The Food and Drug Administration (FDA) has finally—after thirteen years—issued its final rule to amend its current regulations and implement the Medical Modernization Act governing how the American public get their generic drugs.

Until now, the FDA has been issuing requirements based on the statute itself for how brand-name drug companies list their patents, craft “use codes” to characterize their patents, and insert new patents where in some cases there had been none before. The shareholders in the process for enabling generic drugs to get to market—the generic companies, the FDA, the courts, and the public—have for a very long time found what they view as problems in how the brand-name drug companies listed and delisted patents—and in particular the mischief they contend “misuse codes” could cause by improperly requiring generic makers to muck through litigation that a simple carved-out label would have avoided.

The FDA’s final rule addresses all of these areas—notably leaving out “matters . . . related to forfeiture of 180-day exclusivity”, i.e. the so-called first-to-file marketing exclusivity available to the first generic company that files a challenge to a listed patent.

Specifically the FDA takes on the brand’s conduct in submitting use codes:

To address overbroad or ambiguous use codes, we are expressly requiring that if the method(s) of use claimed by the patent does not cover an indication or other approved condition of use in its entirety, the NDA holder’s use code must describe only the specific approved method of us claimed by the patent for which a claim of patent infringement could reasonably be asserted if a person not licensed by the patent owner [were to] engage[] in the manufacture, use, or sale of the drug product.

I.B. Summary of the Major Provisions of the Final Rule; 81(194) Fed. Reg. 69581 (Oct. 6, 2016).

We expect the generic players will groan. Although the language here admonishes the brands to submit only good-faith use codes, such that a generic company can presumably now do a proper label carve out and avoid unnecessary litigation—or at least get summary judgment—the generic players have long complained about such good-faith imputations to the brands. And—here’s the rub—the FDA, as all operating in this space know—insists that its role is ”ministerial”—meaning that it will not second-guess whatever patent-related information that brand submits, i.e. the FDA will not resolve particular brand-generic disputes in this area. By default, the brand’s submissions stand: it is the brand—not the FDA—that is the arbiter of proper patent information. The generics believe and contend this is to their detriment and the public’s. This also is said to occur on the notorious Risk Evaluation and Mitigation Strategy (REMS) front. The FDA expressly informs the brand-name drug company that it may give the generic Abbreviated New Drug Application (ANDA) candidate drug samples for bioequivalency testing, but — according to reports — the brand refuses, indefinitely blocking generic competition. The FDA has said it is the Federal Trade Commission (FTC), not the FDA, that needs to resolve such disputes. This blocking tactic is a hot topic on Capitol Hill.

It is, therefore, very important that, buried within the 79-page final-rule document, we see something new in the context of the listing of method-of-use-patent and use-code disputes:

We intend to take an incremental approach and evaluate whether FDA’s revisions to the regulations on submission of method-of-use patent information and listing dispute procedures adequately address the problem of overbroad and ambiguous use codes before we determine whether a process to review a proposed labeling carve-out with deference to the 505(b)(2) and/or ANDA applicant(s)’ interpretation of the scope of the patent is needed.

I.B.3. Summary of the Major Provisions of the Final Rule; 81(194) Fed. Reg. 69581, 69604 (Oct. 6, 2016).

This is truly an extraordinary development. The FDA has finally recognized the importance of crediting the challenging generic’s position, rather than simply defaulting to the brands’.

This willingness of the FDA to “defer” to a generic company’s articulated position on over-reaching patents and use codes is a critical development for all of the players, and it is anticipated that the generic companies will  watch and promote that position. The FDA for now may still be just a “minister” — but it seems to be a minister with portfolio.