The United States Patent Laws grant to a patentee the right to prevent others from infringing its patent. When Roche v. Bolar was decided, patent infringement was defined as making, using or selling a patented invention during the life of the patent (17 years from date of issuance) without authority from the patent owner.
All drugs, including generic drugs, must receive approval before they can be marketed in the United States. Food and Drug Administration (FDA) approval of a generic equivalent to an original pioneer drug required submission of test data, necessarily meaning that the active (and often patented) drug ingredient must be used to conduct the tests.
Bolar, desiring to market a generic equivalent of Roche's pioneer drug, began testing (using) the patented active ingredient before Roche's patent expired, intending to obtain FDA approval but to market only after Roche's patent expired.
The tests necessary to obtain FDA approval of a generic substitute usually took two years; therefore, if mandatory FDA testing could not even start until Roche's patent expired, no generic product could reach the market until two years after patent expiration.
The court faced the issue whether the use of a patented drug for federally mandated premarketing tests was a use in violation of the Patent Laws; Bolar's testing and investigations were strictly related to FDA drug approval requirements- were they nonetheless prohibited as infringement under the Patent Laws?
The court held that such acts were infringement and not merely "experimental" uses for amusement, to satisfy idle curiosity or for strictly philosophical inquiry. Bolar's tests had a definite commercial purpose and impact on Roche.
Bolar's public policy arguments that inventors are entitled to only a 17-year property right and that the public should enjoy the benefits of competition as soon as possible after patent expiration were not accepted; the court concluded that it was not the proper forum in which to debate such arguments; that was the role of Congress.
Under the Bolar holding, a de facto extension of the patent right occurred because those wishing to use the invention after patent expiration could not begin the time-consuming testing necessary for FDA approval until the patent actually expired.
Premarket Approval Impact On Patent Life
The exclusionary rights granted by a United States Patent are finite and limited today to either seventeen years from the date of patent issuance or twenty years from a patent's filing date in the United States Patent and Trademark Office.
The FDA approval process to enable marketing a new drug in the United States takes many years and frequently prevented a pioneer patent owner from marketing a protected drug until well after the patent issued. This effectively shortened the economically useful period of exclusivity accorded under the Patent Laws.
Without FDA approval, a new drug could not be marketed, yet the term of a patent covering that drug continued to diminish while the pioneer patent owner was blocked from the market awaiting approval.
Patent owners desired to extend the effective life of their patents to reflect time lost due to the tests needed for FDA approval. It was this desire that precipitated the so-called patent term restoration.
The Waxman-Hatch Amendments
In 1984, Congress passed the Waxman-Hatch amendments to the Federal Food Drug and Cosmetics Act (21 U.S.C. §301 et seq. -- FFDCA) which significantly revised the generic drug approval process and provided for the extension of the term of a patent to account for patent life lost due to the time necessary for FDA approval of a pioneer drug.
These amendments represented a hard-fought compromise between:
- the interests of pioneer drug companies seeking to protect their investment in research and in fulfilling the regulatory requirements for approval of new drugs and
- the interests of consumers who might benefit from generic drug products due to increased competition and reduced prices.
Congress sought to balance these inherently conflicting interests while enacting a regulatory scheme that would respect the legitimate patent concerns of both pioneer and generic drug companies.
The public clearly has an interest in the prompt and ready availability of safe, effective and affordable prescription drugs but it also benefits from the research and development efforts of pioneer drug companies, efforts which are often rewarded and encouraged by the Patent Laws and the FFDCA's corresponding protection for patent holders. Thus, a careful balance was struck between the patent and drug technology rights of pioneer drug companies and the rights of generic drug manufacturers. See, 920 F.2d 984, 985 (D.C. Cir. 1990), cert. denied, 502 U.S. 819 (1991).
In essence the new law permitted a generic drug company to begin the testing required for FDA approval while the pioneer drug company's patent was still in force and shortened the period needed to obtain generic drug approval by eliminating the need for safety and efficacy data. At the same time, patent terms could be extended to make up for patent life lost during the approval process for the pioneer drug and a balanced procedure for resolving patent infringement issues was established. Generic manufacturers were obligated to notify patent owners respecting possible infringement and pioneer patent owners were given the right to litigate their claims of patent infringement prior to the time the generic copy is put on the market.
