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**RIN 0910-AC48; Docket No. 02N-0417**

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**COMMENTS**

**of**

**WASHINGTON LEGAL FOUNDATION**

**to the**

**FOOD AND DRUG ADMINISTRATION**

**DEPARTMENT OF HEALTH AND HUMAN SERVICES**

**Concerning**

**PATENT LISTING REQUIREMENTS AND**

**APPLICATION OF 30-MONTH STAYS ON APPROVAL**

**OF ABBREVIATED NEW DRUG APPLICATIONS**

**CERTIFYING THAT A PATENT CLAIMING A DRUG**

**IS INVALID OR WILL NOT BE INFRINGED**

Daniel J. Popeo

Richard A. Samp

Washington Legal Foundation

2009 Massachusetts Ave., NW

Washington, DC 20036

\(202\) 588-0302

December 23, 2002

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**Washington Legal Foundation**

**2009 Massachusetts Avenue**

**Washington, DC 20036**

**(202) 588-0302**

December 23, 2002

Dockets Management Branch (HFA-305)

Food and Drug Administration

5630 Fishers Lane

Room 1061

Rockville, MD 20852

**Re: Patent Listing Requirements and Application of 30-Month Stays on
Approval of Abbreviated New Drug Applications Certifying That a Patent
Claiming a Drug Is Invalid or Will Not be Infringed**

**[Docket No. 02N-0417; 67 Fed. Reg. 65448 (Oct. 24,
2002)]{.underline}**

The Washington Legal Foundation is filing these comments to offer its
qualified support to the Food and Drug Administration\'s (FDA) proposed
rule regarding the application of 30-month stays on approval of
Abbreviated New Drug Applications (ANDA). WLF agrees with FDA (and
conclusions reached by the Federal Trade Commission (FTC) in its July
2002 report entitled *Generic Drug Entry Prior to Patent Expiration: An
FTC Study*) that pioneer drug companies have on occasion improperly
delayed entry of generic competition by invoking existing regulations to
obtain multiple 30-month stays in the granting of ANDAs. WLF also agrees
with FDA that it possesses statutory authority to adopt a rule stating
that the 30-month stay may be invoked only once in connection with any
ANDA.

WLF nonetheless disagrees with portions of FDA\'s statutory analysis and
believes that FDA lacks authority to adopt proposed 21 C.F.R.
§ 314.95(a)(3). In particular, FDA has misread Section 505(j)(2)(B)(iii)
of the Federal Food, Drug, and Cosmetics Act (\"FDCA\"), 21 U.S.C. §
355(j)(2)(B)(iii); that section cannot not plausibly be read in the
manner proposed by FDA. Moreover, it makes little sense as a policy
matter to declare that only the first Paragraph IV certification filed
by an ANDA applicant can give rise to a 30-month stay. Rather, because a
principal purpose of the Hatch-Waxman Act was to encourage the
resolution of patent infringement disputes *before* a generic
manufacturer begins marketing its product, the law ought to be
interpreted as permitting a single 30-month stay, with that stay
commencing on the date on which the generic manufacturer provides the
required notice with regard to the Paragraph IV certification that
initially triggered the pioneer manufacturer\'s patent infringement
action. If a pioneer manufacturer decides not to file an infringement
action with respect to one patent for which a Paragraph IV certification
has been filed, it should not thereby forfeit its right to seek a
30-month stay with respect to later patents that are issued before the
ANDA is approved.

***Interests of WLF.*** WLF is a public interest law and policy center
headquartered in Washington, D.C., with supporters in all 50 states. WLF
devotes a substantial portion of its resources to defending and
promoting free enterprise, individual rights, and a limited and
accountable government. In particular, WLF has appeared in numerous
federal and state courts in cases raising issues related to health care
delivery. *See, e.g., Pharmaceutical Research and Manufacturers of
America v. Concannon,* 249 F.3d 66 (1^st^ Cir. 2001), *cert. granted*,
70 U.S.L.W. 3798 (U.S. June 28, 2002) (constitutionality of Maine
prescription drug price controls). WLF recently successfully challenged
the constitutionality of FDA restrictions on speech regarding off-label
uses of FDA-approved products. *Washington Legal Found. v. Friedman,* 13
F. Supp. 2d 51 (D.D.C. 1998), *appeal dism'd,* 202 F.3d 331 (D.C. Cir.
2000). WLF has participated in several lawsuits concerning the proper
interpretation of the balance struck by the Hatch-Waxman Act between the
competing interests of pioneer and generic pharmaceutical manufacturers.
*See, e.g., Mylan Pharmaceuticals, Inc. v. Thompson,* 268 F.3d 1323
(Fed. Cir. 2001); *Allergan, Inc. v. Alcon Laboratories, Inc.,* No.
02-1449 (Fed. Cir., dec. pending).

