Relinquishment and Waiver of 180-Day Exclusivity Post-MMA; What is FDA Precedent and Where Might FDA be Headed?

By Kurt R. Karst –   

Since shortly after the enactment of the Hatch-Waxman Amendments in 1984, FDA has recognized an NDA sponsor’s ability to relinquish or selectively waive exclusivity, such as 5-year new chemical entity exclusivity and 3-year new use exclusivity, even though  the statute does not specifically permit relinquishment or waiver.  However, as FDA stated in a 2004 citizen petition response, it was not until 1997 that the Agency first considered an ANDA sponsor’s ability to relinquish or waive 180-day generic drug exclusivity.  In that 1997 case, which concerned a request from Genpharm to waive its pre-Medicare Modernization Act (“MMA”) 180-day exclusivity for Ranitidine HCl in favor of Granutec, FDA determined that a waiver was permissible.  That decision was challenged in court, see Boehringer Ingelheim Corp. v. Shalala, 993 F. Supp. 1 (D.D.C. 1997), and the D.C. District Court upheld FDA’s interpretation of the statute as permissible.  FDA subsequently proposed regulations (in 1999) to codify its interpretation, but those proposed regulations were withdrawn in 2002.  

FDA’s 2004 citizen petition response provides a comprehensive discussion of waiver and relinquishment of 180-day exclusivity.  Under FDA policy: 

an ANDA applicant who has obtained 180-day exclusivity may relinquish its exclusivity entirely or selectively waive the exclusivity in favor of a single ANDA, or multiple ANDAs, containing a paragraph IV certification.  Before the exclusivity period has been triggered, an applicant may only relinquish its exclusivity; after the exclusivity has been triggered, it may be selectively waived.

FDA stated in its petition response that “allowing eligible applicants to relinquish or waive [180-day] exclusivity enables them to exercise the exclusivity as they deem most beneficial,” and that there are four general reasons supporting waiver and relinquishment of 180-day exclusivity.  Specifically, that the practice of permitting relinquishment and waiver of 180-day exclusivity:

(1)  is based on a permissible statutory construction as acknowledged by the courts,
(2)  is consistent with the Agency’s long-standing allowance of waiver and relinquishment of other forms of market exclusivity,
(3)  promotes marketplace competition among pharmaceuticals in furtherance of the objectives of the [Hatch-Waxman Amendments], and
(4)  is consistent with FDA’s role in regulating the public health as opposed to competitive business arrangements.  

Importantly, FDA notes in its 2004 petition response that the Agency’s interpretation is limited to 180-day exclusivity subject to the pre-MMA (i.e., pre-December 8, 2003) statute:

[T]his response does not provide[] an Agency interpretation of section 505(j)(5)(B)(iv) as amended by the [MMA]. . . .  [T]he MMA made a number of changes to the statutory scheme in section 505(j) governing 180-day exclusivity, including providing tor forfeiture of the exclusivity. . . . The Agency has not yet assessed whether the changes made by the MMA should result in a different approach to waiver or relinquishment for those applications subject to the new exclusivity provisions.

Given the first applicant approach under the post-MMA statute, under which multiple first applicants can qualify for and share 180-day exclusivity (or forfeit such exclusivity), relinquishment and waiver of 180-day exclusivity is more complicated.

We are unaware of a post-MMA case in which a first applicant has relinquished 180-day exclusivity eligibility; however, FDA’s 2009 Letter Decision concerning generic versions of STARLIX (nateglinide) Tablets could provide some insight as to how FDA might ultimately address this issue in the context of multiple first applicants.  (Where there is only a single first applicant, relinquishment does not appear to complicate a 180-day exclusivity analysis.)  In the generic STARLIX case (see our previous post here), there were multiple first applicants and at least one first applicant forfeited 180-day exclusivity eligibility under FDC Act § 505(j)(5)(D)(i)(IV) (failure to obtain tentative approval in 30 months of ANDA submission).  FDA ruled that “a first applicant that forfeits exclusivity may obtain [ANDA] approval . . . and that first commercial marketing by any first applicant (including a first applicant that forfeits exclusivity) will begin the 180-day exclusivity period.”  Insofar as forfeiture is considered to be effectively the same as relinquishment, a first applicant that relinquishes its 180-day exclusivity could arguably continue to be a first applicant and not be blocked by another first applicant’s 180-day exclusivity eligibility, and also trigger other first applicants’ 180-day exclusivity. 

A selective waiver of 180-day exclusivity post-MMA (both where there is only a single first applicant and especially where there are multiple first applicants) is more complicated than relinquishment, as it confers on a subsequent applicant the most important benefit of first applicant status – 180-day exclusivity. 

We are aware of only one instance post-MMA in which FDA has permitted a selective waiver of 180-day exclusivity.  That case involved Bupropion HCl Extended-Release Tablets, 300 mg, and a single first applicant – Anchen Pharmaceuticals, Inc.  FDA approved Anchen’s ANDA No. 77-284 on December 14, 2006 and noted in the approval letter that as a first applicant the company is eligible for 180-day exclusivity.  Just a few days later, on December 15, 2006, however, FDA approved ANDA No. 77-415 for Bupropion HCl Extended-Release Tablets, 300 mg.  FDA noted in the approval letter for ANDA 77-415 that the applicant was not a first applicant but that there was a “relinquishment or selective waiver” of 180-day exclusivity by Anchen.  Although the ANDA approval letter is not clear on its face whether there was a relinquishment or waiver of 180-day exclusivity, the notation of exclusivity in the Orange Book for both applications makes clear that there was, in fact, a selective waiver and not a relinquishment.  (The Orange Book showed a period of shared 180-day exclusivity for both ANDAs.)

There is not, to our knowledge, a post-MMA case in which FDA has permitted a selective waiver of 180-day exclusivity where there are multiple first applicants.  Given the fact that FDA has permitted a waiver where there is a single first applicant, however, it seems likely that FDA, when faced with the issue, will permit a waiver when there are multiple first applicants.  But there will certainly be some ground rules. 

Being a first applicant means that you are the member of an exclusive club.  So to allow a non-member to share in the benefits of club membership, it seems possible that FDA would require all first applicants (whether 1 or 10) to agree in writing that a subsequent applicant should be accorded the benefits of club membership.  Also, it seems likely that because a subsequent applicant does not become a first applicant by virtue of all club members agreeing to a selective waiver, a first applicant will first have to trigger the 180-day exclusivity period before a waiver is made and a subsequent applicant can take advantage of the 180-day exclusivity period.    

The issue of selective waiver post-MMA is certain to crop up at some point in time, and we will be interested to see the outcome.