FDA had a mixed day in court on Sept. 5 as one judge rejected its policy for denying Depomed Inc.’s Gralise orphan drug market exclusivity and another upheld its decision to allow ANDA sponsors to carve out indications for generics even though they may overlap partially with a patented method of use.

The decision in the Depomed case may change how FDA handles requests for orphan drug designations for me-too drugs as the agency could decide to require sponsors to show clinical superiority before granting the designation. Meanwhile, the label carve-out case involving generic versions of Hospira Inc.’s Precedex (dexmedetomidine hydrochloride) affirms FDA’s authority to make such decisions without going through formal rulemaking procedures.

Depomed filed suit against FDA in 2012 when the agency withheld orphan exclusivity for Gralise (gabapentin) for management of post-herpetic neuralgia because Depomed did not show that it was clinically superior to Pfizer Inc.’s gabapentin drug Neurontin for the same indication Also see "FDA’s Orphan Exclusivity Requirement For “Clinical Superiority” Challenged In Court" - Pink Sheet, 26 September, 2012..

In a memorandum opinion, District of Columbia District Judge Ketanji Brown Jackson said Gralise was entitled to a period of seven-year marketing exclusivity because it had met the two statutory requirements of the Orphan Drug Act: it was designated an orphan drug by FDA and it was approved for marketing.

FDA had argued that the statute is not intended to reward the development of drugs that merely duplicate drugs already on the market and offer no benefit to patients over the existing drugs. Depomed contended that Neurontin never received orphan drug designation or orphan drug exclusivity for the post-herpetic neuralgia indication and that Depomed therefore should not have to show Gralise’s clinical superiority to Neurontin to obtain orphan drug exclusivity.

FDA Can Control Circumstances For Awarding Exclusivity, Court Says

The agency designated Gralise an orphan drug for treatment of post-herpetic neuralgia in 2010, saying the sponsor (then Abbott Laboratories Inc., which had rights to the drug and subsequently returned them to Depomed) would have to prove clinical superiority to obtain seven years of marketing exclusivity. The court noted that FDA later told Abbott in a phone call that it had considered Gralise’s orphan drug designation to be conditional because it was based on a “hypothesis of clinical superiority over” Neurontin and that Abbott had failed to prove this hypothesis.

The court indicated that FDA could prevent a drug from obtaining orphan exclusivity simply by not designating it an orphan drug.

“FDA could require designation applicants to show clinical superiority before granting their product orphan-drug designation,” court says.

“As luck would have it for the FDA, the agency has the ability and opportunity to control the circumstances under which marketing exclusivity attaches because the FDA is responsible for determining when to designate a drug as an orphan drug,” the opinion states.

Responding to FDA’s concerns that a sponsor with exclusivity for a particular drug could tweak the formulation and resubmit an application for an additional exclusivity period, the court said this would “only occur if the FDA permitted it to happen.”

“For example, FDA could require designation applicants to show clinical superiority before granting their product orphan-drug designation, a change in the regulations that would allow the FDA to maintain the benefits of its clinical superiority requirements and also forestall the hypothetical ‘serial exclusivity’ problem while at the same time avoiding any conflict with the plain language of the statute’s exclusivity provision,” the court says.

FDA had told the court that “Depomed would receive an exclusivity windfall for failing to demonstrate clinical superiority and create a new class of super exclusivity holders that can block approvals of generic versions of older drugs, which would turn the Act on its head.”

But the court said that “nothing in the statute even remotely suggests that Congress intended to incentivize only one sponsor to produce a particular drug. … Nor can it be said that permitting Depomed to grasp the brass ring of exclusivity for Gralise is unfair to the manufacturers of the prior iterations of the drug, since each had every opportunity to seek exclusivity and failed to do so.”

The court also noted that FDA had identified 14 prior instances that provide a precedence for its Gralise decision. However, the court said none of them involve the facts in this case. It said only one case was similar, that in which FDA recognized exclusivity for Bayer HealthCare Pharmaceuticals AG’sKogenate (recombinant antihemophilic factor) even though another drug with the same active ingredient previously had been approved for marketing for the same rare disease or condition but had never been designated an orphan drug.

