SPA Issues Comments in Support of Five-Year Exclusivity to Combination Drug Products

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September 6, 2013

Re:  Docket FDA 2013-P-0119; Comments in Support of Citizen Petition Filed by Ferring Pharmaceuticals, Inc. Regarding the Award of Five-Year Exclusivity to Combination Drug Products

Dear Sir or Madam:

            The Specialty Pharma Association (SPA) writes in support of the Citizen Petition filed by Ferring Pharmaceuticals, Inc. (Ferring) (Docket FDA 2013-P-0119).  In that petition, Ferring argues that the U.S. Food and Drug Administration (FDA) should award five-year exclusivity[1] under the Federal Food, Drug, and Cosmetic Act (FFDCA) to combination drug products that contain at least one novel active pharmaceutical ingredient (API) that has never been approved in a § 505(b)[2] new drug application (NDA) or a § 505(j)[3] abbreviated new drug application (ANDA).  Gilead Sciences, Inc.[4] and Bayer HealthCare Pharmaceuticals Inc.[5] make similar arguments in their own Citizen Petitions, and this comment may also be relevant to those petitions.

             Although the SPA takes no position on the specific drugs discussed in any of these petitions, the SPA believes that innovative products should receive the exclusivity that Congress intended.  In the case of combination drug products, if at least one API is novel then the sponsor should be awarded five-year exclusivity under the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Amendments).[6]  We suggest the FDA amend its current combination drug exclusivity policy which has only permitted combination products containing a novel API plus previously-approved APIs to receive three years of marketing exclusivity.

             In order to comply with the requirements of FFDCA § 505(q), I certify that, to my best knowledge and belief: (a) I have not intentionally delayed submission of this document or its contents; and (b) the information upon which I have based the action requested herein first became known to me on or about August 14, 2013.  If I received or expect to receive payments, including cash and other forms of consideration, to file this information or its contents, I received or expect to receive those payments from the following persons or organizations: (Not applicable).  I verify under penalty of perjury that the foregoing is true and correct as of the date of the submission of this petition.

A.  SPA’s Interest in the Issue

             The SPA is a coalition of small to mid-size pharmaceutical manufacturers, distributors, developers, and allied support companies that provide both innovative and generic drug products to patients.  The SPA provides a means for its members to identify, define, and address common interests.  Our membership does not represent big pharma and exclusivity issues are particularly important for our membership.  SPA members rely on five-year exclusivity in exchange for the investments they make to develop new pharmaceutical compounds, especially when there may be little or no patent life remaining.

             FDA’s current combination product exclusivity policy only provides three-year exclusivity to sponsors that bring a new combination product to market that contains both novel and non-novel APIs.  This is a disincentive to innovation.  Innovators should be able to reliably depend upon receiving five-year exclusivity when they develop any drug product containing a novel API.  Neither the number of APIs in a product nor the order of product approval (i.e., single ingredient versus combination drug) should have any bearing on the amount of exclusivity awarded.  The same level of innovation is required to identify, develop, and test any new API.  Therefore, combination products containing a novel API should be awarded the same five-year exclusivity.

             Congress intended to reward development efforts based on the degree of innovation.  This fact is supported by the legislative history of the Hatch-Waxman Amendments, is good public policy, and also makes common sense.  The innovative work of companies such as the members of the SPA should be recognized and rewarded as Congress intended.  Otherwise innovators may think twice about whether it is worth their time and effort to develop new combination products if they are not going to benefit from the expected five-year exclusivity.  FDA should amend its current policy so that it encourages innovation, not stifles it.

B. The Hatch-Waxman Amendments Were Intended to Reward Drug Products Containing Novel APIs with Five-Year Exclusivity

             The Hatch-Waxman Amendments represent a carefully agreed upon balance of risks and rewards for both pioneer and generic sponsors.  These tradeoffs were negotiated by Congress, FDA, and many sectors of the pharmaceutical industry.  The Hatch-Waxman Amendments were intended to provide innovators taking the biggest risks – developing drugs containing new APIs – with the biggest reward of five-year exclusivity.  On the other hand, sponsors that bring a new drug to market that contains non-novel APIs but has other innovative changes (that are supported by new clinical investigations that are essential to the application approval and that are conducted or sponsored by the applicant) are awarded three-year exclusivity.[7]  While both development pathways offer new products for patients, new APIs provide the bigger benefit.  As a result, Congress provided these developments with five-year exclusivity.

            As Ferring notes, the statutory language of the five-year exclusivity provision may be less than clear.[8]  However, the legislative history of the Hatch-Waxman Amendments supports the award of five-year and not three-year exclusivity to combination products containing at least one novel API.  For example, during discussion of the proposed legislation Representative Waxman noted that five-year exclusivity was to be awarded to drugs approved for the first time after the Amendments were enacted,[9] while three-year exclusivity was only intended to be awarded to drugs containing non-novel APIs.  Representative Kastenmeier explained this difference by noting that a drug company that conducts “short, simple, noninnovative, clinical trials” (on existing products) would receive three-years of exclusivity.[10]  Representative Waxman further clarified that three-year exclusivity protects products that are not new chemical entities, but the development of which required essential clinical trials for approval.[11]  As Ferring notes, FDA agreed with this scheme when it developed regulations to implement the Amendments.[12]

            The legislative history of the Amendments shows that the risks and rewards of new drug development were carefully balanced and remain intimately linked.  The effort of identifying, developing, testing, and receiving FDA approval for a drug containing a novel API is dramatically greater than the effort expended to change an existing drug, even if a new clinical trial is required.  Companies that short-circuit the full new drug development process by relying upon changes to old drug products instead of identifying novel ones are rewarded with a shorter period of exclusivity that reflects their less extensive development efforts.

