Expanding the scope of the Hatch-Waxman Act's patent carve-out exception to the identical drug labeling requirement: closing the patent litigation loophole.

• Author: Dohm, Julie

INTRODUCTION

The Food and Drug Administration (FDA) has recently constructed a new roadblock to consumer access to generic drugs by narrowly construing the patent carve-out exception to the identical drug labeling requirement. Generic drug manufacturers often wait until a brand-name drug manufacturer's (or pioneer's) patent on the composition of its drug is about to expire before applying for FDA approval of the generic drug, so as to avoid patent infringement. As a result of the latest obstacle, however, generic drug manufacturers may still be susceptible after the patent on the drug's composition expires to patent infringement lawsuits based on active patents that cover language on the drug label.

Consider the following scenario. (1) The pioneer's patent on the composition of its brand-name drug is about to expire, so a generic drug manufacturer applies for FDA approval to sell the generic drug. As required by law, the generic label is the same as the brand-name drug label, which reads in pertinent part, "take with orange juice."

Upon notification of the generic drug application, the pioneer informs the generic drug company of the pioneer's active patent on a method for administering the drug with vitamin C, a vitamin found in orange juice. The generic drug manufacturer realizes its susceptibility to a patent infringement lawsuit because the generic drug label's instruction "take with orange juice" induces others (i.e., doctors and patients) to infringe the pioneer's patent on the method of administering the drug with vitamin C.

Rather than expose itself to a lawsuit for patent infringement, the generic drug manufacturer requests that the FDA make an exception to the identical labeling requirement and allow the patent-protected "take with orange juice" instruction to be deleted from the label as a patent carve-out. In its request, the generic drug company argues that the labeling instruction "take with orange juice" can be deleted without making the drug less safe or effective.

In the past, the FDA may have entertained the generic drug company's request and evaluated whether the patent carve-out would render the drug less safe or effective than the brand-name drug with its label. Recently, however, the FDA decided to limit the patent carve-out exception to patents in the Orange Book, a listing of patents that pertain to the listed drugs or their methods of use. (2) The Orange Book may not always contain patents claiming drug labeling information, such as "take with orange juice," leaving the generic drug company with two options: litigate or wait until the method patent expires. (3) Either way, consumer access to the generic drug is delayed.

Part I of this Comment discusses the development of the Orange Book restriction on the patent carve-out exception. Part II analyzes two current controversies involving old antibiotics and biological products that have arisen from the Orange Book limitation on the patent carve-out exception. Part III investigates whether limiting the scope of the patent carve-out to Orange Book listings is consistent with the statutory language, legislative history, relevant case law, and the FDA's administrative record and agency decisions. Finally, Part 1V proposes and evaluates alternative mechanisms that the FDA can employ to establish the appropriate scope of the patent carve-out exception.

1. THE ORANGE BOOK RESTRICTION ON PATENT CARVE-OUTS

   Concerned with the cost of healthcare, Congress granted the FDA the authority to promulgate rules and regulations that will provide healthcare consumers with cheaper, generic drugs. (4) The overwhelming administrative costs of creating this complex and intricate regulatory scheme have motivated a number of policy decisions that impose burdens on the generic drug applicants instead of on the FDA. Occasionally, the costs to the drug applicant outweigh the benefits of administrative efficiency. One such instance may be the FDA's decision to limit the scope of the patent carve-out exception to the identical labeling requirement.

   The FDA generally requires the generic drug applicant to have the same labeling as the pioneer drug. The generic drug applicant may, however, request to omit language from the label if the language derives from a patent listed in the Orange Book. This Orange Book listing requirement eases the administrative burden on the FDA, because the agency need not review patents outside the Orange Book. The limitation may burden the generic applicants in ways not intended by Congress, however. To analyze the development and implications of the Orange Book restriction, Part I.A explains the legislation from which the FDA's authority derives; Part I.B discusses the exceptions to the identical labeling requirement; Part I.C fleshes out the impact of the Orange Book restriction on those exceptions; and Part I.D covers the results of a specific aspect of the Orange Book limitation based on use codes.