The Waxman-Hatch Procedure
An applicant ("pioneer applicant") seeking to market a new drug, having an active ingredient never before approved for the intended therapeutic use, must file a New Drug Application (NDA) including a full report of the investigations of the drug's safety and effectiveness. (21 U.S.C. §355(a)).
An applicant seeking to market a generic substitute for an approved, pioneer drug need only submit an Abbreviated New Drug Application (ANDA) which can rely on the safety and effectiveness studies submitted by the pioneer applicant (21 U.S.C. §355(j)). A generic drug contains the same active ingredient, but not necessarily the same inactive ingredients, as a brand name pioneer drug.
The ANDA submission is significantly less onerous than the NDA and allows the ANDA filer to take advantage of the studies previously submitted by the pioneer applicant, without monetary compensation.
The generic manufacturer must submit enough information to show that its product has the same active ingredient, labeling including indications for use, dosage form, route of administration and other essentials as a drug that has already been approved. Evidence of "bioequivalence" must be submitted as well as a listing of the generic drug's composition and its manufacturing procedure. "Bioequivalence" means that the active ingredient is absorbed at the same rate and to the same extent for the generic drug as for the innovator drug. Samples of the generic drug must also be provided the FDA. (21 U.S.C. §355(j)(2)(A)).
Waxman-Hatch Provisions - Patent Infringement
Tests and investigations conducted by the ANDA filer "solely for uses reasonably related to" generating data for obtaining FDA approval are by statute exempt from claims of infringement (35 U.S.C. §271(e)(1)). Thus, a "safe harbor" is provided by the law to enable a generic drug company to prepare and file an ANDA including "use" of the patented inventions of the pioneer drug company in bioequivalence studies.
Congress thus overruled Roche v. Bolar, which had held that the use of a patented drug ingredient for federally mandated premarketing approval testing was infringement.
When an ANDA is filed, the ANDA applicant must certify to the FDA that for each patent applicable to the pioneer drug, the proposed generic drug would not infringe the patent because, inter alia, the ANDA filer will not market the generic drug until after the relevant patents expire (21 U.S.C. §355 (j)(2)(A)(vii)(III)) or the patent is believed to be invalid or will not be infringed by the manufacture, use or sale of the drug for which the ANDA applicant seeks approval (21 U.S.C. §355 (j)(2)(A)(vii)(IV)). The certification of invalidity or non-infringement is called a "Paragraph IV Certification."
The patent owner and NDA holder are then given notice by the FDA that an ANDA has been filed with a Paragraph IV Certification. The Paragraph IV Certification constitutes the only required notice to the patent owner that an ANDA has been filed by someone seeking to market before patent expiration and must explain in detail the legal and factual reasons why the patent is believed invalid or not infringed and must be sent to the patent owner and NDA holder (21 U.S.C. §355(j)(2)(B)).
The filing of an ANDA with a Paragraph IV Certification seeking approval to begin commercialization of a generic drug before the expiration of relevant patents is defined as an act of patent infringement (35 U.S.C. §271(e)(2)) and gives the pioneer patent owner the right immediately to sue in United States Federal District Court if the owner disagrees with the contentions of invalidity or non-infringement. The FDA generally does not concern itself with patent matters and leaves it to the courts to resolve validity and infringement disputes.
The FDA's approval of the ANDA, assuming the ANDA otherwise complies with FDA's standards, will be immediate unless the patent owner has brought a patent infringement suit against the ANDA applicant within 45 days from the date the patent owner or NDA holder received notice of the ANDA applicant's contention of patent invalidity or non-infringement (i.e., a Paragraph IV Certification) (21 U.S.C. §355(j)(4)(B)).
If suit is brought within the 45-day period, the FDA's evaluation of the ANDA will go forward in its normal fashion but final approval to market cannot be effective until the earliest of (1) patent expiration, (2) a final judicial determination favorable to the ANDA applicant or (3) thirty months after ANDA filing unless the court before which the case is pending determines that the plaintiff-patent owner has not been diligent in prosecuting the matter. The typical time period for evaluation and approval of an ANDA absent suit is approximately eighteen to twenty-four months. 69 F.3d 1130, 1131-32 (Fed. Cir.), cert. denied, 516 U.S. 1026 (1995); 21 U.S.C. §355 (j)(5)(B)(iii).
