By Aniruddha Railkar
According to a 2014 report by the Tufts Center for the Study of Drug Development, the cost of developing a new drug is $2.6 billion. That is a 145% increase, adjusted for inflation, over their 2003 estimates. This report has been criticized and praised, but the reality is that developing a new drug is an expensive and time consuming process (on an average it takes 12 years to go from discovery to commercialization). Approximately $125 million is spent on all phases of clinical trials. The high cost of clinical trials was why companies did not want to develop generic drugs. This was the basis for The Drug Price Competition and Patent Term Restoration Act, otherwise known as the Hatch-Waxman Act, of 1984. It was named after Senator Orrin Hatch (R-UT) and Representative Henry Waxman (D-CA). The salient features of the act were:
- To approve a generic version of the innovator drug (reference listed drug or RLD) based on demonstration of bioequivalence rather than performing costly and time consuming clinical trials and by giving the first applicant a 180-day exclusivity before other generic versions could be marketed.
- To incentivize innovating companies by giving them 5 year exclusivity after approval. In other words, the act extended the patent life by 5 years before a generic version could be marketed. It also added the time required for Food and Drug Administration (FDA) review to the patent life.
The Federal Food, Drug, and Cosmetic Act (FFDC) has a provision for approving a new drug in section 505(b)(1) by filing a new drug application (NDA). The Hatch-Waxman Act added provisions for approval of generic drugs in section 505(j) by filing an abbreviated new drug application (ANDA), and for approval of “similar” drugs in section 505(b)(2). While an ANDA requires an exact copy of the innovator drug (meaning same active ingredient, dosage form, strength, and route of administration), a 505(b)(2) NDA is for a new drug with a similar active ingredient. Thus the dosage form and route of administration could be different. While companies filing an ANDA only have to do a bioequivalence trial, companies filing a 505(b)(2) NDA have to do clinical trials to demonstrate that the new dosage form / route of administration is safe and efficacious. However, there are exceptions. Some 505(b)(2) applications may need only one pharmacokinetic study. Since the 505(b)(2) provision allows the applicant to refer to published literature and FDA’s prior findings of safety and effectiveness, a clinical trial may not even be necessary. It should be noted that the purpose of the 505(b)(2) pathway is to minimize all nonclinical and clinical testing. Therefore nonclinical and clinical testing for each 505(b)(2) application will vary depending upon the totality of safety and efficacy information known to FDA.
In my experience, the benefits of a 505(b)(2) NDA are:
- Shorter development timelines—a 505(b)(2) NDA takes about 12 months to review, which is similar to a traditional NDA, but less than 21 months, which is typical review cycle for ANDA.
- Lower development cost—since time required for review is less, costs are less. However, it is dependent on the type of program. In some cases, review could be long and costly.
- Market exclusivity—A 505(b)(2) applicant can get 3 years of market exclusivity as opposed to an ANDA, which only gets 180 days (or 3 months) of exclusivity. Again it depends on the type of program. Some applications do not require a phase 3 study, and in that situation, exclusivity is not granted.
- Patent protection—The applicant can patent their 505(b)(2) product (either dosage form or composition) and prevent generic competition.
- Circumventing the 180 day exclusivity—As mentioned before, an ANDA applicant gets 180 days of exclusivity from other generic manufacturers. But this exclusivity applies to other ANDA filings and not the 505(b)(2) pathway.
- Generic versions of parenteral dosage forms—For injectable, ophthalmic, and otic solutions, FDA requires an identical composition by the ANDA applicant. However, since 505(b)(2) involves a change in composition and dosage form, it can produce generic versions of parenteral dosage forms.
- Low exposure to lawsuits—Since 505(b)(2) is not an exact copy of the innovator, it has lower exposure to lawsuits by the innovator.
There are, however, some risks involved:
- Although exposure to lawsuits is low, the innovator could still sue based on patents covering the original molecule and its other forms such as salt forms.
- Although not successful, there have been instances where the innovator has filed a citizens petition to block the 505(b)(2) applicant from using proprietary clinical data.
- Since composition and dosage form has been changed, the stability/shelf life of the 505(b)(2) product can be a problem.
- In situations where the drug is a low dose, showing similar clinical exposure and efficacy could be an issue. For example a low dose parenteral product will get good exposure because it is injected directly into the blood stream. But an oral dosage form of the same drug could have less bioavailability.
- If the innovator drug is very old, getting access to data might be a problem.
- Finally if the innovator drug is priced cheap, the 505(b)(2) product may not be able to justify higher price.
I hope this blog post has put the 505(b)(2) products into a new perspective and stimulates interest in this somewhat overlooked drug approval pathway.