BIO letter to Rep. Michael Bilirakis, Chairman, Energy & Commerce Cmte., Subcommittee on Health

Honorable Michael Bilirakis
Chairman
Subcommittee on Health
Committee on Energy and Commerce
U.S. House of Representatives
2125 Rayburn Building
Washington, DC 20015

Dear Mr. Chairman:

On June 13, your Subcommittee held a hearing entitled "Recent Developments Which May Impact Consumer Access to, and Demand for, Pharmaceuticals." During the questioning of Janet Woodcock, M.D., Director, Food and Drug Administration (FDA), Center for Drug Evaluation and Research, Representative Pallone asked Dr. Woodcock if "the FDA has a pathway to approve generic biologics?"

The Biotechnology Industry Organization (BIO) respectfully requests that this letter, which responds to Representative Pallone’s question, be included in the hearing record. For the reasons set forth below, it is BIO’s opinion that any action establishing a pathway for "generic biologics" would be inconsistent with current provisions of the Federal Food, Drug and Cosmetic Act (the "FD&C Act") and the Public Health Science Act (the "PHS Act"). Moreover, such action would clearly violate the intent of Congress, as recently expressed during consideration of the Food and Drug Administration Modernization Act of 1997 ("FDAMA").

Overview
A generic drug is a copy of an original, pioneer drug product. A specific statutory mechanism exists under the FD&C Act that allows for the premarket approval of generic drugs based on a showing that the generic is "the same as" the pioneer drug product. No independent clinical showing of the safety and effectiveness of the generic is required or even permitted under the statute. Instead, FDA is required to approve the generic if it is shown to have the same active ingredient, same dosage form, same route of administration, and same strength as the pioneer, and if the generic becomes available inside the body at the same rate and to the same extent as the pioneer drug. See generally section 505(j) of the FD&C Act.

This "abbreviated" path to the market applies only to generic versions of "new drugs" that were approved for marketing under section 505(c) of the FD&C Act. As shown below, it does not apply to biological products that are marketed under licenses issued under the PHS Act, including most of the leading biotechnology products. See generally section 351 of the PHS Act.

The Waxman-Hatch Amendments
A manufacturer seeking to market a pioneer "new drug" product (see section 201(p) of the FD&C Act) must obtain FDA approval through a new drug application ("NDA"). Under section 505(b) of the FD&C Act, an NDA must include full reports of clinical studies demonstrating that the drug is safe and effective for each proposed use. This consists of "adequate and well-controlled clinical studies" providing "substantial evidence" to support each claim of effectiveness for the product. 21 USC 355(d); 21 CFR 314.126. The research and clinical studies needed to support an NDA are time-intensive and costly.

In 1984, after extensive debate, Congress enacted the Drug Price Competition and Patent Term Restoration Act of 1984 (Pub. L. 98-417) (often referred to as "Waxman-Hatch"). The law included two principal features:

• Title I established a statutory basis for approving generic versions of pioneer drugs. It amended the FD&C Act to authorize premarket approval based on abbreviated new drug applications (ANDAs), which lack an independent demonstration of safety and effectiveness. Instead of clinical safety and effectiveness data, an ANDA need only show that the proposed drug is the same as a "listed drug" (i.e., a drug approved by FDA pursuant to an NDA and listed by FDA in "The Orange Book"). Among other things, the generic product must be shown to contain the same active ingredient as the listed drug and must be bioequivalent to the listed drug.
• Title II amended Title 35, United States Code to authorize a limited extension of patent terms on the patents covering approved new drugs. Title II was intended to compensate manufacturers, at least in part, for the loss of patent term during FDA regulatory review.

Title II of Waxman-Hatch (the patent term provisions) on its face applied both to biological products and new drugs. Title II added new section 156 to Title 35 of the United States Code. Section 156 specifically authorized an extension of the "term of a patent which claims a product, a method of using a product, or a method of manufacturing a product." Title II defined the term "product" to mean a "human drug product" and, even further, defined the term "human drug product" as including the active ingredient of a "human biological product." 35 U.S.C.156 (f)(1) and (f)(2).

Conversely, Title I Waxman-Hatch (the generic drug provisions) amended only those sections of the FD&C Act relating to premarket approval of new drugs. Title I used only the term "new drug" and not the terms "drug" or "biological product" when referring to the filing of an ANDA. See, e.g., section 505(j)(1) of the FD&C Act ("Any person may file. . . an abbreviated application for a ‘new drug’.").

The fact that biological products were excluded from the ANDA provisions was confirmed by an FDA letter issued shortly after Congress enacted Waxman-Hatch. The letter, written in response to questions that had been presented to FDA, provides the agency's own contemporaneous interpretation of the law:

Q. It is clear that. . . biologicals are included in Title II. . . . [B]ut are biologicals included in Title I, the ANDA portion of the Act?

