FEDERAL TRADE COMMISSION | 1.877.FTC.HELP | FOR THE CONSUMER | WWW.FTC.GOV
Federal Trade Commission

TIMOTHY J. MURIS Chairman

SHEILA F. ANTHONY Commissioner

MOZELLE W. THOMPSON Commissioner

ORSON SWINDLE Commissioner

THOMAS B. LEARY Commissioner

Joseph J. Simons Director, Bureau of Competition

J. Howard Beales, III Director, Bureau of Consumer Protection

David T. Scheffman Director, Bureau of Economics

William E. Kovacic General Counsel

Rosemarie Straight Executive Director

Report Contributors:

Susan DeSanti, Deputy General Counsel for Policy Studies

Michael Wroblewski, Assistant General Counsel for Policy Studies

Matthew Bye, Office of General Counsel for Policy Studies

Suzanne Michel, Bureau of Competition 

Christina Sarris, Bureau of Competition

Joel Schrag, Bureau of Economics

Natalie Rosenfelt, Bureau of Competition

Nicole Gorham, Bureau of Competition

Paula Katz, Bureau of Competition

Dorice Yoo, Bureau of Competition

Inquiries concerning this report should be directed to:

Michael Wroblewski, Office of General Counsel, Policy Studies ((202) 326-2155 or

mwroblewski@ftc.gov)

Acknowledgments:

FTC Staff is grateful for the contributions of the FDA in preparing this Report. 
GENERIC DRUG ENTRY

PRIOR TO PATENT EXPIRATION:

AN FTC STUDY

Executive Summary and Legislative Recommendations

Pharmaceutical drug products have

become increasingly important to providing

consumers with a myriad of treatments and

cures that increase life expectancy and

enhance lives. It is critical to maintain

appropriate incentives for the development

of new drug products, because the necessary

research and development is risky and

costly. Innovation in the pharmaceutical

industry, spurred in part by competitive

market forces, continues to bring enormous

benefits to Americans. 

At the same time, expenditures on

pharmaceutical products continue to grow

and often outpace expenditures for other

consumer products. Pharmaceutical

expenditures concern not only consumers,

but government payers, private health plans,

and employers as well. Generic drugs offer

opportunities for significant cost savings

over brand-name drug products.

The Hatch-Waxman Amendments to

the Federal Food, Drug, and Cosmetic Act

have shaped substantially the current legal

environment governing Food and Drug

Administration (FDA) approval of generic

drug products. Hatch-Waxman established a

regulatory framework that sought to balance

incentives for continued innovation by

research-based pharmaceutical companies

and opportunities for market entry by

generic drug manufacturers. The

Amendments compensate brand-name

companies, in certain circumstances, for a

lengthy drug approval process, which can

shorten the effective life of patent protection

for drug products. The Amendments also

streamline the procedures for bringing

generic drug products to the market.

Beyond any doubt, Hatch-Waxman

has increased generic drug entry. Generic

drugs now comprise more than 47 percent of

the prescriptions filled for pharmaceutical

products – up from 19 percent in 1984, when

Hatch-Waxman was enacted.

In spite of this record of success, two

of the provisions governing generic drug

approval prior to patent expiration (the 180-

day exclusivity and the 30-month stay

provisions) are susceptible to strategies that,

in some cases, may have prevented the

availability of more generic drugs. These

provisions continue to have the potential for

abuse. 

The Commission has taken antitrust

law enforcement actions against certain

brand-name and generic drug companies

whose allegedly anticompetitive agreements

took advantage of one or the other of these

provisions. Through vigorous enforcement

of the antitrust laws, the FTC has taken an

active role in ensuring that consumers

benefit from competition in the

pharmaceutical industry.

 This study examines whether the

conduct that the FTC challenged represented

isolated instances or is more typical, and

whether the 180-day exclusivity and the 30-

month stay provisions of the Hatch-Waxman

Amendments are susceptible to strategies to
ii

delay or deter consumer access to generic

alternatives to brand-name drug products.

The study focuses solely on the procedures

used to facilitate generic drug market entry

prior to expiration of the patent(s) that

protect the brand-name drug product. The

study does not address other procedures for

generic entry, and it does not address the

patent restoration features of HatchWaxman.

To accomplish the study, the

Commission subpoenaed documents and

information from brand-name and generic

drug manufacturers, and examined instances

since 1992 in which generic applicants filed

an application with FDA seeking to enter the

market with a generic version of a drug

product prior to expiration of the brandname drug products’ patents.1

 An increasing

number of generic applicants have sought

entry prior to patent expiration. During the

1980s, only 2 percent of generic applications

sought entry this way, but from 1998 to

2000, approximately 20 percent of the

generic applications sought entry prior to

patent expiration. 

The brand-name drug products

included in the study represent some of the

largest drug products as measured by annual

sales. They include “blockbuster” drugs2

such as Capoten, Cardizem CD, Cipro,

Claritin, Lupron, Neurontin, Paxil, Pepcid,

Pravachol, Prilosec, Procardia XL, Prozac,

Vasotec, Xanax, Zantac, Zocor, Zoloft, and

Zyprexa.

Based on the data obtained through

the study, we make two primary

recommendations concerning the 30-month

stay provision and the 180-day exclusivity to

mitigate the possibility of abuse that deters

more generic drugs from becoming

available.3

Recommendation 1: Permit only one

automatic 30-month stay per drug

product per ANDA to resolve

infringement disputes over patents

listed in the Orange Book prior to the

filing date of the generic applicant’s

ANDA.

The Current 30-Month Stay Provision: A

30-month stay of FDA approval of a generic

applicant4 is invoked if a brand-name

company receives notice of a generic

applicant’s paragraph IV certification and

files suit for patent infringement within 45

days of that notice. Filing of the lawsuit

stays FDA’s approval of the ANDA until the

earliest of: (1) the date the patents expire;

(2) a determination of non-infringement or

patent invalidity by a court in the patent

litigation; or (3) the expiration of 30 months

from the receipt of notice of the paragraph

IV certification.

1

 These applications are technically referred to as

Abbreviated New Drug Applications (ANDAs) containing

a paragraph IV certification. 

2

 As used herein, “blockbuster” is defined as a

drug product that appears in the top 20 drug products (as

ranked publicly by annual gross sales) during one of the

years covered by this study.

3

 The study did not provide data on whether, or

how, the suggested recommendations might affect brandname companies’ and generic applicant’s incentives to

enter the market with new brand-name or generic drug

products.

4

 For ease of discussion purposes, the term

“generic applicant” means those applicants who have filed

an ANDA containing a paragraph IV certification. See

Appendix A for a glossary of frequently used terms.
iii

Key Facts From the Study:

To What Extent Does 30 Months

Approximate the Time Typically Required

for FDA Review of a Generic’s ANDA or

for Resolution of the Contemplated Patent

Infringement Litigation?

Thirty months historically has

approximated the time required for FDA

review and approval of the paragraph IV

ANDAs of generic applicants that were not

sued, and for district and appellate court

resolutions of ANDA-related patent

infringement litigation. On average, the

time required for FDA review and approval

was 25 months and 15 days from the

application filing date in those cases where

generic applicants filing a paragraph IV

certification were not sued (and thus could

begin commercial marketing once they had

FDA approval). On average, the time

between the filing of a patent infringement

lawsuit and a district court decision in the

case was 25 months and 13 days. On

average, the time between the filing of a

patent infringement lawsuit and a court of

appeals decision in the case was 37 months

and 20 days.

In the future, patent infringement

litigation brought by brand-name companies

against generic applicants that have filed

ANDAs with paragraph IV certifications

may take longer to resolve. The data suggest

that cases involving multiple patents take

longer than those involving fewer patents. 

As of June 1, 2002, for 6 out of the 7 cases

that have been pending for more than 30

months before a decision from a district

court, the brand-name company has alleged

infringement of 3 or more patents. 

Prior to 1998, for only 1 out of the 9

“blockbuster” drug products in which the

brand-name company sued the first generic

applicant did the brand-name company

allege infringement of 3 patents. Since

1998, for 5 of the 8 “blockbuster” drug

products where the brand-name company

filed suit against the first generic applicant,

the brand-name company alleged

infringement of 3 or more patents. Thus,

future 30-month stays may expire more

frequently before the parties obtain a

decision of a court in the patent infringement

litigation. 

Has the Study Identified Any

Circumstances That Can Prevent FDA

Approval of Generic ANDAs Beyond 30

Months?

Yes. If a brand-name company lists

an additional patent in the Orange Book

after the generic applicant has filed its

ANDA, more than one 30-month stay may

be generated. The generic applicant is

required to re-certify to this later-listed

patent, and if, upon notice of the generic’s

re-certification, the brand-name company

sues within 45 days, then FDA approval of

the generic’s previously filed ANDA is

stayed for an additional 30-months from the

notice date or until a court decision in the

newly instituted patent litigation. 

From 1992 through 2000, brandname companies have listed patents in the

Orange Book after an ANDA has been filed

for the drug product in 8 instances; 6 of

these 8 instances occurred since 1998. For

the 8 drug products, the additional delay of

FDA approval caused by the additional 30-

month stay (beyond the first 30-month stay)

ranged from 4 to 40 months. In all 4 of the
iv

cases so far with a court decision on the

validity or infringement of a later-issued

patent, the patent has been found either

invalid or not infringed by the ANDA. 

 Arguments exist that the later-issued

patents, which have provided the basis for

additional 30-month stays, do not meet

FDA’s requirements for listing patents in the

Orange Book. (These arguments are

discussed in detail in Appendix H to the

Report.) Under current court rulings and

FDA procedures, however, it is very difficult

for generic applicants to test these

arguments. Recent court opinions have held

that Hatch-Waxman does not provide a

private right of action through which generic

applicants may challenge a patent listing in

the Orange Book. The FDA has stated that

it lacks the resources and the expertise to

review patents to determine whether they are

properly listed.

Reasons for the Recommendation:

One 30-month period historically has

approximated the time necessary for FDA

review and approval of the generic’s ANDA. 

Thus, it does not appear that the 30-month

stay provision, as applied once to each

ANDA for patents listed in the Orange Book

prior to the ANDA’s filing date, has a

significant potential to delay generic entry

beyond the time already necessary for FDA

approval of the generic’s ANDA. The data

also do not indicate that court decisions in

ANDA-related patent litigation typically are

reached much earlier than 30 months from

notice of the generic’s ANDA.

The expiration of the 30-month stay

may have more significance in the future, if

ANDA-related patent litigation begins to last

longer than was the case from 1992-2000. 

Generic applicants may rely on expiration of

the 30-month stay more frequently as the

first point at which they may decide whether

to enter the market, rather than to wait for a

court decision on ANDA-related patent

litigation that may take longer than 30

months. 

The history thus far of multiple 30-

month stays caused by the filing of laterissued patents appears problematic,

however. The 4 courts that have ruled so far

on the patents causing more than one 30-

month stay each have found the relevant

patent to be invalid or not infringed. The

other 4 drug products with multiple 30-

month stays involved patents whose listing

in the Orange Book could have been the

subject of non-frivolous challenges by the

generic applicant, had either FDA review of

listability or a private right of action to

challenge listability under Hatch-Waxman

been available.

Multiple 30-month stays prevented

FDA approval of the generic applicants’

ANDAs for 4 to 40 months beyond the

initial 30-month period. FDA approval may

have occurred more quickly in the absence

of the multiple 30-month stays, because the

data indicate that FDA approval has

occurred, on average, within 25 months and

15 days for generic applicants with

paragraph IV certifications that were not

sued.

Even without an additional 30-month

stay, later-listed patents still receive the

usual protections of patent infringement

litigation. The brand-name company may

sue for patent infringement with respect to

any of its patents that it believes may be
v

infringed by a generic applicant’s ANDA,

and may seek a preliminary injunction, just

as other patent holders do against alleged

infringers.5

One minor change to the patent

statute, which would clarify when brandname companies can sue generic applicants

for patent infringement, would ensure that

brand-name companies have recourse to the

courts to protect their rights under laterissued patents. Congress may wish to

overrule a recent district court decision,

Allergan, Inc. v. Alcon Labs, Inc., 200 F.

Supp. 2d 1219 (C.D. Cal. 2002), which

questions the rights of brand-name

companies to sue for patent infringement

regarding patents obtained or listed after an

ANDA with a paragraph IV has been filed. 

Under the plain language of 35 U.S.C.

§ 271(e)(2), however, all ANDAs constitute

acts of infringement sufficient to establish

the existence of a case or controversy with

respect to all patents that claim any drug or

any method of using the drug that may be

infringed by generic marketing under an

ANDA – regardless of whether the patent

has been listed in the Orange Book or has

been the subject of a paragraph IV ANDA

(as opposed to a different kind of ANDA). 

To permit only one 30-month stay

per drug product per ANDA6

 should

eliminate most of the potential for improper

Orange Book listings to generate 

unwarranted 30-month stays. However, it

should be noted that, currently, the FDA

does not review the propriety of patents

listed in the Orange Book, and courts have

ruled that generic applicants have no private

right of action to challenge those listings. 

As a result, there is no mechanism to delist

an improperly listed patent from the Orange

Book. The lack of such a mechanism may

have real world consequences in that the

Commission is aware of at least a few

instances in which a 30-month stay was

generated solely by a patent that raised

legitimate listability questions. 

There have been various suggestions

to address this situation, each with its own

pros and cons. One proposal has been to

establish an administrative procedure

through which generic applicants could

obtain substantive FDA review of listability. 

The FDA, however, has taken the position

that it lacks the expertise and resources

necessary to perform such a review, and its

solely ministerial review of Orange Book

listings has been upheld by the courts. At a

minimum, it appears useful for the FDA to

clarify its listing requirements (see

Appendix H).

Another remedy that may warrant

consideration would permit a generic

applicant to raise listability issues as a

counterclaim in the context of patent

infringement litigation already initiated by

the brand-name company in response to a

paragraph IV notice from the generic

applicant. This would permit resolution of

the issue in the same district court

proceeding in which other aspects of the

relevant patents were at issue. It remains

unclear how frequently such a provision

5

 Thus, the usual patent protections would remain

for brand-name companies whose patents may be listed in

the Orange Book after the filing of a generic applicant’s

ANDA solely because it took a long time for the Patent

Office to issue the patent.

6

 This would be applied only to resolve

infringement disputes over patents listed in the Orange

Book prior to the filing date of the generic applicant’s

ANDA.
vi

would be used. 

Recommendation 2: Pass legislation to

require brand-name companies and

first generic applicants to provide

copies of certain agreements to the

Federal Trade Commission. 

The Current 180-Day Marketing

Exclusivity Provision: The first generic

applicant to file an ANDA containing a

paragraph IV certification is awarded 180

days of marketing exclusivity, during which

the FDA may not approve a subsequent

generic applicant’s ANDA for the same drug

product. The 180-day exclusivity period is

calculated from either the date of the first

commercial marketing of the generic drug

product or the date of a court decision

declaring the patent invalid or not infringed,

whichever is sooner. Through this 180-day

provision, Hatch-Waxman provides an

incentive for companies to challenge patent

validity and to “design around” patents to

find alternative, non-infringing forms of

patented drugs. The 180-day marketing

exclusivity provision was intended to

increase the economic incentives for a

generic company to be the first to file an

ANDA containing a paragraph IV

certification and get to market.

Key Facts From the Study:

How Frequently Has FDA Granted 180-

Day Exclusivity?

The regulatory landscape

implementing 180-day exclusivity has

shifted over the last several years. Before

1992 (a time period not included in this

study), the FDA granted 180-day exclusivity

to 3 generic applicants. From 1992 until

1998, the FDA did not grant 180-day

exclusivity to any generic applicant. Since

1998, when the FDA changed its regulations

in response to a court ruling, and more

ANDAs containing paragraph IV

certifications have been filed, the FDA has

granted 180-day exclusivity to the first

generic applicant for 31 drug products. 

