The Hatch-Waxman Act: Promoting Affordable Generic Drugs
H
A
T
C
H
W
A
X
M
A
N
A
C
T
1
2
3
4
5
6
7
•
Introduction
•
Objectives
of
the
Act
•
Provisions
of
the
Act
•
Para
IV
Filings
•
Delay
in
generic
entry(Reverse
payment
agreements)
•
Loopholes
of
the
Act(Authorized
generics)
•
Conclusion
CONTENTS
Also
known
as
“The Drug
Price
Competition
and
Patent
Term
Restoration
Act”
Enacted
in
1984
Amended
the
Patent
laws
Amended
the
Federal
Food,
Drug,
and
Cosmetic
Act
Before
1962-
new
drug
approved
based
on
safety
alone
1962-
Proof
of
efficacy
made
compulsory
for
marketing
approval
of
a
new
drug
(
Kefauver-Harris
Amendments
)
INTRODUCTION
There was no
provision
for
patent
term
extension
prior
to
enactment
of
the
Hatch
Waxman
Act,
to
make
up
for
the
time
lost
out
of
the
total
patent
term
during the
marketing
approval
process
Generic
companies required
to
submit
their
own
comprehensive
NDA
Costly
Time
consuming
If
drug
was
covered
by
patent
Testing
could
not
begin
until
patent
expired
To
overcome
the
above
problems
an
act
was
needed
to
promote
generic
companies
INTRODUCTION
CONTD…
OBJECTIVES
OF
THE
ACT
R
e
d
u
c
i
n
g
t
h
e
c
o
s
t
a
ss
o
c
i
a
t
e
d
w
i
t
h
t
h
e
app
r
o
v
a
l
of
a
generic
drug
Allowing
Early-Experimental-Use
Compensating
the
branded
drugs
manufacturers
for
the
time
lost
from
the
patent
term
because
of
the
regulatory
approval
formality
Motivating
the
generic
drug
manufacturers
“H
W
A
st
r
i
v
e
s
t
o
st
r
i
k
e
a
bala
n
ce
b
e
tw
ee
n
t
h
e
in
t
erests
of
branded
drug
manufacturers,
generic
drug
manufacturers
and
the
consumers”
Creation
of
section
505(j)
Section
505(j)
established
the
ANDA
approval
process
The
timing
of
an
ANDA
approval
depends
in
part
on
patent
protections
for
the innovator
drug
NDA
must
include
any
patent
that
claims
the
"drug"
or
a
"method
of
using
[the]
drug"
for
which
a
claim
of
patent
infringement
could reasonably
be
asserted
On
approval
of
NDA,
FDA
publishes
patent
information
for
drug
in
Orange
Book
(“Approved
Drug
Products
with
Therapeutic
Equivalence
Evaluations”)
PROVISIONS
OF
THE
ACT
PROVISIONS
OF
THE
ACT
ORANGE
BOOK
FDA
publishes
patent
information
on
approved
drug
products
in
the
Orange
Book
An
NDA
applicant must
submit
the
following
information
for
each
patent:
Patent
no
and
date
on
which
the
patent
will
expire
Type
of
patent,
i.e.
drug, drug
product,
or
method
of
use
Name
of
patent
owner
The
name
of
an
agent
of the
patent
owner
or
applicant
Brand
drugs
listed
for
generics
to
compare
with
their
proposed
products
PROVISIONS
OF
THE
ACT
Four
Types
of
Patent
Certifications
When
an
applicant
submits
an
ANDA
to
the
FDA,
the
applicant
must
certify
one
of
four things
under
section
505(j)(2)(A)(vii):
that
the
required
patent
information
relating
to
such
patent
has
not
been
filed
(
Para
I
)
;
that
such
patent
has
expired
(
Para
II
)
;
that
the
patent
will
expire
on
a
particular
date
(
Para
III
);
that
such
patent
is
invalid
or
will
not
be
infringed
by
the
drug,
for
which
approval
is
being sought
(
Para
IV
–
Patent
Challenge
)
PARA
IV-
PATENT
CHALLENGE
GENERIC-
PARA
IV
FILING
GENERIC-
PROVIDE
NOTICE
TO
BRAND
WITHIN
20
DAYS
OF
ACCEPTANCE
BRAND-
MUST
BRING
LAWSUIT
WITHIN
45
DAYS
GENERIC-
IF
SUED,
AUTOMATIC
30
MONTH
STAY
GRANTED
TO
BRAND
PARA
IV-
PATENT
CHALLENGE
INCENTIVES
AND
PROTECTION
1
8
0
D
a
y
M
a
r
k
e
t
e
x
c
l
u
s
i
v
i
t
y
First
applicant
to
submit
a
substantially
complete
ANDA
(first-to-file)
May
be
shared
by
multiple
applicants
Subject
to
forfeiture
3
0
-
m
o
n
t
h
s
t
a
y
o
f
F
D
A
a
p
p
r
o
v
a
l
If
patent
owner
or
NDA
holder
sues
the
ANDA
applicant
for
patent
infringement within
45
days
of
receiving
notice of
the
Paragraph
IV
certification
Runs
from
date
of
notification
or
expiration
of
NCE
exclusivity
May
be
lengthened
or
shortened
by
the
court
Upon
ANDA
acceptance
for
filing,
the
applicant
must
notify
the
NDA
holder
and
patent
owner
of
the
ANDA
within
20
days.
