By Ed Allera - Chairman of The 505(b)(2) Platform
In our “Exclusivity Under Attack” article published in August 2019, we discussed the U.S. District Court for the District of Columbia’s opinion in Braeburn Inc. v. FDA, holding that FDA’s use of “innovation” in determining exclusivity under §505(b)(2) of the Federal Food, Drug, and Cosmetic Act (FFDCA) was too broad. The court remanded the matter to the Agency to more clearly frame the definition. This issue arose because multiple §505(b)(2) new drug applications (NDAs) were filed for variations of buprenorphine delivery, and some applications were blocked by market exclusivity granted by FDA to previously-approved competing products.
In late November 2019, FDA quietly responded to the plaintiff, Braeburn, Inc., in a decision that was not highly publicized but that nonetheless has significant ramifications for exclusivity decisions not only for §505(b)(2) NDAs, but also for orphan drugs and other novel products such as combination products and gene therapies. In its response to Braeburn, FDA defined “exclusivity” in terms of clinical benefit to a patient population that is studied in a clinical trial. Based upon FDA’s response to Braeburn, the central question becomes: What unique clinical question about the safety and effectiveness of the active moiety is answered, for the first time, by the clinical trials that were conducted for—and are essential to—the application’s approval?
FDA’s conclusion is that exclusivity is available when there is no other data available to support the application; in other words, exclusivity does not apply to aspects of the drug product for which the clinical investigations that were conducted were not essential. According to FDA, as the number of applications for therapeutic improvements in the active moiety increases, the exclusivity that is available to sponsors of these incremental advances becomes more limited and usually narrower in scope.
In its decision, the Agency emphasized the fact-specific nature of exclusivity determinations. Clinical trials must address clinically meaningful differences that are unique (i.e., previously unanswered questions of clinical relevance). Thus, clinical safety benefits must be unique to the product that is the subject of the §505(b)(2) NDA. Accordingly, there is a relationship between the scope of exclusivity awarded and the changes to the product that required new clinical investigations which were essential for approval.
However, FDA also noted that the context-specific nature of exclusivity decisions may create divergent results across different therapeutic areas. A product change may be considered an innovation in one therapeutic area, but not in another therapeutic area if clinical trials would be unnecessary to approve the change. Moreover, sponsors must recognize that changes to warnings or other risk information on a drug label must be included in generic drug labeling as well; therefore, such changes do not qualify for exclusivity.
Because FDA’s exclusivity decisions are fact-specific, it is difficult to rely upon a previous FDA exclusivity decision in a new situation—particularly as the industry continues to develop new technologies, combination products, and digital products. FDA’s evaluation of what is known about a previously-approved drug product, combined with new clinical evidence generated by clinical investigations of another drug product containing the same active moiety, presents what we call “the clinical benefit dilemma”:
Because of the economic ramifications involved in many of these decisions, the courts often become entangled in these legal decisions. However, the courts do not realistically appreciate the scientific nuances or practical aspects involved in drug development. Courts look for FDA to make reasonable decisions, and they are becoming more cautious about providing FDA with unfettered discretion. To this end, at least two current U.S. Supreme Court Justices have discussed revisiting the Chevron standard of review, which for decades has given great deference to Agency decisions.
Where do these recent developments leave industry? While congressional groundwork has started on “21st Century Cures 2.0” and the 2022 user fee re-authorization bill, we are entering a new era of patient activism. In this new era, the concepts of clinical benefit and clinical relevance are quickly becoming the 21st century equivalent to the 20th century standard of adequate and well-controlled clinical investigations. Drug development no longer is only about showing efficacy and safety of a product. It now requires that sponsors demonstrate product value. Sponsors would be wise to take all of these facts into account when developing their drug products and when seeking exclusivity for their §505(b)(2) NDA.
Demystifying 505(b)(2) Development: Navigating the Scientific, Regulatory, Legal, and Business Complexities
By Ed Allera - Chairman of The 5059B)(2) Platform
The conference was thorough and sobering because it looked at the interaction of the science, law, regulatory issues, and financing. To rework Tolstoy’s adage about families: each §505(b)(2) can make its sponsor happy, but only in its own way. The pathway cannot be viewed as a cheap fast way to get a product to market that payers will obviously adopt and result in a financial bounty.
A vast number of excellent product ideas, concepts, technologies, and patient needs exist that can fit into the (b)(2) category. Almost all require financing, either from the developer, the parent company, a trade partner, or outside investors.
Financing is the foundation for the (b)(2)’s. Investors want solid returns on their investments. Some are looking for as much as 10X. How do they achieve this return? For a start, the product must have solid intellectual property. Robust patent protection of the technology, drug product, and use is the minimal starting position. Delivery systems and combination product patents are important.
For some 3 years of market exclusivity alone is not enough. Orphan exclusivity is a huge plus. Mere bioequivalence studies or emphasis on bioequivalence are a negative. Alone they are not a value driver. The possibility of generic substitution by payers becomes an obstacle that must be overcome to attract investors. Investors are seeking sustainable value addition.
Nothing directly comparable exists abroad. A coalition has been formed in Europe to begin the process of creating something akin to the (b)(2)’s in order to obtain favorable reimbursement.
FDA is not a monolith. Each FDA reviewing division is unique. But in most cases, the reviewers does not view (b)(2)’s as deviations from the norm of product. They view them as novel or unique products for which they expect a comprehensive development plan and approach. Many (b)(2) sponsors fail recognize the importance of the first meeting and to prepare comprehensively for their initial FDA meeting. They operate on the faulty assumption that they are developing glorified generics and that the Office of New Drug Evaluation will cut them breaks to get a cheaper product on the market. Nothing can be further from the truth. A mistake by a reviewing division can have adverse consequences to the Agency. The biggest mistakes companies make involve the failure to understand the potential for safety issues to arise from the new product’s uniqueness- the safety paradox. ONDE is a high stakes poker game, and you are expected to be ready to play in that league when you make your initial approach. Thus extensive preparation is necessary, often in conjunction with a consultant who understands FDA’s language.
Payers are becoming more demanding of data proving that your product adds value and actually saves money. Theories are interesting, but “show me the money” is the mantra. Developing a reimbursement strategy as soon as possible in the product development plan is advisable to attract investors.
The distribution system has a significant number of players. Multiple options exist but properly pricing the product is vital.
There is a significant market for these products. But you must plan ahead. You must have a comprehensive story that sets out the development plan for the drug product, its path through FDA, and the value that it adds to the healthcare system. What clinical benefit is the product providing. The use of data gathered from all reliable sources, including artificial intelligence, can facilitate creative clinical trial designs that can make development and approval more efficient are on the horizon.
Navigating the Meaning of Conditions of Use, Innovation, and Clinical Benefit under Braeburn
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