Seyfarth Shaw Offers Hatch-Waxman And Biosimilars Litigation: 2017 Year-in-Review

Today’s rapid scientific and technological advances demand not only a thorough understanding of the complex technology, but also a meticulous application of intellectual property law to protect the technology.

Seyfarth’s Intellectual Property and Hatch-Waxman Litigation practitioners are pleased to announce the release of Hatch-Waxman And Biosimilars Litigation: 2017 Year-in-Review which provides a brief overview of the Hatch-Waxman Act, a summary of the recently released FDA Draft Guidance, a general timeline of Hatch-Waxman and Biosimilars litigation and summaries of some of the related decisions issued by the U.S. Supreme Court and Court of Appeals for the Federal Circuit in the year 2017.

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Continue Reading Now Available! Seyfarth Shaw’s Hatch-Waxman and Biosimilars Litigation: 2017 Year-in-Review

This article provides a summary of the draft guidance[1] released by the FDA to assist applicants in determining which one of the abbreviated approval pathways under the Federal Food, Drug and Cosmetic Act (FD&C Act) is appropriate for the submission of a marketing application to the FDA. The draft guidance was released on October 13, 2017, for which comments are due by December 12, 2017.

The guidance expanded on the different pathways for obtaining approval of new drug applications (NDAs) and abbreviated new drug applications (ANDAs), which became available with the passage of the Hatch-Waxman Amendments. In addition, the guidance discussed the regulatory and scientific considerations for determining whether to file an ANDA or a 505(b)(2) Application.

Abbreviated Approval Pathways:

1. Stand-Alone NDA Application:

  • Submitted under section 505(b)(1) and approved under section 505(c) of the FD&C Act and contains “full reports of investigations of safety and effectiveness that were conducted by or for the applicant or for which the applicant has a right of reference or use.”

The guidance did not discuss stand-alone NDAs. It focused on those applications that can be submitted as ANDAs under section 505(j) of the FD&C Act, petitioned ANDAs under 505(j)(2)(c) of the FD&C Act, or NDAs pursuant to section 505(b)(2) of the FD&C Act.

2. 505(b)(2) Application:

  • Submitted under § 505(b)(1) and approved under § 505(c) of the FD&C Act, and contains “full reports of investigations of safety and effectiveness, where at least some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use.”
  • May rely on the FDA’s safety and/or efficacy findings for a listed drug only to the extent that the proposed product of the 505(b)(2) application shares characteristics in common with the listed drug.
    • NOTE: A drug product in a 505(b)(2) application will not necessarily be treated as bioequivalent or therapeutically equivalent to the listed drug(s) relied upon. The applicant is expected to establish a bridge (e.g., by using comparative bioavailability data) between the proposed drug product and each listed drug that the applicant seeks to rely upon to demonstrate that reliance on the listed drug is scientifically justified.
  • Must include sufficient data to support the differences, to the extent that the listed drug and the proposed § 505(b)(2) drug differ.

3. ANDAs

  • Submitted and approved under section 505(j) of the FD&C Act.
  • Must establish that the proposed generic product (1) is the same as the reference listed drug (RLD) with respect to the active ingredient(s), dosage form, route of administration, strength, previously approved conditions of use, and labeling (with permissible differences), and (2) is bioequivalent to the RLD.
  • May not be submitted if studies are necessary to establish the safety and effectiveness of the proposed product because it relies on FDA’s finding of safety and effectiveness for an RLD.

4. Petitioned ANDAs:

  • Submitted and approved under § 505(j) of the FD&C Act.
  • A type of ANDA for a drug product that differs from the RLD in its dosage form, route of administration, strength, or active ingredient (in a product with more than one active ingredient), and for which, in response to a petition under § 505(j)(2)(c) of the FD&C Act, the FDA has determined that safety and efficacy studies are not necessary for the proposed drug product.

