Introduction to the Drug Patent Connection System in the United States

In the United States, the approval and marketing of drugs are regulated by two separate functions: the United States Patent and Trademark Office (USPTO) and the Food and Drug Administration (FDA). The USPTO is responsible for granting patents for new drugs that meet the conditions for a certain period of time, during which the corresponding generic drugs cannot be marketed and sold at will. The core function of FDA is to review the safety, effectiveness and quality control of drugs applied for registration and listing, so as to prevent unsafe, invalid or fraudulent listing of drugs.

The Drug Patent Connection System (Patent linkage) has two meanings: one is the connection between the approval of generic drug listing applications and the procedures for reviewing the validity of the corresponding new drug patents; the other is the connection between FDA and USPTO functions.

Development background

Based on the "thalidomide incident" in Germany in 1961 involving the safety of drugs, the United States passed a "Kefauver-Harris Act" in 1962 ". The bill requires all new drugs and generic drugs to conduct clinical trials to verify safety and effectiveness before they go on the market, and to submit generic drug applications after the corresponding new drug patents expire. This has had a great impact on the patent protection of innovative drugs and the listing of generic drugs. For innovative drugs, the cost of research and development has increased significantly, while also shortening the duration of their actual patent protection. In the face of expensive patented prescription drugs and increasing medical insurance costs, the American public continues to call on the government to establish an effective regulatory management system to promote the listing of generic drugs as soon as possible, and the public can buy reasonably priced generic drugs when they have a choice.

The escalating conflict between the interests of new drug developers and the public interest prompted the U.S. Congress to pass a bill to balance the interests of both parties in 1984, the Drug Price Competition and Patent Term Restoration Act (also known as the Hatch-Waxman Act). The bill is an important revision of the U.S. Food, Drug and Cosmetic Act (FDCA), which establishes a series of effective legal mechanisms for the coexistence of new drugs and generic drugs, and the patent linkage system is one of the important contents.

Specific content

The specific implementation regulations and procedures of the patent connection system include: the submission of the patent status of the new drug application, the publication of the orange peel book, the statement in paragraph IV, the 45-day litigation period, the 30-month containment period, and the 180-day market monopoly period.

New Drug Application Patent Status Submission

Section 21USC § 355(1) of the Hatch-Waxman Act provides that, as part of a New Drug application (NDA), the applicant (and usually the patentee) must submit with the application to the FDA the patent number and expiration date of all patents covering the drug or covering the manufacturing method used by the drug, so that when a person manufactures, uses or sells the drug without permission, can reasonably claim that it constitutes patent infringement.

This article stipulates the patent notification obligation of the NDA approval holder (patentee), that is, at the same time as the NDA application is filed, the applicant must submit documents listing all patents related to the new drug for marketing, and supplement the documents in time after the application is submitted. The patent holder must register all relevant patents within 30 days of approval of the new drug, regardless of whether the patent holder is sufficiently prepared to market at the time of approval of the new drug. For patents that are re-registered after the approval of a new drug, the holder must submit a patent description supplement to the FDA within 30 days of the approval of the patent.

When the NDA applicant is a non-patentee, section 21USC § 355(2) states: If the research submitted by the applicant is not completed by the applicant, or the applicant is not authorized by the person completing the test to use or refer to the test results, a statement shall also be submitted stating that each patent related to the drug meets one of the following conditions in the applicant's opinion or to its best understanding: no relevant patent has been filed; (ii) no relevant patent information has been filed; (iii) the time at which the relevant patent is about to expire, or (iv) the relevant patent is invalid, or its manufacture, use, or sale of the new drug to which the application is filed does not infringe the relevant patent.

2. Orange Book Release

In accordance with the requirements of the Hatch-Waxman Act, the FDA published the book "Drug Products with Therapeutic Equivalence Evaluation Approval" (Approved Drug Therapeutic Equivalence Evaluation). The book lists all FDA-approved drugs that have been evaluated for safety and effectiveness, including prescription and over-the-counter drugs, and publishes patent and exclusivity information related to approved prescription and over-the-counter drugs in the appendix section. Because the cover color of this book is orange, it is commonly known as "orange skin book". The contents of the Orange Book are updated monthly. Therefore, after the NDA mentioned above is approved, the new drug and the related patent submitted by the FDA are issued through orange peel.

3. Paragraph IV states that

A very important provision in the Hatch-Waxman Act is that for the listing declaration of generic drugs, they are no longer required to repeat the safety and effectiveness studies that have been proved by NDA, I .e. pre-clinical animal toxicology experiments and human clinical research projects are reduced, and instead bioequivalence (Bioequivalence) studies with reference to new drugs as standards are used, which simplifies the approval procedures of generic drugs and reduces the waste of time and financial resources for generic drugs. This process for generic drug filings is called the Abbreviated new drug application (ANDA). And the bill provides that generic drugs can be sample-produced for research purposes before the patent expires, but not for commodity production. When filing an ANDA, the applicant must refer to the patent registered in the orange peel book and submit a patent declaration to the FDA, which is stipulated in 21USC § 355(j)(2)(A)(vii): a declaration, in the applicant's opinion or to its best knowledge, each patent related to the drug:(I) no relevant patent has been filed; (II) the relevant patent has expired; (III) the time when the relevant patent will expire, and states that the declared generic drug will not be marketed before the expiration of the patent, or (IV) the relevant patent is invalid, or its manufacture, use or sale of the drug for which the application is filed will not infringe the relevant patent.