The
notice
must
include
a
detailed
statement
of
the
factual
and
legal
basis
of
the
opinion
of
the
applicant
that
the
patent
is
invalid
or
will
not
be
infringed
Upon
notification,
the
NDA
holder
and
patent
owners
have
45
days
in
which
to
initiate
an
action
for
patent
infringement.
If
such
an
action
is
brought
within
45
days,
the
ANDA
is
subject
to
a
30-month
stay
of
FDA
approval
beginning
on
the
date
the
notification
letter
was
received
PARA
IV
DEADLINES
NOTIFICATION
LETTER:
20
DAYS
LAWSUIT:
45
DAYS
ANDA
APPROVALS
11
18
17
18
17
12
11
D
r
u
g
a
p
p
r
o
v
a
l
s
i
n
U
S
2009
2010
19
15
ANDA
APPROVAL
&
INDIAN
COMPANIES
3
Glenmark
Aurobindo
Sun
Lupin
DRL
Indian
companies
bagged
33.17%
or
139
of
419
original
ANDA
approvals
from
US
FDA
in
2010
Source:
http://www.business-standard.com/india/news/indian-pharma-remains-
top-in-us-generics/420523/
The
manufacture,
use,
or
sale
of
a
patented
drug
is
not
an
act
of
infringement,
to
the
extent
it
is
necessary
for
the
preparation
and
submission
of
an
ANDA
The
Hatch-Waxman
Act
provides
under
35
U.S.C.
§
271(e)(1),
generally
that:
“It
shall not
be
an
act
of
infringement
to
make,
use,
or
sell
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.”
EXEMPT
ACTS
OF
PATENT
INFRINGEMENT
FOR
FDA
APPROVAL
B
R
A
ND
S
G
E
N
E
R
I
C
S
BRAND-
30
MONTH
STAY
GENERIC-
180
DAY
EXCLUSIVITY
1
st
successful
Para
IV
filer
A
big
head
start
on
others
Automatic
Injunction
Notice
of
generic
competition
Can
be
worth
$$
mn
per
day
HATCH
WAXMAN
TRADE-OFF
HATCH
WAXMAN
TRADE-OFF
BENEFITS
FOR
BRANDED
MANUFACTURERS
Orange
Book
provides
public
notice
of
patents
A
ll
o
w
s
f
o
r
r
e
s
o
l
u
t
i
o
n
o
f
pa
t
e
n
t
d
i
s
pu
t
e
s
p
r
i
o
r
t
o
g
e
n
e
r
i
c
entry
30-month
stay
of
FDA
approval of generic
drugs
Patent
Term
Restoration
Allows
for
Several
Market
Exclusivities:
Data
Exclusivity
5
years
for
New
Chemical Entity
(NCE)
Drug
3
years
for
non-NCE
Drug
Orphan
Drug
(7
years)
Pediatric
(PEDS)
(6
months)
HATCH
WAXMAN
TRADE-OFF
BENEFITS
FOR
GENERIC
MANUFACTURERS
180-day
market
exclusivity for
first
successful
challenger
to
Orange
Book
patent
Allows
generics
to
challenge
Orange
Book
patents
without
risk
of
damages
“
Safe
Harbor
” rule allows
generics
to
perform
bioequivalence
and
other
testing
relating
to
regulatory
approval
without
risk
of
patent
infringement
“Dr
Reddy’s
was
the
first
Indian
company
to
get
the
180-day
exclusivity
for marketing
Fluoxetine
(Eli
Lilly’s
Prozac)
40
mg
capsule
in
August
2001”
NON-PATENT
EXCLUSIVITY
Hatch-Waxman
Act,
1984
Granted:
to
drug
products
containing
a
New
Chemical
Entity
Blocks:
submission of
505(b)(2)
or
ANDA
Length:
five
years
(or
four
years
if
para.
