This week, The Pink Sheet disclosed an interesting organizational development within FDA: the creation of a new Exclusivity Board to help assure consistency in exclusivity determinations made by the agency about new drugs. ([A#00121029018])

The board’s mission, as briefly outlined on FDA’s website, is to “focus on 5-year new chemical entity (NCE) exclusivity, 3-year new clinical trial exclusivity, and exclusivity for biological products.” In other words, the board is not going to wade into Orphan Drug Exclusivity, Pediatric Exclusivity or the ever fraught “first generic” exclusivity fields.

Instead, its focus really is on defining what counts as “new” when it comes to assessing “new” therapy. The board itself, however, isn’t new. It was formed in November 2011—and it has already had an impact.

In April, the board determined that Viropharma’s Vancocin is not entitled to three years of exclusivity based on new safety labeling. That decision allowed generic drug approvals and prompted Viropharma to sue, unsuccessfully.([A#00121029018])

So, the board may have been in operation for almost a year, but no one really knew about it.

That is all going to change.

First, the board is almost certainly involved in deliberating the new chemical entity status for Amarin Pharmaceuticals Inc.’s Vascepa (icosapant), a fish oil-based therapy that is (on the surface at least) already an element of the active ingredient used in GlaxoSmithKline PLC’s Lovaza (omega-3 acid ethyl esters). Amarin nevertheless asserts that icosapant should be deemed an NCE based on past precedents where a purified component of a previously approved active ingredient has been deemed a new ingredient.

Amarin’s quest for NCE status is being closely watched on Wall Street, although the actual commercial impact of the determination is questionable. (Vascepa has patents that go well beyond the potential five year exclusivity period, so the only real impact of FDA’s decision will be on when those patent challenges can begin – right away, or 4.5 years after approval).

On the plus side, Amarin’s request for exclusivity is clearly getting an audience: FDA hasn’t made any determination yet, but at least it is considering Amarin’s argument.

On the down side, however, the existence of the board means that Amarin likely has a tougher challenge to make its case than it would have in the past. The board was created in part to assure that exclusivity determinations are consistent and appropriate up front, and that changes the dynamics of the sponsor’s request for a determination.

No Longer An Easy Audience

Simply put, FDA’s historical incentives have been to be lenient in granting exclusivity.

That’s because the annual tally of new molecular entity approvals is the most closely watched statistic in judging the agency’s performance for the year. No one can seriously argue that NME approvals are a fair way to judge whether FDA is working hard or not, but that doesn’t matter. When FDA approves 30 NMEs (like it did last year) the headlines are positive. So accepting a plausible case for exclusivity is a win-win: the sponsor gets five years of added protection from generic competition, and FDA gets another plus on its year-end report card.

In fact, the board may already have had a quiet impact on the NME tally for this year—and for the history books.

In May, FDA rejected an exclusivity request from GlaxoSmithKline for the nasal inhaler Veramyst, saying that an esther form of fluticasone is still the same active ingredient, fluticasone. In that case, FDA explicitly reversed a prior precedent, its decision to grant NME status to Wyeth/Pfizer Inc.’s Torisel (temsirolimus) in 2007.

As a result, FDA’s NME tally this year is still “just” 30; had the agency followed the 2007 precedent, it would already be at 31—one more than last year’s banner year. (And Vascepa would make 32, if the agency does grant exclusivity).

But FDA’s decision has also quietly rendered a historically bad year—2007—even worse. That was the year when FDA approved just 17 NMEs, the worst single year total since 1983. Well, it turns out the tally was just 16. So 2007 was even worse than you thought. Also see "Turning Back the Clock: Drug Approvals Hit 25 Year Low" - Pink Sheet, 1 January, 2008.

Okay, obviously FDA’s retroactive decision that Torisel wasn’t a “new” molecule after all doesn’t really mean anything about innovation or the performance of FDA. That, in fact, is one reason why The RPM Report uses a different metric—Innovative Commercial Therapies—to measure the output of R&D each year. Also see "FDA’s Banner Year for Drug Approvals: Time to Change the Focus" - Pink Sheet, 1 January, 2012.

And the Vascepa’s and Veramyst’s are few and far between: deciding whether a small molecule is “new” or not is usually a pretty black-and-white question.

An Eye Toward Biosimilars

But that is not going to be the case in biologics, and that is where the exclusivity board’s long term impact is likely to be greatest.

Indeed, it is noteworthy that FDA muddled through exclusivity determinations for almost 30 years without the board when the only issues involved small molecules governed by the 1983 Hatch/Waxman law. But with the enactment of the 2010 biosimilar law, suddenly there is a whole new realm of exclusivity determinations to make.

The issues are bound to be more complex—biologic molecules are themselves so much more complex—but the stakes are also higher. An “innovator” biologic will receive 12 years of exclusivity under the biosimilar law—not just five. As the Hatch/Waxman era has evolved, the reality is that few drugs are developed without patent protection that extends well beyond the five year NME exclusivity; it just isn’t worth it to go through the process for such a short exclusivity period.

Twelve years is a different matter, and it is very likely that securing exclusivity will often be the difference between a viable project and one that is dropped altogether. In that sense, deciding what’s “new” has never been more important for FDA, and the new board will probably be very busy.

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