Thus, the 180-day exclusivity has been

granted for 31 out of the 104 drug products

for which a first generic applicant filed an

ANDA containing a paragraph IV

certification from 1992 through 2000.

Has the 180-Days Exclusivity Been

Triggered Most Often by a Court Decision

or by the First Generic’s Commercial

Marketing? 

For 19 of the 31 drug products,

commercial marketing triggered the running

of the first generic applicant’s 180-day

exclusivity.7

 For the other 12 drug products,

a court decision favorable to the generic

applicant triggered the 180-day exclusivity.

How Have Generic Applicants Fared in

Patent Infringement Litigation?

 

Generic applicants have prevailed in

73 percent of the cases in which a court has

resolved the patent dispute.8 The rate at

7

 The data further indicate that, when not sued,

first generic applicants begin commercial marketing, after

receiving FDA approval, in a timely manner that triggers

the running of the 180 days and thus would allow FDA

approval of subsequent eligible generic applicants once the

180 days has run. 

8

 These statistics include other cases in addition

to those involving the 12 drug products where a court

decision triggered the 180-day exclusivity. For example,

during a time when FDA did not consider a district court

decision sufficient to trigger the 180-day exclusivity, some

generic applicants began commercial marketing following
vii

which the U.S. Court of Appeals for the

Federal Circuit reversed district court

decisions of patent invalidity and noninfringement for drug products in this study

was 8 percent.

When Did Generic Applicants Enter the

Market?

In most instances, generic applicants

have waited to enter the market until at least

a district court has held that the patent

covering the brand-name company’s drug

product was invalid or not infringed by the

generic applicant’s ANDA.

Are There Circumstances in which the

180-Day Exclusivity Has Been “Parked”

For Some Period of Time, So That the

First Generic Applicant Does Not Trigger

It, and FDA Approval of Any Subsequent

Eligible Generic Applicant Would Be

Precluded?

 Yes. During the time period of the

study, there were 20 final settlements of

ANDA-related patent litigation. Fourteen of

the 20,9 at the time they were executed, had

the potential to delay the start of the first

generic applicant’s 180-day exclusivity.10 If

the 180-day exclusivity for the first generic

applicant does not run, then the FDA may

not approve any subsequent eligible generic

applicants. Once the 180-day exclusivity

runs, the FDA may approve any additional

generic ANDAs that have been filed and

meet regulatory requirements. 

Under 2 of these 14 settlement

agreements, the first generic applicant did

begin commercial marketing, but each

generic was marketing the brand-name

company’s product as a generic – neither

was marketing under its own ANDA. As

discussed in more detail below, it is unclear

whether this type of “commercial

marketing” is sufficient to trigger the

running of the 180-day exclusivity. 

In addition to the 20 final settlement

agreements, there were 4 interim settlement

agreements pursuant to which the patent

litigation continued, but the parties agreed

upon certain conditions in the meantime. 

The Commission has challenged interim

settlements for 3 drug products.11 In those

agreements, the Commission alleged that the

brand-name drug company paid the first

generic applicant not to enter the market,

thereby retaining its (unused) 180-day

marketing exclusivity and precluding FDA

from approving any eligible subsequent

generic applicants. 

Have Such Agreements Continued

Following FTC Enforcement Action in this

Area?

Between April 1999 (shortly after

FTC investigations in this area became

expiration of the 30-month stay and a favorable decision of

a district court. In each of these instances, the generic

applicant ultimately prevailed in the appellate court, but

commercial marketing, not the district court decision,

triggered the 180-day exclusivity.

9

 Ten brand-name companies and 10 generic

companies used these types of agreements with respect

to14 drug products.

10 In some cases, this delay did not occur due to

subsequent events.

11 See Abbott Laboratories, No. C-3945 (May

22, 2000) (consent order), available at

<http://www.ftc.gov/os/2000/03/abbott.do.htm> (this

consent order related to 2 drug products: Hytrin tablets and

Hytrin capsules). Hoechst Marion Roussel, Inc., No. 9293

(May 8, 2001) (consent order), available at

<http://www.ftc.gov/os/2001/05/hoechstdo.pdf>.
viii

public) and the end of the period covered by

this study, brand-name companies and first

generic applicants have not entered

agreements similar to the interim agreements

challenged by the FTC.

Reasons for the Recommendation: 

The data in the study suggest that the

generic applicants have brought appropriate

patent challenges: generic applicants

prevailed in nearly 75% of the patent

litigation ultimately resolved by a court

decision.12 Moreover, most generic

applicants have waited to enter the market

until at least a district court has held that the

patent covering the brand-name company’s

drug product was invalid or not infringed by

the ANDA. This may reflect the fact that a

generic applicant’s potential liability for lost

profits on the brand-name drug usually will

vastly exceed its own potential profits after

market entry.

The data also indicate that, when not

sued, first generic applicants, upon receiving

FDA approval, begin commercial marketing

in a timely manner that triggers the running

of the 180 days and allows FDA approval of

any subsequent eligible generic applicant

once the 180 days has run. Thus, the data

suggest that, in and of itself, the 180-day

exclusivity provision generally has not

created a bottleneck to prevent FDA

approval of subsequent eligible generic

applicants.

Require Brand-Name Companies and First

Generic Applicants to Provide Copies of

Certain Agreements to the Federal Trade

Commission

Issues that merit antitrust scrutiny,

however, may arise when brand-name

companies and first generic applicants reach

agreements that have the potential to “park”

the first generic applicant’s 180-day

exclusivity for some period of time. 

Fourteen of the 20 final settlement

agreements obtained through the study had

this potential as of the time they were

executed. Such agreements may be

procompetitive or competitively neutral. 

But they also may raise antitrust issues, as

was alleged to be the case in the interim

settlement agreements the FTC challenged.

Given this history, we believe that

notification of such agreements to the

Federal Trade Commission and the U.S.

Department of Justice is warranted. We

support the Drug Competition Act of 2001

(S. 754) introduced by Senator Leahy, as

reported by the Committee on the Judiciary,

which would require that if a brand-name

company and a generic applicant enter into

an agreement that relates in any way to the

180-day exclusivity or which concerns the

manufacture, marketing, or sale of either the

brand name drug or its generic equivalent,

then both companies must file a copy of the

agreement (or a complete written summary

of any oral agreement), along with copies of

any other related agreements, with the

Commission and the Department of Justice.

Minor Recommendations to the 180-Day

Exclusivity Provision:

It is unclear whether a few types of

12 The data do not establish, however, whether

even more appropriate patent challenges might have been

brought if the period of generic market exclusivity was

longer than 180 days.
ix

factual circumstances trigger the running the

180-day exclusivity. Three minor changes

would clarify that these circumstances

should trigger the 180-day exclusivity and

thus reduce any potential for the 180-day

marketing exclusivity provision to function

as a bottleneck to subsequent generic entry.

Minor Recommendation 1: Clarify that

“commercial marketing” includes the first

generic applicant’s marketing of the brandname product.

The data revealed 2 instances when

the brand-name company and the first

generic applicant settled the patent

infringement lawsuit with a supply

agreement, and 3 other instances in which an

optional supply agreement was one part of a

patent settlement. In all instances, the

agreements contemplated that the brandname company would supply the generic

applicant with the brand-name drug product,

so that the generic applicant could market it

as a generic version. Currently, it is

somewhat unclear whether marketing of the

brand-name product by the first generic

applicant constitutes “commercial

marketing” sufficient to trigger the 180-day

exclusivity.13

To avoid situations in which the

running of the 180 days is not triggered

because of this uncertainty, it would be

desirable to clarify that “commercial

marketing” includes any marketing by the

first generic applicant, even under a supply

agreement with the brand-name company. 

In some circumstances, such commercial

marketing may be the only event that can

trigger the running of the 180-day

exclusivity. For example, if there is a

second generic applicant, but it is not sued

by the brand-name company, then there will

not be a court decision to trigger the 180

days, and only the first generic applicant’s

commercial marketing under the supply

agreement could start the running of the 180

days and thus, after 180 days, free the FDA

to approve any eligible subsequent generic

applicants. 

Minor Recommendation 2: Codify that the

decision of any court on the same patent

being litigated by the first generic applicant

constitutes a “court decision” sufficient to

start the running of the 180-day exclusivity.

There is some question as to which

court’s decision is sufficient to activate the

“court decision” trigger of the 180-day

exclusivity. Two courts of appeal have

held,14 and the FDA has issued guidance, 15

that any court’s decision on whether the 13 In response to a citizen petition involving the

30 mg strength of Procardia XL, the FDA determined that

the first generic applicant was ineligible for 180-day

exclusivity, because the generic applicant and the brandname company had settled their patent litigation and

effectively changed the generic applicant’s certification

from a paragraph IV to a paragraph III. In addition, and

under alternative reasoning, the FDA determined that even

if the first generic applicant was eligible for the 180-day

exclusivity, that exclusivity already had been triggered by

the generic applicant’s marketing under a supply agreement

with the brand-name company. See FDA Letter to Deborah

A. Jaskot, Docket No. OPP-1446/CP1 (Feb. 6, 2001). This

letter leaves somewhat unclear whether a supply agreement

alone would be sufficient to satisfy the commercial

marketing trigger for the 180-day exclusivity. See, also,

Mylan Pharmaceuticals, Inc. v. Tommy G. Thompson,

2001 U.S. Dist. LEXIS 24234 (N.D. WV Apr. 18, 2001). 

14 See Teva Pharmaceuticals, USA, Inc. v. FDA,

182 F.3d 1003 (D. C. Cir 1999), Granutec, Inc. v. Shalala,

139 F.3d 889 (4th Cir. 1998).

15 See FDA Guidance for Industry: 180-Day

Exclusivity Under the Hatch-Waxman Amendments to the

Federal Food, Drug and Cosmetic Act (Jun. 1998). See

also Teva Pharmaceuticals, USA, Inv. v. FDA, 182 F.3d

1003, 1005 (D.C. Cir. 1999).
x

patent at issue is invalid or not infringed is

sufficient to trigger the running of the first

generic applicant’s 180-day exclusivity.

On balance, we believe this is the

correct result, but there are pros and cons. 

On the one hand, the rule would make it less

likely that agreements between brand-name

and generic companies that had the effect of 

“parking” the 180-day exclusivity for some

period of time could forestall FDA approval

of a subsequent eligible generic applicant. 

This is because, if the brand-name company

sues the second (or later) generic applicant,

and that generic applicant won its patent

litigation, then the 180-day exclusivity of the

first generic applicant would begin to run

from the date of the later generic applicant’s

favorable court decision. Such

circumstances may arise; the data showed

that brand-name companies sued later

generic applicants in nearly 85% of the

cases. The rule would be consistent with the

mandate in the legislative history of HatchWaxman to “make available more low-cost

drugs,”16 because the rule would assist in

eliminating potential bottlenecks to FDA

approval of subsequent eligible generic

applicants.

Such a rule also could speed generic

entry when the second generic applicant’s

lawsuit is resolved prior to that of the first

applicant. This appears to be appropriate

given the low reversal rate of district court

opinions of patent invalidity and noninfringement. For example, under this rule,

if both the first and second generic

applicants are sued, but the court hearing the

second generic applicant’s case is the first to

arrive at a decision, then that court’s

decision would trigger the running of the

first generic applicant’s 180-day exclusivity,

regardless of whether the first generic

applicant had received FDA approval. The

data revealed 1 such case.

On the other hand, as illustrated in

the preceding paragraph, the operation of

this rule could deprive the first generic

applicant of its ability to market under the

180-days exclusivity, even though the first

generic applicant had been diligently

pursuing resolution of its patent litigation. 

This result could dampen the incentive to

become the first generic applicant.17

Moreover, if the later court issues a noninfringement decision, the reasoning

underlying the holding may not apply to the

first generic applicant’s ANDA, depending

upon the facts of the case. 

Minor Recommendation 3: Clarify that a

court decision dismissing a declaratory

judgment action for lack of subject matter

jurisdiction constitutes a “court decision”

sufficient to trigger the 180-day exclusivity.

One court of appeals has held that a

dismissal of a declaratory judgment action

for lack of a case or controversy is a “court

decision” of non-infringement sufficient to

trigger the 180-day exclusivity.18 We

believe that the court’s reasoning is

persuasive and should be adopted. 

16 H.R.Rep. No. 98-857, pt. 1, 98th Cong., 2d

Sess., at 14 (1984), reprinted in 1984 U.S.C.C.A.N. 2647,

2647.

17 By contrast, the absence of such a rule also

could dampen the incentive for later generic applicants to

develop eligible ANDAs containing paragraph IV

certifications. 

18 Teva Pharmaceuticals, USA, Inc. v. FDA, 182

F.3d 1003 (D. C. Cir 1999).
xi

The U.S. Court of Appeals for the

District of Columbia confronted a situation

in which the brand-name company did not

sue any of the generic applicants for patent

infringement, presumably because the brandname company’s patents were not infringed

by the ANDA. To trigger the first generic

applicant’s 180-day exclusivity (because it

had not yet been approved by the FDA), the

second generic applicant sought a

declaratory judgment that its ANDA did not

infringe the brand-name product’s patents. 

The district court hearing the case dismissed

the lawsuit for lack of subject matter

jurisdiction, because the brand-name

company indicated that it would not sue the

second generic applicant for patent

infringement, thus eliminating its reasonable

apprehension of a patent infringement suit

and the existence of a case or controversy. 

This dismissal also estopped the brand-name

company from suing the generic applicant in

the future.