IV)
NEW
CHEMICAL
ENTITY
EXCLUSIVITY
N
e
w
C
h
e
m
i
c
a
l
E
n
t
i
t
y
:
“
a
d
r
u
g
t
h
a
t
c
o
n
t
a
i
n
s
n
o
a
c
t
i
v
e
m
o
i
e
t
y
t
h
a
t
h
a
s
b
e
e
n
a
p
p
r
o
v
e
d
b
y
F
D
A
i
n
a
n
y
o
t
h
e
r
application
submitted
under
section
505(b)
of
the
act”
A
c
t
i
v
e
M
o
i
e
t
y
:
“
t
h
e
m
o
l
e
c
u
l
e
o
r
i
o
n
,
e
x
c
l
u
d
i
n
g
t
h
o
s
e
appended
portions
of
the
molecule
that
cause
the
drug to
be
an
ester,
salt
(including
a
salt
with
hydrogen
or
coordination
bonds),
or
other
noncovalent
derivative
(such
as
a
complex,
chelate,
or
clathrate)
of
the
molecule,
responsible for the
physiological
or
pharmacological
action
of
the
drug
substance”
NEW
CHEMICAL
ENTITY
DEFINITIONS
Federal
Drug
Administration
Amendments
Act,
2007(“FDAAA”)
Under
strict
conditions,
an
enantiomer
can
qualify
as
a
NCE:
–
The
single
enantiomer
has
not
been
previously
approved
except
in
the
approved
racemic
drug
–The
NDA
includes
full
new
clinical
investigations
–The
clinical
studies
were
not
used
for
the racemate
–The
enantiomer
indication
is
not
in
the
same
therapeutic
category
as
the
racemate
Three-year
exclusivity
available:
e.g.,
Lexapro(escitalopram);
Nexium
(esomeprazole)
NCE
EXCLUSIVITY
FOR
ENANTIOMERS
Hatch-Waxman
Act,
1984
Granted:
for
submission of
results
of
new
clinical
studies
Blocks:
approval
of
505(b)(2)
or
ANDA
Length:
three
years
NEW
CLINICAL
STUDY
EXCLUSIVITY
Granted
for submission
of
“reports
of
new
clinical
investigations
(other
than
biovailability
studies)
essential
to
the
approval
of
the
application
[or
the
supplemental
application]
and
conducted
or
sponsored
by
the
applicant”
Examples:
new
or
changed
formulations;
salts;
indications;
dosing
regimens;
patient
populations;
OTC
switches;
or
other
label
changes
Opana
ER
(immediate
release →extended
release)
Caduet
(atorvastatin/amlodipine
combination)
NEW
CLINICAL
STUDY
EXCLUSIVITY
Orphan
Drug
Act,
1983
Granted:
to
drugs
intended for
treatment
of
a
“rare
disease
or
condition”
Affects
<
200,000
people
in
the
U.S.,
or
No
reasonable
expectation of
recouping
dev.
costs
Blocks:
approval
of
505(b)(1),
(b)(2),
or
ANDA
directed
to
the
same
drug,
for
same
disease
Length:
seven
years
Additional
rewards:
tax
credits;
grants;
fees
waived
ORPHAN
DRUG
EXCLUSIVITY
Food
and
Drug
Administration
Modernization
Act,
1997
(“FDAMA”)
Granted:
to
applicants
who
successfully
complete
FDA-requested
clinical
trials
of
a
drug
in
a
pediatric
population
Blocks:
approval
of
505(b)(2)
or
ANDA
Length:
six
months
beyond
any
existing
marketing
or
patent
exclusivity
gov’t
funding
of
pediatric
studies
if
no
exclusivity
PEDIATRIC
EXCLUSIVITY
Hatch-Waxman
Act,
1984
Granted:
to
first
ANDA
applicant
who
submits
a
“substantially
complete”
ANDA
containing
a
paragraph
IV
certification
Substantially complete
=
sufficient
to
permit
review
Blocks:
approval
of
subsequently-filed
ANDA
containing
a
paragraph
IV
certification
Length:
180
days,
from
commercial
marketing
GENERIC
DRUG
EXCLUSIVITY
Medicare
Modernization
Act,
2003
(“MMA”)
Six
ways
to
forfeit:
1.
failure
to
market
2.
withdrawal
of
application
3.
amendment
of
certification
4.
failure
to
obtain
tentative
approval
within
30
mos.
5.
improper
agreement
with
another
applicant,
the
listed
drug
application
holder,
or
a
patent
owner
6.
expiration
of
all
patents
180-DAY
EXCLUSIVITY
FORFEITURE
Reverse
Payment
Agreements
Sham
Litigations(30
months
stay)
Sham
Citizen’s
Petitioning
Walker
Process
Fraud
Product
Hopping
DELAY
IN
GENERIC
ENTRY
Both
parties
decide
it
is
in
their
mutual
best
i
n
t
e
r
e
s
t
s
t
o
s
e
tt
l
e
v
i
a
a
s
i
g
n
i
f
i
c
a
n
t
p
a
y
m
e
n
t
from
the
patent
owner/branded
to
the
generic
to
keep
the
generic
drug
off
the
market
The
generic
may
make
more
money
than
by
rushing
to
market
the
drug
The
branded
may
also
make
more
money
by
paying
the
generic
to
defer
marketing
the
drug
for
a
certain
period
of
time
REVERSE
PAYMENT
AGREEMENTS
REVERSE
PAYMENT
AGREEMENTS
Side
deals
I
n
t
el
l
ec
t
u
a
l
property
licenses
Co-promotion
arra
n
g
eme
n
ts
Supply
agre
e
me
n
ts
No
authorized
generic
D
e
v
elopme
n
t
agreements
Distribution
agre
e
me
n
ts
REVERSE
PAYMENT
AGREEMENTS
CASE
STUDY
FTC
vs.
