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Drug Price Competition and Patent Term Restoration Act

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Title: Drug Price Competition and Patent Term Restoration Act  
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Language: English
Subject: Food and Drug Administration, Abbreviated New Drug Application, Research exemption, Drug coupon, History of United States patent law
Collection: 1984 in Law, Biotechnology Law, United States Federal Health Legislation, United States Federal Patent Legislation
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Drug Price Competition and Patent Term Restoration Act

Drug Price Competition and Patent Term Restoration Act
Great Seal of the United States
Long title An Act to amend the Federal Food, Drug, and Cosmetic Act to revise the procedures for new drug applications, to amend title 35, United States Code, to authorize the extension of the patents for certain regulated products, and for other purposes.
Acronyms (colloquial) Hatch-Waxman amendments
Enacted by the 98th United States Congress
Effective September 24, 1984
Public law 98-417
Statutes at Large 98 Stat. 1585
Acts amended Federal Food, Drug, and Cosmetic Act
Titles amended 21 U.S.C.: Food and Drugs
U.S.C. sections amended Chapter 9 § 301 et seq.
Legislative history
  • Introduced in the Senate as S. 1538 by Charles McC. Mathias, Jr. (RMD) on June 23, 1983
  • Committee consideration by Judiciary
  • Passed the Senate on June 29, 1984 (voice vote agreed)
  • Passed the House on September 6, 1984 (voice vote agreed, with amendments)
  • Reported by the joint conference committee on September 6, 1984; agreed to by the Senate (agreeing to House amendments) on September 12, 1984 (voice vote) and by the Senate on September 19, 1984 (signed)
  • Signed into law by President Ronald Reagan on September 24, 1984

The Drug Price Competition and Patent Term Restoration Act (Public Law 98-417), informally known as the Hatch-Waxman Act, is a 1984 United States federal law which encourages the manufacture of generic drugs by the pharmaceutical industry and established the modern system of government generic drug regulation in the United States. Representative Henry Waxman of California and Senator Orrin Hatch of Utah sponsored the act.

Hatch-Waxman amended the Federal Food, Drug, and Cosmetic Act. Section 505(j) of the Act, codified as 21 U.S.C. § 355(j), outlines the process for pharmaceutical manufacturers to file an Abbreviated New Drug Application (ANDA) for approval of a generic drug by the Food and Drug Administration (FDA). Section 505(j)(2)(A)(vii)(IV), often referred to as Paragraph IV, gives the first company to file an ANDA for a particular drug 180 days of exclusive rights to market the drug as the generic alternative to the branded drug. The 180 days begins on the first day of marketing the drug under the ANDA, if the paragraph IV certification is not challenged by the pioneer manufacturer. If the paragraph IV certification is challenged by the pioneer manufacturer, the 180 days begins on the date a court finds that,as required under paragraph IV, the patent of the pioneer manufacturer was not valid, enforceable, or not infringed.

The Act enables a generic pharmaceutical manufacturer to develop copy of a patented innovator drug without duplicating the clinical and non-clinical studies or risking liability for patent infringement damages. The generic manufacturer must only demonstrate bioequivalence to the innovator.


  • Relevant pharmaceutical industry background 1
  • Main provisions of the bill 2
  • Potential revisions 3
  • See also 4
  • References 5
  • External links 6
    • Papers 6.1
    • Court Cases 6.2
    • See also 6.3
    • Resources for Terminology 6.4

Relevant pharmaceutical industry background

There is not much legislative history on the Hatch-Waxman Act. However, because the bill was hard fought, there has been much written about it after the fact. Below is a brief history of the conditions surrounding the pharmaceutical industry and the prevalence of generic drugs that tie into goals and significance of this act.

Prior to 1962, drugs were approved for safety only. In 1962, in the aftermath of the discovery that the use of a drug called thalidomide by pregnant women (mostly in Europe) had caused severe birth defects, Congress added a requirement that drug manufacturers also prove the effectiveness of the products before FDA could approve them for marketing. Thus, under these amendments to the Federal Food, Drug, and Cosmetic Act, new drugs had to be proven both safe and effective before they could be legally marketed. It is also important to note that for drugs approved prior to approval of Hatch Waxman, generic versions could be approved with a “paper” new drug application (NDA). This "abbreviated" NDA was based solely on published scientific or medical literature. Therefore, a generic manufacturer could get its drug approved by presenting academic articles about the chemical demonstrating that it was safe and effective. Despite this fact, it was found that in the years after 1962 there were 150 drugs that were off-patent, but for which there were no generics because generic companies simply would not spend the time and money doing the clinical trials to get to market, and that there were only fifteen “paper NDAs,” for post-1962 generics.[1]

Main provisions of the bill

The first provision discussed in the Act handles the issue of drug competition. Title I of the Act discusses the authorization of ANDAs and the provision that prohibits the FDA from asking for more than bioequivalence studies. This part of the Act is one of few pieces of legislation that restricts the powers and reach of a federal agency.

