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AUGUST 1, 1991


Mr. Chairman and members of the subcommittee, my name is Stuart Nightingale; I am the Associate Commissioner for Health Affairs of the Food and Drug Administration (FDA). I am pleased to testify this morning about FDA's role in the patent extension process as authorized by the Drug Price Competition and Patent Term Restoration Act. To assist me in answering questions regarding two specific products that are the subject of this hearing, Ansaid and Olestra, I am accompanied by Mr. Richard Ronk, Director of the Product Policy Staff, within FDA's Center for Food Safety and Applied Nutrition; Dr. Gloria Troendle, Deputy Director of Division of Metabolism and Endocrine Drug Products, within FDA's Center for Drug Evaluation and Research (CDER); Dr. John G. Harter, Director of the Pilot Drug Evaluation Staff, also within CDER; and, Ms. Nancy Pirt from the Office of Health Affairs, who coordinates FDA's activities in this area; and Ms. Jill Warner, from our Office of the General Counsel.

FDA is foremost a public health regulatory agency. In the case of new drugs, FDA's primary role is to review whether an applicant for marketing approval has established the safety and effectiveness of the drug for its intended use. For food additives, applicants must apply for premarket approval from FDA, and establish that the proposed use of the additive is safe. In making determinations about safety or efficacy, FDA is guided by scientific, medical, and health considerations, not by economic factors or factors relatingto patent laws.

FDA supported enactment of the Drug Price Competition and Patent Term Restoration Act, primarily on the grounds that it would foster innovation and could result in cost savings to consumers. However, it is not appropriate for FDA to take a position on the merits of individual patent extension requests.

We do, however, provide important information to assist the U.S. Patent and Trademark Office (PTO) under the Patent Term Extension Act. Within FDA, the Patent Term Extension program is administered by the Office of Health Affairs. Since the beginning of this program, FDA has received 178 applications for the extension of the patent terms connected with 167 products that have been approved for marketing. (Because some products have more than one patent, some products have several patent term extension applications, although only one patent per product may be granted an extension.) Of the total number of applications FDA has received, 142 were for human drugs (including biologics), 26 were for medical devices, 6 for animal drugs, and 4 for food additives.

FDA's final regulations implementing the patent term extension program were published in the Federal Register on March 7, 1988. On November 16, 1988, the President signed into law the "Generic Animal Drug Patent Term Restoration Act," by which animal drugs were added to the program. On February 13, 1991, FDA published a proposed rule to amend its regulations to include animal drugs. These changes are in the process of being finalized.

Additionally, FDA and the Patent and Trademark Office have signed a Memorandum of Understanding regarding our respective duties under the Patent Term Extension Act. This Memorandum of Understanding was published in the Federal Register on May 12, 1987.

As you know, a patent term runs for 17 years from the patent's issue date. Congress has recognized that product testing and development, federal application review, and compliance with federal marketing requirements might consume some of this patent term and reduce the marketing time available for recovery of research and development costs. The Drug Price Competition and Patent Term Restoration Act and its amendments were intended to remedy this by creating a program whereby patent holders of human drug products, medical devices, food or color additives, or animal drugs (except those derived from biotechnology) can recoup some of the patent time that elapsed during the development of their products and FDA's premarketing approval process.

In general, patents which claim a product, a method of using a product, or a method of manufacturing a product can qualify for patent term extension provided that the approved product represents the first permitted commercial marketing or use of the product. A maximum of 5 years can be restored to the patent. However, if the patent was issued before September 24, 1984, and the product's regulatory review period began before that date, the extension islimited to 2 years. In all cases, the total patent life for the product cannot exceed 14 years from the product's approval date, or, in other words, 14 years of exclusive marketing time.

The PTO has primary authority for granting patent term extensions. That office also establishes application requirements, makes eligibility determinations, and issues certificates of extension. FDA assists the patent office in determining whether a product satisfies statutory eligibility criteria, and advises as to the amount of time that the product was in the regulatory review process.

To determine eligibility, the patent office asks FDA to examine the patent term restoration application and inform the PTO whether: (1) the product was reviewed and approved by FDA, (2) the patent term restoration was filed within 60 days of the product's approval date, as required by law, and (3) the product represents the "first permitted commercial marketing or use of that product under the provision of law under which such regulatory review period occurred."

If the product is eligible for patent term restoration, the PTO then requests a regulatory review period determination by FDA. The statute divides the regulatory review period into two phases: a "testing phase" and an "approval phase."

Generally speaking, the testing phase starts on the effective date of an investigational product exemption, such as an Investigational New Drug Application for drugs, or, in the case of food additives, the date a major health or environmental effects test is begun. The testing phase ends and the approval phase begins upon the submission of a marketing application, such as a New Drug Application or, for food additives, upon the submission of a petition requesting the issuance of a regulation for use of the additive. The regulatory review period ends when the product is approved.

FDA reviews the information in the patent term restoration application, determines the length of the product's regulatory review period, notifies the Commissioner of Patents and Trademarks of its findings, and publishes its determination in the Federal Register.

Within 60 days of publication in the Federal Register, any person can comment on the regulatory review period determination and request a revision, stating the nature of and basis for the revision. Concurrently, within 180 days of publication in the Federal Register, any person can file a petition challenging the due diligence of an applicant for patent term restoration. The statute defines "due diligence" as "that degree of attention, continuous directed effort, and timeliness as may reasonably be expected from, and are ordinarily exercised by, a person during a regulatory review period." The purpose of the due diligence provision is to ensure that patent holders are not compensated fordelaying the regulatory review process.

A due diligence petition must be served on the patent term restoration applicant, filed with the docket for that product at FDA, and contain sufficient evidence to warrant an investigation. FDA is responsible for resolving due diligence issues and publishing its decision in the Federal Register. The patent term restoration applicant can request an informal hearing within 60 days of the publication of a due diligence determination. Once such a hearing has been held, FDA would affirm or revise the due diligence determination. It should be noted, however, that no due diligence petition has ever been filed with FDA for any of the patent term extension applications.

Once the regulatory review period determination is final, PTO then calculates the length of the extension period, giving half-credit to the testing phase, full credit to the approval phase, and no credit for applicant-caused delays or any time before the patent issued. A certificate of extension is then issued to the patent holder.

That concludes my statement, Mr. Chairman. We would be happy to answer any questions you may have about FDA's role in this process.

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