Biden signs bill limiting new drug exclusivity awards to innovations in active moiety

Ensuring Innovation Act

The Ensuring Innovation Act codifies in the statute FDA’s efforts to award exclusivity based on a drug's "active moiety" rather than its "active ingredient," limiting when drug sponsors can obtain new drug exclusivity periods and avoid competition from generics. “Active ingredient” is defined by regulation at 21 CFR § 314.3 as “any component that is intended to furnish pharmacological activity or other direct effect in the diagnosis, cure, mitigation, treatment, or prevention of disease, or to affect the structure or any function of the body of man or other animals.” A drug’s active moiety is also defined by regulation, as “the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or coordination bonds), or other noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule, responsible for the physiological or pharmacological action of the drug substance.”

A company that sponsors an innovative new drug has historically been awarded the exclusive right to sell that drug for a period of time, so long as “no active ingredient (including any ester or salt of the active ingredient)…has been approved in any other application” (emphasis added), pursuant to 21 U.S.C. 355(c)(3)(E) (section 505 of the FDCA). However, in past litigation, FDA has argued – based on its regulations – that exclusivity should be denied where the active moiety of a new drug had been previously approved (not where the active ingredient had been previously approved). In some cases, courts have disagreed with FDA’s approach, because it strays from the plain language of the statute. The Ensuring Innovation Act’s replacement of the phrase “active ingredient” with “active moiety” in the statute gives FDA direct statutory support in court in defending its exclusivity decisions based on analyzing a newly approved drug substance at the active moiety rather than active ingredient level.

One place where this statutory change could prove meaningful is in cases involving natural source products and later approved synthetic versions of a component of a natural source product. In those cases, by focusing the statutory analysis on the active moiety, rather than the active ingredient, it may be possible for FDA to find that the active moiety in the new product was previously approved as part of the active ingredient in the original natural source product. For example, in the 2015 case Amarin Pharms. Ireland Ltd v. FDA, the U.S. District Court for the District of Columbia reversed FDA’s denial of New Chemical Entity (NCE) exclusivity to Amarin’s Vascepa (icosapent ethyl). The court ruled that FDA cannot divide active ingredients into multiple active moieties and then deny exclusivity based on one of the many moieties in the previously approved drug. FDA did not appeal the court’s ruling in favor of Amarin in 2015.

Advancing Education on Biosimilars Act

Also signed into law on April 23, the Advancing Education on Biosimilars Act will have the Department of Health and Human Services (HHS) operate an internet website to provide educational materials for health care providers, patients, and caregivers, regarding the meaning of the terms, and the standards for review and licensing of, biological products, including biosimilar biological products and interchangeable biosimilar biological products. These materials may include:

• explanations of key statutory and regulatory terms, including “biosimilar” and “interchangeable,” and clarification regarding the use of interchangeable biosimilar biological products;

• information related to development programs for biological products, including biosimilar biological products and interchangeable biosimilar biological products and relevant clinical considerations for prescribers, which may include, as appropriate and applicable, information related to the comparability of such biological products;

• an explanation of the process for reporting adverse events for biological products; and

• an explanation of the relationship between biosimilar biological products and interchangeable biosimilar biological products licensed under section 351(k) and reference products (as defined in section 351(i)), including the standards for review and licensing of each such type of biological product.

The Advancing Education on Biosimilars Act also orders HHS to “advance education and awareness among health care providers regarding biological products, including biosimilar biological products and interchangeable biosimilar biological products, as appropriate, including by developing or improving continuing education programs that advance the education of such providers on the prescribing of, and relevant clinical considerations with respect to, biological products, including biosimilar biological products and interchangeable biosimilar biological products.’’

We will continue to monitor legislation in this area and keep you apprised of any changes. Please contact your Hogan Lovells attorney with any questions about drug approvals and exclusivity periods.

Authored by Dave Fox, George O'Brien, and Jason Conaty