The Ensuring Innovation Act recently became law after passing in the Senate with unanimous, bipartisan support. According to one Senator, the intent of the legislation was to “close loopholes to prevent awarding market exclusivity to products that do not present true innovation and unduly delay cheaper generic from entering the market.” Is this much ado about nothing, or much to be concerned about?

Marketing exclusivity is commonly justified as an opportunity for a drug innovator to recoup its significant investment in developing, clinically testing, and satisfying the FDA as to the safety and efficacy of a new chemical entity (“NCE”). Whether the Ensuring Innovation Act is cause for concern among drug innovators, it seems, turns on the FDA’s historical practice.

The FDA has authority to grant prescription medicines different types of marketing exclusivities, including exclusivity for new medicines that meet the definition of an NCE. The NCE exclusivity precludes the FDA’s approval of any other applications for certain potentially competing drugs for a period of five years.

Previously, an NCE designation meant that the drug’s “active ingredient” was not previously approved by the FDA. The Ensuring Innovation Act replaced the term “active ingredient” with “active moiety” in the Federal Food, Drug, and Cosmetic Act (“FD&C Act”). In short, the change to the law is consistent with the FDA’s historical interpretation of the term “active ingredient.”

Before the new law, FDA regulations interpreted the FD&C Act such that NCE exclusivity would not be granted for a minor change to the chemical structure of an active ingredient that had no therapeutic significance. Not surprisingly, the FDA’s interpretation was the subject of several legal challenges, including a 2017 decision by the U.S. Court of Appeals for the District of Columbia Circuit – Otsuka Pharmaceutical Co., Ltd. v. Price – that upheld the FDA’s interpretation. The court rejected the argument that the FDA’s interpretation of the FD&C Act was inconsistent with the statute. The court cited, among other things, its prior decision in Actavis Elizabeth LLC v. FDA, where the D.C. Circuit upheld the FDA’s position that a prodrug of a previously approved medicine would be entitled to NCE exclusivity if it contained a different active moiety.

In line with Actavis and Otsuka, Congress appears to have codified the FDA’s same-moiety test, eliminating any perceived tension between the FD&C Act and existing regulations with respect to the award of NCE exclusivity.

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Photo of Michelle M. Ovanesian Michelle M. Ovanesian

Michelle Ovanesian is an associate in the Litigation Department, where she focuses on intellectual property and life sciences. Michelle has worked on a range of matters in federal district courts, including serving on the successful trial team in the Amgen Inc. v. Sanofi

Michelle Ovanesian is an associate in the Litigation Department, where she focuses on intellectual property and life sciences. Michelle has worked on a range of matters in federal district courts, including serving on the successful trial team in the Amgen Inc. v. Sanofi remand jury trial in the District of Delaware.

In addition to intellectual property and life sciences, Michelle’s practice has encompassed a variety of other legal matters, including privacy and cybersecurity, and bankruptcy litigation. Most recently, Michelle was part of the litigation team that represented the Financial Oversight and Management Board in the Commonwealth of Puerto Rico’s bankruptcy proceedings.

Michelle maintains an active pro bono practice, with a focus on immigration law and civil rights. As part of her pro bono work, Michelle has filed an amicus brief in state court supporting the constitutionality of executive orders.

Photo of Colin G. Cabral Colin G. Cabral

Colin Cabral is the co-head of Proskauer’s Patent Litigation Group. Colin is an experienced litigator and trial lawyer specializing in complex intellectual property and contract disputes.

Colin represents pharmaceutical, private equity, biotech, and medical device companies in high-stakes commercial litigation in the life…

Colin Cabral is the co-head of Proskauer’s Patent Litigation Group. Colin is an experienced litigator and trial lawyer specializing in complex intellectual property and contract disputes.

Colin represents pharmaceutical, private equity, biotech, and medical device companies in high-stakes commercial litigation in the life sciences industry. He also serves as lead counsel in patent and trade secret matters involving a wide range of technologies, including computer software, electronic devices, and consumer products.

Recently, Colin has tried multiple cases for pharmaceutical companies and investors in contract disputes arising out of unsuccessful drug development programs and the exercise of “commercially reasonable efforts.”

In 2017, Colin was named to Benchmark Litigation’s Under 40 Hotlist, which recognizes attorneys under the age of 40 who “have been deemed the most promising emerging talent in their respective litigation communities . . . by peers and clients.”

Previously, Colin served as in-house litigation counsel for a global life sciences company. He also served as a Special Assistant District Attorney in Dorchester, MA.

Colin volunteers as regular faculty for the National Institute for Trial Advocacy and the firm’s trial advocacy training program. He is Board Chairman of FreeFrom, a charitable organization that helps survivors of domestic violence achieve financial independence. He is also a former board member of the Legal Aid Foundation of Los Angeles (LAFLA).