United States: Two Recent Court Decisions Clarify 'Reliance' Predicate For Hatch-Waxman Exclusivity And Patent Certification Obligations In The Context Of 505(B)(2) Applications

Two lawsuits against the Food and Drug Administration ("FDA") this year have clarified the 3-year data exclusivity and patent certification provisions that govern applications filed under section 505(b)(2) of the Food Drug and Cosmetic Act (the "FD&C Act"). In the exclusivity case, Veloxis Pharmaceuticals, Inc. v. United States Food and Drug Administration, et al., a United States District Court held that reliance on an earlier approval was not necessary for three year data exclusivity to delay the later filed 505(b)(2) application. Exclusivity arose solely because the later application was for the same drug as the earlier approval and would be approved for the same conditions of use. In the patent certification case, Takeda Pharmaceuticals USA, Inc. v. Burwell et al., a United States District Court held that reliance is an essential predicate for the patent certification obligations to arise, and that a later 505(b)(2) applicant who did not rely on an earlier drug approval was not obligated to make patent certifications for the earlier applicant's patents.

Veloxis involved competing applications for an extended release version of tacrolimus, an immunosuppressant used in kidney transplant patients to prevent transplant rejection. FDA originally approved tacrolimus in a twice-daily immediate release capsule in 1994. In 2013, the FDA approved the first extended release version of the molecule, based on an application filed by Astellas Pharma US, Inc. ("Astellas"). Critical to FDA's approval were two Astellas studies demonstrating the drug could successfully suppress the immune system in patients who had just received a kidney transplant ("de novo patients"). Approximately one year later, Veloxis Pharmaceuticals, Inc. ("Veloxis") submitted its own New Drug Application ("NDA") for an extended release version of tacrolimus, based on its own clinical studies for the drug. FDA, however, refused to approve the drug until the expiration of Astellas' three-year data exclusivity period from the clinical studies it had performed. FDA did, however, propose a compromise.  Because Astellas had only studied the treatment of de novo patients, FDA indicated that it would approve the Veloxis NDA for the treatment of patients who were already stabilized on an immunosuppressant regimen, and were being converted to a different regimen ("conversion patients").

Veloxis refused FDA's offer and filed a lawsuit against FDA arguing, among other things, that Astellas' data exclusivity did not bar its application because Veloxis' NDA did not rely on Astellas' clinical studies. Veloxis argued that reliance was an essential requirement for new data exclusivity to arise. The court, however, sided with FDA, and found that reliance was not needed for new data exclusivity to apply. Exclusivity arose solely because Veloxis' application was filed under section 505(b)(2), and Veloxis was seeking approval for the same "conditions of use" in de novo patients that Astellas' clinical studies had supported. Veloxis could secure approval for other conditions of use, as in the conversion patients FDA had proposed, but Astellas' data exclusivity prevented FDA from approving Veloxis' NDA for de novo patients for three years from Astellas' approval.

Takeda involved competing applications for colchicine, a drug used in the treatment of gout and Familial Mediterranean Fever. FDA first approved colchicine in combination with probenecid in 1961 for the treatment of gout, and subsequently approved a single ingredient tablet of colchicine marketed by Takeda Pharmaceuticals, U.S.A., Inc. ("Takeda") in 2009. Hikma Pharmaceuticals PLC ("Hikma") filed its own 505(b)(2) application for colchicine in 2013, as a single ingredient capsule, relying largely on FDA's earlier approval of the 1961 colchicine/probenecid combination. Hikma did not rely on Takeda's earlier approval to support its NDA, and had developed a capsule instead of a tablet to avoid FDA's duplicate policy, which precludes 505(b)(2) applications for duplicates of drugs previously approved by FDA. FDA will only approve a duplicate of a previously approved drug if the application is filed under section 505(j) of the FD&C Act.

Because Hikma's NDA did not rely on Takeda's earlier approval, FDA did not require Hikma to provide patent certifications to Takeda's Orange Book patents. As a consequence, Takeda did not learn of Hikma's NDA until after the NDA was approved, at which time Takeda sued FDA to revoke Hikma's approval.

The question for the Takeda court was whether Hikma was required to comply with the patent certification provisions in the FD&C Act, even though Hikma's 505(b)(2) application did not rely on Takeda's earlier approval. Takeda and its co-plaintiffs argued that the patent certification obligations applied because: (1) reliance is not required for the patent certification obligations to arise, as long as the later application is for the same drug as the earlier application, (2) Hikma did rely on Takeda's earlier approval because, even though Hikma's NDA did not cite any of Takeda's data, FDA extensively consulted its earlier approval of Takeda's drug during its review of Hikma's NDA, and (3) FDA's 505(b)(2) policies required Hikma to cite the closest drug in its 505(b)(2) application, not the 1961 colchicine/probenecid combination. The court ultimately rejected all of these arguments, holding that Hikma was entitled to rely on data of its own choosing in its 505(b)(2) application, and that it was not obligated to certify against Takeda's patents if it did not rely on data supporting Takeda's drug approval.

Sponsors of new drugs plainly wish to simplify the development process as much as possible. Section 505(b)(2) allows drug companies to avoid duplicative time consuming clinical and pre-clinical investigations by relying on data generated by third parties. The Veloxis and Takeda decisions give drug developers valuable insight and guidance when choosing data to rely on in their 505(b)(2) applications, and the ramifications of such reliance.

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