CATALYST PHARMS., INC. V. BECERRA: WHEN THE FOOD AND DRUG ADMINISTRATION REPEATEDLY IGNORES THE PLAIN LANGUAGE OF THE ORPHAN DRUG ACT (ODA).

• Author: Wang, Yifan

TABLE OF CONTENTS INTRODUCTION 141 I. THE CASE 142 II. LEGAL BACKGROUND 142 A. The Orphan Drug Act (ODA) 142 B. Qualification of Orphan Drug Exclusivity 145 C. Previous Orphan Drug Exclusivity Litigation 147 III. THE COURT'S REASONING 148 IV. THE ANALYSIS 149 A. The Court Correctly Reached Its Holding Using Statutory Interpretation Tools 150 B. FDA's Interpretation of the Orphan Drug Act Is an Overreach Beyond Its Statutory Authority and Has Negative Impacts on Orphan Drug Development 151 C. FDA Acts Beyond Its Institutional Competence to Solve Orphan Drug Affordability Issues 154 D. The FDA Should Have Limited the Scope of Orphan Drug Designation, Not Repeatedly Ignored Court's Rulings Under the ODA 156 CONCLUSION 158 I. INTRODUCTION

In Catalyst Pharms., Inc. v. Becerra, the Court of Appeals for the Eleventh Circuit found that the marketing exclusivity provided for in the Orphan Drug Act (ODA) covers all uses or indications of the drug for the diseases or conditions for which the drug was originally designated as an orphan drug. (1) The decision is in contrast to the practice of the Food and Drug Administration (FDA) to narrowly construe the exclusivity to apply only to the uses or indications for which the drug is approved. (2) The FDA has repeatedly ignored the plain language of the ODA, and its previous extra-statutory interpretation negatively impacts orphan drug development. (3) The court's decision, like in the previous litigation, (4) is consistent with the language of the ODA. (5) However, the court's decision may have negative public health impacts, such as delaying drug development for children. (6) While Congress is drafting bills to amend the ODA, the FDA should consider changing its orphan drug designation regulations accordingly. (7)

The court in Catalyst Pharms., Inc. v. Becerra addressed whether the statutory phrase "same disease or condition" of the ODA under the 21 U.S.C. [section] 360cc(a) is ambiguous and, if so, whether the FDA's interpretation is reasonable. (8) More specifically, the issue was whether the scope of orphan drug exclusivity applies to the diseases or conditions for which the drug is designated (broader) or the uses or indications for which the drug is approved (narrower). (9) The court ruled in favor of Catalyst Pharmaceuticals, Inc., holding that the orphan drug exclusivity applies to all uses or indications related to the disease or condition for which the drug is designated. (10) This note will argue in line with the court's holding and that the FDA should fix its regulations of orphan drug designation.

Part I summarizes the factual and procedural background leading to the court's opinion. (11) Part II explores the means and ends of the Orphan Drug Act, (12) the qualifications of orphan drug exclusivity under the ODA, (13) and previous litigation relevant to orphan drug exclusivity. (14) Part III explains the reasoning underlying the court's decision. (15) Finally, Part IV (1) asserts that the court correctly reached its holding using statutory interpretation tools; (16) (2) contends that the FDA's interpretation of the ODA is an overreach beyond its statutory authority; (17) (3) maintains that the FDA is acting beyond its institutional competence to solve orphan drug affordability issues; (18) and (4) proposes a potential solution for the FDA to fix the regulation of the orphan drug exclusivity. (19)

1. THE CASE

   Lambert-Eaton myasthenic syndrome (LEMS) is a rare condition affecting roughly 905 to 1,300 adult patients and a couple dozen pediatric patients. (20) The FDA granted amifampridine orphan drug designation for use in LEMS in 1990 upon request by Jacobus Pharmaceutical Company. (21) In 2009, the Agency granted the designation again, this time upon request by Catalyst Pharmaceuticals. (22) Both companies submitted their New Drug Applications in 2018, seeking approval and marketing exclusivity under the ODA. (23) Catalyst Pharmaceutical's Firdapse (amifampridine) won the race for FDA approval in November 2018 to treat LEMS in adult patients. (24) Under the ODA, FDA granted Firdapse seven years of orphan drug exclusivity. (25) In May 2019, the FDA approved Jacobus Pharmaceutical Company's Ruzurgi (amifampridine) for treating LEMS in pediatric patients, likewise granting 7-year exclusivity. (26)

   Catalyst Pharmaceutical sued the FDA in the Southern District of Florida, alleging that the approval of Ruzurgi violated the Administrative Procedure Act (APA), because the FDA acted in an arbitrary and capricious manner in limiting Catalyst's exclusivity to adult patients and granting Jacobus approval for pediatric use. (27) Jacobus Pharmaceutical Company intervened. (28) Each party moved for summary judgment. (29) The parties disagreed as to whether the "same disease or condition" in the ODA refers to the use for which the drug is designated or approved. (30) A magistrate judge, relying on the Chevron doctrine's deference to agencies, recommended granting summary judgment to the FDA. (31) The district court agreed with the magistrate judge's recommendation and dismissed the case. (32) Catalyst Pharmaceutical appealed to the Eleventh Circuit, which reviewed the FDA's action de novo.

