Transcript Hatch Waxman Prescriptions (slides)

Purpose of the Hatch-Waxman Act
• The purpose of the Act was “to make available
more low cost generic drugs by establishing a
generic drug approval process for pioneer drugs
first approved after 1962.”
–
H.R. Rep. No. 98-957, Pt. 1, at 14 (June 21, 1984).
• The Act was legislatively negotiated to strike “a
balance between two potentially competing policy
interests—inducing pioneering development of
pharmaceutical formulations and methods and
facilitating efficient transition to a market with
low-cost, generic copies of those pioneering
inventions at the close of a patent term.”
–
2
Novo Nordisk A/S, et al. v. Caraco Pharmaceutical Laboratories, Ltd., et al., No. 2010- 1001
(Fed. Cir., April 14, 2010), at 2.
Basic Structure of the Act I
• Orange Book Listings by NDA Holder
• Abbreviated New Drug Applications (ANDA)
– Bioequivalence vs. Repetitive Clinical Trials
• Patent Certifications by ANDA Applicants
– Especially Paragraph IV Certifications
• Notice Letter to Patent Owner
• 45-Days for Patent Owner to Sue
• 30-Month Stay of FDA Approval of ANDA
• 180-Day Marketing Exclusivity for Successful
First-Filer – delayed FDA approval of 2d ANDAs
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Basic Structure of the Act II
• Patent term extension - up to five years to
compensate a patent owner for the marketing
time allegedly lost in the FDA drug approval
process.
• Total patent term extension of up to 14 years.
• NDA holder has Data Exclusivity for five years
after date of FDA approval of a New Chemical
Entity (NCE)
• NDA holder has Data Exclusivity for three years
after date of FDA approval of a new use of an
existing and previously approved chemical entity,
or new dosage form using that chemical entity.
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Basic Structure of the Act III
• FDA is not permitted to approve an ANDA
that relies upon clinical trials during the NDA
holder’s Data Exclusivity period.
• Applicants permitted to file ANDAs one-year
prior to expiration of Data Exclusivity period
(NCE-1).
• MMA (2003) provides forfeiture of ANDA FirstFiler’s 180-day Marketing Exclusivity under
certain circumstances.
• MMA also creates right to file counterclaim
seek correction or de-listing of Orange Book
patents.
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Where We Are Now: Statistics I
In 2008, US national health
expenditures totaled $2.33
trillion - 16.2% of our GDP
($7681 per capita).
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Health expenditure per capita varies widely across OECD
countries.
US almost 2x OECD average (for insured population).
1. Health expenditure is for the insured population rather than resident population.
2. Current health expenditure.
Source: OECD Health Data 2009, OECD (http://www.oecd.org/health/healthdata) (last visit 5/5/2010).
OECD countries spend about 9% of GDP on health.
From 16% in the United States to less than 6% in Turkey.
% GDP
16.0
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Public expenditure
Private expenditure
5.7
5.9
6.4
6.8
6.8
7.3
7.4
7.6
7.7
8.1
8.2
8.4
8.5
8.7
8.7
8.9
8.9
9.1
9.2
9.3
9.6
9.8
9.9
10.1
10.1
10.2
10.4
9.8
10
10.8
11.0
15
0
United States
France
Switzerland
Germany
Belgium1
Canada
Austria
Portugal
Netherlands1
Denmark
Greece
Iceland
New Zealand2
Sweden
Norway
OECD
Italy
Australia
Spain
United …
Finland
Japan
Slovak…
Ireland
Hungary
Luxembourg3
Korea
Czech…
Poland
Mexico
Turkey
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1. Public and private expenditures are current expenditures (excluding investments).
2. Current health expenditure..
3. Health expenditure is for the insured population rather than resident population.
8 OECD Health Data 2009, OECD (http://www.oecd.org/health/healthdata) (last visit 5/5/2010)..
Source:
Share of GDP spent on health increasing in all OECD
countries, mostly due to new medical technologies and
population aging.
Source: OECD Health Data 2009, OECD (http://www.oecd.org/health/healthdata).
Higher health spending generally associated with higher life
expectancy
2007 (or latest year available)
Source: OECD Health Data 2009, OECD (http://www.oecd.org/health/healthdata).
Where We Are Now: Statistics II
By 2019, US national health care
expenditures will be nearly $4.5
trillion - 19.3% of GDP ($13,387
per capita).
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Where We Are Now: Statistics III
• From 1980 to 2008, expenditures on prescription
drugs rose from $12 billion (4.7% of total health
care expenditures) to $234.1 billion (10%).
• By 2019, prescription drug expenditures are
projected to increase to $457.8 billion (10%), an
increase from $769 per capita in 2008 to $1,367
per capita in 2019.
• Between January 2000 and December 2004, the
price of a one-month supply of the 96 of the
most commonly used prescription drugs
increased by 24.5%, double that of consumer
prices generally.
