On June 14, 2018, Senator Orrin Hatch of Utah, the co-author of the Hatch-Waxman Act, filed an amendment to the Hatch-Waxman Act in an effort to further incentivize generic drug development. The language of the amendment, known as the Hatch-Waxman Integrity Act of 2018, states that its purpose is “to prevent the inter partes review process for challenging patents from diminishing competition in the pharmaceutical industry and with respect to drug innovation.” Senator Hatch has indicated that while he strongly supports the inter partes review (“IPR”) process, he feels that it is producing unintended consequences in the pharmaceutical industry by allowing two separate pathways for attacking a brand patent, and that it has upset the brand-generic balance put in place by the Hatch-Waxman Act. In a statement made at a Senate Judiciary Committee hearing, Senator Hatch stated that the amendment would preserve the ANDA/biosimilar process as the standard pathway for companies to challenge brand patents, and that “it would prevent companies from using IPR to put added litigation pressure on innovators above and beyond what Hatch-Waxman already provides. And it would prevent a company that rightfully loses a Hatch-Waxman suit from getting a second bite at the apple.”[1]

Changes Proposed by the Hatch-Waxman Integrity Act

The act provides amendments to Section 505 of the Federal Food, Drug, and Cosmetic Act for generic and brand drug makers and to Section 351(k) of the Public Health Service Act for biosimilar drug makers. For biosimilar applications, the proposed amendment would require an applicant to submit an application including “with respect to any patent that is, or that could be, included on a list of patents under subsection 18 (l)(3)(A)(i), … a certification that neither the applicant nor any party in privity with the applicant has filed, or will file, a petition to institute inter partes review or post grant review of that patent under chapter 31 or 32, respectively, of title 35, United States Code.’’[2]  Similar amendments were proposed for ANDA applicants.

The Hatch-Waxman Integrity Act essentially would require an ANDA or biosimilar applicant to choose between engaging in the ANDA/biosimilar approval pathway or challenging a patent in an IPR or PGR proceeding.  As noted by Senator Hatch, engaging in the ANDA/biosimilar process, a company may “rely on the brand company’s safety and efficacy studies for FDA approval,” whereas a party who files an IPR proceeding would have to develop its own safety and efficacy data.[3]

Potential Impacts for Biosimilar Applicants

Currently, under the Biologics Price Competition and Innovation Act (“BPCIA”), a biosimilar applicant is not required to disclose any patents when submitting its application. Thus, at the outset, the amendment would require more work and costs to be expended by a biosimilar applicant in preparing an application. Furthermore, it may be difficult for a biosimilar applicant to identify all the patents applicable for the proposed certification. There is no FDA listing of the patent exclusivities for biologics similar to the Orange Book. Thus, a biosimilar applicant may not be able to identify the necessary patents, or may be forced to identify the entire patent portfolio related to the biologic whether it would actually apply to its product or not.

Conclusions

In addition to the specific impacts it may have for biosimilar applicants, the Hatch-Waxman Integrity Act may cause significant impacts to ANDA and biosimilar applicants generally. For ANDA/biosimilar applicants, what was originally seen as a quick and cost-effective alternative to engaging in lengthy patent litigation may no longer be a feasible or favorable option. IPR and PGR proceedings are quicker and cheaper than filing a patent litigation lawsuit. However, the added costs and time ANDA/biosimilar applicants would need to spend to develop new safety and efficacy studies would likely far outweigh any potential savings to be had by challenging patents through the IPR process. Therefore, despite recently being upheld to be constitutional, IPR and PGR proceedings may be effectively eliminated in the pharmaceutical industry if the Hatch-Waxman Integrity Act is enacted.

[1] “Hatch Amendment to Incentive Generic Drug Development”, Senator Hatch Press Release, (June 14, 2018) https://www.hatch.senate.gov/public/index.cfm/2018/6/hatch-amendment-to-incentivize-generic-drug-development

[2] S. 974, 115th Cong. (2018).

[3] See supra note 1.