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Congressional Research Service


0


May 17, 2019


Drug Pricing and the Law: Regulatory Exclusivities


The Food and Drug Administration (FDA) generally must
approve pharmaceutical products, such as drugs and
biologics, before they can be marketed in the United States.
To obtain approval of a new drug or biologic (i.e., the
brand-name or reference product), the sponsor must submit
to FDA data from clinical investigations demonstrating that
the underlying product is safe and effective for its intended
use. Conversely, a follow-on product, such as a generic
drug or biosimilar, via an abbreviated process by relying
upon the data generated to support approval of the reference
product. In order to balance interests in competition with
the countervailing interest in encouraging innovation,
federal law establishes periods of regulatory exclusivity that
limit FDA's ability to approve applications to market
pharmaceutical products under certain circumstances.

There are two general categories of regulatory exclusivity:
(1) data exclusivity, which precludes applicants from
relying on the reference product's clinical data to


demonstrate the safety and effectiveness of the follow-on
product; and (2) marketing exclusivity, which precludes
FDA from approving any other application for an identical
or biosimilar product for the same use, even if the applicant
has generated its own data. During a period of data
exclusivity, a company could theoretically submit a full
application with its own data for the same pharmaceutical
product and use. As a practical matter, however, data
exclusivity and marketing exclusivity may generate the
same result due to the significant investments required to
generate the necessary safety and effectiveness data.

This table describes the types of exclusivities available,
their duration, criteria to obtain them, and the impact on
FDA's ability to approve other applications. For more
information, see CRS Report R45666, Drug Pricing and
Intellectual Property Law: A Legal Overview for the 116th
Congress, coordinated by Kevin J. Hickey.


Table I.Regulatory Exclusivities for Pharmaceutical Products for Human Use

   Type of Exclusivity         Length                          Criteria                               Effect

   Drugs


New Chemical Entity
21 U.S.C.
§§ 355(c)(3)(E)(ii),
355(j)(5)(F)(ii), 355(u)


Other New Product
21 U.S.C.
§§ 355(c)(3)(E)(iii) & (iv),
355(j)(5)(F)(iii) & (iv)

First to File
Paragraph IV
21 U.S.C.
§ 355(j)(5)(B)(iv)


5 years; may be
reduced to 4
years if
abbreviated new
drug application
(ANDA) contains
paragraph IV
certification that
a patent listed for
the reference
drug is invalid or
not infringed by
the generic
product


3 years





180 days


Application for drug containing an active
ingredient that has not been approved before;
or application for a drug that contains as an
active ingredient a single enantiomer (each of a
pair of molecules that are mirror images of one
another) that:
(I) is contained in a previously approved racemic
drug (a mixture of two enantiomers in equal
amounts) but has not otherwise been approved
as an active ingredient;
(2) treats a therapeutic category that is different
from that of the racemic drug or other approved
enantiomer of the drug; and
(3) does not rely on data contained in application
for previously approved racemic drug and must
include full reports of new clinical investigations

Application for a change to an approved drug
that contains at least one new clinical
investigation that is essential to the approval of
the application and is conducted or sponsored by
the applicant

First to file an ANDA with a paragraph IV
certification that a patent listed for the reference
drug is invalid or not infringed by the generic
product


FDA cannot accept an
abbreviated application for
the same active ingredient
that relies on the data in the
reference drug application


FDA cannot approve an
application that relies on the
data in the reference drug
application for 3 years


FDA cannot approve another
ANDA for the same drug
until 180 days after first
commercial marketing of first
filer


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