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The Hatch-Waxman Act and How it Works:
Balancing Incentives to Innovate with the Need for Affordable Drugs
Minnesota Intellectual Property Association
Biotech / Chem Law
June 4, 2009
Drug Price Competition and Patent Term Restoration Act
of 1984
Pub. L. No. 98-417Codified at 15 U.S.C. §§ 68b-68c, 70b (1994); 21 U.S.C. §§ 301 note, 355,
360cc (1994); 28 U.S.C. § 2201
Balancing Innovation with Affordability
“ . . . the American people will save money, and yet receive the best medicine that pharmaceutical science can provide.”– President Reagan, Sept.
24, 1984
Background
• 1962 Amendments to FDCA required proof of safety and efficacy
• Lengthy approval period for innovators = defacto shortening of patent term
• Onerous approval requirements for generics = “off-patent” drugs with no generic competition
Key Features of the Hatch-Waxman Act
• Streamlined generic approval process• “Safe Harbor” for pre-approval activities• Patent term restoration to offset lengthy
regulatory approval process• Non-patent exclusivity for innovators
and generics • Framework for patent notification and
litigation
Generic Market Share
Source: Gary Buehler presentation, FDA CDER; IMS Health 2009 study commissioned by GPhA
0
10
20
30
40
50
60
70
1984 2000 2008
%genericRx
Generic Market Share
In 2008, generic sales accounted for 69% of prescriptions written and 16% of all prescription dollars spent
Source: IMS Health 2009 study commissioned by GPhA
0
50
100
150
200
250
2007
brandsales$228b
genericsales$58.5b
Key Features of the Hatch-Waxman Act
• Streamlined generic approval process• “Safe Harbor” for pre-approval activities• Patent term restoration to offset lengthy
regulatory approval process• Non-patent exclusivity for innovators
and generics • Framework for patent notification and
litigation
Requirements for generic approval
• Same active ingredient(s)
• Same route of administration
• Same dosage form
• Same strength
• Same conditions of use
Compared to reference listed drug (RLD) - (brand name product)
Requirements for generic approval
NDA 1. Chemistry2. Manufacturing3. Controls4. Labeling5. Testing6. Animal Studies7. Clinical Studies8. Bioavailability
ANDA
1. Chemistry
2. Manufacturing
3. Controls
4. Labeling
5. Testing
6. Bioequivalence
Key Features of the Hatch-Waxman Act
• Streamlined generic approval process• “Safe Harbor” for pre-approval activities• Patent term restoration to offset lengthy
regulatory approval process• Non-patent exclusivity for innovators
and generics • Framework for patent notification and
litigation
“Safe Harbor” for pre-approval activities
before the Act, a generic manufacturer who used a patented drug during the patent term for the purpose of conducting tests to submit information to the FDA committed patent infringement
Roche Products v. Bolar, 733 F.2d 858 (Fed. Cir. 1984)
“Safe Harbor” for pre-approval activities
35 U.S.C. § 271 (e)(1): It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.
“Safe Harbor” for pre-approval activities
Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193 (2005)
statutory text “provides a wide berth for the use of patented drugs in activities related to the federal regulatory process”
use of patented compounds in preclinical
studies is protected . . . as long as there is a reasonable basis for believing that the experiments will produce “the types of information that are relevant to an IND or NDA.”
Key Features of the Hatch-Waxman Act
• Streamlined generic approval process• “Safe Harbor” for pre-approval activities• Patent term restoration to offset lengthy
regulatory approval process• Non-patent exclusivity for innovators
and generics • Framework for patent notification and
litigation
Patent Term Restoration
Formula Under 35 USC §156:
50% of the time spent in initial clinical trials (IND); PLUS
100% of the time spent in new drug application (NDA) approval process
Patent Term RestorationUnder 35 USC §156
Other Requirements:
No more than 5 years or up to 14 years from date of FDA approval
Patent not expired No previous extension under this
provision First permitted commercial marketing
or use
Patent Term RestorationUnder 35 USC §156
NOT the same as Patent Term Adjustment under § 154 (delays in PTO review)
Extension is in addition to any adjustment under § 154
Key Features of the Hatch-Waxman Act
• Streamlined generic approval process• “Safe Harbor” for pre-approval activities• Patent term restoration to offset lengthy
regulatory approval process• Non-patent exclusivity for innovators
and generics • Framework for patent notification and
litigation
Innovator Non-Patent Exclusivity
Exclusivity Regardless of Existence of Patent
NCE (New Chemical Entity): 5 years New active ingredient, new molecules, new salts FDA can’t even accept a generic application for 5
years (4 years if a PIV challenge) Effectively 7 ½ years if there is a PIV challenge after
4 years
New product/new use /supplemental exclusivity: 3 years (new clinical studies to support a new indication,
formulation, salt, dosage regimen, etc.; enantiomers)
Innovator Non-Patent Exclusivity
Exclusivity Regardless of Existence of Patent
Orphan Drug: 7 years If FDA approval is for disease affecting less
than 200,000 U.S. citizens
Pediatric use: 6 months in addition to existing exclusivity or patent term If pediatric study is undertaken in response
to FDA written request
Key Features of the Hatch-Waxman Act
• Streamlined generic approval process• “Safe Harbor” for pre-approval activities• Patent term restoration to offset lengthy
regulatory approval process• Non-patent exclusivity for innovators
and generics • Framework for patent notification and
litigation
Framework for patent notification and litigation
NDA holder must notify FDA of any patent that claims a drug or method of using a drug and with respect to which a claim of infringement can reasonably be asserted
FDA publishes in “Orange Book”
Active Ingredient Search Results from "OB_Rx" table for query on "rosuvastatin."
