Senator Orrin Hatch (R-UT), the Chairman of the Senate Republican High-Tech Task Force and co-author of the Hatch-Waxman Act, filed an amendment in the Senate Judiciary Committee to restore the careful balance the Hatch-Waxman Act struck to incentivize generic drug development.
Senator Hatch’s amendment, the Hatch-Waxman Integrity Act of 2018, would prevent alternative procedures for challenging drug patents from tilting the playing field contrary to Hatch-Waxman’s design. It would also ensure that brand-name and generic manufacturers alike have the proper incentives to develop life-saving medications.
“As the coauthor and namesake of Hatch-Waxman, I have a keen interest in ensuring we have a well-functioning generic drug industry. My amendment will ensure that Hatch-Waxman continues to operate as originally intended by protecting the ability of generic drug companies to develop low-cost drugs while at the same time ensuring brand-name companies have sufficient protections in place to recoup their investments.”
A key aspect of bringing a generic drug to market is the ability of a generic manufacturer to challenge a brand-name patent through a specialized form of litigation created by the Hatch-Waxman Act. Hatch-Waxman litigation incorporates distinctive rules that allow a generic manufacturer to lawfully reverse-engineer a brand-name drug while at the same time providing the brand-name manufacturer, or innovator, a period of exclusivity to recoup its investment.
In recent years, however, the availability of an alternative path to challenge patents, known as inter partes review (IPR), has threatened to upend the careful Hatch-Waxman balance. IPR, which was created primarily in response to the problem of patent trolling, is a faster, cheaper way to challenge patent validity than traditional litigation. Although IPR has proved enormously beneficial to the tech community, it has had the unintended consequence in the drug development space of enabling companies to put added litigation pressure on drug innovators above and beyond what Hatch-Waxman already provides and to bring a follow-on challenge to a drug patent even after losing in Hatch-Waxman litigation. These results have altered the playing field in ways that run counter to Hatch-Waxman’s intended purpose.
Summary of Amendment
Senator Hatch’s amendment, the Hatch-Waxman Integrity Act of 2018, would require a generic manufacturer wishing to challenge a brand-name drug patent to choose between Hatch-Waxman litigation, which affords certain advantages such as being able to rely on the drug innovator’s safety and efficacy studies for FDA approval, and IPR, which is cheaper and faster than Hatch-Waxman litigation but does not provide the advantages of a streamlined generic approval process. Senator Hatch’s amendment would preserve Hatch-Waxman as the standard path for generic manufacturers to challenge brand patents, while keeping IPR as an option where other interests come into play. It would not have any impact on the use of IPR by the tech community.