WLF believes that both pioneer and generic pharmaceutical manufacturers
play an important role in our health care system. WLF believes that if
advances in health care are to continue, it is vital that pioneer
companies that develop new drugs and medical devices be afforded a
substantial period of exclusivity, during which potential competitors
are not permitted to market the same product. That exclusivity period
provides an economic incentive for new product development by ensuring
that pharmaceutical companies that gamble the substantial sums necessary
for the development of new therapies will be able to reap substantial
rewards in those few instances in which their research and development
expenditures bear fruit. On the other hand, once an appropriate period
of exclusivity has expired, consumers are well served by government
policies that encourage other companies to market generic versions of
the new drug, thereby ensuring the competition necessary to produce
lower prices.

There is an inherent tension between these two goals -- rewarding
research and development while lowering the cost of drugs through
competition. Congress attempted to strike a balance between those
competing interests when, in 1984, it adopted the Hatch-Waxman Act. WLF
supports the balance struck by Congress. The competing interests of
pioneer and generic drug manufacturers inevitably result in litigation
over precisely when a pioneer manufacturer's exclusivity period should
end and when a generic manufacturer should be permitted to begin selling
copycat drugs. The Hatch-Waxman Act provides detailed rules regarding
how such disputes are to be resolved. As the agency charged with
enforcing many provisions of the Hatch-Waxman Act, FDA\'s interpretation
of the Act is entitled to substantial deference. Nonetheless, WLF
opposes any efforts by FDA to re-write the compromise worked out by
Congress. WLF believes that any such re-writing should be done by
Congress itself, not by FDA.

***Statutory Framework.*** Congress created the ANDA procedure as part
of its 1984 Drug Price Competition and Patent Term Restoration Act,
commonly referred to as the Hatch-Waxman Act. *See* Pub. L. 98-417, 98
Stat. 1585 (1984), codified at 21 U.S.C. § 355 and 35 U.S.C. §§ 156 and
271(e). The Hatch-Waxman Act is Congress's attempt to strike a balance
between the competing interests of pioneer and generic drug
manufacturers. The Act benefited generic manufacturers by creating the
ANDA procedure, which greatly streamlined the process by which generic
manufacturers can receive FDA approval to market generic copies of
pioneer drugs. 21 U.S.C. § 355(j). The Act benefited pioneer
manufacturers by granting patent-term extensions under certain
circumstances. 35 U.S.C. § 156.

The Act also set forth procedures for resolving patent disputes between
pioneer and generic manufacturers. Those procedures are set forth in
§ 505(j) of the FDCA, 21 U.S.C. § 355(j). The FDCA provides that FDA is
to maintain a list of FDA-approved drugs and to include on that list any
patent information respecting those drugs. 21 U.S.C. § 355(j)(7)(A).
That FDA list is generally referred to as the "Orange Book." If a
generic manufacturer seeks to market a generic version of an approved
drug for which a patent is claimed in the Orange Book, the manufacturer
must include in its ANDA a certification "that such patent is invalid or
will not be infringed by the manufacture, use, or sale of the new drug
for which the application is submitted." 21 U.S.C.
§ 355(j)(2)(A)(vii)(IV).[^1]

A generic manufacturer that makes a Paragraph IV Certification must
include in its ANDA a statement that it has provided notice of the
Certification both to the owner of the patent that is the subject of the
Certification and to the holder of the approved NDA for the drug in
question. 21 U.S.C. § 355(j)(2)(B)(i) and (ii). The Act further provides
that if an ANDA is amended \"to include\" a Paragraph IV Certification,
the notice required by §§ (B)(i) and B(ii) \"shall be given when the
amended application is submitted.\" 21 U.S.C. § 355(j)(2)(B)(iii).

