FDA Doubles Down On Its Pre-Catalyst Stance On Orphan Drug Exclusivity

• Jurisdiction: United States,Federal
• Law Firm: Cooley LLP
• Subject Matter: Food, Drugs, Healthcare, Life Sciences, Food and Drugs Law, Biotechnology & Nanotechnology
• Author: Ms Sonia Nath and Natasha Leskovsek
• Published date: 31 January 2023

On January 24, 2023, the Food and Drug Administration published a notice in the Federal Register to "address the uncertainty" created by the US Court of Appeals for the Eleventh Circuit's September 30, 2021, decision in Catalyst Pharms., Inc. v. Becerra. In the notice, the FDA noted that it had complied with the court's order to set aside its approval of Jacobus Pharmaceutical Co.'s drug, but explained that "in matters beyond the scope of that court order," the agency intends to apply its existing regulations and long-standing approach to grant orphan drug exclusivity based on the indications for which the drug is approved rather than granting the exclusivity for the entire rare disease or condition that was the subject of the orphan drug designation (as the Catalyst court instructed the FDA to do).

While the FDA's recent announcement may calm the waters for industry, it also leaves the agency open to legal challenge, particularly in the Eleventh Circuit, where Catalyst is binding precedent. That said, the FDA's public Federal Register notice also could serve a protective role in any future Administrative Procedure Act litigation based on the agency's failure to more broadly apply the Catalyst court's interpretation of the statute, in that the FDA could assert that industry is on notice about the agency's planned approach, which is consistent with its past, pre-Catalyst precedent.

FDA historically tied orphan drug exclusivity to the scope of the drug's approval

Under the Orphan Drug Act, the FDA may grant orphan drug designation to a drug or biologic intended to treat a rare disease or condition, defined as a patient population of fewer than 200,000 individuals in the United States, or a patient population of 200,000 or more in the US where there is no reasonable expectation that the cost of developing and making available the drug or biologic will be recovered from sales in the US.

In the US, orphan drug designation entitles a party to financial incentives, such as tax advantages and user fee waivers. In addition, if a drug or biologic with an orphan drug designation subsequently receives the first marketing approval for a particular active ingredient or principal molecular structural features for the indication for which it has such a designation, the product is entitled to a seven-year period of marketing exclusivity, which precludes the FDA from approving another marketing application for the same drug for the same indication during that time period...