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FDA Issues Competitive Generic Therapies (CGTs) Statement and Guidance Regarding CGT Designation, Approval Pathway, and Market Exclusivity

  • 02/21/19
  • Alerts
  • Industry Alerts
  • Global Generics


Recently, the United States Food and Drug Administration (FDA) Commissioner Scott Gottlieb issued a statement (the statement) outlining a new policy to improve access and foster price competition for branded drugs that are not likely (at least in the short term) to face generic competition.1 The statement recites that several hundred branded drugs—which lack patent and regulatory exclusivity protection—do not face "expected" competition.2 At least two factors, alone or in combination, are thought to contribute to the inadequate competition, and appear to be discouraging generic manufacturers from developing cheaper generics: 1) a limited market; and 2) the drugs are complex (and therefore more difficult to copy).3


Daraprim is an example of the type of drug that is not likely to face generic competition any time soon, even though the drug was first approved prior to 1982. Daraprim came to the public's attention when Martin Shkreli, then CEO of Turing Pharmaceuticals (now Vyera Pharmaceuticals), bought the rights to the drug and subsequently raised Daraprim's price more than 5,000 percent (from $13.50 to $750 per pill). This price hike resulted in extremely unfavorable public perception of Shkreli and Turing, negatively impacted Daraprim patient access, set in motion a chain of events that ultimately resulted in Shkreli being sentenced to seven years in federal prison for securities fraud,4 and most recently had a negative drug sales impact.5 A number of organizations, including Fair Access Medicines,6 have contemplated bringing a generic version of Daraprim to market. To date, no generic version has come to the U.S. market.

The Statement

The statement outlines steps the FDA has taken, and intends to take, to reduce barriers to generic drug development and lower the cost of generic drug entry. The FDA intends, in the future, to issue additional guidance documents for developing specific complex generic medications. These include guidances to address regulatory and scientific challenges that "make it generally more difficult to develop complex generics."7 Among these, FDA expects to issue draft guidance with "recommendations on establishing active ingredient sameness."8 The FDA also intends to "advance the development of new analytical tools and in vitro tests" to provide "additional, sensitive, and reproducible tools"9 to support approval of complex generic drugs.

The Guidance: Competitive Generics Therapies (CGTs) Designation, Approval Pathway, and Market Exclusivity

The FDA recently issued a draft guidance (the guidance) outlining various aspects of the Competitive Generics Therapy (CGT) approval pathway, designation, and market exclusivity.10 The guidance applies to certain generic version(s) of a previously approved, Orange Book listed drug.11 Therefore, the guidance applies predominantly to small molecule generic drugs and drug candidates. The guidance recites that "the term drug is intended to cover any product submitted for approval in an abbreviated new drug application, or ANDA, including those products meeting the definition of a combination product…"12 We highlight selected provisions of the guidance below.

The FDA Reauthorization Act of 2017, or FDARA, created a new pathway by which FDA may, at the request of an ANDA applicant, designate a generic drug candidate as a CGT. The FDA may designate a generic drug candidate as a CGT after determining there is "inadequate generic competition" for e.g., a reference listed drug.13 "Inadequate generic competition" means "there is not more than one approved drug in the active section of the Orange Book."14

Generic drug applicants can submit a CGT designation request with, or any time prior to, ANDA submission.15CGT designation requests should include: 1) a pre-assigned ANDA number; 2) a statement supporting the request that contains sufficient identification of the particular drug product that will serve as the basis of submission of the proposed ANDA (e.g., application number of the reference listed drug, proprietary name, and drug strengths); and, 3) information supporting the assertion that there is inadequate generic competition.16 CGT designation requests should be made electronically through the Electronic Submissions Gateway. Form FDA 356h should be submitted with the CGT request.17 The FDA intends to make determinations on CGT designation requests within 60 calendar days of request receipt and will send the determination to the generic applicant.18

Drug applicants who have a CGT designation may request expedited generic drug development and ANDA review.19 The FDA provides several factors it will consider when determining whether to grant expedited development including: 1) the complexity of developing an ANDA; 2) the potential health impact, including the severity of the condition treated and the size of the impacted population and the availability of therapeutic alternatives; and 3) the impact on FDA resources of granting the request.20 Actions the FDA can take to expedite development include: 1) increased product development meetings; and 2) pre-submission meetings.21 Actions FDA may take to expedite ANDA review include: 1) mid-cycle review meetings; 2) coordinated review of CGTs; and 3) good ANDA assessment practices.22

CGT Market Exclusivity: A Different 180-Day Generic Drug Market Exclusivity

A sponsor of a first approved, CGT designated drug can trigger a 180-day CGT market exclusivity period by commencing "first commercial marketing [in the U.S.] of the CGT"23 within 75 days of approval.24 During this CGT market exclusivity period, the FDA is restricted from approving ANDAs for a drug that is the same as the first approved CGT.25 Thus, commercial marketing upon approval is important to the CGT program. If there is a significant gap between approval and marketing, the FDA may, during the gap period, approve other generic drugs which are the same as the first approved CGT.

