Create background
The pharmaceutical industry in the United States can be divided into two categories, namely brand pharmaceuticals and generic pharmaceuticals. The former is usually large in scale and the brand is deeply rooted in the hearts of the people. The annual sales of enterprises are often billions or even tens of billions of dollars. The so-called generic drugs generally refer to drugs whose efficacy is consistent with the original drug after the patent of the original drug expires, and which are listed after the "chemical name" or "generic name" of the original drug is approved. At this time, the original drug can also be called "control drug".
As we all know, the research and development of the original drug has the characteristics of large investment, high risk, great difficulty and long cycle. It takes a long time to find a new lead compound that may become a drug, apply for a patent, and finally bring a new drug to the market. Often, after a drug goes on the market, its compound patent will expire soon. If there is no exclusive market right for a certain period of time, the original drug research enterprises will not be able to get enough returns on drug research and development, which will lead to huge R&D expenses not being compensated by the market, which will greatly dampen the enthusiasm of the original drug research enterprises for new drug research.
On the other hand, because the original drug has obtained market monopoly through patent protection, its price is too high, which leads to high medical expenses. Promoting the listing of generic drugs as soon as possible will play an extremely important role in controlling drug prices and reducing medical expenses.
The contradiction between these two aspects was reflected in the case of 1983 Roche v Bora.
1983, before the patent of this product expired, Bolar Company imported the raw material compound of Roche sleeping pills from Canada, and conducted the bioequivalence test and other research needed to apply to the US FDA for the marketing license of generic drugs (Anda for short). 1On July 28th, 983, Roche Company v. Bora Pharmaceutical Company for patent infringement. After the second trial, the Court of Appeals for the Federal Circuit held that the bioequivalence test of drugs had commercial purposes and did not belong to the experimental research that was not regarded as infringement in the patent law, and finally decided that Bolar Company was infringing. At the same time, however, the court suggested that banning the experimental research of generic drugs before the termination of the patent protection period actually extended the patent protection period in disguise, and this contradiction should be resolved through legislation.
In this way, the loss of Bolar company prompted the United States to revise the drug patent protection system. In order to balance the contradiction between the short patent time of the original drug research company and the promotion of generic drugs to be listed as soon as possible, the US Congress passed the Drug Price Competition and Patent Term Compensation Act, also known as the Hatch-Waxman Act, in 1984.
main content
The main contents of the Hatch-Wachsman Act include the following aspects.
1 Extend the patent period of the original pharmaceutical manufacturer to make up for the patent period consumption caused by the approval of new drugs;
According to the exemption of patent infringement, generic drug research and development manufacturers can conduct generic drug research and development for the purpose of listing application, as long as they meet the FDA regulations within the original patent period, they will not be considered as infringement;
3. Establish a mechanism to challenge the legality of the original drug patent, and establish an incentive policy to challenge the legality, enforceability or infringement of the original drug patent.
The core content of the bill is well reflected in the name of the bill, that is, to encourage the price competition of drugs by accelerating the listing of generic drugs, and to make up for the effective patent time lost due to drug research and development by extending the patent period of drugs.
Before the Hatch-Wachsman Act of 1984 was passed, the approval procedure of generic drugs was the same as that of the original drug, and the same safety and effectiveness tests as those of the original drug manufacturers were needed to obtain the approval of FDA. In addition, patent protection prohibits generic drug manufacturers from using the data of the original drug and the application for starting generic drugs before the patent expires. Therefore, even after the original patent expires, it will take a long time for generic drug manufacturers to complete the approval process of generic drugs. In this way, the lag in the time to market of generic drugs actually extends the patent period of the original drug and greatly limits the commercial motivation of developing generic drugs.
Hatch-Wachsman Act greatly simplifies the approval process of generic drugs. Generic drug applicants only need to provide data to FDA to prove that generic drugs and reference drugs are pharmaceutically equivalent, and provide data to prove that generic drugs and reference drugs are bioequivalent, which is called new drug application for short, and usually referred to as ANDA for short. Hatch-Waxman Act holds that bioequivalence is a good alternative indicator of drug safety and effectiveness. Although these hypotheses have been verified today when hundreds of generic drugs have been approved and effectively used in patients, they are extremely great progress when the bioequivalence theory of 1984 is not perfect.
The contribution of Hatch-Wachsman Act also lies in standardizing the challenge process of generic drug companies to the original drug patents. Generally speaking, the original research industry has set up heavy patent protection for its original research drugs. Some of these patents are the result of long-term high-quality research and development work, while others are closer to word games played to prevent generic drugs from entering the market. Hatch-Wachsman Act provides a mechanism for generic drug industry to challenge the latter's patents. It stipulates that the application for generic drugs must be accompanied by one of the following four statements about the patent status of the original drug.
