1. www.fitzpatrickcella.com Exclusivity And FDA Barriers To Market Entry In The US Brian V. Slater, Esq. Fitzpatrick, Cella, Harper & Scinto Pharmaceutical Patent Life Cycles, London, UK July 5, 2004 © 2004 Brian V. Slater

2. www.fitzpatrickcella.com 2 Non-patent Regulatory Exclusivities Regulatory “exclusivities” that may extend market protection beyond the patent term: –First ANDA patent challenger (180 days) –New Chemical Entities (5 years) –New Clinical Investigations (3 years) –Orphan Drug (7 years) –Pediatric (6 months)

3. www.fitzpatrickcella.com 3 Hatch-Waxman Basics Drug Price Competition and Patent Term Restoration Act of 1984 (“Hatch-Waxman”): –Patent term restoration (partial) to compensate innovators for pre-market approval regulatory delay –Process to approve duplicates of approved drugs that rely on safety and efficacy studies by innovator –Complex scheme of patent information and patent certifications –Regulatory exclusivities for new chemical entities, new clinical investigations and first ANDA patent challenger

4. www.fitzpatrickcella.com 4 Drug Application Types A New Drug Application (NDA) contains full reports of safety and efficacy studies conducted by or for applicant or as to which it has right of reference An Abbreviated New Drug Application (ANDA) is for a generic duplicate of an approved NDA product: –Borrows safety and efficacy studies from NDA –Must have identical active ingredient, route of administration, dosage form, strength, labeling and intended use –Must demonstrate bioequivalence

5. www.fitzpatrickcella.com 5 Drug Application Types A “505(b)(2)” application is an NDA for a modification to an approved drug (e.g., different active ingredient, dosage form, strength, etc.) –relies upon one or more studies not conducted by or for applicant and for which applicant has no right of reference (e.g., published studies or FDA finding of safety/efficacy of approved drug) –application must contain sufficient data to support the safety/efficacy of the modification A Biologics License Application (“BLA”) is an application to market a biological product (NB. some biologics are approved by NDA route)

6. www.fitzpatrickcella.com 6 Patent Information/Certification NDA applicant (including 505(b)(2)) must inform FDA of patents covering drug or method of using it Under 2003 FDA Final Regulations: –Method patent must cover approved method –Product-by-process patent should be listed only where novel product –Metabolite and intermediate patents should not be listed –Patent on different polymorphic form should be listed where testing shows bioequivalence FDA publishes information in “Orange Book”

7. www.fitzpatrickcella.com 7 Patent Information/Certification Generic applicant (either ANDA or 505(b)(2)) must make one of the following certifications: –(I) patent information on the listed drug not filed –(II) patent has expired –(III) the date on which such patent will expire –(IV) patent is invalid, unenforceable or not infringed –(viii) method of use patent does not claim a use for which applicant is seeking approval.

8. www.fitzpatrickcella.com 8 Patent Information/Certification Para IV filer must notify NDA holder/patent owner and provide detailed statement of basis for challenge Under Medicare Prescription Drug, Improvement, And Modernization Act 2003 (for Para IV certifications on or after Aug. 18, 2003), ANDA and 505(b)(2) applicants must give notice –within 20 days of confirmation of generic filing; and –at same time as any amendment or supplement regardless of whether already given notice of another Para IV Filing generic application (ANDA or 505(b)(2)) with a Para IV is an act of patent infringement

9. www.fitzpatrickcella.com 9 Patent Information/Certification NDA holder/patent owner has 45 days from receipt of Para IV notice to sue for infringement If timely suit is brought, 30-month stay of FDA approval of generic application unless earlier court decision of invalidity, non-infringement or unenforceability Under Medicare Act (for patents listed on or after Aug. 18, 2003), opportunity of one 30-month stay per generic application, limited to patents listed prior to generic application –Generic applicant still has to send notice re later listed patents but, if patent holder sues, no extra 30 month stay

10. www.fitzpatrickcella.com 10 First ANDA Patent Challenger Exclusivity Under Hatch-Waxman: –First ANDA Para IV filer (not 505(b)(2)) obtains 180-day exclusivity against other ANDA filers (not 505(b)(2)s) –Exclusivity triggered by earlier of first commercial marketing or “court decision” Several issues arising under Hatch-Waxman have been addressed by the Medicare Act

11. www.fitzpatrickcella.com 11 180-Day Exclusivity Eligibility Under Medicare Act, for ANDAs where no Para IV was made before Dec. 8, 2003: –an applicant that submits a “substantially complete” ANDA for a drug –that contains and “lawfully maintains” a Para IV certification “for the drug” –on the first day that any applicant does so –is a “first applicant” –and obtains 180-days exclusivity (unless forfeited)

