On June 25, 2018, the Food and Drug Administration (“FDA”) approved Epidiolex (cannabidiol), the first marijuana derived drug for use in the United States, to treat two rare forms of epilepsy. This decision for the FDA could have sweeping effects for the marijuana industry. While the FDA has previously approved drugs comprising synthetic (manufactured) cannabinoids, this is the first FDA approved drug comprised of an active ingredient derived from marijuana. Even with FDA approval, further action is required before Epidiolex can enter the market in the United States.

Epidiolex will be the first pharmaceutical form of the cannabinoid cannabidiol, or “CBD.” CBD is a chemical component of the Cannabis sativa plant commonly known as marijuana. Unlike tetrahydrocannabinol or “THC” (a different and highly discussed cannabinoid found in marijuana), CBD is not known to have psychoactive affects. However, because CBD derived from marijuana is considered part of the marijuana plant, it is currently listed as a Schedule I controlled substance and illegal for all uses in the United States.

The Drug Enforcement Administration (“DEA”) must reclassify CBD in order for Epidiolex to be cleared to enter the market in the United States. This process will likely take months and is currently the topic of much speculation. There are five schedules for controlled substances and each controlled substance is scheduled based on whether there is a current acceptable medical use in the United States, their relative abuse potential, and the likelihood of causing dependence when abused. Schedule I drugs have no accepted medical use. Thus, CBD’s classification as such is clearly contrary to the FDA’s recent decision. It is unclear how the DEA will reschedule CBD or if it will expand reclassification to include the entire marijuana plant (this latter option is highly unlikely).

Once Epidiolex enters the market, it may be prescribed beyond the few FDA approved uses. Epidiolex has been approved for the treatment of two rare and severe forms of epilepsy, Lennox-Gastaut syndrome and Dravet syndrome. Doctors, however, generally have the ability to prescribe drugs for unapproved, or “off-label” use. The FDA has generally accepted such procedures for various reasons.

While Epidiolex’s approval is significant, FDA Commissioner Scott Gottlieb made clear in a press release that it is not an approval of marijuana or all of its components. That said, the federal government, through the FDA, has now officially recognized that there are some medical benefits to the marijuana plant, suggesting that there is a path forward leading to the legalization of marijuana at the federal level for healthy, medical-based use of marijuana. Of course, such use has been backed by thorough research, which is essential to any future approvals of similar or new marijuana derived products. In sum, as a result of the FDA’s decision, we are likely to see the DEA reclassify CBD, which may pave the way for more developments and subsequent approval of products with CBD.

Per Senator Orrin Hatch, the America Invents Act has disrupted the “careful balance” he struck with Senator Waxman in the development of the decades-old Hatch-Waxman Act governing the adjudication of generic drug litigation. On June 13, 2018, Senator Hatch filed an amendment in the Senate Judiciary Committee to remedy the perceived conflict between the “carefully calibrated requirements” of Abbreviated New Drug Application (“ANDA”) litigation under the Hatch-Waxman Act and the “much blunter instrument” of post-grant proceedings before the United States Patent Trial and Appeal (“PTAB”).   According to Senator Hatch, the amendment “will ensure that Hatch-Waxman continues to operate as originally intended by protecting the ability of generic drug companies to develop low-cost drugs while at the same time ensuring brand-name companies have sufficient protections in place to recoup their investments.”  A press release of Senator Hatch’s remarks is available here.

The “Hatch-Waxman Integrity Act” by Senator Hatch is an amendment to the Creating and Restoring Equal Access to Equivalent Samples Act (CREATES Act), legislation designed to help generic drug companies acquire the samples they need to develop generic drugs, particularly for products subject to a risk evaluation and mitigation strategy (“REMS”). The CREATES Act advanced to the Senate from the Judiciary Committee on June 14, 2018, and was been placed on the Senate Legislative Calendar on June 21, 2018.

The Amendment would add to the CREATES Act a section entitled “Preventing the Inter Partes Review Process for Challenging Patents from Diminishing Competition in the Pharmaceutical Industry and with Respect to Drug Innovation; Preventing the Manipulative and Deceptive Use of Inter Partes Review.” The section has three parts and targets both generic drug manufacturers and biosimilar companies.

In the first portion of the Amendment, an ANDA applicant must certify that they have not and will not file an Inter Partes Review (“IPR”) or Post-Grant Review (“PGR”) or forfeit the ability to participate in the Hatch-Waxman litigation procedures.  Additionally, the ANDA applicants must certify that they are not relying in whole or in part on any decision reached by the PTAB in an IPR or PGR proceeding.

Second, the Amendment forces a similar choice for biosimilar applicants.  Those who file an abbreviated Biologics License Application (“aBLA”) must decide, with respect to any patent that is or could be included in the lists of patents that are exchanged as part of the “Patent Dance,” whether to challenge patents in an IPR/PGR or take the path outlined in the Biologics Price Competition and Innovation Act (“BPCIA”).

Third, the Amendment aims to end certain market practices and appears to apply broadly to all parties filing for post grant proceedings. To “prevent[] the Manipulative and Deceptive Use of Inter Partes Review,” the Hatch-Waxman Integrity Act amends the Securities Exchange Act of 1934 to address market manipulation tied to inter partes review petitions, such as that attempted by the Coalition for Affordable Drugs.  Specifically, “a person shall be considered to be using a manipulative or deceptive device” if they file a petition for an IPR and engage in a short sale of any publicly traded security of the owner of the patent at issue in the IPR for the 90 days before and after the filing of the petition.

We will continue to monitor the CREATES Act and the Hatch-Waxman Integrity Act in the future. For more information, please feel free to contact Jamaica Potts Szeliga at any time.

This is a cross-posted blog from The Blunt Truth.

Despite the dearth of approved marijuana products, the term “medical marijuana” has become commonplace, and the term’s prevalence continues to increase as more states legalize the use of the marijuana plant and its active derivatives for medical purposes, and marijuana dispensaries continue to expand throughout the United States. As of 2017, 29 states and the District of Columbia have approved the use of marijuana for medical purposes. (Despite state laws legalizing marijuana for medical and/or recreational use, marijuana remains a Schedule I controlled substance its distribution and use remain illegal under Federal law.) Continue Reading Is Medical Marijuana Really Medicinal?