Court Drops Depth Charge on Submarine Exclusivity

On July 22, 2019, the United States District Court for the District of Columbia ruled against the Food and Drug Administration (“FDA”) in a lawsuit challenging FDA’s application of 3-year exclusivity in the context of a 505(b)(2) application. The court’s decision in Braeburn Inc. v. FDA (Civ. Action No. 19-982 (BAH)) took direct aim at what we have called “Submarine Exclusivity” in prior blog posts, faulting the Agency for making decisions about the scope of exclusivity without any “intelligible decisional principle.” The court thus vacated FDA’s exclusivity determination and remanded the issue back to the Agency for further consideration. The FDA has not indicated how it will respond, and it is thus unclear what effect, if any, the court’s decision will have on Submarine Exclusivity going forward.

The Court Decision

The lawsuit was brought by Braeburn, Inc. (“Braeburn”) on April 9, 2019 challenging FDA’s determination that Braeburn’s buprenorphine depot product, Brixadi, could not be finally approved until expiration of the three-year exclusivity period for Sublocade, a previously approved buprenorphine depot product manufactured by another company. In assessing the scope of three-year exclusivity, FDA’s practice has been to identify its “innovative change” compared to previously approved drug products containing the same active moiety. In this case, FDA determined that the “innovation” represented by Sublocade was a monthly buprenorphine product intended to treat patients with moderate to severe opioid use disorder (“OUD”). Because Brixadi also included a monthly buprenorphine version intended to treat patients with moderate to severe OUD, FDA determined that the monthly presentation of Brixadi was blocked by exclusivity.

The district court, however, disagreed with FDA’s exclusivity determination, holding that it was based upon an unreasonable interpretation of the statute and was otherwise arbitrary and capricious. Although the court found that the statutory language governing three-year exclusivity is ambiguous, it nevertheless held that FDA’s interpretation, which focuses on the drug product’s “innovation,” is unreasonable because it lacks any legal or scientific principle for identifying the innovation. And without an intelligible decisional principle, “the FDA’s standard simply supplants the ambiguous phrase ‘the conditions of approval’ for the ambiguous term ‘innovation.’”

The court seemed particularly concerned that FDA’s interpretation could result in overbroad grants of exclusivity, thereby blocking patient access to innovative new medicines. For example, the court noted that, under FDA’s approach, a monthly depot drug approved for the first time only for certain patients (e.g., men) could block approval of a subsequent monthly depot product that could be used in a broader patient population (e.g., men and women). The court observed: “The disincentive for new innovations to expand available treatment options for new patient populations is obvious and appears to run counter to the over-arching goal of the Hatch-Waxman Amendments.”

Finally, the court held that FDA’s exclusivity decision also was arbitrary and capricious because of multiple inconsistencies, both within the decision itself and as compared to decisions in similar situations. Although FDA limited the exclusivity for other products based upon the patient population participating in essential clinical investigations, it did not do so for Sublocade. The court observed that these inconsistencies were “a symptom of the FDA’s unreasonable statutory interpretation ….”

Effect of Court Decision

At bottom, the Braeburn court honed in on exactly the problems with Submarine Exclusivity that we identified in our prior blog post. For example, we noted that FDA’s “innovation” test is an inherently ambiguous standard that is virtually impossible to predict. We also pointed out that, as a result, this standard has not been applied consistently by FDA. And finally, we observed that by blocking patient access to innovative new treatments, FDA’s standard arguably is inconsistent with the careful balance Congress intended when it enacted the Hatch-Waxman Act. In its opinion, the district court highlighted all of these problems with Submarine Exclusivity.

The question is: will the court’s decision finally sink Submarine Exclusivity. And at this point, the answer is unclear. FDA has not yet indicated whether it will appeal the district court decision. And even if it does not appeal, the Agency has not indicated whether or how it will modify its ambiguous “innovation” test to provide real standards that help 505(b)(2) applicants better predict the regulatory risks associated with three-year exclusivity. So we are still in the wait-and-see stage.  But however FDA decides to proceed in this particular case, the district court has laid down a marker that undoubtedly will cast a long shadow over future three-year exclusivity decisions.

In the interest of transparency, Lassman Law+Policy represented Braeburn (with co-counsel Goodwin) in this litigation.

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