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REP. WAXMAN's PROPOSED SOLUTION TO PATENT CERTIFICATION ROADBLOCK WOULD TECHNICALLY ESTABLISH GENERIC FIRMS AS PATENT INFRINGERS TO ENSURE COURT REVIEW

Executive Summary

Rep. Waxman's latest patent certification proposal would technically establish generic firms as patent infringers from the point at which they formulate raw material into a finished dosage form with the intent to market a generic version of a brandname drug prior to patent expiration. The proposal is designed to allay PMA concerns from an earlier draft that legal challenges to pioneer drug patents will not be addressed by the courts. Under the new proposal, a generic firm who wants to challenge a patent must notify the mfr. of the branded product that it has developed a finished dosage form, and that it intends to market the drug. In doing so, the generic firm, according to the draft proposal, would be presenting the courts with a substantive question of patent infringement, making the issue "ripe" for judicial review. Waxman earlier proposed that the courts should enter the patent certification process when a generic mfr. purchases raw materials of the patented drug. However, PMA objected that a court might not consider the purchase of bulk drug material to a patent infringement suit brought by the patent holder, and would refuse to hear the case. PMA's concern stemmed from the provision in the draft that if a court ruling on the validity of a patent is not reached within a two year time period, a generic firm may go-ahead and market its product. The assn. feared that if the two-year time clock started running at the point of raw materials purchase by the generic firm, the deadline might expire and marketing of the me-too version would begin without a court review of the validity of the patent. PMA Exec Cmte. To Review Draft On May 31; Rep. Kastenmeier Sets Hearings For June 6 The new compromise starts the time clock when the generic company is closer to getting a product to market, lending greater urgency to patent holder legal appeals. An earlier draft proposal that a court's declaratory judgment is required before a generic challenger can market a patented product is replaced by the new provision. Under the new Waxman proposal, generic firms may market their products without legal authorization after the two-year period runs out. However, if a court subsequently rules that the patent is valid, the generic marketer would then be liable for patent infringement penalties. Waxman's staff has worked the compromise into draft language, and a clean bill incorporating all negotiated changes, plus a number of minor technical revisions, will be circulated the week of May 28. PMA has scheduled an exec cmte. meeting for May 31 to review the Waxman plan. The patent certification issue is reportedly the last remaining roadblock to PMA acceptance of the overall ANDA/patent restoration package. If PMA accepts the proposal, it may be introduced to the House as a substitute to HR 3605 -- Waxman's original post-1962 ANDA bill -- at a House Commerce/Health Subcmte. markup, which could be held the week of June 4. Rep. Kastenmeier's (D-Wisc.) House Judiciary/Courts Subcmte. has tightened the legislative deadline for the compromise by rescheduling to June 6 a hearing initially slated for June 13. The subcmte. will hear testimony on a patent restoration bill for agricultural chemicals. Reportedly, if the Waxman bill is not ready to be added to the June 6 hearing agenda, its chances of passing the House this session will be reduced.

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