Significant recent legislative, judicial, and regulatory developments have laid the groundwork for a number of important developments that will impact the life sciences industry in 2023. These developments are the result of:
- The planned end to the COVID-19 Public Health Emergency (PHE),
- The enactment of the Food and Drug Omnibus Reform Act (FDORA) and the Prepare for and Respond to Existing Viruses, Emerging New Threats, and Pandemics Act (PREVENT Pandemics Act) as part of the Consolidated Appropriations Act, 2023, and
- Significant litigation outcomes involving orphan drugs, Orange Book patent listings, and regenerative medicine.
Although the full impacts of these events are yet to be realized, companies should have certain issues on their radar and begin to assess the short and long-term implications on their businesses and product portfolios. In this introductory article, we review what we believe are the top five developments that the life sciences industry should be watching for in 2023. In future articles, we will take a closer look at these issues individually and their impact on the industry.
Ending the PHE Will Impact COVID-Era FDA Changes
The planned end to the federal PHE, set by the U.S. Department of Health and Human Services (HHS) for May 11, 2023, raises a number of questions about the regulatory flexibilities that the life sciences industry has been afforded during the PHE, particularly by the FDA.
In HHS’s recently released COVID-19 Public Health Emergency Transition Roadmap, it is clear that access to pathways for emergency use authorizations (EUA) for COVID-19 products, including tests, vaccines, and treatments, will remain. HHS emphasized that the FDA could continue to issue new EUA going forward when the criteria for issuance are met. Additionally, key themes of the PREVENT Pandemics Act include structural leadership changes and an increase in accountability and transparency with the goal of strengthening medical and public health preparedness and response.
The FDA has also recognized a need for continued flexibility in other respects, as reflected in the Agency’s March 13, 2023, Federal Register announcement pertaining to COVID-19 guidance documents, some of which (1) will no longer be effective when the PHE ends, (2) will be revised to remain in effect for 180 days after the PHE ends to allow for stakeholder transition, and (3) will be revised to remain in effect for 180 days after the PHE ends and during which time FDA will further revise the guidances. The impacted guidances span FDA’s Centers, thus requiring a close look by FDA-regulated life sciences companies as to how their business and products will be impacted.
Changes to the Accelerated Approval Program
The FDA accelerated approval program allows sponsors to seek expedited approval of drugs for serious conditions that fill an unmet medical need with data that relies on the use of surrogate endpoints believed to predict clinical benefit rather than primary clinical endpoints. The use of the accelerated approval program has received significant criticism in recent years, including the FDA’s perceived failure to ensure that the relevant studies are conducted and, in fact, confirm the basis on which the drug was originally approved, thus permitting the conversion of the accelerated approval to a full approval.
One of FDORA’s key reforms involves implementing changes to the accelerated approval framework, including an expansion of requirements related to post-approval studies, the timing and transparency related to such post-approval studies, and post-approval reporting. More specifically, FDORA allows the FDA to require that post-approval study elements, including the type and timing of the study, be agreed upon—and even potentially underway—prior to accelerated approval and with post-approval reporting required every six months.
FDORA also expands FDA authority for expedited withdrawal of accelerated approval drugs. Moreover, the FDA must form an intra-agency coordinating council within one year of enactment and issue multiple guidance documents regarding the accelerated approval pathway and post-approval studies within 18 months.
One of the goals of establishing the accelerated approval pathway was to provide earlier access to drugs for patients with serious or life-threatening conditions. Although FDORA established these changes to bring greater clarity and constraint to this pathway, it remains to be seen how the FDA will implement these changes and whether there will be any repercussions on drug sponsors’ interest in pursuing this pathway.
Rumblings of Orange Book Changes
The FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as the Orange Book) functions to identify drug products approved on the basis of safety and effectiveness, to list FDA-granted regulatory exclusivity, and to notify other companies of the drug substance, drug product, and method of use patents that cover the approved product and for which a claim of patent infringement could reasonably be asserted. Although scrutiny of Orange Book patent listings is not new, these discussions have taken on new significance for several reasons.
