What is the Hatch Waxman Act and how does it affect pharmaceutical patents?

What is the Hatch Waxman Act and how does it affect pharmaceutical patents?

A patent is a set of exclusive rights granted to the inventor of a new invention.  A patent grants its owner the exclusive right to make, use, sell or import the patent invention within the territory which granted the patent.  To be granted a patent in the United States an inventor must file a patent application with the United States Patent and Trademark Office.  The United States Patent and Trademark Office will review the patent application, and if all the requirements of patentability are met, then the inventor will be issued a patent.

Patent law does not exist in a vacuum.  Patents and the inventions that are eligible for patent protection are subject to laws outside the sections of United States Code that constitute patent law.  Pharmaceuticals are eligible for patent protection and several laws outside of the patent act can affect the rights granted by patent law.  The Food and Drug Administration regulates the use of pharmaceuticals on humans and requires a lengthy testing phase.  A utility patent in the United States lasts 20 years from the earliest filing date.  This means that a new patented pharmaceuticals might not be approved for use by the Food and Drug Administration until several years into the term of the patent.

The Drug Price Competition and Patent Term Restoration Act, informally known as the Hatch-Waxman Act, is another law that affect the rights of a pharmaceutical patent owner.  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.  The Hatch-Waxman Act grants the inventor of a new pharmaceutical a 5 year exclusive right to manufacture a drug, during which time a generic version of the drug cannot be approved by the Food and Drug Administration.  The Hatch-Waxman Act also extends the term of a patent until the Food and Drug Administration regulatory review of a new pharmaceutical so the term of a patent will not be consumed by the regulatory review.  Patents related to a new pharmaceutical must be listed in the Orange Book, a listing of pharmaceuticals that have been approved by the FDA.  Generic manufacturers are also given a research exemption to patent infringement so that generic versions of a new pharmaceutical can be developed while the patent is still enforceable.  Normally such research could be considered patent infringement.

When a generic manufacturer is ready to present its application to sell a generic version a pharmaceutical to the Food and Drug Administration, the Hatch-Waxman Act requires the generic manufacturer to declare how its activities relate to patents listed in the Orange Book.  There are four certifications a generic manufacturer: 1. there never were patents listed, 2. that listed patents have expired, 3. that the generics will not be marketed until the all the patents listed in the Orange Book have expired, or 4. that the patents in the Orange Book are not relevant or are invalid.

While the Hatch Waxman Act has generally made it easier for generic versions of a patented pharmaceutical to come to market, it has had some unintended consequences.  When a generic manufacturer chooses certification 4, that the patents are invalid, it typically leads to litigation between the patent owner and the generic manufacturer.

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