Patents & market exclusivity

Presentation compiled by “ Drug
Regulations” a not for profit organization
from publicly available material on the
world wide web.

www.drugregulations.org 1

 Food, Drug, and Cosmetics Act (FDCA), 21 U.S.C. §301 et
seq, governs manufacture and marketing of pharmaceuticals

 FDA is the primary regulatory agency for pharmaceuticals

 Marketing of a new drug requires filing a “New Drug Application”
(NDA) with the FDA, along with clinical tests showing that the
drug is both safe and effective for the intended use

 Approved drugs, and certain underlying patents, are listed in the
“Orange Book”


Drug Application Types Types
Drug Application
 A New Drug Application (NDA) contains full reports of
safety and efficacy studies conducted by or for applicant
or as to which it has right of reference

 An Abbreviated New Drug Application (ANDA) is for a
generic duplicate of an approved NDA product:

 Borrows safety and efficacy studies from NDA

 Must have identical active ingredient, route of
administration, dosage form, strength, labeling and
intended use

 Must demonstrate bioequivalence

3

Drug Application Types

 A “505(b)(2)” application is an NDA for a modification to an
approved drug (e.g., different active ingredient, dosage
form, strength, etc.)

 relies upon one or more studies not conducted by or for
applicant and for which applicant has no right of reference
(e.g., published studies or FDA finding of safety/efficacy of
approved drug)

 application must contain sufficient data to support the
safety/efficacy of the modification

4

 Patents are fully protected under 505(b)(2), because applicants must
certify to listed patents on the reference drug, and patentees have at
least 30 months to vindicate their patent(s) through litigation
without competition.

 Unlike generics, 505(b)(2) products do not get “AB” ratings, so are
not automatically substituted for original products.

 The safety/efficacy of approved products is a matter of public
record, as reflected in the approved labeling. Forcing applicants to
re-invent the wheel would be a costly and unnecessary policy choice.
 Indeed, it would be unethical to subject patients to clinical studies
just to prove what everybody already knows about a drug.


 New Chemical Entity (rarely)
 New dosage form
 New dosing regimen
 New strength
 New route of administration
 New indication


 New active ingredient (different
salt, ester, complex, chelate, clathrate, racemate, or enantiomer
of active moiety)
 New inactive ingredient that requires more than limited
confirmatory studies
 Rx OTC switch
 New Combination Products


 NDA applicant (including 505(b)(2)) must inform FDA of patents
covering drug or method of using it

 Under 2003 FDA Final Regulations:

 Method patent must cover approved method

 Product-by-process patent should be listed only where novel product

 Metabolite and intermediate patents should not be listed

 Patent on different polymorphic form should be listed where testing
shows bioequivalence

 FDA publishes information in “Orange Book”

9

 A Drug will have two forms of market protection.

 The first comes in the form of “exclusivity” which is a creation of
law.

 Exclusivity enables the drug product to have exclusive, or
monopoly, status in the market for a certain number of years
(five years for a new chemical entity and other periods of time
for different situations.)

 Exclusivity means that the FDA cannot legally approve a generic
drug application for that product until the exclusivity period
expires.


 Exclusivity should not be confused with patent protection, which
is the second form of market protection for a marketed branded
drug.

 Included in the NDA is information regarding any patents on the
drug product.

 The manufacturer applies for these patents with the US Patent
and Trademark Office which, of course, works independently
from the FDA.

 The FDA lists the patents in the Approved Drug Products with
Therapeutic Equivalence Evaluations , also known as the Orange
Book.


 Consider a product with one patent.

 A provisional application was filed, the utility (regular)
application was filed within a year, and the patent was issued
within three years.

 The patent term is 20 years from the date of filing.

 Note that the IND became effective – a requirement for the start
of clinical trials – after the patent issued and many years after
the patent filing. This scenario is often the case because
companies file patent applications before knowing that a product
will be suitable for clinical trials.

 The NDA is filed four years after the IND became effective, and
the NDA is approved one year after the NDA filing.


Patents & Market Exclusivity

NDA
Provisional Filed
Application Patent
Filed Application NDA
Filed Patent Issued IND Effective Approved

Original Patent Term - 20 years

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26


 If the product is a “new chemical entity,” it will be eligible for 5
years of new product exclusivity.

 For five years after NDA approval, FDA cannot accept for filing a
generic application (ANDA or 505(b)(2)). However, FDA may
accept for filing a generic application that contains a patent
certification that the patent is invalid, not infringed, or not
enforceable – a Paragraph IV certification.

