United States: Dead Zone: Are Your Biological Products Ready For FDA's Regulatory Transition?

On March 23, 2020, hundreds of approved and pending applications for biological products will face a regulatory transition as the U.S. Food and Drug Administration (FDA) implements the "deemed to be a license" provision of the Biologics Price Competition and Innovation Act of 2009 (BPCIA). On that date, FDA will replace all approved new drug applications (NDAs) and abbreviated new drug applications (ANDAs) for biologics with biologic license applications (BLAs) or abbreviated biologic license applications (aBLAs), remove these applications and their patents from the FDA's Orange Book, and largely extinguish the products' regulatory exclusivities. FDA will also reject all pending NDAs and ANDAs for biologics, requiring their resubmission as BLAs or aBLAs. Pharmaceutical companies and industry organizations have responded that these actions would constitute unlawful government takings and cause a regulatory dead zone wherein companies cannot gain FDA approval for follow-on biologics through any type of application. Despite guidance from FDA, significant uncertainty remains for pharmaceutical companies regarding their approved and pending applications and associated patent litigations. This article introduces the law underpinning FDA's regulatory transition, discusses FDA's interpretation of that law, and identifies issues that pharmaceutical companies should be considering now.

The Law

FDA regulates biologics under the Public Health Service Act of 1944 (PHSA), as amended by BPCIA, and the Federal Food, Drug, and Cosmetic Act of 1938 (FDCA), as amended by the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Act).1,2,3,4 BPCIA and Hatch-Waxman were each enacted to create abbreviated approval pathways for pharmaceutical products (with BPCIA being specific to biologics), provide regulatory exclusivities to incentivize innovation, and set forth frameworks under which patent disputes would be decided. But the exclusivities and patent dispute frameworks of BPCIA and Hatch-Waxman differ considerably.

The FDCA, as Amended by Hatch-Waxman

FDA approves innovative or reference drug products under the FDCA through "stand-alone" NDAs, which require full safety and efficacy reports. Approved innovative products may qualify for regulatory exclusivities, during which FDA cannot accept and/or approve other applications, including a seven-year exclusivity period for orphan drugs, a four- or five-year exclusivity for new chemicals, a three-year exclusivity period for significant and required changes, and a six­ month exclusivity period for pediatric studies.

Generic drugs are approved under the FDCA through 505(b)(2) applications and ANDAs, which partly or wholly rely on information in the reference product's NDA. Approved 505(b)(2) applications may qualify for some of the regulatory exclusivities available to approved NDAs, and the first ANDA filed may qualify for a 180-day exclusivity period against other ANDA follow-on products.

Products approved under the FDCA are listed in the FDA's Orange Book, along with patents covering approved reference products. 505(b)(2) applications and ANDAs for generic products must include one of four certifications as to each listed patent, the fourth of which (a paragraph IV certification) being that the patent is invalid or will not be infringed by the follow-on product. The filing of an application with a paragraph IV certification constitutes an artificial act of infringement whereby the patentee can sue before the follow-on product is marketed. Such a suit triggers an automatic stay of thirty months or more, where FDA cannot approve the application pending a final judicial decision.

The PHSA, as Amended by BPCIA

FDA approves innovative biologics under the PHSA through BLAs, which require full safety and efficacy reports. Approved innovative biologics may qualify for regulatory exclusivities that differ significantly from those under the FDCA, including a twelve-year exclusivity period during which FDA cannot approve aBLAs referencing the product, a four-year exclusivity period during which FDA cannot accept aBLAs referencing the product, a seven-year exclusivity period for orphan drugs, and a six-month exclusivity period for pediatric studies.

Biosimilars are approved through aBLAs. The first approved aBLA for an interchangeable biosimilar may qualify for an exclusivity of one year or more against other biosimilars deemed interchangeable.

Products approved under the PHSA are listed in the FDA's Purple Book, but patents covering approved reference products are not listed as they are in the Orange Book for products approved under the FDCA. aBLAs do not need to include patent certifications like those required for 505(b)(2) applications and ANDAs. Instead, the PHSA provides a complicated "patent dance" procedure for resolving patent disputes. Some of the intricacies of this procedure are currently pending before the U.S. Supreme Court,5 so uncertainty remains regarding how patent disputes will be resolved under the PHSA. Patent litigation under the PHSA does not involve an automatic stay of FDA approval pending a final judicial decision; instead, patent owners must seek to enjoin approval through the courts.

BPCIA's "Deemed to Be a License" Provision

Although FDA regulates biologics under both the PHSA and the FDCA, it licenses the majority of biologics under the PHSA. With the passage of BPCIA, however, all biologics must be licensed under the PHSA with an exception for certain transition products until March 23, 2020. According to FDA, exemplary transition products include those products listed in Table 1.

On March 23, 2020, all biologics must be approved under the PHSA. In addition, any approved NDAs or ANDAs for biological products will be "deemed to be a license" under the PHSA as of that date. This "deemed to be a license" provision presents numerous questions for pharmaceutical companies regarding their approved and pending applications and associated patent litigations—questions seemingly unanswered by the law itself.