2. LEGAL BACKGROUND

   1. The Orphan Drug Act (ODA)

      About one in ten people in the United States are affected by rare diseases. (33) By definition, rare diseases are those that 1) affect fewer than 200,000 people in the United States (34) or 2) affect more than 200,000 people in the United States but can be treated only by drugs that are not likely to yield significant profit. (35) Pharmaceutical companies often have insufficient incentives to research and develop treatments for rare diseases due to the lack of a sufficiently profitable market. (36) The ODA, enacted in 1983, stimulates the development of drugs for rare diseases by empowering the FDA to incentivize the production and address the general accessibility of drugs used to treat rare diseases (orphan drugs). (37)

      The means and the ends of the ODA have been clear since its enaction. The "ends" of the ODA are to improve social welfare by providing treatments for orphan diseases. (38) The statutory text explicitly states that "it is in the public interest to provide such changes and incentives for the development of orphan drugs." (39) As a House Report explained, providing incentives under the ODA allows sponsors to "recoup the cost of development by capturing all revenues from the sale of the drug for the rare disease," free from competition. (40) In 2017, the FDA released the Orphan Drug Modernization Plan to ensure continued progress toward more treatments for rare diseases. (41) The Plan clearly articulates the FDA's understanding of the ODA's purpose: to incentivize research and development of orphan drugs. (42) Courts have considered the FDA's interpretation of the ODA's purpose consistent with the statutory language and legislative history. (43) Therefore, the "ends" of the ODA is to allow more resources to be allocated to unmet medical needs. (44)

      On the other hand, the means specified in the ODA are limited to providing a variety of financial incentives to support the research and development of new treatments for rare diseases. The most attractive incentive is seven years of market exclusivity. (45) The FDA will grant orphan drug exclusivity if the drug receives orphan drug designation and premarket approval. (46) The exclusivity precludes the FDA from approving another drug product application "for the same drug for the same disease or condition" for seven years after approval of the orphan-designated drug. (47) Orphan drug exclusivity is a bargain that strikes a delicate balance. (48) The scheme grants innovators enough monopoly to encourage orphan drug development but not too much monopoly to extract from the patients and insurers more than Congress thought necessary to spur the innovation. Other financial incentives under the ODA include federal funding of grants and contracts for clinical trials of orphan products, a tax credit of a certain percentage of clinical testing costs, and a waiver of FDA User Fees. (49) In addition, ODA allows patients access to the drug even before FDA marketing approval through an Orphan Drug Open Protocol. (50)

      The ODA successfully reduces financial barriers and promotes the availability of drugs to treat rare diseases. The success of the ODA is most apparent from the increasing number of orphan drug designations and approvals each year. Since ODA's enaction, the FDA has granted 6,242 orphan drug designations and approved 1,085 orphan drugs. (51) In 2021 alone, there were 93 orphan drug approvals. The uptick in designations and approvals reflects substantial medical progress and scientific understanding of rare diseases. (52) Another implicit measure of ODA's success is its embedded flexibility to address scientific advances. For example, the degree of chemical and structural similarity that allows the FDA to determine whether two drugs are the "same drug" depends on whether the drugs have small or large molecules. (53) The definition of the "same drug" under the ODA has withstood the test of time to accommodate scientific advances. (54)

      Although the ODA has successfully stimulated the development of orphan drugs, it has been criticized for not sufficiently addressing orphan drug affordability. Critics allege that the ODA helps to create blockbuster orphan drugs with billions in sales. (55) Some are concerned that pharmaceutical companies abuse the tax credit and market exclusivity for profit. (56) Two common examples of pharmaceutical companies gaming the ODA are "recycling" and "salami slicing." In "recycling," a manufacturer finds a cheap drug with expired patents that is approved for one indication but is widely used off-label for an orphan disease. Then the manufacturer runs clinical trials of the drug for that orphan disease and seeks FDA's approval for the new indication. (57)...