United States: Pharmaceutical Life Cycle Management: Navigating The New IP, FDA, And Antitrust Terrain

Efforts to extend the life cycle of pharmaceutical products frequently involve innovations and improvements in product design, formulation, route of administration and treatment indications. In addition, negotiation of agreements with competitors, including generic and biosimilar manufacturers, is frequently employed as part of a life cycle management strategy. However, recent changes in patent, regulatory and antitrust laws have introduced greater complexity and higher risk into these strategies.

On October 23, 2015, a distinguished panel of BakerHostetler partners led an exclusive seminar in person and online at which they discussed these and related issues and provided suggestions for developing successful life cycle management strategies. Carl W. Hittinger, Lee Rosebush, Lance Shea and Maurice Valla are all deeply knowledgeable attorneys with decades of experience in helping clients meet their pharmaceutical business objectives.

Patent-Based Exclusivity

Maurice Valla discussed several broad categories with regard to patent-based exclusivity:

  • Early-stage development
  • Developmental candidate identification
  • Clinical development
  • Approaching approval
  • Prior to launch and follow-on indications
  • Active pharmaceutical ingredient characteristics and new formulations
  • Additional protection strategies

Selected highlights:

Early-stage development: Patent practitioners have historically focused on obtaining protection for therapeutic targets such as isolated DNA sequences, or for research tools used to identify compounds that interact with those isolated DNA sequences. But Valla also explained that patent practitioners now face a legal landscape in which isolated sequences are no longer patentable unless the sequence has a markedly different characteristic from its naturally occurring counterpart.

He also discussed how patent practitioners regularly sought patent protection for correlations between a therapeutic target and disease. For example, a claim might be directed to a method of treating a disease by interacting with a particular target. The current § 112 jurisprudence forecloses these types of claims unless the specification provides sufficient examples of the therapeutic compound to inform one of ordinary skill in the art. Valla suggested that such target/disease correlation claims might still be allowable when the target is well-characterized and the contemplated method of treatment is the administration of a biologic such as an antibody or an oligonucleotide. Unlike small molecule therapeutics, the prevailing view is that one of skill in the art could design an antibody or an interfering RNA to a sufficiently definite target.

Developmental candidate identification: Valla said that freedom to operate should be a consideration from the very beginning of the patenting process. He advised looking at what already exists in the patent landscape in terms of the therapeutic target, drugs and competing companies. If patents exist, ask whether those patents are still valid under the latest legal standards and how much of the patent term remains.

Valla explained that the primary concern from a legal standpoint is how broadly to draft a claim. In the past, practitioners drafted broad generic claims to cover a vast universe of species. Valla noted that the current practice involves starting with a broad generic claim then narrowing the scope of the claim. If the field is very crowded, it may be desirable to claim a narrower genus, especially where that narrow genus has unexpected advantages over the prior art.

He cautioned that many countries require the applicant to limit the scope of the claims to only those compounds that have actually been synthesized. This is a significant shift from the conception-focused practice in the United States. In certain countries, like China, Japan and Taiwan, it is necessary to submit data for a representative number of compounds that shows that the compounds actually work for their claimed purpose. Such requirements are in direct tension with the "first to file" system in the United States and elsewhere. Determining when to file may come down to a business decision where the applicant balances timing considerations with the importance of capturing the international markets.

Clinical development: Valla said that it is desirable to claim as broadly as possible from the outset to anticipate future changes to the product. He advised that in a situation where protection is later sought for a particular salt form of the compound, such claims may face obstacles where the compound is already known and there are a limited number of pharmaceutically acceptable salts. Similarly, it may be difficult to get a claim directed to a particular isomer where the racemic mixture is known in the art.

Approaching approval: 35 U.S.C. § 156 provides for an extension to the patent term to compensate for any delay introduced by the regulatory approval process. Valla advised that the applicant should carefully consider which patent to extend as it is only possible to extend the term for one patent per product. He suggested considering which patent is strongest in terms of validity and which patent will give the longest period of exclusivity if extended. He also noted that the extension does not apply to the patent as a whole, but only to the product for which approval was sought. Interpreting what qualifies as the same product becomes particularly difficult when dealing with biologics, where the marketed product is similar, but not identical, to the claimed product.

Prior to launch and follow-on indications: Valla stressed the importance of reassessing the intellectual property landscape and the client's portfolio throughout the approval process, as the transition to commercial-scale manufacturing might yield methods of treating additional conditions. However, diagnostic-style claims may face greater scrutiny under some newly developed case law. Valla suggested looking for novel testing methods or reagents, or simply drafting the claims as a method of treatment. Method of treatment claims are valuable to the drug manufacturer insofar as they provide support for a product label, but they may be less valuable to third parties given the complexities of distributed infringement.

Active pharmaceutical ingredient characteristics and new formulations: Valla said that it might also be possible to claim new formulations. For example, the applicant may wish to draft claims covering new coatings or new routes of administration, keeping in mind that the new formulation must overcome an obviousness challenge or problems stemming from a lack of written description in the specification.

Additional protection strategies: In addition to drug/drug combinations, the applicant may pursue drug/device combinations such as a loaded syringe or inhaler. Such a combination would be separately patentable and listable in the Orange Book, and could provide an attractive avenue for gaining protection for an old drug.