Statement 1: This medicine has no patent.
Statement 2: The new drug has a patent, but the patent has expired.
Statement 3: FDA does not need to approve generic drugs before the relevant patents expire.
Statement 4: The patent application for generic drugs is invalid or generic drugs are not infringing.
The generic drug application based on the first or second statement will be approved after meeting all regulatory and scientific requirements, while the generic drug application based on the third statement will be approved after the patent expires, while the generic drug application based on the fourth statement (that is, questioning the patent statement) must first notify the patent owner. The patentee may file a patent infringement lawsuit within 45 days after receiving the notice. Once the patent owner files a lawsuit, the FDA cannot approve the drug within 30 months, unless the court decides that the original drug patent is invalid or the infringement does not exist before that.
In order to encourage generic drug companies to challenge the legitimacy of the original drug patents, Waxman-Hatch Act stipulates that the first company to apply to the FDA for simplified new drugs according to the IV statement can obtain the exclusive market right of 180 days after being approved. During the period of market monopoly, the company was able to recover its expenses and establish its position before the market was flooded with other generic drugs. This provision has a great incentive for the generic drug industry. Due to the price competition, whether or not to obtain the market exclusive period of 180 days can produce a difference of five to ten times in income.
However, if the generic drug company obtains the approval of the FDA before the legal battle begins, the original drug research company will have no recourse, and even if the court decides that the patent is valid, it may not be able to obtain compensation from the generic drug company with insufficient funds. Therefore, Wachsman-Hatch Act provides the above-mentioned 30-month delay period for FDA to finally approve ANDA.
Hatech-Maxman Act was highly praised. It balances the interests of the public and pharmaceutical manufacturers, and also balances the interests of original drug manufacturers and generic drug manufacturers, encouraging both the research and development of new drugs and the listing of generic drugs as soon as possible. Since the implementation of 10 to 15, this system has played a great role. Statistics show that the proportion of generic drug sales to total drug sales has increased from 19% before the implementation of the bill to 55%, and consumers save at least $8 billion to10 billion annually on average.
Development and revision
However, by the end of 1990s, pharmaceutical companies gradually adopted some clever methods, taking advantage of some loopholes in the Wachsman-Hatch Act to try their best to confront the challenge of generic drugs. One strategy is to apply for a new patent with little value, which will trigger a series of 30-month delay periods and put generic drug companies into legal disputes for many years. Another method is to sign an agreement with the generic drug company that first proposed ANDA, that is, the original company will pay millions of dollars to the generic drug company that obtained the exclusive right of 180 days, and the generic drug company promises not to list its competitive generic drugs, thus preventing the generic drugs of other companies from entering the market.
According to these circumstances, the Medical Insurance Modernization Act promulgated in 2003 revised the Wachsman-Hatch Act to prevent the further development of the anti-competitive situation. According to the new legislation, the original drug research company can only apply for a 30-month delay period for each product once. If the court decides that the original company's patent is invalid before the end of the 30-month delay period, generic drugs will be allowed to go on the market.
For the exclusive period of 180 days, it is also clear that many companies that put forward ANDA on the same day are allowed to enjoy the exclusive period discount. In addition, if a company fails to market its generic drugs within 75 days after the approval of the court, the company will lose its due exclusive rights.
Future and thinking
Although the revised Wachsman-Hatch Act has been strengthened, patent companies have been looking for new ways to deal with it. The most deadly strategy of generic drug companies is the recent emergence of "authorized imitation". According to this new strategy, once the original drug company thinks that a generic drug company is about to launch a generic drug that will pose a threat to it, they will authorize another generic drug company, and sometimes even sell the authorized generic drugs through their own generic drug subsidiaries, thus eliminating the 180-day market monopoly enjoyed by the first generic drug company that challenges drug patents, and competing with it for market share will often lead to price decline. The market profitability of generic drug companies will be greatly reduced, even not enough to make up for the capital investment in their early development, which is a great pressure for those generic drug companies that have developed and sold similar generic drugs themselves, and may even make them gain nothing, thus affecting their development and even survival.
The existence of authorized imitation makes generic drug companies and original drug research companies stand on the cusp of unfair competition again. It is not difficult to see that the American pharmaceutical industry has maintained a leading position in the world in scientific research and development and marketing for nearly half a century, which is inseparable from the adjustment and balance of various interest conflicts in the pharmaceutical market by a series of institutional arrangements, policies and regulations of the American government. In the face of the growing generic drug market, it remains to be seen how the law will make a gesture between the powerful original drug research companies and the rising generic drug companies.