Hyman, Phelps & McNamara attorney Kurt Karst said in an FDA Law Blog post that the decision raises several questions, including what effect it will have on other drugs with orphan designations that obtained approval but were unable to obtain orphan drug exclusivity due to an inability to demonstrate clinical superiority. He questioned whether the agency now will grant exclusivity to those drugs. He also asked whether FDA will impose a higher bar at the orphan designation step for drugs that are claimed to be clinically superior.

Depomed said in a release that with the orphan drug exclusivity and a recent victory in patent litigation against Allergan PLC, Gralise will not face generic competition until 2024.

Asked if it would appeal the decision, FDA said it does not comment on ongoing litigation.

FDA’s Generic Precedex Decision Not Subject To Notice And Comment, Court Says

In the label-carve out case, Hospira filed suit against HHS and FDA after the agency determined that ANDA sponsors of generic Precedex could submit a section viii statement to carve out one of Precedex’s indications from their labeling. The generic labeling excluded the still-patented method of using the drug (for sedation in an intensive care unit) and included the unpatented method of use (for procedural sedation).

But Hospira claimed that the patent use code, which accompanies a method of use patent and describes how a drug is to be used, covered both indications as it completely overlaps the first indication and partially overlaps the second indication ([A#14140819006]).

“FDA is not obligated to consider how the product might be used by physicians beyond the approved labeling,” the court concludes.

The dispute has broad implications for the biopharmaceutical industry as it could impact when ANDA sponsors can obtain approval of generics by carving out unpatented indications from the label. Mylan NV and Par Pharmaceutical Inc., which began shipping their dexmedetomidine generics after FDA’s decision, intervened in the suit on the side of FDA, while Sandoz Inc., which has the right to launch a generic version of Precedex in December under a patent settlement, intervened on behalf of Hospira.

On Aug. 19, Maryland District Judge George Jarrod Hazel issued an order granting Hospira’s request for a temporary restraining order and staying FDA’s decision allowing ANDA sponsors to obtain approval of generic Precedex for procedural sedation. He also ordered FDA to recall any generics on the market and rescind its ANDA approvals.

But the following day, the judge granted Mylan’s motion to stay the portion of the ruling regarding the recall and ANDA approvals ([A#14140820003]).

In a Sept. 5 opinion, Judge Hazel completely reversed his initial decision in favor of Hospira and ruled for FDA. He concluded that the agency was correct in determining that there was no reference to Precedex’s protected method of use – intensive care unit sedation – on the proposed generic label, “regardless of the fact that some physicians might use the generic product in the ICU at some point in the future.”

Hospira’s argument “boils down to what doctors may do with generic Precedex,” the ruling states. “For purposes of the ‘overlap’ analysis, however, it is irrelevant that the FDA has acknowledged the possibility that generic Precedex may be used for the procedural indication in an ICU setting since all references to the protected ICU use code have been carved out of the proposed label.”

“FDA is not obligated to consider how the product might be used by physicians beyond the approved labeling,” the court concludes.

The judge also rejected Hospira’s argument that FDA’s decision amounted to a new rule that was subject to notice and comment rulemaking requirements of the Administrative Procedure Act.

“FDA has an established history of approving section viii ANDAs for broad, general indications even though they may, as here, partially overlap with a protected method of use where all express references to the protected use were carved out of the generic’s label,” the ruling states. “Indeed, this is exactly the practice the FDA followed in its handling of the approval of generic repaglinide, generic tramadol, and generic oxandrolone.”

Hospira filed an appeal of the decision and a motion for injunction pending appeal with the U.S. Court of Appeals for the Fourth Circuit. Sandoz also filed an appeal with the court.

FDA May Modify Orphan Exclusivity Reg, But Label Carve-Out Policy Is Intact

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