FDA Issues Orphan Drug Exclusivity Policy That Could Be a Catalyst for Future Litigation
On January 24, 2023, FDA published a notice in the Federal Register entitled, “Clarification of Orphan-Drug Exclusivity Following Catalyst Pharms., Inc. v. Becerra.” In brief, the Catalyst decision by the 11th Circuit Court of Appeals concerned FDA’s application of the Orphan Drug Act (21 USC 360cc(a)), and in particular the extent of the 7-year orphan drug market exclusivity (ODE) provided with an orphan drug’s approval. The ODE, per the Orphan Drug Act prevents FDA from approving another applicant’s same drug for “the same disease or condition.”
Catalyst arose out of FDA’s approval of a drug for the treatment of Lambert-Eaton myasthenic syndrome (LEMS) (an orphan disease) in children to a Catalyst competitor, despite FDA having previously approved and awarded ODE to Catalyst’s same drug product for LEMS in adults. Catalyst’s ODE was unexpired at the time that FDA approved the competitor’s product. FDA based its approval decision on FDA’s long-asserted position that ODE only applies to the specific indication that FDA ultimately approves. Therefore, FDA claimed its approval and award of ODE to a product that is indicated for use in adults does not preclude FDA from approving the same drug for the same use in children.
The Catalyst court disagreed, holding that “the phrase ‘same disease or condition’”, unambiguously forecloses FDA’s longstanding interpretation, and instead covers the entire disease, not just the subpopulation for which it is indicated. Thus, the Catalyst court set aside FDA’s approval of Catalyst’s competitor’s product.
Per its notice, FDA set aside the approval of the competitor product as compelled by the Court. However, FDA announced that it otherwise expressly rejected the 11th Circuit’s holding, stating in pertinent part –
FDA intends to continue to apply its existing regulations tying orphan-drug exclusivity to the uses or indications for which the orphan drug was approved. The Agency believes that this approach is appropriate for several reasons. FDA continues to believe that the statutory text does not unambiguously require that orphan-drug exclusivity extend to the entire disease or condition for which a drug received orphan-drug designation if the drug is only approved for some uses within that disease or condition. . .
This notice is a remarkably direct rebuke of the Court’s decision, especially in light of Congress’s rejection of legislation that would have overturned Catalyst. FDA certainly wanted (and advocated for) Congress to intervene, and saw language included in the 2022 Senate HELP Committee user fee bill that would have overturned the Catalyst holding. However, this language was stripped from the final user fee bill, and was not included in the subsequent appropriations bill, H.R. 2617, the Consolidated Appropriations Act of 2023 that became the vehicle for many FDA legislative reforms at the end of the year.
With regard to drug developers, FDA’s notice raises some important questions, including how much developers should rely on it. The notice is simply an FDA policy statement, and cannot overturn the Court’s decision in Catalyst, which is legally binding precedent (at least in the 11th Circuit). Catalyst therefore remains a basis upon which persons aggrieved by FDA’s policy can challenge its application, either prospectively (through threat of litigation during discussions with FDA, or pursuit of a declaratory judgment) or following FDA actions such as approval or orphan drug designation. Regardless, developers will need to account for this uncertainty in their product development strategies.
Beyond orphan drug issues, the FDA’s approach raises questions about the role of the court in FDA matters, as well as the Agency’s general approach to litigation. Instead of asking for an en banc rehearing, or appealing to the Supreme Court, FDA decided to expressly reject the Court’s interpretation of law, and only recognized the Court’s order to affect the very specific case or controversy before it – the one drug product approval at issue.
Of course, it is not unheard of for FDA (or other federal agencies) to narrowly interpret court orders to align with agency-preferred policy. For example, FDA took such an approach in 2014 following a defeat at the District Court in Depomed v. HHS. Depomed addressed whether FDA could deny ODE to Gralise (gabapentin). FDA had previously awarded ODE to a gabapentin product for the same indication Gralise was seeking. FDA initially denied ODE to Gralise because it failed to demonstrate clinical superiority to the previously approved gabapentin product for the same orphan indication, although this is not an express requirement in the statute for awarding ODE. The Depomed decision – authored by now Supreme Court Justice Ketanji Brown Jackson – held “that Gralise is entitled to exclusivity and that the FDA must recognize as much without requiring proof of clinical superiority or imposing any additional conditions on Depomed.” Thereafter, FDA issued a notice that stated –
“It is the Agency’s position that, given the limited terms of the court’s decision to GRALISE, FDA intends to continue to apply its existing regulations in part 316 to [other] orphan-drug exclusivity matters. FDA interprets section 527 of the FD&C Act and its regulations . . .to require the sponsor of a designated drug that is the “same” as a previously approved drug to demonstrate that its drug is “clinically superior” to that drug upon approval in order for the subsequently approved drug to be eligible for orphan-drug exclusivity.”
Though similar, the FDA did not go quite as far as it did in Catalyst, where the Agency explicitly challenges the court’s holding that the relevant statutory provision is unambiguous. Also, the Depomed case involved a lower-level court decision than Catalyst, which makes the Catalyst announcement somewhat more striking.
The Agency’s response to Catalyst may be a signal to the courts that FDA is going to be less deferential to court decisions at a time when many agency decisions have been under attack. One ongoing litigation that has attracted a lot of attention is seeking to overturn FDA’s approval of the drug mifepristone. The plaintiff (Alliance for Hippocratic Medicine) is making a number of arguments that, if adopted by the Court, could throw the entire new drug approval process in flux. See Alliance for Hippocratic Medicine v. U.S. Food and Drug Administration, 2:22-cv-00223, US District Court, Northern District of Texas (Amarillo). The approach in Catalyst may be a harbinger of what FDA will do going forward, trying to protect long-standing FDA regulatory regimes from disruption where Congress will not intervene, but it could trigger a lot of uncertainty (and litigation) in the years ahead.
 88 Fed. Reg. 4068 (Jan. 24, 2023), available at, https://www.govinfo.gov/content/pkg/FR-2023-01-24/pdf/2023-01179.pdf.
 Catalyst Pharms., Inc. v. Becerra (Catalyst), 14 F.4th 1299 (11th Cir. 2021), available at, https://scholar.google.com/scholar_case?case=16203018648614022647.
 Catalyst, 14 F.4th, at, 1311-12.
 88 Fed. Reg. 4068 (emphasis added).
 See https://endpts.com/cder-director-on-accelerated-approval-reforms-and-a-court-decision-that-will-send-a-chill-across-rare-disease-drug-development/.
 S. 4348, 117th Cong. § 510, available at, https://www.congress.gov/bill/117th-congress/senate-bill/4348.
 . 66 F.Supp.3d 217 (D.D.C. 2014), available at, https://scholar.google.com/scholar_case?case=8462693287912278712.
 Id., at, 237.
 79 Fed. Reg. 76888 (2014) (emphasis added), available at, https://www.govinfo.gov/content/pkg/FR-2014-12-23/pdf/2014-29920.pdf.