Attorney East Hampton

By Kurt R. Karst –
Earlier this week, the Subcommittee on Health of the House Energy and Commerce Committee held a mark-up session of several bills, including H.R. 2430, the FDA Reauthorization Act of 2017 (“FDARA”). (The Senate version of FDARA, S. 934, passed out of committee earlier this month.)  Initially proposed as a “clean” user fee bill, several riders were added to the bill during the mark-up session, including provisions concerning over-the-counter hearings aids, requiring risk-based device inspections, restricting drug imports . . . . and, of particular interest to this blogger, provisions creating a new class of competitive generic drugs, including associated 180-day exclusivity.
Introduced by Representative Kurt Schrader (D-OR), the amendment, which passed by voice vote, would amend the FDC Act to add Section 505H, titled “Competitive Generic Therapies.” As explained by Rep. Schrader in his opening remarks:

We know that when generic drugs compete in the market, drug prices come down dramatically. Although nine out of every ten prescriptions is for a generic drug, generic drugs only make up 28% of the total prescription drug spending in the United States.  Unfortunately, though, some drugs for small patient populations may not attract the same interest from generic drug manufacturers due to market and regulatory uncertainty.  This amendment takes many steps to encourage competition where there is none today.
First, the amendment requires greater communication between the FDA and manufacturers for these competitive generic products before and during the application process. We have seen great strides toward faster drug approvals in the brand drug breakthrough process, and this is modeled after that.
The amendment also creates an incentive for this select set of particular generic drugs to come to market by guaranteeing them the same six months of exclusivity that the vast majority of first generic drugs receive. Under current law, if a first generic drug challenges a patented drug, they get this treatment.  This would extend that treatment for new generic drugs competing with off-patent brand drugs where there is no competition.

The “competitive generic therapy” pathway described in the amendment is a new (and we think much improved) take on Rep. Schrader’s “Lower Drug Costs Through Competition Act” (H.R. 749), which was introduced earlier this year (see our previous post here).
Under the new pathway, a generic drug sponsor would request, either before or upon the submission of an ANDA, that FDA designate, within 60 calendar days of receipt of the designation request, a drug as a “competitive generic therapy.” The designation process would be described in draft guidance provided by FDA not later than 18 months after enactment of the provisions, and, if necessary, in new regulations. 
A drug would be eligible for designation if FDA determines that there is “inadequate generic competition.” The term “inadequate generic competition” is defined in the bill to mean that:

there is not more than one approved drug product on the list of products described in section 505(j)(7)(A) (not including products on the discontinued section of such list) that is—
(A) the reference listed drug; or
(B) a generic drug with the same reference listed drug as the drug for which designation as a competitive generic therapy is sought.

In other words, there is “inadequate generic competition” if the “active” section of the Orange Book does not show generic competition for an NDA-approved RLD, or if there is a single ANDA approved (presumably identified as the “reference standard”) and the NDA RLD is no longer marketed (and identified in the “discontinued” section of the Orange Book).
Designation as a “competitive generic therapy” carries with it several benefits. FDA would be required to:

(1) Hold meetings with the sponsor and the review team throughout the development of the drug prior to submission of the application for such drug under section 505(j).
(2) Provide timely advice to, and interactive communication with, the sponsor regarding the development of the drug to ensure that the development program to gather the nonclinical and clinical data necessary for approval is as efficient as practicable.
(3) Involve senior managers and experienced review staff, as appropriate, in a collaborative, cross-disciplinary review, including with respect to drug-device combination products and other complex products.
(4) Assign a cross-disciplinary project lead for the Food and Drug Administration review team— (A) to facilitate an efficient review of the development program and application, including manufacturing inspections; and (B) to serve as a scientific liaison between the review team and the sponsor.

Rep. Schrader’s amendment would also incentivize competitive generic therapy development by creating a new 180-day exclusivity provision applicable to such drug products. Specifically, FDC Act § 505(j)(5)(B) would be amended to add the following:

(v) 180-DAY EXCLUSIVITY PERIOD FOR COMPETITIVE GENERIC THERAPIES.—
(I) EFFECTIVENESS OF APPLICATION.—If the application is for a competitive generic therapy, the application shall be made effective on the date that is 180 days after the date of the first commercial marketing of the competitive generic therapy.