 5-year exclusivity is independent of any patent protection that
might be available.



NDA
Provisional Filed
Application Patent


Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26



NDA
Provisional Filed
Application Patent


Data Exclusivity,
NCE

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26


 If the product is not a “new chemical entity,” it will be eligible for
3 years of new product exclusivity.

 For three years, FDA may not approve a generic application for
the same indication or condition of approval as the approved
product.

 3-year exclusivity is independent of any patent protection that
might be available.

 A product may be eligible for either 5-year or 3-year exclusivity
– but not both.



NDA
Provisional Filed
Application Patent


Data Exclusivity,
NCE

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26



NDA
Provisional Filed
Application Patent


Data Exclusivity,
NCE

Data Exclusivity,
Non-NCE

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26

www.drugregulations.org
19

 If the product also qualifies for Orphan Drug Exclusivity –
generally, a product for treating fewer than 200,000 patients in
the United States per year – then, the example product is eligible
for 7 years of market exclusivity following product approval.

 During the 7-year period, FDA cannot approve the same drug for
the same indication – even if the second applicant generates
completely independent data.



NDA
Provisional Filed
Application Patent


Data Exclusivity,
NCE

Data Exclusivity,
Non-NCE

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26



NDA
Provisional Filed
Application Patent


Data Exclusivity,
NCE

Data Exclusivity,
Non-NCE

Orphan Drug
Market
Exclusivity

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26


 Patent term restoration is designed to restore to the patent term
some of the time that was lost in the process of satisfying the
requirements for regulatory approval.

 If the patent and the product meet the requirements for patent
term restoration, the duration of the restored is calculated as
one-half the period in clinical trials – from the IND effective date
to the filing of the NDA -- plus the entire period of FDA review.

 The restored period cannot exceed 5 years, and the patent life
following product approval cannot exceed 14 years.

 For the product in this example, the restored term is 3 years --
2 years (one-half of the 4-year clinical trials period), plus one
year of regulatory review.



NDA
Provisional Filed
Application Patent


Data Exclusivity,
NCE

Data Exclusivity,
Non-NCE

Orphan Drug
Market
Exclusivity

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26


Patents & Market Exclusivity Paradigm

NDA
Provisional Filed
Application Patent

Patent
Original Patent Term - 20 years Term Restoration

Data Exclusivity,
NCE

Data Exclusivity,
Non-NCE

Orphan Drug
Market
Exclusivity

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26

25

 If the product is eligible for Pediatric Exclusivity – because the
drug sponsor completed studies in accordance with a Written
Request from FDA – then, the product is eligible for an additional
six-months of exclusivity added on to any other exclusivity that
has not expired.

 For example, 5-year exclusivity becomes 5 years and 6 months;
3-year exclusivity becomes 3-years and six-months; and 7-year
Orphan Drug exclusivity becomes 7 years and 6 months.

 With respect to patent protection, the generic applicant must
certify that the expiration date of any patent is six months later
than the actual expiration date. Accordingly, any generic
applicant that is waiting for patent expiration before marketing
its product will need to delay marketing for an additional six
months.



NDA
Provisional Filed
Application Patent

Original Patent Term - 20 years PTR

Data Exclusivity,
NCE

Data Exclusivity,
Non-NCE

Orphan Drug
Market
Exclusivity

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26

27


NDA
Provisional Filed
Application Patent
Filed Application NDA Pediatric Drug
Filed Patent Issued IND Effective Approved Patent
Certification


Data Exclusivity,
NCE

Data Exclusivity,
Non-NCE

Orphan Drug
Market
Exclusivity

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26

28

Provisional
Application Patent NDA Filed
Certification


Pediatric Drug
Data Exclusivity,
Exclusivity, NCE
NCE

Data Exclusivity,
Non-NCE

Orphan Drug
Market
Exclusivity

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26

29

Provisional
Certification


Pediatric Drug
Data Exclusivity,
Exclusivity, NCE
NCE

Pediatric Drug
Data Exclusivity,
Exclusivity, Non-NCE
Non-NCE

Orphan Drug
Market
Exclusivity

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26

30

Provisional
Certification


Pediatric Drug
Data Exclusivity,
Exclusivity, NCE
NCE

Pediatric Drug
Data Exclusivity,
Exclusivity, Non-NCE
Non-NCE

Pediatric Drug
Orphan Drug
Exclusivity
Market
Exclusivity

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26

31

 The Effective Patent Life is the period of patent protection
following product approval – after taking into consideration
any applicable Patent Term Restoration and Pediatric
Exclusivity. The Effective Patent Life is substantially shorter
than the original 20-year patent term.