The CGT designated generic drug applicant must qualify as a first approved applicant, which is defined as an applicant that: 1) is for a CGT that is approved on the first day on which any application for such designated competitive generic therapy is approved; 2) is not eligible for a 180-day exclusivity period under section 505(j)(5)(B)(iv) for the drug that is the subject of the application for the CGT; and, 3) is not a drug for which [al] drug versions have forfeited eligibility for a 180-day exclusivity period under section 505(j)(5)9B)(iv) pursuant to section 505(j)(5)(D).26

"There can be multiple first approved applicants for the same CGT, if all such ANDA applicants obtain approval for their ANDAs for the same CGT on the same day, [then] such approvals constitute the first ANDA approvals for this CGT."27

It is worth noting that 180 days of CGT market exclusivity is different from the 180-day exclusivity period available to first ANDA filing generic drug makers who successfully challenge a patent (paragraph iv) under the Hatch-Waxman Act (patent challenge exclusivity). To highlight this difference, and as noted above, there are no unexpired patents listed in the Orange Book for CGT designated drugs.

FDA strongly recommends that the first approved, CGT applicant submit general correspondence, in duplicate, to the agency informing the FDA when commercial marketing has commenced. The guidance recites that FDA will assume that "no holder of CGT exclusivity has begun commercial marketing, and thus that no CGT exclusivity blocks approval of a subsequent ANDA, unless the first approved applicant provides the FDA with written notification confirming that it has commenced commercial marketing."29 The FDA also notes, absent written notice of commercial marketing within the 75-day, post-approval period, that the FDA will assume the CGT exclusivity has been forfeited.30


Generic drug manufacturers should be aware of the CGT designation requirements, the marketing and notice requirements, and how CGT market exclusivity may be forfeited. For questions about CGT designation, approval pathway, market exclusivity, "inadequate generic competition," or any generic or branded drug question, please contact David Hoffmeister, Vern Norviel, or any member of Wilson Sonsini's patents and innovation strategies or FDA/life sciences groups.

1 "Statement from FDA Commissioner Scott Gottlieb, M.D., on new policy to improve access and foster price competition for generic drugs that face inadequate generic competition," FDA (Feb. 2019); available at: https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm631456.htm.
2 Id.
3 Id.
4 Dan Mangan, "'Pharma bro' Martin Shkreli sentenced to 7 years in prison—says, 'This is my fault'," CNBC (Mar. 2018); available at: https://www.cnbc.com/2018/03/09/pharma-bro-martin-shkreli-sentenced-to-7-years-in-prison.html.
5 Beth Mole, "The 5,000% price hike that made Martin Shkreli infamous is no longer paying off," ARS Technia (Jul. 2018); available at: https://arstechnica.com/tech-policy/2018/07/shkrelis-former-company-is-now-losing-money-even-with-the-5000-price-hike/.
6 To understand more about Fair Access Medicines, please visit https://www.fairaccessmedicines.org/.
7 The statement.
8 Id.
9 Id.
10 "Competitive Generic Therapies: Draft Guidance for Industry," FDA (Feb. 2019); available at: https://www.fda.gov/ucm/groups/fdagov-public/@fdagov-drugs-gen/documents/document/ucm631401.pdf.
11 The Orange Book listed drug may be either a reference listed drug, or a generic drug approved in an ANDA referencing the same reference listed drug for which the CGT designation is sought.
12 Id. at 1, n.3.
13 Id. at 3.
14 Id.
15 Id. at 4.
16 Id. at 5-6.
17 Id. at 6.
18 Id. at 5.
19 Id. at 7.
20 Id.
21 Id. at 8.
22 Id. at 9-10.
23 Id. at 13.
24 Id. at 14.
25 Id.
26 Id. at 11.
27 Id. at 12.
28 Id. at 15-16.
29 Id. at 15.
30 Id.