The Court of Appeals determined

that the dismissal for lack of case or

controversy was, in fact, a court decision,

because the brand-name company indicated

that the second generic applicant’s ANDA

did not infringe the relevant patent. As a

result, the dismissal activated the court

decision trigger. Such a rule eliminates the

potential for a bottleneck created by a first

generic applicant that does not exercise its

commercial marketing rights.
Table of Contents

EXECUTIVE SUMMARY ..................................................... i

CHAPTER 1 Introduction and Background

Introduction ...................................................... 1

Overview of the Hatch-Waxman Act and the FDA’s 

Implementing Regulations ........................................... 3

Price Effect of Generic Entry ......................................... 9

Scope of the Study ................................................. 9

Organization of the Report .......................................... 11

CHAPTER 2 Outcomes of Patent Infringement Lawsuits Under the 

Hatch-Waxman Amendments

Introduction ..................................................... 13

How Frequently Have Brand-Name Companies Sued 

the First Generic Applicant? ........................................ 14

What Were the Results of Patent Infringement Litigation 

with the First Generic Applicant? .................................... 15

How Frequently Have Brand-Name Companies Sued 

the Second Generic Applicant? ...................................... 18

What Are the Results of Litigation with the Second Generic 

Applicant if the Brand-Name Company Settles with the First

Generic Applicant? ............................................... 19

For Those Patent Litigations that Resulted in a Court Decision,

How Often Did Generic Applicants Prevail for All of the Drug 

Products in the Study? ............................................. 19

How Frequently Did the Federal Circuit Reverse a District Court

Decision of Non-Infringement or Patent Invalidity? ...................... 21
In Which District Courts Did Brand-Name Companies Initiate 

Patent Infringement Litigation? ...................................... 21

When Did Generic Applicants Enter the Market? ........................ 22

CHAPTER 3 Settlements Related to Paragraph IV Certifications

Introduction ..................................................... 25

Scope of Information Requested and Received .......................... 26

Settlements Involving Patent Licenses or Supply Arrangements ............ 27

Final Settlements Involving Brand Payments ........................... 31

Interim Agreements ............................................... 34

Agreements Between Brand-Name Companies and the Second 

 Generic Applicant ................................................ 35

Agreements Between First and Second Generic Applicants ................ 36

CHAPTER 4 Orange Book Patent Listing Practices and Use of 

Multiple 30-Month Stays

Introduction ..................................................... 39

Legal and Regulatory Background of the 30-Month Stay 

 Provision ....................................................... 41

Duration of Patent Infringement Litigation ............................. 47

Multiple 30-Month Stays on Later-Issued Patents For

Drug Products in the Study ......................................... 48

Analysis of Later-Issued Patents in the Orange Book ..................... 52

CHAPTER 5 180-Day Marketing Exclusivity Under the Hatch-Waxman

Amendments

Introduction ..................................................... 57
The Shifting Regulatory Landscape Implementing

the 180-Day Exclusivity Period ...................................... 58

Triggers for the 180-Day Exclusivity Period ............................ 60

 

CHAPTER 6 FDA Citizen Petitions and Generic Drug Applications

 Introduction ..................................................... 65

 FDA Regulations Governing Citizen Petitions .......................... 65

 The Use of Citizen Petitions About Drug Products for Which 

an ANDA Containing a Paragraph IV Certification Was Filed .............. 66

 Conclusions ..................................................... 68

APPENDIX A Glossary of Terms ....................................... A-1

APPENDIX B Relevant Provisions of the Hatch-Waxman Amendments ....... A-2

APPENDIX C New Drug Applications Examined in Study ................. A-15

APPENDIX D Brand-Name Companies Served Special Orders ............. A-17

APPENDIX E Specifications in the Special Orders Sent to 

Brand-Name Companies ................................. A-20

APPENDIX F FTC Staff’s Citizen Petition on the Listability of 

Certain Patents in the Orange Book ....................... A-24

APPENDIX G Orange Book Listing and Analysis ......................... A-29

APPENDIX H Orange Book Patent Analysis ............................. A-39
1

Chapter 1 Introduction and Background

Introduction

In April 2001, the Commission

began an industry-wide study focused on

certain aspects of generic drug competition

under the Hatch-Waxman Amendments.1

The Amendments provide certain methods

by which generic drug manufacturers can

obtain approval to market a generic version

of a brand-name product. The study’s

purpose was to provide a more complete

picture of how generic drug competition has

developed under one method the

Amendments established: generic entry

prior to expiration of the brand-name

company’s patents on the relevant drug

product.2 This report sets forth the results of

the study.3

The study was prompted, in part, by

the Commission’s enforcement actions

against alleged anticompetitive agreements

that relied on certain Hatch-Waxman

provisions.4 The study was designed to

determine whether such agreements are

isolated instances or more typical, and

whether particular provisions of the HatchWaxman Amendments are susceptible to

strategies to delay or deter consumer access

to low-cost generic alternatives to brandname drug products.

The study also was requested by

Representative Henry Waxman, one of the

co-sponsors of Hatch-Waxman, who asked

the FTC to “investigate and produce a study

on the use of agreements between and

among pharmaceutical companies and

potential generic competitors and any other

strategies that may delay generic drug

competition throughout the U.S.” Other

members of Congress have proposed

legislation to amend various portions of

Hatch-Waxman, including the sections that

1

 Drug Price Competition and Patent Restoration

Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 (1984)

(codified as amended 21 U.S.C. ' 355 (1994)).

2

 The study did not examine how generic

competition has developed under the other methods the

Amendments established. Nor did the study examine

whether Hatch-Waxman provisions have achieved another

purpose of the Amendments: to compensate brand-name

companies for lost patent life due to the time needed for

FDA’s safety and efficacy review process.

3

 Appendix A contains a glossary of frequently

used terms and their meanings under Hatch-Waxman.

4

See, e.g., Abbott Laboratories, No. C-3945

(May 22, 2000) (consent order), available at

<http://www.ftc.gov/os/2000/03/abbott.do.htm>. Hoechst

Marion Roussel, Inc., No. 9293 (May 8, 2001) (consent

order), available

<http://www.ftc.gov/os/2001/05/hoechstdo.pdf>. The

same issues are raised by another case in which the

Commission settled similar allegations, see American

Home Products, Docket No. 9297 (Feb. 19, 2002) (decision

and order) available at

<http://www.ftc.gov/os/2002/02/ahpdo.pdf>. See also

Schering-Plough Corp., et al., Docket No. 9297, Initial

Decision (Jul. 2, 2002), available at

<http://www.ftc.gov/os/2002/07/scheringinitialdecisionp1.

pdf>. The Commission also has accepted for public

comment a consent order settling charges that Biovail

illegally acquired an exclusive patent license and

wrongfully listed that patent pursuant to another provision

of the FDA’s regulations implementing Hatch-Waxman. 

Biovail Corp., File No. 011-0094, Agreement Containing

Consent Order, (Apr. 19, 2002), available at

<http://www.ftc.gov/os/2002/04/biovaildecision.htm>.

Moreover, the Commission has accepted for public

comment a consent order settling charges that Elan and

Biovail entered into a supply and distribution agreement

for a generic drug product that may have unreasonably

restrained their incentives to compete against each other. 

See FTC, Biovail Corp. and Elan Corp., File No. 011 0132,

Agreement Containing Consent Order (Jun. 27, 2002),

available at

<http://www.ftc.gov/os/2002/06/biovailelanagreement.pdf>

.
2

are the subject of the Commission’s study.5

 Finally, the study was motivated, in

part, by the prospect of a substantial sales

volume of brand-name drug products

coming off patent in the next several years.6

This represents an enormous opportunity for

the generic drug industry and, conceivably,

a commensurate threat to the brand-name

pharmaceutical industry. Brand-name

pharmaceutical drug manufacturers seeking

to protect the sales of brand-name drugs

may have an incentive and ability to enter

into agreements with would-be generic

competitors, or engage in other types of

activities, that would slow or thwart the

entry of competing generic drug products. 

The Commission has developed

significant expertise regarding competition

in the pharmaceutical industry. The

Commission has, for example, brought

antitrust enforcement actions affecting both

brand-name and generic drug

manufacturers.7 Commission staff have

conducted empirical analyses of competition

in the pharmaceutical industry, including indepth studies by the staff of the Bureau of

Economics.8 The Commission has provided

testimony before Congress,9

 and

Commission staff have filed comments with

the Food and Drug Administration (“FDA”)

regarding competitive aspects of HatchWaxman implementation.10 In addition,

individual Commissioners have addressed

the subject of pharmaceutical competition

before a variety of audiences, both to solicit

input from affected parties and to promote

dialogue regarding practical solutions.11

5

See, e.g., S. 812, 107th Cong. (2001)

(introduced by Sens. Schumer and McCain); S. 2677, 107th

Cong. (2002) (introduced by Sen. Rockefeller); S. 754,

107th Cong. (2001) (introduced by Sen. Leahy).

6 National Institute for Health Care Management,

APrescription Drugs and Intellectual Property Protection@

(Aug. 2000) at 3.

7

See, e.g., FTC v. Mylan Laboratories, Inc. et

al., 62 F. Supp. 2d 25 (D.D.C. 1999); Roche Holding Ltd.,

125 F.T.C. 919 (1998) (consent order); Ciba-Geigy Ltd.,

123 F.T.C. 842 (1997) (consent order).

8

Bureau of Economics Staff Report, Federal

Trade Commission, The Pharmaceutical Industry: A

Discussion of Competitive and Antitrust Issues in an

Environment of Change (Mar. 1999) available at

<http://www.ftc.gov/reports/pharmaceutical/drugrep.pdf>;

David Reiffen and Michael R. Ward, Generic Drug

Industry Dynamics, Bureau of Economics Working Paper

No. 248 (Feb. 2002) (AReiffen and Ward@), available at

<http://www.ftc.gov/be/econwork.htm>

9

Testimony of Federal Trade Commission

before the Committee on Commerce, Science and

Transportation, United States Senate (April 23, 2002)

available at

<http://www.ftc.gov/os/2002/04/pharmtestimony.htm>;

Testimony of the Federal Trade Commission before the

Committee on the Judiciary, United States Senate,

Competition in the Pharmaceutical Marketplace: Antitrust

Implications of Patent Settlements (May 24, 2001)

available at

<http://www.ftc.gov/os/2001/05/pharmtstmy.htm>.

10 FDA: Citizen Petition, Comment of the Staff

of the Bureau of Competition and of Policy Planning of the

Federal Trade Commission Before the Food and Drug

Administration (Mar. 2, 2000) available at

<http://www.ftc.gov/be/v000005.pdf> (recommending

modifications to the FDA’s Proposed Rule on citizen

petitions intended to discourage anticompetitive abuses of

the FDA’s regulatory processes); FDA: 180-Day Marketing

Exclusivity for Generic Drugs, Comment of the Staff of the

Bureau of Competition and of Policy Planning of the

Federal Trade Commission Before the Food and Drug

Administration (Nov. 4, 1999) (AMarketing Exclusivity

Comment@) available at

<http://www.ftc.gov/be/v990016.htm> (recommending that

the FDA’s Proposed Rule on 180-day marketing

exclusivity be modified to limit exclusivity to the first

ANDA filer and to require filing of patent litigation

settlement agreements).

11 See, e.g., Sheila F. Anthony, Riddles and

Lessons from the Prescription Drug Wars: Antitrust

Implications of Certain Types of Agreements Involving

Intellectual Property (June 1, 2000) available at

<http://www.ftc.gov/speeches/anthony/sfip000601.htm>;

Thomas B. Leary, Antitrust Issues in Settlement of

Pharmaceutical Patent Disputes (Nov. 3, 2000) available

at <http://www.ftc.gov/speeches/leary/learypharma.htm>;

Thomas B. Leary, Antitrust Issues in the Settlement of

Pharmaceutical Patent Disputes, Part II (May 17, 2001)

available at

<http://www.ftc.gov/speeches/leary/learypharmaceutical

settlement.htm>; Timothy J. Muris, Competition and
3

In October 2000, the Commission

began the formal process of obtaining

authorization to conduct this study. As

required by the Paperwork Reduction Act

and implementing regulations of the Office

of Management and Budget,12 the

Commission published a Federal Register

notice13 that included, among other things,

the special orders under Section 6(b) of the

Federal Trade Commission Act14 that the

Commission planned to serve on brandname pharmaceutical companies and generic

drug manufacturers.

In response to the public comments

received following this Federal Register

notice, the Commission clarified the

proposed information requests as suggested

by several parties and published in March

2001 a second notice requesting public

comments.15 On April 6, 2001, the

Commission obtained OMB approval to

conduct the study, and on April 25, 2001,

the Commission began service of the special

orders on 28 brand-name companies and

over 50 generic drug companies.

16 By

December 31, 2001, the Commission had

received substantial compliance with the

special orders.

Overview of the HatchWaxman Act and the FDA’s

Implementing Regulations

Before describing the scope of the

study, it is important to understand the

historical context in which Hatch-Waxman

arose. Moreover, the generic approval

process Hatch-Waxman implemented

demands an understanding of the interaction

of the patent system and the regulatory

structure governing the approval of brandname drugs. 

Pre-Hatch-Waxman Regulatory

Environment

In 1962, amendments to the Federal

Food, Drug, and Cosmetic Act added a

proof-of-efficacy requirement to new drug

approvals; before that time, the FDA

approved drugs for safety only. As a result

of the amendments, brand-name companies

are required to prove that new drugs are safe

and effective prior to FDA approval. To

prove safety and efficacy, brand-name

companies are required to conduct tests on

humans (“clinical trials”) and to submit

those results to the FDA with their new drug

application (NDA). 

Those seeking to market a generic

version of an existing post-1962 brand-name

drug also had to perform their own safety

and efficacy studies, much like the brandname companies had to demonstrate the

safety and efficacy of the brand-name

drug.17 The FDA did not have a streamlined

Intellectual Property Policy: The Way Ahead, at 5-6 (Nov.

15, 2001) available at

<http://www.ftc.gov/speeches/muris/intellectual.htm>. 

12 The Commission was required to obtain OMB

clearance before it could begin the study because the

number of special orders to be sent triggered the

requirements of the Paperwork Reduction Act of 1995, 44

U.S.C. Ch. 35, as amended. 

13 See 65 Fed. Reg. 61334 (Oct. 17, 2000).

14 15 U.S.C. ' 46(b).

15 See 66 Fed. Reg. 12512 (Feb. 27, 2001).

16 Several brand-name drug companies have

equity interests in generic subsidiaries and, thus, were

requested to answer questions relating to both brand-name

products and generic products.

17 The FDA considered “such retesting to be

unnecessary and wasteful because the drug [had] already

been determined to be safe and effective. Moreover, such
4

procedure by which to approve generic

versions of brand-name drug products

whose patents had expired.18 By 1984, the

FDA estimated that there were

approximately 150 brand-name drugs whose

patents had expired for which there was no

generic equivalent.19

Another factor complicating generic

drug approval concerned the timing of when

generic companies could perform their

clinical tests. Before Hatch-Waxman was

enacted, a generic company could not begin

the required FDA approval process until

after patents on the relevant brand-name

product had expired; to begin earlier would

typically have infringed the brand-name

company’s patents.20 Thus, at that time,

patent law coupled with the FDA generic

approval process, in effect, extended the

term of the brand-name company’s patent

protection and delayed market entry by

generic versions of brand-name

pharmaceutical drug products. 

Brand-name pharmaceutical

companies also confronted problems. The

discovery and development of new drug

products are expensive and timeconsuming.21 To spur this investment, as

well as to recoup investments made, brandname companies obtain patent protection to

exclude others from making, using, or

selling an invention for a number of years. 

Often, however, the brand-name companies

obtained patents prior to FDA approval of

the drug product. Thus, the effective terms

of many patents were shortened due to the

time required for the FDA to ensure the

safety and efficacy of the brand-name

company’s drug product.

The Hatch-Waxman

 Amendments

Congress passed the Hatch-Waxman

Amendments to address both issues.22 To

enable earlier generic entry, the

Amendments provided that certain conduct

related to obtaining FDA approval that

would otherwise constitute patent

infringement would be exempt from

infringement liability under the patent laws. 

In addition, generic applicants were

permitted to rely on the brand-name

company’s trade secret data demonstrating

the safety and efficacy of the brand-name

drug product. To restore patent protection

to brand-name companies to compensate

them for the time used to obtain FDA

approval, the Amendments contained

provisions to extend patent terms in certain

circumstances. 

Thus, Hatch-Waxman balanced an

expedited FDA approval process to speed

generic entry with patent term restoration to

retesting is unethical because it requires that some sick

patients take placebos and be denied treatment known to be

effective.” See H.R. Rep. No. 98-857, Part I at 16 (1984),

reprinted in 1984 U.S.C.C.A.N. 2647, 2649.

18 The FDA did establish, however, a procedure

to determine the effectiveness of all drugs approved prior

to 1962, and it established a policy of permitting the

approval of a generic equivalent to a safe and effective pre1962 brand-name drug. This generic approval procedure,

however, did not apply to drugs approved after 1962. Id.

19 Id. at 17.

20 Roche Products, Inc. v. Bolar Pharmaceutical

Co., 733 F.2d 858 (Fed. Cir. 1984).

21 See Pharmaceutical Research and

Manufacturers of America, ADelivering on the Promise of

Pharmaceutical Innovation: The Need to Maintain Strong

and Predictable Intellectual Property Rights, White Paper,@

submitted to Federal Trade Commission and the

Department of Justice B Antitrust Division (Apr. 22, 2002)

at 7-10, available at

<http://www.ftc.gov/os/comments/intelpropertycomments/

phrma020422.pdf>.

22 Appendix B contains the Hatch-Waxman

Amendments, as codified at 21 U.S.C. 355 et seq.
5

ensure continuing innovation. As one

federal appellate judge explained, the

Amendments “emerged from Congress’s

efforts to balance two conflicting policy

objectives: to induce brand-name

pharmaceutical firms to make the

investments necessary to research and

develop new drug products, while

simultaneously enabling competitors to

bring cheaper, generic copies of those drugs

to market.”23

Pursuant to the Federal Food, Drug,

and Cosmetic Act, a brand-name company

seeking to market a new drug product must

first obtain FDA approval by filing a New

Drug Application (NDA). The NDA

ultimately must include a variety of

information that is extremely expensive and

time-consuming to develop, including

clinical trial data. 