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Where We Are Now: Statistics IV
• In the year ending September 2009, the 19
largest pharmaceutical manufacturers (not P&G)
reported consolidated revenues of $558 billion,
an average of $29.39 billion.
• These companies had net income of $96 billion,
an average of $5.08 billion, or 16.5% of
revenues, representing an average return of
16.48% on assets, and 21.23% on shareholder
equity.
• These companies spent $88.9 billion on research
and development, an average of $4.681 billion,
representing 16.28% of average total revenues.
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Congressional Budget Office, Pharmaceutical R&D and the Evolving Market for Prescription Drugs, at 2
(October 2009)
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Where We Are Now: ANDA Filings
Food and Drug Administration, Office of Pharmaceutical Science, Generic Drugs: Overview of ANDA Review
Process, http://www.fda.gov/downloads/Drugs/NewsEvents/ UCM182553.pdf
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Where We Are Now: ANDA Approvals
Food and Drug Administration, Office of Pharmaceutical Science, Generic Drugs: Overview of ANDA Review
Process, http://www.fda.gov/downloads/Drugs/NewsEvents/ UCM182553.pdf
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DATA EXCLUSIVITY: Should be Left As-Is
Grabowski’s Chart
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DATA EXCLUSIVITY: Should be Left As-Is
Brill’s Charts I
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DATA EXCLUSIVITY: Should be Left As-Is
Brill’s Charts II
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DATA EXCLUSIVITY: Should be Left As-Is
Brill’s Charts III
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DATA EXCLUSIVITY: Should be Left As-Is
• Real-world conclusions about investment behavior,
including the behaviors of branded pharmaceutical
companies in making investments in research and
development of both NCEs and new biological entities
(NBEs), can only be seen partially through the lens of
these studies.
• Real-world data strongly suggests that branded
companies and their shareholders continue to make
substantial investments in research and development,
and that they realize significant returns on those
investments.
• Until greater evidence is provided of a need to
change, the data exclusivity provided to NCEs in the
Hatch-Waxman Act should not be enlarged.
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180-day Exclusivity – Should be
“Rolling” I
• 180-day Marketing Exclusivity created to
encourage Paragraph IV challenges by
rewarding First Filers for undertaking the
costs and risks of patent litigation, to
challenge weak or improperly obtained
patents, or to defend non-infringing
generic products.
• At one time, “very valuable to generic
manufacturers, as they can sell product at
a price significantly higher than they could
if multiple generics were on the market.”
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180-day Exclusivity – Should be
“Rolling” II
• “Perhaps no single provision of the 1984
law has caused so much controversy as the
180-day marketing exclusivity rule.” (Sen.
Hatch)
• Recent MMA Amendments have not solved
all problems, have reduced the incentive,
and have created new issues.
• Settlement agreements are still made that
have the effect of delaying market
competition, even after the MMA, and have
continued to raise antitrust concerns.
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180-day Exclusivity – Should be
“Rolling” III
• Branded companies still employ strategies
designed to eliminate or diminish the “reward”
for successful First Filers, built into the Act, in the
180-day provision.
• Litigation over FDA actions affecting 180-day
Marketing Exclusivity continues. See, e.g., Teva
Pharmaceuticals, Inc. v. Kathleen Sebelius, et al.,
No. 09-5281 (D.C.Cir., March 2, 2010); and
Millenium Pharmaceuticals, Inc., et al. v. Teva
Parental Medicines, Inc., et al., 2010 WL
1507655 (D.Del., April 14, 2010).
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180-day Exclusivity – Should be
“Rolling” III
The Act should be amended to provide
180-day exclusivity to a second,
successful ANDA applicant, in the
event the NDA holder settles with the
First-Filer and the First Filer does not
enter the market within 180 days after
such settlement.
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Orange Book Delisting Provisions Should be
Strengthened I
• In Teva, the D.C. Court of Appeals ruled that Teva had
standing to challenge a patent de-listing, broadly applying the
purposes of the Act. Teva commented:
“...letting brand makers delist challenged patents in order to
trigger a forfeiture of exclusivity would be completely
ineffective; given the incentives for the brand manufacturer, it
will be used only where its impact on Congress’s scheme is
most destructive. ... If the generic appears unlikely to park its
exclusivity, the brand maker can delist well before the generic
can go to market, thus eviscerating the exclusivity incentive
altogether.”
• Teva held that the FDA may not de-list an Orange Book
patent, if, after serving a Paragraph IV notice with respect to
one of three Orange Book patents, the NDA Holder asks that
the challenged patent be withdrawn from the Orange Book.
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Orange Book Delisting Provisions
Should be Strengthened II
• The Federal Circuit ruled, in Novo Nordisk A/S, et al. v. Caraco
Pharmaceutical Laboratories, Ltd., et al., No. 2010- 1001 (Fed.
