Orphan Drug Exclusivity (ODE) – FDA Continues Its Attack

June 27, 2023

Orphan drug exclusivity was created in 1983 to encourage pharmaceutical companies to develop drugs for diseases which affect less than 200,000 persons in the U.S. Jazz Pharmaceuticals developed Xwav® to treat narcolepsy, a rare sleep disorder characterized by excessive daytime sleepiness and cataplexy, voluntary muscle weakness. Xywav® received orphan drug exclusivity until July 2027 when it expires.  Xywav® comprises the drug oxybate as mixed salts of calcium, magnesium, potassium, and sodium oxybate. The Orphan Drug Act 21 U.S.C. 360 cc (b) provides the exclusivity can be broken if: 

(1)   The exclusivity holder cannot meet the needs of the persons with the condition; or

(2)   The exclusivity holder provides written consent to the FDA to issuing additional licenses for the drug; 

A drug with an existing ODE may obtain an additional ODE under subsection (c):

(3)   If the sponsor demonstrates that it is clinically superior to the approved product where “clinically superior” is defined as greater efficacy, greater safety, or by providing a major contribution to patient care.

In May, the FDA licensed a competitive oxybate product by Avadel CNS Pharmaceuticals to treat narcolepsy. The drug was approved under (3) as allegedly being “clinically superior” even though the FDA acknowledged that the provision did not authorize the FDA to break an unexpired exclusivity. The FDA approval letter is here. Provision (3) allows for serial ODE exclusivities. Xywav® was the second Jazz oxybate formulation to obtain ODE; the first was Xyrem® which was sodium oxybate. Dosing with Xyrem® exposed the patient sodium levels beyond the recommended limits and was problematic for those with cardiac issue. Xywav® received ODE because it did not increase sodium levels and was considered “clinically superior” to Xyrem®. Note that serial ODE does not currently restrict the number of serial ODEs. Jazz’s oxybate has received four ODEs, three for Xyrem® with the last expiring October 2025 and one for Xywav® expiring July 2027 for a total exclusivity period of 25 years if Jazz succeeds in the litigation. The oxybate exclusivities are here.

This is not the first time the FDA has acted without statutory authority. See Catalyst Pharms., Inc. v. Becerra, 14 F.4th 1299 (11th Cir. 2021); Eagle Pharms., Inc. v. Azar, 952 F.3d 323 (D.C. Cir. 2020) (“Eagle II”); United Therapeutics Corp. v. HHS, No. 17-01577 (ESH), 2020 WL 6498619 (D.D.C. Sept. 2, 2020); Eagle Pharms., Inc. v. Azar, No. 16-790 (TJK), 2018 WL 3838265 (D.D.C. June 8, 2018) (“Eagle I”); Depomed, Inc. v. HHS, 66 F. Supp. 3d 217 (D.D.C. 2014) (Jackson, J.). In these cases, the FDA had used the clinical superiority to achieve two purposes -- first to break the ODE exclusivity, and second to provide for a serial ODE. The FDA’s position was rejected to break the ODE. Congress amended the statute to remove allegedly ambiguous language regarding “same drug” to legislatively confirm the use of clinical superiority for serial exclusivity, but did not authorize its use to break ODE.

One seeking ODE needs to be aware that the FDA is ignoring the statute and court decisions in interpreting the statute in a way the FDA believes it should have been written, and not as it is written, and that the exclusivity may be ephemeral. It is difficult to feel sorry for Jazz as it has enjoyed 21 years of ODE regulatory exclusivity.