In deciding whether to approve a generic version of a pioneer orphan drug, the FDA only needs to look to the proposed labeling of the generic drug to determine its intended use. The agency does not need to speculate as to possible off-label use of the generic drug that would potentially violate the seven-year marketing exclusivity of the pioneer drug. The decision of the district court upholding the FDA’s approval of the generic drug was affirmed (Spectrum Pharmaceuticals, Inc. v. Burwell, June 3, 2016, Griffith, T.).
Background. Levoleucovorin, better known by the brand-name Fusilev®, has been sold by Spectrum Pharmaceuticals, Inc. since 2008 for the purpose of counteracting liver damage during a type of chemotherapy known as methotrexate therapy (the Methotrexate Indications). Because Fusilev was designed to treat a rare disease or condition that historically received little attention from pharmaceutical companies, it was designated as an “orphan drug” by the FDA, giving Spectrum exclusive marketing rights to the Methotrexate Indications for seven years. This meant that no other company could sell a generic version of the drug for that purpose until March 7, 2015.
In 2011, Spectrum received approval from the FDA to market Fusilev for a new use: helping patients with advanced colorectal cancer to manage their pain (the Colorectal Indication). Spectrum was granted exclusive marketing rights for the Colorectal Indication until 2018.
On March 9, 2015, two days after Spectrum’s exclusivity period expired for the Methotrexate Indications, generic manufacturer Sandoz Inc. received FDA approval to market a generic version of levoleucovorin for the Methotrexate Indications, having had its application expedited in 2012 to address a drug shortage. Unlike Fusilev, which is sold in a freeze-dried powder that must be mixed with another chemical before it can be used, Sandoz sells its generic drug in a ready-to-use form. Sandoz’s FDA-approved label contains only the Methotrexate Indications and makes no mention of the Colorectal Indication.
Spectrum’s allegations. Spectrum sued to enjoin the FDA’s approval of Sandoz’s drug, arguing that Sandoz’s sole intended use of the generic was to treat patients with colorectal cancer, even though the label provided for use only in patients undergoing methotrexate therapy. Spectrum suggested to the district court that the FDA was willfully blind to the fact that the generic drug would not be used for counteracting liver damage, but for managing colorectal pain, which is Spectrum’s exclusive domain until 2018.
Spectrum’s argument to the district court focused on Sandoz’s vial sizes. While the standard dose of levoleucovorin for the Methotrexate Indications is 7.5 milligrams (mg), some patients need a dose of 75 mg or 85 to 90 mg in certain rare situations. In contrast, the Colorectal Indication regularly requires a much larger dose of 150 mg. Spectrum sells Fusilev in 50 mg vials, but Sandoz sells its generic in 175 mg and 250 mg vials, sizes that Spectrum argued are intended to treat the Colorectal Indication despite being labeled for only the Methotrexate Indications.
Spectrum also claimed that the FDA’s approval of Sandoz’s generic version was arbitrary and capricious because the agency changed its position on the safety and efficacy of large vials of levoleucovorin without explanation, and it was entitled to notice before the FDA expedited review of Sandoz’s generic drug due to drug shortage.
District court decision. The district court granted summary judgment against Spectrum, finding that the FDA’s approval of Sandoz’s generic drug was lawful. The district court reasoned that the Orphan Drug Act allowed the FDA to approve Sandoz’s drug so long as the generic’s label omits the Colorectal Indication. The district court also rejected Spectrum’s remaining arguments as well, finding that the agency did not improperly make a policy change on the safety and efficacy of large vials of levoleucovorin without explanation, and any error in expediting the agency’s review of the generic due to a drug shortage was harmless (see Sandoz may distribute its generic colorectal drug in larger vials than the brand version, June 9, 2015).
Exclusive marketing rights. The D.C. Circuit decided that Spectrum’s exclusive marketing rights for the Colorectal Indication were not violated by the FDA’s approval of Sandoz’s generic version of the drug in larger vials. Spectrum made three arguments.
First, Spectrum argued that the FDA must consider the intended use of an orphan drug, even if the drug is not designated or labeled for that purpose. The FDA responded that it is only required to consider the uses included on a drug’s label. The D.C. Circuit found the FDA’s decision permissible. The court reasoned that the FDA’s interpretation accommodated Sandoz’s right to enter the market for certain purposes while, at the same time, protecting Spectrum’s right to market its pioneer drugs for exclusive uses.
Second, Spectrum argued that the FDA clearly knew that Sandoz’s generic version was intended for only the Colorectal Indication because of the size of its vials. The court disagreed, finding at least two reasons why a user could prefer Sandoz’s generic to Fusilev for the Methotrexate Indications: (1) Spectrum’s 50 mg vial, unlike Sandoz’s 175 mg and 250 mg vials, is insufficient to provide an entire dose for some patients who require 85 to 90 mg for the Methotrexate Indications; and (2) Sandoz’s drug is in a ready-to-use form, while Spectrum’s must be mixed with another chemical before it can be used.
Third, Spectrum argued that even if the Orphan Drug Act does not require the FDA to consider a generic’s intended off-label uses, the agency’s own regulation bars the FDA from approving a generic that is “intended” for the same use as the pioneer drug during its seven-year exclusivity period. Spectrum claimed that the regulation’s use of the word “intended” required the FDA to consider how Sandoz subjectively intended doctors and patients to use its drug when the FDA evaluated its generic drug application. The FDA responded, and the court agreed, that even if it must consider a generic’s intended use, the agency can properly determine that purpose by looking solely to the labeled uses proposed in the application.
Improper policy change. Spectrum argued that when the FDA approved Sandoz’s generic drug application, the agency found that large vials of levoleucovorin are appropriate for the Methotrexate Indications, yet the agency had previously reached the opposite conclusion. The court rejected Spectrum’s argument, finding that the FDA never changed its position at all.
In fact, the record showed that the FDA always treated larger-than-necessary vials of levoleucovorin as appropriate for the Methotrexate Indications. For instance, even though the average dose needed for the Methotrexate Indications is 7.5 mg, Spectrum had been selling an FDA-approved vial of 50 mg for these indications. In addition, the FDA approved Spectrum’s own application to market 175 mg and 250 mg vials of levoleucovorin, even though Spectrum ultimately chose not to sell the drug in those vial sizes.
Expedited review. Spectrum’s final contention was that the FDA was required to give Spectrum notice and an opportunity to be heard before expediting Sandoz’s generic drug application in response to a drug shortage. The court found that the Orphan Drug Act allows the FDA to abrogate market exclusivity in the case of a drug shortage, but the FDA must first give the producer of the pioneer drug an opportunity to show that it can meet market demand. In this case, Spectrum claimed the Orphan Drug Act created a notice obligation even though the FDA did not cut short its market exclusivity period. The court found that this argument had no basis in the statute. Therefore, Spectrum was not entitled to notice and an opportunity to be heard before the agency approved Sandoz’s generic drug applications.
The case is No. 15-5166.
Attorneys: Jessica L. Ellsworth (Hogan Lovells US LLP) for Spectrum Pharmaceuticals, Inc. Christopher M. O’Connell, U.S. Department of Justice, for Sylvia Mathews Burwell, Secretary, U.S. Department of Health and Human Services.
Companies: Spectrum Pharmaceuticals, Inc.; U.S. Department of Health and Human Services; U.S. Food and Drug Administration; Sandoz Inc.
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