The Act provides for a period of exclusivity such that once a New Molecular Entity (NME) is approved, a generic version cannot be approved for five years. The Act also calls for a three-year data exclusivity period for supplements requiring clinical trials. It also sets out the certifications that must be made when someone files an ANDA. The first is that the drug associated with the ANDA is not patented. The second is that the patent for the pioneer version has expired. The third is that the generic will not be marketed until the patent for the pioneer has expired. Lastly, the applicant believes that the patent for the pioneer drug has not been infringed or is proven invalid. These 4 alternative statements are referred to as the paragraph I, II, III, and IV certifications.

The paragraph IV certification proved to be fairly controversial in the efforts to get the bill passed. The controversy erupted because of confusion as to how long the FDA would be required to wait before approving a generic for marketing if it claimed that the patent for the pioneer was in fact invalid. Initially the wait period was decided to be eighteen months, however, this was later changed to thirty months.

In terms of patent term restoration, the bill provides that a pioneer drug can receive an extension term equal to one-half of the time of the investigational new drug (IND) period, which runs from the time human clinical trials begin to the time the NDA is submitted. In addition to getting credit for the IND period the complete period of NDA review is added as the second part of the extension. This is so long as half of the IND period plus the NDA review period is less than or equal to 5 years. Furthermore, the time after the drug has been approved and is on the market cannot exceed fourteen years. These numbers are strictly arbitrary numbers that were deemed to be sufficiently long to provide incentive for research-based pharmaceutical companies to develop new drugs. The regulations also speak as to how extensions for pipeline drugs (drugs currently under FDA review) should be handled. The Act provides that pipeline drugs would receive two years or less of extended term. This was based on the assumption that if they were under review already that they would be approved in a year or two, making there no need to provide a longer extension. However, some pipeline drugs have taken eight years for approval, which exposes the flaws in this logic. (This patent term restoration part of the Act appears in title 35 of the United States Code.)

Lastly, the Act provides that if the pioneer company fails to exercise due diligence during development, a period amounting to the time delay will be subtracted from the patent extension period when seeking patent term restoration.[2]

Potential revisions

There are several important potential revisions to the Hatch-Waxman Act. One of these revisions includes a one-for-one extension, and a change from the one-half of IND period to a full IND. Furthermore, there is the issue of decreasing NDA review time. Initially the legislation was enacted because of the concern that overall drug development time was getting longer and longer. However, the FDA has done a remarkably good job in cutting back the time for NDA review as a result of initiatives and funding resulting from PDUFA (the Prescription Drug User Fee Act). Despite this major improvement in FDA review, the human clinical trials are taking even longer. Another proposal has been to remove the two-year extension limit for drugs under review and the arbitrary five- and fourteen-year limitations. This last particular revision also would permit multiple extensions of the same patent and change the five-year limit to ten years to match competing international standards.[3]

See also


  1. ^ Mossinghoff, Gerald. "Overview of the Hatch-Waxman Act and Its Impact on the Drug Development Process." Food and Drug Law Journal. 54. (1999): 187-194. Print.
  2. ^ Mossinghoff, Gerald. "Overview of the Hatch-Waxman Act and Its Impact on the Drug Development Process." Food and Drug Law Journal. 54. (1999): 187-194. Print.
  3. ^ Mossinghoff, Gerald. "Overview of the Hatch-Waxman Act and Its Impact on the Drug Development Process." Food and Drug Law Journal. 54. (1999): 187-194. Print.


External links


  • "The ”Hatch-Waxman” Act: Selected Patent-Related Issues", United States Congressional Research Service, April 1, 2002

Court Cases

  • "Bristol-Myers v. Royce"
  • "Merck v. Kessler

See also

  • "The Generic Drug Scandal"
  • "Release of generic Lipitor is delayed"
  • "Biotechnology Companies Try to Ward Off Generic Drugs"
  • "Driving Up Drug Prices"
  • "Biologic Drugs May Get Less Protection"

Resources for Terminology

  • FDA Glossary of Term in Relation to Drugs
  • Glossary of Pharmacy-Related Terms
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