FDA's Draft Guidance

In March 2016, FDA issued draft guidance to provide its interpretation of the "deemed to be a license" provision of BPCIA and its recommendations for industry.6 FDA explained that while the "deemed to be a license" provision is the "linchpin" of BPCIA's transition scheme, "the statute is silent regarding implementation."

Approved NDAs, 505(b)(2) Applications, and ANDAs

According to FDA, the "deemed to be a license" provision requires that as of March 23, 2020, all applications for biologics that were approved under the FDCA will cease to exist. FDA will replace these applications with approved BLAs and aBLAs as appropriate, with further guidance to come from FDA on how it will handle that transition. In addition, FDA will remove approved NDAs and ANDAs from the Orange Book, along with patents covering reference products. FDA explains that as of the transition date, any listed patents would "no longer be relevant for purposes of determining the timing of approval of a 505(b)(2) application (or ANDA)." As of the transition date, FDA will also terminate any unexpired period of regulatory exclusivity under the FDCA for transitioning applications, with the exception of orphan drug exclusivity. These applications will not, however, be eligible for regulatory exclusivities under the PHSA. Industry organizations have argued that FDA's termination of unexpired FDCA exclusivity will amount to an unconstitutional government taking of private property.7 

Pending NDAs and ANDAs

FDA also interprets the "deemed to be a license" provision as requiring rejection of all pending and tentatively approved applications under the FDCA for biologics. Companies may withdraw their applications and resubmit them under the PHSA. FDA recognizes that its interpretation could significantly affect development programs for proposed biologics intended for submission under the FDCA that are not able to receive final approval before March 23, 2020. It recommends that companies evaluate whether a planned submission under the FDCA would allow adequate time for approval before the transition date, considering factors such as whether the submission will likely require a second review cycle or whether patents or regulatory exclusivities will likely delay final approval. Some pharmaceutical companies and industry organizations have argued that FDA is creating a regulatory "dead zone" wherein companies cannot file applications for follow-on biologics under the PHSA and will not file under the FDCA unless they expect final approval before the transition date.8

Considerations for Pharmaceutical Companies

Despite FDA's guidance, significant uncertainties remain. Pharmaceutical companies should be developing strategies to prepare their biologic pipelines for March 23, 2020, in view of various regulatory and patent considerations. 

Companies with Approved Applications

On March 23, 2020, approved NDAs for biologics will transition to approved BLAs. Holders of such applications should consider how the transition will affect them and prepare accordingly. For example, NDA holders should consider whether they will lose unexpired regulatory exclusivities under the FDCA and be unable to qualify for exclusivities under the PHSA. If NDA holders have pending or expected litigations against 505(b)(2) or ANDA applicants under the Hatch-Waxman framework, they should consider what the status of those litigations will be as of the transition date and if there are options for accelerating the resolution of those litigations so they are decided before the transition date. If NDA holders expect that they will have litigations pending as of the transition date, they should consider whether the litigations will be terminated or modified once the 505(b)(2) applications or ANDAs at issue cease to exist. If NDA holders expect that litigations will not occur until after the transition date, they should consider whether they are ready for litigation under the "patent dance" framework of the PHSA. For example, they should be prepared to aggressively seek injunctive relief after the transition since there is no automatic stay of FDA approval associated with patent litigation under the PHSA.

There is no pathway under the PHSA that corresponds to section 505(b)(2) of the FDCA, and it is uncertain whether approved 505(b)(2) applications will transition to approved BLAs or aBLAs. Holders of approved 505(b) (2) applications should consider whether they would benefit more from a transition to a BLA or an aBLA, and whether their application would support that preferred type of application. For example, a company may need to transition their approved 505(b)(2) application to a BLA if their product does not meet the biosimilar or interchangeable requirements of an aBLA. But the company may need to transition to an aBLA if their application does not contain sufficient data or analyses to support a BLA. Companies should consider what steps they can or should take now to ensure their preferred transition. For example, a 505(b)(2) holder that prefers a transition to a BLA may want to proceed with collecting additional data or conducting additional analyses, and then submitting that information to FDA. 505(b)(2) holders should also consider whether they will lose unexpired regulatory exclusivities under the FDCA and be unable to qualify for exclusivities under the PHSA.

Approved ANDAs for biologics will transition to approved aBLAs on March 23, 2020. ANDA holders likely have the least to consider as the transition date approaches, other than whether any 180-day exclusivity would terminate such that other follow-on products could gain approval.

Companies with Pending Applications

Companies with pending applications under the FDCA should consider whether there are steps they can take to ensure approval before March 23, 2020, or if they would benefit more from withdrawing their application and refiling it under the PHSA. For example, a company with a pending NDA should consider whether it could qualify for regulatory exclusivities under the PHSA if it withdrew its application and refiled it as a BLA.

