1 December 2010PatentsDavid K.S. Cornwell and Kevin W. McCabe

ANDA one, ANDA too?

In 1984, 19 percent of prescription drugs sold were generic. In stark contrast, some accounts estimate that up to 75 percent of all prescription drugs sold in the United States 25 years later were generic. Understandably, the desire for generic drugs is fuelled by consumer demand and simple economics—with competition comes price reduction.

However, innovator companies realise that drug pricing must pay for the cost of both basic drug discovery and the cost of obtaining approval from the Food and Drug Administration (FDA). The innovator drug companies therefore continue to rely on an effective patent system to ensure that generic companies cannot easily enter the marketplace.

US ANDA legislation

The Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Act) was enacted to increase the availability of generic drugs to consumers. While generics are more readily available, the act has caused delays in these drugs entering the market.

The FDA compiles a list of approved drugs in Approved Drug Products with Therapeutic Equivalence Evaluations, known as the ‘Orange Book’. When required patent information is submitted for a new drug application (NDA), the patent information is included in the Orange Book.

The abbreviated new drug application (ANDA) process allows a party to obtain FDA approval for a generic drug without clinical trials if the drug is a bioequivalent of an FDA-approved drug. To piggyback off of the NDA approval, the ANDA applicant must make a certification regarding the patents listed in the Orange Book. Often this is a certification that the patent is either invalid, unenforceable or will not be infringed by the ANDA applicant.

After being notified of this certification, an NDA holder has the right to sue the ANDA applicant for patent infringement even though the ANDA applicant has not yet commercialised the generic drug. The patent infringement case is tried by a judge and the remedy is an injunction (not monetary damages).

If the NDA holder files a patent suit within 45 days of the certification, an automatic stay provision is triggered so that the ANDA application will not generally be approved for 30 months. The first company seeking ANDA approval gets a 180-day market advantage over subsequent filers.

US biosimilars legislation

In spring 2010, President Obama signed healthcare reform legislation, which included for the first time an abbreviated approval path for generic versions of biological medicines (biosimilars). It is often said that the two things that the public ought never to see being made are sausage and law. In the case of the biosimilar approval process legislation, Congress tried to balance various divergent interests. As a result, the law is full of snouts and feet and tails.

The legislation establishes two categories of generic biological medicines—those that are ‘biosimilar’ to the approved medicine and those that are ‘interchangeable’. To be biosimilar, the drug must be highly similar to the reference drug, notwithstanding minor differences in clinically inactive components, and must have no meaningful differences in safety and potency.

To be interchangeable, the drug must have the same clinical result in any given patient, and it must be possible to switch back and forth between the reference drug and the drug seeking approval without risk to a patient. Biological medicines that are ‘interchangeable’ qualify for an exclusivity period of up to one year after marketing of the first approved product.

The biosimilar legislation outlines a fascinating process for managing patent disputes:

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