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, and a member of the Intellectual Property and Privacy & Cybersecurity practice groups. Michelle’s practice primarily focuses on helping companies navigate the complex and rapidly evolving laws, regulations, and industry best practices relating to…

Michelle Ovanesian is an associate in the Litigation Department, and a member of the Intellectual Property and Privacy & Cybersecurity practice groups. Michelle’s practice primarily focuses on helping companies navigate the complex and rapidly evolving laws, regulations, and industry best practices relating to cybersecurity and data protection.

Her experience includes counseling clients through the important steps that must occur immediately after incidents, as well as navigating the federal and state government investigations and private litigations that often go hand-in-hand with cybersecurity incidents.

In addition, Michelle’s practice has encompassed a variety of other legal matters, including commercial and bankruptcy litigation, in both federal and state courts.  Most recently, Michelle was part of the successful litigation team that represented the Financial Oversight and Management Board in the Commonwealth of Puerto Rico’s bankruptcy proceedings.

Michelle is a registered patent attorney before the U.S. Patent & Trademark Office; and an International Association of Privacy Professionals (IAPP) Certified Information Privacy Professional, United States (US CIPP).

She maintains an active pro bono practice with a focus on reproductive rights, immigration law, and veterans.

Photo of Colin G. Cabral Colin G. Cabral

Colin Cabral is an experienced first-chair trial lawyer with a strong track record of success. He has tried cases in federal district court, state court, Delaware Chancery Court, the International Trade Commission, and before domestic and international arbitration tribunals.

Colin specializes in high-stakes…

Colin Cabral is an experienced first-chair trial lawyer with a strong track record of success. He has tried cases in federal district court, state court, Delaware Chancery Court, the International Trade Commission, and before domestic and international arbitration tribunals.

Colin specializes in high-stakes patent, commercial, and antitrust disputes. He represents a broad range of clients in the life sciences and pharmaceutical industries. Colin also serves as lead trial counsel in cases involving computer software, medical devices, and consumer products.

Recently, Colin won a defense verdict for a medical device company following a jury trial in the District of Delaware.  The jury rejected the plaintiff’s claim that NuVasive fraudulently induced him to enter into a royalty buyout and license agreement.  In late 2023, Colin secured a landmark victory for Sanderson Farms in a blockbuster broiler chicken antitrust conspiracy case, defeating $7 billion in damages claims. Following a six-week trial, a jury in the U.S. District Court for the Northern District of Illinois returned a full defense verdict.

Colin was named a Litigation Star by Benchmark Litigation in its 2024 U.S. Guide.

Colin is also the co-chair of Proskauer’s Patent Litigation Group.

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 programs. He is Board Chairman of FreeFrom, a charitable organization that helps survivors of domestic violence achieve financial independence. He is also a board member of Tech Goes Home, a Boston-based non-profit that empowers underprivileged communities by providing access to computers, Internet access, and training.