Generic Exclusivity Forfeiture Provisions Put FDA In “Hot Seat”

FDA is grappling with how to define triggers for forfeiture of generic exclusivity as it develops regulations to implement changes in Hatch/Waxman created by the Medicare Modernization Act of 2003.

"FDA is going to be a little more in the hot seat in terms of approval time because of the extended approval forfeiture element," Associate Counsel for Drugs Elizabeth Dickinson said Sept. 30 at the Institute for International Research's Annual Generic Drugs Summit in Washington, D.C.

"I don't want to go into tremendous detail on these because we're still thinking on these," she said.

Under MMA, first-filing generic companies would have to "forfeit" their 180-day exclusivity if they do not launch within 75 days of the latter of two events: either an ANDA approval or an appeals court decision.

Dickinson acknowledged that FDA will be faced with a dilemma if "there appears to be no chance that second event is ever going to happen."

"I love those questions, even if I can't provide an answer, and on this one I can't. It gets us thinking, as we're working on regs, that's something that we didn't think of, we need to respond to," Dickinson said.

Given the nature of the applications that are affected, the forfeiture provisions will not come into effect until at least sometime next summer, Dickinson predicted.

During her presentation, Dickinson expressed disappointment that generic companies did not offer more formal comments on this issue, although she understood why there was a lack of specificity.

"You want to make sure that if the facts go against you in the future, you're not going to be foreclosed from making an argument, because you made a counter-argument in the docket, and I know that we sort of play that game too."

Dickinson emphasized the need to have such comments when developing regulations so FDA may take them into consideration. Even if the regs are challenged, it would help the generic industry to see what other firms think for planning purposes, she said.

¹ Sandoz' comments on implementation of Hatch/Waxman reform do address the issue, albeit in a request for FDA to explain how it would handle 11 different scenarios.

Even without a clear regulatory framework, generic firms are already making strategic plans and choosing which drugs to develop and what patents to challenge.

"It will be interesting for you all to sit down in the future and figure out if you made the right call or not," Dickinson said.

A broad interpretation of the forfeiture provisions could significantly impact the profits earned by a first filer generic company's exclusivity rights.

"If this is the effect of those provisions, many companies will have to reassess and revalue their development portfolios as well as their future development strategies," Sandoz' comments state.

Dickinson acknowledged the lack of certainty for the generic industry. "You have not gotten the certainty you wanted out of the MMA. Hopefully, there will be more certainty, but you don't have it yet."

The new forfeiture provisions will be extremely complicated for both the generic industry and FDA, she said.

Dickenson highlighted a pending case in D.C. federal court that could impact FDA's development and implementation of generic regulations. Teva Pharmaceuticals sued the agency on July 26 in response to FDA's decision that the company's exclusivity for generic pravastatin was triggered by an earlier court order and has already expired (² (Also see "Teva Loses Exclusivity On Generic Pravachol; Earlier Court Case Was Trigger" - Pink Sheet, 11 Jul, 2005.), p. 28).

"It will be interesting to see what the district court does, what the district court of appeals does, especially because there are conceivably implications for this decision for how MMA works, and for how the forfeiture provisions work," she said.

Teva appears to need to win the case relatively quickly to enjoy any exclusivity since Bristol-Myers Squibb's patent on Pravachol expires April 20, 2006.