The provisions of the Drug Price Competition and Patent Term Restoration Act of 1984 (Hatch-Waxman Amendments) which govern the generic drug approval process give 180 days of marketing exclusivity to certain generic drug applicants. The 180-day generic drug exclusivity provision is one component of the complex patent listing and certification process, which also provides for a 30-month stay on generic drug approvals while certain patent infringement issues are litigated.
The Hatch-Waxman amendments are intended to balance two important public policy goals. First, drug manufacturers need meaningful market protection incentives to encourage the development of valuable new drugs. Second, once the statutory patent protection and marketing exclusivity for these new drugs has expired, the public benefits from the rapid availability of lower priced generic versions of the innovator drug.
The Hatch-Waxman Amendments amended the Federal Food, Drug, and Cosmetic (FD&C) Act and created section 505(j). Section 505(j) established the abbreviated new drug application (ANDA) approval process, which permits generic versions of previously approved innovator drugs to be approved without submission of a full new drug application (NDA). An ANDA refers to a previously approved new drug application (the "listed drug") and relies upon the Agency's finding of safety and effectiveness for that drug product.
The timing of an ANDA approval depends in part on patent protections for the innovator drug. Innovator drug applicants must include in an NDA information about patents for the drug product that is the subject of the NDA. FDA publishes patent information on approved drug products in the Agency's publication "Approved Drug Products with Therapeutic Equivalence Evaluations" (the Orange Book) (described in more detail below). The FD&C Act requires that an ANDA contain a certification for each patent listed in the Orange Book for the innovator drug. This certification must state one of the following:
that the required patent information relating to such patent has not been filed;
that such patent has expired;
that the patent will expire on a particular date; or
that such patent is invalid or will not be infringed by the drug, for which approval is being sought.
A certification under paragraph I or II permits the ANDA to be approved immediately, if it is otherwise eligible. A certification under paragraph III indicates that the ANDA may be approved on the patent expiration date.
A paragraph IV certification begins a process in which the question of whether the listed patent is valid or will be infringed by the proposed generic product may be answered by the courts prior to the expiration of the patent. The ANDA applicant who files a paragraph IV certification to a listed patent must notify the patent owner and the NDA holder for the listed drug that it has filed an ANDA containing a patent challenge. The notice must include a detailed statement of the factual and legal basis for the ANDA applicant's opinion that the patent is not valid or will not be infringed. The submission of an ANDA for a drug product claimed in a patent is an infringing act if the generic product is intended to be marketed before expiration of the patent, and therefore, the ANDA applicant who submits an application containing a paragraph IV certification may be sued for patent infringement. If the NDA sponsor or patent owner files a patent infringement suit against the ANDA applicant within 45 days of the receipt of notice, FDA may not give final approval to the ANDA for at least 30 months from the date of the notice. This 30-month stay will apply unless the court reaches a decision earlier in the patent infringement case or otherwise orders a longer or shorter period for the stay.
The statute provides an incentive of 180 days of market exclusivity to the "first" generic applicant who challenges a listed patent by filing a paragraph IV certification and running the risk of having to defend a patent infringement suit. The statute provides that the first applicant to file a substantially complete ANDA containing a paragraph IV certification to a listed patent will be eligible for a 180-day period of exclusivity beginning either from the date it begins commercial marketing of the generic drug product, or from the date of a court decision finding the patent invalid, unenforceable or not infringed, whichever is first. These two events - first commercial marketing and a court decision favorable to the generic - are often called "triggering" events, because under the statute they can trigger the beginning of the 180-day exclusivity period.
In some circumstances, an applicant who obtains 180-day exclusivity may be the sole marketer of a generic competitor to the innovator product for 180 days. But 180-day exclusivity can begin to run - with a court decision - even before an applicant has received approval for its ANDA. In that case, some, or all, of the 180-day period could expire without the ANDA applicant marketing its generic drug. Conversely, if there is no court decision and the first applicant does not begin commercial marketing of the generic drug, there may be prolonged or indefinite delays in the beginning of the first applicant's 180-day exclusivity period. Approval of an ANDA has no effect on exclusivity, except if the sponsor begins to market the approved generic drug. Until an eligible ANDA applicant's 180-day exclusivity period has expired, FDA cannot approve subsequently submitted ANDAs for the same drug, even if the later ANDAs are otherwise ready for approval and the sponsors are willing to immediately begin marketing. Therefore, an ANDA applicant who is eligible for exclusivity is often in the position to delay all generic competition for the innovator product.
Only an application containing a paragraph IV certification may be eligible for exclusivity. If an applicant changes from a paragraph IV certification to a paragraph III certification, for example upon losing its patent infringement litigation, the ANDA will no longer be eligible for exclusivity.
This 180-day exclusivity provision has been the subject of considerable litigation and administrative review in recent years, as the courts, industry, and FDA have sought to interpret it in a way that is consistent both with the statutory text and with the legislative goals underlying the Hatch-Waxman Amendments. A series of Federal court decisions beginning with the 1998 Mova1 case describe acceptable interpretations of the 180-day exclusivity provision, identify potential problems in implementing the statute, and establish certain principles to be used by the Agency in interpreting the statute.
