The path to generic biotech approvals gains a little clarity; de facto patent extensions of pioneer biotechnology drugs may be in jeopardy

Last week, Sandoz (a Novartis company) scored a major victory in federal court against the Food and Drug Administration that could mark the beginning of a significant change in the biotech drug industry.  The decision highlights the need for clarification on the issue of generic biotech approvals and should remind pioneer biotech companies of the importance of strong patent protection.

Currently, the regulatory landscape for the approval of generic biotech drugs is about as clear as a contaminated cell culture.  FDA openly struggles with such applications and often  is urged to refuse approval by the pioneer, which typically cites the complex nature of the drug and the difficulties associated with reproducing the sensitive manufacturing environment.  Frustration continues to mount among would-be generic manufacturers as more and more pioneer biotechnology drugs go “off patent.”  The end result is, in effect, non-patent market exclusivity for pioneer biotech drug manufacturers reminiscent of the de facto patent term extensions for traditional drugs that provided one of the driving forces behind enactment of the Hatch-Waxman amendments in 1984.

Clarifying the path to regulatory approval for generic biotechnology drugs is a massive effort that will likely take years to accomplish. The decision of the United States District Court for the District of Columbia in Sandoz v. Leavitt (2006 U.S. Dist. LEXIS 17549; April 10, 2006) provides an early step in the direction of change and may have interesting patent implications in the future.

Sandoz had filed an application with the FDA to market a generic version of Pfizer’s Genotropin, an approved biotechnology drug (its a human growth hormone) that has been ok’d for marketing since 1995.  Months passed and nothing happened.  Eventually, Sandoz grew impatient and ultimately filed suit against FDA and Health and Human Services officials, claiming that the agency failed to meet its statutory obligation to act on the Abbreviated New Drug Application (ANDA) within 180 days of the filing of the application.

Last week, the court issued a strongly-worded opinion holding that the agency had failed to meet the deadline imposed by the Federal Food Drug and Cosmetic Act (FDCA; 21 U.S.C. 355(c)) and instructed it to end this “marathon round of keep-away”  (citation omitted).

While the practical effect of the decision on the Sandoz NDA may be minimal (under the FDCA, the agency isn’t required to make a final decision on the application within 180 days; it can also satisfy its obligation by giving the applicant notice of an opportunity for a hearing on the question of whether the application is approvable), the case is interesting for several reasons:

First, it highlights the difficulty the FDA is having with applications for generic biotechnology drugs and the growing impatience of the generic biotechnology industry.  The regulatory pathway to approval of generic biotechnology drugs is not crystal clear and many believe that the agency freezes like a deer in the headlights when faced with a generic biotech application.  Sandoz harnessed the growing frustration of the industry and sought the judicial interpretation of the deadline that seemed necessary before a clear pathway could be established.  The Court stated, in no uncertain terms, that the deadline is in fact a real one, and that the agency should treat it accordingly.

Second, it may ultimately impact the non-patent exclusivity enjoyed by many pioneer biotechnology manufacturers created by the FDA’s inability to efficiently handle generic applications.  Remember, no one can market a generic version of a drug, including biotechnology drugs, in the United States until the FDA approves it.  Once patent protection expires, market exclusivity may still exist for the pioneer if the FDA has yet to approve a generic.  Sandoz makes it clear that the FDA must act on biotech (and all) drug applications promptly, which, with all things being equal, may ultimately lead to a faster path to market for generic biotechnology drugs.  If such non-patent exclusivity is reduced or eliminated, strong patent protection for biotechnology drugs becomes even more important.

Third, the case may prompt Congressional action on the subject.  The de facto patent term extension described above was one of the driving forces behind the Hatch-Waxman amendments in 1984 that dealt with the same situation as applied to traditional drugs.  As the first generation of biotech drugs continues to go off patent, more attention will be paid to the de facto extension enjoyed by pioneer biotech drugs and the murky regulatory pathway for generic versions of these drugs.  With the court stressing the agency’s statutory obligation to act on generic applications in a timely manner, there may be opportunity to clarify the path to approval by legislative and/or regulatory action.

If history is a guide, a thriving generic biotechnology industry may be just around the corner.  The Sandoz decision is a victory for generics that may ultimately be a victory for the entire population.  In the meantime, it should serve as a not-so-subtle reminder to pioneer companies that change is likely inevitable and that strong patent protection is critically important.