Regulatory Considerations for ANDAs and 505(b)(2) Applications:

1. Duplicates:

  • The FDA generally will refuse a 505(b)(2) application for a drug that is a duplicate of a listed drug and eligible for approval under § 505(j) of the FD&C Act.
    • However, if FDA approves a duplicate product after a § 505(b)(2) application is submitted, but before the § 505(b)(2) application is approved, the 505(b)(2) application would remain eligible for approval.

2. Petitioned ANDAs:

  • An applicant may submit a petition under § 505(j)(2)(c) of the FD&C Act (a suitability petition) to FDA requesting permission to submit an ANDA for a generic drug product that differs from an RLD in its route of administration, dosage form, or strength or that has one different active ingredient in a fixed-combination drug product.
  • A suitability petition will generally be approved unless (1) the FDA determines that the safety and effectiveness of the proposed change from the RLD cannot be adequately evaluated without data from investigations that exceed what may be required for an ANDA, or (2) the petition is for a drug product for which a pharmaceutical equivalent has been approved in an NDA.

3. Bundling:

  • An applicant may seek approval for multiple drug products containing thesame active ingredient(s) when some of these products would qualify for approval under the section 505(j) pathway and some would qualify for approval under the 505(b)(2) pathway.
  • FDA has permitted an applicant to submit a single “bundled” 505(b)(2) application forall such multiple drug products.

Scientific Considerations for ANDAs and § 505(b)(2) Applications:

1. Limited Confirmatory Studies:

  • If the safety or effectiveness of a proposed drug product must be established by investigations, then an ANDA application is not appropriate.
  • However, data from limited confirmatory testing to show that the characteristics that make the proposed drug product different from the listed drug do not alter its safety and effectiveness may be submitted in an ANDA.

2. Active Ingredient Sameness Evaluation:

  • “If the active ingredient in an applicant’s proposed drug product cannot be demonstrated to be the same as the active ingredient in the RLD by using the information and data that may be submitted in connection with an ANDA, the drug product should not be submitted for approval in an ANDA.”
  • In situations where current limitations of scientific understanding and technology may preclude approval of an ANDA with the data permitted for submission in an ANDA, FDA may be able to receive, review and approve ANDAs as the scientific understanding and technology evolve.

3. Intentional Differences Between the Proposed Drug Product and an RLD:

Differences in Formulation:

  • An ANDA must include information regarding the identity and quantity of all active and inactive ingredients of the proposed drug product and a characterization of any permitted differences between the formulations of the proposed drug product and the RLD, along with a justification demonstrating that the safety and effectiveness of the proposed drug product is not adversely affected by these differences. If the proposed drug product contains changes to its formulation that are not permissible in an ANDA, the applicant should consider submitting a 505(b)(2) application.

Differences in Bioequivalence and/or Bioavailability Differences:

  • An ANDA must contain information to show that the proposed drug product is bioequivalent to the RLD, such as (i) the rate and extent of absorption of the proposed drug do not show a significant difference from that of the RLD when administered at the same molar dose of the therapeutic ingredient under similar experimental conditions in either a single dose or multiple doses.
    • NOTE: “[(w]here there is an intentional difference in rate (e.g., in certain extended-release dosage forms), certain pharmaceutical equivalents or alternatives may be considered bioequivalent if there is no significant difference in the extent to which the active ingredient or moiety from each product becomes available at the site of drug action.”
  • An application for a proposed drug product where the rate and/or extent of absorption exceed, or are otherwise different from, the 505(j) standards for bioequivalence may be submitted under the 505(b)(2) pathway and may require studies to show the safety and efficacy of the proposed product at the different rate and/or extent of delivery.  However, the FDA generally will not accept a 505(b)(2) application for a drug product where the only difference from a listed drug is that (1) the extent to, or (2) the rate at, which its active ingredient is absorbed or otherwise made available at the site of action isless than that of the RLD.

Differences in Conditions of Use:

  • A § 505(j) application must include a statement that the conditions of use prescribed, recommended, or suggested in the labeling for the proposed drug product have been previously approved for the RLD. The application cannot be approved as an ANDA if the proposed drug product has added a new indication. However, the FDA will not refuse to approve an ANDA whose proposed labeling excludes conditions of use approved for the RLD because of patents or exclusivity.