12. www.fitzpatrickcella.com 12 180-Day Exclusivity Eligibility Two or more ANDA applicants first to file Para IV’s re different patents: –Pre-Medicare: FDA policy that each applicant shares exclusivity and neither blocks the other FDA policy rejected in TorPharm v. FDA, 2004 U.S. Dist. LEXIS 524 (D.D.C. Jan. 2, 2004) (appeal pending) –Under Medicare: Exclusivity goes to first to file Para IV with respect to any listed patent on day one (need not file as to all listed patents)

13. www.fitzpatrickcella.com 13 180-Day Exclusivity Eligibility Two or more ANDA applicants file Para IV’s on same patents on same day: –Pre-Medicare: Initially, FDA awarded exclusivity to first to file that day Since Jul. 2003, FDA policy that each applicant that files on day one shares exclusivity (unclear if FDA had that authority) –Under Medicare: All “first applicants” on day one share exclusivity and, presumably, are not blocked by each other

14. www.fitzpatrickcella.com 14 180-Day Exclusivity Trigger Under Hatch-Waxman, is exclusivity triggered by district court or appellate decision? –FDA policy since Mar. 2000, that exclusivity triggered by district court decision –Created quandary for ANDA applicants: launch at risk of appellate reversal and face potential lost profits damages, or potentially lose benefit of 180-day exclusivity

15. www.fitzpatrickcella.com 15 180-Day Exclusivity Trigger Under Medicare: –For ANDAs with no Para IV prior to Dec. 8, 2003: trigger is first commercial marketing of generic drug or brand drug by any “first applicant” court decision is no longer a trigger but may be a “forfeiture” event (see below) –For ANDAs with a Para IV prior to Dec. 8, 2003: (assuming trigger has not already occurred) trigger is commercial marketing or appellate decision (not district court)

16. www.fitzpatrickcella.com 16 180-Day Exclusivity Forfeiture First applicant’s 180-day exclusivity forfeited by first applicant’s: 1.Failure to market (see next slide) 2.Withdrawal of ANDA (either voluntarily or by FDA) 3.Amendment/withdrawal of qualifying Para IV as to all patents 4.Failure to obtain tentative approval within 30 months 5.Agreement with another ANDA applicant, NDA holder or patent owner adjudicated to violate antitrust laws 6.Expiration of all the patents that are subject of qualifying Para IV of first applicant

17. www.fitzpatrickcella.com 17 180-Day Exclusivity Forfeiture 1.Failure to market: A first applicant forfeits exclusivity by failing to market by the later of: 75 days after FDA approval of first applicant is made effective or 30 months after ANDA filing, whichever is earlier; or 75 days after one of following has occurred with respect to each patent in first applicant’s Para IV (in an infringement or d.j. action involving first applicant or another applicant with tentative approval) –court enters final decision from which no appeal has been/can be taken, or signs a settlement order or consent decree that enters final judgment, that patent is invalid or not infringed –NDA holder withdraws the patent information

18. www.fitzpatrickcella.com 18 180-Day Exclusivity Forfeiture Only forfeiture by all “first applicants” means subsequent applicants are not subject to exclusivity If all first applicants forfeit exclusivity, subsequent applicant does not inherit 180-day exclusivity 180-day forfeiture provisions apply to ANDAs filed for a drug as to which no Para IV was made before Dec. 8, 2003, except that –Exclusivity is forfeited where first applicant enters agreement violating antitrust laws

19. www.fitzpatrickcella.com 19 Generic Strategies re 180 days Declaratory judgment action by “subsequent” Para IV applicant that is not sued against patent owner to “burn off” first ANDA filer’s exclusivity. [See Teva Pharms., USA, Inc. v. U.S.F.D.A., 182 F.3d 1003 (D.C. Cir. 1999)] –must demonstrate “case or controversy”, i.e., an explicit threat or other action by patentee giving rise to a “reasonable apprehension” of suit? –BUT (i) Orange Book listing, (ii) prior history of suing generics, and (iii) refusal to grant covenant not to sue, do not demonstrate “reasonable apprehension” [See Teva Pharms. USA, Inc. v. Pfizer Inc., 69 USPQ2d 1791 (D. Mass. 2003); Dr. Reddy’s Labs. v. Pfizer Inc., 2003 WL 21638254 (D.N.J. 7/28/03)]