When the NDA is filed, the NDA

filer also must provide the FDA with certain

categories of information regarding the

patents that cover the drug that is the subject

of its NDA.24 Upon approval of the NDA,

the FDA lists the patents in an agency

publication entitled “Approved Drug

Products with Therapeutic Equivalence,”

commonly known as the “Orange Book.”25

In addition to patents on the active

ingredient in a drug product, patents on

specific formulations (i.e., a tablet form) or

methods of use (i.e., used to treat heartburn

in mammals) of the drug product are also

listed in the Orange Book.

Rather than requiring a generic

manufacturer to repeat the costly and timeconsuming NDA process, the Amendments

permit the company to file an Abbreviated

New Drug Application (“ANDA”). The

object of the ANDA process is to

demonstrate that the generic drug product

has the same active ingredient, route of

administration, dosage form and strength,

and proposed labeling as the brand-name

drug. The ANDA also must contain

sufficient information to demonstrate that

the generic drug is “bioequivalent” to the

relevant brand-name product.26 As a result

of providing this information, the generic

applicant is allowed to rely on the FDA’s

previous findings of safety and effectiveness

for the referenced brand-name drug, and

thus the applicant does not have to provide

its own clinical studies to demonstrate the

generic drug product’s safety and

effectiveness. This reliance on the

innovator’s safety and efficacy data allows

generic applicants to save very substantial

amounts of money in development costs.

An ANDA also must contain a

certification regarding each patent listed in

the Orange Book that relates to the relevant

NDA for which the generic applicant is

seeking to make a generic version. The

statute provides ANDA applicants with four

certification options: they may certify (I)

that the required patent information has not

been filed; (II) that the patent has expired;

(III) that the patent has not expired, but will

expire on a particular date and approval is

sought after patent expiration; or (IV) that

the patent is invalid or will not be infringed

23

 Abbott Labs. v. Young, 920 F.2d 984, 991 by the generic drug for which the ANDA

(D.C. Cir. 1990) (Edwards, J., dissenting on other grounds)

(citations omitted).

24 21 U.S.C. ' 355(b)(1).

25

 Id. at ' 355(j)(7)(A).

26

 Id. at ' 355(j)(2)(A)(iv). Bioequivalence

means that the rate and extent of absorption of the generic

drug is not significantly different from the rate and extent

of absorption of the listed drug when administered at the

same dosage.

7

NDA filer29 with a detailed statement of the

factual and legal basis for the ANDA filer’s

assertion that the patent is invalid or not

infringed. Once the ANDA filer has

provided such notice, a patent holder

(usually the brand-name company) must

bring an infringement suit within 45 days to

take advantage of the statutory stay

provision.30 If the patent holder does not

bring suit within 45 days, the FDA approval

process may proceed, and the FDA may

approve an ANDA as soon as regulatory

requirements are fulfilled.31 A 30-month

stay of FDA approval of an ANDA

applicant is invoked when a brand-name

company receives notice of a generic

applicant’s paragraph IV certification and

files suit for patent infringement within 45

days of that notice.32 Filing of the lawsuit

stays the FDA’s approval of the ANDA until

the earliest of: (1) the date the patent(s)

expire; (2) a final determination of

non-infringement or patent invalidity by a

court in the patent litigation; or (3) the

expiration of 30 months from the receipt of

notice of the paragraph IV certification.

The second provision is the “180-day

period of exclusivity.” The first generic

applicant to file an ANDA containing a

paragraph IV certification is eligible for 180

days of marketing exclusivity, during which

the FDA may not approve subsequent

ANDAs for the same drug product.33 The

180-day exclusivity period thus increases

the economic incentives for a generic

company to be the first to file an ANDA

containing a paragraph IV certification. 

Through this 180-day provision, the

Amendments also provide an incentive for

generic companies to litigate patents that

may be invalid and to “design around”

patents to find alternative, non-infringing

forms of patented drugs.34 The 180-day

exclusivity period is calculated from either

the date of the first commercial marketing of

the generic drug product or the date of a

court decision declaring the patent invalid or

not infringed, whichever is sooner.35 After

the 180 days, other generic products can

enter the market, provided they obtain the

FDA regulatory approval. Subsequent

eligible generic applicants must wait until

the first generic applicant’s 180 days have

run before the FDA can approve the

subsequent ANDA.

Figure 1-2 describes graphically how

the 30-month stay and 180-day exclusivity

provisions affect FDA approval of a generic

applicant’s ANDA.

29 Id. at ' 355(j)(2)(B). Although the patent

holder and the NDA filer are often the same person, this is

not always the case. The Hatch-Waxman Amendments

require that all patents that claim the drug described in an

NDA must be listed in the Orange Book. Occasionally,

this requires an NDA filer to list a patent that it does not

own.

30 Id. at ' 355(j)(5)(B)(iii).

31 Id. For example, the statute requires the

ANDA applicant to establish bioequivalence.

32

 21 U.S.C. at ' 355(j)(5)(B)(iii).

33

 Id. at ' 355(j)(5)(B)(iv).

34

 See Granutec, Inc. v. Shalala, 139 F.3d 889,

891 (4th Cir. 1998).

35

 21 U.S.C. ' 355(j)(5)(B)(iv).

9

Price Effect of Generic Entry

Because generic drugs are typically

far less expensive than their corresponding

brand-name versions, competition from

generic drugs can deliver large savings to

consumers. A Congressional Budget Office

(CBO) study attempted to quantify the

magnitude of this effect by analyzing retail

pharmacy data from 1993 and 1994. The

study found that, for drugs that are available

in both generic and brand-name versions,

the average price of a generic prescription

was approximately half of the average price

of a brand-name prescription.36 The CBO

estimated that, in 1994, the availability of

generic drugs saved purchasers between $8

billion and $10 billion.37

The broader empirical economics

literature also points to a number of

competitive effects associated with the

introduction of generic drugs. Early

research using small data samples with

information on brand name and generic

prescription drug prices and sales found that

(1) brand name drug prices rose slightly, but

that average drug prices declined some 20

percent within approximately two years of

generic entry,38 and (2) generic entry

produces slight reductions in brand name

drug prices and declines in generic prices as

the number of generic rivals increases.39

 

A more recent study of 32 drugs that

lost patent protection around the time of the

passage of the Hatch-Waxman Amendments

found that generic entry results in somewhat

higher prices for brand-name prescription

drugs (in light of factors such as inelastic

demand among users of brand-name

products), but large decreases in the prices

of corresponding generic drugs.40 Another

recent study of 32 drugs that lost patent

protection after passage of the HatchWaxman found that generic drug prices fell

until at least the fifth generic firm enters,

and that falling prices from increased

competition can continue with the entry of

additional generic competitors.41 It is also

noteworthy that elements of this literature

indicate that generic entrants gain

significant market share at the expense of

their rival brand name drug companies after

their entry. Overall, this literature points to

significant short-run competitive impacts of

generic entry that can lead to substantial

benefits for consumers of prescription drugs.

 

Scope of the Study

This study focuses solely on the

competitive circumstances surrounding

36 Congressional Budget Office, How Increased

Competition from Generic Drugs Has Affected Prices and

Returns in the Pharmaceutical Industry (July 1998) (ACBO

Study@) at 28, available at

<http://www.cbo.gov/showdoc.cfm?index’655&sequence’

0>.

37 Id. at 31.

38 Henry Grabowski & John M. Vernon, ABrand

Loyalty, Entry and Price Competition In Pharmaceuticals

After the 1984 Drug Act,@ 35 J. of Law & Econ. 331-50

(Oct. 1992).

39 Richard E. Caves, et al., APatent Expiration,

Entry, and Competition in the U.S. Pharmaceutical

Industry@ (Brookings Papers on Economic Activity,

Microeconomics, Martin Neil Baily & Clifford Winston,

eds., Brookings Institution, Washington, DC 1991).

40 Richard G. Frank & David S. Salkever,

AGeneric Entry and the Pricing of Pharmaceuticals,@ 6 J. of

Econ. & Mgmt Strategy, 75-90 (Spring 1997) (Generic

entry will induce those buyers who are highly sensitive to

price to switch to low-price generics; price-insensitive

buyers continue to purchase branded products. This

segmentation of the market means that the branded drug

often will face a less elastic demand curve, which can

induce the profit-maximizing branded producer to raise its

price.).

41 Reiffen and Ward, supra n. 8.
10

generic competition for those brand-name

drug products (1) subject to an ANDA

notice containing a paragraph IV

certification (2) that brand-name companies

received after January 1, 1992 and prior to

January 1, 2001. By focusing on these

brand-name drug products, the study could

examine how the 180-day marketing

exclusivity and the 30-month stay

provisions have influenced the development

of generic drug competition. 

The study does not address how

generic competition has developed under

paragraph I, II, or III certifications. The

study also does not address the patent

restoration features of Hatch-Waxman. 

ANDAs Under Hatch-Waxman

According to the FDA, from the time

Hatch-Waxman became effective in 1984

through December 31, 2000, 8,019 ANDAs

were filed with the FDA.42 Of these

applications, 7,536 (94 percent) raised no

patent issues (i.e., the ANDAs did not

contain a paragraph IV certification). A

substantial portion of the total number of

ANDAs, however, relate to the same brandname product or NDA. Thus, the total

number of ANDAs does not represent 8,019

unique brand-name drug products, and it is

unclear as to how many unique brand-name

drug products the total 8,019 ANDAs

related.

Four hundred eighty-three (483) (or

six percent of the total number of ANDAs

filed) contained Paragraph IV certifications. 

The 483 ANDAs relate to 130 unique brandname drug products as measured by unique

NDAs. The share of ANDAs with paragraph

IV certifications – compared to all ANDAs

filed (those with paragraph I-IV

certifications) -- has increased significantly

since Hatch-Waxman was enacted. 

According to the data provided by the FDA,

during the 1980s (1984-89), only 2 percent

of ANDAs contained paragraph IV

certifications. This share increased to

approximately 12 percent for the 1990s, and

it has increased substantially in the last few

years: from 1998-2000, approximately 20

percent of ANDAs contained paragraph IV

certifications. 

The brand-name drug products this

study covered include any drug product for

which the brand-name company received

notification of an ANDA containing a

paragraph IV certification after January 1,

1992 and prior to January 1, 2001.43 This

selection criteria resulted in 104 drug

products, as represented by New Drug

Applications (NDAs) filed with the FDA,

within the scope of the study. As noted

previously, from 1984 to January 2001, 130

unique NDAs were subject to at least one

ANDA with a paragraph IV certification. 

The most recent 104 brand-name drug

products (of the 130 total) are included

within the scope of the study.

Appendix C contains a list of the

NDAs within the scope of the study. The

drug products included in the study

represent some of the largest drug products

as measured by annual sales, including socalled “blockbuster” drugs such as Capoten,

Cardizem CD, Cipro, Claritin, Lupron

Depot, Neurontin, Paxil, Pepcid, Pravachol,

42 FDA staff provided this information to the

FTC staff.

43 If any later-filed generic applicant filed its

ANDA with the requisite certification after January 1,

1992, even if the first generic applicant for a particular

drug product filed its application prior to January 1, 1992,

the drug product was included within the scope of the

study. 
11

Prilosec, Procardia XL, Prozac, Vasotec,

Xanax, Zantac, Zocor, Zoloft, and Zyprexa.

The FDA provided the Commission

with the identity of the generic companies

that have filed ANDAs containing paragraph

IV certifications since enactment of HatchWaxman in 1984. Using this information,

FTC staff identified which brand-name

companies had received notice of the filing

of an ANDA containing a paragraph IV

certification. The list of brand-name

companies and generic companies are

attached as Appendix D. Special orders

were served on all identified brand-name

companies who received notice of, and on

the first three generic drug companies who

had filed, the ANDA.44 

The FTC’s special orders required

the brand-name companies to produce

agreements with generic applicants that

relate to the ANDA filing, results of ANDA

patent infringement litigation with generic

applicants, listing of patents in the FDA’s

Orange Book, sales information, and the use

of citizen petitions. Generic applicants were

required to produce agreements relating to

the innovator’s drug products for which they

had filed an ANDA containing a paragraph

IV certification, and to respond to questions

about the results of patent infringement

litigation with the brand-name company,

sharing of litigation expenses with other

generic applicants, allegations of improper

Orange Book listings, and sales information.

Organization of the Report

Chapter 2 of the Report reviews the

frequency and outcome of patent

infringement lawsuits in connection with

paragraph IV certifications. Chapter 3

discusses the agreements that litigants have

used to settle patent infringement litigation

under Hatch-Waxman. Chapters 4 and 5

examine in more detail how certain HatchWaxman provisions, the 30-month stay and

the 180-day exclusivity provisions

respectively, affect generic entry. Chapter 6

discusses the use of citizen petitions by

brand-name companies for drug products

included in the study.

Appendix A contains a glossary of

terms used most frequently. Appendix B

contains the text of Hatch-Waxman. 

Appendix C lists the NDAs within the scope

of the study. Appendix D lists the brandname companies and generic companies that

received special orders. Copies of the

questions in the special orders are contained

in Appendix E. Appendix F contains a copy

of the FTC Staff’s Citizen Petition on the

listability of certain patents in the Orange

Book. Appendix G describes the drug

products where the brand-name company

has filed a patent in the Orange Book after

being notified of the ANDA, which, in turn,

generated an additional 30-month stay upon

suit. Appendix H analyzes certain

categories of patents that raise Orange Book

listability issues.

44 In many instances, only one generic applicant

had filed an ANDA containing a paragraph IV certification

for a particular drug product. In these cases, special orders

were served only on the first generic applicant.
12
13

Chapter 2 Outcomes of Patent Infringement Lawsuits Under the

 Hatch-Waxman Amendments

Introduction

The application of both the 180-day

exclusivity and 30-month stay provisions

depends, at least in part, upon whether the

brand-name company initiates patent

infringement litigation against a generic

applicant.1 As noted earlier, the 180-day

exclusivity provision grants, under certain

circumstances, 180 days of exclusive

marketing to the first generic applicant that

files an ANDA containing a paragraph IV

certification. A 30-month stay of FDA

approval of a potential generic competitor is

invoked if a brand-name company receives

notice of a generic applicant’s paragraph IV

certification and files suit for patent

infringement within 45 days of that notice. 

Filing of the lawsuit stays the FDA’s

approval of the ANDA until the earliest of:

(1) the date the patents expire; (2) a final

determination of non-infringement or patent

invalidity by a court in the patent litigation;

or (3) the expiration of 30 months from the

receipt of notice of the paragraph IV

certification. This chapter reviews the

frequency and outcome of these patent

infringement lawsuits.

For nearly 75 percent of drug

products this study covered, brand-name

companies initiated patent infringement

litigation against the first generic applicant. 

In the other 25 percent, there was no suit,

and the FDA has approved most of the

generic products, thus allowing generic entry

to occur. FDA approval of ANDAs

submitted by first generic applicants who

were not sued by the brand-name company

took, on average, 24 months and 2 weeks

from the ANDA filing date.

In 70 percent of the cases in which

the brand-name company sued the first

generic applicant, there has been either a

court decision, or the parties have agreed to

a final settlement. Of these lawsuits,

involving 53 drug products, 20 settled

without a court decision on the merits of the

patent infringement lawsuit. These

settlement agreements are discussed in detail

in Chapter 3. In the other 30 percent of the

cases, a district court had not yet ruled as of

June 1, 2002. 