4. Other Differences:

  • Drug products that differ considerably from the RLD are generally not candidates for the § 505(j) pathway. In assessing whether differences between a proposed generic drug product and the RLD would necessitate additional data or information to establish the safety or efficacy of the proposed drug product, FDA will examine the individual differences between the products and the combined effects of those differences.

 


[1] https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM579751.pdf

In an unprecedented move by the U.S. Patent and Trademark Office (USPTO), the Patent Trials and Appeals Board (PTAB) has permitted the filing of amicus briefs on whether the Saint Regis Mohawk Tribe (“Tribe”) should be permitted to terminate the inter partes review of Allergan’s patents contested in IPR2016-00127, IPR2016-01128, IPR2016-01129, IPR2016-01130, IPR2016-01131, and IPR2016-01132. Allergan assigned the patents challenged in these IPRs to the Tribe, while retaining an exclusive license in exchange for ongoing payments. As a sovereign entity, the Tribe seeks to terminate the IPR challenges of these patents, a move which the PTAB had ruled in 2016 shielded the University of Florida Research Foundation as a sovereign entity from IPRs. See Covidien LP v University of Florida Research Foundation Inc., IPR2016-01274, Paper 21 (PTAB Jan. 25, 2016). Amicus briefs of no more than 15 pages are due to be filed by December 1, 2017, and the Petitioners and Tribe are each authorized to file a single response to any amicus brief by December 15, 2017.

This maneuvering has caught the attention of many, including members of Congress and the district court specifically addressing the validity of these patents. In response to a bipartisan committee investigating the Allergan-Tribe deal, Senator McCaskill has already drafted a bill to block tribal claims of sovereign immunity, which could otherwise preclude USPTO review of patents assigned to tribes. Court of Appeals for the Federal Circuit Judge William Bryson, sitting by “designation” in the Eastern District Court of Texas, expressed concerned that Allergan sought to “rent” sovereign immunity from the Tribe. On the other hand, heralded as an innovative defense, patent attorneys now seek such a defense to patent challenges before the USPTO. The Saint Regis Mohawk Tribe has reportedly already taken ownership of patents from SRC Labs and is in discussion with another technology company.

Interestingly, the district court under Judge Bryson recently found four of the six patents invalid, a decision which will likely be appealed to the CAFC. However, the PTAB nevertheless will need to answer, inter alia, the question of  whether the Tribe’s right as a sovereign immunity will shield the Allergan patents from IPRs. Due to additional parties joining as Petitioner and the complicated issues surrounding this challenge, the PTAB has extended a deadline to render its final decision in the IPR from December 8, 2016, to April 6, 2018.

BioLoquitur has reported on legislative developments in the past, but never did we expect to discuss a tax bill. Last week, however, the U.S. House of Representatives passed the “Tax Cut and Jobs Act” Bill (H.R. 1) and H.R. 1 deserves a spotlight. After all, one of our goals is to provide the life science industry with the latest news that could affect the industry.

Below are a few provisions that could affect U.S. pharma and biotechnology companies and others investing in those companies.[1]

