Changes in US Policy: What Generic Pharmaceutical Companies Need to Know

February 1, 2004
Deborah Yellin

Whitney Hapangama

Pharmaceutical Technology Europe

Pharmaceutical Technology Europe, Pharmaceutical Technology Europe-02-01-2004, Volume 16, Issue 2

In this article the authors examine a number of significant amendments to US policy regarding generic pharmaceuticals. These important changes could have a major impact not only on the US pharmaceutical market, but also globally. The US Food and Drug Administration (FDA) implemented new regulations, effective from 19 August 2003, that promise to benefit generic pharmaceutical companies in several ways. Significantly, they seek to prevent multiple 30-month stays and resolve much of the uncertainty regarding which patents may properly be listed in FDA's Orange Book.1,2

In the US, an applicant for a new drug application (NDA) is required to provide the patent number and expiry date of any patent claiming the drug or method of using the drug.3 After approving the NDA, FDA includes this information in the Orange Book. The NDA holder remains obligated to submit later-issued patents, and this information is also published in the Orange Book upon submission.4

By listing patents in the Orange Book, the patent holder ensures that a generic applicant filing an abbreviated new drug application (ANDA) will be required to file a "paragraph IV" certification with respect to the corresponding Orange Book-listed patent for that drug substance. This certification states that either the patent is invalid or will not be infringed.5 At the time the certification is made, notice must be given to the NDA holder and patent owner. If the patent holder brings suit within 45 days, FDA may not approve the ANDA for 30 months, with few exceptions (that is, if a court orders a shorter or longer period, or grants a preliminary injunction or until the date of a court decision). Effectively, this provision, which can only be invoked by patents properly listed in the Orange Book, amounts to a 30-month stay.


A common complaint of generic pharmaceutical companies is the practice of "late-listing" in the Orange Book, which refers to later-issued patents that are listed after the generics company has filed its ANDA. The late-listed patents are often related to various aspects of the drug substance, such as improved purity of the active ingredient, a safer dosing regime or new indications for which a drug was approved but not patented until after application approval. Such patents are sometimes listed as late as the eve of the ANDA's product launch. As a result, generic manufacturers are faced with the risk of a 30-month stay after substantial investment has already been made in preparation for a product launch.

In the past, NDA holders could bring multiple stays against a generic applicant. According to a Federal Trade Commission (FTC) report, generic applicants were frequently delayed by late-listing of additional patents after the filing of the ANDA, but before its approval.6 In such cases, the generic applicant could be delayed by multiple, automatic 30-month stays for each of the late-listed patents.

Circumstances still remain under the new regulations in which a patent holder may list a patent after a generic applicant has filed an ANDA. However, even if a patent holder does validly list a patent after filing a generic ANDA, the regulations now specify that no additional notice must be provided by the ANDA applicant following recertification to the later-listed patent. Thus, the patent holder has no opportunity to file a subsequent infringement suit, and thereby has no opportunity to invoke an additional 30-month stay.

One criticism of the new regulations is that they still allow brand name companies to seek stays on listed patents right up until the day before the generic drug enters the market, provided that the company has not already exhausted its opportunity for a 30-month stay by filing an infringement suit on the original patents certified by the generic ANDA. By merely declining to file an infringement suit on its original patents, the NDA/patent holder company can leave the door open for a later-listed patent, and initiate a 30-month stay at the last possible moment.

But viewed differently, the notice provisions not only protect the NDA/patent holder, but also provide a valuable mechanism for resolving patent disputes before commercialization of the generic drug. Without the requirement that the ANDA holder provide notice, generic manufacturers will not have the benefit of the resolution of issues such as infringement or invalidity prior to commercialization. There is also no recourse to a declaratory judgement, and even the risk of possible exposure to treble damages.

Additionally, it is possible that an NDA/patent holder may decide not to sue on the original ANDA if there does not appear to be infringement. However, if the ANDA is later amended to contain an infringing product, the NDA/patent holder may not receive any notice of the infringing product under the new regulations. As such, the NDA/patent holder may never have an opportunity to exercise the 30-month stay. However, it remains to be seen if the regulations will be amended to address this loophole.

The provision relating to a single 30-month stay is likely to lead to much litigation. There are arguments to be made by the NDA/patent holder that FDA's interpretation is beyond its authority and inconsistent with the Hatch-Waxman Act.7


FDA's new regulations clarify that

  • NDA holders must list patents in the Orange Book for drug substances (active ingredients), drug products (formulations and compositions), methods of use and product-by-process patents.

  • Patents on unapproved methods of use cannot be submitted. Furthermore, submitted patent information claiming approved methods of use must identify each individual claim and the corresponding use or indication in the approved drug labelling.