Appl NoTE Code RLD Active Ingredient
Dosage Form;Route
StrengthProprietary
NameApplicant
021366 No ROSUVASTATIN CALCIUM
TABLET; ORAL 10MG CRESTOR IPR
021366 No ROSUVASTATIN CALCIUM
TABLET; ORAL 20MG CRESTOR IPR
021366 Yes ROSUVASTATIN CALCIUM
TABLET; ORAL 40MG CRESTOR IPR
021366 No ROSUVASTATIN CALCIUM
TABLET; ORAL 5MG CRESTOR IPR
Patent and Exclusivity Search Results from query on Appl No 021366 Product 002 in the OB_Rx list.
Patent Data
Appl No
Prod No
Patent No
PatentExpiration
Drug Substance
Claim
Drug ProductClaim
Patent Use
Code
DelistRequested
021366 002 6316460 Aug 4, 2020 Y
021366 002 6858618 Dec 17, 2021
U-618
021366 002 RE37314 Jan 8, 2016 Y
Exclusivity Data
Appl No Prod NoExclusivity
CodeExclusivity Expiration
021366 002 NCE Aug 12, 2008
021366 002 I-573 Nov 6, 2011
021366 002 I-547 Nov 8, 2010
Generic applicant patent certifications
ANDA Certification
Paragraph I:
Paragraph II:
Paragraph III:
Paragraph IV:
Patent status
No Patent info in Orange Book
Patent expired
No product launch until patent expires
Patent is invalid,unenforceable, or will not be infringed by the manufacture, use, or sale of the drug product for which the ANDA is submitted
Generic exclusivity
First ANDA filer with para. IV certification gets:
180 days of exclusivity against other generics
Starts with first marketing or final appeals court decision
Notice Letter
Generic applicant who files a paragraph IV certification must notify the patent and NDA holder with a detailed statement
Patent/NDA holder has 45 days to sue
Generic applicant can file a declaratory judgment action if not sued
Submitting an ANDA with a PIV certification is an act of
infringement
35 USC § 271:
(a) direct infringement
(b) induced infringement
(c) contributory infringement
(e)(1) safe harbor
Submitting an ANDA with a PIV certification is an act of
infringement
35 USC § 271 (e)(2): It shall be an act of infringement to submit –
(A) an [ANDA] Act for a drug claimed in a patent or the use of which is claimed in a patent . . .
Submitting an ANDA with a PIV certification is an act of
infringement
“somewhat artificial” act of infringement that vests district courts with jurisdiction
– Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661 (1990)
Automatic Stay of FDA Approval
Initiation of Lawsuit means FDA cannot approve an ANDA until:
Final court ruling;
Patent expires; or
30 months from notification
Remedies for infringement§ 271(e) (4) For an act of infringement described in
paragraph (2) —
(A) court can set approval date as end of patent,
(B) grant injunctive relief;
(C) no damages unless there has been commercial manufacture, use, or sale .
The remedies prescribed by subparagraphs (A), (B), and (C) are the only remedies which may be granted by a court for an act of infringement described in paragraph (2), except that a court may award attorney fees under section 285.
Hatch-Waxman Summary
Innovator gets: Patent term extension/restoration Guaranteed marketing exclusivity period Automatic 30 month stay of FDA approval if
litigation
Generic Gets: Streamlined approval process First-to-file 180-day marketing exclusivity Safe harbor and possibility of definitive decision
prior to launch
Example timeline: rosuvastatin11/9/93
06/12/92
8/9/98
6/26/01
8/12/03
12/9/07
2/10/10
8/27/98
8/7/01
8/12/07
8/12/08
2/12/11
440 patent filing date
IND becomes effective
NDA filed
NDA approved - product marketing begins
infringement suits filed
trial scheduled
440 patent issues
reissue application
Re 314 patent issues
generic applicant first-to file date
NCE marketing exclusivity
expires
30 month automatic stay expires
6/12/12
1/8/16
Original patent expiration date
patent expiration date following extension