The Impact of Patents and Exclusivities on FDA’s Approval of Generic Drugs

January 7, 2020

What are some of the factors affecting whether a brand-name drug has generic competition?

Have you ever had a patient balk at getting their prescription filled when they find out the cost and then look to you for advice about their prescription? Or have you ever wondered why a generic manufacturer isn’t offering all strengths of a drug product for sale? Substituting a generic version of a brand-name drug can often be a cost-saving way for patients to purchase their prescription and maintain medication adherence. But what are some of the factors affecting whether a brand-name drug has generic competition?

The FDA knows that competition from multiple generic drugs for 1 brand-name drug can save money. In fact, multiple generic companies are often approved by FDA to market a single product. This creates greater competition in the marketplace, typically resulting in lower prices. Research shows that consumers may see a significant price reduction1 when there are at least 3 FDA-approved generics available.

The legal and regulatory framework that provides for FDA’s approval of generic drugs seeks to balance the public health goals of spurring innovation for new drugs and encouraging competition through generic drugs. Congress created the basic structure under which generic drugs are approved in the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments.

Generic drug competition with a brand-name drug can only begin after a generic drug has been approved by FDA. Patents and exclusivities for brand-name drug products are forms of protection for drug makers that may affect how and when a generic drug is approved and can be sold.2 The following are some of the overarching principles behind patents and exclusivitiesthat affect the timing of the FDA’s approval of generic drugs.

What is a patent?

Patents can protect a company’s intellectual property investments (eg, by preventing other manufacturers from entering the market with the same product). Issued by the US Patent and Trademark Office (USPTO), patents can be issued before the drug has been approved by FDA.

When a brand-name drug applicant seeks FDA approval for a drug product via a New Drug Application (NDA), they must submit information to FDA specifying which patents claim the drug substance, drug product, and method of using the drug. The FDA publishes this information in the Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as the Orange Book). These are referred to as “listed patents.” The FDA updates patent listings daily. The FDA’s role related to patents is essentially limited to ensuring that the patent information published in the Orange Book accurately reflects what the brand-name applicant submitted FDA. The FDA does not interpret patents or participate in patent infringement litigation between brand-name and generic drug companies. 

What is an exclusivity?

The Hatch-Waxman Amendments are designed to achieve a balance between innovation and access to affordable drugs. To incentivize the development of brand-name drugs and new uses for approved brand-name drugs, the law provides sponsors of brand-name drugs with different marketing exclusivities, independent of patent protection, that could delay when a generic drug can be approved.

These exclusivities may be available for products containing new active moieties, new uses for previously-approved products, products treating rare diseases, products for which the brand-drug applicant conducted studies in pediatric patients, and certain antibacterial or antifungal drugs intended to treat serious or life-threatening infections.

The exclusivities can also block the submission or approval of generic drug applications for set periods of time depending on the exclusivity. For example, if a brand-drug product is awarded exclusivity for a new use of a previously approved product, generic applications may be blocked from approval for three years from the time that the new use was approved by the FDA. The Orange Book3 provides information on what exclusivities a brand-drug product has. Information on how brand-drug sponsors qualify for these exclusivities is available on FDA’s website.

How do generic drug companies challenge a brand-name company’s patent?

If there are patents listed in the Orange Book, the generic drug applicant must address each patent by “certifying” to the patents.

If the generic drug applicant believes that the listed patents are either invalid, unenforceable, or will not be infringed by the manufacture, use, or sale of the generic version, the applicant would provide a “paragraph IV” certification to that patent. The brand-name company or patent owner then can sue the generic drug applicant for patent infringement before the generic application is approved. Approved generic drug may be allowed to enter the market before the patent(s) expires if the generic drug applicant is not sued by the patent owner or brand-name company or if it is sued and either wins or the litigation is dismissed.

It is not uncommon for patent litigation between a brand-name company and the generic company to end with a settlement agreement between the parties. In a settlement agreement, the brand-name drug and generic drug companies agree on a date when the generic drug can go to market. The lawsuit is dismissed as part of the settlement agreement. Specific information related to settlement agreements and when a generic drug could go to market pursuant to such an agreement are not managed by FDA and are not available in the Orange Book.

The Hatch-Waxman Amendments provide an incentive of 180 days of marketing exclusivity which can be granted to the "first" generic drug applicant that challenges a patent listed in the Orange Book for the brand-name drug by filing a paragraph IV certification and assuming the risk of having to defend a patent infringement lawsuit. A generic drug applicant can potentially retain eligibility for 180-day exclusivity even if it is not sued over its proposed generic drug or, if sued, the case is resolved or settled. This 180-day period starts when a “first” generic drug applicant startsmarketingits product.on published in the Orange Book accurately reflects what the brand-name applicant submitted to FDA. The FDA does not interpret patents or participate in patent infringement litigation between brand-name and generic drug companies.

FDA’s Orange Book Can Help

Given the complex patent and exclusivity landscape surrounding generic drug approval, it can be difficult to know when a generic drug may enter the market. The Orange Book is a great resource to find out if there are patents or exclusivities that protect the brand-name drug and when those patents will expire. Patients will appreciate your knowledge of this information! The Orange Book can be found online at: https://www.fda.gov/drugs/drug-approvals-and- databases/approved-drug-products-therapeutic-equivalence-evaluations-orange-book.

Additional resources for information on patents, exclusivity and Generic Drugs

Patent Certifications: Information and resources related to patents, Paragraph IV certifications. https://www.fda.gov/drugs/abbreviated-new-drug-application-anda/patent-certifications-and- suitability-petitions

Frequently Asked Questions on Patents and Exclusivity:https://www.fda.gov/drugs/drug- approvals-and-databases/approved-drug-products-therapeutic-equivalence-evaluations- orange-book

Overview and Basics of Generic Drug Approval Process: https://www.fda.gov/drugs/generic- drugs/overview-basics

References:

1. Berndt ER, Mortimer R, Bhattacharjya A, et al. Authorized generic drugs, price competition, and consumers' welfare. Health Affairs. May/June 2007. https://doi.org/10.1377/hlthaff.26.3.790

2. FDA. Generic Drug Facts. FDA's website. https://www.fda.gov/drugs/generic-drugs/generic-drug-facts

3. FDA. Approved Drug Products with Therapeutc Equivalence Evaluations (Orange Book). https://www.fda.gov/drugs/drug-approvals-and-databases/approved-drug-products-therapeutic-equivalence-evaluations-orange-book 

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