   1. The Hatch-Waxman Act

      In 1984, Congress passed a complex set of amendments to the Food, Drug, and Cosmetic Act (FDCA) that significantly changed the process of approving both new and generic drugs. (5) Those amendments, known generally as the Hatch-Waxman Act (the Act), used both patent and food and drug laws to strike "a balance between two competing policy interests: (1) inducing pioneering research and development of new drugs and (2) enabling competitors to bring low-cost, generic copies of those drugs to market." (6) Congress wanted to expedite the process by which generics bring cheaper drugs to market while still creating incentives for pioneers to devote resources to research and development of new drugs. (7) Accordingly, the Act provides pioneers with a limited extension of their patent terms (8) and the generics with a shortened FDA approval process. (9)

      The Act offers three possible mechanisms by which a drug may secure FDA approval and reach the U.S. market: (1) a new drug application (NDA), (2) an abbreviated NDA (ANDA), or (3) a section 505(b) (2) application. The first pathway, the NDA, is used by a pioneer who wants to produce and sell a new drug for a particular use. (10) The NDA is a lengthy document that includes, inter alia, safety and efficacy information, composition data, and substantial testing. (11) Along with the NDA, the pioneer must also submit patent information for "any patent which claims the drug for which the applicant submitted the application or which claims a method of using such drug." (12) The FDA then publishes the patent information, along with patent expiration dates, in the Orange Book, to give notice to future generic drug applicants that the patent may block introduction of generic products.

      The Act relieves a generic, however, of the requirement to submit its own costly testing information to prove the safety and efficacy of an already NDA-approved drug. Instead, a generic may use the second pathway and file an ANDA for the same drug that has been approved by the FDA. (13) To piggyback on the original NDA, the generic must demonstrate that its drug product is the "same" as the pioneer drug by submitting information to show that its product is pharmaceutically equivalent (14) and bioequivalent (15) to the pioneer approved drug. (16) ANDAs are generally filed when a generic manufacturer wishes to duplicate an NDA holder's drug product.

      As a complement to the ANDA, the Act also implements a third mechanism, section 505(b)(2), for approved drugs that cannot be brought under an ANDA. (17) Section 505(b)(2) is essentially a hybrid of an NDA and an ANDA. Under section 505 (b) (2), an applicant submits reports of investigations of safety and effectiveness, but also relies on data not developed by the applicant. (18) A section 505(b) (2) applicant can either submit an application for a new chemical entity or for changes to previously approved drugs. (19) Section 505(b)(2) applications are meant for new drug products that are innovative or that offer a new therapeutic benefit or alternative.

      For every patent listed in the Orange Book that relates to the NDA-approved drug, the ANDA or section 505(b)(2) applicant must include appropriate patent certifications and explain the basis for its belief that the application does not infringe any valid claim of an Orange Book-listed patent. The applicant may submit one of two types of possible certifications: (1) a "paragraph" certification explaining that the patent has not been filed (paragraph I), has expired (paragraph II), will expire (paragraph III), or is invalid or will not be infringed (paragraph IV); (20) or (2) a "section eight" statement (21) that the patent is a method-of-use patent that does not claim a use for which the applicant is seeking approval.

      If an applicant certifies under paragraph IV that a patent is invalid or will not be infringed, then the applicant is required to notify the patentee and the NDA holder for the approved drug claimed by the patent as to why the patent is invalid or will not be infringed by the generic product. (22) The patentee and NDA holder then have forty-five days to review the paragraph IV notice, during which time the FDA will take no action on the generic filing. (23) If the patentee or NDA holder files an infringement suit within the forty-five-day period, FDA approval of the generic application is suspended for up to thirty months unless the matter is disposed of sooner by a court. (24)

      The FDA limits the second type of certification, section eight statements, to situations where "the labeling for the drug product for which the applicant is seeking approval does not include any indications that are covered by the use patent." (25) Therefore, a generic manufacturer filing a section eight statement must request FDA approval to change the generic drug's labeling instructions to exclude the patented method of use listed in the Orange Book. Accordingly, the Act sets up a framework wherein a generic may...