1. The Hatch-Waxman Act
The Drug Price Competition and Patent Term Restoration Act, commonly known as the "Hatch-Waxman" Act, was enacted in USA in 1984. The Act aims to strike a balance between the drug innovators and generic manufacturers by permitting limited extensions of patent term to compensate for market time lost during the drug approval process undertaken by the FDA, and allowing more rapid entry of generic versions of brand name drugs through an expedited abbreviated approval process.
(1) Filing of Patent information (Orange Book listing)
To facilitate the orderly execution of the patent provisions of the Hatch-Waxman Act, New Drug Application (NDA) holders are required to include certain patent information in their applications when submitted to the FDA. This information includes the patent number and expiration date of each patent that claims the drug or a method of using the drug product that is the subject of the approved or pending applications. Should a patent issue during the FDA's review of the application, the NDA holder is required to amend the application with the new patent information. For any appropriate patents granted after NDA approval, the applicant is required to submit information of the new patent to the FDA within 30 days of patent issuance.
The Hatch-Waxman Act requires the FDA to make publicly available a list of all approved drug products. The list, among other things, is required to contain the patent information submitted by the NDA sponsor once an application is approved. The FDA is to update this information on a regular basis. The FDA meets this statutory requirement by publishing the patent information submitted in its publication entitled Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. The FDA updates this information in cumulative monthly supplements to the Orange Book. The publication of the patent information should allow a prospective ANDA applicant to determine at a given point in time when it should most likely begin development of its generic product, when it will likely be able to market its product, and what patent obstacles or challenges it will have to face if it proposes to market the product prior to patent expiration.
The only patents that are appropriate for listing, that is, for inclusion in the Orange Book are defined by FDA regulations as patents that cover an approved method of use of the drug product; those that cover the approved active ingredient (composition of matter patents); and those that cover the approved drug product's formulation. The NDA holder may list multiple patents that claim the approved drug or an approved method of using the drug product. Each may have a different expiration date and offer its own unique protection to the NDA product. Patents that cover the process or the method of manufacture of the active ingredient or the finished dosage form are among the types of patents that are not authorized to be listed in the Orange Book. Additional types of patents that are currently inappropriately listed in the Orange Book include unapproved uses, unapproved compounds, and devices, designs, and process patents that are disguised as products to old products.
Because a generic applicant relies on previous FDA findings of safety and effectiveness, the Hatch-Waxman Act requires the ANDA applicant to identify the specific reference-listed drug (RLD), that is, the NDA upon which its submission is based. If there are any patent listed in the Orange Book for the RLD upon which the ANDA applicant relies, the FDA is prohibited from approving the ANDA until any listed patents have expired, until such time as the patents are successfully challenged or after the so-called "free 30-month automatic injunction" discussed below. Therefore, the existence of a listed patent in the Orange Book covering the RLD may place a restriction on when the FDA may approve a generic version of the innovator product.
(2) Abbreviated New Drug Application (ANDA)
The abbreviated new drug application (ANDA) process established by the Hatch-Waxman legislation eliminated the need for the generic manufacturers to repeat the duplicative pre-clinical and clinical testing that was both necessary and required to establish safety and efficacy of the innovator product. Instead of duplicating the new drug application (NDA) applicant's testing, the generic applicant could rely on the FDA's previous findings of safety and efficacy for the innovator product it copied if the generic product was the "same as" the innovator. In that regard, to be eligible for the abbreviated procedures, the generic product had to contain the same active ingredient(s), in the same dosage form, and route of administration as the brand name product. In addition, the conditions of use had to have been previously approved, and the labeling of the generic had to be the same as the innovator's labeling with exceptions allowed because either the generic and brand name products were produced by different manufactures or some information was protected by patent or exclusivity. The generic drug manufacture is also required to demonstrate that its product is bioequalivalent (i.e., had the same rate and extent of absorption) as that of the innovator drug product. This link between establishing bioequivalent and the safety and efficacy determination forms the underpinning of the Hatch-Waxman provisions.
