C&EN: TODAY'S HEADLINES - Senate Votes To Close Patent Loopholes

BETTE HILEMAN

On July 29, the Federal Trade Commission called on Congress to close loopholes in patent law that it says unduly delay the sale of low-cost generic drugs. The next day, the Senate responded by passing, 78 to 21, a bill, S. 812, that follows FTC’s major recommendations contained in a new report.

According to the report, several provisions in the 1984 drug patent law known as the Hatch-Waxman Act have been exploited by drug companies with brand-name products to slow the marketing of generic drugs.

Under Hatch-Waxman, a generic drug cannot be marketed if the brand-name manufacturer files a new patent on the drug it is already selling. If the generic drugmaker then attempts to market that drug, it can be sued by the brand-name manufacturer. Such a suit automatically triggers a 30-month hold on the generic’s approval. By filing multiple new patents, the manufacturer can trigger several successive delays. According to FTC, marketing of eight generic drugs has been delayed in this way since 1992.

S. 812, which was introduced by Sens. Charles E. Schumer (D-N.Y.) and John McCain (R-Ariz.), allows only one 30-month stay per drug.

Hatch-Waxman also allows brand-name drug companies to reach secret out-of-court settlements of patent litigation with generic drug firms under which the generic drug firm is sometimes paid to delay sale of a drug.

S. 812 would require such settlements to be filed with FTC to safeguard competition.
Brand-name drug firms and the Biotechnology Industry Organization are fiercely opposed to S. 812, while health insurance companies and generic drug firms strongly favor it. BIO President Carl B. Feldbaum says,

“S. 812 would topple the delicate balance within the prescription drug patent system, which ... has helped speed the approval of generic drugs while maintaining market incentives for innovators.”