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  5. Small Business Assistance: Frequently Asked Questions for New Drug Product Exclusivity
  1. CDER Small Business & Industry Assistance (SBIA)

Small Business Assistance: Frequently Asked Questions for New Drug Product Exclusivity

1. What is new drug product exclusivity?

New Drug Product Exclusivity is provided by the Federal Food, Drug, and Cosmetic Act under section 505(c)(3)(E) and 505(j)(5)(F). Exclusivity provides the holder of an approved new drug application limited protection from new competition in the marketplace for the innovation represented by its approved drug product. This limited protection precludes approval of certain 505(b)(2) applications or certain abbreviated new drug applications (ANDAs) for prescribed periods of time. Some exclusivity provisions also provide protection from competition by delaying the submission of 505(b)(2) applications and ANDAs for certain periods of time. Exclusivity is available for new chemical entities (NCEs), which by definition are innovative, and for significant changes in already approved drug products, such as a new use. New drug product exclusivity includes two categories of exclusivity (described in Q & A #6) both NCE and "other significant changes" exclusivity.

2. Why is new drug product exclusivity also known as the Hatch/Waxman exclusivity?

On September 24, 1984 the President signed into law the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch/Waxman Amendments). Title 1 of the Hatch/Waxman Amendments amended the Federal Food, Drug, and Cosmetic Act (the Act) to expand the universe of drugs for which FDA would accept ANDAs. The Hatch/Waxman Amendments also provided for New Drug Product Exclusivity and are often referred to as Hatch/Waxman exclusivity since Senator Hatch and Congressman Waxman sponsored the amendments in Congress to encourage research and development, as well as to speed entry of generic drugs into the market.

 3. What is a 505(b)(2) application?

A 505(b)(2) application is one described under section 505(b)(2) of the act as an application for which one or more of the investigations relied upon by the applicant for approval "were not conducted by or for the applicant and for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted" (21 U.S.C. 355(b)(2)). This provision expressly permits FDA to rely for approval of an NDA, on data not developed by the applicant such as published literature or the agency’s finding of safety and effectiveness of a previously approved drug.

505(b)(2) applications are submitted under section 505(b)(1) of the act and are therefore subject to the same statutory provisions that govern 505(b)(1) applications that require among other things, "full reports" of safety and effectiveness.

4. What is an abbreviated new drug application (505)(j)?

An abbreviated new drug application is described under section 505(j) of the Act as an application that contains information to show that the proposed product is identical in active ingredient, dosage form, strength, route of administration, labeling, quality, performance characteristics and intended use, among other things to a previously approved application (the reference listed drug (RLD). ANDAs do not contain clinical studies as required in NDAs but are required to contain information establishing bioequivalence to the RLD. In general, the bioequivalence determination allows the ANDA to rely on the agency’s finding of safety and efficacy for the RLD.

 5. What is a full new drug application 505(b)(1)?

A 505(b)(1) application is described by section 505(b)(1) of the act as an application that contains full reports of investigations of safety and effectiveness, in addition to other information. The data in the application is either owned by the applicant or is data for which the applicant has obtained a right of reference.

6. What are the time periods of new drug product exclusivity?

A 5-year period of exclusivity is granted to new drug applications for products containing chemical entities never previously approved by FDA either alone or in combination. No 505(b)(2) application or ANDA may be submitted during the 5-year exclusivity period except that such applications may be submitted after 4 years if they contain a certification of patent invalidity or noninfringement. A 3-year period of exclusivity is granted for a drug product that contains an active moiety that has been previously approved, when the application contains reports of new clinical investigations (other than bioavailability studies) conducted or sponsored by the sponsor that were essential to approval of the application. For example, the changes in an approved drug product that affect its active ingredient(s), strength, dosage form, route of administration or conditions of use may be granted exclusivity if clinical investigations were essential to approval of the application containing those changes.

