Biomedical Engineering Reference
In-Depth Information
The 1984 Drug Price Competition and Patent Term Restoration Act also known
as the Hatch Waxman act is US-based legislation intended to balance the interests
of branded drug manufacturers, generic drug companies and consumers. This legis-
lation provides a number of options for pharmaceutical companies to extend some
or all of the regulatory market exclusivity of their original patented molecule
(Mossinghoff
1998
). An important option facilitated by Hatch Waxman allows
those drug innovating entities with an approved new drug application (NDA) to
recover some of the patent term that may have been lost due to clinical trials and or
NDA prosecution delays at the government agency that reviews and adjudicates
NDAs. In the United States the Food and Drug Administration processes and adju-
dicates NDA's (Boone
2009
). Patent term extensions under Hatch Waxman are lim-
ited to 5 years maximum and are frequently less. The application for and prosecution
of an extension is a process with many technicalities that must be carefully managed
in order to realize the formal extension of the patent term (Boone
2009
).
The Hatch Waxman legislation also encourages the rapid entry of generic fi rms
with a “bioequivalent,” undifferentiated product by limiting their legal liability for
developing or using the molecule during the term of the molecule patent in prepara-
tion for patent expiry. To promote the prompt entry of multiple generic fi rms post
expiry, a 6-month market exclusivity period is granted to the fi rst approved auxiliary
new drug application (ANDA). This 6-month period of generic marketing exclusiv-
ity has the effect of providing for a limited period of duopoly pricing between the
fi rst ANDA approved generic company and the incumbent NDA drug provider.
During this period of limited competition, the fi rst ANDA approved can earn an
abnormally large return on the investment. In theory, this opportunity will motivate
ANDA applications from multiple generic sources such that there will be price-
based competition amongst a plurality of generic providers within 1 year of formal
patent expiry (Mehl
2006
).
Hatch Waxman further encourages generic providers to pursue an ANDA appli-
cation at any time during the term of the patent on a particular molecule if the
generic manufacturer believes the molecule patent to be invalid. If this type of appli-
cation is challenged in court by the incumbent drug fi rm/NDA holder, a 30-month
ANDA approval delay will be triggered at the FDA (Higgins et al. 2009). In theory,
this statutory 30-month delay is anticipated by those generic companies that submit
a patent challenging ANDA more than 30 months before formal patent expiry.
2
Additional market exclusivity advantages for developing a new chemical entity and
other improvements via a supplemental new drug application (SNDA) are also pro-
vided for in the act.
Beyond the Hatch Waxman specifi c options available to incumbents or generic
fi rms, the FDA grants a range of marketing exclusivities to incumbent fi rms who
address certain unmet needs in the market place. More specifi cally, those NDA
2
This type of ANDA is sometimes referred to as a Paragraph IV certifi cation in the pharmaceutical
literature.
Search WWH ::
Custom Search