The term “competitive generic therapy” in the exclusivity provision above is further defined to mean a drug “that is designated as a competitive generic therapy under section 506H,” and “for which there are no blocking patents or exclusivities” identified in the Orange Book.
As with the “standard” form of 180-day exclusivity, eligibility for competitive generic therapy 180-day exclusivity could also be forfeited . . . but only on a single “failure-to-market” basis:

(iv) SPECIAL FORFEITURE RULE FOR COMPETITIVE GENERIC THERAPY.—The 180-day exclusivity period described in subparagraph (B)(v) shall be forfeited by the holder of the approved abbreviated application for the competitive generic therapy involved if the holder fails to market the competitive generic therapy within 75 days after the date on which the approval of the application is made effective.

In addition to “clos[ing] a loophole and improv[ing] program integrity in the Tropical Disease priority review voucher program,” Rep. Schrader’s amendment would make other modifications intended to enhance ANDA review transparency and to study what can be done “to get more first-cycle approvals in the generic drug review program,” according to Rep. Schrader. For example, FDC Act § 505(j) would be amended to require FDA to provide ANDA applicants with application review updates:

Upon the request of an applicant regarding one or more specified pending applications under this subsection, the Secretary shall—
(A) by telephone or electronic mail, provide review status updates; and
(B) indicate in such updates the categorical status of the applications by each relevant review discipline.

Earlier this year, Office of Generic Drugs Director Dr. Kathleen (Cook) Uhl, during her keynote address at the annual meeting of the Association for Accessible Medicines, reported that for the Fiscal Year 2015 cohort of ANDAs covered under GDUFA, the rate of first cycle approval/tentative approvals was only 9%.  Rep. Schrader’s amendment would require the Government Accountability Office to study first-cycle approval rates under GDUFA and determine “whether there are ways the review process for generic drugs could be improved to increase the rate of first cycle approvals and tentative approvals for generic drug applications.”

By Anne K. Walsh –
Dr. Scott Gottlieb was sworn in as FDA’s 23rd Commissioner on May 11, 2017. There has been a lot of speculation about what policies he will prioritize for the Agency during his tenure.  A review of his background shows he has been an advocate for autonomy in the practice of medicine and the use of medical products for off-label uses.  He has opined that doctors are appropriately trained to make medical decisions based on the best interest of their patients.  Dr. Gottlieb is well-versed on the controversies surrounding FDA’s current restrictions on drug and device manufacturers from discussing off-label uses with health care practitioners. 
Given his expertise, he may be poised to loosen FDA’s enforcement of off‑label communications and to provide clarity to industry on these issues. Perhaps it is telling that one of the first actions the Agency has undertaken since his confirmation was to further extend the time period for reviewing the rules defining “intended use.”  As reported here, FDA derives authority to regulate a product based on its intended use. Although FDA first proposed changes to the “intended use” rules back in 2015, it was not until after the 2016 election but before the inauguration, that FDA issued its final rule.  It is not uncommon for a former administration to fast-forward pending rules before the political climate shifts; nor is it uncommon for a new administration to stay the most-recently implemented rules until it has time to consider them.
In the case of the “intended use” rules, FDA issued the final rule on January 9, 2017, with a stated effective date of March 21, 2017. The proposed version of the rule was markedly different from the January 9 version because it permits FDA to look at the “totality of the evidence” in determining a manufacturer’s intended use for its drug or device.  Pharmaceutical groups filed a Citizen Petition requesting reconsideration of the language, and FDA without the benefit of a confirmed Commissioner, agreed to delay the effective date of the rule for a year.  FDA solicited comments on the decision to postpone the effective date, as well as on its regulation of product distribution in light of First Amendment considerations.  The 60-day comment period was expected to end on May 19, 2017.
Yet on May 18, 2017, without substantive explanation, FDA further extended the comment period until July 18, 2017. According to the Federal Register notice, FDA “has received a request for a 30-day extension and another request for a 90-day extension of the comment period . . . . The requests conveyed concern that the current 60-day comment period does not allow sufficient time to develop a meaningful or thoughtful response to issues FDA raised in the Final Rule Extension.”  The 90-day extension request was submitted on April 5, 2017, by the same group that filed the Citizen Petition leading up to the initial comment period: the Medical Information Working Group, the Pharmaceutical Research and Manufacturers of America, and the Biotechnology Innovation Organization.  We were unable to find in the docket the request FDA referenced that sought a 30-day extension.
It is unclear why FDA felt compelled to honor requests for more time in this case. The additional time could signal that the new Commissioner seeks to weigh in before FDA takes further action related to these rules affecting off-label communications.  We will continue to monitor these developments closely.