As NDA holders are required to submit certain patent information to the FDA for publication in the Orange Book, ANDA applicants must make appropriate certifications or certain statements in addressing each of the listed patents on the RLD as required by the Hatch-Waxman Act (21 USC § 355(j)(2)(A)(vii)(I)-(IV)) and regulations (21 CFR 314.94(A)(12)(i)). There are 4 certifications from which the ANDA applicant must choose in addressing each patent. They are commonly referred to as Paragraphs I, II, III or IV, after the respective paragraph number cited in the Act.
Paragraph I Certification: A Paragraph I certification is appropriate when there are no patents listed in the Orange Book on the RLD. This certification is made when the ANDA applicant is aware that there may be a patent in force that may cover the RLD, but that the NDA holder has for whatever reason decided not to list the patent with the agency. If an ANDA applicant makes a Paragraph I certification, the FDA may approve its application immediately, as long as the FDA determines that the ANDA otherwise meets the approval requirements.
Paragraph II Certification: A Paragraph II certification is appropriate when there is a patent listed in the Orange Book, but it has expired. The ANDA applicant simply certifies that the patent has expired, and provides the patent number and the date the patent expired. An ANDA application containing such a certification is eligible for immediately effective approval if the ANDA applicant has otherwise met the FDA approval requirements.
Paragraph III certification: A Paragraph III certification acknowledges that there is a listed patent on the RLD that has not expired and that the ANDA applicant does not plan to market its product prior to the expiration of the patent. In this instance, the law precludes the FDA from approving the application until the patent has expired.
Paragraph IV certification: An application containing a Paragraph IV certification signifies that the ANDA applicant plans to challenge 1 or more listed patents. The ANDA holder would claim that the patent is invalid, unenforceable, or will not be infringed by the manufacture, use, or sale of the generic product. A generic applicant will make a Paragraph IV certification only when its intent is to market the drug product prior to the expiration date of the patent. Once an ANDA is submitted to the FDA containing a Paragraph IV certification and is found substantially complete to warrant a substantive scientific review, the FDA sends an acknowledgement letter to applicant indicating it has accepted the application for review (filing), and a series of events is triggered.
Upon receipt of the acknowledgement letter (filing notice) from the FDA, the ANDA applicant must provide notice to the holder of the approved NDA for the listed drug that is claimed by the patent and to the owner of the patent (if different from the NDA applicant) that it has filed an ANDA with any required bioequivalence testing seeking approval of a generic copy of the NDA drug product. The notice must contain the ANDA number, pertinent description of the proposed drug product, the patent number and expiration of each specific patent that is being challenged, and a full and factual basis of the reasons the applicant believes that patent will not be infringed, is invalid, or unenforceable. If the NDA holder initiates a lawsuit in the federal district court within 45 days of receipt of the ANDA applicant's notice, the FDA is precluded from approving the ANDA for a period of 30 months. This so-called "free 30-month automatic injunction" or "stay" allows the parties time to litigate the patent issues.
(3) Patent term extension under Hatch-Waxman Act
In exchange for allowing generic applicants to rely on the safety and efficacy findings for the innovator product, the Act contains provisions that would provide special incentives in the form of patent term extensions (a lengthening of the effective term of an existing patent) and awards of various forms and periods of market exclusivity to the innovator to ensure the continued development of new and innovative therapies. The patent term extension was meant to compensate the applicant for a portion of the time wasted after the issuance of a patent during which the testing and approval phases of the FDA's regulatory review process commenced.
The term of a patent, which claims a human drug product, a method of using the product or a method of manufacturing the product will be extended from the original expiration date if it satisfies six conditions. First, the applicant must show that the patent has not expired. Second, the applicant must establish that the patent has not previously been extended. Third, the patent owner or its agent must submit an application for patent term restoration that includes details about the patent and the activities undertaken to secure FDA approval. Fourth, the applicant must establish the product was subject to a regulatory review period before its commercial marketing or use. Fifth, the applicant must show that the product either represents the first permitted commercial marketing or use of the product after such regulatory review period or, in the case of a product manufactured under a process patent that primarily uses recombinant DNA technology, represents the first permitted commercial marketing or use of a product manufactured under the process claimed in the patent. Finally, the applicant must submit the application for patent term restoration to PTO within 60 days of FDA approval of the commercial marketing application.