20. www.fitzpatrickcella.com 20 Generic Strategies re 180 days Under Medicare, ANDA applicant can still file declaratory judgment action for invalidity/non- infringement (if no suit during 45 day period) –“Case or controversy” must still be shown: “Courts shall, to the extent consistent with the Constitution, have subject matter jurisdiction” over such actions.” [35 U.S.C. § 271(e)(5)] –Strategy less of an issue now because: For new Para IVs, trigger is now only commercial marketing and forfeiture is based on appellate decision For ANDAs with Para IV before Dec. 8, 2003, trigger is now appellate (not district) decision

21. www.fitzpatrickcella.com 21 Generic Strategies re 180 days Medicare also entitles generic to bring a counterclaim in infringement suit to delist patents from Orange Book –Previously, generic had no private cause of action against NDA holder [See Mylan Pharmaceuticals, Inc. v. Thompson, 268 F.3d 1323, 1332 (Fed. Cir. 2001); see also Apotex v. Thompson, 349 F.3d 1335 (Fed. Cir. 2003)] –First Para IV ANDA filer likely will not want to do this because it would lose 180-days exclusivity, but subsequent ANDA filer may.

22. www.fitzpatrickcella.com 22 FTC Review Of Agreements Under Medicare, the following must be filed with Assistant Attorney General and FTC: –Agreements between ANDA Para IV filer and brand name co. regarding (i) manufacture, marketing or sale of brand name drug or generic drug or (ii) 180-day exclusivity period –Agreements between two ANDA Para IV filers regarding 180-day exclusivity period –Doesn’t apply to 505(b)(2) applicant Agreements must be filed by each party prior to first commercial marketing of drug and within 10 business days of execution Applies to agreements entered into on or after Jan. 8, 2004

23. www.fitzpatrickcella.com 23 New Chemical Entity Exclusivity Eligibility: NDA (including 505(b)(2)) for a drug no “active ingredient” (including ester or salt) of which has been approved in any other NDA Period: 5 year exclusivity from NDA approval (4 years where Para IV is filed) –Where Para IV is filed between 4 th and 5 th years, and timely patent action is commenced, 30 month statutory stay is extended so that 7½ years elapses from NDA approval Bars: Submission of ANDA or 505(b)(2) (not full NDA) for same drug for which exclusivity granted

24. www.fitzpatrickcella.com 24 New Chemical Entity Exclusivity FDA regulation that active ingredient means “active moiety”, which in turn is defined as: – the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or coordination bonds), or other noncovalent, derivative (such as a complex, chelate, or clathrate) of the molecule, responsible for the physiological or pharmacological action of the drug substance. [59 Fed. Reg. 50358 (Oct. 3, 1994)]

25. www.fitzpatrickcella.com 25 New Clinical Investigations Exclusivity Eligibility: NDA (including 505(b)(2)) or supplemental NDA that contains: –reports of “new clinical investigations” (other than bioavailability studies) that are –“essential to the approval” and are –“conducted or sponsored by the applicant” Period: 3-year period of exclusivity from approval of NDA or supplemental NDA Bars: Approval of ANDA or 505(b)(2) application (not NDA) for same conditions of approval of the drug for which exclusivity was granted

26. www.fitzpatrickcella.com 26 New Clinical Investigations Exclusivity “Clinical investigations” means in humans “New” means investigations that have not already been relied upon by FDA to approve another product “Essential to approval” means there are no other data available that could support approval “Conducted or sponsored by the applicant” means either applicant was named sponsor of study or provided 50% or more of the cost of conducting the study –purchase of non-exclusive rights in a study is insufficient

27. www.fitzpatrickcella.com 27 New Clinical Investigations Exclusivity Clinical investigations that DO qualify for exclusivity: –New product (NP); new combination (NC); new indication (I); new dosage form (NDF); new strength (NS); new dosing schedule (D); new route of administration (NR); new patient population (NPP); and OTC switch (RTO) Investigations that DO NOT qualify for exclusivity: –Labeling changes involving warning or risk information –Label comprehension studies in qualifying OTC switch

28. www.fitzpatrickcella.com 28 New Clinical Investigations Exclusivity Labeling exceptions: –FDA will allow generic applicant to exclude from label an indication that is subject to exclusivity or patent [21 C.F.R. 314.94(a)(8)(iv) (1997)] –Product still rated as therapeutically equivalent so pharmacists may substitute for the exclusive uses Brand strategy: replace old labeling with labeling containing only protected new indication to prevent generic carve out –2001 FDA Draft Guidance: proposed allowing generic applicant to copy withdrawn labeling unless it was withdrawn for safety reasons

