Drug Exclusivity in the US

Exclusivity refers to the period of time when laws and regulations prevent generics from competing with brand name drugs. In the US, exclusivity for the pharmaceutical industry comes from two sources. The first is the typical intellectual property protection from patents. The other is one we will call Food Drug & Cosmetics Act (FD&C) Exclusivity. These are specific grants above and beyond patent protections that act as incentives meant to spur development and investment in certain types of drug development. Some of the most important exclusivity grants for the pharmaceutical industry include:

• New Chemical Entities 5 years exclusivity following FDA Approval of a New Drug Application
• New Clinical Investigations 3 years for the new use
• Orphan Drug Exclusivity 7 years of exclusivity following FDA Approval of a New Drug Application
• Pediatric Exclusivity In addition to other exclusivity grants, 6 more months of exclusivity
• Qualified Infection Disease Products and the GAIN Act In addition to other exclusivity grants, 5 more years of exclusivity

New Chemical Entities and New Clinical Investigations ¶

A new chemical entity (NCE) is typically what the public thinks of as a “new” drug. An NCE is evaluated by CDER and defined as a drug that has no active moiety that has been approved by FDA in any other new drug application¹. This protection lasts for 5 years from Approval.

If an approved drug undergoes new clinical trials (besides bioavailability studies) and is approved for a new use, a three year exclusivity period is granted.

Orphan Drugs ¶

Orphan drugs are treatments for rare diseases. A rare disease is defined in the Orphan Drug Act of 1983 as one “which occurs so infrequently in the United States that there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales in the United States of such drug” or one that affects fewer than 200,000 people. The extended 7 year exclusivity is meant to provide extra incentives for companies to develop treatments for rare diseases.

Pediatric Exclusivity ¶

Children represent a small and ethically fraught market for drug testing and marketing, but it is important to assess whether drugs are effective for children. To incentivize this, section 505A of the Food and Drug Administration Modernization Act² granted an additional 6 months of exclusivity to drugs that have been shown effective specifically in children (after such studies are requested by the FDA). As discussed in an FDA FAQ on the section 505A, pediatric exclusivity is different in that it applies to “all the applicant’s formulations, dosage forms, and indications for products with existing marketing exclusivity or patent life that contain the same active moiety”³.

Generating Antibiotic Incentives Now (GAIN) ¶

Meant to spur innovation in the urgently important area of antiobiotic and antifungal development, a drug may receive a designation of “qualified infectious disease product” (QIDP) and receive an additional exclusivity period of 5 years. QIDP was described in Generating Antiobiotic Incentives Now (GAIN) Act⁴⁵ in 2012. This is a significant extension that adds an additional 5 years of exclusivity to all the other exclusivity grants that may apply.

Other Exclusivity ¶

Patents provide the broadest exclusivity protection, and generally last for 20 years from the patent grant⁶. Patent protections are independent of the any of the FDA exclusivity grants and come with many caveats and corner cases, allowing patent holders to stretch the patent exclusivity sometimes far further than 20 years ⁷⁸.

Other forms of exclusivity include patent term extensions for time when the drug was under review at the FDA, and first generic entries receiving 180 days of eclusivity⁹. For detailed discussions, see:

• FDA Approval Process FAQ
• A Cheat Sheet to Navigate the Complex Maze of Exclusivities in the United States ¹⁰
• Patent and Marketing Exclusivities 101 for Drug Developers ¹¹

Interested in Learning More? ¶

Drug exclusivity information is tracked in the FDA Orange Book. While a useful resource, it is important to note that the Orange Book is maintained by the FDA but the contents are voluntarily submitted by drug sponsors and are not necessarily checked for accuracy.