District Court Orders FDA to Recognize Orphan Drug Exclusivity for GRALISE; Rejects FDA’s Requirement to Demonstrate Clinical Superiority of GRALISE

By Kurt R. Karst –      

Nearly two years after Depomed, Inc. (“Depomed”) filed a Complaint in the U.S. District Court for the District of Columbia challenging FDA’s denial of orphan drug exclusivity for GRALISE (gabapentin) Tablets, the court (Judge Ketanji Brown Jackson) has finally ruled in the case.  And it’s a bit of a shocker!  In an Order handed down last Friday, Judge Jackson denied FDA’s Motion to Dismiss/Motion for Summary Judgment and granted Depomed’s Motion for Summary Judgment (Reply and Opposition briefs available here and here).  In doing so, Judge Jackson ordered FDA to recognize orphan drug exclusivity for GRALISE “without requiring any proof of clinical superiority or imposing any additional conditions on Depomed.” 

Although we’d like to share with you a copy of the court’s Memorandum Opinion, we can’t.  We don’t have it because it was issued under temporary seal.  In an Order To Show Cause, Judge Jackson is giving Depomed and FDA the chance to show cause why his opinion should not be made public in its entirety given that portions of the 771-page administrative record in the case were filed under seal.  Hopefully the decision will be made public later this month.  Until then, we’ll be chomping at the bit to read it!  In the meantime, we can glean some things from the few lines in Judge Jackson’s Septemeber 5, 2014 Order.  But first, some background on the case and the issues involved. . . .

FDA’s orphan drug regulations at 21 C.F.R. § 316.20(a) state that “a sponsor of a drug that is otherwise the same drug as an already approved orphan drug may seek and obtain orphan-drug designation for the subsequent drug for the same rare disease or condition if it can present a plausible hypothesis that its drug may be clinically superior to the first drug” (emphasis added).  The term “orphan drug” is defined in FDA’s regulations to mean “a drug intended for use in a rare disease or condition as defined in section 526 of the act” (i.e., FDA considers a drug to be an orphan drug regardless of whether or not it has been designated as such).  A “clinically superior” drug is a drug shown to have greater efficacy, greater safety, or that provides a major contribution to patient care vis-à-vis the previously approved drug, and, by virtue of its clinical superiority, is not considered the “same drug” as the previously approved orphan drug.

In cases where orphan drug designation has been granted based on a plausible hypothesis of clinical superiority, FDA has determined that, in order to be granted a period of orphan drug exclusivity, clinical superiority must be demonstrated.  FDA explained that the standard for obtaining orphan drug designation is different from the standard for obtaining orphan drug exclusivity in the Agency’s proposed and final orphan drug regulations from 2011 and 2013, respectively (see our previous post here), as well as in an August 2012 Citizen Petition decision (see our previous post here) where FDA noted:

Though the sponsor of a subsequent orphan drug must set forth a plausible hypothesis of clinical superiority over the previously approved drug at the designation stage, such a sponsor faces a higher standard at the time of approval.  At approval, the sponsor of a drug which was designated on the basis of a plausible hypothesis of clinical superiority must demonstrate that its drug is clinically superior to the previously approved drug.  Should the sponsor fail to do so, then the subsequent drug will be considered to be the same drug as the previously approved drug, and will not be able to gain marketing approval if the previously approved drug’s orphan-drug exclusive approval period is still running.  Once this exclusivity has expired, the subsequent drug may be approved . . . , but it will not be eligible for orphan-drug exclusivity because the same drug has already been approved for the same orphan indication.

As we previously reported, FDA designated GRALISE as an orphan drug in November 2010 for the management of Postherpetic Neuralgia (“PHN”), and approved the drug product on January 28, 2011 under NDA No. 022544 for the orphan-designated indication.  The designation was based on FDA’s determination that Depomed provided a plausible hypothesis that GRALISE may be clinically superior to NEURONTIN (gabapentin) for the management of PHN.  FDA approved NEURONTIN for PHN many years ago, but the Agency never designated and approved NEURONTIN as an orphan drug.