Cir., April 14, 2010), that “the Hatch-Waxman Act authorizes a
counterclaim only if the listed patent does not claim any
approved methods of using the listed drug.”
• Novo Nordisk involved a change by the NDA Holder in the “use
code narrative” that expanded the use description for the
product, Prandin®, a change that caused the FDA to deny
Caraco’s “carve out,” based upon the original “use code.”
• Caraco, the generic manufacturer, counterclaimed under MMA
provisions, to challenge the change in “use code.”
• The Federal Circuit reversed the trial court’s grant of summary
judgment on this “de-listing” issue, and its grant of an
injunction requiring Novo Nordisk to reinstate the prior “use
code.”
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Orange Book Delisting Provisions Should be
Strengthened III
• The “counterclaim provision” of was added in the MMA, “in
order to prevent manipulative practices by patent holders with
respect to the Orange Book listings,” that “were designed to
delay the onset of competition from generic drug
manufacturers.”
• “Strict” construction of the MMA counterclaim provision lead to
the decision in Novo Nordisk, a result that defeats the purpose
of the MMA amendments.
• “Purposive” construction, like that used in Teva, has lead to
other results or conclusions that may not be entirely
satisfactory.
• The Act should be amended to clearly provide for US District
Court jurisdiction over declaratory judgment actions brought
by ANDA applicants to review the propriety of any listing
related to any patent in the Orange Book.
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Standards for Measuring Intent Should be
Uniform I
• Exergen Corp. v. Wal-Mart Stores, Inc., 573 F.3d 1312 (2009)
applied FRCP Rule 9(b) and 37 C.F.R. § 1.56, and held that to
plead the “circumstances” of inequitable conduct with the
requisite particularity” a pleading must identify the specific
who, what, when, where, and how of the material
misrepresentation before the PTO.
• In SEB., S.A. v. T-Fal Corporation, the Federal Circuit
determined that induced infringement may be proven by a
showing of “deliberate indifference” to the existence of a
patent.
• The CAFC recently granted en banc review in Therasense, Inc.
v. Becton Dickinson and Co., No. 2008-1511o (April 26, 2010),
to consider standards for assessing materiality in inequitable
conduct cases, and whether the standards should “be tied
directly to fraud or unclean hands.”
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Standards for Measuring Intent Should be
Uniform II
• The most recent drafts of the Patent Reform Act of 2009,
especially the “Manager’s Amendment,” omit previously
suggested provisions relating to inequitable conduct, that
were motivated by the perceived failure of the Federal
Circuit “to establish one clear standard of materiality for
inequitable conduct purposes.” .
• The absence of clear standards for assessment of intent has
lead or may lead to confusing and inconsistent results.
There is no valid reason for applying different standards of
intent in Hatch-Waxman cases involving different portions
of Patent Act, or applying a PTO regulation based on the
Act generally, when none of those provisions contain any
legislative standard. Instead, a single standard should
apply.
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Standards for Measuring Intent Should be
Uniform III
• The Hatch-Waxman Act should be amended to provide that, in cases
arising under the Act, where no other standard is provided in the Patent
Act, the level of intent that should be required is “willfulness,” as that
term has been and may be applied in the courts, generally.
• The Hatch-Waxman Act should be amended to provide a clear
statutory basis for the doctrine of inequitable conduct that, in cases
arising under the Act, should be applied based upon a showing of
“knowing” statements or omissions of material information which were
or had the effect of misleading the USPTO.
• Liability for such inequitable conduct, in the view of the author, should
not be limited, in Hatch-Waxman cases, to “individuals” involved in the
prosecution of a patent, but should extend to corporate “knowledge,” as
in cases of fraud under other statutes that prohibit false statements to
the Federal government.
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Authorized Generics Should be Abolished I
• Authorized generics contravene the purposes of the
Hatch-Waxman legislatively supervised, negotiated
compromise. They “disrupt the ‘bounty’ system
established by the Hatch-Waxman Act.’”
• The “loophole” in the Hatch-Waxman scheme that
permits introduction of authorized generics during
the 180-day exclusivity period, diverts a significant
portion of sales that would be realized by a
successful generic challenger to the authorized
generic and its branded sponsor.
• Authorized generics negatively affect the incentive
given to generic manufactures to challenge drug
patents.
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Authorized Generics Should be Abolished II
• Authorized generics may help consumers by
lowering short-term prices.
• Authorized generics should “be banned as a
strategic response to impending Paragraph IV
entry, but should be allowed in their absence or
after 180-day exclusivity expiration.
• The Hatch-Waxman Act should be amended to
prohibit the introduction of an authorized
generic equivalent to a branded product, either
directly or indirectly, by an NDA holder, during
the 180-day Hatch-Waxman exclusivity period.
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