Of all the patent infringement cases

(including first and subsequent generic

applicants) in which there has been a

decision of a court as of June 1, 2002,

generic applicants prevailed in 73 percent of

the cases, and brand-name companies

prevailed in 27 percent. Of the decisions

favoring the generic applicant, there were

slightly more non-infringement decisions

(14) than patent invalidity decisions (11). 

The rate at which the U.S. Court of Appeals

for the Federal Circuit overturned district

court decisions of patent invalidity for drug

products in this study was 8 percent.

In most instances when the 30-month

1

 For ease of discussion purposes, the term

“generic applicant” means those applicants who have filed

an ANDA containing a paragraph IV certification. See

Appendix A for a glossary of frequently used terms.
14

stay has expired without a decision of a

district court and the FDA approved the

generic applicant’s ANDA, the generic

applicant did not enter the market until it

secured a district court decision of patent

invalidity or non-infringement.

How Frequently Have BrandName Companies Sued the

First Generic Applicant?

The study sought to determine the

frequency with which brand-name

companies have initiated patent

infringement lawsuits against generic

applicants within the required 45-day period,

thus triggering the 30-month stay provision. 

The data revealed 75 drug products, out of a

total of 104 NDAs (72 percent), in which the

brand-name company sued the first generic

applicant. For all but 5 of the 104, the first

generic applicant for one dosage strength of

the drug product (e.g., 10, 20, and 40 mg

tablets) was the first applicant for all

strengths of the drug product. In light of this

fact, unless otherwise noted, all of the drug

products with multiple strengths (with the

same 5 exceptions) involved one NDA, and

therefore were counted as one brand-name

drug product with one first generic

applicant. The 5 exceptions are presented in

footnotes 4, 7, and 8 to ensure completeness. 

Table 2-1 summarizes this result.

Table 2-1 Patent Litigation Frequency

Litigation Between Brand-name

Company and Generic Applicant

Number of

NDAs

Brand-Name Company Sued the First

Generic Applicant

75

Brand-Name Company Did Not Sue

the First Generic Applicant

292

Total 104

For the 75 drug products where

patent litigation was brought, the median net

sales in the year the first generic applicant

filed its ANDA were $190 million per year. 

By contrast, the majority of the 29 NDAs for

which no suit was filed had net sales of less

than $100 million in the year the generic

applicant filed its application.3

For 15 of the 29 drug products where

the brand-name company did not sue the

first generic applicant, the generic applicant

began commercial marketing soon after

FDA approval and prior to patent expiration. 

In 6 cases, the FDA has not approved the

generic applicant’s ANDA as of June 1,

2002, and the patents have not yet expired. 

In 6 cases the FDA has approved the

ANDA, but commercial marketing has not

yet begun. And in the remaining 2 cases, the

2

 For 1 of the 29 drug products, 2 different

generic applicants were the first to file for each of the 3

different strengths of this drug product. In each strength,

the brand-name company did not sue the generic applicant. 

As noted above, this brand-name drug product is only

counted once in the total of 29.

3

 For 2 of the 29 drug products in which no suit

was filed, the brand-name company’s patents would have

expired during the first several months of the 30-month

stay. Because patent expiration terminates the 30-month

stay, it may not have made sense in those cases to initiate

patent infringement litigation, which takes, on average, 25

months to resolve. 
15

patents expired before FDA approved the

generic applicant’s ANDA.

What Were the Results of

Patent Infringement Litigation

with the First Generic

Applicant?

The brand-name company sued the

first generic applicant for patent

infringement involving 75 NDAs. Figure 2-

1 shows a graphical depiction of the

resolution (i.e., a decision of a court, a final

settlement, or miscellaneous resolutions) of

each case as of June 1, 2002. For 4 drug

products, different generic applicants were

the first to file on different dosage strengths

of the drug product, thus contributing to

multiple suits on the same drug product (and

the same patent) with different generic

applicants. For clarity, the results of more

than one suit involving the same drug

product are not included in the totals

reported, but are described in footnotes 4, 7,

and 8. Only results from the first applicant

for a drug product are included in the totals

discussed below.
16

Pending Patent Infringement

Litigation

As of June 1, 2002, for 22 of the 75

drug products,4 the district court hearing the

lawsuit has not yet ruled on the merits of the

patent infringement allegations.

5

 For 7 of

these 22 drug products, the 30-month stay

has expired. For 3 of these 7 drug products,

the brand-name company also sued for

infringement of a patent that was listed in

the Orange Book after the first generic

applicant had filed its ANDA.6

 In these

cases, it has been possible for a brand-name

company to obtain more than one 30-month

stay. The first 30-month stay has expired in

these 3 cases, but the second (or even later)

one has not. In none of these cases has the

generic applicant entered the market.

Resolution of Patent Infringement

Suits

There has been a court decision for

53 drug products (75 in total less 22

pending). The resolution of each is

classified in Table 2-2 and also is described

in Figure 2-1. Settlements were used in 38

percent of the instances (20 drug products

out of 53 settled).7 A court decision

resolved the patent infringement claims for

30 drug products. Generic applicants

prevailed 73 percent of the time (22 out of

30),8

 and brand-name companies prevailed

27 percent of the time (8 out of 30). In 3

miscellaneous instances, either the patents

expired before the 30-month stay expired, or

the brand-name company withdrew the

NDA due to safety reasons.

4

 In addition to these 22 cases, there are 2 more

pending cases on a dosage strength of a drug product for

which the patent litigation on another strength has been

resolved. The resolution of these cases is discussed in the

following section.

5

 In one pending case, the FDA determined that

the brand-name company failed to submit the required

information for a particular patent in a timely manner. 

Therefore, the generic applicant was not required to submit

a patent certification to address that patent, the 30-month

stay was dissolved, and the FDA subsequently approved

the ANDA. Commercial patent litigation was still pending

as of June 1, 2002, however, and the generic applicant has

not yet entered the market.

6 As discussed further in Chapter 4, if a brandname company lists in the Orange Book later-issued patents

(i.e., patents obtained from the U.S. Patent and Trademark

Office after obtaining NDA approval) after receiving

notification from a generic applicant, the generic applicant

must re-certify that its ANDA does not infringe the laterissued patent. If the brand-name company initiates a patent

infringement suit within 45 days of notice of the generic

applicant’s re-certification, then FDA approval of the

ANDA is stayed automatically for an additional 30 months

from the notice date or upon final determination of noninfringement or patent invalidity by a court in the patent

litigation.

7

 For one of these 20 drug products, a different

generic applicant was first for each of the product’s 3 

strengths; the brand-name company settled with 2 of these

applicants, and the litigation involving the other strength is

pending. This drug product is counted only once as

“settled.” See supra n. 4. For another of these 20 drug

products, a different generic applicant was first for each of

the product’s 2 strengths; the brand-name company entered

a settlement with one generic applicant, and the first

applicant for the other strength prevailed on noninfringement at the Federal Circuit. This drug product is

counted only as “settled.”

8

 For one of these 22 drug products, a different

generic applicant was first for each of the product’s 2

strengths; the first generic applicant prevailed on noninfringement at the Federal Circuit on one strength, while

the other case is pending. This drug product is counted

only once as “generic prevails.” See supra n. 4. For

another of these 22 products, a different generic applicant

was first for each of the product’s 3 strengths; the first

generic applicant for each strength prevailed in each patent

suit, which were on the same patent. This drug product is

counted only once as “generic prevails.”
17

Table 2-2 Results of Lawsuits with the 

 First Generic Applicant

Resolution of Patent Litigation

with First Generic Applicant

Number of

NDAs

Settlement Between Brand-Name

Company and Generic Applicant 

20

Generic Applicant Prevails in

Patent Infringement Suit

22

Brand-Name Company Prevails in

Patent Infringement Suit

8

Miscellaneous 3

Total Number of Cases Resolved 53

Patent Settlements with the

First Generic Applicant

As shown in Table 2-2, the brandname company and the first generic

applicant settled patent infringement

litigation involving 20 drug products. Most

of the settlements can be classified into 3

types. Nine of these settlements contained a

provision by which the brand-name

company, as one part of the settlement, paid

the generic applicant (settlements involving

“brand payments”). Seven of the 20

settlements involved the brand-name

company licensing the generic applicant to

use the patents for the brand-name drug

product prior to patent expiration. Two of

the settlements allowed the generic applicant

to market the brand-name drug product as a

generic product, under the brand-name

company’s NDA, not the generic applicant’s

own ANDA. The remaining 2 settlements

do not fit into any of these 3 categories. The

provisions of each of these settlement

agreements are discussed more fully in

Chapter 3.

Generic Applicant Prevails

Table 2-3 shows that the generic

applicant prevailed in litigation over 22 drug

products.

9

 In 18 instances, a court held that

the brand-name company’s patents were

either invalid or not infringed. Of these 18

court decisions, 13 were appellate and 5

were district court (4 of which the brandname companies have appealed as of June 1,

2002, but the decisions are pending). In 9 of

these instances, the court held that the

generic applicant’s ANDA did not infringe

the brand-name company’s product; in the

remaining 9 instances, a court held that the

underlying patent was invalid for reasons

such as being anticipated by prior art or

double patenting.

For 2 of the 18 drug products, the

parties implemented interim settlements that

included brand payments to the generic

applicant. For both of these drug products,

the generic applicant began marketing after

the interim settlement was terminated and

the Federal Circuit had affirmed the district

court’s ruling of patent invalidity.10

For 3 of the 4 remaining drug

9

 This total does not include the resolution of

follow-on lawsuits on 2 drug products that are counted as

“settled.” In the first instance, after the parties settled, the

brand-name company submitted a late-issued patent for

listing in the Orange Book, and a second round of litigation

ensued in which the generic applicant prevailed. In the

second instance, the parties settled the initial lawsuit, but

the generic applicant later re-filed an ANDA for a

reformulated version of the product. The brand-name

company dismissed this second case with prejudice after

determining that the reformulated version did not infringe

its patents.

10 One of these drug products (Hytrin tablets)

was discussed in Abbott Laboratories, No. C-3945 (May

22, 2000) (consent order), available at

<http://www.ftc.gov/os/2000/03/abbott.do.htm>.
18

products (of the 22), the brand-name

company dismissed the litigation after

receiving samples of the generic applicant’s

proposed product. In 2 of these cases, the

FDA approved the generic drug soon

thereafter, and generic entry occurred after

the case was dismissed.11 In the other case,

the FDA had not approved the generic drug

product as of June 1, 2002. For the last of

the 4 drug products, the brand-name

company dismissed the litigation without

prejudice. Entry was delayed in light of an

interim settlement on a later-listed patent for

which the brand-name company failed to sue

the first generic applicant within the

requisite 45 days.12 

The patents covering the 22 brandname drug products in which the generic

applicant prevailed involved formulation or

method of use patents. In 3 instances (out of

6 where a drug substance patent was at

issue), a drug substance patent was found

invalid or not infringed.

Brand-Name Company

Prevails

For 8 drug products, the brand-name

company prevailed in the patent

infringement litigation. For 7 drug products,

a court held that the generic applicant’s

ANDA infringed the brand-name company’s

patents. Two of these decisions were

appellate decisions; the other 5 were district

court decisions, of which only one has been

appealed by the generic applicant. As of

June 1, 2002, this appeal is pending. By

contrast, brand-name companies appealed

nearly 90 percent of the cases in which they

obtained an adverse district court opinion. 

In the last of the 8 cases, the generic

applicant abandoned its ANDA after it was

sued, and the court did not issue a final

judgment.

The patent claims in 3 of these patent

lawsuits involved drug substance claims,

and the other 5 involved method of use

and/or formulation claims. 

How Frequently Have BrandName Companies Sued the

Second Generic Applicant?

If the brand-name company sued the

first generic applicant, it also sued the

second generic applicant, if there was one, in

nearly 85 percent of the cases. There were

43 such instances. Of the suits that have

been resolved as of June 1, 2002, in no

instance did different district courts reach

different results in resolving infringement

issues over the same brand-name drug

product.

The brand-name company generally

sued all generic applicants if the drug

product had annual sales larger than $500

million in the year the first generic applicant

filed its ANDA. Twenty such drug products

are included in the study. 

11 For the details of one of these case, see

Hoechst Marion Roussel, Inc., No. 9293 (May 8, 2001)

(consent order), available at

<http://www.ftc.gov/os/2001/05/hoechstdo.pdf>.

12 This drug products (Hytrin capsules) was

discussed in Abbott Laboratories, No. C-3945 (May 22,

2000) (consent order), available at

<http://www.ftc.gov/os/2000/03/abbott.do.htm>.
19

What Are the Results of

Litigation with the Second

Generic Applicant if the

Brand-Name Company Settles

with the First Generic

Applicant?

Table 2-3 shows the results of

litigation with the second generic applicant

in those instances in which the first generic

applicant settled its patent infringement

litigation. Out of a total of 20 drug products

with first generic settlements (see Figure 2-

1), 9 drug products involved litigation with

the second generic applicant.13 In 1 case,

litigation is still pending. Table 2-3 shows

the resolution of the 8 decided cases.

Table 2-3 Resolution of Patent Litigation

 with Second Generic Applicant

 if the First Generic Applicant

 Settled its Litigation

Resolution of Subsequent Litigation Number

of NDAs

Settlement with Second Generic Applicant 4

Second Generic Applicant Wins Patent

Infringement Suit

3

Brand-Name Company Wins Patent

Infringement Suit

1

Total 8

In these 8 cases, the parties settled in

4, while in 3 the generic applicant prevailed

(2 non-infringement decisions and 1

invalidity decision). In 1 case, the brandname company won a decision of

infringement. 

For Those Patent Litigations

that Resulted in a Court

Decision, How Often Did

Generic Applicants Prevail for

All of the Drug Products in the

Study? 

For many drug products, the brandname company sued several generic

applicants over the same patents. Thus, in

determining how frequently generic

applicants or brand-name companies

prevailed in patent litigation on a drug

product basis, it would be misleading simply

to count the number of decisions in either

party’s favor, because several of the

decisions may be related to the same patent. 

Table 2-4 shows the results of the resolution

of the patent suits without counting any

similar outcomes involving the same drug

product. For example, if both the first and

second generic applicant obtained court

decisions of non-infringement, the drug

product is included only once as a generic

win. If the case against the first generic

applicant settled or is pending, but the case

against the second applicant was resolved,

the resolution of the second case is included. 

In no instance were the outcomes of the suits

against the first and second generic applicant

different.

There were court decisions on 40

different drug products. Table 2-4 presents

the resolution of the patent litigation derived

from five sources: (1) litigation with the first

generic applicant (Table 2-2), (2) litigation

with the second generic applicant if the first

13 Eleven drug products either did not have a

second generic applicant, or the brand-name company did

not sue the second applicant.
20

generic applicant settled (Table 2-3), (3)

litigation with the second generic applicant

was resolved, but either the first generic

applicant was not sued or the case is pending

(3 drug products), (4) litigation with a third

generic applicant when the first two generic

applicants had settled, and (5) follow-on

litigation with the first generic applicants on

two drug products described in footnote 9.

Generic applicants prevailed for 29

out of 40 drug products (or 73 percent). 

Decisions involving 14 drug products held

that the generic applicant did not infringe the

patent, decisions involving 11 drug products

held the relevant patent(s) invalid, and in 4

cases, the brand-name company abandoned

the litigation with the first generic applicant

before a decision of a court. 

The brand-name company prevailed

against the generic applicant in litigation

involving 11 drug products. In one of these

11 cases, the generic applicant abandoned

the litigation and admitted infringement

before the court issued a decision. 