By Kurt R. Karst –
Since it was first published in 1980, the Orange Book has undergone a lot of change. Over the decades we’ve seen the publication transform and evolve from a paper edition to an electronic database, and now to an app (see our previous post here).  Although the Orange Book has become more complex to navigate, the first edition was rather simple, with two primary sections and several subsections:
I.    Preface
A.    Introduction
B.    Definitions
C.    General Policies Governing the List
D.    Legal status of the List
E.    Precautions to Users of the List
F.    Codes and Specific Policies for Therapeutic Equivalence Evaluations
G.    Description of Special Situations
H.    Updating Procedures
II.    Listings
A.    Format Guide
B.    Drug Product List
C.    Trade Name Index
D.    Application Holder Index
E.    Application Holder Abbreviation List
F.    Appendix: Prescription Drug Products Deemed Approved – Pending Resolution of Safety or Effectiveness Issues
Today, the Orange Book contains a preface and six Drug Product Lists, either in their entirety, or by reference to an FDA website containing the full list:

Prescription Drug Product List
OTC Drug Product List
Drug Products with Approval under Section 505 of the Act Administered by the Center for Biologics Evaluation and Research List
Discontinued Drug Product List
Orphan Products Designations and Approvals List
Drug Products Which Must Demonstrate in vivo Bioavailability Only if Product Fails to Achieve Adequate Dissolution

(Although the Orange Book used to contain a list of ANDA suitability petitions approved by FDA, that list is now posted separately on FDA’s website. . . . but the list has not been updated in nearly three years!) 
The Orange Book also contains three appendices (Product Name Index; Product Name Index Listed by Applicant; and Uniform Terms) and a Patent and Exclusivity Information Addendum (divided into Patent and Exclusivity Lists and Patent and Exclusivity Terms) that are updated monthly. (In the first few editions of the Orange Book, FDA listed in an appendix – later named the “DESI Addendum” – those drug products still in the Drug Efficacy Study Implementation program administrative process.)
But in addition to what appears in the printed version of the Orange Book, there is other information FDA maintains that is important to drug manufacturers and that we consider to be an extension of the Orange Book. Some of that information is identified on FDA’s Orange Book website as “Additional Resources.”  Thus, for example, for many years now FDA has published “Additions/Deletions for Prescription and OTC Drug Product Lists” and has provided monthly “Orange Book Data Files.” Those files can be quite helpful in pinpointing when a particular change occurred with respect to a particular drug product listing. (Other extensions of the Orange Book include the daily updated “Newly Added Patents or Delisted Patents” electronic Orange Book search function . . . and perhaps even the recently published ANDA “Program Fee List,” which FDA prepared for GDUFA II user fee purposes, but that can assist with determining what ANDAs listed in the discontinued section of the Orange Book have merely been discontinued and which have had their approval withdrawn.)
FDA’s latest additional resource is a list called “Reference Listed Drugs by ANDA Reference Standard List.”  Dated April 2017 and published last week for the first time, the new list is described by FDA as follows:

This list refers to drug products approved under an Abbreviated New Drug Application (ANDA) that FDA has selected as reference standards and the associated reference listed drugs (RLDs). The purpose of this list is to assist applicants submitting an ANDA to seek approval of a generic drug in identifying an RLD when an ANDA RS has been selected. If the applicant has a question about which listed drug it should refer to as the RLD, the applicant may consult with FDA (refer to section 1.4 Reference Listed Drug and Reference Standard of the Orange Book Preface for more information).
This list is updated monthly. Information in this list is sorted by Active Ingredient(s), Dosage Form, Route, Trade Name, Applicant Name and Strength. Additional information included are marketing status (RX, OTC, DISCN), Application Number, Product Number, and approval date of the Reference Standard.