Permission for commercial marketing or use must be the first permitted commercial marketing or use of the product under the provision of law under which such regulatory review period occurred. A product is the active ingredient contained therein for patent term extension purposes. Active ingredient does not equal active moiety (generally the molecule or ion responsible for the physiological or pharmacological action). A new ester or salt of a previously approved acid is eligible for patent extension; a new acid of a previously approved salt or ester is ineligible.
The regulatory review period is the basis for patent extension. Basically, a regulatory review period is composed of two parts: a testing phase, and an approval phase. The testing phase for a human drug product is the period between the effective date of an investigational product exemption (Investigation New Drug Application, INDA) and the initial submission of the marketing application (New Drug Application, NDA). The approval phase is the period between the submission and approval of the marketing application.
The regulatory review period that occurs after the patent to be extended was issued is eligible to be counted towards the following calculation: First, each phase of the regulatory review period is reduced by any time that the applicant did not act with due diligence during that phase. The reduction in time would only occur after an FDA finding that the company did not act with due diligence. Second, after any such reduction, one-half of the time remaining in the testing phase would be added to the time remaining in the approval phase to comprise the total period eligible for extension. Third, all of the eligible period can be counted unless to do so would result in the total remaining patent term from the date of approval of a marketing application of more than fourteen years. An additional limitation on the period of extension is that the extension cannot exceed five years. Therefore, the USPTO calculates the length of patent extension based on a formula that allows half of the testing phase and the entire approval phase toward a maximum of a 5-year patent extension but not more than 14 years from the date of NDA approval.
Unlike a patent term adjustment, a patent term extension does not extend the patent in terms of the full scope of its claims. Rather, the extension pertains to the claims only to the extent that the claims cover the approved product. Thus, the patent during the extended term can prevent manufacture and sale of generic "me-too" versions of the approved product, but does not apply to other non-approved products that would otherwise be covered by the patent claims during the original, non-extended term.
(4) Court Interpretations of patent term extension provisions under the Hatch-Waxman Act
1) Patent must claim either the active ingredient or its use
The meaning of the term "claims" was at issue in Hoechst-Roussel Pharmaceuticals Inc. v. Lehman, where the Federal Circuit reviewed the district court's affirmation of the USPTO's denial of the plaintiff's application for extension under Hatch-Waxman act. Hoechst argued that its patent claiming a metabolite, 1-hydroxy-tacrine, of an FDA approved drug, tacrine-hydrochloride, was entitled to patent term extension. Hoechst' patent claims the compound 1-hydroxy-tacrine and a method of treating a patient for memory enhancement by administering an effective amount of 1-hydroxy-tacrine. Tacrine-hydrochloride, after ingestion, metabolizes into 1-hydroxy-tacrine and other compounds. The USPTO however denied the extension of the grounds that: (1) Hoechst was not a property applicant because it was not involved in the FDA approval of tacrine-hydrochloride, and (2) the patent did not claim the FDA approved tacrine-hydrochloride or a method of using the product.
First, Warner-Lambert Company, which is not a party to this case, submitted a new drug application to the FDA for approval to market the drug COGNEX to treat Alzheimer's disease. The active ingredient in COGNEX is tacrine-hydrochloride. The FDA approved Warner-Lambert's drug. Hoechst sued Warner-Lambert for infringement of its patent that discloses and claims the compound 1-hydroxy-taccrine and a method of treating a patient in need of memory enhancement using 1-hydroxy-tacrine. Since, tacrine-hydrochloride, after ingestion, metabolizes into 1-hydroxy-tacrine and other compounds, Warner-Lambert admitted that tacrine-hydrochloride infringed certain claims of Hoechst’s patent. Thus, the court entered a consent judgment of infringement.
