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The Enduring Role of Orphan Drug Exclusivity for Biologics

The Enduring Role of Orphan Drug Exclusivity for Biologics

From Humira and Rituxan to Herceptin and Enbrel, biologics continue to succeed in tackling numerous, challenging diseases and conditions. Many new biologics receive Orphan Drug designation for treating rare diseases, meaning sponsors get 12 years of Reference Product Exclusivity and seven years of Orphan Drug Exclusivity.

But both time periods begin on the single common date of drug approval. With the seven years of exclusivity overlap, is the Orphan Drug incentive lost?

Reference Product Exclusivity Vs. Orphan Drug Exclusivity

Biologics (derived from viruses, toxins, therapeutic serums, proteins, antitoxins, blood, vaccines, allergenic products, trivalent organic arsenic compounds) have proven historically difficult to study, purify, and manufacture on a large scale. But new knowledge and technological advances over the past 25 years have positioned biologics as a major player in the pharmaceutical industry.

In 1997, Congress established the biologics license application (BLA), an application for biological product approval filed under section 351(a) of the Public Health Service (PHS) Act. Subsequent, substantial growth in biologic drug applications urged the development of the Biologics Price Competition and Innovation Act of 2009 (BPCIA).

Under BPCIA, sponsors of new, licensed biological products approved through a BLA receive 12 years of “Reference Product Exclusivity.” FDA cannot license any 351(k) application for a biosimilar or interchangeable product that relies on the previously approved product as a reference for biosimilarity during this 12-year period. This Reference Product Exclusivity does not attach to molecules that are the “same” as a molecule previously approved for the same sponsor.

Today’s most popular biologics are designed to treat serious and chronic illnesses like diabetes, cancer, and rheumatoid arthritis. These products include AbbVie’s anti-inflammatory Humira (Adalimumab). Now the best-selling biologic, Humira was launched in 2002 and includes indications to treat rheumatoid arthritis, psoriatic arthritis, plaque psoriasis, Crohn's disease, ulcerative colitis, and ankylosing spondylitis. As a result of these multiple indications, the patient population for this drug is enormous. In 2017 alone, Humira generated $18.4 billion in global sales.

But what about rare diseases? Though often equally as devastating, rare diseases with small patient populations have traditionally been much less financially attractive targets for drug developers than common diseases.

In 1983, Congress attempted to address the paucity of rare disease drug development by enacting the Orphan Drug Act (21 CFR Part 316). Under the Orphan Drug Act, drug and biologic products intended for use in fewer than 200,000 patients in the U.S. annually (or products that are unlikely to recover research and development costs) can receive Orphan Drug designation. Examples include single entity products for new Orphan indications, fixed-dose combination products, co-packaged products, and combination products where one of the components of the combination has (or is eligible for) Orphan Drug exclusivity.

Orphan Drugs receive a 7-year period of exclusivity from product approval - effective on the date of FDA approval of a marketing application. For seven years, FDA will not approve a subsequent sponsor of the same drug for the same disease (except as otherwise provided).

Since 1983, the Orphan Drug Act has succeeded in increasing the number of approved drugs and biologics to prevent, diagnose, or treat rare diseases and conditions – especially in the fields of oncology, metabolism and endocrinology, hematology, infectious disease, and neurology.

Biologics are no strangers to Orphan Drug Exclusivity. Between 1983-2017, 238 (36%) approved Orphan Drugs were biologics and FDA studies show that the proportion of biologic products receiving Orphan Drug designation are ever-increasing.

But if FDA approves a biological product for an Orphan indication and awards overlapping 7-year Orphan Drug Exclusivity and 12-year Reference Product Exclusivity, what is the relevance of the Orphan Drug Exclusivity?

The short answer is… the competitive effect of the exclusivities is not the same.

For the first seven years, the sponsor is able to control a wide-spanning corner of the market for his novel product. For the remaining five years, exclusivity is still present but narrows significantly.

Orphan Drug Exclusivity Is Product & Disease Specific

Importantly, Orphan Drug Exclusivity is product- and disease-specific. It blocks approval of the same product for the same disease. Orphan Exclusivity bars any sponsor from making the same drug for the same disease – even if the sponsor does not rely on the innovator’s data.