Renewed interest in the Orange Book began when the Orange Book Transparency Act of 2020 (OBTA) was enacted in January 2021. The FDA’s first report to Congress under the OBTA stated that it would take efforts to modernize the Orange Book, improve transparency, and provide additional information to industry and the public. Specifically, the FDA stated it would create a working group to evaluate whether additional clarity around Orange Book patent listings is required. The U.S. Government Accountability Office (GAO) also just released a highly anticipated report required by the OBTA that describes stakeholders’ views on improving FDA patent information.
Furthermore, the FDA and the United States Patent and Trademark Office (USPTO) are looking at collaboration to advance President Biden’s Executive Order on “Promoting Competition in the American Economy” and to support the provision of greater access to generic and biosimilar products. Finally, the Court of Appeals for the Federal Circuit affirmed a Delaware District Court decision that determined that a patent for a risk evaluation and mitigation strategy (REMS) program was not appropriate for listing in the Orange Book. Notably, the Federal Trade Commission (FTC) filed an amicus brief in the case emphasizing that improperly listed patents block the introduction of lower cost generic medications or other follow-on competition and are significantly harmful to consumers. This case has created fresh interest in how the Orange Book is policed, if at all.
These recent events collectively suggest that changes to the Orange Book—including patents that can and cannot be listed—could be in the cards in 2023.
Orphan Drug Exclusivity Fallout
The FDA’s interpretation of its statute governing the award of orphan drug exclusivity (ODE) continues to remain in flux. In a September 2021 decision, the 11th Circuit Court of Appeals reversed the District Court for the Southern District of Florida and held that the statutory phrase “same disease or condition” was not ambiguous and, as a result, ODE applied to all uses for an approved drug product for that “same disease or condition.” This interpretation conflicted with the FDA’s historical interpretation, which awarded ODE to a product for a specific indication within a particular disease or condition. The court’s interpretation raised concerns about its impact on the research and development of medical products for rare diseases and led to an extended period wherein the FDA did not award any ODE.
Earlier this year, the FDA finally clarified its position on ODE. Specifically, the FDA stated that while it would comply with the court’s order in that case it would not apply the court’s holding to ODE decisions generally. Despite this clarification, important questions remain. The FDA could face additional legal challenges over its decision not to broadly apply the September 2021 decision, or Congress could enact legislative changes that address the lack of clarity.
FDA Looking for a Win on Regulation of Certain Regenerative Medicine Products
The FDA’s regulation of human cells, tissues, and cellular and tissue-based products (HCT/Ps) is in question following a 2022 California District Court decision, and the outcome on appeal may have a big impact on how the Agency proceeds with regulating stem cell clinics.
In 2018, the Department of Justice (DOJ) filed two lawsuits on the FDA’s behalf seeking to enjoin two separate stem cell clinics from treating patients with stem cell products marketed for a variety of serious health conditions and diseases without FDA approval. In U.S. v. U.S. Stem Cell Clinic, LLC, the U.S. District Court for the Southern District of Florida held in 2019 that the clinic’s procedures involving certain patient cells resulted in the clinic creating a new product that required FDA approval. The 11th Circuit affirmed on appeal in 2021. However, in U.S. v. California Stem Cell Treatment Center, Inc. (2022), the U.S. District Court for the Central District of California held that the two procedures being conducted by the clinic did not create a new product and did not require FDA approval. The FDA is appealing this decision to the 9th Circuit, and a reversal could reinvigorate the Agency’s HCT/P enforcement efforts.
We believe that each of these developments will have an impact on life sciences companies in 2023. Buchanan will continue to closely monitor both FDA and congressional action in these areas, and will offer an in-depth look at each issue and how it impacts the life sciences industry throughout the year. If your company needs help determining how these recent developments may impact your specific product portfolio and business plans, Buchanan’s experienced regulatory team is here to help. Please reach out to the authors or to our FDA Practice Group with any questions.