THE HATCH-WAXMAN ACT (SIMPLY EXPLAINED)

The Hatch-Waxman Act (formally known as the Drug Price Competition and Patent Term Restoration Act) is a law passed in 1984 that created the generic drug industry as we know it today in the United States.

The Hatch-Waxman Act was created in response to a court case called Roche Products, Inc. v. Bolar Pharmaceutical Co., which involved a drug called flurazepam. Roche owned flurazepam, and Bolar was seeking to sell a copy after Roche’s patents expired. Bolar was hoping to time the approval with the expiration of the patents, and began work on drug development activities while Roche’s patents were still in force. The problem for Bolar was that by doing so, it was legally infringing. Roche sued them for infringement and ultimately won.

From a public policy perspective, this in effect extended the term of the patent. That is, if another manufacturer can’t work on a drug while the patent is still in force, that means it could only work on it after the patent expired — and the approval process for a drug is two to three years, so this would have the effect of extending the life of the patent. Congress acted quickly after Roche was decided to pass the Hatch-Waxman Act.

My experience working for several generic drug companies taught me that navigating the Hatch-Waxman Act is like a complicated game of chess, with a lot of rules and nuances. Broadly speaking, the Hatch-Waxman Act provides incentives for generic drug companies to challenge patents owned by innovators, and it gives generics a research exemption that allows them to develop generic drugs while patents for the brand are still in force — without being liable for infringement. Another feature of the act was to encourage a race to market by granting the first generic approval that challenges a patent listed in the “Orange Book” (a database of patents covering approved pharmaceuticals) with as much as 180 days of market inclusivity.

Hatch-Waxman also has some provisions that are favorable to innovators. Innovator drug companies now enjoy a period of FDA regulatory inclusivity, normally five years for a new product, during which the FDA will not approve a generic. In addition, Hatch-Waxman gives innovators a potential five-year patent term extension. For a number of big drugs, these periods of inclusivity have been worth billions of dollars.

The process of challenging patents is accomplished with something called a Paragraph IV Certification. We have done many of these letters and advise clients on patent and regulatory strategies and prepare the required notice letters.

The generic drug game is one I know well, after having worked in the sector for over fifteen years. I know how to manage the whole process from developing strategies to the certification, all while attending to the details and processes that need to be in place. If generic drug patent challenges are in your business plan, give us a call.

 

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