Cephalon
(E.D.
Pa.)
(filed
Feb.
13,
2008
)
Provigil
-
$800
million
brand
sales
6
years
delayed
entry
Complaint
alleges
that
Cephalon
unlawfully
induced
four
first
filers
to
refrain
from
marketing
generic
Provigil
until
2012
by
entering
into
over
13
side
deals
that
transferred
substantial
value to
the
generics
FTC
V.
CEPHALON,
INC.
Settlements
Allegedly
Delay
Entry
By
6
Years
FTC
V.
CEPHALON,
INC.
SETTLEMENT
TERMS
AND
TIMELINE
REVERSE
PAYMENT
AGREEMENTS
MMA
Patent
Settlement
Filing
Requirements
Pharmaceutical
patent
settlements
required
to
be
filed
with
FTC
(per
2003
Medicare
Modernization
Amendments)
Why
Congress
Enacted
This
Requirement
Waxman:
“to
re-emphasize
the
Hatch-Waxman
Act’s
original
intent
of
enhancing
competition,
not
collusion,
between
generic
and
name-brand
drug
manufacturers”
S
e
t
t
l
e
m
e
n
t
s
a
t
I
s
s
u
e
Original
Settlement
–
FTC
did
not
approve because
included
provision
that
BMS
would
not launch authorized
generic
Revised
Settlement
–
Did
not include authorized
generic provision,
but
BMS
orally
represented
it
would
not launch authorized
generic
B
o
t
h
S
e
t
t
l
e
m
e
n
t
s
S
u
b
m
i
t
t
e
d
t
o
F
T
C
Required
under
prior
BMS
consent,
which
required
FTC
approval
Required
under
MMA
filing
requirement
Apotex
submitted letter with
MMA
filing
noting
oral
terms
BMS
signed
FTC
certification
confirming
no
oral
terms
R
a
m
i
f
i
c
a
t
i
o
n
s
f
o
r
B
M
S
DOJ
Criminal Investigation
and
Plea
Agreement
with
BMS
(two
felony counts
and
criminal
fine
of
$1
million)
BMS
Senior
VP
Andrew
Bodnar
($100,000
fine,
one
year
jail
time,
required
to
write
book
on
experience)
State
Attorneys
General
($1.1
million
fine
for
misleading
States
regarding
settlement
(violation
of
2003
Order
with
States))
FTC
($2.1
million
in
civil
penalties
for
misleading
FTC
regarding
settlement
(violation
of
2003
FTC
Order
and
MMA
violation))
BMS/APOTEX
SETTLEMENT
ON
PLAVIX
Brand
sues
generic
for
patent
infringement
Court
finds
for
generic,
often
on
SJ,
and
holds
patent
invalid
or
unenforceable
Hatch-Waxman
30-month
stay
allows
brand
to
win
even
if
they
lose
Plaintiffs
must
prove
brand’s
infringement
suit
is
objectively
and
subjectively
baseless
SHAM
LITIGATION
Companies
can
petition
FDA
to
not
approve
an
ANDA
Should
be
based
on
safety
or
formulation
concerns
Citizen’s
Petitions
delay
approval
of
ANDAs
Ripe
for
abuse,
and
often
abused
Delay
itself
is
the
goal
Same
standard
as
Sham
Litigation
SHAM
CITIZEN
PETITIONING
Antitrust
violation
premised
on
fraud
on
the
PTO
Patent
applicants
have
a
duty
of
candor
to
PTO
because
applications
are
ex
parte
Elements
track
fraud
claims
Often
coupled
with
Sham
Litigation
and
other
theories
WALKER
PROCESS
FRAUD
Delay
sometimes
allows
brands
to
introduce
new
versions
of
the
product
Changes
are
often
minimal
but
can
defeat
generic
competition
Brands
actively
convert
the
market
–
Free
samples
–
Pulling
the
“old”
product
from
the
market
PRODUCT
HOPPING
LOOPHOLES
IN
THE
HATCH-WAXMAN
ACT
Authorized
generics
30
month
stay
W
arehousing
pa
tents
Reverse
payments
Citizen’s
petitions
AGs
are
pharmaceutical
products
that
are
approved
as
brand-name
drugs
but
marketed
as
generic
drugs
AGs
do
not
bear
the brand-name
or
trademark
of
the
brand-name
drug
or
manufacturer,
but
the
brand-
name
and
AG
products
are
manufactured
to
the
brand’s
specifications
Authorized
generics
have
