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 Hatch-
Waxman 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
%
30 generic
Rx
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 250
sales accounted
200
for 69% of
brand
prescriptions 150 sales
written and 16% $228b
100 generic
of all prescription sales
dollars spent 50
$58.5b

0
2007

Source: IMS Health 2009 study commissioned by GPhA

Key Features of the Hatch-
Waxman 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
NDA ANDA
1. Chemistry 1. Chemistry
2. Manufacturing
2. Manufacturing
3. Controls
3. Controls
4. Labeling
5. Testing 4. Labeling
6. Animal Studies 5. Testing
7. Clinical Studies 6. Bioequivalence
8. Bioavailability
Key Features of the Hatch-
Waxman 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 Hatch-
Waxman 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 Hatch-
Waxman 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 Hatch-
Waxman 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."

Dosage Form; Proprietary

TE Code RLD Active Ingredient Strength Applicant
Appl No Route Name
021366 No ROSUVASTATIN 10MG CRESTOR IPR
TABLET; ORAL
CALCIUM
021366 No ROSUVASTATIN 20MG CRESTOR IPR
TABLET; ORAL
CALCIUM
021366 Yes ROSUVASTATIN 40MG CRESTOR IPR
TABLET; ORAL
CALCIUM
021366 No ROSUVASTATIN 5MG CRESTOR IPR
TABLET; ORAL
CALCIUM
Patent and Exclusivity Search Results from query on Appl No 021366
Product 002 in the OB_Rx list.

Patent Data

Drug Drug Patent

Appl Prod Patent Patent Delist
Substance Product Use
No No No Expiration Requested
Claim Claim Code
021366 002 6316460 Aug 4, 2020 Y
021366 002 6858618 Dec 17, U-618
2021
021366 002 RE37314 Jan 8, 2016 Y

Exclusivity Data

Exclusivity
Appl No Prod No Exclusivity Expiration
Code
021366 002 NCE Aug 12, 2008
021366 002 I-573 Nov 6, 2011
021366 002 I-547 Nov 8, 2010
 Generic applicant patent
certifications
ANDA Certification Patent status

Paragraph I: No Patent info in Orange

Book

Paragraph II: Patent expired

No product launch until

Paragraph III: patent expires

Patent is
Paragraph IV: 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
06/12/92 440 patent filing date

11/9/93 440 patent issues

8/9/98 IND becomes effective

8/27/98 reissue application

6/26/01 NDA filed

8/7/01 Re 314 patent issues

8/12/03 NDA approved - product

marketing begins

generic applicant first-to file

8/12/07 date
12/9/07 infringement suits filed
NCE marketing exclusivity
8/12/08
expires

2/10/10 trial scheduled

2/12/11 30 month automatic stay
expires
6/12/12 Original patent expiration
date
patent expiration date
1/8/16 following extension
By Edward J. Pardon