Table 2-4 Patent Litigation Results per

 Drug Product

Result of Litigation Number

of NDAs

Generic Applicant Wins 29

Brand-Name Company Wins 11

Total 40

Results of Litigation and

Patent Invalidity Rates

Out of 40 drug products in Table 2-4,

11 drug products had at least one patent

listed in the Orange Book that was

determined to be invalid. Thus, the

minimum invalidity rate of patents that the

parties chose to litigate to conclusion is 28

percent (11 invalid findings / 40 total). This

rate assumes that the patents underlying the

non-infringement decisions and cases when

the brand-name company abandoned the

litigation are valid, even though the courts in

these cases may not have addressed the

validity question. Thus, the invalidity rate

may be higher than 28 percent, although we

do not have data to determine it.

The recent empirical literature on the

outcome of patent litigation provides a point

of comparison with these findings, and

suggests that this invalidity rate, although it

may be understated as noted above, is not

out of line with that of patents generally. 

Moore compares the outcomes of patent

cases decided by judges with the outcomes

of patent cases in which the finder-of-fact is

a jury.14 In her data set of 1209 patent trial

decisions from 1983 through 1999, she finds

that patents are invalidated in 36 percent of

cases with a judge as the adjudicator and in

29 percent of cases with a jury.15

14 Kimberly A. Moore, Judges, Juries & Patent

Cases: An Empirical Peek Inside the Black Box, 98 Mich.

L. Rev. 365 (2000).

15 Id. at 391. See, also, John R. Allison & Mark

A. Lemley, Empirical Evidence on the Validity of Litigated

Patents, 26 AIPLA L.Q. 185 (1998). Allison and Lemley

study the outcomes of patent validity cases from 1989 to

1996. They focus on those cases in which there exist final

written decisions at either the district court or the Federal

Circuit levels. In their study, a district court decision is

“final” if a later decision by the Federal Circuit does not

supersede it. In their data set of 299 patents in 239

different cases, they find that 46 percent of the final

decisions hold the relevant patent invalid. In contrast to

this figure which covers all patent validity decisions, they

find that pharmaceutical patents are found invalid in 27

percent of cases. Allison and Lemley do not consider

decisions that focus only on infringement.
21

How Frequently Did the

Federal Circuit Reverse a

District Court Decision of NonInfringement or Patent

Invalidity? 

Of the 29 NDAs where the generic

applicant prevailed, as noted in Table 2-4, in

14 instances, the brand-name company

appealed a district court decision that the

patent at issue was either invalid or not

infringed in a patent suit against either the

first or second generic applicant.16 In 13 of

these decisions, the U.S. Court of Appeals

for the Federal Circuit affirmed district court

decisions of patent invalidity or noninfringement – 8 affirmed decisions of noninfringement,17 and 5 affirmed decisions of

patent invalidity. In the remaining case, two

patents were at issue. The district court had

determined both patents to be valid, but the

Federal Circuit reversed as to one of the

patents, and affirmed the validity decision

for the other. Thus, the rate at which the

Federal Circuit reversed decisions of

invalidity and non-infringement for drug

products included in this study was 8

percent.18

Table 2-4 shows that the brand-name

company prevailed in litigation for 11 drug

products. Of the 4 cases in which the

generic applicant appealed the district

court’s decision of infringement, the Federal

Circuit affirmed all 4 of these district court

decisions of infringement.

In Which District Courts Did

Brand-Name Companies

Initiate Patent Infringement

Litigation?

In 62 percent of the cases involving

litigation with the first and second generic

applicants, brand-name companies initiated

patent litigation in just five federal judicial

districts. These were the District of New

Jersey, the Southern District of New York,

the Southern District of Indiana, the

Northern District of Illinois, and the

Southern District of Florida. Thus, these

courts have more experience with ANDA

patent infringement litigation than most

other federal district courts.19 16 To ensure no double counting, if the suits

against the first and second generic applicant were

consolidated into 1 district court opinion, and that decision

was appealed, the appellate decision is counted only once. 

This also does not include one case where the district

court’s decision on summary judgment was vacated and

remanded. Moreover, of the 29 drug products in which the

generic applicant prevailed, some of the appeals are

pending, or the district court decision was not appealed.

17 In one of these decisions, the district court

held the patent invalid and not infringed. The Federal

Circuit upheld the non-infringement holding, but reversed

on the invalidity holding. This has not been counted in the

rate at which the Federal Circuit reversed decisions of

invalidity and non-infringement for drug products included

in this study because the non-infringement decision was

affirmed and generic entry occurred prior to patent

expiration.

18 This rate does not include Federal Circuit

overrules of summary judgement or collateral estoppel

decisions.

19 For those drug products in which both the first

and second generic applicant were sued, approximately 50

percent of the suits were pursued in different district courts.
22

When Did Generic Applicants

Enter the Market?

If a generic applicant was sued for

patent infringement, it generally did not

enter the market until there was a district

court holding that the brand-name

company’s patent was invalid or notinfringed. In no instance has a generic

applicant (either the first or second) entered

the market and then a court later has found

that the patent was infringed, making the

generic applicant subject to damages.

In 22 cases (out of 75, Table 2-1)

involving litigation between the brand-name

company and the first generic applicant, as

of June 1, 2002, the first 30-month stay had

expired before the district court decision. In

8 of those cases, the FDA approved the

generic applicant’s ANDA prior to a district

court ruling on the merits of the patent

infringement suit.

20 In the first 2 cases, the

district court case was ongoing as of June 1,

2002, and the generic applicant had not

entered, although it had FDA approval to do

so. In the next 2 cases, the generic applicant

entered after obtaining a district court

decision, but prior to the Federal Circuit’s

decision.21 In the fifth case, the generic

applicant waited until the Federal Circuit

affirmed the district court’s ruling. In the

sixth case, the generic applicant

reformulated its product and the brand-name

company dismissed the litigation before a

ruling on the merits. The generic applicant

entered the market soon thereafter.

In the seventh case in which the FDA

approved the generic applicant after the 30-

month stay had expired but before a district

court decision, there were two generic

applicants for different dosage strengths (30

mg and 60 mg) of the same drug product

(Drug Product A). The discussion of generic

entry that follows only relates to the 60 mg

product. The brand-name company sued

each generic applicant over the same patent

in different district courts. The first generic

applicant on the 30 mg product obtained a

district court decision of non-infringement

and the Federal Circuit affirmed this

decision. The 60 mg generic applicant

entered once the Federal Circuit affirmed the

district court’s decision of non-infringement

on the 30 mg product. This occurred,

however, before the district court reached a

decision on the litigation involving the 60

mg generic applicant’s litigation.

In the eighth case involving a drug

product that was covered by the same patent

that covered Drug Product A (described

above), the generic applicant also entered

prior to a district court decision. Like the 60

mg generic applicant, the first applicant for

this drug product also entered after the 30

mg decision of non-infringement of Drug

Product A was affirmed by the Federal

Circuit.

In separate instances involving the

drug products Taxol and BuSpar, which are

not included in the 22 described above, the

generic applicants began commercial

marketing without waiting for a district

20 In the other 14 cases (22 less 8), either the

district court had not ruled as of June 1, 2002 and the FDA

has not yet approved the ANDA, or the district court ruled

and the FDA acted accordingly, depending upon the

outcome of the litigation.

21 In addition to these 2 instances, generic

applicants for 3 other drug products entered after a district

court case, but prior to the Federal Circuit’s ruling. In

these cases, however, the 30 month stay had not expired

before the district court ruled.
23

court decision in their favor on the patent the

brand-name companies had listed in the

Orange Book after the generic applicants

had filed their ANDAs.22 In both cases the

district court eventually held the patent to be

invalid or not infringed.

22 See Chapter 4 for a full discussion of multiple

30-month stays. Both suits on the later-issued patents

raised questions whether the patents should be listed in the

Orange Book.
24
25

Chapter 3 Settlements Related to Paragraph IV Certifications

Introduction

Certain patent settlement agreements

between brand-name companies and

potential generic competitors have received

antitrust scrutiny in recent years. Parties

have debated whether these settlements

increased or harmed consumer welfare.

Patent settlements can resolve

disputes in whole, or in part, and in a timely

manner. Public policy favors the use of

settlements to reduce the use of limited

judicial resources. Moreover, settlements

may provide for generic entry that might

otherwise be delayed by patent disputes, and

can reduce uncertainty by clarifying

intellectual property rights among the

parties. Thus, patent settlements can be

procompetitive. This potential is not always

fulfilled, however. As noted earlier, the

FTC has alleged that certain settlements

between brand-name and generic companies

were anticompetitive.

This chapter describes the contours

of agreements that settled patent litigation

between brand-name companies and generic

applicants concerning patents listed in the

Orange Book for the drug products this

study covers.1 The chapter discusses trends

concerning the settlements produced in the

study, and describes similarities and

differences among such settlements. It also

describes how these settlements compare to

the ones that the Commission alleged to be

anticompetitive in its enforcement actions. 

This chapter does not reach any conclusions

about the competitive effects of the

settlements produced.

Twenty final2 and 4 interim3

agreements that settled litigation between

the brand-name company and the first

generic applicant were produced in response

to the FTC’s special orders. In 9 of the final

settlement agreements, the brand-name

company agreed to pay the generic applicant

(a “brand payment”). In 7 of the 20 final

settlements, the brand-name company

granted a license to the generic applicant to

use the patents that cover the brand-name

drug product prior to patent expiration so

that the generic applicant could market

under its ANDA. Two of the final

settlements allowed the generic applicant to

distribute the brand-name drug product as a

generic product, marketed under the brandname company’s NDA, not the generic

applicant’s own ANDA. The remaining 2

final settlements do not fit into any of these

3 categories of settlement types. 

1

 Brand-name and generic companies produced a

range of other types of agreements relating to the drug

products included in the study. These agreements are not

discussed in this report.

2

 One of these agreements is subject to litigation

currently pending at the FTC. See Schering-Plough Corp.,

et al., Docket No. 9297, Initial Decision (Jul. 2, 2002),

available at

<http://www.ftc.gov/os/2002/07/scheringinitialdecisionp1.

pdf>.

3

 For 3 out of the 4, see Abbott Laboratories, No.

C-3945 (May 22, 2000) (consent order), available at

<http://www.ftc.gov/os/2000/03/abbott.do.htm> (this

consent order related to 2 drug products: Hytrin tablets and

Hytrin capsules). Hoechst Marion Roussel, Inc., No. 9293

(May 8, 2001) (consent order), available at

<http://www.ftc.gov/os/2001/05/hoechstdo.pdf>.
26

Fourteen of the final settlements with

the first generic applicants, at the time they

were executed, had the potential to delay the

triggering of the first generic applicant’s

180-day exclusivity for some period of time,

and thus to delay FDA approval of any

subsequent eligible applicants.4

 This

potential to delay the triggering of the 180-

day exclusivity existed because the

settlement contained a waiting period before

which the generic applicant could enter the

market. All of the waiting periods expired at

some time either before the patent(s) expired

or at patent expiration. Ten brand-name

companies and 10 generic companies used

agreements with respect to 14 drug products. 

See Chapter 5 for a further discussion of

180-day exclusivity.

Most of the final settlements with

brand payments involved drug products with

higher sales than the drug products that the

brand-name companies chose to license or

supply to generic applicants. Final

settlements with brand payments have been

used by 7 brand-name companies (of which

two companies had 2 such agreements) and

8 generic companies (one of which was a

party to 2 agreements). 

In addition to the final settlements

with the first generic applicant, in 7

instances, brand-name companies entered

final patent settlements with the second

generic applicant. In 6 of the 7, the brandname company also had settled with the first

generic applicant.

Finally, in 6 instances (out of the 53

resolved cases noted in Chapter 2), the first

and second generic applicants entered into

agreements with each other that related to

generic market entry. Most involved either

relinquishing the 180-day exclusivity or

determining which generic company had

rights to the 180-day exclusivity in light of

agreements between the first generic

applicant and the brand-name company.

Scope of Information

Requested and Received

The FTC’s special orders required

each brand-name company to submit all

agreements between itself and any person

relating to an ANDA containing a paragraph

IV certification involving any drug product,

when the brand-name company holds the

rights to the NDA corresponding to the

ANDA that is the subject of the agreement. 

Examples of such agreements include, but

are not limited to: (a) patent litigation

settlements; (b) agreements related to the

filing (or non-filing) of an ANDA by any

applicant (or potential applicant) involving

any drug product; (c) licensing agreements

between the company and persons that have

filed an ANDA involving any drug product;

and (d) agreements related to any

acquisition, divestiture, joint venture,

alliance, license, or merger by the company

of any business involving the research,

development, manufacture, or sale of any

drug product that is the subject of an ANDA. 

The companies were also requested to

produce all studies, surveys, analyses, and

reports prepared by or for any officer(s) or

director(s) of the company (or, in the case of

unincorporated entities, individuals

exercising similar functions) that evaluate or

4

 Whether the FDA actually was prevented from

approving subsequent eligible generic applicants depends

on specific facts, including whether there were subsequent

generic applicant(s) and the result(s) of any patent litigation

with those applicants.
27

analyze the reasons for making such

agreements. Generic companies received

similar requests.

Brand-name and generic companies

produced a variety of other agreements

relating to the drug products subject to the

study. Examples of these agreements

include brand-name and generic companies

obtaining third-party arrangements for the

supply of raw materials, manufacturing,

repackaging, distribution, marketing,

development, and license of formulation

technologies relating to the drug products. 

These agreements are not analyzed in this

chapter.

Overview of Patent Settlements

As discussed in Chapter 2, litigants

reached agreements that finally settled patent

suits involving 20 out of 53 drug products

for which a brand-name company sued the

first generic applicant who had filed an

ANDA containing a paragraph IV

certification (see Figure 2-1). 

For 9 drug products, the brand-name

company and the generic applicant settled

the patent infringement litigation through a

license or supply agreement.5 Six of these

agreements occurred in 2000 and 2001. For

9 other drug products, one component of the

settlement agreement was a payment from

the brand-name company to the generic

applicant. The existence of brand payment

provisions distinguished these agreements

from those involving a license or supply

arrangement, which did not contain a brand

payment.6

 The remaining 2 of the 20

settlements did not fit into either of these

categories. Table 3-1 categories these 20

final settlements. 

Settlements Involving Patent

Licenses or Supply

Arrangements

In light of the confidential nature of

many of the provisions of these settlements,

the following discussion has been written to

ensure anonymity. Each lettered drug

product corresponds to a distinct brandname drug product. 

5

 Two different generic applicants were the first

to file on different strengths of the same drug product. The

brand-name company settled the litigation with both

applicants (one settlement was a license agreement and the

other was a supply agreement). Because the different

strengths are covered by only one NDA, the drug product is

counted only once as a “supply agreement” to ensure

consistency in counting drug products with agreements.

6

 Two district court decisions have examined the

use of brand payment provisions in the settlement

agreements involving Cardizem CD and Hytrin. Both

courts have found the agreements to be per se restraints of

trade under Section 1 of the Sherman Antitrust Act. In re

Cardizem CD Antitrust Litigation, 105 F.Supp.2d 618, 684

(E.D. Mich. 2000) and 105 F.Supp.2d 618, 622 (E.D.

Mich. 2000); In re Terazosin Hydrochloride Antitrust

Litigation, 164 F.Supp.2d 1340, 1342 (S.D. Fl. 2000). 

Both of these district court decisions are currently on

appeal.
28

Table 3-1 Overview of Final Settlements with the First Generic Applicant

Type of Agreement Number of

Drug Products

Net Sales Number of BrandName Companies

Number of

Generic

Applicants

License Agreements 7Less than $100 million = 3

Between $100 and $250

million = 4;

Between $250 and $500

million = 0;

Greater than $500 million = 1

6 (two had 2

agreements)

7 (one had 2

agreements)

Supply Agreements 2 Between $250 and 500

million = 1;

Greater than $500 million = 1

2 2

Agreements with Brand

Payments

9 Less than $100 million = 3

Between $100 and $250 

million = 2;

Between $250 and $500

million = 2;

Greater than $500 million = 2

7 (two had 2

agreements)

8 (one had 2

agreements)

Other 2 Less than $100 million = 1

Between $100 and $250

million = 1

2 2

Total 20 N/A 11 (3 had 2

agreements each,

2 had 3

agreements each,

and 1 had 4

agreements)

14 (3 had 2

agreements each,

and 2 had 3

agreements)

Settlements Involving Patent

Licenses

As discussed in Table 3-2, for 8 drug

products,

7

 the generic applicant obtained a

non-exclusive, royalty-bearing license

(except for drug product F, which was an

exclusive license, and drug product H,

which was royalty-free) to use the brandname company’s patents for the particular

brand-name product prior to the patent

expiration. In 4 instances (B, C, D, and G),

generic entry proceeded immediately after

executing the settlement and obtaining FDA

approval. In the other 4 instances (A, E, F,

and H), the parties agreed to a waiting

period before the generic applicant could

enter.

