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1 1 (June 01, 2020)

handle is hein.crs/govdatz0001 and id is 1 raw text is: June 1, 2020 Pharmaceutical Patenting Practices: A Legal Overview Pharmaceutical manufacturers frequently obtain intellectual property (IP) rights in theirproducts. IPlawprovides exclusive rights in a particular invention orproduct for a certain time period, potentially enabling the rights holder (e.g., a brand-name drug manufacturer) to chargehigher- than-competitive prices. Ifrights holders are able to charge such prices, they may have an incentive to lengthen the period of exclusive rights. Some commentators allege that pharmaceutical manufacturers have engaged in patenting practices that unduly extend the period of exclusivity. These critics argue that thesepatenting practices are used to keep drug prices high, without any benefit for consumers or innovation. Defenders of these patenting practices contend that patents are generally necessary to allow manufacturers to recoup their investments in research, development, and regulatory approval, and that concerns regarding these practices are either overstated or unjustified. This In Focus provides an overview of the relevant legalbackground and describes four such alleged patenting practices. The U.S. Food and Drug Administration (FDA) must approvenew drugs and biologics (i.e., pharmaceutical products derived frombiological materials, such as a virus or blood component) prior to their being marketed in interstate commerce. The approval processes for drugs and biologics are similar, but distinct. To obtain FDA approval, a drug manufacturer mustsubmit a new drug application (NDA) that demonstrates, among other things, that the drug is safe and effective for its intendeduse. The clinical studies necessary to establish safety and efficacy are often expensive andlengthy; the average costto develop anewdrughas beengenerally estimated to be between $1 billion to $3 billion, and the average length of the FDA approvalprocess is over twelve years. To encourage competition and lower drug prices through generic drug entry, the Drug Price Competition and Patent TennRes toration Act of 1984 (Hatch-W axman) created a streamlined approvalprocess that allows generic drugs to be approved through an abbreviated new drug application (ANDA) that establishes the drug's safety and efficacy by relying on FDA's priorapproval of a drug with the s ame active ingredient. In certain circumstances, the generic's ANDA filing constitutes an act ofartificial patent infringement, allowing the brand manufacturer to sue the generic drug manufacturer. Similarly, a biologic may only be marketed in the United States after FDA approves abiologics license application (BLA). To approve a BLA, FDA must determine thatthe biologic is safe, pure, andpotent, andthatthe production and dis tribution processes are designed to ensure the same. Like Hatch-Waxman, the Biologics Price Competition and Innovation Act of 2009 (BPCIA) created an abbreviated process to encourage early market entry of sufficiently similar biologics byrelying on FDA's priorapproval ofa biologic. A biologicalproduct is sufficiently similar if it is biosimilar to or interchangeable with an approved biologic. The BPCIA also created a process forbiologic and biosimilar manufacturers to res olvepatent disputes following the filing of an abbreviated BLA. r at , Law kSiC: Patents, which are available for a wide variety ofinventions beyond pharmaceuticals, grant the patent holder the right to exclude others frommaking, using, selling, or importing a patented invention within the United States for a defined term of years (generally, twenty years fromthe date a patent applicationwas filed). A person who does so without the patent holder's permis sion infringes the patent and is potentially liable for monetary damages and other legal remedies. Patent exclusivity allows the patent holder to recoup any expenses incurred during research and development, and is intended to incentivize innovation. The exclusivity may also shield patentees fromcompetition, thus allowing themto chargehigher-than-competitive prices for goods protectedby patents. Patent incentives are said to be particularly necessary for products like pharmaceuticals, which are costly to developbut may be easily copied once marketed. Pharmaceuticalpatents may cover many different features of a drug or biologic beyond the active ingredient itself. Such secondary patents may claim, among other things: 1. formulations of the drug orbiologic (e.g., an administrable formor dosage); 2. methods of using the pharmaceutical (e.g., to treat a particular dis ease); 3. methods of manufacturing or technologies used to make the pharmaceutical; 4. methods or technologies for administrating the pharmaceutical; or 5. other chemicals related to the active ingredient, such as intermediaries. From the patentholders' perspective, the practices describedbelow are appropriate uses of the legalrights granted by their patents. Critics, however, view these practices as harmful strategies that exploit the patent system in ways that Congress did not intend. A A '2 k

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