The BLOCKING Act: “Oh You Know, Strikes and Gutters, Ups and Downs”

The BLOCKING Act: “Oh You Know, Strikes and Gutters, Ups and Downs”

The BLOCKING Act: “Oh You Know, Strikes and Gutters, Ups and Downs” Posted: 02 Jun 2019 08:50 PM PDT By Kurt R. Karst — That quote from “the Dude” from one of the final scenes of the 1998 film The Big Lebowski sums up well where things stand—or should we say “cannot stand, man”—insofar as drug pricing legislation, and, in particular, the Bringing Low-cost Options and Competition while Keeping Incentives for New Generics Act (“BLOCKING Act),” is concerned. The BLOCKING Act, which was introduced as H.R. 938 in the U.S. House of Representatives on January 31, 2019 by Representatives Kurt Schrader (D-OR) and Earl L. “Buddy” Carter (R-GA), has drawn our ire (see this blogger’s Congressional testimony here) and the ire of the generic drug industry (here).  (It has also drawn the interest of former FDA Commissioner Scott Gottlieb, M.D., who recently penned an article on the bill.)  And now, after being reported out of the House Committee on Energy and Commerce, it’s up for discussion and consideration by the U.S. Senate (Committee on Health, Education, Labor and Pensions) as part of a larger package of drug pricing legislation dubbed the “Lower Health Care Costs Act.” As we noted in a post earlier this year, the BLOCKING Act would significantly alter the FDC Act’s 180-day exclusivity provisions and the 180-day exclusivity incentive itself.  And not in a good way.  If enacted as currently drafted, the BLOCKING Act would punish ANDA applicants eligible for 180-day who are diligently pursuing final application approval and would further dilute and cheapen the 180-day exclusivity incentive Congress created in the 1984 Hatch-Waxman Amendments.  In particular, the BLOCKING Act, as drafted, could trigger a loss of 180-day exclusivity—even when the generic drug applicant is diligently seeking final approval—based on a failure of FDA to grant final approval to a first applicant within 30 months of application submission for any reason.  In other words, under the current BLOCKING Act language, the events listed below might delay final approval of an ANDA and trigger a loss of 180-day exclusivity, thereby penalizing first applicants through no fault of their own: A citizen petition directed to a first applicant’s formulation which causes a delay in approving the first filer’s generic application; A failure by FDA to timely inspect or re-inspect a facility; A change in the review or requirements for approval specific to a first applicant; and A first applicant’s patent certification: If a first applicant makes a paragraph III certification for an earlier patent (that expires more than 30 months after ANDA submission), and a paragraph IV certification for a later patent, and a subsequent applicant has paragraph IV’s for both patents, the BLOCKING Act would very likely trigger a loss of 180-day exclusivity. As FDA has repeatedly recognized, a first applicant need only have a single Paragraph IV certification to be entitled to 180-day exclusivity. The BLOCKING Act grew out of a provision in the Trump Administration’s proposed Fiscal Year 2019 Budget intended to “ensure[] that first-to-file generic applicants who have been awarded a 180-day exclusivity period do not unreasonably and indefinitely block subsequent generics from entering the market beyond the exclusivity period.”  According to the budget proposal, “when a first-to-file generic application is not yet approved due to deficiencies, FDA would be able to tentatively approve a subsequent generic application, which would start the 180-day exclusivity clock, rather than waiting an indefinite period for the first-to-file applicant to fix the deficiencies in its application.” While that intent seems reasonable, the BLOCKING Act goes much further than that.  And, as we noted in a prior post, FDA already has sufficient authority under existing law and regulations to deal with such situations.  Nevertheless, the BLOCKING Act continues to move forward . . . . The Senate version of the BLOCKING Act is included in Section 205 of a discussion draft of the “Lower Health Care Costs Act,” which is titled “Preventing blocking of generic drugs.”  And while there are several strikes in Title II the “Lower Health Care Costs Act,” which is titled “Reducing the Prices of Prescription Drugs,” inclusion of the BLOCKING Act is a definite gutter ball. The Senate version of the BLOCKING Act up for discussion makes a few cosmetic changes to the House version of the bill, but that’s it.  The unnecessary complexities, concerns, and unintended consequences we pointed out in the House bill all remain in the draft Senate version of the bill. Isn’t there a better way to handle the concern laid out in the Trump Administration’s proposed budget?  We’re glad you asked . . . .  Indeed, there is! The generic industry has been tirelessly canvassing Capitol Hill over the past several months in an effort to significantly improve the BLOCKING Act and to dispel misunderstandings and misconceptions about the bill and the perceived problem it is intended to address.  (And those misunderstandings and misconceptions are rampant!  