Provisional

Pediatric
Exclusivity

Effective Patent Life

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26

33

 Prior to 1962, as per Federal Food, Drug and Cosmetic Act, all
application for registration were examined on the basis of the
safety profile. But for manufacturing of generic, there were also
the requirement of the clinical data to prove efficacy.

 Kefauver- Harris amendment was done in FDC Act in the year of
1962. As per this amendment, proof of efficacy was also
required along with the safety profile.


 To overcome the drawback of Kefauver- Harris amendment, in year
of 1984, Drug Price Competition and Patent Term Restoration act
was implemented in FDC act, also known as Hatch-Waxman act.

 "The Hatch-Waxman Act is an act dealing with the approval of
generic drugs and associated conditions for getting their approval
from the Food and Drug Administration (FDA), market
exclusivity, rights of exclusivity, patent term extension and Orange
Book Listing."


 There were no generic drugs in market for 150 off patent drugs.
Manufacturers were not interested to manufacture cheaper
generic versions because of stringent regulatory procedures.

 Drug companies were not interested to waste time and money on
clinical trials of generic drugs, because of fewer profits from
those cheaper generics and more stringent regulations.

 The Hatch-Waxman Act focused these issues and proposed
many changes and started the generic drugs approval procedure
as Abbreviated New Drug Application (ANDA), for the purpose of
market authorization.


 Each holder of an approved new drug application (NDA) must list
pertinent patents it believes would be infringed if a generic drug
were marketed before expiration of these patents. The FDA
maintains a list of such patents in its publication, Approved Drug
Products with Therapeutic Equivalence Evaluations commonly
known as Orange Book.

 Purpose: To make generic pharmaceutical firms aware of patents
protecting brand-name drugs

 All patents that claim a new drug, or some method of using this
drug are listed in the Orange Book.


 Electronic Orange Book (EOB) is updated daily providing
product information for new generic drug approvals. Daily
generic updates provide the consumer with the current list
of approved generic products which is important for
substitution purposes.
 The EOB content includes:
◦ New Drug Application (NDA) approvals. NDA application numbers are
preceded with “N”
◦ Abbreviated New Drug Application approvals (ANDA or Generic).
Generic application numbers are preceded with “A”.


 A generic drug is a drug which is produced and distributed
without patent protection. The generic drug may still have a
patent on the formulation but not on the active ingredient.
 A generic must contain the same active ingredients as the
original formulation.
 Generics are considered (by the Food and Drug
Administration (FDA)) identical in dose, strength, route of
administration, safety, efficacy, and intended use.


 FDA requirements can overlap with patent requirements
 ANDA “sameness” requirements (FDCA §505(j)(2)(A)
◦ Same active ingredient
◦ Same conditions of use (labeling)
◦ Same dosage form
◦ Same strength
◦ Same route of admin
◦ Bioequivalent
◦ Patent Certification


NDA ANDA
1. Chemistry 1. Chemistry
2. Manufacturing
2. Manufacturing
3. Controls
3. Controls
4. Labeling
5. Testing 4. Labeling
6. Animal Studies 5. Testing
7. Clinical Studies 6. Bioequivalence
8. Bioavailability


 Streamlined generic approval process
 “Safe Harbor” for pre-approval activities
 Patent term restoration to offset lengthy regulatory approval
process
 Non-patent exclusivity for innovators and generics
 Framework for patent notification and litigation


 Before the Act, a generic manufacturer who used a
patented drug during the patent term for the
purpose of conducting tests to submit information to
the FDA committed patent infringement

Roche Products v. Bolar, 733 F.2d 858 (Fed. Cir. 1984)


 35 U.S.C. § 271 (e)(1): It shall not be an act of
infringement to make, use, offer to sell, or sell within
the United States or import into 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.


 The generic approval process is called Abbreviated
New drug Application (ANDA). While filing an
ANDA, the generic company has to choose one of the
following four options (referred to as paras)

 A Para I filing is made when the innovator has not
made the required patent information in the Orange
Book.

 A Para II filing for the launch of a generic drug is
made when the drug is already off patent.

