Martin maintained in an interview that "CMS' proposed definition is contrary to the statute because the statute uses the term ‘original NDA' and CMS' proposed definition of ‘original NDA' basically reads the word ‘original' out of the definition. It gives that word no special effect or meaning, when in fact we think that that's not what Congress intended."
He added, "CMS' proposal – which is any NDA is an NDA is an NDA – would mean that even though all of those drugs potentially have been classified as non-innovator, multiple-source drugs and paying the generic rebate amount, which up until the health care reform bill was 11% of their AMP and now would be 13% of their AMP, [they] would actually be subject to the rebate formula for branded drugs, which takes into account best price, the inflation-based penalty – a much more complicated and much higher rebate requirement."
A definition that would be acceptable to the generic drug industry can be found in a proposed rule the agency issued in 1995, Martin said, when CMS was called the Health Care Financing Administration. That proposal, never made final, would have defined an original NDA as "an FDA-approved drug or biological application that received one or more forms of patent protection, patent extension under … the [Hatch-Waxman] Drug Price Competition and Patent Term Restoration Act, or marketing exclusivity rights granted by the FDA."
"Congress intended exactly what HCFA proposed in 1995, which was to restrict the higher rebate formula to those drugs that were actually the first drug of a kind on the market, i.e., those that received market exclusivity or have a patent and that protects them from competition for some period of time," Martin said.