In contrast, Reference Product Exclusivity only blocks review or license of any biosimilar or interchangeable product that relies on the approved product as a reference for biosimilarity. Reference Product Exclusivity does not preclude the subsequent sponsor from pursuing a BLA for the same product for the same disease by using its own data.

Drug sponsors who obtain Regulatory Product Exclusivity and coinciding Orphan Drug Exclusivity are able to reap the separate benefits and different competitive effects of both simultaneously. For the first seven years after approval, sponsors enjoy the very strong, very narrow protection of Orphan Drug Exclusivity.

Once the Orphan Exclusivity period expires, the sponsor still enjoys five more years of Reference Product Exclusivity. The remaining exclusivity is effective only against biosimilar applicants. Although patents can provide additional protection, sponsors may now be more vulnerable to litigation challenges and uncertainties regarding validity and infringement.

In this regard, Reference Product Exclusivity protects neither the product nor the indication, unless the competitor relies on the approved product.

Orphan Drugs Have More Potential “Same Drugs”

Orphan Exclusivity offers an additional exclusivity effect. Products that might be considered the “same drug” (for exclusivity purposes) might include more products than those that could be considered “biosimilar.” In this regard, Orphan Exclusivity often provides a broader scope of protection than Reference Product Exclusivity.

For example, since Reference Product Exclusivity only protects against subsequent biosimilar applications, the preclusive effect of this protection extends only to biological products:

  1. That are determined to be substantially similar to the reference product (excluding minor differences in clinically inactive components); and

  2. For which there are no clinically meaningful differences between the biological product and the reference product in terms of the safety, purity, and potency of the product.

In contrast, Orphan Drug Exclusivity prevents FDA from approving the same product for the same disease -- even if the sponsor files a full BLA without referencing the innovator product.

A question of what exactly “same disease” means came up in 2019 when FDA approved Jacobus Pharmaceutical Company, Inc.’s orphan drug Ruzurgi (amifampridine) for treatment of the rare and often fatal neuromuscular disorder Lambert-Eaton myasthenic syndrome (LEMS).

FDA’s Ruzurgi marketing approval overlapped a seven-year orphan drug exclusivity period for the same drug, same disease - Catalyst Pharmaceuticals, Inc.’s Firdapse (amifampridine) for LEMS.

Catalyst sued FDA, arguing that it had violated the Orphan Drug Act’s “same disease or condition” clause by approving Ruzurgi. FDA argued that “same disease or condition” could be interpreted as “same use or indication,” and since Ruzurgi was approved to treat pediatric LEMS patients, while Firdapse was approved for adult LEMS patients, approval was justified.

In September 2021, a D.C. circuit appellate court ruled that FDA violated the Orphan Drug Act and unlawfully infringed on Catalyst Pharmaceuticals Inc.’s orphan drug exclusivity period when it approved Jacobus’ drug, finding that FDA’s interpretation of the term was “not in accordance with law, and its approval of Ruzurgi must be set aside.”

Regarding the meaning of “same drug,” FDA’s rules for determining sameness under the Orphan Drug Act provide additional exclusivity effect. For example, FDA uses different criteria for macromolecules versus small molecules in determining whether two drugs can be considered the “same” under the orphan drug regulations.

A drug containing macromolecules is the same as a previously approved drug if it contains the same primary molecular structural features and is intended for the same use. If the only differences in structure are due to post translational events, infidelity of translation or transcription, or minor differences in amino acid sequence, FDA may consider two protein drugs the same. In addition, there is no requirement that the two protein drugs have “no clinically meaningful differences” in terms of purity, potency, and safety. Therefore, the scope of exclusivity under the Orphan Drug Act might preclude the approval of products that would not be sufficiently the same to be biosimilar – thereby, preventing the approval of products whose approval would not be prevented by Reference Product Exclusivity.

Because of the unique structural and functional components of antibody molecules, FDA bases the sameness of monoclonal antibodies on the complementarity determining region (CDR) - without regard to the framework. This means that two antibodies with the same CDR, one with a human framework and one with a murine framework, would be considered the same.