 A Para III filing is made when the patent for the product
exists but the generic company wants to enter the markets
after the date of patent expiry passes.
 A Para IV filing is made when the ANDA applicant believes
its product or the use of its product does not infringe on
the innovator's patents listed in the Orange Book or where
the applicant believes such patents are not valid or
enforceable.
 Method of use patent does not claim a use for which
applicant is seeking approval.


 Para IV filer must notify NDA holder/patent owner and
provide detailed statement of basis for challenge

 Under Medicare Prescription Drug, Improvement, And
Modernization Act 2003 (for Para IV certifications on or
after Aug. 18, 2003), ANDA and 505(b)(2) applicants must
give notice

 within 20 days of confirmation of generic filing; and

 at same time as any amendment or supplement regardless of
whether already given notice of another Para IV

◦ Filing generic application (ANDA or 505(b)(2)) with a Para IV is
an act of patent infringement

48

Patent Information/Certification
 NDA holder/patent owner has 45 days from receipt of
Para IV notice to sue for infringement.

 If timely suit is brought, 30-month stay of FDA
approval of generic application unless earlier court
decision of invalidity, non-infringement or
unenforceability.

 Under Medicare Act (for patents listed on or after Aug.
18, 2003), opportunity of one 30-month stay per
generic application, limited to patents listed prior to
generic application

 Generic applicant still has to send notice re later listed
patents but, if patent holder sues, no extra 30 month
stay

49

 Under Hatch-Waxman:

 First ANDA Para IV filer (not 505(b)(2)) obtains 180-
day exclusivity against other ANDA filers (not
505(b)(2)s)

 Exclusivity triggered by earlier of first commercial
marketing or “court decision”

 Several issues arising under Hatch-Waxman have been
addressed by the Medicare Act

50

 Under Medicare Act, for ANDAs where no Para IV was
made before Dec. 8, 2003:

 an applicant that submits a “substantially complete”
ANDA for a drug that contains and “lawfully maintains”
a Para IV certification “for the drug” on the first day that
any applicant does so is a “first applicant” and

 Obtains 180-days exclusivity (unless forfeited)

51

Generics & Market Exclusivity

Provisional
Application Patent NDA Filed ANDA filed, Notice
Filed Patent Issued IND Effective Approved Patent Infringement Suit

Pediatric
Exclusivity


Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26

52

Market Exclusivity Paradigm

Provisional
Application Patent NDA Filed ANDA filed, Notice
Filed Patent Issued IND Effective Approved Patent Infringement Suit

Pediatric
Exclusivity


30-month
Stay

Years 1 3 5 7 9 11 13 15 17 19 21 23 25
2 4 6 8 10 12 14 16 18 20 22 24 26

53

 Once FDA authorizes the marketing of the generic drug, the
first-filed Paragraph IV ANDA applicant becomes entitled to 180
days of marketing exclusivity.

 This exclusivity protects the first FDA-approved Paragraph IV
ANDA applicant from competition against other ANDA marketers
during the 180-day period,

 This provides an incentive for ANDA applicants to challenge
patents on brand-name drugs and

 to seek generic entry prior to patent expiration.


 The Generic Pharmaceutical Association (“GPhA”), a trade
association comprised of generic drug companies, attributes
much of the health of generic marketing to Hatch-Waxman
exclusivity,

 The vast majority of potential profits for a generic drug
manufacturer materialize during the 180-day exclusivity period.

 The 180-day marketing exclusivity does not, however, preclude
competition from an Authorized Generic (AG).


 The courts have determined that a brand-name company can market an AG
during that exclusivity period.
 This is because the brand-name company does not need the FDA to approve
an ANDA.
 Instead, the brand-name company can rely on its already-approved NDA.
 This practice has become increasingly common.
 AG‟s have generated increasing controversy.
 Generic companies contend that AGs deprive generic companies of the “true”
exclusivity that was contemplated by the Hatch-Waxman Amendments.
 However brand-name companies defend AGs as procompetitive and
consistent with the Amendments.


 In order to protect their patents, brand-name manufacturers and
initial ANDA filers often agree to a settlement that delays the entry
of the generic drug into the market -- namely, pay-for-delay
settlements.

 However, as any other ANDA files are prohibited from selling their
own generic versions of the drug in question under the 180-day
exclusivity period generated under Paragraph IV, pay-for-delay
settlements can also effectively delay the market entry of any
generic version of the drug, thereby driving the FTC‟s
aforementioned concerns about illegal restraint of trade.