If, before expiration of the thirty-month period, a final court decision invalidates or holds the patent not infringed, the FDA approval date is the date of the final court decision (21 U.S.C. § 355 (j)(4)(B)(iii)(I)). A final decision is one by the Court of Appeals for the Federal Circuit, the court which hears appeals in all patent matters.
Thus, the underlying legislative scheme permits litigation respecting validity and infringement to begin before FDA approval and allows the litigation to proceed simultaneously with the FDA's evaluation of the ANDA. The pioneer patent owner can litigate the patent issues before the generic copy reaches the market. See generally Glaxo, Inc. v. Novopharm, Ltd., 110 F.3d 1562, 1569 (Fed. Cir. 1997).
Once the thirty-month period expires (or any shorter or longer period as the court may order), an ANDA filer which has received FDA approval may commence marketing immediately (but subject to infringement damages if it ultimately loses the infringement suit) or it may delay such activities until the conclusion of the litigation.
A patent owner may sue outside the forty-five day period but will not likely get the benefit of the thirty-month statutory stay of effective approval.
Waxman-Hatch Provisions - Patent Term Extension
To lessen the adverse impact on pioneer patent owners due to the time necessary for obtaining regulatory approval, 35 U.S.C. §156 provides for an extension of a patent term up to five years under certain circumstances.
Patents qualifying for extension include product, method of manufacture and method of use patents covering human and animal drugs, medical devices and certain food and color additives. The patent must be in force when regulatory approval is granted and must not have been previously extended. The regulatory approval must be the first approval of a commercial marketing and use of the product.
Exclusivity To The First ANDA Filer
If a subsequent ANDA is filed for a drug for which a previous and substantially complete ANDA was filed, and both ANDAs certify that the pioneer company's relevant patent is invalid or not infringed, the second ANDA's approval cannot be effective until at least one hundred and eighty days after:
- the original ANDA applicant's first commercial marketing of the generic drug or
- the date of a decision of a court holding the relevant patent(s) invalid or not infringed, whichever trigger event is earlier (21 U.S.C. §355(j)(4)(B)(iv)).
This six-month period of exclusivity is very valuable because the generic drug company which first enters the market is virtually assured of achieving a significant share of the market both initially and in the future. Mylan Laboratories v. Akzo, W.F., 770 F. Supp. 1053, 1058 (D. Md. 1991).
Under current FDA interpretation, the invalidity or non-infringement decision must be by the court of appeals, not simply a lower court decision.
The one hundred and eighty day exclusivity accorded the first ANDA filer encourages prompt ANDA filings and enables the original ANDA applicant to be the first generic entry in the market; but, under current law, the one hundred eighty day exclusivity also blocks all subsequent ANDA applicants from the market if the first filer does not market and there is no court decision.
The first ANDA applicant need not actually be sued by the patent owner to receive its exclusivity period (Purepac Pharmaceutical Co. v. Friedman, 162 F.3d 1201 (D.C. Cir. 1999)).
The court decision trigger of the exclusivity period is not satisfied by a case dismissed for lack of jurisdiction. A decision on the merits is contemplated as the trigger event and a dismissal of the suit without decision due to settlement is not a trigger (id.).
Failure to activate either trigger because there is no court decision and the original ANDA applicant is unable or unwilling to market could eliminate all future generic competition despite subsequently approved ANDAs.
If the first ANDA filer is sued and loses the lawsuit, i.e., the pioneer patent is found valid and infringed, the first filer will be enjoined from marketing, and all subsequent ANDA applicants may be blocked by the one hundred eighty day exclusivity period.
Notice To The Public Of Relevant Patent Rights
A NDA applicant may provide appropriate notice of its patent rights applicable to a pioneer drug through an official FDA publication titled, Approved Drug Products With Therapeutic Equivalence Evaluations, commonly called the "Orange Book."
The Orange Book lists all commercial drug products approved for safety and effectiveness in the United States together with patents relevant to the active drug substances as well as drug formulations, inert ingredients and uses (21 U.S.C. §§355 (b)(1) and 355 (j)(7)).