A. No. There is no specific provision in Title I that includes. . . biologicals. . . . The Act refers to generic versions of those drugs originally approved under Section 505(b) of the Federal Food, Drug and Cosmetic Act. Biologicals are approved under the Public Health Service Act. . . . Accordingly, we do not consider these products to be covered by Title I.

Letter from Harry M. Meyer, Jr., M.D., Director, Center for Drugs and Biologics FDA, Nov. 16, 1984.

As described above, Title I of Waxman-Hatch provided specific statutory authority for the approval of generic versions of drug products that had been approved under NDAs. See section 505(j)(2)(A) of the FD&C Act. No parallel provision was included or even contemplated for biological products that are licensed under section 351 of the PHS Act. Moreover, licensed biological products are not "approved for safety and effectiveness under [section 505(c)]" and, therefore, are neither listed in FDA's "Orange Book" nor otherwise eligible to be referenced in a generic drug application. See section 505(j)(2)(A)(i) and 505(j)(7).

FDAMA
At the end of the debate that preceded the enactment of FDAMA, the issue of the applicability of the ANDA provisions to biological products was renewed, perhaps unintentionally. The conference report on FDAMA included a provision that was not contained in either the House or Senate versions of the 1997 legislation. The provision section 123(g) of FDAMA added a new subsection (j) to section 351 of the PHS Act as follows:

(j) The Federal Food, Drug, and Cosmetic Act applies to a biological product subject to regulation under this section, except that a product for which a license has been approved under this section shall not be required to have an approved application under section 505 of such Act.

PHS Act 351(j).
The biotechnology industry expressed concern that some may interpret this section to allow biological products to be approved using the "new drug" ANDA process. As a result, the House passed a technical corrections bill (House Con. Res. 196, 105th Cong., 1st sess.) clarifying that new section 351(j) of the PHS Act did not subject biological products to Title I of Waxman-Hatch. Although the bill was never considered by the Senate, on December 3, 1997, Senators Jeffords and Kennedy wrote FDA's Lead Deputy Commissioner (who, at the time, was serving as Acting Commissioner) about new section 351(j). The Senators expressed concern that "the new provision could erroneously be read to render biological products subject to Title I of [Waxman-Hatch]. . . . We wish to make it clear that the provisions of section 123(g) of [FDAMA] were not intended by Congress to change the status of biological products under the provisions of Title I of Pub. L. 98-417."

In response, FDA’s Associate Commissioner for Legislative Affairs sent letters to Senators Jeffords and Kennedy acknowledging the Senators' intent "to make it clear that the provisions of the new section were not intended to change the current status of biological products under the provisions of Title I of Pub. L. 98-417" and assuring them that "the Food and Drug Administration does not view the new section 351(j) as changing the current status of the law with respect to biological products." Letters from Diane E. Thompson, Associate Commissioner for Legislative Affairs, to Senator James Jeffords and Senator Edward M. Kennedy, dated January 28, 1998.

Takings
Finally, some have suggested that FDA could create a regulatory pathway for approving generic versions of biological products simply by changing the regulatory status of a specific product or class of products from "biological products" (requiring licensure under the PHS Act) to "new drugs" (requiring approval under the FD&C Act). According to this argument, once a given product is "converted" from biological product to new drug, FDA would be fully authorized to approve generic versions of the product under section 505(j).

Putting aside the statutory issue raised above (i.e., that section 505(j) is available only for new drugs that were approved under NDAs), we believe that such an approach would raise substantial constitutional and administrative law questions, including the unlawful taking of proprietary data and trade secrets held by the biotechnology industry. See, e.g., Ruckelshaus v. Monsanto Co., 467 U.S. 986 (1984); Tri-Bio Laboratories Inc. v. United States, 836 F.2d 135 (3d Cir. 1987), cert. denied 484 U.S. 818 (1988). A change in regulatory status (from biological product to new drug) to allow for the approval of generics would, in effect, retroactively undo the reasonable expectations of the biotechnology industry.

The industry has made substantial investments based on the existing structure and regulatory classifications. Were FDA to undo that structure for licensed biological products, it would raise substantial questions under the Administrative Procedure Act and would expose the government to financial liability for having taken or destroyed property rights. We would welcome the opportunity to explore this issue further, should the need arise.

Thank you for the opportunity to present BIO’s analysis of the legal issues involved in this important public health issue. There are, of course, important scientific issues that we would be happy to address at a later date.

Sincerely,
Stephan E. Lawton
Vice President and General Counsel