While the suit was pending, Hoechst filed an application for extension of the term of its patent, based on the regulatory review of Warner-Lambert's COGNEX. Hoechst rationalized that if the claims were infringed by the FDA approved product, then the infringed claims were within the meaning of the term "claims" as used in Hatch-Waxman Act and were eligible for term extension. However, because it was Warner-Lambert whose FDA application was approved, not Hoechst, the Commissioner decided Hoechst was not the property applicant for patent term extension. The district court affirmed.
Additionally, in applying the plain meaning to the Act's use of the term "claims", the USPTO argued that the patent claimed 1-hydroxy-tacrine and a method of treating a patient with that compound. The patent did not "claim" tacrine-hydrochloride, which was the product that, after injection, metabolized into 1-hydroxy-tacrine, or the method of using tacrine-hydrochloride. Thus, the Commissioner decided that Hoechst had not claimed either the active ingredient that received FDA approval or its use. Instead, Hoechst had not claimed a chemically distinct compound and the method of using that compound.
On appeal, Hoechst argued that Congress intended the meaning of "claims" to include anything that infringes the claims, but the Court found that the legislative history was "not an extraordinary showing of contrary intentions" to the plain meaning of the term. The court concluded that because Hoechst's patent did not claim tacrine-hydrochloride, which had received regulatory approval, or its use, the patent was ineligible for extension under Hatch-Waxman Act. Thus, in view of Hoechst, patents that do not "claim" the FDA approved product are ineligible for extension under Hatch-Waxman Act.
2) Patent Term extension applies to the approved new drug and its salts or esters
Merck & Co. Inc. v. Teva Pharm. USA, Inc., was a case where the court considered the invalidity of the patent term extension. The Federal Circuit affirmed the district court's ruling that Teva Pharmaceuticals USA Inc. and Zenith Goldline Pharmaceuticals, Inc. (collectively "Teva") not only infringed a patent, owned by Merck & Co., but also that the patent was properly entitled to term extension. The patent at issue had one claim to a product that had been given the common name alendronic acid. Merck, however, marketed the alendronate salt under the brand name Fosamax. Teva was sued by Merck after it filed an ANDA to sell the generic version of Fosamax. In its defense, Teva argued that: (1) Merck was not entitled to a patent term extension because the approved product is not alendronic acid, but the monosodium salt, and (2) Teva did not literally infringe Merck's patent because the patent claim was directed to the alendronic acid and Teva's ANDA was for the monosodium sale. The Federal Circuit disagreed with Teva's theories.
In considering whether Merck was entitled to the patent term extension, the Federal Circuit gave the "appropriate deference" to the USPTO' s determination as to which patents were entitled to term extensions. Accordingly, the court construed the claims to include the usage of the monosodium salt. Support for the claim construction was found throughout the specification, such that the specification described the acid active agent as encompassing the acid and its sale forms. Hence, the Federal Circuit concluded that Merck was appropriately allotted the term extension and that the scope of the claims included the salt forms. As a consequence, Teva was found guilty of infringement.
In Pfizer Inc. v. Dr. Reddy's Laboratories, Ltd., the Federal Circuit similarly interpreted the breadth of a patent approved for patent term extension to include not only the new drug, but also, any salts or esters of the active ingredients that was approved by regulatory review. In this case, Pfizer's patent covered Norvasc, an anti-hypertensive, anti-ischemic drug product, whose active ingredient is amlodipine. The specification described clinical data of amlodipine besylate and amlodipine maleate. Pfizer selected the besylate salt for regulatory review. The FDA approved the besylate salt. After regulatory review, Pfizer obtained patent term extension of 1251 days, from February 25, 2003 to July 21, 2006.
Dr. Reddy's sought use of amlodipine maleate. Dr. Reddy's argued that the term extension only applied to amlodipine besylate. The district court agreed with Dr. Reddy's and dismissed Pfizer's complaint. On appeal by Pfizer, the Federal Circuit disagreed with the lower court's decision and reversed it, finding that "the district court misconstrued the statute…the Act by its terms extended the term of the patent of the registered uses of the drug product including its salts and esters."