  • Section 3001 reduces the U.S. corporate tax rate from 35% to 20%. If the bill goes into law, the reduction will be the largest corporate tax cut in over 100 years.
  • Under Title IV, the U.S. will only tax the U.S. income of a corporation and exempt most or all foreign income. Currently, a corporation headquartered in the U.S. pays corporate income tax on all income, both U.S. and foreign income that has been brought back into the U.S.
  • Section 3401 eliminates the Orphan Drug Tax Credit (“ODTC”). Currently, the U.S. provides an orphan drug manufacturer a tax credit of 50% of qualified clinical research costs incurred between the date of approval for the drug and the date that the U.S. Food and Drug Administration (“FDA”) designates the drug as an orphan drug. According to the U.S. Department of the Treasury, the tax expenditures attributable to the ODTC credit are expected to be $2.3 billion in 2017 and would grow substantially over the next ten years; eliminating the credit would thus generate billions in revenue for the United States.
  • After December 31, 2022, Section 3315 provides that research and experimental expenditures are not deductible unless they are charged to a capital account, where they must be amortized over a five year period. Currently, the tax code allows such research and experimental expenses as a deduction without requiring amortization under 26 U.S.C. § 174(a).
  • Section 3312 changes the tax treatment for self-created patents, taxing the gains from sales of such patents as ordinary income rather than capital gains.
  • Section 3307 narrows the ability to deduct certain business expense, eliminating deductions for membership dues, any payments relating to “entertainment, amusement, or recreation,” and on-premises athletic facilities, among others.
  • Section 1308 repeals the deduction for medical expenses. The tax code provides for the deduction of medical expenses that exceed 10% of an individual’s adjusted gross income. H.R. 1 eliminates this deduction. Critics suggest the elimination may potentially leading to reduced consumer spending on medical needs and/or increased reliance on government healthcare resources.

At 450 pages, H.R. 1 is a complex and dense bill — the list above is not exhaustive, of course.  We will keep you updated as tax reform continues.

 

[1]          Title V amends several provisions relating to exempt organization that are beyond the scope of this article, but may be of interest to research universities and foundations. If you have questions on the potential impact of Title V, please contact us and we will refer you to our tax and benefits colleagues for further information.

The Federal Circuit’s Review of Bayer’s Erectile Dysfunction Treatment Suggests Tolerance for a Wide Girth When Aiming for a Narrow Point

In Bayer Pharma AG v. Watson Laboratories, Inc. (Fed. Cir. November 1, 2017), the Federal Circuit overturned the District of Delaware’s finding that Watson failed to prove by clear and convincing evidence that the subject matter encompassed by the claims of Bayer’s U.S. Patent 8,613,950 (the ‘950 patent) was obvious under 35 USC 103. The CAFC invalidated claims 9 and 11 of the ’950 patent as unpatentably obvious. The Federal Circuit made this determination de novo based on the underlying findings of fact from the district court. Continue Reading When Are Swashbuckling Experts Seemingly ‘Flooding’ a Court with Large Number of References?

This article summarizes information taken from the following sources:  FDA’s Draft Guidance for Industry on Bioequivalence Studies With Pharmacokinetic Endpoints for Drugs Submitted Under an Abbreviated New Drug Application (ANDA) (Dec. 2013) & information set forth in the following link: https://www.fda.gov/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/ucm075207.htm

In order to launch a generic version of an approved reference listed drug (“RLD”), an applicant must file an abbreviated new drug application (“ANDA”) generally demonstrating, among other things, that a proposed generic drug product is bioequivalent (“BE”) to the RLD.[1] Continue Reading FDA Provides New Product Specific Guidance for Development of Certain Generic Drug Products

The America Invents Act (“AIA”) provides for post grant challenges of U.S. patents in the Patent Trial and Appeal Board (“PTAB”) of the U.S. Patent and Trademark Office. One type of AIA proceeding, Inter Partes Review (“IPR”), came into effect in September 2012, and provides a process for relatively quick determination of invalidity of challenged patent claims based on published prior art. [1] IPR decisions rendered in the past five years have created a body of law addressing a variety of issues related to invalidity challenges before the PTAB. In a recent IPR proceeding, a novel strategy has arisen that posts an interesting question of first impression, whether the assignment of a patent involved in an IPR proceeding to a U.S. Indian tribe can avoid an IPR proceeding based on a sovereign immunity defense. The present blog post summarizes the new issue that the PTAB will be required to decide in the IPR. Continue Reading Indian Tribal Sovereign Immunity Asserted in an IPR

Less than two months after oral argument, the Supreme Court issued a unanimous decision on Monday, May 22, 2017, in TC Heartland LLC v. Kraft Foods Group Brands LLC, uprooting long-standing Federal Circuit precedent regarding proper venue for patent infringement cases.  While the TC Heartland decision certainly portends a shift away from certain district courts, its effects may very well be minimal with respect to Paragraph IV litigation.