a
unique
impact
during
the
first
six
months
of
generic
competition
Competition
from
AGs
during the
180
-day
exclusivity
period
has
the
potential
to
reduce
both
generic
drug
prices
and
generic
firm
revenues
AUTHORIZED
GENERICS(AG)
AUTHORIZED
GENERICS(AG)
AUTHORIZED
GENERICS(AG)
Drug:
Nitrofurantoin
Innovator:
P&G
AG:
Watson
Generic:
Mylan
Mylan
lost
about
$30
mn
of
the
revenue
it
was
set
to
realize
under
its
180-day
exclusivity
grant
from
FDA
AUTHORIZED
GENERICS(AG)
•
L
u
p
in
•
2011
Femcon
Fe
(Warner
Chilcot)
•
R
anbaxy
•
2009
R
ocalt
r
ol
(Validus)
•
R
anbaxy
•
2011
C
a
d
u
e
t
(Pfizer)
INDIAN
COMPANIES
&
AUTHORIZED
GENERICS
•
DRL
•
2006
Zocor
(Me
r
c
k)
Evergreening
or
warehousing
of
patents
An
innovator
may
patent
multiple
attributes
of
a
product
(may
be
color,
manufacturing
process
or
the
chemicals
produced
when
the
drug
is
ingested
in
the
body)
and
keeps
on
adding
patents
in
the
Orange
Book,
essentially
forcing
t
h
e
g
e
n
e
r
i
c
t
o
h
o
s
e
b
e
t
wee
n
w
a
i
t
i
n
g
f
o
r
t
h
e
p
a
t
e
n
t
s
to
expire
or
file
a
Para
IV
certification
which
b
r
i
n
g
s
a
l
o
n
g
t
h
e
r
i
s
k
s
o
f
li
t
i
g
a
t
i
o
n
an
d
a
ss
o
c
i
a
t
e
d
costs
and
delays
The
provision
of
filing
a
patent
infringement
lawsuit
g
i
v
e
s
t
h
e
b
r
an
d
na
m
e
m
anu
f
a
c
t
u
r
e
r
a
t
l
e
a
s
t
a
n
additional
two
and
a
half
years
of
product
monopoly
has
resulted
in
a
wave
of
such
lawsuits
WAREHOUSING
PATENTS
The
Hatch
Waxman
Act
–
extended
the
life
of
the
pharmaceutical
patents
up
to
14
years
from
the
time
the
New
Drug
Application
is
approved
by
the
FDA,
–
provided
additional
market
exclusivity
for
the
new
uses
or new
formulations,
–
allowed
potential
generic
manufacturers
to
conduct
work
related
to
marketing
approval
of
the
drug
without
the
charge
of
patent
infringement,
–
permitted
generic
manufacturers
to
use
safety
and
effectiveness
research
performed
by
the
brand
name
pharmaceutical
companies,
–
introduced
the
concept of
bioequivalence
to
obtain
the
approval
of
generic
drug,
and
simplified
generic
drug
approval
process
by
introducing
ANDA,
and
–
encouraged
patent
challenges
by
providing
180
-day
market
exclusivity
for
the
first
generic
manufacturer
who
files
ANDA
CONCLUSION
Hatch
Waxman
Act
led
to
the
birth
of
generic
industry
It
also
gave
protection
to
innovators
in
terms
of
30
month
stay,
market
exclusivities
and
patent
term
extensions
But,
the
brand
companies
are
taking
advantage
of
the
loopholes
of
HWA
in
the
form
of
authorized
generics
and
reverse
payment
agreements
Brand
companies
are
also
involved
in
sham
litigations
to
take
advantage
of
30
month
stay
provision
Role
of
both
brand
and
generic
companies
are
vital
for
US
healthcare
system
Maintaining
the
balance
between these
two
important
contributors
to
health
care
will
be
essential
in
meeting
the
goals
of
affordable
health
care
and
innovative
research
CONCLUSION
CONTD…
The Hatch-Waxman Act, also known as The Drug Price Competition and Patent Term Restoration Act, was enacted in 1984 to amend patent laws and the Federal Food, Drug, and Cosmetic Act. It aims to reduce costs associated with generic drug approval, allow early experimental use, compensate branded drug manufacturers for lost patent time, and motivate generic drug manufacturers. The Act seeks to balance the interests of all stakeholders involved in the pharmaceutical industry.