 7. What is the definition of a "new clinical investigation"?

FDA interprets "new clinical investigation" as an investigation in humans, the results of which (1) have not been relied upon by FDA to demonstrate substantial evidence of effectiveness of a previously approved drug product for any indication or of safety in a new patient population and (2) do not duplicate the results of another investigation relied upon by FDA to demonstrate a previously approved drug’s effectiveness or safety in a new patient population. A clinical investigation that provides a "new" basis for approval of an application can qualify for exclusivity. In this context, "new" is intended to convey a lack of prior use of a clinical investigation rather than any temporal requirement.

8. What is the definition of a "new chemical entity"?

A new chemical entity means a drug that contains no active moiety that has been approved by FDA in any other application submitted under section 505(b) of the Act.

9. What is the definition of an "active moiety"?

An active moiety means the molecule or ion, excluding those appended portions of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or coordination bonds), or other noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule, responsible for the physiological or pharmacological action of the drug substance.

10. What is the definition of "Conducted or sponsored by the applicant"? 

An investigation conducted or sponsored by the applicant means that before or during the investigation, the applicant was named in Form FDA 1571 filed with FDA as the sponsor of the investigational new drug application under which the investigation was conducted, or the applicant or the applicant’s predecessor in interest, provided substantial support for the investigation. An applicant who has purchased exclusive rights to a study should be able to obtain new drug product exclusivity. Applicants cannot qualify for exclusivity by simply collecting and submitting to FDA information from the literature or buying the results of tests already done and submitting them to FDA without obtaining exclusive rights for those tests.

11. What types of applications can receive 5 year and 3 year periods of exclusivity?

Full new drug applications under 505(b)(1) and 505(b)(2) can receive 5 years of exclusivity for a new chemical entity drug product. A 505(b)(1), 505(b)(2) application or a supplement to a new drug application can receive 3 years of exclusivity.

 12. Is the original applicant required to conduct the complete study to obtain exclusivity?

 No, FDA interprets the Act to allow for exclusivity where the applicant has conducted or sponsored the study by providing 50 percent of the funding or by purchasing exclusive rights to the study.

13. Do the new drug product exclusivity provisions of the Act provide any protection from the marketing of a duplicate version of the same drug product if the duplicate version is the subject of a full new drug application submitted under 505(b)(1) of the Act? 

No, the new drug product exclusivity provisions do not provide any protection under these conditions.

14. Are there other types of exclusive marketing available?

Yes, there is orphan drug exclusivity, pediatric exclusivity, 180-day generic drug exclusivity, and patent protection (For an explanation of orphan drug exclusivity, pediatric exclusivity, and patent term extension/also referred to as patent term restoration.  See the Small Business Assistance: Economic Assistance and Incentives web page.

15. Can the six months of pediatric exclusivity be added to the 5 or 3 years of new drug product exclusivity? 

Yes, pediatric exclusivity is the only exclusivity that runs from the end of other exclusivity protection (New Drug Product and Orphan Drug) or patent protection. A six-month pediatric exclusivity that attaches after a patent term is not a patent extension; it is a FDA-enforced exclusivity period that begins at the termination of the patent.

 16. How do you apply for New Drug Product Exclusivity?

There is no requirement to apply. The Center for Drug Research and Evaluation (CDER) makes exclusivity determinations on all relevant applications. There is a procedure in CDER that provides review of all relevant applications, with or without a request from the applicant, for an exclusivity determination.

17. Where do you find information on drugs that have received New Drug Product Exclusivity? 

The Orange Book & Supplements/Electronic Orange Book, has an addendum with patent and exclusivity information. The Orange Book, Approved Drug Products with Therapeutic Equivalence Evaluations,identifies drug products approved on the basis of safety and effectiveness by the Food and Drug Administration (FDA) under the Federal Food, Drug, and Cosmetic Act.  See the electronic Electronic Orange Book.

18. Where do you find the regulations for New Drug Product Exclusivity? 

The regulations are at 21 CFR 314.108.

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