Hatch-Waxman Act

Also known as “THE DRUG PRICE COMPETITION AND PATENT TERM RESTORATION
ACT”. Enacted in 1984. Amended the patent laws. Before 1962- new drug approval based on
safety alone. In 1962-proof of efficacy made compulsory for marketing approval of a new drug.
There was no provision for patent term extension prior to enactment of the hatch-waxman act to
make up for the time lost out of the total patent term during the marketing approval process.

Generic companies were required to submit their own comprehensive NDA which were costly &
time consuming. To overcome the above problems, an act was needed to promote generic
companies.

OBJECTIVES OF THE ACT:

Reducing the cost associated with the approval of a generic drug

Allowing early-experimental use

Compensating the branded drugs manufacturers for the time lost from the patent term because of
the regulatory approval formality

Motivating the generic drug manufacturers.

The FDA requires every new drug, including generic drugs, to be safe and effective.

Before the adoption of the Hatch- Waxman Act, the FDA required branded and generic drug
companies alike to demonstrate the safety and efficacy of their products in the same manner
through a New Drug Application (NDA).

The Hatch-Waxman Act changed certain aspects of the new drug application process and the
new drug’s patent term. In addition, the Hatch-Waxman Act created an abbreviated process to
allow generic drug companies to obtain FDA approval of generic drugs. Because of this, today it
is far easier for generic drug companies to demonstrate the safety and efficacy of their generic
drugs.

A branded drug company seeking FDA approval to market a new drug must submit an NDA to
the FDA. The information provided in the NDA allows the FDA to determine whether:

1) The new drug is both safe and effective.

2) Certain other regulatory requirements are met, such as those concerning labeling and good
manufacturing processes.

Obtaining and submitting this information frequently is a time-consuming process requiring the
branded drug company to conduct many extensive and expensive clinical trials.
GENERIC DRUG APPROVAL

The FDA reviews generic drug applications for compliance with the appropriate scientific and
regulatory criteria. If an application meets those criteria, the FDA may grant either:

a) Tentative approval b) Final approval

Under the Hatch-Waxman Act, generic drug companies can typically file one of two different
kinds of abbreviated applications for approval of a generic drug:

A) An Abbreviated New Drug Application (ANDA)

B)A Section 505(b)(2) application, which is often called a paper NDA

A) Abbreviated New Drug Applications (ANDA) : Under an ANDA, a generic drug company
must establish that the generic drug is effectively a duplicate of the branded, NDA drug, which is
referred to as the Reference Listed Drug (RLD). Specifically, the generic drug company must
show that the proposed generic drug:

a)Has the same active ingredient, route of administration, dosage form, strength and intended use
as the RLD.

b) Is bioequivalent with the RLD, so that it performs in the same manner as the RLD in the body.

B) Section 505(b)(2) Applications: A proposed generic drug may differ in significant ways from
the RLD, Under these circumstances, the proposed generic drug must be approved through the
Section 505(b)(2) paper NDA application process, which is a hybrid of a full NDA and an
ANDA. This application includes less data than an NDA but more data than an ANDA.

NEW DRUG EXCLUSIVITY

A)Non-patent Exclusivities

(1) Orphan drug exclusivity, which is granted to drugs:

a) that treat a disease or condition that affects less than 200,000 people in the US; or

b) for which it is unlikely that US sales of the drug will recoup its development costs. This
exclusivity period is seven years, but only applies to use in treating the specific rare disease or
condition

(2) New chemical entity (NCE) exclusivity: This is granted if the FDA has not previously
approved the “active drug moiety.”

NCE exclusivity bars a generic drug company from filing an application for approval of a
generic drug five years from the first approval of the relevant NDA. However, a generic drug
company may file an ANDA with a Paragraph IV certification four years after the first NDA
approval

(3) New clinical study exclusivity: This applies when new clinical studies lead to new or
changed formulations, dosing regimens or patient population. The applicant is entitled to this
exclusivity if an application or supplement contains reports of new clinical investigations
conducted or sponsored by the applicant that were essential for approval. This exclusivity,
sometimes called data exclusivity, prohibits the FDA from approving a generic drug application
for the new dosage form or use for three years after the first NDA approval. However, it does not
otherwise bar approval of generic drug applications

(4)Pediatric exclusivity: This applies if the FDA requested that the NDA holder conduct studies
with the drug in pediatric populations. Pediatric exclusivity adds six months of exclusivity to
any marketing or patent exclusivity.