Evolution of Patent Venue Laws

The issue in TC Heartland can be traced back to the creation of a separate venue statute in 1897 for patent infringement cases.  Prior to the amendments of 1897, patent litigation cases were treated just like any other federal matter for venue purposes.

Venue refers to the proper or most convenient location for a case or trial — it is designed to keep litigation near the defendant or the site of the action that gave rise to the suit.  In 1897, Congress approved a separate patent venue statute, which defined venue to include (1) where the alleged infringer was an “inhabitant” or (2) where the defendant both committed the act(s) of infringement and maintained a “regular and established place of business.”  In 1948, Congress made a slight non-substantive revision to the patent venue statute, replacing “inhabit[]” with “resides.”  Supreme Court decisions relating to the pre-1948 and post-1948 patent venue statute determined that the patent venue statute was the exclusive venue provision for patent infringement actions and that both “inhabit” and “resides” meant the place of incorporation of the alleged infringer. Stonite Products Co. v. Melvin Lloyd Co., 315 U.S. 561, 563-66 (1942); Fourco Glass Co. v. Transmirra Products Corp., 353 U.S. 222, 224-229 (1957).

The 1948 patent venue statute, 28 U.S.C. § 1400(b), has not been modified since its enactment.  It reads:

28 U.S.C. § 1400(b):  Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business.

In contrast to the patent venue statute, the generally applicable venue statute, 28 U.S.C. § 1391, has undergone more recent revisions.  For example, in 1988, Congress expanded the location where a defendant can and should be sued.  The general venue statute modified the definition of “resides” by expanding residence to include “any judicial district in which such defendant is subject to the court’s personal jurisdiction.”  28 U.S.C. § 1391(c).  Personal jurisdiction can include places where the defendant has directed its actions, for example, where the product at issue is in the stream of commerce.

Two years after the 1988 amendment, the Federal Circuit evaluated whether the 1988 change to the general venue statute affected the patent-specific venue provision, 28 U.S.C. § 1400(b).  In VE Holding Corp. v. Johnson Gas Appliance Co., the Federal Circuit held that the term “resides” in Section 1400(b) should be interpreted using the new definition of “resides” in Section 1391(c).  The end result was to make venue proper for patent litigation anywhere the defendant is subject to personal jurisdiction rather than the more restricted definition of resides as the place of incorporation. VE Holding Corp. v. Johnson Gas Appliance Co., 917 F.2d 1574 (Fed. Cir. 1990).  The Supreme Court denied certiorari. Johnson Gas Appliance Co. v. VE Holding Corp., 499 U.S. 922 (1991).

Over the last 27 years, attorneys have associated VE Holding Corp. with an increase in forum shopping — once venue became easier to establish, plaintiffs brought suit in places thought to provide advantages in terms of procedure, outcome, or otherwise.  For example, VE Holding is said to have contributed to the rise of the Eastern District of Texas as a go-to district for patent owners. See, e.g., Alisha Kay Taylor, What does Forum Shopping in the Eastern District of Texas Mean for Patent Reform, 6 J. Marshall Rev. Intell. Prop. L. 570, 575-577 (2007).  The Eastern District of Texas offers streamlined patent litigation procedures and a reputation for patent holder wins.  It is not a populous district, nor a place of incorporation or a principal place of business for most defendants.

After VE Holding, the Federal Circuit continued to field cases about patent venue.  In light of the rise of “troll” litigation, i.e., litigation by non-practicing entities (“NPE”s) filed in plaintiff-friendly forums, the Federal Circuit attempted to limit venue by finding that retaining jurisdiction in certain forums was an abuse of discretion. E.g., In re TS Tech United States Corp., 551 F.3d 1315 (Fed. Cir. 2008) (ordering transfer of case from the Eastern District of Texas to the Southern District of Ohio).  Congress also repeatedly introduced bills specifically designed to limit patent venue in an attempt to curb NPE litigation; those bills were never passed. See, e.g., Venue Equity and Non-Uniformity Elimination Act of 2016, S. 2733, 114th Cong. (2015-2016).