An ANDA that includes a Paragraph IV certification and that is otherwise
proper must be approved immediately by FDA unless the patent holder
files an infringement action within 45 days of the date on which the
applicant notifies the patent holder that a Paragraph IV certification
has been filed. 21 U.S.C. § 355(j)(5)(B)(iii). If an infringement action
is filed within that 45-day period, then the FDCA provides:

> \[T\]he approval \[of the ANDA\] should be made effective upon the
> expir­ation of the thirty-month period beginning on the date of the
> receipt \[by the patent holder of notice of the Paragraph IV
> Certification\] or such shorter or longer period as the court may
> order because either party to the action failed to reasonably
> cooperate in expediting the action, except that --
>
> \(I\) if before the expiration of such period the court decides that
> such patent is invalid or not infringed, the approval should be made
> effec­tive on the date of the court decision.

*Id.* The FDCA further provides that the ANDA applicant may not file a
lawsuit for "a declaratory judgment with respect to the patent" until 45
days after the patent holder receives notice of the Paragraph IV
Certification. *Id.*

***FDA\'s Proposal.*** In its Federal Register notice, FDA expressed
concern over what it viewed as abuse of § 355(j)(5)\'s 30-month stay
provision by pioneer drug manufacturers. FDA noted that the number of
such stays per product has been increasing; while before 1998, \"patent
infringement litigation generated, at most, one 30-month stay per drug
product per ANDA,\" in recent years there have been many cases involving
multiple 30-month stays for products with substantial annual sales. 67
Fed. Reg. at 65455 (quoting FTC Report). The FDA stated that in many
cases, the stays were triggered by Orange Book filings that may well not
have met the criteria for Orange Book filing (and thus may well have
been filed solely for the purpose of triggering a 30-month stay). *Id.*

FDA\'s proposal concludes that the patent rights of pioneer
manufacturers can be fully protected if they are granted one Paragraph
IV Certification notice and one opportunity for a stay of up to 30
months (while patent infringement litigation is resolved), while at the
same time eliminating potential for abuse of the 30-month stay
provision. *Id.* at 65455-56. The proposal examines the language of the
Hatch-Waxman Act and its legislative history and concludes that a
regulation limiting pioneer drug manufacturers to a single 30-month stay
is consistent with both the Act\'s language and its legislative history.
*Id.* Accordingly, FDA proposes to amend its current regulations (which
provide for a 30-month stay each time a Paragraph IV Certification
triggers patent infringement litigation) to provide that the 30-month
stay can be triggered on only the first occasion that a generic
manufacturer files a Paragraph IV Certification.

In defense of its new interpretation of the Hatch-Waxman Act, FDA relies
primarily on § 355(j)(2)(B)(iii), which provides:

> If an \[ANDA\] is amended to include a certification described in
> subparagraph (A)((vii)(IV) \[*i.e.,* a Paragraph IV Certification\],
> the notice \[to the patent holder and the holder of the approved NDA\]
> required by clause (ii) shall be given when the amended application is
> submitted.

FDA interprets § (2)(B)(iii) as requiring notification on only the first
occasion on which an ANDA is amended to include a Paragraph IV
Certification. FDA concludes that because no notification is required
for subsequently-filed Paragraph IV Certifications and because the
30-month stay provision can only be triggered by a suit filed in
response to such a notification, suits filed in response to any
Certification filed by a generic drug company after its initial
Paragraph IV certification cannot give rise to a 30-month stay.

***FDA\'s Interpretation of § (2)(B)(iii) Is Implausible.*** WLF agrees
with FDA that on some occasions, pioneer manufacturers have misused the
30-month stay provision, with the result that the onset of generic
competition has been delayed unnecessarily. WLF further agrees with FDA
that it has a plausible basis for interpreting the Hatch-Waxman Act as
limiting pioneer manufacturers to a single 30-month stay. However, WLF
believes that FDA\'s reliance on § 355(j)(2)(B)(iii) as the primary
basis for its conclusion is wholly implausible. Furthermore, the result
of FDA\'s reliance on § (2)(B)(iii) is to hamstring pioneer
manufacturers in a manner never intended by Congress. WLF respectfully
suggests that FDA can adopt regulations that limit pioneer manufacturers
to a single 30-month stay but in a manner that does not (as does FDA\'s
proposal) significantly erode pioneer manufacturers\' patent rights.