29. www.fitzpatrickcella.com 29 Salts and Esters Salts/esters of previously approved acid/salt/ester –Currently not considered “same” for ANDA filing purposes, so have to file as 505(b)(2) –No NCE exclusivity because same “active moiety” See also Pfizer v. Dr. Reddy’s, 359 F.3d 361 (Fed. Cir. 2004) (patent term extension granted for different salt than previously- approved salt where same active moiety) But what if you can show salt/ester has different pharmacological properties? –3-year NCI exclusivity (new ester or salt = NE)

30. www.fitzpatrickcella.com 30 Polymorphs Polymorphic forms of previously-approved drugs, e.g., different crystalline form, different waters of hydration, solvates and amorphous forms –ANDA generally acceptable because considered same active ingredient (provided it performs the same) Under new Orange Book listing rules, if patentee lists patent on the polymorph, aids generic argument ANDA is proper on polymorph –No NCE exclusivity because same “active moiety” as previously approved drug –3-year NCI exclusivity?

31. www.fitzpatrickcella.com 31 Enantiomers Enantiomers of previously-approved racemate: –Not currently eligible for NCE exclusivity 1989 FDA proposed regulations saying no NCE because racemate “contains” the enantiomer 1994 FDA regulations took same position despite one contrary comment 1997 FDA Request for Comments: should enantiomers of previously-approved racemate be eligible for NCE exclusivity? No FDA proposed rules promulgated yet

32. www.fitzpatrickcella.com 32 Enantiomers –Should FDA grant NCE exclusivity for enantiomer of previously-approved racemate? What if one enantiomer is active and the other is inactive? What if both enantiomers share activity but one has an additional activity? What if both enantiomers are active but one is less toxic? –Eligible for 3 years NCI exclusivity (e.g., Nexium, Lexapro)

33. www.fitzpatrickcella.com 33 Orphan Drug Exclusivity Eligibility: First NDA or BLA approved for a “rare” disease or condition, i.e., one that –affects less than 200,000 persons in US, or –affects more than 200,000 persons in US but there is no “reasonable” expectation that development costs for drug will be recovered from US sales Period: 7 years from NDA or BLA approval Bars: Approval of another NDA, ANDA, 505(b)(2) or BLA for same drug for same disease or condition [See Sigma-Tau Pharms. v. Schwetz, 288 F.3d 141 (4 th Cir. 2002) (ANDA not barred where not labeled for Orphan indication)]

34. www.fitzpatrickcella.com 34 Orphan Drug Exclusivity “Same drug” means: –For small molecules, a drug that contains same active moiety –For large molecules, a drug that contains the same principal molecular structural features Unless –Second drug can be shown to be “clinically superior” Greater effectiveness Greater safety or Major contribution to patient care –E.g., Berlex Labs. v. FDA, 942 F. Supp. 19 (D.D.C. 1996) ( Avonex “clinically superior” to Betaseron, and not barred from approval, because of lower incidence of skin reactions)

35. www.fitzpatrickcella.com 35 Pediatric Exclusivity Eligibility: Timely submission of studies in pediatric patients upon written request of FDA for drugs that are approved or in approval process –Studies need not be successful Period: 6 months at end of all other exclusivities (NCE, NCI, OD, Orange Book listed patents) Bars: Same as underlying exclusivity (except patents): –Submission of ANDA or 505(b)(2) in case of NCE –Approval of application in case of NCI and OD Sunset: October 1, 2007 [Best Pharmaceuticals for Children Act 2002]

36. www.fitzpatrickcella.com 36 Pediatric Exclusivity and NCI Successful pediatric studies are eligible for 3-year NCI exclusivity –BUT, since 2002, ANDA applicant that carves the indication out of its label is not subject to NCI exclusivity –Statute does not say 505(b)(2) can avoid NCI exclusivity by carve out

37. www.fitzpatrickcella.com 37 Pediatric Exclusivity and Patents Runs from expiration (including any extensions) of each Orange Book listed patent Bars approval of ANDA or 505(b)(2) for 6 months Not a patent term extension so commercial activities after patent expiration are not subject to damages or injunction In case of Para II and Para III (patent expiration), any exclusivity automatically begins at patent expiration

38. www.fitzpatrickcella.com 38 Pediatric Exclusivity and Para IV’s In case of Para IV applicant statute says pediatric exclusivity awarded if court determines patent is valid and infringed Several questions arise in the case of a Para IV applicant: Q.Does pediatric exclusivity attach if patent expires before patent litigation is resolved (assuming 30 month stay did not expire before patent expiration)? A. Yes. FDA will change generic applicant’s Para IV to a Para II, so exclusivity attaches upon patent expiration. [Ranbaxy v. USFDA, 30 F.Supp.2d 15 (D.C. 2004), aff’d 2004 WL 886333 (D.C. Cir. 2004) (unpublished)]

