Senate Generic Drug Bill Would Allow Challenges To Orange Book Listings

The amended version of the McCain/Schumer generic drug legislation would allow generic companies to sue patent holders for not providing correct and complete information about Orange Book listings.

An amendment to the "Greater Access to Affordable Pharmaceuticals Act" (S 812), sponsored by Sens. John Edwards (D-N.C.) and Susan Collins (R-Maine), would allow a generic applicant to "bring a civil action" against the brand company to "correct...or delete" patent information submitted to FDA.

A generic company could seek deletion of the listing if "the patent does not claim the drug for which the application was approved; or the patent does not claim an approved method of using the drug."

A brand company that does not correctly provide the required patent information or has it deleted in litigation would lose its right to sue for infringement of the patent.

The Senate Health Committee approved the Edwards/Collins amendment by voice vote and reported S 812 out of committee on July 11.

The 16-5 vote reflected broad bipartisan consensus. Republican Sens. Tim Hutchinson (Ark.), John Warner (Va.), Pat Roberts (Kan.) and Jeff Sessions (Ala.) joined Collins in supporting the bill. Independent Sen. Jim Jeffords (Vt.) and the 10 Democrats on the panel also voted in favor of the legislation.

Senate Majority Leader Tom Daschle (D-S.D.) intends to use the generic bill to kick off two weeks of debate over pharmaceutical issues beginning July 15.

The Health Committee's vote indicates there is a fair chance for passage of S 812 as a stand-alone measure in the Senate. Committee Chairman Ted Kennedy (D-Mass.) noted after the markup that all Republicans who voted for the bill are up for re-election in 2002.

The Edwards/Collins amendment also would establish new standards for Orange Book patent listings.

Sponsors would be directed to provide the patent number and expiration date; the identity of the patent owner; "whether the patent claims a method of use and whether the claim covers a drug substance, a drug formulation, a drug composition or a method of use"; and a declaration the applicant has provided "complete and accurate patent information" under the requirements. If the patent claims a method of use, the firm must provide "the approved use covered by the claim."

The amendment additionally would require sponsors to update currently listed patents within 30 days of enactment to comply with the new standards.

To balance the new patent listing requirements, the amended bill includes a new provision that would require that Paragraph IV certifications outline the basis for a patent challenge. In a section entitled, "Fair Treatment for Innovators," the bill directs generic applicants to provide "a detailed statement of the factual and legal basis of the applicant's opinion...the patent is not valid or is not otherwise infringed."

The generic sponsor also "shall include...a description of the applicant's proposed drug substance, drug formulation, drug composition or method of use."

"Nothing in this subparagraph precludes the applicant from amending the factual or legal basis on which the applicant relies in patent litigation," the bill notes.

The Edwards/Collins amendment limits the 30-month stay of approval provisions in Hatch/Waxman to patents listed at the time of NDA approval.

While McCain/Schumer would have eliminated 30-month stays entirely, Edwards/Collins allows innovators only one 30-month stay per generic application and only on patents filed within 30 days of the original NDA approval. Sponsors still could submit subsequent patents for Orange Book listing, provided they are submitted within 30 days of the issuance of the patent.

Rather than a 30-month stay for late-listed patents, Edwards/Collins would rely on the notification system and give patent holders 45 days to seek an injunction to block the generic approval.

In a nod to the concerns of brand name manufacturers, the bill specifically directs that "a court shall not regard the extent of the ability of an applicant to pay monetary damages as a whole or partial basis on which to deny a preliminary or permanent injunction under this clause."

When McCain/Schumer was first introduced, the Pharmaceutical Research & Manufacturers of America defended 30-month stays, claiming "preliminary injunctions are rarely granted in patent infringement suits because courts view money damages as an adequate remedy" and small generic companies may "be unable to pay the court judgment."

Much of the discussion during mark-up focused on the sections authorizing generic companies to challenge Orange Book listings, as well as the process for defending late-listed patents.

A separate amendment sponsored by Collins clarified that the new cause of action allowing generic companies to challenge Orange Book listings would not apply to late-listed patents.

Edwards/Collins also would require a patent holder to sue a generic company who files a Paragraph IV certification within 45 days or surrender entirely the right to sue over that application.

The language may be revised before the bill reaches the floor; Kennedy urged staff members to clarify whether the loss of the right to sue would apply only to the particular generic application in question or to all future generics as well.

Ranking Minority Member Judd Gregg (R-N.H.) and Sen. Bill Frist (R-Tenn.), however, expressed concerns about the litigation provisions. Gregg called it a bill "for the trial lawyers," arguing that brand companies would be forced to sue quickly or essentially lose their patent rights. PhRMA emphasized that line of attack in its response to the bill as well.

Another provision in Edwards/Collins would modify the "rolling" 180-day exclusivity language set out by McCain/Schumer.

Under Edwards/Collins, in cases where the first generic company to file an ANDA with Paragraph IV certification forfeited its exclusivity, it would be awarded to the next approved applicant only if it were also the second to file a Paragraph IV certification.

If the next applicant in the approval queue were not the second-to-file or if the second-to-file forfeited its exclusivity, however, all generics with an approved application could go to market immediately.

McCain/Schumer would have allowed the six months awarded to the first-to-file to continue to roll over indefinitely until it was used by an eligible applicant. Under current Hatch/Waxman law, the exclusivity is used by the first-to-file or lost completely.