WLF agrees with FDA that the Hatch-Waxman Act\'s legislative history
indicates that Congress contemplated that no more than one 30-month stay
would be granted in connection with patent infringement litigation filed
in response to a Paragraph IV Certification. That intent is reflected in
the language of 21 U.S.C. § 355(j)(5)(B)(iii). That section states that
FDA approval of an ANDA containing a Paragraph IV Certification shall be
made effective immediately unless \"an\" action is brought for patent
infringement within 45 days, in which case approval shall be effective
no later than the expiration date of \"the\" 30-months period following
receipt of \"the\" notice of the Certification provided by the ANDA
applicant pursuant to § 355(j)(2)((B)(i). WLF respectfully suggests that
Congress\'s use of the singular on three occasions (\"an\" action,
\"the\" period, and \"the\" notice) indicates that § 355(j)(5)(B)(iii)
was intended to allow no more than one 30-month stay in connection with
a single ANDA. Even if that is not the only permissible interpretation,
it is certainly a plausible one. Congress clearly had only one patent
infringement lawsuit in mind, and its reference to \"the\" notice that
marks the commencement of \"the\" 30-month stay can logically be equated
with the notice that initially triggered the patent infringement
litigation \-- even if the pioneer manufacturer receives additional §
(2)(B)(i) notices after suit has been filed.

However, rather than relying on § (5)(B)(iii) for its conclusion that
only a single 30-month stay is permissible, the FDA proposal seeks to
rely on § (2)(B)(iii). That section requires that notice be provided to
the patent holder and the holder of an approved NDA whenever an ANDA is
\"amended to include a\" Paragraph IV Certification. FDA proposes to
interpret the phrase \"amended to include a\" as encompassing an ANDA
amendment *only* if the Certification attached to the amendment is the
*first* Certification attached to the ANDA. 67 Fed. Reg. at 65455. That
simply is not a plausible interpretation of the phrase. The word
\"include\" means \"to take in or comprise as a part of a larger
aggregate or principle.\" *Webster\'s New Collegiate Dictionary* (G. &
C. Merriam Co. 1981). Whenever an ANDA is amended to attach a Paragraph
IV Certification, the new Certification has been \"included\" in the
ANDA (*i.e.,* it is thereafter \"a part of\" the ANDA) regardless
whether it is the first such Certification.[^2] So long as a second or
subsequent Certification is not identical to any prior Certification, it
adds to the ANDA and thus has been \"include\[d\]\" within the meaning
of § 355(j)(2)(B)(iii). Whenever such a Certifi­cation is \"included\" in
an ANDA amendment, the § 355(j)(2)(B)(i) and (ii) notification
requirement is triggered.[^3]

FDA\'s effort to rely on § 355(j)(2)(B)(iii), rather than (as WLF\'s
proposes) relying on § 355(j)(5)(B)(iii), is of significant practical
importance. Under WLF\'s interpretation, a pioneer manufacturer may
invoke the 30-month stay only once, but it may do so in connection with
the patent of its choice. Under FDA\'s proposal, only the patent cited
in the first Paragraph IV Certification can trigger a 30-month stay, and
will do so *only* if the patent holder chooses to initiate patent
infringement litigation within 45 of the date of notification. Such a
rule can be of considerable hardship to the pioneer manufacturer. There
is no reason to force an NDA or patent holder to use its single 30-month
stay to litigate narrow patents when more protective patents are likely
to issue before the ANDA is approved. This situation is likely to arise
with some frequency. For example, where an ANDA is filed during an
exclusivity period (whether granted by patent or due to approval of an
NDA), it may include Paragraph IV Certification(s) filed with respect to
patents that the NDA holder was *required* to list in the Orange Book
but that may, in fact, not cover a particular formulation of the generic
drug product. Under this scenario, the NDA holder is unable to bring an
infringement action in good faith, and so no 30-month stay takes effect.
If a patent covering the broader formulation proposed by the generic
manufacturer is later issued, the manufacturer would be required to
amend its ANDA to include an additional Paragraph IV Certification, but
the pioneer manufacturer would be forced (under FDA\'s proposal) to
conduct any subsequent patent infringement litigation without the
protection of the 30-month stay. Moreover, because delisting of patents
is not an option for patents whose listing in the Orange Book is
required by statute, FDA\'s proposed rule unfairly penalizes pioneer
manufacturers, who have little or no control over either their Orange
Book listings or the timing of patent issuance by the U.S. Patent and
Trademark Office.