Valla concluded with the observation that the applicant also may wish to seek patent coverage for an approved Risk Evaluation and Mitigation Strategy (REMS), though courts are increasingly viewing these sorts of patents as directed to the abstract idea of a method of distributing or controlling the risk in a population.

FDA Exclusivity

Five Types of Exclusivities

In addition to the patent rights that a drug sponsor should use to protect its products in the increasingly competitive pharmaceutical marketplace, there are powerful regulatory exclusivities that should be considered. Understanding the different exclusivities and the pathways to obtain them will help shape a pharmaceutical company's research and development strategy and enhance its competitive advantage.

Rosebush discussed five types of Food and Drug Administration (FDA) exclusivities available for pharmaceutical products:

  • New chemical entity (NCE) exclusivity
  • New clinical investigation (NCI) exclusivity
  • Orphan drug exclusivity
  • Pediatric exclusivity
  • Biologics license application (BLA)

Each exclusivity has specific criteria that an applicant/sponsor must meet. In addition, each exclusivity has its own limitations on what competitive activities are excluded.

New chemical entity exclusivity (NCE): A sponsor may apply for NCE exclusivity for "a drug that contains no active moiety that has been approved by FDA in any other application submitted under section 505(b) of the act." The active moiety of a drug is the molecule or ion responsible for the physiological or pharmacological action of the drug.

NCE exclusivity can be obtained by submitting either a 505(b)(1) or 505(b)(2) application. A 505(b)(1) applicant will submit to the FDA safety and efficacy data generated in clinical trials performed by the applicant to support its request for exclusivity. A 505(b)(2) applicant relies at least partially on prior clinical data that the sponsor did not generate.

NCE exclusivity typically lasts five years and prevents the submission of any 505(b)(2) or abbreviated new drug applications (ANDAs) for drugs containing the same active moiety.

New clinical investigation exclusivity (NCI): NCI exclusivity can be granted to applicants submitting 505(b)(1), 505(b)(2), or supplemental applications. The sponsor must perform clinical studies, which the FDA defines as "an investigation in humans, the results of which (1) have not been previously relied upon by FDA to demonstrate substantial evidence of effectiveness of a previously approved drug product for any indication or of safety in a new patient population and (2) do not duplicate the results of another investigation relied upon by FDA to demonstrate a previously approved drug's effectiveness or safety in a new patient population."

NCI exclusivity prohibits the FDA from approving a 505(b)(2) or ANDA application for three years, but it does not prevent applicants from submitting their applications. NCI exclusivity is available for "recycled" or "rebranded" drugs, or those drugs deemed to have the same active moiety as previously approved drugs, provided the new product relies on a new clinical study. "Recycled" drugs can include extended-release versions of drugs currently on the market or new salt forms of the drugs. NCI exclusivity also is granted for new indications, dosage regimens, patient populations and formulations of products previously on the market.

Orphan drug exclusivity: Orphan drug designation, or drugs intended for conditions that affect fewer than 200,000 people in the United States, may be eligible for seven years of market exclusivity. Originally intended for sponsors who would be unable to recoup the costs associated with developing an orphan drug, this designation provides full market exclusivity, which means the FDA will not approve another sponsor's marketing application for the same drug with the same indication for seven years from the date of the orphan product's approval letter from the FDA.

Rosebush noted that receiving an orphan drug designation does not limit the sponsor to the orphan indication. While the drug will enjoy the market exclusivity for the orphan indication, the sponsor also may pursue a more broadly applicable indication. He gave the example of Viagra, a well-known treatment for erectile dysfunction (ED), which was initially used to treat pediatric pulmonary hypertension, a condition affecting fewer than 200,000 people in the United States. Viagra received orphan drug designation for the pediatric pulmonary hypertension indication, while Pfizer also was able to get a broad label for ED.

Pediatric exclusivity: This is only available for a drug if the FDA requests a sponsor to undertake pediatric studies for a specific indication. But Rosebush emphasized that the sponsor can initiate contact and ask the FDA to request the pediatric studies. If a sponsor complies with the request to perform pediatric studies, the drug will likely receive the six-month pediatric exclusivity even if the drug is never approved for the pediatric indication studied by the sponsor. The six-month pediatric exclusivity period is added to any FDA exclusivity the drug enjoys, as well as the patent rights covering the drug.

Biologics license applications exclusivity (BLA): Biologics also are entitled to FDA-regulated exclusivities. Section 7002 of the Patient Protection and Affordable Care Act (PPACA) provides 12 years of exclusivity for approved BLA. BLA exclusivity is not available for supplements or subsequent applications by the same sponsor for a change that results in a new indication, dosing schedule, dosage form, delivery system, delivery device or strength. Only applications by the same sponsor for changes to an existing biologic that result in a modification of safety, purity or potency can be granted an additional 12 years of exclusivity. Biologics can also receive orphan drug and pediatric exclusivities.


In conclusion, Rosebush said sponsors need to be aware of the regulatory exclusivities that are available in addition to patent protection. These exclusivities are designed to encourage the development of new, safe and effective treatments. While taking advantage of these exclusivities may help a sponsor realize a return on investment, Rosebush warns that failure to utilize the regulatory exclusivities can result in increased competition and sponsors using potential research and development resources to fund expensive litigation.

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