Hatch-Waxman Act — US Laws, Litigations and Benefits

What is the Hatch-Waxman Act?

It is a comprehensive legal framework enacted by Congress in 1984 to streamline the process for generic pharmaceutical approvals and preserve incentives for innovation, including the creation of a procedure for generic pharmaceutical patent litigation. The Hatch-Waxman Act laid the legal and economic groundwork for the current generic pharmaceutical business.

Why was the Hatch Waxman Act passed?

The Hatch-Waxman Act was enacted in reaction to a court case involving the drug flurazepam called Roche Products, Inc. v. Bolar Pharmaceutical Co. Hence, this act is also called ‘Bolar Exemption.’

Enactment of the Hatch-Waxman Act

The ruling in Roche v. Bolar was generally credited with spurring Congress to pass the Drug Price Competition and Patent Term Restoration Act of 1984.

The Exception for Statutory Experimental Use

The Hatch-Waxman Act established a statutory exception to some patent infringement claims. “It shall not be an infringement to make, use, offer to sell, or sell within 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,” according to 35 U.S.C. 271(e)(1). The Roche v. Bolar ruling was effectively reversed by this provision. As a result, generic manufacturers may begin work on a generic version of an approved drug at any point during the patent lifetime, as long as the work advances FDA requirements.

Abbreviated New Drug Applications (ANDA)

Prior to the Hatch-Waxman Act, there were no specific provisions in the federal food and drug legislation that addressed generic copies of previously approved pharmaceuticals. As a result, a potential generic medication producer would have to file its own NDA in order to commercialise its product. Some generic producers may be able to rely on public scientific material to prove the drug’s safety and efficacy. Because such studies were not accessible for all medications, not all generic companies were able to file these so-called paper NDAs. Furthermore, the FDA has requested additional studies to address safety and efficacy concerns that have arisen following the drug’s first clearance.

Certifications for Orange Book-Listed Patents

The FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations list all approved drug products, including brand name and generic. Due to the colour of its cover, this periodical is widely referred to as the “Orange Book,” albeit today’s readers are more likely to access its contents via the Internet or the smartphone app “Orange Book Express.” The FDA deems approved medications therapeutically comparable, and the Orange Book uses a coded writing scheme to distinguish them. Drugs with an “A” code are considered therapeutically equal by the FDA, whereas those with a “B” code have a known bioequivalence concern. Physicians, pharmacists, and patients can use the Orange Book to determine when therapeutically equivalent generic medications can be replaced by brand-name drugs.

  • The brand-name company has not filed any patent information for that drug;
  • The patent has already expired;
  • The patent’s expiration date; or
  • The patent is invalid or will not be infringed by the manufacture, use, or sale of the drug for which the ANDA is filed.

Proceedings for Patent Infringement

The filing of an ANDA with a paragraph IV certification is considered a “somewhat artificial” act of patent infringement under 35 U.S.C. 271(e)(2). The ANDA applicant is required by the Hatch-Waxman Act to notify the patent owner of patents subject to a Paragraph IV certification. The patent owner may then file a patent infringement lawsuit in federal district court against the ANDA applicant. This infringement charge under 35 U.S.C. 271(e)(2) is of a technical character. The generic producer has done nothing more than ask the FDA for permission to market a medicine at this point. However, if the patentee’s infringement claim is successful, it may prevent the generic counterpart from being marketed until the patent expires.

Extension of Patent Term

The Hatch-Waxman Act also allows for patent term extensions. Patents can often last up to 20 years from the day the application is filed. According to the Hatch-Waxman Act, a pharmaceutical patent’s term can be extended for a portion of the time lost during clinical testing. If a patent owner has multiple patents covering the same drug, he or she must choose one to be eligible for a term extension.

Regulatory Exclusivities

The Hatch-Waxman Act has provisions that give certain FDA-approved medications regulatory exclusivity. The FDA enforces these provisions by approving the marketing of a medicine to a single entity. To put it another way, the FDA protects an approved medicine against competing applications for the period of time specified by law. The existence of patent protection is not required for regulatory exclusivity to be granted. Indeed, two wholly separate corporations may control USPTO-granted patent rights on the one hand and FDA-issued regulatory exclusivity on the other.

Is the Hatch Waxman Act beneficial to the inventors?

There are various provisions in Hatch-Waxman that are beneficial to innovators. The FDA now grants innovator drug companies a term of regulatory exclusivity, usually five years for a new medicine, during which time a generic will not be approved. In addition, Hatch-Waxman allows for a five-year patent term extension for innovators. These moments of inclusion have been worth billions of dollars for a number of big medications.

Hatch- Waxman’s true legacy

Hatch-Waxman, the Biologics Price Competition and Innovation Act, and other regulations implemented over the last 40 years that have given pharmaceutical companies unprecedented monopoly strength have resulted in higher drug prices and less innovation. Longer monopolies yield higher dug prices, but they do not ensure increased investment in innovation, as I predicted in 1982. The claim that Hatch-Waxman was a consumer victory is debunked by the fact that low-cost generic drugs now fill 90% of all prescriptions in the United States, despite the fact that Americans still spend two to three times more per capita on prescription drugs than citizens of other developed countries.

Drawbacks

Though the Hatch-Waxman Act has succeeded in establishing a clear path to market for generic medications, it has loopholes that allow both brand name and generic businesses to engage in actions targeted at increasing monopoly profits, thereby depriving consumers of a generic option. Reverse payments, citizen petitions, product hopping, and drug misclassification are just a few of these tactics. This note contends that pharmaceutical firms have engaged in some of these tactics and that the Hatch-Waxman Act should be changed to prevent them from continuing to defy the Act’s genuine goal.

Conclusion

Several latent side effects of the Hatch-Waxman Act have lately surfaced, given the fact that it was passed more than thirty years ago. These issues underscore unresolved conflicts between the goals of encouraging innovation, assuring pharmaceutical quality, and keeping healthcare prices stable. Hatch-concentration Waxman’s premarket medication approval left unsolved questions concerning risk regulation after generics hit the market. Furthermore, the Act’s drafters overlooked the complicated set of incentives established by the Act’s patent and exclusivity requirements. The unexpected implications of Hatch-Waxman serve as cautionary markers for the development of a biosimilars regulatory approval pathway. The FDA and politicians should be aware of these potential dangers and address the inescapable tradeoffs between safety, cost, and access to therapeutic biologics as soon as possible.

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