The ninth installment of Ropes & Gray's podcast series, Non-binding Guidance, focuses on changes to the FDA regulation of certain products pursuant to the "Deemed to be a License" provision, also known as the transition provision, of the Biologics Price Competition and Innovation Act (BPCIA). On the transition date of March 23, 2020, around 90 insulin and other protein products currently regulated as drugs will be deemed to have Biologic License Applications and subject to regulation as biological products. In this episode, life sciences regulatory and compliance attorneys Kellie Combs and Deborah Cho are joined by Filko Prugo, chair of the life sciences IP litigation group, to discuss the transition provision and its anticipated impacts on regulatory exclusivity, patent litigation, and the biologics and biosimilars market.
Kellie Combs: Hi, I'm Kellie Combs, a partner in the life sciences regulatory and compliance practice group at Ropes & Gray, and based in our Washington, D.C. office. Welcome to Non-binding Guidance, a podcast series from Ropes & Gray focused on current trends in FDA regulatory law as well as other important developments affecting the life sciences industry. I'm here today with my colleagues Filko Prugo and Deborah Cho, and we'll be talking about the so-called "transition provision" of the Biosimilars Price Competition and Innovation Act. Filko is chair of our life sciences IP litigation group and based in New York. He's a litigator and a USPTO-registered patent attorney. For over 20 years, Filko has been extensively involved in all aspects of contested patent matters and licensing disputes, bolstered by a solid foundation in chemistry and biotechnology. He's first-chaired proceedings in every venue of importance, including the PTAB, federal district courts and the Federal Circuit. Filko also has experience handling arbitrations under the American Arbitration Association, and with pre-litigation work having handled comprehensive preparatory investigations for numerous blockbuster drugs. Deborah is an attorney here in D.C. with me, and we work together in our life sciences regulatory and compliance practice. Prior to joining Ropes, Deborah worked at the FDA for nearly four years as associate chief counsel for drugs in the Office of the Chief Counsel. There, she counseled FDA's Center for Drug Evaluation and Research on generic drugs, biosimilars and pediatric drug development, serving on the Office of Chief Counsel's biosimilars team, and the MMA Rule Working Group, which was a group designed to handle the 2016 Hatch-Waxman regulations.
So, as I mentioned, we'll be talking today about the transition provision of the Biosimilar Price Competition and Innovation Act. As we know, the market for biosimilars is continuing to become more robust. Last year, FDA approved ten biosimilars, making 26 approved in total. Commissioner Hahn, like his predecessors, has expressed support for faster approval of biosimilars to increase competition in the market, and presumably, to lower prices. Sarah Yim, who was just named the permanent director of the Office of Therapeutic Biologics and Biosimilars, or OTBB, has expressed a similar sentiment. With enhanced competition as a key driver, we're expecting a couple of important developments in the short term. The "transition provision" will take effect on March 23 of this year. On that date, the approved new drug applications for insulin and certain other protein products—around 90 in total—will be deemed to have a "Biologic License Application" or a "BLA" approval. This has significant implications for industry, most notably that the transition products can now serve as reference products for biosimilars. Let's start with the basics. Deborah, can you describe the transition provision?
Deborah Cho: Sure, Kellie. The transition provision is part of the Biologics Price Competition and Innovation Act, or the BPCI Act, which was enacted in 2010 as part of the ACA. The BPCI Act is best known for creating the biosimilars pathway, but it also made several other important changes to the biologics framework. The BPCI Act amended the definition of biological product in the Public Health Service Act, such that protein products are now considered biological products. Protein products had historically been regulated as drugs and were approved as NDAs. In FDA's recently published final rule, the agency interpreted protein to mean "any amino acid polymer with a specific defined sequence that is greater than 40 amino acids in size." Examples of protein products are insulin and human growth hormone. The BPCI Act also included the transition provision for these protein products. Under the act, applications for biological products must be submitted as BLAs starting on March 23, 2020. The transition provision, which is also referred to as the "Deemed to be a License" Provision, says that for those biological products already approved as NDAs, so these are products such as insulin, these NDAs will be deemed to be BLAs on March 23, 2020. I should also add here that there was some additional clarity provided in the recent Appropriations Act, which we'll describe in more detail shortly. Kellie, what guidance has FDA provided on the transition so far?
