Hatch’s Swan Song: A Bill to Block Generic Companies’ IPR Filings
Retiring Sen. Orrin Hatch (R-UT) and two Republican colleagues in the House and Senate proposed a bill earlier this week to prevent generic drug applicants from taking advantage of the inter partes review (IPR) created under the America Invents Act.The bill, known as the Hatch-Waxman Integrity Act of 2018, would require a generic manufacturer wishing to challenge a brand-name drug patent to choose between the Hatch-Waxman legal framework and the IPR.
Generic drugmakers have embraced the IPR and successfully challenged patents about 50% of the time, according to a recent study published in Applied Health Economics and Health Policy.
First author Jonathan Darrow told Focus: “Generic firms can use IPR as a strategy device: Many IPRs are filed after generic firms have already been sued in court. The IPR filing can create a ‘second front’ that puts additional pressure on the brand name drug company to come to the settlement table,” he said. “The legal standards in the patent office are also more challenger-favorable compared to the standards applied by a court.”
The authors of the bill, meanwhile, called the IPR “cheaper and faster than Hatch-Waxman litigation but does not provide the advantages of a streamlined generic approval process.” The bill would apply similarly to patents on biologics and impact biosimilars.
“Even though Congress did not intend to upset its drug/biologic-specific Hatch-Waxman and BPCIA [Biologics Price Competition and Innovation Act] procedures with the enactment of the IPR and PGR [post-grant review] processes, generic drug and biosimiliars manufacturers have increasingly used the IPR process to circumvent the Hatch-Waxman Act and BPCIA patent challenge processes while nonetheless taking advantage of their abbreviated processes for drug entry,” a summary of the bill says. “Moreover, hedge funds with no interest in manufacturing or marketing drugs have filed IPR challenges against drug patents with the goal of profiting from stock market declines triggered by the IPR filings—a type of market manipulation.”
One section of the bill is intended to address this practice by hedge funds and similar entities.
Hatch-Waxman Integrity Act of 2018 Summary