Federal drug regulators say they’ll stand by their existing system of awarding orphan drug exclusivity, restoring the approach in place prior to a recent legal feud. 

The announcement promises to alleviate a year-and-a-half-long backlog of exclusivity determinations, but experts say additional legislation is needed to prevent future litigation from paralyzing the system again.

The Food and Drug Administration took action last week to reassert its approach to granting newly approved rare-disease drugs their seven years of exclusivity, as per the 1983 Orphan Drug Act (ODA). The move clarified the lay of the land after the Catalyst Pharms., Inc. v. Becerra ruling in September 2021 had spurred the FDA to halt that process.

“Although clarity as to FDA’s attention with respect to awards of orphan drug exclusivity is finally here, it’s likely to be short-lived without a statutory fix,” warned Rachel Sher, a partner at Manatt Health who’s been closely monitoring the developments.

“Further litigation can be expected by parties that would benefit from a broader award of exclusivity under the Catalyst court’s interpretation of the Orphan Drug Act,” added Sher. “So this issue is surely going to arrive at Congress’s doorstep again.”

In September 2021, the U.S. Court of Appeals for the Eleventh Circuit reversed the district court’s rejection of Catalyst Pharmaceuticals‘ argument that, once a drugmaker wins orphan designation in a disease or condition, the ODA requires orphan drug exclusivity to apply to all uses or indications within that disease or condition.

At the time of the appeal, Catalyst and Jacobus Pharmaceutical, which is now part of Catalyst, each had orphan designation for the drug amifampridine for the treatment of Lambert-Eaton myasthenic syndrome (LEMS). Catalyst’s designation was for treating LEMS in adults, while Jacobus had it for treating children. 

By the end of 2021, the FDA knew it had a real problem on its hands with the eleventh-circuit decision. Orphan-exclusivity awards are designed to block the agency from greenlighting other drugs for the same orphan indication during the exclusivity period. 

However, the agency interprets orphan drug exclusivity in an intentionally broad way in an effort to catalyze the study of drugs within that disease state. The Catalyst court was essentially going against the FDA’s approach.

The easiest thing to do would involve getting a “legislative fix” codifying into the law FDA’s interpretation, which has been set forth in regulations for decades. Said fix ended up as The Rare Act, which codified that a drug’s approved use is much narrower than its orphan-designated use. 

Throughout the course of 2022, as user fee reauthorization progressed through the House and into the Senate, the Rare Act provision was introduced in the Senate HELP Committee bill. The committee passed the bill, but then-Ranking Member Sen. Richard Burr (R-NC) unexpectedly had a change of heart

A “clean” user fee bill later re-introduced by Burr did not include the proposed FDA policy. With the passage of the year-end omnibus bill, it became clear that the legislative fix to the Catalyst case wasn’t going to happen. That’s why the FDA published its announcement in the Federal Register last week. 

What FDA said is that the agency intends to apply the court’s ruling only in the context of the Catalyst case, i.e., only for Firdapse (amifampridine). Since Catalyst was the first company to gain approval for any use for its orphan-designated drug, it’s entitled to seven years of exclusivity for the entire rare disease, the agency explained. 

Because the court held that exclusivity blocks approval of Jacobus’s application for the same drug for that entire disease state, FDA set aside that drug’s approval. 

Beyond the Catalyst case, though, FDA said it will consider orphan drug exclusivity to block approval of the same drug for only the same approved use or indication. Under that interpretation, drug companies can continue to study and seek approval for other uses of the drug for that disease or condition, such as a pediatric indication for a product that had been approved for adults, the agency said.

It’s a public statement of a stance that, basically, hews closely to the way it’s interpreted the ODA since its 1983 enactment. According to the Federal Register notice, it will also go forward in applying the policy as of Tuesday, January 24, paving the way to clear up the backlog of delayed exclusivity determinations. 

At stake were a number of consequences the FDA had warned about in last year’s notice about the Catalyst decision.

This includes that some late-stage and pre-registration drugs would be blocked from approval, that sponsors could seek approval and exclusivity by focusing on the smallest, easiest-to-study populations and that both children and the elderly could be adversely affected because sponsors often focus first on easier-to-study populations.

Still, the acknowledgment does nothing to prevent other drugmakers from using the legal system to enforce a narrower definition of orphan exclusivity under ODA. Indeed, it seems, this clarity is only temporary because what Catalyst did was write a playbook for any company that’s unhappy with a competing orphan drug coming on the market, like in this case. Formalization of FDA’s approach in statute could head off future court challenges.

“It’s a new Congress, so the legislation would need to be reintroduced,” said Sher, adding that she expects that to happen and for Congress to see it through, “especially in the wake of any future litigation coming from this action.”

This story has been updated.