B) Patent exclusivity & the orange book: An NDA holder must provide the FDA with the patent
number and expiration date of any patent that claims either:

a) The drug, including the active ingredient and the formulation for the active ingredient.

b)A method of using the drug, but not other inventions

such as: ;-metabolites; ;-synthetic intermediates; or ;-methods of making the drug. When the
FDA approves the NDA, the FDA publishes the patent information in the FDA’s Approved Drug
Products with Therapeutic Equivalence Determinations publication (also called the Orange book)

CHALLENGING PATENT EXCLUSIVITY:

A generic drug company submitting either an ANDA or a Section 505(b) (2) application must
make one of the following four certifications as to each patent listed in the Orange Book for an
RLD:

a) Paragraph I certification that no relevant patent is listed in the Orange Book.

b) Paragraph II certification that the listed patent has expired.

c) Paragraph III certification that the listed patent, plus any other exclusivity, will expire before
the requested approval.

d)Paragraph IV certification that the listed patent is invalid or will not be infringed by the
commercialization of the generic drug

PARAGRAPH IV CERTIFICATION: A Paragraph IV certification is a potential trigger for

Hatch- Waxman Act patent litigation because the filing of an application with that certification is
a statutory act of patent infringement. A generic drug applicant making a Paragraph IV
certification must provide a Notice Letter to the NDA holder and the patentee, if different from
the NDA holder, setting out: a)The existence of the ANDA. b)A detailed statement of its basis
for believing that the listed patents are invalid or not infringed.

SECTION VIII STATEMENTS: A Section viii Statement, in contrast, ordinarily is not a trigger
for patent litigation. Typically, the generic drug applicant attempts to remove from its label, or
carve-out, anything related to the patented method in the RLD’s label.

As a result, there is no certification or notice requirement. Generic drug companies may use the
same procedure to avoid the three-year new clinical study exclusivity by carving out the
information that relates to the clinical trials and relevant approval. The FDA will approve these
so-called skinny labels if it does not make the proposed drug less safe or effective than the listed
drug for all remaining, non-protected conditions of use.

ANDA EXCLUSIVITY: The first filer of an ANDA with a Paragraph IV certification

concerning an RLD is potentially entitled to a 180-day period during which the FDA will not
approve any other ANDA having a Paragraph IV certification for a generic version of the RLD.
However, the first filer may forfeit this exclusivity. First-filer exclusivity blocks final approval of
other ANDAs with Paragraph IV certifications for 180 days. However, first-filer exclusivity does
not apply against an applicant who has filed a Section viii Statement because it is not a
Paragraph IV certification.

PATENT TERM EXTENSION The Hatch-Waxman Act provides a patent term extension for
patents covering certain products and methods, including human drug products, that are subject
to FDA approval. Only one extension can be granted in connection with a particular product, and
it must be for a patent that claims either a: a) Drug product, which means the active ingredient
and any approved drug using that active ingredient. b) Method of using a drug product. c)
Method of manufacturing a drug product.

PATENT LITIGATION UNDER THE HATCH- WAXMAN ACT

 Various time periods concerning aspects of the litigation that may affect the FDA’s approval
process

 Certain defenses and counterclaims that drug companies may raise

 Specific remedies the parties tend to seek  Unique challenges in entering into settlement
agreements

The generic drug applicant cannot file a declaratory judgment action against the NDA holder for
45 days after the date of the Notice Letter (45- day period). If the patentee sues within the 45-
day period, the FDA may not grant final approval of the generic application for 30 months from
the NDA holder and patentee’s receipt of the Notice Letter (30-month stay). The court may
shorten or lengthen the 30-month stay period in a pending patent case if either party fails to
reasonably cooperate in expediting the case. The 30-month stay terminates if a court issues a
final order determining that the patent is invalid, unenforceable or not infringed.

BENEFITS FOR BRANDED MANUFACTURERS

 Orange book provides public notice of patents.

 Allows for resolution of patent disputes prior to generic entry.

 30-months stay of FDA approval of generic drugs

 Patent term restoration

 Allows for several market exclusivities: a)Data exclusivity (1) 5 years for new chemical entity
exclusivity (2) 3 years for new clinical study exclusivity b)Orphan drug ( 7 years)
c)Pediatric(PEDS) (6 months).