39. www.fitzpatrickcella.com 39 Pediatric Exclusivity and Para IV’s Q.Does pediatric exclusivity attach if patent expires before patent litigation is resolved (assuming 30 month stay does expire before patent expiration)? A.Presumably, but not yet decided. –FDA may delay generic application for up to 90 days while reviewing studies –Once statutory 90 day review period has passed, there is no barrier to generic approval. –If patentee subsequently wins patent suit, ANDA applicant can be enjoined, and (presumably) injunction will cover pediatric term.

40. www.fitzpatrickcella.com 40 Pediatric Exclusivity and Para IV’s Q.Does pediatric exclusivity attach if patent holder does not sue Para IV filer within statutory 45 days but wins patent suit (i.e., no 30 month stay)? A.Not yet decided but complaint has been filed in Mylan v. Thompson (D.D.C.) by ANDA Para IV applicant that was given “final” FDA approval because it was sued after 45 days had expired, and which subsequently lost patent suit. Applicant challenges award of pediatric exclusivity and FDA’s changing of its Para IV to a Para II certification.

41. www.fitzpatrickcella.com 41 Pediatric Exclusivity and 180-day Exclusivity Q.Does pediatric exclusivity extend the 180-day first ANDA patent challenger exclusivity? A.Yes. Recent legislation provides that 180-day exclusivity is extended so that it does not overlap with pediatric exclusivity. [Best Pharmaceuticals for Children Act 2002]

42. www.fitzpatrickcella.com 42 Second Pediatric Exclusivity Eligibility: Submission of supplemental application –for a “new use”, i.e., one not included in labeling of approved drug that –qualifies for 3-year NCI exclusivity and –contains studies in pediatric patients requested by second FDA written request Period: 6 months added on to the end of 3-year NCI exclusivity for the new use (does not extend other exclusivities or patents) Bars: Approval of ANDA or 505(b)(2)

43. www.fitzpatrickcella.com 43 505(b)(2) NDAs An end run around statutory “sameness” concept for borrowing safety and efficacy? –Citizen’s Petitions filed by Pfizer challenging FDA’s use of 505(b)(2) NDAs: Only ANDAs should be allowed to borrow innovator’s safety and efficacy data Dr. Reddy’s should not be allowed to file 505(b)(2) application for a different salt of Norvasc and borrow Pfizer’s proprietary data (Pfizer’s NDA contained data for both salts) –Oct. 2003 FDA responded that it may reconsider use of 505(b)(2) for different form of active, but then approved Dr. Reddy’s salt variation anyway –Pfizer sued FDA (before CAFC decision granting Pfizer PTE for Dr. Reddy’s salt variation)

44. www.fitzpatrickcella.com 44 “Follow-on” Biologics No abbreviated procedure for BLAs FDA Draft Guidance allows 505(b)(2) NDAs for generic “biologics” that are regulated as drugs, e.g., human insulin, human growth hormone. BIO filed Citizen Petition in 2003 opposing use of 505(b)(2)s for follow-on biologics arguing it does not allow applicant to borrow innovator’s proprietary data Oct. 2003 FDA responded by reaffirming its view of 505(b)(2) but deferring on scientific issues associated with follow-on biologics FDA working on guidances on approval of follow-on biologics (WSJ 2/18/04)...

45. www.fitzpatrickcella.com Thank You BRIAN V. SLATER is a partner with Fitzpatrick, Cella, Harper & Scinto in New York, where he has practiced since graduating from the University of Pennsylvania in 1990. Prior to that he obtained his LL.B. from the University of Strathclyde in Scotland. He specializes in patent litigation, licensing and counseling especially in the pharmaceutical and biotechnology fields. Mr. Slater has extensive experience litigating patents against generic pharmaceutical companies under the Hatch-Waxman Act. Among the clients Mr. Slater has represented in the pharmaceutical/biotech field are Hoffmann-La Roche, GlaxoSmithKline, Novartis, G.D. Searle and Yamanouchi. Mr. Slater has argued before the Court of Appeals for the Federal Circuit and numerous U.S. district courts, and is a frequent author and speaker on intellectual property-related issues. Fitzpatrick, Cella, Harper & Scinto 30 Rockefeller Plaza New York, New York 10112 Tel: 212-218-2100 Fax: 212-218-2200 bslater@fchs.com