In so holding, the Federal Circuit discussed the definition of the term "drug product" under the Hatch-Waxman Act. The term is defined as "the active ingredient of a new drug…including any salt or ester of the active ingredient." The court considered that the FDA had ruled that the term "active ingredient" as used in the phrase "active ingredient including any salt or ester of the active ingredient" to mean "active moiety." Abbreviated New Drug Application Regulations: Patent and Exclusivity Provisions, 59 Fed. Reg. 50,338, 50,358 (F. D. A. Oct. 3, 1994). Further, the FDA defined "active moiety" as "the molecule or ion, excluding those appended portions of the molecules that cause the drug to be an ester, salt…responsible for the physiological or pharmacological action of the drug substance." 21 C.F.R. §314/108(a). Accordingly, the Federal Circuit interpreted 35 U.S.C. §156(f) to extend patent term of the new drug as well as any salts or esters of the active ingredient.
3) In a combination product, one active ingredient must be new to the marketplace
On March 24, 2004, the Federal Circuit upheld, in The Arnold Partnership v. Godici, the USPTO' s denial of patent term extension for a patent application claiming a combination of hydrocodone and ibuprofen as well as methods of treating pain with this composition. Both hydrocodone and ibuprofen had previously been marketed separately. However, the combination of hydrocodone and ibuprofen had never been marketed. Even though, the FDA required a NDA before clearing the combination of hydrocondone and ibuprofen ("Vicoprofen"), the USPTO did not consider the combination drug the first commercial marketing of the product. Thus, the USPTO ruled that Vicoprofen did not comply with the fifth constitution under the Hatch-Waxman Act i.e. the "first commercial marketing" requirement.
The plaintiff argued that the meaning of the term "product” means a single active ingredient, even where multiple active ingredient are present. As a consequence, because the combination of hydrocodone and ibuprofen is the "product" within the meaning of the Act, the patent claiming hydrocodone and ibuprofen was therefore eligible for extension. The district court agreed with the USPTO' s decision and held that patent term extension may not be based on a combination of active ingredients where the individual ingredients have been separately approved for marketing. The Federal Circuit affirmed.
The USPTO' s decision was based upon a policy in place since 1989 that, in order for a combination of active ingredients to be eligible for extension, at least one of the active ingredients must not have been previously approved for commercial marketing or use. For this reason, the USPTO determined that the patent was not eligible for patent term extension to compensate of the delay caused by regulatory review.
The Federal Circuit decision was based on a closer look at the statutory language of "a drug product." In particular, "a drug product" is defined as "the active ingredient of a new drug…with another active ingredient." The Act uses the disjunctive to show that the drug product may consist of either a single ingredient or an active ingredient in combination with another active ingredient. Accordingly, the Federal Circuit reasoned that the statute places a combination drug product having two active ingredients in the same category as a drug with a single active ingredient. To extend the term of a patent claiming a composition comprising multiple active ingredients, one ingredient must not have been previously marketed. As a result, at least one of the claimed active ingredients must be new to the marketplace as a drug product.
2. Methods of obtaining Market Exclusivity
It is important to recognize that brand name firms can continue or extend market protection through two separate and distinct route, namely, patent protection and market exclusivity. Market exclusivity is different from patent term extension. It provides qualified drug products competition-free periods by preventing FDA or USDA approval of identical generic products. Market exclusivities enforced by either the FDA or the USDA include: (1) Five-year new chemical entity exclusivity under the Hatch-Waxman Act; (2) Three-year New use/new clinical studies exclusivity under the Hatch-Waxman Act; (3) seven-year Orphan Drug Exclusivity; (4) Six-month Pediatric exclusivity; (5) 30 month stays of FDA approval under the Hatch-Waxman Act; and (6) Generic 180-day drug exclusivity under the Hatch-Waxman Act.