7

 Although 8 drug products involved licenses

with the first generic applicant, the generic applicant for

drug product G was first for only one strength of the

product. At the time the brand-name company entered into

this license, it had already entered a supply agreement, see

discussion in the following section, with the first generic

applicant for another strength of the drug product. See

supra n. 5. For purposes of Table 3-2, this license

agreement is discussed separately.
29

Table 3-2 Settlement Agreements Involving Patent Licenses

Drug

Product

Time

Between

Agreement

Date and

Patent

Expiration

Effective Date of the

License

Brand-Name

Products’

Annual Net

Sales in the

Year Prior to

the Agreement

Royalties Paid by the Generic Company to

the Brand-Name Company for the License

Agreement

A 15 years, 2

months

7 months after date of

agreement.

Less than $100

million

1.5% of sales for 5 years. 

B 13 years, 10

months

Immediately Between $100

and $250

million

$1 million at signing. $500,000 when the FDA

approves the generic product; $1.5 million if

generic company sells its product prior to

another entity having sold a generic version of

the product; and an additional payments of

$500,000 if the generic company is the sole

company selling a generic version of the

product at certain future dates.

C 15 years, 8

months

Immediately Less than $100

million

A license fee of $3 million plus a royalty of

3.0% of net sales for first 6 years of sales; $1

million when the suit is dismissed; and $1

million at the first and second anniversaries of

the shipment of the generic product.

D 5 years, 2

months 

Immediately Between $100

and $250

million

$2.5 million upon dismissal of litigation.

E 2 years, 6

months

15 months after date of

agreement. 

Between $100

and $250

million

The generic company’s royalty payment is 20%

of generic company’s first $15 million in net

sales, 40% of net sales between $15 and $30

million; and 60% of net sales greater than $30

million. 

F 3 years, 6

months

17 months after date of

agreement.

Between $100

and $250

million

A royalty payment of 7.5% of the generic

company’s net sales for months 21 through 15

prior to expiration of patents, 5% royalty of net

sales for months 14 through 8, and 2.5% of net

sales for months 7 through end of patent term.

G 10 years, 5

months

Immediately Less than $100

million

No royalty payment unless generic company

changes its formulation, then it must pay a 5%

royalty.

H 1 year, 11

months

14 months after date of

agreement.

Between $500

and $750

million

Royalty-free license. 

In 4 instances (A, E, F, and H), there

was only one generic applicant for the drug

product. The brand-name company did not

sue the second generic applicant for 3 drug

products (B, C, and D) as of June 1, 2002. 

The brand-name company sued the second

generic applicant for drug product G, and

this litigation settled.

Table 3-2 describes the attributes of
30

these 8 patent license agreements and the

royalty provisions in each. The licenses

were for formulation or method of use

patents. In each case, except for drug

product D, the generic applicant affirmed the

validity and enforceability of the patent(s) at

issue. None of the license agreements

prohibited the generic applicant from

developing non-infringing generic versions

of the brand-name drug product, nor did they

involve licenses for other products other

than the one subject to the ANDA litigation.

Among the license agreements

described in Table 3-2, the four agreements

with waiting periods (A, E, F, and H) related

to brand-name drug products in which there

was not yet a second generic applicant for

the drug product as of January 1, 2001.

Settlements Involving Supply

Agreements

As part of two settlements, the

brand-name company entered into a supply

agreement that allowed the generic applicant

to market the brand-name company’s

product as a generic product. These

agreements differ from the licenses

described above because the generic

applicant distributes the brand-name

company’s drug and does not sell product

pursuant to its ANDA.

• In one of the supply agreements,

generic marketing did not begin until a

subsequent generic applicant was ready to

ship its product to customers. Annual net

sales for this drug product in the year prior

to the agreement date were over $500

million. The district court had not yet ruled

in the brand-name company’s patent

infringement suit against subsequent generic

applicants when the supply agreement with

the first generic applicant was executed. 

Under the agreement, if the patent litigation

with these subsequent applicants resulted in

the patent being declared invalid or not

infringed, then the brand-name company’s

obligation to supply the first generic

applicant would be triggered.8 The patents

at issue were formulation patents, and the

time difference between the agreement date

and patent expiration was 14 years and one

month.

• In the other supply agreement, the

generic applicant agreed to pay a substantial

royalty to distribute exclusively a generic

version of the brand-name product

manufactured by the brand-name company.9

Alternatively, the generic company could

choose a patent license agreement (similar to

those discussed above) in exchange for a

small royalty on net sales. The agreement is

dated 10 years, 9 months before the

formulation/method of use patent was due to

expire.

Miscellaneous Agreements with the

First Generic Applicant

Two additional agreements did not

appear to raise issues related specifically to

Hatch-Waxman. For example, one of the

agreements settled litigation over when the

8

 The supply agreement sets forth the transfer

price at which the generic company is obligated to purchase

all of its requirements. The generic applicant is required to

pay a 50% royalty of the net profits from all sales of the

generic product.

9

 The supply agreement was for not only the

strength of the drug product for which the generic company

was the first ANDA IV filer, but also for two additional

strengths of the same drug product for which it had not

filed an ANDA with a paragraph IV certification.
31

brand-name company’s patent should expire. 

These agreements are not discussed in this

report. 

Final Settlements Involving

Brand Payments

Nine out of 20 final settlements

between brand-name companies and generic

applicants involved brand payments from

the brand-name company to the generic

applicant. The first such agreement included

in the study was executed in March 1993. 

The Basic Model

Eight of the 9 agreements with brand

payments followed the same basic model. 

Each prohibited the generic applicant from

purchasing, manufacturing, using, selling,

distributing, and shipping to third parties any

form of the generic’s drug product until the

expiration of the patents (or in 2 cases, until

the end of waiting period specified in the

agreement, which occurred prior to patent

expiration). 

Four of these settlements also

prohibited the generic applicant from

marketing any other form of the brand-name

company’s drug product, which was the

subject of the ANDA, prior to patent

expiration or the waiting period established

in the agreement. These four settlements

involved formulation or method of use

patents.

Two of the settlements included

licenses for drug products other than one

subject to the ANDA litigation.10

 

These 8 settlements each had the

effect of precluding FDA approval of the

generic applicant’s ANDA until patent

expiration or, in 2 cases, until the date

specified in the agreement. Each also had

the further effect of precluding the FDA, for

the duration of the agreement, from

approving a later-filed ANDA with a

paragraph IV certification for the same

brand-name drug product, unless a second

(or later) generic applicant obtained a court

decision of non-infringement or invalidity. 

None of these 8 agreements contained a

provision that prohibited the generic

applicant from relinquishing the 180-day

exclusivity.

As described in Table 3-3, the range

of brand payments was $1.75 million to

$132.5 million, and the time between the

date of agreement and patent expiration

ranged between 4 months and 10 years.

10 For a discussion of one of these agreements,

see Schering-Plough Corp., supra n. 2.
32

Table 3-3 Settlement Agreement with Brand Payments: Basic Model

Drug

Product

Total Brand Payment from Brand-name Company

to Generic Applicant

Time Between

Agreement Date and

Patent Expiration

Brand-Name Company’s

Annual Net Sales in

Year of Agreement

I $132.5 million (in part to settle additional patent

litigation)

1 year, 9 months Greater than $1 billion

J $72.5 million paid in four installments of increasing

amounts

4 years, 1 month Between $250 and $500

million

K $66.4 million in a lump sum (includes payments to

ANDA filer and its raw material manufacturer)

9 years, 5 months Less than $100 million

(year after agreement)

L $60 million (includes fees for licenses to other

products)

4 years, 3 months* Between $100 and $250

million (year after

agreement)

M $49.1 million, plus optional annual payments for 6

years of at least $50 million in lieu of a supply

agreement

6 years, 11 months Between $750 million and

$1 billion

N $22 million paid in 2 installments (plus $2.5 million

per month beyond the 4th month if certain events occur)

4 months Between $250 and $500

million

O An 8.5 percent royalty fee of the brand-name

company’s sales of the product during the first and

second year of the 2.5 year period (based on sales of

the first year, the payment was approximately $5

million), a 7.5 percent royalty fee for the remaining 6

months of the 2.5 year period.

2 years, 6 months* Less than $100 million

P $1.75 million divided in three equal installments. 10 years Less than $100 million

* Time between agreement date and generic entry allowed under the agreement. In each case generic entry was permitted prior

to patent expiration pursuant to a license.

Additional Conditions: These 8 final

agreements included additional conditions. 

For example, in most of the agreements, the

generic applicant agreed not to cause, aid,

assist others in the purchase, manufacture,

use, sale of a generic version of the drug

product prior to patent expiration or the date

the patent is held invalid by a court of

competent jurisdiction and the decision

becomes final. Another frequent provision

was that the generic applicant not aid or

assist any third party in the preparation,

filing, or processing of an application for a

generic version of the drug product,

including the sharing of any information

obtained through the litigation.

Timing of Settlements: The

agreements were entered at various times in

relation to whether a court had ruled on the

underlying patent infringement lawsuit. A

court had not yet ruled on the merits of the

patent infringement suit for 4 drug products. 

For the other 4 drug products, a district court

had ruled on the merits of the brand-name

company’s infringement claims as follows:

(1) the district court held the patent invalid

on summary judgment, but the Federal
33

Circuit reversed and remanded for trial on

certain factual issues; (2) the district court

held the patent invalid, but the parties settled

and the lower court’s decision was then

vacated; (3) the district court denied the

brand-name company’s summary judgment

motion of infringement, thus indicating

triable issues of fact remained; and (4) the

brand-name company obtained a temporary

restraining order prohibiting the generic

applicant’s sale of the drug product.

Optional Licenses: The brand-name

company for one drug product had the

option of granting the generic company a

non-exclusive, royalty-free license for the

underlying patent rather than making the

brand payments to the generic applicant. If

the license had been granted, the generic

applicant would have been able to seek

approval of its ANDA and brand payments

would have stopped. The brand-name

company did not exercise this option.

Optional Supply Agreements: Three

of the final settlements in Table 3-3

involved optional supply agreements under

which the generic applicant would distribute

the brand-name product as a generic. For 2

of these drug products, the supply

agreements were implemented. For the

other product, the supply agreement was not

implemented. These 3 supply agreements

are described below.

The supply agreement involving one

drug product specified that the brand-name

company would supply brand-name product

to foreign affiliates of the generic applicant

for marketing outside the United States

during the 6-month period prior to patent

expiration.

Under the supply agreement

involving another drug product, the brandname company appointed the generic

applicant as the non-exclusive distributor for

the sale of the product under a private label

at a cost to the generic applicant equal to

75% of the brand-name company’s

wholesale druggist price. The generic

applicant used this supply agreement to

market the brand-name company’s product

as a generic product.

The brand-name company of the

third drug product entered into an

agreement, not implemented, to supply the

generic applicant with the drug to sell as the

generic version; the agreement prohibited

the generic applicant from manufacturing

the product drug itself. This agreement

specified the generic’s resale price at a

limited discount (15% to 30%, based on

certain contingencies) off the brand-name

drug product’s price. The brand-name

company was to receive substantial royalties

from the generic company’s sales of the

product (40% to 33.3%, based on when the

royalty was paid). 

Alternatively, this brand-name

company could decide to make quarterly

payments to the generic applicant instead of

fulfilling the supply agreement. The

payment schedule, which continued until

expiration of the patent, provided for total

annual payments of at least $50 million. 

The agreement guaranteed the generic

company the right to enter the market with a

generic version of the product (under the

NDA) either 6 months prior to patent

expiration, or immediately upon the patent

being declared invalid or unenforceable. 

Because the supply agreement was not

implemented, the brand-name company
34

made the brand payments to the generic

applicant. 

Miscellaneous Final

Agreement with Brand

Payments

A ninth final agreement involved

brand payments, but did not fit into the basic

model described above. In this case, the

parties agreed to terminate the 30-month

stay and allow the generic applicant’s

ANDA to be approved soon thereafter. 

Prior to executing the settlement agreement,

the two companies had been involved in

commercial patent infringement litigation

over the brand-name drug product (and

another related drug product) that the

generic company had initiated. The parties

settled that litigation, entering into an

agreement with cross-royalty provisions. 

One of the cross-royalty provisions provided

the generic company with a 1 percent royalty

on net sales of the brand-name drug product. 

Thus, the brand payment was in the form of

a royalty on the brand-name drug company’s

drug product. 

Final Agreements with the

First Generic Applicant that

Could “Park” the Applicant’s

180-Day Exclusivity

Fourteen of the 20 settlements

obtained through the study, at the time they

were executed, had the potential to “park”

the first generic applicant’s 180-day

exclusivity for some period of time, and thus

to prevent FDA approval of any subsequent

eligible applicants. Whether the FDA

actually was prevented from approving

subsequent eligible generic applicants

depends on specific facts, including whether

there were subsequent generic applicant(s)

and the result(s) of any patent litigation with

those applicants. 

These agreements include the 4

license agreements with waiting periods

(drug products A, E, F, and H in Table 3-2),

the 2 supply agreements, and settlements

with brand payments (drug products I

through P in Table 3-3) that had the effect of

precluding FDA approval of the generic

applicant’s ANDA. Ten brand-name

companies and 10 generic companies used

agreements with respect to the 14 drug

products. Chapter 5 discusses how these

settlements could be used to delay FDA

approval of any subsequent eligible generic

applicants.

Interim Agreements

In addition to the 20 final settlements, 4

interim settlements with the first generic

applicant were produced. The interim

settlements did not resolve the underlying

patent litigation, but were contingent upon

the outcome of the litigation. The FTC has

taken law enforcement actions relating to 3

of these drug products.11 The FTC’s actions

relating to 2 of those agreements, involving

Hytrin tablets and capsules, are described in

Box 3-1. No settlements similar to the

interim settlements challenged by the

Commission were executed after April, 1999

(shortly after the FTC’s investigations in this

area became public) and the end of the

period covered by this study.

11 See supra, n. 3. The FTC’s action regarding

Hytrin involved two drug products (Hytrin capsules and

Hytrin tablets).
35

Box 3-1 Summary of the Commission’s Action in the Abbott/Geneva Matter

In May 2000, the Commission issued a complaint and consent order against Abbott Laboratories and Geneva

Pharmaceuticals, Inc. The complaint charged that Abbott paid Geneva approximately $4.5 million per month to keep

Geneva's generic version of Abbott's Hytrin, in both tablets and capsules, off the U.S. market, potentially costing consumers

hundreds of millions of dollars a year. Hytrin is used to treat hypertension and benign prostatic hyperplasia (BPH or

enlarged prostate) - chronic conditions that affect millions of Americans each year. BPH alone afflicts at least 50% of men

over 60. In 1998, Abbott's sales of Hytrin amounted to $542 million (over 8 million prescriptions) in the United States. 

Abbott projected that Geneva's entry with a generic version of Hytrin would eliminate over $185 million in Hytrin sales in

just six months.

