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Every new drug must prove to be safe and effective to be approved by any health authorities. The new drug/therapeutic moieties invented are protected by a specific patent that allows the innovator firm or patent holder to enjoy the exclusivity to market the product and doesn’t allow other players to enter the markets.

Typically, when any innovator discovers a potentially significant moiety, the innovation will be immediately protected by securing the patent rights in relevant regions. Regardless of the patent protection any new drug must receive a marketing approval from the FDA through a New Drug Application (NDA) containing the extensive safety, efficacy and chemistry manufacturing and controls (CMC) that allows the agency to determine the drug’s marketability.

Due to the reason the innovator spends a lot of time and resources while invention, this scenario will make the new drugs very expensive and reduce the access to the public, although it will create an opportunity for the innovator to recover the investment incurred during the discovery and development of new drugs.

To counter the situation a major domestic policy was launched by FDA and a new regulatory framework was made to strengthen and share the opportunity to both innovators and generics. This will provide incentives for continued innovation by research-based firms while simultaneously expediting and encouraging earlier market entry of generic drugs.

An Act named “The Hatch-Waxman Act” was enacted, formally known as the “Drug Price Competition and Patent Term Restoration Act” 1984 by the Food and Drug Administration.

The main features of the Hatch-Waxman Act:

  • An expedited FDA approval process for generic drug applications.
  • Market and patent exclusivity periods for innovators and generics.
  • Patent term extension to adjust for delays caused by the FDA approval process.
  • A unique patent litigation process triggered by a generic drug company’s submission of an application for FDA approval.

As the name implies, the HW act to create a competition for pricing and facilitates the earlier market entry for generic drugs while restoring the patent term by protecting the rights of the innovator by adding exclusivity to the patent term. Also, the act allows the generic players to use the patented information for applying the Abbreviated New Drug Application (ANDA) prior to patent expiry through an abbreviated process for FDA approval of generic drug applications.

Usually, the innovator spends a lot of time in the clinical trials and the FDA approval process. The term lost during the human trails and application review process to be restored in the form of increased market exclusivity to the one-half of the time up to 5-years.

Ideally, an innovator retains the exclusivity to market the new drug until the generic is approved by the FDA. To speed up the generic drug availability in the market, the HW act relaxed the process that delaying the approval. The generic players may use the extensive safety and efficacy studies conducted by the innovator to submit the generic version of that drug as long as they demonstrate the bioequivalence, between a generic and a innovator.

Also, any experimental evidence collected by the generic player in order to collect the bioequivalence data required for its generic application (ANDA) will not constitute the patent infringement as the generic version of a drug will be available to the public as soon as the patent term expired.

The Drug Price Competition and Patent Term Restoration Act allows generic player to determine one of the four certifications for each patent.

  • that no patent information on that brand name drug has been submitted to the FDA;
  • that the listed patent has expired;
  • that the listed patent will expire on a certain date, before which time the generic will not enter the market; or
  • that the patent is invalid or will not be infringed by the manufacture, use, or sale of the new drug for which the ANDA was submitted.

When the generic application refers a paragraph I or paragraph II certification, the FDA may approve its ANDA immediately.  The FDA may approve a paragraph III certification any time after the patent’s expiration date.

A generic player makes a paragraph IV certification when they do not want to wait for the expiration of the innovator’s patent rights and challenges a patent that does not infringe, or when it establishes the patent’s invalidity.

Now let’s understand the generic approval process by FDA.

Under the Hatch-Waxman Act, generic players can typically file one of two different kinds of abbreviated applications for approval of a generic drug:

  • An Abbreviated New Drug Application (ANDA).
  • A Section 505(b)(2) application (paper NDA).

Abbreviated New Drug Applications:

FDA requires a generic drug must establish that it is safe and effective against and to that of the reference listed drug (RLD) that is designated by the agency.

Each generic must be similar to that of the RLD and specifically, the generic drug:

  • has the same active ingredient, route of administration, dosage form, strength and intended use as the RLD.
  • Is bioequivalent with the RLD, so that it performs in the same as that of the RLD.

Section 505(b) (2) Applications

A drug that may differ in significant ways from the RLD, such as:

  • route of administration
  • dosage form
  • strength
  • Dosage regimen

Including a different version of the active ingredient such as a:

  • Salt
  • Ester
  • Chelate

The proposed generic drug must be approved through the Section 505(b)(2) paper NDA application process, which is a hybrid of a full NDA and an ANDA.

Drugs approved under a Section 505(b)(2) application rely on studies both:

  • those were not conducted by or for the applicant.
  • for which the applicant has not obtained a right of reference or use from the person by or for whom the investigations were conducted.