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Presentation Transcript
CONTENTS Introduction 1 Objectives of theAct 2 Provisions of theAct 3 Para IVFilings 4 Delay in generic entry(Reverse payment agreements) 5 Loopholes of theAct(Authorized generics) 6 Conclusion 7
INTRODUCTION Also known as The Drug Price Competition and Patent Term Restoration Act Enacted in 1984 Amended the Patent laws Amended the Federal Food, Drug, and Cosmetic Act Before 1962- new drug approved based on safety alone 1962- Proof of efficacy made compulsory for marketing approval of a new drug (Kefauver-Harris Amendments)
INTRODUCTION CONTD There was no provision for patent term extension prior to enactment of the Hatch Waxman Act, to make up for the time lost out of the total patent term during the marketing approval process Generic companies required to submit their own comprehensive NDA Costly Time consuming If drug was covered by patent Testing could not begin until patent expired To overcome the above problems an act was needed to promote generic companies
OBJECTIVES OF THEACT Reducing the cost associated with the approval of a generic drug Allowing Early-Experimental-Use Compensating the branded drugs manufacturers for the time lost from the patent term because of the regulatory approval formality Motivating the generic drug manufacturers HWA strives to strike a balance between the interests of branded drug manufacturers, generic drug manufacturers and the consumers
PROVISIONS OF THEACT Creation of section 505(j) Section 505(j) established the ANDAapproval process The timing of an ANDA approval depends in part on patent protections for the innovator drug NDA must include any patent that claims the "drug" or a "method of using [the] drug" for which a claim of patent infringement could reasonably be asserted On approval of NDA, FDA publishes patent information for drug in Orange Book ( Approved Drug Products with Therapeutic Equivalence Evaluations )
PROVISIONS OF THEACT ORANGEBOOK FDA publishes patent information on approved drug products in the Orange Book An NDA applicant must submit the following information for each patent: Patent no and date on which the patent will expire Type of patent, i.e. drug, drug product, or method of use Name of patent owner The name of an agent of the patent owner or applicant Brand drugs listed for generics to compare with their proposed products
PROVISIONS OF THEACT Four Types of Patent Certifications When an applicant submits an ANDA to the FDA, the applicant must certify one of four things under section 505(j)(2)(A)(vii): that the required patent information relating to such patent has not been filed (Para I) ; that such patent has expired (Para II) ; that the patent will expire on a particular date ( Para III); that such patent is invalid or will not be infringed by the drug, for which approval is being sought (Para IV Patent Challenge)
PARA IV- PATENT CHALLENGE GENERIC-PARA IVFILING GENERIC-PROVIDE NOTICE TO BRAND WITHIN 20 DAYS OFACCEPTANCE BRAND-MUST BRING LAWSUIT WITHIN 45 DAYS GENERIC-IF SUED, AUTOMATIC 30 MONTH ST A Y GRANTED TOBRAND
INCENTIVES AND PROTECTION 180 Day Marketexclusivity First applicant to submit a substantially complete ANDA (first-to-file) May be shared by multiple applicants Subject to forfeiture 30-month stay of FDAapproval If patent owner or NDA holder sues the ANDA applicant for patent infringement within 45 days of receiving notice of the Paragraph IVcertification Runs from date of notification or expiration of NCE exclusivity May be lengthened or shortened by the court
PARA IVDEADLINES NOTIFICATION LETTER: 20 DAYS Upon ANDA acceptance for filing, the applicant must notify the NDA holder and patent owner of the ANDA within 20 days. The notice must include a detailed statement of the factual and legal basis of the opinion of the applicant that the patent is invalid or will not be infringed LAWSUIT: 45 DAYS Upon notification, the NDA holder and patent owners have 45 days in which to initiate an action for patent infringement. If such an action is brought within 45 days, the ANDA is subject to a 30-month stay of FDA approval beginning on the date the notification letter was received
ANDA APPROVAL & INDIANCOMPANIES Drug approvals inUS 2009 19 2010 18 18 17 17 15 12 11 11 3 Glenmark Aurobindo Sun Lupin DRL Indian companies bagged 33.17% or 139 of 419original ANDA approvals from US FDA in 2010 Source: http://www.business-standard.com/india/news/indian-pharma-remains- top-in-us-generics/420523/
EXEMPT ACTS OF PATENT INFRINGEMENT FOR FDA APPROVAL The manufacture, use, or sale of a patented drug is not an act of infringement, to the extent it is necessary for the preparation and submission of an ANDA The Hatch-Waxman Act provides under 35 U.S.C. 271(e)(1), generally that: It shall not be an act of infringement to make, use, or sell 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.