Finally, in establishing an elaborate set of procedural rules for
resolving patent disputes between pioneer and generic manufacturers, the
Hatch-Waxman Act unequivocally expressed Congress\'s desire for speedy
and inexpensive resolution of such disputes; FDA\'s proposed rule would
undercut that goal. To ensure speedy resolution, Congress provided that
patentees have only 45 days to bring an infringement suit if they wish
to challenge a generic company\'s Paragraph IV Certification and take
advantage of the 30-month stay. 21 U.S.C. § 355(j)(5)(B)(iii). Delays in
issuance of an ANDA caused by the pendency of such suits are limited to
a maximum of 30 months (and can be shortened significantly by court
order). *Id.* Also, Congress explicitly limited the damage awards that
can be awarded to patentee in such suits. 35 U.S.C. § 271(e)(4)(A).

Contrary to Congress\'s intent, FDA\'s proposed rule guarantees that
many patent disputes will be resolved only after an ANDA has been
approved and marketing of the generic drug has begun. Because FDA\'s
proposal denies them the right to seek a 30-month stay in many
instances, pioneer manufacturers will have little incentive to file suit
within 45 days of their receipt of notification of the Paragraph IV
Certification. Courts hearing the patent disputes will have far less
incentive to expedite consideration of those disputes in comparison to
other actions pending before them. Because of the huge potential damages
created in any patent dispute involving the marketing of a generic
version of a drug,[^4] the parties will have much more difficulty
arriving at an amicable settlement once generic marketing has begun. WLF
submits that this scenario is the precise opposite of the one envisioned
by Congress when it adopted the Hatch-Waxman Act.

***Conclusion.*** WLF applauds FDA for taking steps to end abuses of the
30-month stay provision by some pioneer manufacturers. However, FDA\'s
proposed solution does not comply with the Hatch-Waxman Act and would
have severe negative consequences. WLF proposes that the rule be amended
to make clear that whenever a pioneer manufacturer first files a patent
infringement suit in response to a Paragraph IV Certification and does
so within 45 days of notification, the 30-month stay on issuance of the
ANDA begins to run from the date on which the manufacturer received
notice of the Certification giving rise to the initial filing of the
suit.

Respectfully submitted,

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Daniel J. Popeo

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Richard A. Samp

WASHINGTON LEGAL FOUNDATION

2009 Massachusetts Ave., NW

Washington, DC 20036

\(202\) 588-0302 (voice)

\(202\) 588-0386 (fax)

rsamp@wlf.org

Dated: December 23, 2002

[^1]: Such a certification is often referred to as a "Paragraph IV
    Certification."

[^2]: FDA states, \"\[I\]f the ANDA contained a paragraph IV
    certification, then any ANDA amendment containing a paragraph IV
    certification does not amend the ANDA to \'include\' a paragraph IV
    certification because the ANDA already contained a paragraph IV
    certification.\" *Id.* That statement is nonsense. As noted above,
    the word \"include\" does not mean (as FDA suggests it means) \"add
    an item that is the first of its kind.\"

[^3]: FDA\'s contrary interpretation is also inconsistent with and
    undermines Congress\'s expressed desire that patent holders be given
    the first crack at determining the timing and venue of patent
    infringement litigation. *See* 21 U.S.C. § 355(j)(5)(B)(iii) (patent
    holder has the exclusive right to file patent infringement
    llitigation during the first 45 days following submission of a
    Paragraph IV Certification).

[^4]: Generic drugs are generally sold at a small fraction of the price
    previously offered by a pioneer manufacturer with market
    exclusivity. Thus, the profits derived by a generic manufacturer
    from its sale of a generic alternative product will be dwarfed by
    the profits lost by the pioneer manufacturer. Accordingly, a damage
    award issued in a pharmaceutical patent infringement case would
    likely drive a generic manufacturer into bankruptcy, and thus most
    likely would never be collected by a pioneer manufacturer.