Regarding sameness between antibody-drug conjugates, if either the CDR component or the drug component is different, the conjugates are different - even if the other element is the same. Note that, to-date, a biosimilar determination requires identical amino acid sequence unless the biosimilar sponsor justifies the change.

In addition, for Orphan Exclusivity, any products that are deemed the “same drug” need to prove clinical superiority. Under Orphan Drug regulations, “clinically superior” means a drug offers a substantial therapeutic improvement to that of the approved drug. Therefore, if a subsequent sponsor cannot show that a subsequent drug is clinically superior to the original drug, FDA would not approve the product.

A clinically superior drug has greater effectiveness than the approved drug, or greater safety in a significant fraction of the target population. If neither of these can be shown, the sponsor must show that the drug otherwise makes a major contribution to patient care.

Pediatric Exclusivity Tacks On 6 Months

Particularly industrious sponsors can go even further to pursue three concurrent exclusivities. Biologic products that treat rare pediatric diseases can gain Reference Product Exclusivity, Orphan Drug Exclusivity, and Pediatric Exclusivity.

If FDA awards Pediatric Exclusivity to the active ingredient, the sponsor gets six months added to any exclusivity for the product that exists at the time of awarding Pediatric Exclusivity – including both the Reference Product and Orphan Drug Exclusivity periods. Note that Pediatric Exclusivity has no effect on patent protection for biological products.

Rare Pediatric Disease Priority Review Voucher

Alternatively, if the only indication is for a rare pediatric disease, the sponsor might be eligible for Reference Product Exclusivity, Orphan Drug Exclusivity, and a Rare Pediatric Disease Priority Review Voucher (PRV). Section 529 of the FD&C Act defines a “rare pediatric disease” as a disease that:

  • Is a serious or life-threatening disease in which the serious or life-threatening manifestations primarily affect individuals aged from birth to 18 years, and

  • Meets the rare disease or condition requirement (affects less than 200,000 persons in the U.S. or affects more than 200,000 in the U.S. and there is no reasonable expectation that the cost of creating a drug for the disease or condition will be recovered from U.S. sales).

In addition to rare pediatric diseases, PRVs are also awarded as incentives for pursuing approvals of drugs for tropical disease indications and material threat medical countermeasure (MCM) drugs (intended to prevent or treat illness caused by a biological, radiological, chemical, or nuclear agent determined to be a material threat by the Department of Homeland Security).

PRVs are benefits issued by the FDA at the time of approval of an application that the holder can use to trade in for priority review of any single human drug NDA or BLA. In general, PRVs are only awarded to applications for drug products that do not contain a previously approved drug.

PRVs are also transferable. This means a sponsor who receives a PRV may transfer/sell the entitlement to such voucher to another sponsor of a human drug application. There is no limitation on the number of times a priority review voucher may be transferred before the voucher is used.

As of January 2019, the FDA has awarded25 PRVs, 17 (68%) of them under the Rare Pediatric Disease Program, and drug companies have redeemed at least six of the 17 rare pediatric vouchers for priority review. Rare pediatric diseases involved in these PRV approvals include Adenosine Deaminase-Severe Combined Immunodeficiency (ADA-SCID), B-cell acute lymphoblastic leukemia, Duchenne muscular dystrophy, lysosomal acid lipase (LAL) deficiency, rare bile acid synthesis disorders, spinal muscular atrophy (SMA), and X-linked hypophosphatemia (XLH).

Rare Pediatric Disease PRVs do not expire, but the program itself is scheduled to expire in December 2020. Initially, the program was to expire on September 30, but the Continuing Appropriations Act, 2021 and Other Extensions Act created a short-term extension. On September 29, the Creating Hope Reauthorization Act proposed to extend the Rare Pediatric PRV Program an additional four years. A companion bill is currently under review by the Senate.

Through the use of Priority Review Vouchers and coinciding terms of Orphan Drug Exclusivity and Reference Product Exclusivity, biological product companies can enjoy far-reaching competitive benefits.


Gregory J. Glover MD JD is a patent attorney and non-practicing physician. A noted expert on developments and emerging conflicts in the pharmaceutical industry, Greg is an expert on regulatory IP issues.

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