On Friday, November 20, 2020, the United States Food and Drug Administration (FDA) announced it would end the Unapproved Drugs Initiative (UDI), a program launched in 2006 to encourage manufacturers to seek approval for older drugs that were introduced to the market before the beginning of the FDA approval processes.
The UDI was initially instituted because many drugs used today entered the market prior to 1938, when the FDA started safety reviews. In 2006, when the UDI was launched, manufacturers were required to remove those drugs and other unapproved drugs (those categorized as “generally recognized as safe and effective” – GRASE) from the market and seek review and approval of the drug. Following that new approval, manufacturer-sponsors would then receive a limited period of exclusivity on the drug.
However, the Trump Administration contends that the UDI has inadvertently allowed manufacturers to increase prices on older drugs and has resulted in unexpected shortages. This is because when a sponsor’s application for approval of an old drug is approved, its competition is removed from the market and it is given an exclusivity period, which can then result in manufacturers using that exclusivity period as a monopoly to charge more for the drug.
The FDA also stated that the UDI did not achieve its goals of providing the FDA with more data regarding older drugs. Instead, the Agency cites a Yale study that found that the program actually “rarely generat[ed] additional clinical evidence of safety or efficacy.” The study specifically references a review of 34 previously unapproved drugs that were approved by the FDA between 2006 and 2015, which found that manufacturers produced new clinical studies in only two cases.
By withdrawing guidance documents under the UDI, the regulatory environment for unapproved drugs essentially returns to the pre-2006 guidance. This means that exclusivity that had been granted upon receiving approval for a previously unapproved drug will not be given and the FDA will not take any action against unapproved drugs that it would have taken under the UDI.
It’s uncertain what kind of impact this will have on the regulatory horizon. FDA has indicated that it is unaware of any unapproved prescription drugs that are lawfully marketed that would either be considered GRASE or grandfathered. To confirm that, the FDA issued a request for information along with this notice, seeking information on drugs that were marketed prior to the era of FDA review and approval or is GRASE.
Going forward, only manufacturers of “new drugs” under the terms of the FD&C Act that meet other statutory requirements are entitled to receive regulatory exclusivity. However, the revocation of the UDI does not apply to drugs subject to (1) Investigational New Drug applications (IND) that are in effect as of the effective date of this Notice, (2) any subsequent NDA based on new clinical trial investigations (other than bioavailability studies) derived under such IND, and (3) existing approved NDAs.
FDA also requested information on the parameters of the exceptions to the definition of “new drug.” This action will become effective 30 days after the publication of the Notice in the Federal Register.