The new list is an outgrowth of FDA’s retooling of the 37th (2017) edition of the Orange Book to identify RLDs (i.e., NDA-approved drug products) and Reference Standards (i.e., an NDA- or ANDA-approved drug product used for bioequivalence testing purposes) and carves out of the Orange Book a select category of ANDA-approved Reference Standards. We previously posted on the retooling of the Orange Book and FDA’s guidance document, titled “Referencing Approved Drug Products in ANDA Submissions,” which delves into the details of RLD and Reference Standard status and designation. 

By David B. Clissold –
As we previously reported, FDA issued a final rule in May 2016 that extended the agency’s authority to regulate all tobacco products, including e-cigarettes, cigars, hookah tobacco and pipe tobacco, among others. The final rule contained numerous compliance deadlines for manufacturers and retailers of these products.
As FDA explained in a “Web Statement” dated May 3, 2017, in lawsuits over the final rule involving e-cigarettes, cigars, and pipe tobacco, FDA had stated that it would defer enforcement of all future compliance deadlines for these particular products for three months. The Web Statement explains that the three-month extension applies to the future compliance deadlines for all categories of newly regulated products, not just those products involved in the lawsuits. FDA said that the extension “will allow new leadership at the FDA and the Department of Health and Human Services additional time to more fully consider issues raised by the final rule that are now the subject of multiple lawsuits in federal court,” and said that it would “issue guidance describing its position in the near future.”
FDA has now announced the availability of that guidance. The extension applies to compliance deadlines set for May 10, 2017 or later, and includes deadlines for the submission of cigar warning label plans, registration of manufacturers and listing of products, ingredient listing, the submission of health documents, substantial equivalence exemption requests, substantial equivalence applications, premarket tobacco product applications, and harmful and potentially harmful constituent reports. However, any compliance deadline that occurred before May 10, 2017, such as mandatory age and photo-ID checks, is not affected. The new compliance dates are detailed in a chart that accompanies the guidance.

By Andrew J. Hull  
On April 17, 2013, Dr. David A. Moon was held up at a TSA checkpoint at a Las Vegas airport. Law enforcement officers stopped the physician—the holder of DEA registrations in Tulsa, Oklahoma, and Las Vegas, Nevada—carrying an unregistered firearm, and found in his carry-on luggage drugs in pill bottles labeled for other individuals, drugs in unlabeled pill bottles, and other loose drugs.  The physician was placed under arrest, and a subsequent DEA investigation ensued.
On December 8, 2015, DEA issued an order to show cause (OSC) alleging that the physician (1) possessed controlled substances with intent to redistribute them to individuals for whom they were not originally dispensed, (2) accepted controlled substances from patients (i.e., non-DEA registered sources) and redistributed them to other patients, (3) failed to conduct a biennial inventory, (4) had shortages of controlled substances and was missing purchase records, and (5) issued prescriptions in Nevada under his Oklahoma license. On top of that, DEA alleged that both Oklahoma and Nevada’s medical boards had revoked his state license to handle controlled substance.
The physician never responded to the OSC, and the Acting Administrator issued a Final Order over a year later on April 27, 2017. Unfortunately, the Administrator declined to rely in his opinion on most of the juicy facts—i.e., the attempted escape from Vegas, the illicit drugs and weapons, and the airport arrest—and determined that DEA had failed to provide sufficient factual or evidentiary support for many of the allegations (e.g., the arrest report submitted on evidence by DEA did not identify that the pills in the physician’s possession were controlled substances). 
The Administrator likely left out the interesting facts because he did not need to rely on them to render a decision: The Administrator found that there was evidence that the physician lacked state authority to handle controlled substances (see our previous post here on state authority cases) after both medical boards revoked his state licenses, and that the physician’s improper recordkeeping and issuance of prescriptions in states without proper registration were evidence that his continued registration was not in the public interest. Accordingly, the Administrator revoked the physician’s registration.
Probably the most interesting takeaway from this decision is the Administrator’s discussion of Factor One of the CSA’s public interest factors for practitioners found in 21 U.S.C. § 823(f), specifically the “recommendation of the appropriate State licensing board or professional disciplinary authority.”  
Historically, DEA has taken a broad interpretation of this factor to include any form of disciplinary action taken against the registrant (e.g., probation, suspension, revocation, restoration). See, e.g., Tyson D. Quy, M.D., 78 Fed. Reg. 47412, 47417 (Aug. 5, 2013); Daniel Koller, D.V.M., 71 Fed. Reg. 66975, 66981 (Nov. 17, 2006); Saihb S. Halil, M.D., 64 Fed. Reg. 33319, 3320-21 (June 22, 1999); William E. Brown, D.O., 58 Fed. Reg. 64004, 64005 (Dec. 3, 1993). 
The plain language of the statute suggests a stricter interpretation, such as an actual recommendation from the state board to DEA, and this interpretation is more consistent with 21 U.S.C. § 824(a)(3)’s separate ground for revocation based on a loss of state authority. (See this law review article for a fuller analysis and critique of DEA’s historic Factor One precedent.)
Breaking from tradition, the Administrator made an interesting statement, perhaps signaling an agency switch in precedent to a strict reading of Factor One. In a footnote, the Administrator noted that there was no evidence relating to a Factor One analysis, despite the prior disciplinary actions by the state boards:

As to factor one, there is no evidence that either the Oklahoma State Board of Osteopathic Examiners or the Nevada State Board of Osteopathic Medicine made a recommendation to DEA; both, however, revoked Registrant’s licenses to practice osteopathic medicine.

82 Fed. Reg. 19385, 19389 n.9 (Apr. 27, 2017).
This development may be a positive one for practitioner registrants, or it may be a distinction without a difference. The more strict, plain language interpretation of Factor One could allow a practitioner in an administrative hearing to request a recommendation from the appropriate state licensing board (even after a license suspension or probation), and an adverse state action will not necessarily count against the registrant in the public interest determination.  However, that specific determination did not need to be made here, because the practitioner ultimately lacked state authority continue to handle controlled substances. 

Over its ten years the FDA Law Blog has posted numerous stories about FDA’s regulation of laboratory developed tests (LDTs) (see, e.g., here, here, and here)  Yet, the story of FDA’s efforts to regulate LDTs goes back even further than the FDA Law Blog, to 1992.  While there have been other regulatory initiatives that have lasted longer – the OTC review, DESI review, and the program to end Class III 510(k) devices spring to mind– the 25 year LDT saga has had a healthy run.  
 
Hyman, Phelps & McNamara, P.C. Director Jeff Gibbs recently published in the FDLI Update an article that summarizes this 25-year history.  The article, titled “LDT’s: The Saga Continues,” summarizes the tale of LDT regulation, from FDA’s initial statement of authority through developing a plan to regulate to LDTs, culminating in FDA’s issuance of a Discussion Draft about how LDTs might someday be regulated in the future.  For devotees of LDTs – or of epic efforts to regulate a class of products – it will be riveting reading.  And for those who have not read about laboratory developed tests before, and never thought about them, this succinct summary is the one to read.

The American Conference Institute’s (“ACI’s”) 5th annual “FDA Boot Camp: Devices Edition” conference is coming up fast! The conference will take place from July 26-28, 2017 in Chicago, Illinois.
ACI’s FDA Boot Camp: Devices Edition delivers in-depth coverage of FDA regulatory law to professionals who work in conjunction with the medical device industry. In addition to providing a “basic training,” ACI’s brand new 2017 agenda offers “advanced training” sessions covering the “ins and outs” of applying this knowledge to real-life situations.  Highlights from this year’s program include a “Ripped from the Headlines” section covering the recent hot issues of 21st Century Cures Act, Cybersecurity, and Digital Health, and their impact on FDA practice, and an in-depth Post-Conference Skills session, providing an interactive, step-by-step journey through the submission process with strategies and tips for success.
A distinguished faculty of top FDA regulatory device experts — a “Who’s Who of the FDA Bar” — will share their knowledge and give you critical insights on:

The organization, jurisdiction, functions, and operations of FDA
An overview of medical device regulations and classification
Clinical trials and IDEs
The 510(k), PMA, and de novo pathways and choosing the right one
Device labeling, promotion, and related First Amendment concerns
General post-market controls and MDRs
Quality Systems Regulation and UDI
Understanding FDA’s Enforcement authority and how to remain compliant
Recalls and Withdrawals

Hyman, Phelps & McNamara, P.C.’s Jeffrey N. Gibbs will be speaking at a session titled “Low to Moderate-Risk Devices: Weighing the Pros and Cons of 510(k) Clearance vs. De Novo Pathways.” FDA Law Blog is a conference media partner. As such, we can offer our readers a special 10% discount.  The discount code is: P10-670-FDALB17.  You can access the conference brochure and sign up for the event here.  We look forward to seeing you at the conference.

The American Conference Institute’s (“ACI’s”) “FDA Boot Camp: Drugs & Biologics Edition” – now in its 30th iteration – is scheduled to take place from September 13-15, 2017, at the Omni Parker House, in Boston, Massachusetts. The conference is billed as the premier event to provide folks with a roadmap to navigate the difficult terrain of FDA regulatory law.
This year’s FDA Boot Camp will provide you not only with the essential background in FDA regulatory law to help you in your practice, but also key sessions that show you how this regulatory knowledge can be applied to situations you encounter in real life. A distinguished cast of presenters will share their knowledge and provide critical insights on a host of topics, including:

The organization, jurisdiction, functions, and operations of FDA
The essentials of the approval process for drugs and biologics, including: INDs, NDAs, BLAs, OTC Approval, the PMA process and the Expedited Approval Process
Clinical trials for drugs and biologics
Unique Considerations in the approval of combination products, companion diagnostics, and stem cell therapies
The role of the Hatch-Waxman Amendments in the patenting of drugs and biologics
Labeling in the drug and biologics approval process
Off-Label use and a New World Order
cGMPs, adverse events monitoring, risk management and recalls

Hyman, Phelps & McNamara, P.C.’s Kurt R. Karst, will present with a panel of experts and provide an overview of the Hatch-Waxman Amendments and the Biologic Price Competition and Innovation Act (“BPCIA”). Mr. Karst will also lead a conference workshop, titled “Hatch-Waxman and BPCIA in the Trenches: Deconstructing and Constructing an Exclusivity Dispute.”  During the workshop, Mr. Karst will deconstruct, in a step-by-step manner, a complex exclusivity dispute, analyzing the various (and sometimes evolving) positions on exclusivity presented.  Relevant court decisions will also be analyzed and their practical and future effects discussed.  After the exclusivity case analysis is completed, attendees will have the opportunity to construct their own exclusivity dispute by choosing from various base facts.  Once the case is constructed, Mr. Karst will lead attendees through the exclusivity analysis.
FDA Law Blog is a conference media partner. As such, we can offer our readers a special 10% discount. The discount code is: P10-999-FDAB17.  You can access the conference brochure and sign up for the event here.  We look forward to seeing you at the conference.

By Ricardo Carvajal –
A citizen petition (Docket No. FDA-2017-P-2626) recently submitted to FDA asks the agency to exercise enforcement discretion with respect to the regulatory prohibition on interstate shipments of milk products that have not been pasteurized (21 CFR 1240.61).  There have been previous petitions asking FDA to allow the interstate shipment of raw milk on a variety of grounds.  This one breaks new ground by citing as support for the requested action several Executive Orders and Memoranda issued by President Trump that are intended to reduce regulatory burdens. 
The petition contends that FDA’s enforcement of the regulatory prohibition have been “extremely burdensome, forcing some farmers out of business.”  The petition further contends that “public health can be adequately protected through labeling bearing a warning and safe handling instructions.”  The warning could be one that is required by a state, or where no such state requirement exists, the following:

WARNING: This raw (unpasteurized) milk [cream] may contain disease-causing organisms. Persons at highest risk of these organisms include newborns and infants; the elderly; pregnant women; those taking corticosteroids, antibiotics or antacids; and those having chronic illnesses or other conditions that weaken their immunity.

