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The Interplay Between U.S. Pharmaceutical Patents and FDA Law

Managing Intellectual Property, Chinese Edition
December 2010

Racine, Richard B.

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Authored by Richard B. Racine 

In the United States, both U.S. Patent Law and U.S. Food and Drug Administration (FDA) law govern the exclusivity rights for new pharmaceutical products. As Chinese companies invest research time and money in developing new drugs, it is important to keep in mind both the relevant U.S. patent law and the applicable FDA law that could affect the exclusivity period for that drug in the United States. Mistakes in not obtaining proper patent coverage or satisfying the FDA laws could cost the drug company valuable exclusivity rights when that drug is sold in the United States.  For a successful drug, the lost of exclusivity rights usually means the loss of substantial revenue and profit.

How can a drug innovator have exclusivity in the United States without a patent? The FDA will give a five year exclusivity period for a new chemical entity (NCE) used in a drug. What does this mean? During this five year exclusivity period, no other company can submit an Abbreviated New Drug Application (ANDA) to the FDA seeking approval of a drug product containing the NCE. This exclusivity period rewards the innovator for all of the research and development effort, including expensive clinical tests to show the safety and efficacy of the NCE that must be done to support a New Drug Application (NDA). The five year exclusivity period allows the NDA holder to recoup this investment. Importantly, this exclusivity occurs regardless of whether or not a U.S. patent has been issued. 

An ANDA filer does not submit its own clinical test data to the FDA to support its application. To do so would typically cost hundreds of millions of dollars. Instead, the generic company’s ANDA relies upon the already performed clinical test data that is detailed in the innovator’s NDA. But, the generic company cannot file such an ANDA for five years, which results in the NDA-holder having an exclusivity period in the marketplace. This exclusivity period is when the innovator company needs to recover its costs in developing new drugs. As noted, this exclusivity period occurs even if there are no patents that cover the NCE or drug. And, in practice, this five year period often becomes a six or seven year period of exclusivity as it often takes the FDA two or more years to review and approve an ANDA once it is filed.

Even though there can be this five year exclusivity regardless of whether or not there are any patents on the NCE or drug, patent protection should also be obtained if at all possible. Without patent protection, generic drugs can come into the marketplace upon expiration of the exclusivity period. With patent protection, the exclusivity period can be extended until the expiration of the U.S. patents, often years later, which can result in the generation of substantial revenue for the NDA-holder. So, obtaining strong and valid U.S. patents should be the goal when a company is researching and developing new drugs. Once the drugs have become commercially successful in the U.S., it is too late to think of obtaining strong patent protection. Rather, the time to do so is when the drug is being researched and developed.

But, obtaining the U.S. patents is not enough. Rather, they must be properly listed on the FDA Orange Book for them to have the desired exclusivity effect in delaying the approval of any ANDA for that drug. To get this exclusivity period from the patents, the NDA-holder must list in the FDA’s Orange Book (although the list is kept electronically today it is still called the “Orange Book” after the orange colored paper on which it was originally printed) any U.S. patents that it has on the NDA product or its use for which infringement could be reasonably asserted. The FDA Orange Book lists each approved drug product by its brand name (e.g., Lipitor or Plavix) and its chemical name (e.g., atorvastatin or clopidogrel). The Orange Book also lists the U.S. patents that the NDA-holder has submitted to the FDA as covering the drug or its use. This puts the public, including the generic companies, on notice as to those U.S. patents that the NDA-holder believes would be infringed by a generic version of the brand name drug.

This listing of patents for the drug is very important and can affect the period of exclusivity the NDA-holder might obtain. If U.S. patents are listed for a drug, a generic company submitting an ANDA must make a certification as to the status of each listed patent. For example, the generic company can say that it is willing to wait for FDA approval of its ANDA until the patents expire. Usually, however, the generic company wants its ANDA approved by the FDA before the patents expire and, if possible, as soon after the five year, non-patent exclusivity period that results from being the first to file for approval of that NCE. 

To try to enter the U.S. market before the Orange Book listed patents for the brand name drug expire, the generic company submits a certification (called a Paragraph IV certification after the part of the statute governing the certification) challenging the validity or enforceability of the listed patents or stating that the generic drug would not infringe the listed patents. Such a Paragraph IV certification is an attempt by the generic company to get FDA approval for the generic drug before the U.S. patents have expired. To do so, the generic must establish that the patents are invalid, unenforceable, or not infringed. 

After receiving a Paragraph IV certification, the NDA-holder has 45 days in which to bring suit against the generic company. If suit is timely brought, the FDA cannot approve the ANDA for 30 months unless the court finds the patents invalid, unenforceable, or not infringed. Most of the time, the submission of a Paragraph IV certification to the NDA-holder results in suit being filed within 45 days. Once suit is filed, a court decides the validity, enforceability, and infringement of the challenged patents. All of this occurs before the ANDA is approved.  During this time, the NDA-holder maintains its exclusivity in the marketplace.

Given all of this, what are the lessons for a Chinese pharmaceutical company? 

First, during research and development, work with U.S. patent attorneys to obtain strong, valid, and enforceable U.S. patents. 

Second, make sure that these patents contain appropriate claims that allow them to be listed on the FDA’s Orange Book. What types of claims are listable is beyond the scope of this article; suffice to say that a U.S. patent attorney should be consulted to make sure that the issued patent claims are Orange Book listable. 

Third, the patent portfolio for any drug to be sold in the U.S. should be regularly reviewed to make sure that the claims are still strong ones in light of recent case law. If not, post-issuance steps (e.g., reissue or reexamination) might be possible to improve the strength of the patent portfolio. 

Fourth, prepare for the eventual generic challenge to the drug. If the drug is commercially successful, it should be expected that generic challenges will be filed by the submission of ANDAs.

Copyright © Finnegan, Henderson, Farabow, Garrett & Dunner, LLP. This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws.  This article is only the opinion of the authors and is not attributable to Finnegan, Henderson, Farabow, Garrett & Dunner, LLP, or the firm's clients.

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