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A federal court upheld the Food and Drug Administration’s approval of a competitor for a major drug Tuesday, a decision that possibly opens new avenues for drug companies eager to get products approved quickly.

In the case, Japanese drugmaker Otsuka Pharmaceutical challenged the FDA’s approval of an antipsychotic drug made by Alkermes Inc., called Aristada. Otsuka said Aristada was too similar to its Abilify Maintena. The FDA granted Otsuka a three-year period of exclusivity that expires in December, during which the FDA would not approve other applications for similar drugs.

But the agency said Aristada was not similar enough to Abilify, and a three-judge panel at the U.S. Court of Appeals for the D.C. Circuit ruled Tuesday the agency’s determination was reasonable. The ruling could expand another avenue for drug companies to circumvent exclusivity, some experts said.

“[The ruling] gives sort of a bright line that FDA is going to follow in similar circumstances,” said Kevin Nelson, a partner at Schiff Hardin who focuses on exclusivity issues. “It may lead to additional types of filings where [drug companies] try to get around these exclusivity problems.”

Wilmer Cutler Pickering Hale & Dorr partner Thomas Saunders argued the case for Otsuka, along with a team including former Solicitor General Seth Waxman and associate Robbie Manhas. Goodwin Procter partner William Jay argued on behalf of Alkermes, which intervened on the side of the FDA. He was joined by partners Brian Burgess, Sarah Frederick, Christopher Holding and associate Andrew Kim.

Neither Saunders nor Jay immediately responded to a request for comment.

Congress passed the Hatch-Waxman amendments to the Food, Drug and Cosmetic Act in 1984 to streamline the FDA approval process for drugs. The amendments provided a process to allow speedy approval of generic drugs without requiring brand-new studies on their ingredients, and a second option known as the “(b)(2) application,” which allows applications to rely on other companies’ studies in certain circumstances. However, the amendments also created “periods of exclusivity,” during which the FDA will not approve similar drugs as a tradeoff for the time and money companies expend to create new medicines.  

Despite Abilify’s period of exclusivity, the FDA approved Aristada because it has a different active ingredient, known as a moiety. Otsuka sued the agency in 2015, arguing the approval conflicted with the Hatch-Waxman Act’s goal of allowing pioneering companies to enjoy periods of exclusivity to make up for the millions spent on innovation. 

The court said that the FDA’s determination was not unreasonable, so it should therefore defer to the agency. It denied Otsuka’s argument that the drugs, while not chemically equivalent, were “legally equivalent.”

“Congress perhaps could have written a statute under which, if one drug relies on the safety or efficacy of a previously approved drug to obtain approval, the two drugs must be considered ‘legally equivalent’ for purposes of defining the previously approved drug’s zone of exclusivity. But the statutory [rules] nowhere expressly set out any concept of legal equivalence in describing the scope of marketing exclusivity,” Judge Sri Srinivasan wrote in the opinion.

Nelson explained that the (b)(2) application, used by Alkermes in this case, is typically an onerous option because requires a fair amount of time and money to satisfy. But the blessing of the D.C. Circuit could its “raise the profile.”  

“The (b)(2) process has always been a viable option, but now it might be even more viable for companies to proceed with,” Nelson said.

In approving of the FDA’s determination that the moieties in two drugs need to be the same in order to bar approval on the basis of exclusivity, the court provided a clear set of facts that can be used as a rough guide for companies looking to circumvent exclusivity, Nelson said.

Companies still need to get the science right to be successful, said Jim Shehan, head of the FDA regulatory practice at Lowenstein Sandler.

“You’ve got to find the right chemistry for that to work,” Shehan said. “It’s not like for every drug you can find this kind of situation where you can have something that’s a little different but ends up acting the same way in the body.”

Shehan added he’s “always a little bit wary” when the FDA narrows the scope of exclusivity. He said he favors “broader exclusivity because it’s intended to be a reward for innovation.”