             On the other hand, a company that identifies and brings to market a novel API is awarded exclusivity that reflects the longer and more costly development efforts.  The same amount of effort is expended to bring a new API to market regardless of whether it is in a combination drug or not.  Arguably, development of a combination product requires even greater time and effort than development of a drug containing a single novel API in order to comply with FDA’s combination drug policy.[13]

             The key distinction between five- and three-year exclusivity is the novelty of the API and the resulting level of innovation, not the number of novel or non-novel APIs in that product.  Congress could not have intended for companies that expend equal effort to be treated differently.  FDA’s combination drug exclusivity policy should reflect this fact.  Any FDA interpretation of the statutory language that does not further Congress’ purpose and intent is contrary to the reason for enacting the Hatch-Waxman Amendments, is not sound public policy, and does not benefit the public health.

C.  Sound Public Policy Supports the Award of Five-Year Exclusivity to Combination Drug Products Containing at Least One Novel API

             The legislative history of the Hatch-Waxman Amendments supports Ferring’s argument that combination drug products with at least one novel API should be awarded five-year exclusivity.  Common sense and public policy also dictate that this is the correct result.

            The concept behind FDA’s interpretation of the § 505(b)(2)[14] NDA provisions to exclude the need for a “phantom ANDA” (to eliminate duplicative research) is a sound policy, and the same premise should be applied to the combination drug exclusivity policy as well.[15]  In the case of § 505(b)(2) NDAs, FDA has interpreted and applied the statutory provisions to eliminate the need for an ANDA (the so-called “phantom ANDA”) before a § 505(b)(2) NDA can be submitted.  If FDA were to require a phantom ANDA before submission of a § 505(b)(2) NDA, then sponsors would have to spend additional time developing a drug that they may not intend to market.  The only reason to file the phantom ANDA would be to get approval for the § 505(b)(2) drug product that the sponsor ultimately desires.  FDA correctly decided that this approach would waste time and resources.

            FDA should apply this same logic to its combination product exclusivity policy as well.  Under the current exclusivity policy, a drug product containing a single novel API will be awarded five-year exclusivity if it is brought to market before a combination drug containing that same API (plus other non-novel APIs).  In this situation, FDA will even award the same five-year exclusivity period to the subsequent combination product (i.e., exclusivity on both products will expire on the same day five years after the approval of the single API product).[16]  This means that a combination drug approved after the single API product will benefit from the exclusivity period awarded to the single API product and may receive greater than three years exclusivity (depending on how much exclusivity time remains for the single API product).

            On the other hand, if the sponsor decided to market the combination product containing the novel API plus other non-novel APIs before the drug with the single API, then neither product would receive five-year exclusivity.  The combination drug would receive three years, and the subsequent single API product would get no exclusivity.  Therefore, for a sponsor to obtain five-year exclusivity, it would have to develop the single API drug first, even if it had no intention of marketing it.

            The result demonstrates that FDA’s current exclusivity policy depends on the number of APIs and whether they are novel.  Like the phantom ANDA, a sponsor that develops a single ingredient drug containing a novel API merely to obtain the benefit of the longer five-year exclusivity period wastes company (and FDA) time and resources.  Furthermore, in the case of a drug product for which FDA deems studies with the novel API alone to be unethical, FDA’s current policy would dictate that even the single ingredient drug product could not qualify for five-year exclusivity.[17]

            It is difficult to believe that Congress would have rewarded sponsors with five-year exclusivity when the single ingredient drug product containing a novel API was approved first, but not when the combination product containing that same novel API was approved first.  As demonstrated, this approach results in drug type and timing trumping innovation.  This result is not reasonably supported by the legislative history of the Hatch-Waxman Amendments.  There is no justifiable reason why innovators that bring new APIs to market should be treated differently.

 D.  Conclusion

            The SPA strongly supports the argument in the Ferring Citizen Petition that the sponsor of a combination drug product that contains at least one novel API should be awarded five-year market exclusivity, not three-year exclusivity.  The degree of innovation is the same no matter whether the novel API is alone or in combination with other non-novel APIs, and is the same whether a single ingredient or combination product containing that novel API is approved first.  The legislative history of the Hatch-Waxman Amendments addresses the novelty of APIs and the level of innovation in bringing drugs containing novel APIs to market.  FDA’s current policy of awarding five-year exclusivity to combination drugs that contain only novel APIs is unduly restrictive and does not further Congressional intent to reward innovation.  Furthermore, it does not comport with FDA’s policies regarding unnecessary duplicative research.

            The SPA urges FDA to reconsider its position and determine that combination drugs with at least one novel API deserve five-year exclusivity based upon their innovation and benefit to the public health.  FDA’s actions should be geared towards rewarding innovation, not penalizing it.

             I will be happy to address these matters with you further.  I can be reached at the contact information listed above.  Thank you for your consideration.

                                                                                     Respectfully submitted, 

                                                                                    Perry N. Cole

                                                                                    President

                                                                                    Specialty Pharma Association

 cc:        Margaret Hamburg

            FDA Commissioner

             Janet Woodcock

            FDA CDER Director

            Elizabeth Dickinson

            FDA Chief Counsel

            Denise Esposito

            FDA Deputy Associate General Counsel

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