In light of the court decisions finding certain FDA regulations inconsistent with the statute, the Agency proposed new regulations (Federal Register notice) in August 1999 to implement the 180-day exclusivity.
Since then many comments have been submitted and there have been additional court decisions further interpreting the 180-day exclusivity provision and complicating the regulatory landscape. The Agency has not yet published a final rule on 180-day exclusivity. As described in a June 1998 guidance for industry, until new regulations are in place, FDA is addressing on a case-by-case basis those 180-day exclusivity issues not addressed by the existing regulations.
One of the most fundamental changes to the 180-day exclusivity program that has resulted from the legal challenges to FDA's regulations is the determination by the courts of the meaning of the phrase "court decision." The courts have determined that the "court decision" that can begin the running of the 180-day exclusivity period may be the decision of the district court, if it finds that the patent at issue is invalid, unenforceable, or will not be infringed by the generic drug product. FDA had interpreted the "court decision" that could begin the running of 180-day exclusivity (and the approval of the ANDA) as the final decision of a court from which no appeal can be or has been taken - generally a decision of the Federal Circuit. FDA's interpretation had meant that an ANDA applicant could wait until the appeals court had finally resolved the patent infringement or validity question before beginning the marketing of the generic drug. FDA had taken this position so that the generic manufacturer would not have to run the risk of being subject to potential treble damages for marketing the drug, if the appeals court ruled in favor of the patent holder. The current interpretation means that if the 180-day exclusivity is triggered by a decision favorable to the ANDA applicant in the district court, the ANDA sponsor who wishes to market during that exclusivity period now may run the risk of treble damages if the district court decision is reversed on appeal to the Federal Circuit. As a practical matter, it means that many generic applicants may choose not to market the generic and thus the 180-day exclusivity period could run during the pendency of an appeal.
In one of the cases rejecting FDA's interpretation of the "court decision" language in the statute, the court determined that the applicant who relied in good faith on FDA's interpretation of the 180-day exclusivity provision should not be punished by losing its exclusivity. The court, therefore, refused to order FDA to begin the running of 180-day exclusivity upon the decision of the district court in the patent litigation at issue. FDA has taken a similar approach in implementing the courts' decisions: the new "court decision" definition will apply only for those drugs for which the first ANDA was submitted subsequent to March 30, 2000. In adopting this course, a primary concern for the Agency was to identify an approach that would minimize further disruption and provide regulated industry with reasonable guidance for making future business decisions.
To advise the public and industry of this position, FDA published a Guidance for Industry in March 2000. FDA intends to incorporate the courts' interpretation of the "court decision" trigger for 180-day exclusivity into the final rule implementing the changes in 180-day exclusivity.
Under the FD&C Act, pharmaceutical companies seeking to market innovator drugs must submit, as part of an NDA or supplement, information on any patent that 1) claims the pending or approved drug or a method of using the approved drug, and 2) for which a claim of patent infringement could reasonably be asserted against an unauthorized party. Patents that may be submitted are drug substance (active ingredient) patents, drug product (formulation and composition) patents, and method of use patents. Process (or manufacturing) patents may not be submitted to FDA.
When an NDA applicant submits a patent covering the formulation, composition, or method of using an approved drug, the applicant must also submit a signed declaration stating that the patent covers the formulation, composition, or use of the approved product. The required text of the declaration is described in FDA's regulations. FDA publishes patent information on approved drug products in the Orange Book.
The process of patent certification, notice to the NDA holder and patent owner, a 45-day waiting period, possible patent infringement litigation and the statutory 30-month stay mean there is the possibility of a considerable delay in the approval of ANDAs as a result of new patent listings. Therefore, these listings are often closely scrutinized by ANDA applicants. FDA regulations provide that, in the event of a dispute as to the accuracy or relevance of patent information submitted to and subsequently listed by FDA, an ANDA applicant must provide written notification of the grounds for dispute to the Agency. FDA then requests the NDA holder to confirm the correctness of the patent information and listing. Unless the patent information is withdrawn or amended by the NDA holder, FDA will not change the patent information listed in the Orange Book. If a patent is listed in the Orange Book, an applicant seeking approval for an ANDA must submit a certification to the patent. Even an applicant whose ANDA is pending when additional patents are submitted by the sponsor must certify to the new patents, unless the additional patents are submitted by the patent holder more than 30 days after issuance by the U.S. Patent and Trademark Office.
FDA does not undertake an independent review of the patents submitted by the NDA sponsor. FDA does not assess whether a submitted patent claims an approved drug and whether a claim of patent infringement could reasonably be made against an unauthorized use of the patented drug. FDA has implemented the statutory patent listing provisions by informing interested parties what patent information is to be submitted, who must submit the information, and when and where to submit the information. As the Agency has stated, since the implementation of the 1984 Hatch-Waxman Amendments began, FDA has no expertise or resources with which to resolve complex questions of patent coverage, and thus the Agency's role in the patent-listing process is ministerial. The statute requires FDA to publish patent information upon approval of the NDA. The Agency relies on the NDA holder or patent owner's signed declaration stating that the patent covers an approved drug product's formulation, composition or use. Generic and innovator firms may resolve any disputes concerning patents in private litigation.
1Mova Pharmaceutical Corp. v. Shalala,140 F.3d 1060, 1065 (D.C. Cir. 1998)