Paragraph IV of the patent statement (Certification IV of the Paragraph) is because the Hatch-Waxman Act also stipulates that before the patent expires, generic drugs can apply to FDA and challenge the patented drug. The filing of a paragraph IV statement indicates that someone wishes to apply for a generic drug marketing authorization before the expiration of the new drug patent. This statement is a document required by law to be issued. The applicant must also notify each patentee or NDA approval holder within 20 days of the ANDA filing. The notice not only announces the filing date of the generic drug and lists all valid patents, but also states the scientific and legal basis for challenging the patent.

4.45 day litigation period

The patentee or NDA approval holder may, within 45 days from the date of receipt of the paragraph IV statement, file a lawsuit in the Federal Court seeking a finding that the relevant patent is valid and/or the ANDA applicant has infringed, and notify FDA that the Federal Court has accepted the lawsuit. However, if the patentee or NDA approval holder does not file a lawsuit with the court within 45 days of receiving the notice, the FDA can approve the listing of generic drugs after the qualified material review.

5.30-month containment period

Section 21USC § 355(j)(5)(B)(iii) provides that the FDA gives the patentee or NDA approval holder 30 months to resolve the lawsuit. At the same time, FDA's approval of ANDA is automatically delayed for 30 months, during which time FDA does not stop the review of ANDA materials. If the patent term expires within 30 months or the court finally makes a ruling in favor of the ANDA applicant, and the ANDA meets the FDA's approval requirements, the approval of the ANDA becomes effective on the date of expiration of the patent term or the date of the court's decision in favor of the ANDA applicant. If the court has no final judgment and the ANDA application has expired for 30 months, the approval of the ANDA shall also take effect. The effective date shall be the expiration date of the ANDA application for 30 months, but the ANDA applicant shall do so at his own risk. The parties may also reach a settlement on the matter. This rule is the FDA's restrictive rule for infringement lawsuits.

6. 180 days of market exclusivity

Section 21USC § 355(j)(5)(B)(iv) stipulates that the first generic drug declarant who submits a paragraph IV declaration to challenge the patented drug and wins (the declaration has not received a legal complaint from the patentee or NDA approval holder, or the generic drug company wins the law) shall be granted a 180-day market exclusivity period. If multiple applicants file an ANDA on the same day, they can all get a 180-day market exclusivity period. The purpose of this provision is to encourage and compensate generic drug companies for the financial and financial resources they spend in patent litigation. The 180-day market exclusivity period is calculated from the first day the generic drug is listed on the market, or from the day the generic drug company legally wins the case, based on the earliest of them. During this 180-day period, the FDA no longer approved the same ANDA for marketing. During the 180-day market monopoly period, generic drugs can be sold at about 80% of the price of new drugs and obtain the market allocation of generic drugs, thus greatly stimulating the enthusiasm of generic drugs to challenge innovative drugs.

The Significance of Patent Connection System

Protection of patent rights and prevention of unfair competition: through orange peel patent registration, possible infringements can be found in time. The FDA does not approve drug applications that clearly infringe patent rights, stifling patent infringement in its infancy and strengthening factory protection of drug patents.

Facilitate coordination between government agencies: The USPTO grants patents based on criteria that determine whether an invention is novel, innovative, and useful. The patent connection system allows the FDA to not only evaluate the safety and effectiveness of drug approval, but also open the door to challenge the validity and infringement of existing drug patents. However, the FDA's approval behavior will not conflict with the USPTO, and the patent debate will be resolved by the judicial authority.

Reduce litigation, improve efficiency, and save resources: The patent connection system encourages the resolution of tenure issues before ANDA approval is completed, reducing the opportunity for litigation. Promote positive actions by all parties concerned to safeguard their rights to the maximum extent. And the patent connection process is open and transparent, which is conducive to the risk assessment of all parties.

The Positive Role of Patent Connection System

The patent connection system balances drug innovation and imitation, speeds up the listing of factory generic drugs, and increases the proportion of generic drugs used. The proportion of generic drugs in prescription drugs in the United States has increased from 19% before 1984 to 47% now. At the same time, the patent connection system has also intensified the competition in the drug market. A direct impact is the reduction of drug prices. The price of generic drugs is generally 20%-60% lower than that of new drugs, which greatly reduces the drug expenditure in the United States.

Inadequacy of the patent connection system

There are also some deficiencies in the actual operation of the patent connection system, the most important of which are as follows: NDA patent description is not standardized, and the types of patents are not strictly limited; Orange peel only contains patent descriptions submitted by NDA, but there is no objection mechanism, and there is no specification on the types and contents of patents that can be included in orange peel. There is also no specific regulation on the reasonable use of the 180-day market monopoly period. Therefore, it leads to the abuse of patent connection system. For example, because of the 30-month containment period, new drug companies continue to add new and even insignificant patents to orange peel books, and frequently file lawsuits with generic drug companies to continue to obtain 30-month containment periods to delay the listing of generic drugs. GlaxoSmithKline (Glaxo Smith Kline) in the Canadian generic drug company Apotex (Apotex) for its antidepressant paroxetine (Paxil) after the first ANDA, has registered nine patents in the orange book, resulting in a total of five patent infringement lawsuits against Apotex, the total containment period reached 65 months. The 180-day patent exclusivity period is also often "shared" by new drug companies and generic drug companies: innovative drug companies reach an agreement with generic drug companies and pay a certain amount of remuneration to suspend the listing of generic drugs. If the 180-day protection period for first-time generic drug filers has not yet begun, FDA cannot approve other generic drugs of the same variety, and new drug companies can continue to enjoy a certain period of exclusivity. This is a violation of antitrust law.