(1) Five-year new chemical entity (NCE) exclusivity under the Hatch-Waxman Act
New chemical entity exclusivity provides the holder limited protection from new competition. It precludes approval and can delay submission of certain ANDAs. New chemical entity exclusivity is granted to a drug that does not contain an active moiety previously approved in a FDA new drug application (NDA). During the 5-year period, the FDA is precluded from accepting an ANDA for review. The only exception is that if a patent is also listed on the NDA product subject to NCE exclusivity, the FDA may accept an ANDA after 4 of the 5-year period had expired, if the ANDA contains a Paragraph IV certification challenging the patent. This gives the ANDA applicant an additional year to litigate the patent if sued by the innovator. NCE exclusivity is considered blocking exclusivity, as no generic product can be submitted or approved while the exclusivity is in force. This market exclusivity can stand alone, or be coupled with a six-month pediatric exclusivity.
(2) Three-year new use/new clinical studies exclusivity under the Hatch-Waxman Act
Previously approved drugs with new indications or dosage forms can receive new use or new clinical study exclusivity. This exclusivity application must contain reports of new clinical investigations conducted by the applicant. Examples of the type of changes for which this exclusivity may be created include: as a new dosage form (e.g., development of an extended-release version of a previously approved immediate-release product), a new use or indication, a new salt or ester of a drug product, a change in strength, etc. The exclusivity term runs for three years from NDA approval. The nature of the 3-year exclusivity will dictate when the FDA may approve a generic version for the changed product. The 3-year exclusivity may block FDA approval of a generic version until after the exclusivity expires (e.g. new dosage form), or it is possible that the FDA can approve the generic version if approval will not impinge on the protected change (e.g. exclusivity awarded for a new use where there are other non-protected uses available to the generic). This exclusivity can stand alone or be coupled with a six-month pediatric exclusivity.
(3) seven-year orphan drug exclusivity
Pharmaceuticals receive orphan drug exclusivity if they are approved to treat disease or conditions affecting fewer than 200,000 people in the US or for which there is no hope of recovering costs. The term runs for seven years from NDA or Biologics License Application (BLA) approval. However, if another drug exists which is chemical different or clinically superior, the second drug can be approved and may receive its own orphan status. Again, this market exclusivity can stand alone or be coupled with a six-month pediatric exclusivity.
(4) Six-month pediatric exclusivity
A drug sponsor receives pediatric exclusivity is granted exclusivity after submission of pediatric studies on the drug at the FDA's request (Antibiotics are not eligible for this extension unless considered an orphan drug). The FDA may issue a request for pediatric studies at the drug sponsor's request or on its own initiative. Title 111 of the FDA Modernization Act (FDAMA) of 1997 permits certain applicants to obtain an additional 6-month period exclusivity, if, in accordance with the statute, the sponsor submits requested information on the use of drug moiety in pediatric patients. This 6-month period of exclusivity extends or attaches to all already existing periods of exclusivity and extends by 6 months the period during which the FDA cannot approve an ANDA due to a limiting patent on the listed NDA product. In additional, this 6-month exclusivity is added to all other dosage forms that contain the same active moiety, thus protecting the entire product line, not just the form used in the pediatric population. The purpose of the pediatric exclusivity provision of the statute is to provide an incentive for an NDA applicant to study the proper use of its drug in the pediatric population and, thus, facilitate the development of appropriate labeling instructions for use in that patient population. Frequently, a second pediatric study is sought via a supplemental NDA for a drug already granted pediatric exclusivity; thus, a pharmaceutical can potentially received two pediatric exclusivity terms subject to certain limitations.
The pediatric exclusivity is currently one of the most common means for brand companies to extend its excising exclusive marketing protection. This 6-month period of exclusivity is added to any existing patent or exclusivity protection already in force for the drug product at the time the pediatric study is submitted. For currently marketed products, brand firms typically submit these pediatric studies just prior to expiration of existing patent or exclusivity protection.