 A study was undertaken by the Federal Trade Commission on the
effects of AGs on competition in the prescription drug marketplace.

 The Commission undertook this study at the request of Senators
Grassley, Leahy, and Rockefeller,

 They asked the Commission to examine “the short term and long
term effects on competition of the practice of „authorized generics,

 Waxman, one of the co-authors of the Hatch-Waxman
Amendments, requested the FTC to study “the impact of so-called
„authorized generics‟ on competition in the prescription drug
marketplace.


 According to the report of the FTC number of potentially anticompetitive
patent dispute settlements between branded and generic drug
companies increased significantly compared with FY 2011, jumping from
28 to 40.
 Overall, the agreements reached in the latest fiscal year involved 31
different brand-name pharmaceutical products with combined annual
U.S. sales of more than $8.3 billion.
 Of the 40 final settlements that potentially involve pay-for-delay, 19
involved agreement by the branded firm not to market an AG product
that would compete with the generic company‟s product.
 Such “no-AG” promises are valuable to generic firms, as they
significantly reduce the level of competition the new generic entrant will
face, allowing the generic firm to secure greater market share and
extract higher prices from consumers.


 More and more brand and generic drug companies are engaging in these
sweetheart deals, and consumers continue to pay the price.

 The FTC has challenged a number of these patent settlement
agreements in court, contending that they are anticompetitive and
violate U.S. antitrust laws. One case, involving the generic testoterone-
replecement drug AndroGel is currently pending before the U.S.
Supreme Court. The agency also has supported legislation in Congress
that would restrict pay-for-delay settlements.

 Despite the record number of potential pay-for delay settlements in FY
2012, the vast majority of patent settlements (greater than 70%)
continued to be resolved without compensation to the generic
manufacturer.


 FDA shall not delay approval of a pending ANDA or 505(b)(2)
application “because of any request to take any form of action
relating to the application, either before or during
consideration of the request, unless”
 The request is in writing and is a petition submitted to FDA
pursuant to 21 C.F.R. § 10.30 or § 10.35; and

 FDA determines, upon reviewing the petition, that a delay is
necessary to protect the public health.


 Consideration of the petition shall be separate and apart from
review and approval of any application.

 Added by the Animal Drug User Fee Amendments of 2008.

 FDA has been criticized for its implementation of FDC Act
§ 505(q), and, in particular for not decoupling ANDA
approval from responding to an applicable petition that
could delay generic competition.


 Delay notification requirement.

 If FDA determines that a delay is necessary with respect to an
application, not later than 30 days after making such
determination, FDA shall provide to the applicant –

 A determination notification;

 Any clarification or additional data that the applicant should
submit to the docket on the petition to allow [FDA] to review the
petition promptly , and

 A brief summary of the specific substantive issues raised in the
petition which form the basis of the determination.


 Denial based on intent to delay.

 If FDA determines that a petition or a supplement to the petition
was submitted with the primary purpose of delaying the approval
of an application and the petition does not on its face raise valid
scientific or regulatory issues, FDA may deny the petition at any
point based on such determination.


 Final agency action.
◦ FDA shall take final agency action on a petition not later
than 180 days after the date on which the petition is
submitted.”
◦ FDA may not extend the 180-day period “for any reason,”
including consent of the petitioner.


 Extension of 30-month 180-day exclusivity forfeiture
period.
◦ If the filing of an ANDA resulted in first-applicant status and
ANDA approval was delayed because of a petition, the 30-month
period under FDC Act § 505(j)(5)(D)(i)(IV) (failure to obtain
tentative approval within 30 months)
 is deemed to be extended by a period of time equal to the period
beginning on the date on which [FDA] received the petition and ending
on the date of final agency action on the petition (inclusive of such
beginning and ending dates), without regard to whether [FDA] grants, in
whole or in part, or denies, in whole or in part, the petition.


 Exhaustion of administrative remedies.
 Final agency action
 FDA shall be considered to have taken final agency action
on a petition if –
 (i) during the 180-day period . . . the [Agency] makes a
final decision within the meaning of [21 C.F.R. § 10.45(d)];
or
 (ii) such period expires without [FDA] having made such a
final decision.


Presentation compiled by “ Drug
Regulations” a not for profit organization
from publicly available material on the
world wide web.


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