Agency Rules Final Approval Date Starts NCE Exclusivity, Even if Firm Can’t Go To Market

In a (not unexpected) petition denial (here), the FDA confirmed the statutory requirement that the 5 year New Chemical Entity (NCE) starts on the date of the letter approving the NDA.  While this has long been the standard, this case does have a wrinkle that at least two firms, Eisai and UBC, argued in almost identical petition requests.  The products in question were substances with abuse potential and also clearly qualified as first time approvals of the drug entity that guaranteed them 5 year NCE.  However, because they were controlled substances, there was a need for the Drug Enforcement Administration to formally schedule the product prior to the firms actually being able to market them, even though the firms had final FDA approval in hand.

How can this be fair, the firms argued in the petition.  If they could not legally take their products to market until the DEA scheduled the products, and, since that almost always happens post-NDA approval, their claim was that they lost valuable market protection of their 5 year NCE exclusivity.  FDA countered that there is a statutory and regulatory definition of approval, and that the firms actually committed to not market their product until DEA scheduled the drug products, but gladly accepted their final approval and made immediate announcements of their final approval to their stock holders.

It is not permissible from a regulatory standpoint to market a controlled substance until such time as its label bears the appropriate schedule symbol/number on its labeling.  This cannot be accomplished until DEA actually scheduled the product.  FDA pointed out that, while a post approval supplement was necessary to revise the label to include the appropriate schedule symbol/number, FDA would permit the change to be made by a Changes Being Effected (CBE) supplement, meaning the firm could market its product as soon as they submitted the supplement to the FDA.  The firms understood from their approval letters that they would need to submit a supplement before marketing and that acknowledgement alone should have be useful in recognizing that their applications were fully approved, as a supplement can only be submitted to an approved application.

The firms argued that there should be two approvals – one for the application and another for the marketing of the product post scheduling.  FDA disagreed, and noted that the definition of final approval is clearly articulated in the statute and the regulations.  They also correctly pointed out that, if the firm had not wanted the approval letter, FDA’s only other choice would have been to issue a Complete Response Letter, which was (at the time) not something the firms sought.  FDA also properly noted that they were not able to issue a tentative approval (TA) letter because the statute and regulations provide for a TA letter only for 505(b)(2) NDAs or ANDAs when the application was otherwise approvable but for a period of patent protection or period of market exclusivity, neither of which applied in these cases.  Also the “refuse to approve” regulations for NDA do not provide the scheduling issue as a reason to not approve an NDA.

FDA relied on the plain reading of the statute and regulations as written, as well as the requirements therein, for the start of NCE exclusivity as the basis for their decision.  While they recognized that it might not be fair, they pointed out that Congress spoke to the issue of start of NCE exclusivity differently than it did for 180-day exclusivity, which is triggered at first commercial marketing.  NCE exclusivity is triggered on the date of the letter giving final approval to the NDA.

With a lot at stake for both firms, it is possible that we have not seen the end of this issue as it is possible that they may seek a remedy in the courts.