HATCH WAXMAN TRADE-OFF BRANDS GENERICS BRAND- 30 MONTH STAY GENERIC- 180 DAY EXCLUSIVITY 1st successful Para IV filer A big head start on others Automatic Injunction Notice of generic competition Can be worth $$ mn per day
HATCH WAXMAN TRADE-OFF BENEFITS FOR BRANDEDMANUFACTURERS Orange Book provides public notice of patents Allows for resolution of patent disputes prior to generic entry 30-month stay of FDA approval of generic drugs Patent Term Restoration Allows for Several Market Exclusivities: Data Exclusivity 5 years for New Chemical Entity (NCE) Drug 3 years for non-NCE Drug Orphan Drug (7 years) Pediatric (PEDS) (6 months)
HATCH WAXMAN TRADE-OFF BENEFITS FOR GENERICMANUFACTURERS 180-day market exclusivity for first successful challenger to Orange Book patent Allows generics to challenge Orange Book patents without risk of damages Safe Harbor rule allows generics to perform bioequivalence and other testing relating to regulatory approval without risk of patent infringement Dr Reddy s was the first Indian company to get the180-day exclusivity for marketing Fluoxetine (Eli Lilly s Prozac) 40 mg capsule in August2001
NON-PATENT EXCLUSIVITY Types Term New chemical entity 5 years New Clinical study 3 years Orphan drug 7 years Pediatric exclusivity 6 months 180-day generic market exclusivity 180 days
NEW CHEMICAL ENTITYEXCLUSIVITY Hatch-Waxman Act, 1984 Granted: to drug products containing a New Chemical Entity Blocks: submission of 505(b)(2) or ANDA Length: five years (or four years if para. IV)
NEW CHEMICAL ENTITY DEFINITIONS New Chemical Entity: a drug that contains no active moiety that has been approved by FDA in any other application submitted under section 505(b) of the act Active Moiety: appended portions of the molecule that cause the drug to be an ester, salt (including a salt with hydrogen or coordination bonds), or other noncovalent derivative (such as a complex, chelate, or clathrate) of the molecule, responsible for the physiological or pharmacological action of the drug substance the molecule or ion, excluding those
NCE EXCLUSIVITY FORENANTIOMERS Federal Drug Administration Amendments Act, 2007( FDAAA ) Under strict conditions, an enantiomer can qualify as a NCE: The single enantiomer has not been previously approved except in the approved racemic drug The NDA includes full new clinical investigations The clinical studies were not used for the racemate The enantiomer indication is not in the same therapeutic category as the racemate Three-year exclusivity available: e.g., Lexapro(escitalopram); Nexium (esomeprazole)
NEW CLINICAL STUDY EXCLUSIVITY Hatch-Waxman Act, 1984 Granted: for submission of results of new clinical studies Blocks: approval of 505(b)(2) or ANDA Length: three years
NEW CLINICAL STUDY EXCLUSIVITY Granted for submission of reports of new clinical investigations (other than biovailability studies) essential to the approval of the application [or the supplemental application] and conducted or sponsored by the applicant Examples: new or changed formulations; salts; indications; dosing regimens; patient populations; OTC switches; or other label changes Opana ER (immediate release extended release) Caduet (atorvastatin/amlodipine combination)
ORPHAN DRUGEXCLUSIVITY Orphan Drug Act, 1983 Granted: to drugs intended for treatment of a rare disease or condition Affects < 200,000 people in the U.S., or No reasonable expectation of recouping dev. costs Blocks: approval of 505(b)(1), (b)(2), or ANDA directed to the same drug, for same disease Length: seven years Additional rewards: tax credits; grants; fees waived
PEDIATRIC EXCLUSIVITY Food and Drug Administration Modernization Act, 1997 ( FDAMA ) Granted: to applicants who successfully complete FDA-requested clinical trials of a drug in a pediatric population Blocks: approval of 505(b)(2) or ANDA Length: six months beyond any existing marketing or patent exclusivity gov t funding of pediatric studies if no exclusivity
GENERIC DRUGEXCLUSIVITY Hatch-Waxman Act, 1984 Granted: to first ANDA applicant who submits a substantially complete ANDA containing a paragraph IV certification Substantially complete = sufficient to permit review Blocks: approval of subsequently-filed ANDA containing a paragraph IV certification Length: 180 days, from commercial marketing
180-DAY EXCLUSIVITY FORFEITURE Medicare Modernization Act, 2003 ( MMA ) Six ways to forfeit: 1. failure to market 2. withdrawal of application 3. amendment of certification 4. failure to obtain tentative approval within 30 mos. 5.improper agreement with another applicant, the listed drug application holder, or a patent owner 6. expiration of all patents
DELAY IN GENERIC ENTRY Reverse PaymentAgreements Sham Litigations(30 monthsstay) Sham Citizen s Petitioning Walker ProcessFraud Product Hopping
REVERSE PAYMENT AGREEMENTS Both parties decide it is in their mutual best interests to settle via a significant payment from the patent owner/branded to the generic to keep the generic drug off the market The generic may make more by rushing to market the drug The branded may also make more money by paying the generic to defer marketing the drug for a certain period of time money than
REVERSE PAYMENT AGREEMENTS Intellectual property licenses Distribution agreements Co-promotion arrangements Side deals Development agreements Supply agreements Noauthorized generic
REVERSE PAYMENT AGREEMENTS CASESTUDY FTC vs. Cephalon (E.D. Pa.) (filed Feb. 13, 2008 ) Provigil -$800 million brand sales 6 years delayed entry Complaint alleges that Cephalon unlawfully induced four first filers to refrain from marketing generic Provigil until 2012 by entering into over 13 side deals that transferred substantial value to the generics