Kellie Combs: The act provided very little detail about how the transition would actually occur. In fact, there was less than one page of text in the statute, so guidance from FDA has been really critical here. In addition to providing a lot of basic information including some FAQs on the agency's website, FDA has also issued two relevant guidance documents. In draft guidance, issued in 2018, FDA addressed a number of administrative questions like who to contact if you think a product should or shouldn't transition, what BLA number an approved NDA will get, what the user fees will be, and so on. That draft guidance also clarified that all transitioning NDAs, including 505(b)(2) products, will be deemed to be 351(a) BLAs, as opposed to 351(k) BLAs. What that means as a practical matter is that these could be considered reference products rather than biosimilars. The guidance also clarified that regulatory requirements applicable to BLAs will apply to the set of deemed BLAs—or example, labeling, CMC and other requirements will be in play. The guidance also addressed a compliance policy for labeling. So, as I mentioned, the set of transition BLAs will now be subject to the BLA labeling requirements. And there are a number of changes that these new BLA holders will need to make in order to comply with the regulatory obligations. FDA said in the guidance that it would provide a five-year grace period during which it didn't intend to enforce those labeling requirements in order to give the manufacturers time to get the labeling up-to-date and in compliance. In final guidance, which was initially issued in draft form in 2016 and then finalized in 2018, FDA covered a number of key points. First, the guidance lays out how the transition will occur. In the guidance, FDA said that only approved NDAs will transition. That meant that NDAs pending on the transition date will not transition, and that those applications would need to be resubmitted as BLAs. Now, notably, this changes later, which we'll discuss here in a little bit. So now that we've talked through various issues related to regulatory exclusivity, Filko, I'd be curious about your thoughts with respect to patent implications of the transition.
Filko Prugo: Thanks, Kellie. Certainly the loss of Hatch-Waxman exclusivity and the absence of the 12-year reference product exclusivity, as well as the change from the Orange Book to the Purple Book, are both very interesting from a patent litigation perspective. Let's start with the absence of FDA regulatory exclusivity. That, combined with the fact that the BPCIA, as I like to refer to it, unlike the Hatch-Waxman Act, does not provide for a 30-month stay of FDA approval, means that the FDA is unencumbered in its ability to approve aBLAs, even if the applicant is embroiled in a patent litigation. So as such, we can expect that an aBLA applicant that is involved in a patent dispute will have every incentive to streamline the litigation and will be looking to go to trial quickly. Perhaps more importantly, innovators will have to rely on (and this is a huge change) preliminary injunctions to stop an aBLA launch. Gone are the protections provided by the Hatch-Waxman 30-month stay, and that's a really significant change, in particular given preliminary injunctions are not automatic and, in fact can be very difficult to obtain. As for listing patents, what you can list in the Orange Book is relatively limited. And so with the transition to the Purple Book, companies have the opportunity to insert additional patents during patent litigation. Perhaps the textbook example here relates to manufacturing patents – those cannot be listed in the Orange Book, but certainly could be set forth as part of the BPCIA's patent dance. I think, Kellie, it's also worth noting here that there is some proposed legislation floating around that would require innovator companies to list patents in the Purple Book in a manner akin to what is currently happening with respect to the Hatch-Waxman Act (i.e. the Orange Book).
Kellie Combs: Thanks, Filko. Deborah, now turning back to you, what are the impacts to companies developing follow-on versions of protein products?
Deborah Cho: Kellie, as you were discussing, FDA had initially said only approved NDAs would transition on the transition date. But the recent December 2019 Appropriations Act now requires that FDA must continue reviewing past the transition date any pending application that was filed by March 23, 2019. As long as these applications are approved by October 1, 2022, they will be deemed to be a BLA upon approval. Any applications not approved by then will be deemed withdrawn. Notably, these pending applications are subject to the patent certification and statement requirements that apply to NDAs. And the date on which these applications can be approved is determined based on the last expiration date of any applicable period of Hatch-Waxman, pediatric, orphan or GAIN antibiotic exclusivity. Because the added provision sunsets on October 1, 2022, any pending applications blocked by exclusivity extending past October 2022 will not be approvable as NDAs. FDA hasn't provided much clarity on this change, but it seems like this means 505(b)(2) and generic applications submitted by March 23, 2019 referencing a transition product, may be blocked by Hatch-Waxman exclusivity past the transition date. On the other hand, biosimilar applications submitted after the transition date, March 23, 2020, will not be blocked by Hatch-Waxman exclusivity.
