Drug Price Competition and Patent Term Restoration Act

Drug Price Competition and Patent Term Restoration Act
U.S. Government · Public domain · source
Name	Drug Price Competition and Patent Term Restoration Act
Short title	Hatch–Waxman Act
Enacted by	98th United States Congress
Effective date	1984-10-24
Public law	98-417
Citation	21 U.S.C. § 355; 35 U.S.C. § 156
Introduced in	United States Senate
Sponsor	Orrin Hatch; Henry Waxman

Drug Price Competition and Patent Term Restoration Act is a United States federal statute enacted in 1984 that amended the Food, Drug, and Cosmetic Act and the Patent Act to create a framework for approval of generic pharmaceuticals and adjustment of patent terms. It is commonly known by the informal name that combines the surnames of Senators Orrin Hatch and Henry Waxman, and it has influenced regulatory practice at the Food and Drug Administration and litigation before the United States Court of Appeals for the Federal Circuit and the United States Supreme Court.

Background

Congressional action producing the statute followed debates involving members such as Orrin Hatch, Henry Waxman, Edward Kennedy, and Strom Thurmond and hearings before committees like the United States Senate Committee on Labor and Human Resources and the United States House Committee on Energy and Commerce. Policymakers balanced interests represented by industry groups including the Pharmaceutical Research and Manufacturers of America, Generic Pharmaceutical Association, and academic experts from institutions such as Harvard University, Yale University, and Johns Hopkins University. The legislative history involved earlier statutes such as the Food, Drug, and Cosmetic Act of 1938 and the Patent Act of 1952, and responded to market events involving firms like Pfizer, Merck & Co., and Roche as well as antitrust concerns addressed in cases like United States v. Glaxo Group Ltd..

Provisions

The statute amended title 21 and title 35 to establish procedures including the Abbreviated New Drug Application pathway administered by the Food and Drug Administration, patent term adjustment under provisions of the Patent Act, and market exclusivity awards. Key statutory mechanisms referenced the New Drug Application, the concept of "patent term restoration" codified at 35 U.S.C. § 156, and the exclusivity periods enforced by the Food and Drug Administration. It created notice and certification procedures that implicated litigation in the United States District Court for the District of Columbia and established deadlines affecting regulatory review by the Food and Drug Administration Modernization Act of 1997.

Impact on Generic Drug Approval

The Abbreviated New Drug Application pathway enabled companies like Teva Pharmaceutical Industries and Mylan N.V. to seek approval based on bioequivalence studies rather than full clinical trials, altering strategies for firms such as Sandoz and Apotex. The statute's requirements produced litigation at the United States Court of Appeals for the Federal Circuit and influenced decisions by the United States Supreme Court in cases involving ANDA litigants and paragraph IV certifications. Regulatory agencies including the Food and Drug Administration and courts such as the United States District Court for the District of Delaware adjudicated disputes over bioequivalence, labeling, and exclusivity involving products from companies like Johnson & Johnson, GlaxoSmithKline, and Novartis.

Patent Term Restoration and Exclusivity

Patent term restoration under 35 U.S.C. § 156 provided patentees relief for time lost during regulatory review, affecting patent portfolios held by innovators such as Eli Lilly and Company, AbbVie, and Amgen. The statute's exclusivity provisions—new chemical entity exclusivity, pediatric exclusivity, and orphan drug considerations—interacted with programs administered by the Food and Drug Administration and incentives established under statutes like the Orphan Drug Act and regulatory initiatives tied to the Pediatric Research Equity Act of 2003. Disputes over the scope of term restoration reached the United States Court of Appeals for the Federal Circuit and the United States Supreme Court in cases implicating firms including Eli Lilly, Pfizer, and Sanofi.

Legal Challenges and Litigation

Litigation arising under the statute produced landmark decisions from the United States Supreme Court, including rulings clarifying preemption, patent exhaustion, and standards for patentability, with opinions referencing justices from the Rehnquist Court and the Roberts Court. The United States Court of Appeals for the Federal Circuit developed doctrines concerning paragraph IV certifications, declaratory judgment jurisdiction, and damages in Hatch–Waxman cases, with important disputes involving litigants such as Teva Pharmaceutical Industries, Forest Laboratories, Lilly, and generic challengers like Mylan. Administrative review and enforcement involved the Food and Drug Administration, the Federal Trade Commission, and sometimes the Department of Justice in antitrust inquiries.

Economic and Public Health Effects

Empirical analyses by scholars at Harvard University, Yale University, Columbia University, and think tanks such as the Brookings Institution and the Kaiser Family Foundation show the statute accelerated generic entry, reducing prices for medications produced by firms like Bristol-Myers Squibb and AstraZeneca and expanding access to therapies for conditions addressed by products from Merck, Pfizer, and Roche. Critics represented by industry groups including Pharmaceutical Research and Manufacturers of America argue that patent term restoration and exclusivity can delay competition and affect incentives for innovation, while proponents point to cost savings and increased utilization documented by agencies such as the Centers for Medicare & Medicaid Services and studies published in journals like the New England Journal of Medicine and the Journal of the American Medical Association.

Category:United States federal health legislation Category:United States federal patent legislation