Over the past few years, FDA has lobbied to tighten (or even eliminate) the 180-day exclusivity period currently granted to the first generic drug applicant that submits an ANDA seeking FDA approval for a generic based on a listed drug product.
This exclusivity period provides an incentive for generic applicants to challenge patents on brand name drugs by providing first filers 180-days of exclusivity that protects the generic product from competition by later-filed generic products. But some argue that its value has been diminished by overlapping exclusivity with other generic candidates and brand name drug marketing strategies (such as releasing improved versions, distributing authorized generics, and offering rebates to pharmacy benefit managers).
Now, FDA is apparently altering the 180-day exclusivity period for generic applicants with Rx-to-OTC reference products.
A patent holder can switch the drug product from prescription to over-the-counter use by submitting an efficacy supplement to an approved NDA application. Generic applicants can file ANDAs based on Rx drugs, OTC drugs, or Rx-to-OTC drugs. In all three cases, an ANDA is an ANDA. And all first-filed ANDAs come with the 180-day exclusivity period. Therefore, shouldn't 180-day exclusivity protect a Paragraph IV certification submission in each of the three scenarios?
According to Teva Pharms USA, Inc. v. Sebelius [595 F 3d 1303, 1318 (2010 D.C. Cir.)]:
"The statute's grant of a 180-day delay in multiple generic competition for the first successful paragraph IV filer is a pro-consumer device. And it happens to be precisely the device Congress has chosen to induce challenges to patents claimed to support brand drugs. The statute thus deliberately sacrifices the benefits of full generic competition at the first chance allowed by the brand manufacturer's patents, in favor of the benefits of earlier generic competition, brought about by the promise of a reward for generics that stick out their necks (at the potential cost of a patent infringement suit) by claiming that patent law does not extend the brand maker's monopoly as long as the brand maker has asserted. As Congress deliberately created the 180-day exclusivity bonus, the FDA cannot justify its interpretation by proudly proclaiming that it has eviscerated that bonus."
But on February 14, 2020, FDA made some interesting decisions. It approved three full Rx-to-OTC switches:
- Voltaren Arthritis Pain (diclofenac sodium)
- Pataday Twice Daily Relief (olopatadine hydrochloride)
- Pataday Once Daily Relief (olopatadine hydrochloride)
The switches were approved via an NDA supplement. Traditionally, in a full Rx-to-OTC switch, the original Rx listing is removed from the Orange Book, and the OTC product is then listed in the Orange Book under a new product number.
But for the three switches approved in February 2020, FDA decided to keep the same listing and product number. According to an April 2020 memorandum, the new OTC product does not get a separate listing because a separate NDA was not used to obtain FDA approval for the OTC drug (instead, just a supplement to the original Rx NDA).
FDA reasoned that it does not consider the OTC drug to be a different drug than the Rx drug for the purposes of the 180-day exclusivity period. Therefore, the OTC product should not obtain a separate listing.
The memo states, "The rationale for this change in administrative practice is to better align the description of these products in the Orange Book with the Agency's view that a full switch through approval of a supplement to an NDA does not create a new "listed drug" under section 505(j)(2)(D)(i), does not create a new period of 180-day exclusivity (or eliminate an existing period of exclusivity), and generally does not alter the submission date of any patents that were previously submitted for the NDA and then timely resubmitted after the full switch."
In defense of the decision, the memo explains:
"Both the prior Orange Book practice (i.e., creation of an entry in the OTC section for "Product: 002") and the new practice (i.e., creation of an entry in the OTC section for "Product: 001") are consistent with the proposed rule preamble's statement that changes including a full switch "would result in a new entry in the Orange Book"; both practices result in the creation of a "new entry" in the OTC section, and the preamble did not specifically address the more granular practice of creating a "Product: 002" versus creating a new entry for "Product: 001."
Under 21 U.S.C. § 353(b)(4)(B), non-prescription drugs must be deemed “misbranded” if, before dispensing, the label of the drug contains the symbol “Rx only.” When the reference product is Rx-only, conversion to OTC by the NDA holder means that any previously approved ANDA product can no longer be lawfully marketed, rendering any awarded 180-day exclusivity obsolete. Moreover, since FDA does not recognize the new OTC product as a new listed drug, FDA’s policy has removed the incentive to be the first to contest a new OTC product patent because the first filer would not benefit from 180-day exclusivity.
Note that the rule applies only to full Rx-to-OTC switches. A partial Rx-to-OTC switch would result in a new Orange Book listing since the sponsor must submit a new NDA rather than a supplement to a previously approved NDA. After a partial switch, the drug would receive a new Orange Book listing for the OTC conditions of use.
In a nutshell, first-to-file generic drug applicants submitting ANDAs with Paragraph IV Certifications for OTC drugs will want to double-check that the 180-day exclusivity period applies for that approval.