resolving hatch-waxman issues

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Post on 09-Apr-2017




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By:Kirby Drake

Hatch-Waxman ActDrug Price Competition and Patent Term Restoration Act of 1984Easier for generic manufacturer to enter market by permitting it to file an Abbreviated New Drug Application (ANDA)ANDA must show that generic version is bioequivalent to approved drug May include Paragraph IV certification

Hatch-Waxman ActIncentive to generic manufacturer to be first to file ANDA with Paragraph IV certification: 180-day period of marketing exclusivity with respect to other generic manufacturersNo provisions in original version of Act for review of settlements of Paragraph IV patent litigation

Bayer-Barr Cipro LitigationBayer patent relates to active ingredient in Cipro - ciprofloxacin hydrochlorideBayer patent issued in 1987 Bayer received approval from FDA to market Cipro in October 1987

Bayer-Barr Cipro Litigation1991:Barr applied to FDA to bring generic to market claiming Bayer patent related to Cipro was invalid and unenforceable1992:Bayer sued Barr for patent infringement1997:Bayer started paying Barr in exchange for agreement not to manufacture generic Cipro

Bayer-Barr Cipro SettlementBayer-Barr settlement termsBayer agreed to pay approximately $49.1M to Barr (initial payment)Barr converted Paragraph IV certification to Paragraph III certificationBarr agreed not to challenge validity or enforceability of Bayer patentBarr could sell a competing product beginning 6 months before the expiration of Bayer patent

Follow-On Cipro Patent LitigationBayer filed for reexamination of its patent and validity of claims affirmed by PTOBayer defended its patent against 4 other generic challengersTwo on summary judgment (Schein, Mylan)One after trial (Carlsbad)One after generic company withdrew its Paragraph IV certification (Ranbaxy)Validity and enforceability of the Bayer patent upheld in lawsuits

Cipro Antitrust LitigationLawsuits filed in 2000 and 2001 by private plaintiffs to challenge Bayer-Barr settlementVarious lawsuits consolidated in federal court in New York

Cipro Antitrust LitigationPolicy bases for antitrust lawsuit:Prop-up drug price at expense of consumers and health insurance companiesBlocking access to adequate suppliers and cheaper, generic versions of CiproGeneric manufacturers forced to abandon efforts to bring generic Cipro to marketManipulation of price and supply of drug

Cipro Antitrust LitigationArgued violations of Sections 1 and 2 of the Sherman Act and violations of state antitrust and consumer protection lawsSummary judgment granted no antitrust violationsRelevant market is CiproBayer had the market powerSettlement was in exclusionary zone of the Bayer patent

Cipro Antitrust LitigationNY court assessed rulings in Hytrin and Cardizem litigation where courts applied per se analysis and found settlement agreements illegal

Hytrin LitigationAbbott settled patent litigation with Geneva and Zenith GoldlineAgreement was interim agreement and did not finally resolve patent issuesSettlement agreement found per se unlawful

Cardizem LitigationInterim settlement of patent litigation between HMRI and Andrx Settlement agreement found to be per se unlawful - reduces competition in market

Cipro Antitrust LitigationFound Cipro settlement distinguishable from settlements in Hytrin and Cardizem litigationAgreements did not finally dispose of litigationAgreements potentially blocked competition from non-infringing products

Cipro Antitrust Litigation Federal CircuitArguments on appeal to Federal CircuitAgreement was per se unlawfulAgreement did not fall within exclusionary zone of the Bayer patentFailure to consider law of the regional circuitsFailure to appreciate effects of agreement on other generic manufacturersFailure to consider that agreements may preserve Barrs claim to 180-day exclusivity period

Cipro Antitrust Litigation Federal CircuitNY court properly applied rule of reason analysisDetermined relevant marketFound that Bayer had market power within marketNo bottleneck on challenges to patent or restraint on competition outside zone of exclusion of patentReverse payment within zone of exclusion is not illegal

Cipro Antitrust Litigation Federal CircuitPatents are naturally anticompetitiveBayer-Barr agreement within rights of patent holder

The essence of the agreements was to exclude the defendants from profiting from the patented invention. This is well within Bayers right as the patentee. Judge Prost

Cipro Antitrust Litigation Federal CircuitNot problematic that Barr agreed not to challenge patentTypical provision in settlement of patent cases Settlement did not prevent others from challenging patentSettlements favored even when anticompetitive

Cipro Antitrust Litigation Federal CircuitNo antitrust violation by settlement if:Patent holder makes payments to generic manufacturer who filed ANDA with Paragraph IV certificationGeneric manufacturer agrees not to market its product until expiration of the patentPatent lawsuit dismissed and generic manufacturer agrees not to challenge the validity or enforceability of the patent

Cipro Antitrust Litigation Federal CircuitMust prove that patent litigation was objectively and subjectively baselessDid not find Bayer enforced patent without reasonable basis

Changing Times Since CiproHatch-Waxman Act now includes forfeiture events that may eliminate the first filers 180-day period of exclusivitySettlement agreements must now be filed with the FTC and the DOJ for review

Congressional ActionS.369 Preserve Access to Affordable Generics ActAdds new section to Clayton Act Generic manufacturer who violates would forfeit 180-day period of exclusivityProhibit reverse payments

Congressional ActionH.R. 1902 Protecting Consumer Access to Generic Drugs Act of 2007Includes same or similar prohibited conduct as in recently proposed Senate actDid not specifically propose to amend Clayton Act

Resolving Hatch-Waxman IssuesConflict in the courtsConflict between courts and Congress and/or private consumersConflict between importance of patents in the pharma sector and suggestion that pharma companies do not have right to protect their patents


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