FDA’s 180-Day Exclusivity Q&A Guidance: Two Items of Note

February 5, 2017By Kurt R. Karst

Earlier this month, FDA published much-needed draft guidance on 180-day exclusivity, titled “180-Day Exclusivity: Questions and Answers.”  We perused the document and promptly posted on it the next day, noting, among other things, that the draft guidance doesn’t reveal anything revolutionary, but rather,  provides a one-stop shop reference on 180-day exclusivity insofar as it consolidates court cases and documents released in litigation, letter decisions, citizen petition responses, and other correspondence to provide answers to commonly asked questions.  Since then, we’ve had some time to dig into the draft guidance, and we found two points in particular worth noting.  The points aren’t new insofar as they reflect newfound FDA interpretations; however, it later occurred to us that these points reflect decisions previously made by FDA of which we’ve had some awareness, but that haven’t yet been made public in an FDA letter or approval decision.

Both points concern the so-called failure-to-market forfeiture provision at FDC Act § 505(j)(5)(D)(i)(I) – and the “(bb) bookend event” in particular – and both points are embedded in FDA’s response to Question 24 in the draft guidance (on pages 15-17): “Q24. How does FDA determine whether a first applicant has forfeited exclusivity under the “failure to market” provision?”  The first point is made in four short words in line 585 of the draft guidance: “the same other applicant.”  The second point is made in a hypothetical forfeiture analysis on page 16 of the draft guidance where the key words are “received tentative approval at some point.”

By way of background, the FDC Act provides that a first applicant’s eligibility for 180-day exclusivity may be forfeited if the first applicant fails to market the drug by the later of two “bookend” dates. The first date is the earlier of 75 days after final approval of the first applicant’s ANDA and 30 months after the date of submission of the first applicant’s ANDA.  The second date is calculated 75 days after a final court decision.  Specifically, the statute provides:

(bb) with respect to the first applicant or any other applicant (which other applicant has received tentative approval), the date that is 75 days after the date as of which, as to each of the patents with respect to which the first applicant submitted and lawfully maintained a certification qualifying the first applicant for the 180-day exclusivity period under subparagraph (B)(iv), at least 1 of the following has occurred:

(AA) In an infringement action brought against that applicant with respect to the patent or in a declaratory judgment action brought by that applicant with respect to the patent, a court enters a final decision from which no appeal (other than a petition to the Supreme Court for a writ of certiorari) has been or can be taken that the patent is invalid or not infringed.

(BB) In an infringement action or a declaratory judgment action described in [FDC Act § 505(j)(5)(D)(i)(I)(bb)(AA)], a court signs a settlement order or consent decree that enters a final judgment that includes a finding that the patent is invalid or not infringed.

(CC) The patent information submitted under [FDC Act § 505(b) or (c)] is withdrawn by the holder of the application approved under subsection (b).

With that, let’s turn to point 1: whether FDC Act § 505(j)(5)(D)(i)(I)(bb) permits a “mix-and-match” approach in addition to an “all-in-one” approach. Under the “all-in-one” approach, the parenthetical “(which other applicant has received tentative approval)” provides that the 75-day period is triggered when the same subsequent applicant has both tentative approval and a final court decision that the relevant patent is invalid or not infringed.  Under the “mix-and-match” approach, the parenthetical allows different subsequent ANDA applicants to have tentative approval and a final court decision.

FDA has already faced this scenario in a couple of instances, and has determined that the “all-in-one” approach is the way to go. FDA conveys this in the draft guidance in a sentence stating: “For an event to occur under item (bb) by any other applicant, the same other applicant must receive both tentative approval and a final court decision described in subitem (AA) or (BB)” (emphasis added).

Moving on to point two – whether the order in which an other applicant obtains a court decision and tentative approval counts – FDA answers this question in the following hypothetical:

A hypothetical example illustrates how FDA determines whether forfeiture has occurred under the “failure to market” provision. For the purposes of evaluating item (aa), presume that on June 1, 2009, the applicant for ANDA A submitted its substantially complete application containing a paragraph IV certification, which it lawfully maintained.  FDA approved the ANDA on December 20, 2012, and the 75-day period identified in subitem (AA) of this forfeiture provision ended on March 4, 2013.  Thirty months after the date the ANDA is submitted was December 1, 2011 (the date identified in subitem (BB)).  The relevant date for item (aa) of the forfeiture analysis is December 1, 2011, the earlier of these two dates.

For the second part of the analysis under item (bb), presume that on January 1, 2013, a court entered a final decision (from which no appeal (other than a petition to the Supreme Court for a writ of certiorari) has been or can be taken) that the relevant patent is invalid and not infringed in an infringement action against a subsequent applicant for this RLD whose ANDA received tentative approval at some point before FDA makes the forfeiture determination.  The relevant forfeiture date for ANDA A pursuant to subitem (AA) is March 17, 2013, 75 days after the date on which the court issued its decision.  Notably, this date applies even though ANDA A in this example was not the subject of the litigation.

In this scenario, the failure to market forfeiture provision requires the first applicant to market by March 17, 2013, the later of the dates applicable under item (aa) (December 1, 2011) and item (bb) (March 17, 2013). In this example, if ANDA A applicant did not begin commercial marketing until after March 17, 2013, it would forfeit its exclusivity.  [(Emphasis added)]

In this hypothetical, FDA not only repeats (inherently) the “all-in-one” approach, but also clarifies, in the highlighted language above, that a relevant court decision triggers the 75-day period once tentative approval is obtained, even if that tentative approval is later obtained by the same applicant. Thus, it is not the completion of the two events – tentative approval and a court decision – that triggers the 75-day countdown (unless the tentative approval comes before the court decision), but the court decision that is solely relevant.  So, a later-obtained tentative approval makes a previously-obtained court decision (by the same applicant) operative, such that if tentative approval is obtained one year after the court decision, 180-day exclusivity is forfeited retroactively (absent any commercial marketing by the first applicant).

We imagine there was more language concerning the points above – as well as other forfeiture-related items/provisions – in FDA’s internal draft versions of the guidance document, and that a lot of text was left on the cutting room floor.

One item we hoped the draft guidance would cover explicitly but doesn’t appear to is whether the so-called “change-based exception” under the failure-to-obtain-timely-tentative-approval forfeiture provision at FDC Act § 505(j)(5)(D)(i)(IV), when it is invoked, means that there is no deadline to obtain tentative approval or else forfeit exclusivity. This blogger thinks most folks would agree that the change-based exception is truly that: a provision that, when it applies, means that FDC Act § 505(j)(5)(D)(i)(IV) is no longer relevant to a forfeiture determination. But at least one court, in an antitrust action, has determined otherwise, stating: “It makes sense to read the Change-Based Exception as an extension, not an obliteration, of the 30-month deadline” (see here, here, and here).