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