Why is 505(b)(2) a must-have strategy for your company’s long-term growth, success, and survival?
Vanilla generic programs are commoditized and fighting for pennies on bottles. In some cases, they are sold at a loss. Constant threats of right-of-first refusals (ROFRs) from the wholesaler and cutthroat competition in this crowded generic industry have forced many companies out of business, sold off their generic business or consolidated. When the race to the bottom is the norm with millions of dollars invested at stake with lengthy approval timelines, 505(b)(2) offers a unique opportunity to small molecule generics and brand companies. As the generic drug industry slowly moves to the 505(b)(2) battleground, are you ready to secure long-term growth, success and survival for your company?
What is 505(b)(2)?
505(b)(2) is a pathway for the approval of new drugs by the U.S. Food and Drug Administration (FDA). This pathway allows for the submission of a New Drug Application (NDA) that relies, in part, on data from previously approved drugs.
This pathway was created to allow for the approval of drugs that are like existing drugs but have some differences, such as a different formulation, dose, route of administration, or indication.
The 505(b)(2) pathway can streamline the drug development and approval process because it allows the use of existing data, reducing the amount of new data that needs to be generated. However, depending on the nature of the program, it still requires the submission of new clinical data to support the drug approval.
Compared to the traditional NDA pathway, the 505(b)(2) pathway can be advantageous for drug developers because it can lead to a faster and potentially less expensive approval process. However, it can also be more challenging because it requires careful consideration of the existing data and the regulatory requirements.
FDA has detailed the overview of the 505(b)(2) regulatory pathway for new drug applications here:
How is the 505(b)(2) pathway gaining traction?
- Patent Protection: Drugs approved through the 505(b)(2) pathway can offer stronger patent protection than drugs approved through the ANDA pathway. That can provide drug developers with a competitive advantage and a longer period of market exclusivity before generic competition is allowed.
- Faster Approval Times: While the approval process for the 505(b)(2) pathway can take longer than the ANDA pathway, it can still be faster than the traditional New Drug Application (NDA) pathway. That can enable drug developers to bring new drugs to market more quickly and capture market share.
- Cost Savings: The 505(b)(2) pathway can allow drug developers to save on development costs by leveraging existing data, such as data from previously approved drugs. That can reduce the time and resources required for drug development and increase the likelihood of success.
- Flexibility: The 505(b)(2) pathway offers greater flexibility in terms of the types of data required for approval. That can enable drug developers to submit more tailored and efficient applications that are better suited to their development strategies.
Overall, the 505(b)(2) pathway has become an increasingly popular regulatory pathway for drug developers due to its potential for stronger patent protection, faster approval times, cost savings, and greater flexibility. However, drug developers must carefully consider their options and select the regulatory pathway that is best suited for their particular drug and development strategy. There are numerous drugs approved through the 505(b)(2) pathway by the FDA over the past few years. Here are some examples:
- Fleqsuvy (baclofen oral suspension): This drug was approved in 2022 to treat spasticity resulting from multiple sclerosis, particularly for the relief of flexor spasm and concomitant pain, clonus, and muscular rigidity.
- Sezaby (phenobarbital sodium for injection): This drug was approved in 2022 to treat neonatal seizures in term and preterm infants.
- Adhansia XR (methylphenidate hydrochloride): This drug was approved in 2019 to treat attention-deficit/hyperactivity disorder (ADHD) in patients 6 years and older.
- Vazculep (phenylephrine hydrochloride injection): This drug was approved in 2017 to treat clinically significant hypotension resulting primarily from vasodilation in the setting of anesthesia.
- Zubsolv (buprenorphine and naloxone sublingual tablets): This drug was approved in 2013 for the maintenance treatment of opioid dependence.
What are the risks associated with 505(b)(2)?
- Regulatory Uncertainty: Because the 505(b)(2) pathway relies on existing data, there can be some uncertainty around the regulatory requirements and the data needed to support the drug approval. That can make it challenging for drug developers to know what data they need to collect and how to design their studies.
- Intellectual Property Challenges: Using existing data in the 505(b)(2) pathway can create intellectual property challenges, if the drug developer uses data from a competitor’s product. This can lead to disputes over patent infringement and intellectual property rights.
- Clinical Development Challenges: While the 505(b)(2) pathway can streamline the drug development process, it still requires the submission of new clinical data to support the approval of the drug. This can be challenging and expensive, particularly if the drug developer needs to conduct new clinical studies.
- Commercialization Challenges: Drugs approved through the 505(b)(2) pathway can face commercialization challenges, if they are competing with existing, well-established drugs in the same therapeutic area.
Overall, the 505(b)(2) pathway can offer significant benefits for drug developers but also poses some risks and challenges that need to be carefully considered. The budget to develop a drug under the 505(b)(2) pathway can vary widely depending on many factors such as the therapeutic area, complexity of the drug, required data, and clinical trial requirements. However, developing a drug under the 505(b)(2) pathway generally requires a lower budget compared to developing a drug under the traditional New Drug Application (NDA) pathway, as some data can be leveraged from existing sources. Some of the typical costs involved in the development of a drug under the 505(b)(2) pathway may include:
- Preclinical Studies: Not all, but in some cases, these studies are conducted to evaluate the safety and efficacy of the drug in animal models and can cost hundreds of thousands of dollars.
- Clinical Trials: Clinical trials are the most expensive part of drug development, and the cost can vary widely depending on the size, complexity, and duration of the trial. Clinical trial costs can range from a few million dollars to over $30 million.
- Regulatory Fees: Drug developers are required to pay fees to the FDA for the review of their applications. These fees can range from approximately 1.5 to 3 million dollars depending on the type of application. A fee waiver option is available for the 1st time filer and/or small businesses. A tax break is also an option for certain types of applications, e.g. Orphan drugs.
- Manufacturing Costs: These costs include the development and production of the drug, including raw materials, production equipment, and personnel costs. Manufacturing costs can range from a few thousand dollars to several million dollars.
- Intellectual Property: Patent and legal fees can be a significant expense in the drug development process, particularly in cases where the drug includes a new formulation or delivery method.
The 505(b)(2) pathway offers a unique opportunity for both small molecule generics and brand companies to thrive in a crowded market. However, developing a drug under the 505(b)(2) pathway can require a significant investment of time and resources, but it can still be a more cost-effective option compared to the traditional NDA pathway.
At WiTii Consulting, we can assist you through the 505(b)(2) process and ensure that you render the most effective strategy and approach, for we specialize in Drug Development and CMC services related to generics, complex generics and 505(b)(2). Contact us for assistance with the 505(b)(2) process at admin@witii.us
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