TC Heartland

The TC Heartland litigation allowed the Supreme Court a second chance to evaluate the merits of VE Holding Corp. (and their own opportunity to combat forum-shopping in patent litigation matters). In TC Heartland, Kraft Food Group Brands LLC (“Kraft”) brought suit against TC Heartland, LLC (“TC Heartland”) in the district court of Delaware.  TC Heartland moved to dismiss the suit or at least transfer the case — the company was incorporated in Indiana, maintained headquarters in Indiana, and less than 2% of the allegedly infringing product ended up in Delaware. See In re TC Heartland LLC, 821 F.3d 1338, 1340 (Fed. Cir. 2016).  The Delaware district court denied the motion to dismiss or transfer venue, leading to an appeal to the Federal Circuit.

On appeal, the Federal Circuit addressed the effect of another set of amendments to the general venue statute made in 2011. At that time Congress, inter alia, added language in 28 U.S.C. § 1391(a), stating that the general venue statute applied “[e]xcept as otherwise provided by law.” Id. at 1341.  According to TC Heartland, the additional language made the general venue statute inapplicable where other venue statutes existed, such as the patent venue statute of 28 U.S.C. § 1400(b). Id. The Federal Circuit rejected TC Heartland’s arguments, reaffirming the VE Holding Corp. precedent.  According to the court, the patent venue statute did not define the term “resides” and thus looking to the general venue statute for guidance would not defy the “otherwise provided by law” language added in 2011. Id. at 1341-44.

By an 8-0 vote, the Supreme Court reversed the Federal Circuit’s In re TC Heartland decision, overturning the precedent of VE Holding Corp. In its place, the Supreme Court has determined that the term “resides” for purposes of the patent venue statute should be interpreted in accordance with the Supreme Court’s 1956 decision of Fourco: residence means the state of incorporation of the defendant.  Under TC Heartland, plaintiffs alleging patent infringement must therefore file suit where the defendant resides (i.e., their state of incorporation) rather than wherever personal jurisdiction exists.  Alternatively, a plaintiff can make use of the second location for venue provided by Section 1400(b)–where the defendant has committed acts of infringement and has a regular and established place of business.

Effects of TC Heartland

The most obvious effect predicted from TC Heartland is a shift in patent litigation forums away from places like the Eastern District of Texas, where venue typically relied on very minimal ties to the district, and toward states such as Delaware, where many domestic corporations are incorporated.  An increase in inter partes review and post grant review proceedings before the Patent Trial and Appeal Board (PTAB) also may occur given that venue rules do not apply.

With respect to ANDA litigation, however, TC Heartland may not move the needle.  First, generic companies are already being sued primarily where they are incorporated.  According to recent data from Lex Machina, the vast majority of ANDA litigation matters are heard before the District Court of Delaware and the District Court of New Jersey — more than 10 times as many cases are cited in each of these districts than the next most popular venue.  Lex Machina, Hatch-Waxman/ANDA Litigation Report 2017 at Fig. 5 (showing that from 2015 to Q1 of 2017, there were 324 ANDA filings in New Jersey and 387 in Delaware compared to 30 in the Northern District of West Virginia (home to generic drug company Mylan)).

Second, the Supreme Court declined to review the Federal Circuit’s decision last year on ANDA jurisdiction. In Acorda Therapeutics Inc. v. Mylan Pharm. Inc., 817 F.3d 755 (Fed. Cir. 2016), the Federal Circuit determined that ANDA filers are subject to specific jurisdiction, a form of personal jurisdiction, in any state where they plan to market their generic product.  While TC Heartland eliminates the ability to use personal jurisdiction to establish venue, Acorda’s reasoning has implications for the second ground for venue under Section 1400(b):  where the acts of infringement have occurred and the defendant has a regular and established place of business.  In Acorda, the Federal Circuit determined that the “real world market injury” for an ANDA filing is where the generic product will be sold.  This suggests that in evaluating where the acts of infringement have occurred, the Federal Circuit may take into account the intent of an ANDA filing to infringe nationwide rather than focusing on just the filing of an ANDA with a Paragraph IV certification as the act of infringement.  This could keep litigation in more forums than simply where the Paragraph IV certification was drafted or submitted.