  • Polymorph patents may be submitted if they claim the same active ingredient as the approved product. However, the applicant must certify that it has test data demonstrating that a drug product containing the polymorph will perform the same as the original drug product, including demonstration of bioequivalence and comparative in vitro dissolution testing on the polymorph and the original drug product.8

  • Patents claiming metabolites, intermediates or packaging features may not be submitted for listing in the Orange Book.9 Process patents are also not to be listed.

ANDA applicants are well-advised to frequently review Orange Book listings for relevant patents, and begin ANDA preparation early; that is, by identifying counsel, performing the necessary conflict checks, lining up experts and obtaining legal opinions and declarations. Generic companies should also monitor published US patent applications and issued patents, as well as work with formulators to design around patents and develop their own intellectual property position as early as possible.

More changes

The most recent version of the Greater Access to Affordable Pharmaceuticals Act (GAAP) was introduced in early 2003 and is still pending.10 If this legislation is enacted, it will bring further change for pharmaceutical companies. The GAAP includes several provisions that aim to further speed consumer access to generic drugs. These include the following proposals:

Forfeiture of rights to sue ANDA applicant. Among the more controversial aspects of the proposed legislation is the requirement that the NDA/patent holder list qualifying patents in the Orange Book within either 30 days of NDA approval or within 30 days of later patent issuance. Failure to do so results in the NDA/patent holder forfeiting his or her right to sue the ANDA applicant for patent infringement, even after commercial marketing of the drug.

Also controversial is the requirement that the NDA/patent holder sue an ANDA applicant for patent infringement within 45 days of receiving notice of a paragraph IV certification. Failure to do so amounts to a forfeiture of the right to sue the ANDA applicant for patent infringement, even after the commercial marketing of the drug.

Whereas failure to properly list a patent in the Orange Book might lead to a failure to obtain the benefit of a 30-month stay, the complete forfeiture of the right to sue is constitutionally suspect.

Provisions regarding the 30-month stay. The GAAP, like the new regulations, would allow only one 30-month stay per ANDA. This would only be triggered when a NDA/patent holder sued a generic applicant for infringing a patent listed in the Orange Book before the ANDA was submitted to FDA. The 30-month stay would probably not cause a significant delay in the generic's introduction to the market because the stay, in most cases, would run concurrently to FDA's consideration of the application, which on average takes 18–25 months.

The GAAP also provides that if a brand name company does not bring an infringement suit within 45 days of the generic applicant's initial certification and notice, the generic applicant may seek a declaratory judgement stating that no patents are being violated. Subsequently, the GAAP would provide generic drug companies with additional protection from potential abuses of the 30-month stay by NDA/patent holders.

Provisions regarding Orange Book listings. Currently, there is no mechanism for delisting improper patents from the Orange Book. However, the GAAP creates a new mechanism for challenging improper Orange Book listings. If an NDA/patent holder lists a questionable patent and sues a generic applicant for violating that patent to trigger the 30-month stay, the GAAP allows the generic company to file a counterclaim, which can allege that the patent should not have been listed. Subsequently, an order may be entered requiring the patent owner to correct or delete the patent information from the Orange Book.

Provisions regarding generic exclusivity. Another provision of Hatch-Waxman that has allegedly been subject to abuse by pharmaceutical companies is the 180-day exclusivity period granted to generic applicants. Under current law, the first generic pharmaceutical company to submit a paragraph IV certified ANDA has an exclusive right to market the generic drug for 180 days, during which time FDA may not approve a subsequent generic applicant's ANDA.

This provision has been criticized because it creates incentive for brand and generic companies to enter into anticompetitive agreements, under which a generic manufacturer may accept payment from a brand company not to market the generic product, thereby blocking other generic manufacturers from entering the market.

Under the GAAP, if a generic drug company enters into an anti-competitive agreement with an NDA/patent holder or fails to market in a timely manner, then the generic company would forfeit its rights to exclusivity. The 180-day period would then be awarded to any other generic company ready to market.

Provisions regarding bioequivalence testing. Generic drugs will not receive FDA approval unless they can show that they are the bioequivalent of the previously approved brand name drug. Typically, bioequivalence is determined by measuring the rate and absorption of the drug into the bloodstream. However, for certain drugs that are not absorbed into the bloodstream, including topical medications, FDA uses different tests to determine bioequivalence. Brand name companies have challenged these tests, which has led to approval delay of generic versions. The GAAP clarifies that FDA has the authority to establish separate tests for determining the bioequivalence of drugs that are not absorbed into the bloodstream.




3. U.S.C. 21 §355(b)(1).

4. U.S.C. 21 §355(c)(2).

5. U.S.C. 21 §355(j)(2)(A)(vii)(IV).



8. Revised 21 C.F.R. §514.53(b)(2).

9. 21 C.F.R. §314.53 (b)(1).

10. S. 1225, 108th Cong. (2003).