Companies with pending 505(b)(2) applications and ANDAs that are involved in patent litigation under the Hatch-Waxman framework should consider what the litigation status will be as of the transition date and if there are options for accelerating the resolution of those litigations so they are decided before the transition date. If companies expect that they will have litigations pending as of the transition date, they should consider whether the litigations will be terminated or modified once their application is replaced by a BLA or aBLA. 

Companies with Intended Applications

Intended NDA Filers

FDA recommends that companies intending to submit "stand-alone" NDAs for transition products consider submitting BLAs instead. Companies should decide whether to follow FDA's recommendation based on factors including their expected approval date, the strength of their patent portfolio, and eligibility for regulatory exclusivities. Nonetheless, it is difficult to imagine a scenario in which a company should proceed with plans to submit a "stand-alone" NDA. Companies that will not receive FDA approval by the transition date will likely gain nothing from filing an NDA. Companies that may receive FDA approval in time should also likely file a BLA instead, particularly given FDA's position that all FDCA exclusivities will terminate on the transition date and not be replaced by PHSA exclusivities.

Intended 505(b)(2) Application and ANDA Filers

As the transition date approaches, companies seeking approval for follow-on transition products are entering a regulatory dead zone. On one hand, these companies cannot file aBLAs until the reference product NDA transitions to a BLA on March 23, 2020. At the same time, they may be reluctant to file 505(b)(2) applications or ANDAs that may not be finally approved by the transition date.

FDA recommends that companies intending to submit 505(b)(2) applications consider modifying their development programs to (1) support submission of a BLA before or after March 23, 2020; or (2) support submission of an aBLA once there is a biological product licensed under a BLA that could be a reference product. In deciding whether to follow FDA's recommendation, companies should consider their expected approval date and whether pursuing a BLA would require additional data or analyses. For example, a company seeking to market a product that is not biosimilar to or interchangeable with the reference product should likely pursue a BLA.

Although FDA makes no recommendations for companies intending to submit ANDAs, it seems they might have more incentive to file ANDAs rather than waiting to file aBLAs. Companies intending to submit ANDAs for transition products should consider whether they will receive approval before the transition date and if so, whether they will be able to enter the market more quickly than if they pursued an aBLA. They should also consider whether they may be entitled to at least a portion of the first-filer 180-day exclusivity. Depending on timing, companies may also pursue an ANDA because they prefer to litigate under the familiar Hatch-Waxman framework rather than face the uncertain patent litigation landscape under BPCIA. Intended ANDA filers should consider, though, whether they would be able to receive final approval before March 23, 2020, in view of patents, regulatory exclusivities, and any stays under the Hatch-Waxman litigation framework.


Despite FDA's draft guidance, significant uncertainty remains regarding how BPCIA's "deemed to be a license" provision will affect pharmaceutical companies. Companies should consider how the provision and FDA's implementation of it may affect their approved applications for biological products, their biological product pipelines, and the timing and procedures of related patent litigations.


1 Public Health Service Act, Pub. L. No. 78-410, 58 Stat. 682, codified at 42 U.S.C. § 201 et seq. (PHSA).

2 Biologics Price Competition and Innovation Act of 2009, Sec. 7001-7003 of the Patient Protection and Affordable Care Act, Title VII, Subtitle A, Pub. L. No. 111-148, 124 Stat. 119, codified at 21 U.S.C. § 355(b)(5)(B), 35 U.S.C. § 271(e), and 42 U.S.C. § 262 (BPCIA).

3 Federal Food, Drug, and Cosmetic Act, Pub. L. No. 75-717, 52 Stat. 1040, codified at 21 U.S.C. § 301 et seq. (FDCA).

4 Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585, codified at 21 U.S.C. § 301 et seq. (Hatch-Waxman).

5 Amgen Inc. v. Sandoz Inc., 794 F.3d 1347 (Fed. Cir. 2015), cert. granted, 137 S. Ct. 808 (Jan. 13, 2017).

6 Food & Drug Administration, Draft Guidance for Industry on Implementation of the "Deemed to Be a License" Provision of the Biologics Price Competition and Innovation Act of 2009 (March 14, 2016), available at: https://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM490264.pdf (last accessed March 20, 2017).

7 E.g., Pharmaceutical Research and Manufacturers of America (PhRMA), Comments on FDA's Draft Guidance for Industry on Implementation of the "Deemed to Be a License" Provision of the Biologics Price Competition and Innovation Act of 2009 (May 13, 2016), available at: https://www.regulations.gov/document?D=FDA-2015-D-4750-0003 (last accessed March 22, 2017).

8 E.g., Biosimilars Council, Generic Pharmaceutical Association (GPhA), Comments on FDA's Draft Guidance for Industry on Implementation of the "Deemed to Be a License" Provision of the Biologics Price Competition and Innovation Act of 2009 (May 13, 2016), available at: https://www.regulations.gov/document?D=FDA-2015-D-4750-0010 (last accessed March 22, 2017).

Originally printed in American Pharmaceutical Review in April 2017.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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