Ostensibly, proper handling instructions would reduce the risk of foodborne illness by educating consumers on how to pasteurize their own milk.  The petition sets out the following example:

SAFE HANDLING INSTRUCTIONS: To prevent foodborne illness, keep this product refrigerated at 45°F or lower and, prior to consumption, follow the pasteurization process identified below.
Pasteurization Process: (1) Heat milk at 145°F [150°F] for 30 minutes in stainless steel pot; (2) Remove pot of milk from heat and place it in sink or large bowl filled with ice water stirring constantly until milk temperature drops to 40°F; and (3) Store pasteurized milk in a refrigerator at 45°F or lower.

To date, FDA has been steadfast in refusing to allow interstate shipments of raw milk.  This petition aims to find out whether that position is more malleable under the new administration.

By Kurt R. Karst – 
In a new paper, titled “The Drug Innovation Paradox,” Professor Erika Lietzan of the University of Missouri School of Law (and a friend and fellow Hatch-Waxman addict) examines the relationship between the incentives offered under the law to develop drug products and the research and innovation behavior those incentives are intended to encourage.  According to Professor Lietzan’s research, there’s a paradox in this scheme: the period of exclusive marketing of a drug does not adequately reward challenging research and development programs.  Said another way, the post-market reward to the sponsor of a drug is flat (or even decreases) if the company spends a greater amount of time in pre-market research and development.  This means that whole areas of medicine could remain underdeveloped.  Here’s how Professor Lietzan summarizes the issue:

In medicine today, we face an innovation paradox. The companies that develop new medicines are highly dependent on a period of exclusive marketing after approval, to fund their research and development programs.  But longer research and development programs are not associated with longer periods of exclusive marketing. Instead the period of exclusive marketing may be shorter. Exclusivity that dwindles with each additional month of pre-commercialization research would ordinarily lead innovators to be more efficient, but the added factor of the drug regulatory system leads to a different result.  In this system, the length of any particular premarket program turns largely on considerations not within the firm’s control.  The design and length of the program is a function of variables that include the molecule and its chemical class, its mechanism of action, the disease and disease stage targeted, the outcomes that can be formally tested, the nature of other treatments on the market, and scientific obstacles and opportunities at the time.  Moreover, certain types of medicine — for example, drugs for long term use and prevention of disease, drugs to stop progressive or degenerative diseases, and drugs for early stage cancer — are consistently more likely to require longer research and development programs.  These findings have significant implications for innovation policy.  The paradox in drug innovation is that we have chosen to incentivize research and development with a post-market award, but as the research and development timeline increases, the post-market reward for the innovation remains the same or decreases.  If the length of the premarket process correlates with particular drug types, disease targets, or studied outcomes, we may be offering an inadequate incentive in entire areas of medicine where we have a critical need for new treatments.

Professor Lietzan’s research, which will be published in the Missouri Law Review, is based on a dataset of 570 regulatory review periods culled from patent term extension applications received by the Patent and Trademark Office from September 28, 1984 and September 30, 2016. In scouring and examining these records and data points, Professor Lietzan is able to draw some interesting conclusions:

the preclinical research period has been getting shorter;
the clinical period has increased in length, at least for some types of product;
there is variability in the length of the clinical testing period by therapeutic category and perhaps also within therapeutic categories;
surrogate endpoints can shorten the clinical testing period; and
certain types of product will generally require a longer research and development period.

Professor Lietzan’s research is illustrated in various tables and figures included throughout her paper. One figure we found particularly interesting shows the average length of the clinical testing period for some therapeutic categories.  The average length ranges from about 3 years for antimigraine agents, to more than 9 years for central nervous system products:
We don’t have the time now to cover all of the topics and research discussed in Professor Lietzan’s paper, but we encourage our readers to take a closer look at the paper. Perhaps some nice weekend reading?