Generic Drug Approval

The FDA reviews generic drug applications for compliance with the appropriate scientific and regulatory criteria.

  1. Tentative approval, which means that the application meets the scientific, labelling and other approval criteria but some unexpired exclusivity prevents final approval.
  2. Final approval, which is full clearance to enter the market, allowing the applicant to begin selling the generic drug immediately.

The Hatch-Waxman Act changed certain aspects of the new drug application process and the new drug’s patent term. In addition, the Hatch-Waxman Act created an abbreviated process to allow generic drug companies to obtain FDA approval of generic drugs.


The Hatch-Waxman Act provides generic players with certain procedures for challenging a innovator’s patent exclusivity for the RLD.

  • A generic player makes a statement that the listed patent does not claim a use for which the applicant is seeking approval.
  • A generic player makes both a Paragraph IV certification and a Section viii Statement, for example, when the patent covers both the product and a method of use.

Paragraph IV Certification:

A Paragraph IV certification is a potential trigger for Hatch-Waxman act patent litigation as the filing of an application with that certification is a statutory act of patent infringement.

When a generic player challenges that the innovator’s patent is invalid or not infringed and files a paragraph IV certification in the generic application, the innovator has the chance to sue the generic and challenge in court before the generic enters the market.

A generic applicant making a Paragraph IV certification must send a Notice Letter to the NDA holder and the patentee, if different from the NDA holder, setting out:

  • the existence of the ANDA.
  • a detailed statement of its basis for believing that the listed patents are invalid or not infringed.

The generic applicant must provide the Notice Letter within 20-days after the FDA accepts the ANDA for filing. The notice letter should provide a detailed factual and legal explanation of why its generic drug does not infringe or why the patent is invalid.

The innovator has a chance and may sue the generic player with in forty-five-day (45) after the receipt of the notice following which FDA may not approve the ANDA for thirty months (30), or until a court rule that the patent is invalid or not infringed, whichever is earlier.

A baseless Notice Letter may lead to the award of attorneys’ fees for an exceptional case if the generic drug applicant loses the patent litigation.

If the innovator does not sue the generic during that 45-day window, the FDA may accept the ANDA immediately.

Generally, while applying through paragraph IV, the generic players make a great investment of time and money in product development and in a legal assessment of the validity and infringement of the innovator’s patent and assume the risk of the expensive and lengthy litigation process that could result if the innovator files suit.

A first-filer also successfully challenges the innovator’s patent when the first-filer is sued by the innovator during the forty-five-day window but prevails in the litigation, either by invalidating the innovator patent or by proving that its product does not infringe.

Section viii Statements

A section-viii statement, in contrast, ordinarily is not a trigger for patent litigation. Typically, the generic applicant attempts to remove from its label, or carve-out, anything related to the patented method in the RLD’s label.

It also must have the same labelling; except that the generic company sometimes may remove information related to a patented method or use subject to exclusivity from its label.

Generic players may use the same procedure to avoid the three-year new clinical study exclusivity. This label carve-out tactic can be seen as a mere technical way of generic drug applicants avoiding the innovator’s method patent and use exclusivity since doctors may use an approved generic drug for any use, including uses omitted from the generic label but present in the RLD label.


The first-filer of an ANDA with a Paragraph IV certification rewarded with the 180-days of market exclusivity, during which the FDA will not approve any other ANDAs having a Paragraph IV certification for a generic version of the same RLD and may enter the market.

A Section 505(b)(2) applicant is not entitled to this 180-day exclusivity. However, a Section 505(b)(2) applicant still may be entitled to NCE, a new chemical study or orphan drug and paediatric exclusivity.


The term “first-ANDA filer” refers to all of the applicants who submits substantially complete ANDAs with Paragraph IV certifications on the same day that is earlier than any other ANDA.

A substantially complete application is one that:

  • on its face is sufficiently complete to permit substantive FDA review.
  • contains all information statutorily required in an ANDA.

Multiple ANDA applicants may hold exclusivity concurrently on the same drug if they each apply on the same day and file Paragraph IV certifications concerning at least one of the listed patents for that drug. This most commonly occurs when multiple applicants file ANDAs on the four-year anniversary of FDA approval of an NDA subject to NCE exclusivity.

Exclusivity can also be split among different ANDA filers. For example, different ANDA filers can hold exclusivity on different dosage strengths of the same RLD.

Exclusivity Period:

First-filer exclusivity blocks final approval of other ANDAs with Paragraph IV certifications for 180 days. However, first-filer exclusivity does not apply against an applicant who has filed a Section viii statement because it is not a Paragraph IV certification.

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