguity. The court found that the FDA reasonably declined to grant the exclusivity period to the manufacturer of Prepopik. However, the court also held that supplemental briefing was necessary to determine whether the FDA acted arbitrarily and capriciously when it revised its previous interpretation, allowing the exclusivity for fixed-combination drug products that included a novel substance, but did not apply its new interpretation retroactively to Ferring (see Court upholds FDA’s marketing exclusivity denial, seeks clarification on change of heart, March 16, 2016).

Current court action. In the midst of the supplemental briefing, Par Pharmaceutical, Inc. (Par), a company that has filed an abbreviated new drug application (ANDA) for approval to market a generic version of Prepopik, filed a motion to intervene and a related motion for a protective order. The court ultimately granted Ferring’s motion for reconsideration, reversing the court’s March 16, 2016 decision, denied as moot Par’s motion to intervene and the parties’ renewed summary judgment motions, and denied Par’s motion for a protective order.

With regards to Ferring’s motion to reconsider the March 16, 2016 decision, the court concluded that the FDA failed to provide a "legitimate reason" for treating those drug substances differently from ones that were first approved in their single-entity forms. The court stated that if a drug substance is sufficiently novel to warrant protection under a five-year exclusivity period—and sufficiently novel that other products containing that drug substance should also be protected through the FDA’s umbrella policy—it is not apparent why timing, or the order in which the drugs were approved, should alter that assessment.

Ultimately, the court decided that the FDA failed to offer anyscientific, technical, economic, or other explanation for why Congress would intend the grant of market exclusivity to depend on the temporal sequence in which applications were approved. Thus, the court found the FDA’s prior interpretation was arbitrary and capricious. The court decided to correct its clear error in its March 16, 2016 opinion, and remanded the case to the FDA for action not inconsistent with its opinion.

The case is No.15-0802 (RC).

Attorneys: Catherine Emily Stetson (Hogan Lovells US LLP) for Ferring Pharmaceuticals, Inc.; Ann Frances Entwistle, U.S. Department of Justice, for Sylvia Mathews Burwell.

Companies: Ferring Pharmaceuticals, Inc.; Par Pharmaceutical, Inc.

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