They range from a lack of understanding of how 180-day exclusivity operates legally, to believing that the BLOCKING Act is intended to address patent settlement agreements instead of parked exclusivity eligibility due to manufacturing issues.  See, for example, a recent article from former FDA Commissioner Scott Gottlieb, M.D., titled “The HELP Committee’s Fix For 180-Day Generic Marketing Exclusivity: Does It Solve The Problem?”  While this blogger agrees with Dr. Gottlieb that “any provision should protect generic companies from forfeiting the exclusivity if they’re actively seeking final approval,” I have to respectfully disagree with other comments in the article.) Two alternative versions of the bill—outlined below in red typeface—would address alleged “parking” without gutting 180-day exclusivity. ALTERNATIVE #1 This proposal codifies FDA’s existing authority and deems an application “withdrawn”—and exclusivity forfeited—if a sponsor is not actively seeking approval or is on the application integrity policy.  Notably, this proposal expressly adopts former FDA Commissioner Scott Gottlieb’s suggested revisions on active pursuit of final approval—provisions not included in the BLOCKING Act. Section 505 of the Federal Food, Drug, and Cosmetic Act (“FDCA”) (21 U.S.C. § 355) is amended by inserting the following in sub-section (j)(5)(D)(i)(II): (D) Forfeiture of 180-day exclusivity period.— (i)  Definition of forfeiture event.—In this subparagraph, the term “forfeiture event”, with respect to an application under this subsection, means the occurrence of any of the following: . . . . (II)  Withdrawal of application.— (A)  The first applicant withdraws the application; or (B)  The Secretary considers the application to have been withdrawn as a result of a determination by the Secretary that the application does not meet the requirements for approval under paragraph (4), including if: (1)  The sponsor is not actively pursuing approval of its ANDA; or (2)  The sponsor is identified on the Application Integrity Policy list described in 56 Reg. 46191 at the time the subsequent applicant containing a certification described in paragraph (2)(A)(vii)(IV) could be granted final approval but for the 180-day exclusivity. (C)  The Secretary may, after opportunity for public comment, issue guidance describing the factors taken into consideration under subparagraph (B). By clarifying that eligibility for exclusivity is forfeited when a sponsor is not actively seeking final approval, an amendment such as the one above could address perceived “parking” without otherwise diluting 180-day exclusivity.  Such an approach could also avoid inconsistencies—and potential unpredictable outcomes—by modifying and clarifying the existing forfeiture provisions in the MMA rather than creating a new framework. ALTERNATIVE #2 The BLOCKING Act can also be modified to ensure that it is consistent with FDA’s own median approval times and is narrowly tailored to address the purported problems giving rise to the legislation.  Additionally, given the fundamental changes that are being made to 180-day exclusivity, this proposal makes clear that these provisions should only apply to ANDAs filed after the date of enactment of the legislation. (2) by adding at the end the following new subclause: “(III) APPLICABLE DATE.—The applicable date specified in this subclause, with respect to an application for a drug described in subclause (I), is the date on which both of the following conditions are first met: “(aa) All first applicants have failed to obtain final approval within 42 months of submission because such application(s) do not meet the requirements for approval under paragraph (4)(A). “(bb) A subsequent applicant has tentative approval that could be converted to final approval but for the eligibility of a first applicant for 180-day exclusivity under this clause. “Before determining that the conditions under this subparagraph (III) have been met, the Secretary shall notify all first applicants of its preliminary determination and offer all first applicants at least ten days to comment on the preliminary determination.  If the Secretary subsequently determines that the conditions have been met, the Secretary shall notify all first applicants of the determination, providing a full rationale for the determination, at least five days before implementing the determination. The Secretary’s determination that the conditions of this subparagraph (III) have been met is final agency action subject to the Administrative Procedure Act, and irreparable injury to first applicants is presumed. SEC. 3.  EFFECTIVE DATE.  The provisions of Section 2 apply only to abbreviated new drug applications first submitted to FDA on or after the date of enactment of this Act. Either of these alternatives would address the concerns raised by the FDA while maintaining the 180-day incentive. As Congress and the Trump Administration move forward, it’s critical that the right balance be struck.  If left unamended, the BLOCKING Act could weaken the only incentive available to generics to challenge patents.  By diluting that incentive, the BLOCKING Act may ultimately result in less competition and higher prices.