U.S. District Judge Rudolph Contreras found that the FDA’s prior interpretation of the Federal Food, Drug, and Cosmetics Act’s (“FDCA”) five-year exclusivity provision was arbitrary and capricious. Ferring Pharm., Inc. v. Burwell, No. 15-0802 (D.D.C. Sep. 9, 2016).  This provision—known as NCE exclusivity—provides a five-year period of marketing exclusivity for drugs in which “no active ingredient (including any ester or salt of the active ingredient)” has been previously approved “in any other application.”  21 U.S.C. § 355(j)(5)(F)(ii).  For many years, the FDA interpreted this provision to state that a drug product could not receive five year exclusivity unless it did not contain any active moieties that had been previously approved, even if it contained an API that had not previously been approved in an for use in another product.

In the application at issue, Ferring applied for five-year exclusivity for its PREPOPIK® product.  PREPOPIK® is a fixed-dose drug product that contains three active ingredients.  Ferring argued that it is entitled to five-year exclusivity because one of the active ingredients in PREPOPIK®, sodium picosulfate, had never previously been approved in an NDA.  In 2012, the FDA denied Ferring’s application because the two other drug substances in the product were previously approved for use in other drug products.

Ferring responded by filing a Citizen’s petition with the FDA requesting that it change its interpretation of the NCE exclusivity statute, arguing that the FDA’s interpretation of the statute was inconsistent with Congressional intent and conflicted with FDA policy.  Two other companies filed similar petitions.  The FDA was persuaded and issued draft guidance proposing that five-year exclusivity would be available for “a drug substance that does not contain a previously approved active moiety, even where such a drug substance is approved in fixed-combination with another drug substance that contains at least one previously approved active moiety.” Although the FDA agreed to alter its interpretation, it declined to retroactively recognize five-year exclusivity for PREPOPIK® or the other drug products that were previously denied five-year exclusivity.

Ferring sued, alleging that the FDA’s decision was arbitrary and capricious.  Under FDA’s old interpretation (on which the Ferring decision was issued), when the new API was the only API in an approved drug, it would be allowed to share exclusivity with later approved fixed-dose drug products including that API, but if the fixed-dose combination was approved before a drug product containing only the novel API, neither product would receive the five-year exclusivity.  The court rejected this argument, holding that the FDA’s old construction was reasonable.  In making this determination, however, the Court agreed that if there were “situations in which a drug [product] was eligible for five-year exclusivity under the FDA’s prevailing interpretation but failed to receive it because of the order in which it was approved, those circumstances might render the FDA’s policy arbitrary and capricious.”

Thereafter, Ferring filed a motion to reconsider, identifying examples of situations where a product with a novel API did not receive exclusivity because a fixed-combination drug product including that API was approved first.  The Court found that these examples proved the FDA’s interpretation was arbitrary and capricious.  Therefore, the Court remanded the action to the FDA for further proceedings consistent with its decision—effectively ordering the FDA to approve PREPOPIK’s application for five-year exclusivity.

As a result of the Court’s decision, fixed combination drug products that include a novel API that were denied exclusivity under the FDA’s old interpretation of the FDCA may be able to retroactively receive this exclusivity.