Despite the orphan drug designation and approval of GRALISE, however, FDA did not grant orphan drug exclusivity.  FDA laid out the Agency’s rationale in a November 2012 Letter Decision sent to Depomed’s counsel after the lawsuit was filed.  According to FDA:

Section 527(a) of the Federal Food, Drug, and Cosmetic Act (FD&C Act) (21 U.S.C. § 360cc) generally grants orphan exclusivity to designated drugs upon approval, but does not address eligibility for exclusivity when the same drug has already been approved for the same orphan indication.  FDA interprets this statute to confer exclusivity only to drugs that are designated and not the same as an already approved drug.  By regulation, FDA requires sponsors of orphan-designated drugs to demonstrate the clinical superiority of their drug to the previously approved drug to show that their drug is not the same as the previously approved drug and is therefore eligible for exclusivity.

Gralise obtained orphan designation pursuant to section 526(a) (21 U.S.C. § 360bb) by offering a plausible hypothesis of clinical superiority over the previously approved drug, Neurontin.  But, at the time of approval, Depomed was unable to demonstrate actual clinical superiority.  Nor have any additional Depomed submissions demonstrated Gralise’s clinical superiority over Neurontin. Gralise is therefore the “same drug” as the previously approved drug, Neurontin, and is ineligible for orphan exclusivity.

Depomed’s September 2012 Complaint, seeking declaratory and injunctive relief, alleges that FDA is violating the Administrative Procedure Act by refusing to grant orphan drug exclusivity for GRALISE.  FDA “placed additional hurdles between Gralise and orphan-drug exclusivity by attempting to impose requirements that are found nowhere in the statute and that exist in regulation only for circumstances not present here,” alleges Depomed.  Elsewhere, Depomed lays out with particularity its beef with FDA:

FDA’s course of action with respect to Gralise is a paradigm of arbitrary and capricious decision-making.  From the beginning, FDA has maintained a singular focus on its preferred outcome in this case, and it violated its own regulations and the statute to get there.  The agency began by denying Gralise orphan designation because Depomed had not presented a plausible hypothesis of clinical superiority.  As the record makes clear, FDA did not have a lawful basis for requiring a hypothesis of clinical superiority over a drug that never had marketing exclusivity under the Orphan Drug Act.  No such requirement appears in 21 C.F.R. § 316.25, the regulation that provides the exclusive list of permissible reasons for denying designation requests, and indeed FDA never cited that regulation as a basis for its decisions.  Instead, the agency raised concerns about the uses of taxpayer money and cited an inapplicable regulatory provision on timing. Then, in its second letter, the agency claimed the clinical-superiority hypothesis was in fact required by virtue of still another regulation, although that rule, too, was irrelevant.  Thus, in denying Gralise orphan designation for failure to present a clinical-superiority hypothesis, FDA violated 21 C.F.R. § 316.24, the regulation stating that the agency “will grant” a request for designation if none of the exclusive bases in 21 C.F.R. § 316.25 applies.

FDA followed this unlawful course to its conclusion when it approved Gralise without granting it marketing exclusivity.  The reason FDA gave for this decision was that the data did not prove the clinical-superiority hypothesis the agency had unlawfully demanded in the first place.  This time, the agency’s action was doubly flawed: It violated both the Orphan Drug Act, which provides that marketing exclusivity automatically attaches to a drug designated and approved for its orphan indication, and it violated FDA regulations, which confirm that the agency will record and confirm marketing exclusivity upon approval.

For its part, FDA argued that the Orphan Drug Act is not intended

to reward the development of drugs that merely duplicate drugs already on the market and that offer no benefit to patients over the existing drugs.  Thus, FDA has long interpreted the Orphan Drug Act and its implementing regulations to deny orphan exclusivity to a later-approved “same” drug unless the sponsor demonstrates that its drug is clinically superior to the previously approved drug.  FDA’s interpretation and its past practice are consistent with the statute and its goal of encouraging the development of new treatments for orphan conditions or clinically significant improvements to existing drugs – not just minor modifications to existing drugs that offer no material benefit to patients.

Although we won’t know for sure until we see the Memorandum Opinion what Judge Jackson’s reasoning is for ruling against FDA, it seems that FDA’s all-encompassing definition of “orphan drug” and and the two-step process for first providing a plausible hypothesis of, and then demonstrating, clinical superiority may be in jeopardy.  However, we doubt FDA will take this decision on the chin and will probably appeal it to the D.C. Circuit.  If it stands, then we suspect that FDA’s Office of Orphan Products Development will need to do a lot of backpeddling on designation files where these issues were critical to determinations denying orphan drug designation or orphan drug exclusivity.