The December 2019 Appropriations Act also made a few other important additions. First, the act codified FDA's approach to exclusivity that was laid out in the guidances. Now the governing statute, the PHS Act, says that only orphan exclusivity and any attached pediatric exclusivity will have effect after the transition date and that deemed BLAs will not get 12-year reference product exclusivity upon deeming. Second, the changes require that any transition product referenced in another application that was filed by March 23, 2019, will continue to be listed in the Orange Book until all those pending applications are approved. Lastly, the Appropriations Act revised the definition of biological product so that chemically synthesized polypeptides would also transition and be regulated as BLAs. FDA has said this revision would allow chemically synthesized follow-on insulins and other protein products to potentially come to market through the biosimilar and interchangeable pathways, thereby expanding access to these drugs and helping promote potential innovation in manufacturing methods.
Kellie Combs: Great. Thanks, Deborah. So now we've heard about exclusivity implications. We've heard that the transition products will now be subject to the BLA requirements and potentially subject to biosimilar competition. We also know that, through guidance, FDA has addressed a number of procedural issues. What we haven't talked yet about is the dynamic of litigation and so, Filko, I'd be curious here about your sense. How will litigation change as we move from the Hatch-Waxman framework to the biosimilar framework?
Filko Prugo: Sure. Thanks, Kellie. Setting aside the major procedural differences between Hatch-Waxman litigation and litigation under the BPCIA, the biggest impact this change will have relates to how defendants will behave during patent litigation. So traditionally, in Hatch-Waxman cases what I refer to as second ANDA filers typically settle early, and this is because the first ANDA filers are entitled to 180 days of generic drug exclusivity—so there's really little incentive for a second filer to go and spend the money to invalidate a patent only to have to wait in line before getting on the market. Moreover, first filers in a Hatch-Waxman litigation often cooperate, knowing they are entitled to get to the market simultaneously. Now, we know the FDA, and Deborah mentioned this just a moment ago, is looking to approve interchangeable aBLA products and undoubtedly, smaller, less complex protein products are a good place for them to start. However, the first interchangeable biological exclusivity is given to the first product to be approved. So being a second, for example, aBLA applicant nonetheless means you have an interest in defending against patent assertions. And being a joint first aBLA filer doesn't mean your interests are aligned with other joint first filers. So the dynamic is drastically different and we can expect less cooperation in the aBLA space amongst defendants to patent litigation than with have historically seen with respect to Hatch-Waxman litigation. So Kellie perhaps you can address some of the potential impacts of the change on competition and pricing?
Kellie Combs: Well, look, I think the administration, and FDA in particular, certainly seems hopeful that the biosimilars framework and the transition provision, in particular, will result in more robust biosimilar competition and potentially significantly lower drug prices for a variety of products, most notably the insulin products. So the insulin products have been talked about extensively in the broader context of drug pricing as well as in the narrower context of the transition provision. Now that these insulin products will be transitioned to the BLA provisions and regulated as biologic products, this means, as a practical matter, that they could be subject to biosimilar competition as well as even potentially down the line to competition with a biosimilar deemed interchangeable. As of now, FDA hasn't approved any interchangeable product, so there are still a fair bit of open questions on how the agency will apply interchangeability requirements. FDA has, in the past year, issued additional guidance on interchangeability. Deborah, can you give us an overview of those two guidance documents?
Deborah Cho: Sure. In the final interchangeability guidance issued last May, FDA reversed a prior policy position. There, the agency said that sponsors could use non-U.S.-licensed reference products in their clinical switching studies to support interchangeability. In the insulin draft guidance that was issued November of last year, FDA also reversed a prior policy position. There, the FDA proclaimed that, in general, developers of biosimilar or interchangeable insulin products would not have to conduct comparative clinical switching studies. These two policy changes, which FDA has expressly said were intended to facilitate the approval of interchangeable biosimilars, could significantly speed the process and lead to approvals for biosimilar and interchangeable insulins soon after the transition.
Kellie Combs: Great. Thanks so much, Deborah. And thanks to you, Filko, for providing your perspective as well. We appreciate both of you joining the podcast today. Thanks as always to our listeners. That's all the time we have, but for more information about our practice or other topics of interest to life sciences companies, please visit our FDA regulatory and life sciences practice pages at www.ropesgray.com. You can also listen to Non-binding Guidance and other RopesTalk podcasts in Ropes & Gray's podcast newsroom on our website, or subscribe to this series wherever you listen to podcasts, including on Apple, Google and Spotify. Thanks again for listening.
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