(5) 30-month stays of FDA approval under the Hatch-Waxman Act
An ANDA applicant must submit a certification for each patent listed in the orange book for the subject drug. Paragraph IV certification starts the legal process of deeming whether the listed patent is valid or will be infringed by the proposed generic product. The ANDA applicant with a Paragraph IV certification must notify the patent owner and the NDA holder for the listed drug that an ANDA containing a patent challenge has been filed. The patent owner may then sue the ANDA applicant for patent infringement. If the patent owner files suit, the FDA will stay approval of the ANDA for 30 months from the date of the notice. This 30-month stay (and associated exclusivity period) remains effective until the court reaches a decision in the suit or otherwise alters the stay period.
(6) Generic 180-day drug exclusivity under the Hatch-Waxman Act
The first ANDA applicant to make a Paragraph IV certification receives the benefit of a 180-day market exclusivity period during which no other ANDA can be approved for that drug. ANDA applicants with certifications other than Paragraph IV are not eligible for the 180-day exclusivity. The 180-day exclusivity begins the earlier of the first date of the generic drug's commercial marketing or a court decision on the patent.
The 180-day exclusivity provisions provide an incentive for generic firms to develop non-infringing formulations of patent-protected products, or to adjudicate the validity of listed patents. The 180-day exclusivity is triggered by any court decision in the ANDA applicant's favor or the first commercial marketing of the first ANDA applicant's product under the application. This 180-day period is extremely valuable to an ANDA applicant, as they are able to gain and maintain a substantial share of the generic market during this period of time.
3. Strategies to extending market exclusivity after the patent term ends
(1) Blocking generic manufacturers' ANDA's
After the innovating company's patent term expires, generic companies can begin their FDA approval process on their generic drug equivalent using the ANDA process to gain approval within six months under the Hatch-Waxman Act. One of the requirements for a generic company to file an ANDA application is that the applicant does not use a method of producing the proposed generic drug that is protected by a "method of production" patent.
Because a "production method" patent can be separate from a "drug composition" patent, a tactful patent strategy is to file the production method patent a few yeas after filing the composition patent. Therefore although the composition would be public domain, the production method's term would still be running and thus be protected. Put simply, a generic has access to the product itself, but does not have rights to produce the product according to the patented method. This strategy is even more effective with biopharmaceuticals than with traditional chemical pharmaceuticals because of the complexity of macromolecules. While there may be more than one method to synthesize a chemical compound, allowing competitors to design around the method of production patent, it is difficult to engineer around complex microbiological systems. Thus, a delayed production method patent can extend market exclusivity of a biopharmaceutical by protecting its production.
(2) Delay through the "metabolite defense"
The "metabolite defense" can be used to stall generic market entry. Metabolites are the metabolized derivatives of the original structure, formed after being introduced into and processed by the body. The strategy is to file patents for the metabolites in years subsequent to the filing date of the main patent. Once the generic version is marketed, the innovating company holding the metabolite patent can file a patent infringement claim against generic company because the generic company will be making products that inevitably become infringing products once digested by consumers. While the metabolite defense has never actually prevailed in court, the litigated dispute can delay the generics' market entry for up to six months. This extended market exclusivity leads to increased profits by the innovating company.
(3) Delay through raising "citizen petitions"
Similar to raising the metabolite defense in court, an innovating company can file a "citizen petition" with the FDA, which raises safety objections with the particular biopharmaceutical. Although the majority of petitions are rejected by the FDA or withdrawn by companies, the petition delays the FDA review staff and generic market entry for 6 months or more.
(4) Layering of Patents and the combination of drugs to create new patens
Often, drug companies facing the expiration of a patent will develop a new use or different version of their drug. This practice is referred to as layering. Eli Lilly's Prozac demonstrate one example of a drug company obtaining new patent on an additional aspect of an old drug. When faced with the patent expiration of the popular antidepressant drug, Eli Lilly developed a weekly version of the drug. By advertising this new feature to the public the drug company basically killed the demand of the old product along with any likely generic imitations.
