Approval of generic drugs

The Hatch-Waxman Act aims at promoting generics without putting them through the tough and long approval process involving clinical trials etc so that the burden on patients can be reduced, say Parikshit Bansal and Anand Sharma

Indian pharmaceutical companies enjoyed two ‘home-grown’ advantages namely, much cheaper manufacturing facilities and world-class medicinal chemistry skills, honed by years of reverse engineering

As the world moves closer to the concept of a global village by reducing and eliminating trade barriers, new challenges crop up. A case in point is the market for generic drugs (drugs which are free from patent protection or not covered under patents). Amidst a lot of protests and opposition on the homefront, India eventually signed the Trade Related Intellectual Property Rights (TRIPs) agreement under General Agreement on Tariffs and Trade (GATT). Fears of increase in drug prices were brushed away as ‘myths and misconceptions.’ It was felt that since 95 per cent of the drugs being marketed in India were generics, introduction of a new IPR regime would not affect prices. Rather it was felt that the benefits were more — Indian companies could license out new technologies and also tap global markets for their products.

Indian pharmaceutical companies enjoyed two ‘home-grown’ advantages namely, much cheaper manufacturing facilities and world-class medicinal chemistry skills, honed by years of reverse engineering. However, what is the reality? Can Indian companies really tap overseas markets for new discoveries or generics? Are generics also under some form of Intellectual Property Rights (IPR) protection? A clear understanding of the protective mechanisms for generics is the key to successful exploitation of overseas markets.

The Hatch-Waxman Act

The Hatch-Waxman Act also known as the Drug Price Competition and Patent Term Restoration Act is ‘an act dealing with the approval of generic drugs and associated conditions for getting their approval from the Food and Drug Administration (FDA), market exclusivity, rights of exclusivity, patent term extension and Orange Book Listing.’

The Act was enacted in the USA in 1984. It was necessitated by the following observations:

• Absence of generic drug manufacturing: Sometime in 1962 it was observed in the USA that out of 150 off-patent drugs in the market, there were no generic drugs! Owing to cumbersome procedures involved, manufacturers were simply not interested to take up manufacture of these, even though these were cheaper.
• Cumbersome regulatory procedures: Many companies did not go in for manufacture of generic drugs because of the impractical and non-scientific manner in which the regulatory authorities viewed the approval process and insisted upon proving the obvious.
• Patients were denied the option of cheaper drugs: Owing to the cumbersome procedures involved, drug companies did not want to waste time and money on clinical trials of generic drugs, insisted upon by regulatory authorities.

The Hatch-Waxman Act addressed these issues and proposed many reforms, including the mechanism for approval of generic drugs, which had to be initiated as Abbreviated New Drug Application (ANDA), for the purpose of market approval.

Thus, the Act aims at promoting generics without putting them through the tough and long approval process involving clinical trials etc so that the burden on patients can be reduced. The underlying objective of the Act is that in the absence of generic drugs, it is difficult to check the profiteering motive of the patent owner of a drug, who may hold patients to ransom!

However, at the same time it also takes care of the interest of the patent owner and provides relief for undue lengthy process. It is important to note that the Act does not consider making or using a patented invention an act of infringement, if it is used only for development and submission of information under a Federal Law which regulates the manufacture, use or sale of drugs. Hence, there is no restriction on when R&D on a generic drug should start.

General provisions of the Act

Maintaining list of patents which would be infringed: Each holder of an approved new drug application (NDA) must list pertinent patents it believes would be infringed if a generic drug were marketed before expiration of these patents. The FDA maintains a list of such patents in its publication, Approved Drug Products with Therapeutic Equivalence Evaluations (commonly known as Orange Book). Only bioavailability studies and not clinical trials needed for approval: FDA can only ask for bioavailability studies in respect of an ANDA and not for clinical trials etc. (For bioavailability, FDA uses +/- 20 per cent test ie. the amount of active ingredient in the blood serum over a period of time has to come within +/- 20 per cent of that which is observed with the patented drug)

Para I, II, III and IV certifications: While filing an ANDA, a generic firm must certify any one of the following:

• Patent information on the drug has not been filed (in the Orange Book)
• Patent has already expired
• Date on which patent will expire, and that the generic drug will not go to the market until that date passes
• Patent is invalid and will not be infringed by the manufacture, use or sale of the generic drug. The above certifications are also called paragraph I, II, III and IV certifications. In case of certification I and II, approval for manufacture can be granted immediately. In case of III, approval for ANDA can be made effective from the date of patent expiration. In case of IV, it is mandatory for the manufacturer to notify the original patent holder, who can take upto 45 days to bring an infringement suit against the manufacturer, if he feels his IPRs are being violated. However, if no such action is taken within the stipulated period, certification of the ANDA applicant will be accepted by the FDA.

If an infringement action is brought in time, FDA must suspend approval of the ANDA until the date of court’s decision. If the court decision goes in favour of the patent owner, FDA will suspend the approval till expiry of the patent. FDA does not wait indefinitely — the maximum time available for coming to a decision is 30 months (2.5 years) after the expiry of 45 days.

The first generic applicant to file paragraph IV certification is awarded a 180 days (six months) market exclusivity period by the FDA. The six-month exclusivity period will start at the earliest of the two dates — the date of commencement of commercial marketing of the generics or the day a court decides that the patent which is the subject matter of para IV certification, is invalid or not infringed.

Data exclusivity period for NMEs: New molecular entities (NMEs) approved by the FDA will enjoy data exclusivity for a period of five years from the date of approval of the NM by the FDA. A generic version cannot be approved during these five years.

Data exclusivity period for supplements: Supplements requiring clinical trials will enjoy three-year data exclusivity period.

Extension of the original patent term: Original patent term can be extended by a maximum of five years, if undue delays take place during the regulatory process (FDA approval).

Parikshit Bansal is with IPR Cell and Anand Sharma is with Dept of Pharmaceutical Management at National Institute of Pharmaceutical Education & Research (NIPER), Punjab. E-mail: pbansal@niper.ac.in