Hatch-Waxman Act

A U.S. law whose full title is the Drug Price Competition and Patent Term Restoration Act of 1984, codified in several places, including 21 U.S.C. §§ 301, 355, 360cc; 28 U.S.C. § 2201; 35 U.S.C. §§ 156, 271, 282. The statute is extremely complex, as it addresses several areas of law including drug patents, drug marketing approval and regulation and Federal Civil Procedure.

Hatch-Waxman is designed to deal with the complex issues that arise when the patent on a drug is about to run out and generic drug makers want approval of their products, for which they would normally file an ANDA. One difficulty in this situation is that applying for approval of a drug while is still under patent might be regarded as technically patent infringement. The Act allows an NDA holder (usually the company that originally developed the drug), to list its patent in a record maintained by the FDA known as the “Orange Book.” Once the patent or patents are listed in the Orange Book, a generic company that would like to market the same drug must assert that those patents listed in the Orange Book are either invalid or not infringed by the generic drug the company is filing an ANDA for. The patent/NDA holder then has forty-five days to file an infringement suit, after which there is an automatic thirty-month stay of FDA approval of the ANDA, unless or until there is a court decision in the generic drug company’s favor.

One problem with this structure is that because the patent/NDA holder has every incentive to slow the process, it inevitably files suit in the slowest court it can find and does everything it can to slow the litigation (profits per day being potentially orders of magnitude more than legal fees). Another issue is that some drug companies have (allegedly) recorded patents in the Orange Book, which they know do not apply to a specific therapy, specifically to delay generics. One recent change has been to allow the generic drug manufacture to file a declaratory judgment action to speed the legal process, if they argue they have a reasonable fear of being sued for infringement.

The “patent term restoration” phrase in the statute deals with a peculiar problem, which arose temporarily as a result of the TRIPS. Prior to the Uruguay Round of the GATT (General Agreement on Tarriffs and Trade), U.S. patent were valid for seventeen years from the date of grant, while in the rest of the world patents were valid for twenty-one years from the date of application—amending U.S. patent law created an issue known as “delta,” where depending on how long a patent application had been pending, a patent holder might have a shorter term under one rule than the other. This provisions of Hatch-Waxman in effect created complex rules for restoring the “delta.”