A third reason that TC Heartland may have a limited impact on ANDA litigation is that it explicitly did not reach any decision on where a foreign company can be sued for purposes of 28 U.S.C. § 1400(b).  Plaintiffs often file suit against both the domestic generic company and its foreign parents or subsidiaries who may have developed the product or plan to produce it.  Under such circumstances, TC Heartland is silent as to how venue should be determined in such cases.

Finally, because many ANDA litigations involve multiple generic companies, ANDA litigation may still end up in a less convenient forum. Under 28 U.S.C. § 1407, if civil actions that “involv[e] one or more common questions of fact” are pending in different districts, the actions can be transferred by the Judicial Panel on Multidistrict Litigation (“JPML”) or consolidated pretrial proceedings. Any party can request consolidation.

Overall, the distribution of patent litigation in the United States in TC Heartland likely will change to favor districts more amenable to defendants, such as where the alleged infringer has chosen to incorporate.  We will be closely monitoring ANDA forum choices, however, including the activity of the JPML, in the coming months to see if a similar shift occurs for ANDA litigation.

 

 

If you would like further information, please contact Jamaica P. Szeliga at jszeliga@seyfarth.com, Dean L. Fanelli, Ph.D., at dfanelli@seyfarth.com, or Thomas A. Haag, Ph.D., at thaag@seyfarth.com. 

 

shutterstock_279495203One goal of BioLoquitur is to provide commentary and analysis on important developments in U.S. law affecting the pharmaceutical and biologics industry. It can be easy to forget that legal developments are not limited to the latest court decisions or agency actions, however.  The most profound changes in U.S. law arise from legislation.   This post thus provides a snapshot of relevant legislative proposals for the first quarter in 2017.

While the bills highlighted in this post have yet to make significant progress in the legislative process, they provide insight into what issues Congress is concerned about and how they might address such issues.

Currently, there over a dozen bills pending in the House of Representatives and Senate relevant to pharmaceutical and biologics companies. Common themes include (1) expediting the market entry of generic drugs and biosimilar products; (2) addressing drug shortages; and (3) discouraging certain settlement provisions between brands and generic companies that are thought to have anti-competitive effects, such as “pay-for-delay” requirements.  Below is a short summary of key bills and their status to date.  For a Quick View table, click here.

“Improving Access to Affordable Prescription Drugs Act,” H.R. 1776; S. 771. On March 29, 2017, Representative Janice Schakowsky and Senator Al Franken, both democrats, introduced identical bills that would enact comprehensive reforms relating to pharmaceutical drugs and biologics products. Provisions of the bills would impose reporting requirements, levy taxes and eliminate tax deductions for certain actions, reduce market exclusivity periods, and imposing de facto limits on settlements between generic drug companies and brand companies. The bills have been referred to committees. Significant provisions include:

