Last week, the House passed the Fairness in Orphan Drug Exclusivity Act and Aquestive Therapeutics stock soared after a potentially, life-saving type A meeting for their drug, Libervant. We’ve compiled a breakdown of noteworthy developments in biotech that focus on the economics of innovation.
Fairness in Orphan Drug Exclusivity Act
The House of Representatives unanimously passed the Fairness in Orphan Drug Exclusivity Act. The bill would require drugmakers to prove that they don’t expect to recoup R&D costs through U.S. sales in 12 years in order to obtain orphan drug designation. Currently, the Orphan Drug Act provides two mechanisms for orphan drug designation: if it affects less than 200,000 people in the U.S., or if it affects more than 200,000 people in the U.S., drug companies must not expect the cost of development to be recovered from U.S. sales. Orphan drug designation was created to reward biopharma companies with seven-year marketing exclusivity for developing drugs for rare diseases. Many argue that the current law has unintended consequences because it allows market exclusivity to be extended for a new version of the same drug without the contingency of showing unprofitability again.
This legislation was born out of controversy with Indivior’s opioid addiction treatment, buprenorphine. The drug, as an under-the-tongue formulation, was granted FDA approval and seven-year exclusivity under the brand Subutex in 1994. In 2016, Indivior won approval for a new injectable version, Sublocade, and also received the seven-year exclusivity. In late 2019, the FDA reversed its original orphan designation to allow other generics to enter the market, arguing Indivior had already reaped billions of dollars from the drug. For orphan exclusivity granted before potential enactment of the Act, a drugmaker has 60 days to show that, at the time of approval, it didn’t reasonably expect to recoup the R&D costs within 12 years of first marketing the drug. If a drugmaker cannot deliver the evidence, the FDA will revoke the exclusivity.
What Does An FDA Type A Meeting Mean?
Last week, Aquestive Therapeutics shares were trading higher after they announced completion of a Type A meeting with the FDA. The meeting was to confirm a pathway for resubmission for approval of Libervant, a drug to aid in management of seizure clusters. Previously, the FDA issued a complete response letter indicating the review cycle for the application was complete and could not be approved in its current form. They cited unsatisfactory drug exposure levels for certain weight groups and protocol deviations as the cause. In a type A meeting, the FDA confirmed issues identified in their CRL may be addressed by utilizing modeling and simulations for an updated dosing regimen, in lieu of undertaking a new study. This new development for Libervant could place it in a strong position for it’s resubmission but what exactly does a Type A meeting mean?
Prior to approval of a drug, regulators and product sponsors meet several times to discuss details and areas of concern, these discussions occur through three types of meetings. As in the case of Libervant, Type A meetings are used to help an otherwise stalled product development program proceed. Type B meetings are routine meetings at pre-defined endpoints between the FDA and a sponsor. Type B are the most common meetings and typically occur immediately after or before the submission of clinical data or a new drug filing. Any meeting that is not Type A or B is a Type C meeting (e.g. a meeting for early consultation on the use of new surrogate endpoints). Biopharma companies meeting with regulators could signal a shift in their shares depending on the purpose and purview of discussion. Knowing what type of meeting they will have can give a good idea of what is in store for a new drug application.