Generics and biosimilar makers have
increasingly used inter
partes reviews (“IPRs”), proceedings made possible by the America
Invents Act, to
challenge patents protecting innovator small-molecule drugs and biologic
medicines. Senator Orrin Hatch, co-author of the Hatch-Waxman Act, has introduced an
amendment that would
require these manufacturers either to take oadvantage of the abbreviated
regulatory approval pathways provided by the Hatch-Waxman Act and BPCIA and
challenge innovator patents in district court or to challenge innovator patents
in IPRs before the PTAB, but not both.
Senator Hatch explains that while he strongly supports IPRs and the
America Invents Act and that IPRs are of particular importance to the tech
community to fight “patent trolls,” they are also “producing unintended
consequences in the Hatch-Waxman context” and “threaten[] to upend the careful
Hatch-Waxman balance by enabling two separate paths to attack a brand patent.”
If enacted, generics and biosimilar makers that choose to take advantage of the
abbreviated regulatory process will challenge innovator patents in court rather
than in IPRs before the PTAB.
Senator Hatch states that he has filed the amendment, the
Hatch-Waxman Integrity Act of 2018, “to restore the careful balance” struck by
the Hatch-Waxman Act for small-molecule drugs and by the BPCIA for biologics.
Congress enacted the Hatch-Waxman Act in 1984. Senator Hatch explains that to
“incentivize innovation by branded drug manufacturers, the Hatch-Waxman Act
included various protections for patent terms and data exclusivity.” At the
same time, to “incentivize market entry of low-cost generic drugs,” the
Hatch-Waxman Act created an abbreviated drug approval pathway and a pathway for
challenging drug patents. Senator Hatch explains that Congress “has also
enacted rules comparable to the Hatch-Waxman Act for biologic products.” The
BPCIA, enacted in 2010, provides incentives for biologic innovation and creates
an abbreviated pathway for market entry of biosimilar products.
As Senator Hatch explains, in 2011 “Congress enacted
the America Invents Act to fix a problem unrelated to drug/biologic innovation
and drug/biologic affordability; it created the inter partes review (“IPR”) and
post-grant review (“PGR”) processes to combat the growing problem of patent
trolls.” He notes that “[e]ven though Congress did not intend to upset its
drug/biologic-specific Hatch-Waxman and BPCIA procedures with the enactment of
the IPR and PGR processes, generic drug and biosimilars manufacturers have
increasingly used the IPR process to circumvent the Hatch-Waxman Act and BPCIA
patent challenge processes while nonetheless taking advantage of their
abbreviated processes for drug entry.”
Senator Hatch’s legislation “would close the loophole
unintentionally created by the America Invents Act.” “To restore the careful
balance of the Hatch-Waxman Act and the BPCIA, and to prevent the IPR or PGR
processes from undercutting them, the FD&C Act and the PHS Act would be
amended to prevent using IPR (or PGR) challenges to circumvent the specific
patent-challenge processes for drugs and biologics painstakingly created by
Congress.”
In his remarks to the Senate, Senator Hatch explained that Hatch-Waxman litigation “contains numerous
carefully calibrated requirements affecting timing, market exclusivity, and FDA
approval.” He stated that IPRs, by contrast, are “a much blunter instrument
than Hatch-Waxman” and “contain[] none of the important industry-specific
balancing features that come into play in Hatch-Waxman litigation.” Senator
Hatch’s amendment would require generic and biosimilar applicants to certify to
FDA that “neither the applicant nor any party in privity with the applicant,
has filed, or will file,” IPRs (or PGRs) in order to be eligible for
abbreviated regulatory approval under the Hatch-Waxman Act or BPCIA. An applicant
would also be required to certify that it is not relying on an IPR or PGR
determination in making a certification that the relevant listed patent “is
invalid or will not be infringed.” As Senator Hatch explains, the amendment
“would force a party that wishes to challenge a brand patent to choose”
litigating in district court and being able to rely on the abbreviated
regulatory pathway of the Hatch-Waxman Act and BPCIA, or “it can file an IPR
proceeding, which is cheaper, faster and easier to win” than a challenge to the
patent in district court. “But it can’t do both.”
The Hatch amendment “would preserve” litigation in
district court under the Hatch-Waxman Act or BPCIA as the “standard path” for
generics and biosimilar makers to challenge innovator patents, while keeping
IPRs an option in certain circumstances. Given the tremendous benefits of the
abbreviated regulatory pathway, generics and biosimilar makers will opt for
abbreviated approval of their products over being able to file or rely on an
IPR in the typical case. The amendment “would prevent companies from using IPR
to put added litigation pressure on innovators above and beyond what
Hatch-Waxman” and the BPCIA already provide. And it would prevent a company
that loses in district court from “getting a second bite at the apple” in IPR
proceedings.
Patterson Belknap Webb & Tyler LLP - Andrew D.
Cohen and Irena Royzman