FTC V. CEPHALON, INC. Settlements Allegedly Delay Entry By 6 Years
FTC V. CEPHALON, INC. SETTLEMENT TERMS ANDTIMELINE
REVERSE PAYMENT AGREEMENTS MMA Patent Settlement Filing Requirements Pharmaceutical patent settlements required to be filed with FTC (per 2003 Medicare Modernization Amendments) Why Congress Enacted This Requirement Waxman: to re-emphasize the Hatch-Waxman Act s original intent of enhancing competition, not collusion, between generic and name-brand drug manufacturers
BMS/APOTEX SETTLEMENT ON PLAVIX Settlements at Issue Original Settlement FTC did not approve because included provision that BMS would not launch authorized generic Revised Settlement Did not include authorized generic provision, but BMS orally represented it would not launch authorized generic Both Settlements Submitted to FTC Required under prior BMS consent, which required FTCapproval Required under MMA filing requirement Apotex submitted letter with MMA filing noting oral terms BMS signed FTC certification confirming no oral terms Ramifications for BMS DOJ Criminal Investigation and Plea Agreement with BMS (two felony counts and criminal fine of $1 million) BMS Senior VP Andrew Bodnar ($100,000 fine, one year jail time, required to write book on experience) State Attorneys General ($1.1 million fine for misleading States regarding settlement (violation of 2003 Order with States)) FTC ($2.1 million in civil penalties for misleading FTC regarding settlement (violation of 2003 FTC Order and MMA violation))
SHAM LITIGATION Brand sues generic for patent infringement Court finds for generic, often on SJ, and holds patent invalid or unenforceable Hatch-Waxman 30-month stay allows brand to win even if they lose Plaintiffs must prove brand s infringement suit is objectively and subjectively baseless
SHAM CITIZENPETITIONING Companies can petition FDA to not approve an ANDA Should be based on safety or formulation concerns Citizen s Petitions delay approval of ANDAs Ripe for abuse, and often abused Delay itself is the goal Same standard as Sham Litigation
WALKER PROCESSFRAUD Antitrust violation premised on fraud on the PTO Patent applicants have a duty of candor to PTO because applications are ex parte Elements track fraud claims Often coupled with Sham Litigation and other theories
PRODUCT HOPPING Delay sometimes allows brands to introduce new versions of the product Changes are often minimal but can defeat generic competition Brands actively convert the market Free samples Pulling the old product from the market
LOOPHOLES IN THE HATCH-WAXMAN ACT Authorizedgenerics 30 month stay Warehousing patents Reversepayments Citizen s petitions
AUTHORIZED GENERICS(AG) AGs are pharmaceutical products that are approved as brand-name drugs but marketed as generic drugs AGs do not bear the brand-name or trademark of the brand-name drug or manufacturer, but the brand- name and AG products are manufactured to the brand s specifications Authorized generics have a unique impact during the first six months of generic competition Competition from AGs during the 180 -day exclusivity period has the potential to reduce both generic drug prices and generic firm revenues
AUTHORIZED GENERICS(AG) Drug: Nitrofurantoin Innovator: P&G AG: Watson Generic: Mylan Mylan lost about $30 mn of the revenue it was set to realize under its 180-day exclusivity grant from FDA
INDIAN COMPANIES & AUTHORIZEDGENERICS Femcon Fe (WarnerChilcot) Lupin 2011 Rocaltrol (Validus) Ranbaxy 2009 Caduet (Pfizer) Ranbaxy 2011 Zocor (Merck) DRL 2006
WAREHOUSING PATENTS Evergreening or warehousing of patents An innovator may patent multiple attributes of a product (may be color, manufacturing process or the chemicals produced when the drug is ingested in the body) and keeps on adding patents in the Orange Book, essentially forcing the generic to hose between waiting for the patents to expire or file a Para IV certification which brings along the risks of litigation and associated costs and delays The provision of filing a patent infringement lawsuit gives the brand name manufacturer at least an additional two and a half years of product monopoly has resulted in a wave of such lawsuits
CONCLUSION The Hatch Waxman Act extended the life of the pharmaceutical patents up to 14 years from the time the New Drug Application is approved by the FDA, provided additional market exclusivity for the new uses or new formulations, allowed potential generic manufacturers to conduct work related to marketing approval of the drug without the charge of patent infringement, permitted generic manufacturers to use safety and effectiveness research performed by the brand name pharmaceutical companies, introduced the concept of bioequivalence to obtain the approval of generic drug, and simplified generic drug approval process by introducing ANDA, and encouraged patent challenges by providing 180 -day market exclusivity for the first generic manufacturer who files ANDA
CONCLUSION CONTD Hatch Waxman Act led to the birth of generic industry It also gave protection to innovators in terms of 30 month stay, market exclusivities and patent term extensions But, the brand companies are taking advantage of the loopholes of HWA in the form of authorized generics and reverse payment agreements Brand companies are also involved in sham litigations to take advantage of 30 month stay provision Role of both brand and generic companies are vital for US healthcare system Maintaining the balance between these two important contributors to health care will be essential in meeting the goals of affordable health care and innovative research