Drug companies also avoid losing monopoly rights due to patent expiration by combining the different drug and patenting the combination. The combination often consists of one drug to treat a medical condition and a secondary drug to alleviate a side effect of the primary drug. Patent protection is frequently granted for these pharmaceutical combinations. Again, the drug company can use advertising to essentially eliminate demand of the old product, as well as any comparable generic substitute.
(5) Multiple patent listings
Any patent that covers the drug (active ingredient) or drug product may be listed in the FDA's Orange book. Any ANDA applicant seeking approval for a drug product containing that active ingredient must certify to the patent once listed in the Orange Book. Although only a single patent can be selected for extension under the Hatch-Waxman Act, filing additional patents after the core NCE patent will mean that the follow-on form patens will still be in force during the patent extension term. Some common types of patents that may be issued well after approval of the brand name product and may extend the effective patent life for a given product are for revised formulations, new uses, or new crystalline forms of the active ingredient. The listing of newly issued patents, often referred to as "evergreening", supplements the originally listed patent that may have already provided years of market protection. The impact of new patens can vary depending on the type or claims of the patent and any resultant labeling changes that maybe approved for the brand product. By filing on all the specific commercially viable forms after filing the NCE patens, market exclusivity will run until the first of the form-specific patent expires.
One strategy that has often been employed by brand firms is to seek approval of a patent for a particular crystalline form of an active ingredient. This crystalline form may differ from the originally approved form. For example, the brand product may change its crystalline form from an anhydrous form to a dihydrate form, which only differs in the quantity of water of hydration of the active ingredient. These differences usually do not affect safety or efficacy of the product in any manner, but rather create a regulatory hurdle for the generics since these patents frequently are issued late in the life of other existing market protections (patent of exclusivity) on the innovator drug product. Whether or not these patents apply to the active ingredient contained in the drug product for which an ANDA approval is sought, ANDA applicants must certify to the newly issued patent merely because they are listed in the Orange Book. If the ANDA applicant submits a Paragraph IV patent certification, as required under the FFDCA, challenging the patent and is sued by the NDA applicant, the FDA is precluded from approving the ANDA for 30 months, unless the court case has been decided or the parties reach an agreement to settle the case. Submitting a Paragraph III patent certification would preclude the FDA from approving the generic application until the patent expired. In either case, generic approvals would be typically delayed well beyond the end of the original patent expiration date. Therefore, newly issued patents on the drug substance can have a significant impact on when an ANDA can be approved by the FDA.
(6) Joining hands with generic manufacturer
NDA holders had begun to negotiate with ANDA filers who get 180-day exclusivity, to delay "first marketing". According to Mylan v. Henny, D.C.Cir. 2000, exclusivity can be cancelled if settlement results in effective conversion to Paragraph III. Certification. In Andrx v. Friedman, 83 F. Supp. 2d 179 (D.C.Cir. 2000), the court held that there is no antitrust standing by later filer to challenge agreement between NDA holder and first filer to delay marketing beyond 30 mos.
Despite apparent compliance with the statutes, antitrust violations have been alleged by the FTC regarding actions by both generic and pioneer drug manufactures. Certain settlement agreements (e.g. agreements with reverse payments from pioneer to generic companies) settling patent interference and litigation disputes (e.g. Paragraph IV infringement cases) can be ruled as collusive restraints on trade. But, so far, courts seem to uniformly side with drug manufacturers. In a move that marks a trend toward a legal stamp of approval for settlements between brand-name drug makers and their generic competitors, a federal court in New York has rejected an antitrust challenge to Barr Pharmaceuticals' 1997 settlement with Bayer Corp. of patent litigation related to the antibiotic Cipro. Also, on March 8, 2005, the 11th Circuit vacated a FTC ruling that settlements between a patented drug company and generic drug companies, involving delayed market entry for the generics, violated the FTC Act and the Sherman Act. Schering-Plough Corp. v. Federal Trade Commission, 11th Cir. No.04-10688, 2005.
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Connie
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