  • Sec. 101. Requiring Mandatory reporting for drug and biologic manufacturers, including disclosure of sales volume, gross and net revenue and profit, drug pricing, information executive compensation, and a breakdown of expenditures for research and development, costs of goods sold, acquisition and licensing costs, and marketing and advertising spend.
  • Sec. 202. Imposing a tax on revenue earned because of any “price spike” in prescription drug pricing.
  • Sec. 204. Permitting the importation and sale of drugs by foreign wholesale distributors and licensed foreign. pharmacies, starting initially with Canadian pharmacies.
  • Sec. 303 (a)(1). Allowing the early submission of an abbreviated new drug application (ANDA) for a new chemical entity (NCE) (three years after approval) and shortening the approval time for ANDAs under certain conditions. Currently, the earliest date for submitting an ANDA is four years after the approval of the NCE.
  • Sec. 303(a)(2). Restricting the current three year supplementary regulatory exclusivity granted for new indications, formulations, dosages and the like to only those approvals that show a “significant clinical benefit over existing therapies.
  • Sec. 303(a)(3). Slashing the market exclusivity afforded to new biologic drugs from 12 years to 7 years.
  • Sec. 304. Revoking market exclusivities for drugs and biologics for certain violations, including misbranding, illegal marketing, kickbacks, and other acts of fraud.
  • Sec. 404. Creating a legal presumption that the Federal Trade Commission (FTC) can rely on that the following settlements between brand companies and ANDA filers have an anticompetitive effect:
    • Settlements that provide the ANDA filer with anything of value, including an exclusive license, other than the right to market before the expiration of the patents covering the drug, payment of legal expenses up to $7.5 million, and/or a covenant not to sue;
    • Settlements where the ANDA filer agrees to limit or forego research and development, manufacturing, marketing or sales of the ANDA product for any period of time.
  • Sec. 405. Preventing deductions for direct-to-consumer advertising of prescription drugs.
  • Sec. 406. Requiring the FTC to prepare a report accessing the impact of “product hopping,” where “product hopping” refers to when a manufacturer develops a new formulation of a known drug or biologic product for a particular indication and then acts to reduce or eliminate demand for the original product,

“Medical Innovation Prize Fund Act,” S.495. Introduced by Independent Senator Bernie Sanders on March 2, 2017, this bill would broadly eliminate patent and market exclusivity provisions for drugs and biologics and instead establish a fund to award prizes and payments for medical innovations. The bill has been referred to committee.

Affordable and Safe Prescription Drug Importation Act, H.R. 1245; S. 469. On February 28, 2017, Democratic Representative Elijah Cummings and Independent Senator Bernie Sanders introduced identical bills to permit importation of drugs from foreign wholesales and foreign pharmacies. The provisions of these bills are largely subsumed within the more comprehensive “Improving Access to Affordable Prescription Drugs Act.” The bills are currently in committee.

The “OPEN ACT,” H.R. 1223. On February 27, 2017, Republican Representative Gus Bilirakis introduced the OPEN ACT, i.e., the Orphan Products Extension Now Accelerating Cures and Treatments Act of 2017. The OPEN ACT would grant an additional 6 months of market exclusivity for an approval of a new indication treating rare diseases and conditions. This exclusivity would extend any existing market exclusivity, such as the five-year exclusivity period for NCE products. The bill has been referred to committee.

“Increasing Competition in Pharmaceuticals Act,” S. 297; “Lower Drug Costs through Competition Act,” H.R. 749. Senator Susan Collins, Republican, and Representative Kurt Schrader, Democrat, introduced these related bills on February 2, 2017 and January 30, 2017 respectively. The legislation requires the FDA to prioritize and complete an expedited review of ANDA applications for generic drugs where there is a shortage or where there is only one current manufacturer and no more than two tentative approvals for other manufacturers. The bills also authorize a study on the REMS program, which allows the FDA to require Risk Evaluation and Mitigation Strategies from manufacturers of drugs or biological products that have known or potential serious risks. The bill is currently referred to committee.

“Short on Competition Act,” S. 183. Introduced by Democratic Senator Amy Klobuchar on January 20, 2017, the Short on Competition Act also addresses drug shortages. In addition to authorizing expedited reviews of ANDA applications, the Act would permit temporary importation of drugs from foreign countries. The bill is currently referred to committee.

“Preserve Access to Affordable Generics Act,” S. 124. On January 12, 2017, Senator Klobuchar (D) introduced a bill directed to prohibiting certain settlement agreements provisions between brand and generic drug companies. The provisions of this Act are mostly subsumed within the more comprehensive “Improving Access to Affordable Prescription Drugs Act.” Senator Klobuchar’s bill has been referred to committee.

Bioloquitur will continue to track legislative proposals throughout the year and report on any relevant developments.