 According to the complaint, Geneva agreed not to enter the market with any generic version of Hytrin, even if it were

non-infringing, until the earlier of: (1) the final resolution of the patent infringement litigation involving Geneva's generic

version of Hytrin tablets, including review through the U.S. Supreme Court; or (2) entry of another generic Hytrin product. 

Geneva also agreed not to transfer, assign, or relinquish its 180-day exclusivity right. These provisions ensured that no

other company's generic version of Hytrin could obtain FDA approval and enter the market during the term of the

agreement, because Geneva's agreement not to launch its product meant the 180-day exclusivity period would not begin to

run.

 Under the Commission's consent order, Abbott and Geneva are barred from entering into agreements pursuant to

which a first-filing generic company agrees with a manufacturer of a branded drug that the generic company will not (1)

give up or transfer its exclusivity or (2) bring a non-infringing drug to market. In addition, agreements to which Abbott or

Geneva is a party that involve payments to a generic company to stay off the market must be approved by the court when

undertaken during the pendency of patent litigation (with prior notice to the Commission), and the companies are required

to give the Commission 30 days' notice before entering into such agreements in other settings. Moreover, Geneva was

required to waive its right to a 180-day exclusivity period for its generic version of Hytrin tablets, so other generic tablets

The fourth interim agreement

involved a brand-name drug that had net

sales of over $1 billion per year in the year

before the settlement was executed. The

settlement was entered at approximately the

same time the 30-month stay had expired. 

To ensure that the generic drug applicant

did not begin commercial marketing until

the district court ruled on the patent

infringement claims, the brand-name

company agreed that, if the patent was

found invalid, the brand-name company

would pay the generic applicant based on

the generic applicant’s lost profits from the

date of the expiration of the 30-month

through appeals. Since the date of this

agreement, generic entry has occurred

because of a court decision. 

Agreements Between BrandName Companies and the

Second Generic Applicant

Brand-name companies settled

patent litigation with the second generic

applicant for 7 drug products, out of a total

of 43 suits against the second generic

applicant (see Chapter 2) – or at a rate of 16

percent. This settlement rate is substantially

lower than the settlement rate between

brand-name companies and the first generic

applicant of 38 percent (20 of 53 total

lawsuits against the first generic applicant

settled). In 6 of the 7 instances, the brandcompany had also entered into a patent

settlement with the first generic applicant.
36

One of the 7 settlements involved

brand payments. The agreement specified

that the brand-name company would make

brand payments up to $15 million, and that

entry by the second generic could not occur

until 5 years and 6 months after the date of

the agreement (or 2 years and 9 months

before patent expiration).

Four of the 7 agreements involved

patent licenses that allowed the second

generic applicant to enter the market prior to

patent expiration using the generic version

of the brand-name drug product approved

through its ANDA. In 2 of these instances,

the second generic applicant was allowed to

market its generic product immediately after

executing the agreement, obtaining FDA

approval, and paying the brand-name

company a royalty.

 In 1 of the 4 instances, the license

agreement prohibited the generic applicant

from introducing its product into the market

until the brand-name company or another

licensee marketed a generic version of the

brand-name company’s generic product. 

The brand-name company also entered a

license agreement with the third generic

applicant for the drug product, specifying

that it could come on the market 4 years and

2 months prior to patent expiration.

In the remaining license agreement,

the parties agreed to cross-license related

products in settlement of not only the patent

infringement litigation in response to the

ANDA that had been filed, but also related

infringement litigation involving another

drug product.12

Agreements Between First and

Second Generic Applicants

For 6 out of 68 drug products in

which there was more than one generic

applicant, the first and second generic

applicants entered into agreements related to

generic market entry. In 4 of these

agreements, one of the main provisions

specified which generic applicant had or

retained rights to the 180 day exclusivity.13

The other two agreements did not focus on

the 180-day exclusivity provision.

Agreements Focusing on 180-Day

Exclusivity: In 1 agreement, the first

generic applicant relinquished its rights to

180-day exclusivity for a $3.5 million

license and royalty payment based on the

second generic applicant’s sales for a period

of 7 years. In another agreement, the first

and second generic applicants entered into a

supply arrangement under which the first

generic applicant relinquished its rights to

180-day exclusivity so that the second

generic applicant’s ANDA could be

approved, and the first applicant could

market the second applicant’s product. This

step was necessary because the first generic

applicant’s ANDA was not ready to be

approved at the time of the agreement.

Two other agreements clarified

12 The other 2 of the 7 settlements with the

second generic applicant did not appear to raise issues

related specifically to Hatch-Waxman.

13 For a fuller discussion of the 180-day

exclusivity, see Chapter 5, n. 18 and accompanying text.
37

which generic applicant had rights to the

180-day exclusivity in light of a settlement

agreement between the first generic

applicant and the brand-name company. In

one case, the first generic applicant changed

its patent certification from a paragraph IV

to a paragraph III, and the agreement settled

a dispute between the first and second

generic applicant regarding whether the first

generic applicant retained its 180-day

exclusivity in those circumstances. In the

other case, the agreement related to a drug

product that had been the subject of one of

the court cases that invalidated certain of

the FDA’s rules governing the 180-day

exclusivity.14

Remaining Agreements: The other 2

agreements involve more detailed

relationships between the first and second

generic applicants. In one instance, the

brand-name company had licensed its

patents to an over-the-counter product to the

first generic applicant, with a right to

sublicense the patents. The first generic

applicant granted the sublicense to the

second generic applicant. In the second

agreement, the first and second generic

applicants allegedly entered into a supply

and distribution agreement that

unreasonably restrained their incentives to

compete against each other.15

14 Granutec Inc. v. Shalala, 139 F.3d 889(4th

Cir. 1998).

15 See FTC, In the Matter of Biovail Corp. and

Elan Corp., File No. 011 0132, Agreement Containing

Consent Order, available at

<http://www.ftc.gov/os/2002/06/biovailelanagreement.pdf

>.
38
39

Chapter 4 Orange Book Patent Listing Practices and Use of

 Multiple 30-Month Stays

Introduction

The 30-month stay provision of the

Hatch-Waxman Amendments protects

brand-name companies beyond their existing

intellectual property rights. A 30-month stay

of FDA approval of a potential generic

competitor is invoked if a brand-name

company receives notice of a generic

applicant’s paragraph IV certification and

files suit for patent infringement within 45

days of that notice. Filing of the lawsuit

stays the FDA’s approval of the ANDA until

the earliest of: (1) the date the patents

expire; (2) a final determination of

non-infringement or patent invalidity by a

court in the patent litigation; or (3) the

expiration of 30 months from the receipt of

notice of the paragraph IV certification. The

30-month stay affords both the brand-name

company and the generic applicant the

opportunity to resolve patent disputes prior

to commercial marketing, and in tandem

with FDA review of the ANDA for

approval.

The 30-month stay has received

increased attention, because it can have a

significant impact on market entry by

generic drugs. One 30-month period to

resolve disputes over patents listed in the

Orange Book prior to the ANDA’s filing

date appears unlikely to delay generic entry,

however, because it historically has

approximated the time necessary for FDA

review and approval of the ANDA and the

duration of a patent lawsuit. FDA approval

of generic applicants that filed paragraph IV

certifications and were not sued took, on

average, 25 months and 15 days from the

filing date. On average, the time between

the complaint and a district court decision in

litigation between a brand-name company

and first or second generic applicants was 25

months and 13 days. The average time

between the complaint and an appellate

decision was 37 months and 20 days. 

Prior to 1998, litigation between a

brand-name company and a first or second

generic applicant generated, at most, one 30-

month stay per drug product per ANDA,

except for two drug products. For 8 out of

the 9 “blockbuster” drug products (i.e., drug

products that are among the top 20 drug

products, ranked publicly by annual gross

sales, during one of the years included in the

study) as to which the brand-name company

filed suit against the first generic applicant

prior to 1998, the brand-name company

alleged infringement of 1 or 2 patents. In

the remaining case, the brand-name

company alleged infringement of 3 patents. 

Since 1998, however, two new

phenomena appear to be emerging. First, for

drug products with substantial annual net

sales, brand-name companies are suing

generic applicants over more patents. Since

1998, for only 3 of the 8 “blockbuster” drug

products as to which the brand-name

company filed suit against the first generic

applicant, the brand-name company alleged

infringement of 1 or 2 patents. In the

remaining 5 instances, the brand-name

company alleged infringement of 3 or more
40

patents. With additional patents to be

litigated, the average time to obtain a court

decision has increased. As of June 1, 2002,

for 6 of the 7 cases that have been pending

for more than 30 months without a decision

from a district court, the brand-name

company has alleged infringement of 3 or

more patents.

Second, by the timely listing of

additional patents in the Orange Book after a

generic applicant has filed its ANDA (laterissued patents), brand-name companies can

obtain additional 30-month stays of FDA

approval of the generic applicant’s ANDA. 

Although the generic applicant had already

certified to the patents previously listed in

the Orange Book for a particular drug

product, it must re-certify to the newly listed

patent(s) and notify the brand-name

company of its re-certification. If the brandname company sues for patent infringement

on the new certification within 45 days of

notification, a new 30-month stay will begin

to run. The FDA is prohibited from

approving the ANDA until the new 30-

month stay expires.

In 8 instances, brand-name

companies have listed later-issued patents in

the Orange Book after an ANDA has been

filed for the drug product. For the 8 drug

products, the additional delay of FDA

approval (beyond the first 30 months)

ranged from 4 to 40 months. In all of the 4

cases so far with a court decision on the

validity or infringement of a later-issued

patent, the patent has been found either

invalid or not infringed by the ANDA. 

Moreover, most of the later-issued

patents in the Orange Book raise questions

about whether the FDA’s patent listing

requirements have been met. For example,

many of the later-issued patents do not

appear to claim the approved drug product

or an approved use of the drug. Recent court

opinions hold that Hatch-Waxman does not

provide a right of action through which

generic applicants may challenge a patent

listing in the Orange Book. Thus, to

terminate a second 30-month stay, a generic

applicant’s only recourse is to obtain a

decision of a court on patent infringement or

invalidity. 

This chapter sets forth the legal and

regulatory background of the 30-month stay

provision, including a discussion of the

patent listing requirements. It then reviews

the patent-related information requested

from brand-name company and generic

companies. For each NDA that was within

the scope of the study, brand-name

companies were required to identify all

patents that the company has listed in the

Orange Book and the date of listing

(regardless of whether currently listed in the

Orange Book).1 This information provides

the basis for an examination of the patents

that led to the granting of multiple 30-month

stays. Generic companies were required to

provide information on instances in which

they alleged that a patent had been

improperly or untimely listed in the Orange

Book. This information was used to identify

any trends in the patent listings.

1

 Many brand-name companies noted that they

could only provide information about when they had

submitted the patent to the FDA for Orange Book listing

rather than the date on which the patent was actually listed.
41

Box 4-1 Patents and Patentability

A patent is the grant of a right to exclude others from “making, using, offering for sale, or selling” an invention. U.S. patent laws

are enacted pursuant to Article I, Section 8 of the U.S. Constitution, which states that Congress shall have the power "[t]o promote the

Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive Right to their respective Writings

and Discoveries."

There are three basic types of patents: utility, plant, and design patents. Utility patents generally have a term of 20 years from the

date on which the application for the patent was filed. Utility patents are divided into three basic categories: chemical, electrical and

mechanical. Pharmaceutical patents are a subset of chemical patents and are issued over four different categories: drug substance, method

of use, formulation, and process. Drug substance patents cover the compound or active ingredient in the drug product, such as fluoxetine

hydrochloride, which is the active ingredient in Prozac. Method of use patents cover the use of the product to treat certain health problems,

such as depression or asthma. Formulation patents cover the physical composition or delivery mechanism of the drug product, such as an

extended release tablet or capsule. Process patents generally cover the procedure used to make the active ingredient.

To be patentable, an invention must be new and useful, as well as non-obvious. The Patent Office determines novelty by

searching prior patents and publications. The patent must also contain a written description to “enable any person skilled in the art to which

it pertains . . . to make and use” the invention. Non-obviousness is determined in light of the prior art and involves asking whether a person

skilled in the art would consider the invention to be “obvious.” 

Legal and Regulatory

Background of the 30-Month

Stay Provision

As part of the FDA process to obtain

approval of a new drug product under

Hatch-Waxman, brand-name companies

must submit information on any patent

claiming the approved drug and for which a

claim of patent infringement could

reasonably be asserted. The FDA then lists

the approved drug and its related patents in

the Orange Book. Box 4-1 describes how

patents are obtained and how the

pharmaceutical industry uses them. A

generic applicant, as part of the ANDA

process, must provide a certification to the

FDA regarding its generic product and any

patents listed in the Orange Book that claim

the brand-name drug. When a generic

applicant makes a paragraph IV certification,

it claims that the patents listed in the Orange

Book either are invalid or will not be

infringed by the manufacture, use, or sale of

the generic drug product for which the

ANDA is submitted. Frequently, a generic

applicant will make multiple certifications in

its ANDA, depending upon the number of

patents listed in the Orange Book. For

example, a generic applicant may make a

paragraph III certification (indicating that it

will not begin commercial marketing until

that patent expires) for a brand-name drug

product’s drug substance patent, but also

make paragraph IV certification(s) with

respect to listed method of use and/or

formulation patents.

 The Hatch-Waxman Amendments

further provide that each generic applicant

making a paragraph IV certification must

notify each patent owner and the brandname company for the listed drug. If the

patent owner and/or brand-name company

do not initiate a patent infringement suit

within 45 days after receiving notice of a

paragraph IV certification, then the FDA's

review and generic approval process may

proceed according to the FDA's schedule. If,

however, a patent infringement suit is filed

within the 45-day window, the FDA's

approval of the ANDA is automatically

stayed until the earliest of: (1) the date the

patents expire; (2) a final determination of

non-infringement or patent invalidity by a
42

court in the patent litigation; or (3) the

expiration of thirty months from the receipt

of notice of the Paragraph IV certification. 

The initial 30-month stay is not

dependent upon the number of patents for

which a paragraph IV certification is made. 

Whether a generic applicant makes an initial

paragraph IV certification with respect to

one patent, or to multiple patents, only one

30-month stay will be invoked.

The 30-month stay provision

provides the brand-name company an

additional exclusionary right beyond those

granted by the patent system. Even absent

the 30-month stay, a brand-name company

may file suit against an accused infringer,

such as an ANDA applicant, and prevent the

accused infringer from marketing its product

by obtaining a preliminary injunction.2 To

obtain a preliminary injunction, a patentee

must establish four factors: (1) a reasonable

likelihood of success on the merits; (2)

irreparable harm if the injunction were not

granted; (3) the balance of the hardships,

and (4) the impact of the injunction on the

public interest.3

Patent Listing Statute and

Regulations

The Hatch-Waxman Amendments

describe the patent information that brandname companies must file with any new

drug application (NDA). Once the FDA

approves the drug, it then lists the patents in

the Orange Book. Specifically, the listing

statute requires that an NDA filer “shall file

with the application the patent number and

the expiration date of any patent which

claims the drug for which the applicant

submitted the [new drug] application or

which claims a method of using such drug

and with respect to which a claim of patent

infringement could reasonably be asserted if

a person not licensed by the owner engaged

in the manufacture, use, or sale of the

drug.”4 

The FDA has adopted regulations

governing the types of patents that can be

listed in the Orange Book.5

 The listing

regulation is separated into 6 subsections

below for ease of reading. Specifically, the

brand-name company must list in the Orange

Book each patent which:

[1] claims the drug or a method of

using the drug that is the subject of the new

drug application or amendment or

2

See, e.g., Purdue Pharma L.P., v. Boehringer

Ingelheim GMBH, 237 F.3d 1359, 1363 (Fed. Cir. 2001)

(affirming district court’s grant of a preliminary injunction

blocking marketing of a generic drug product).

3

Relatively little case law exists to indicate the

ease or difficulty for the brand-name company to obtain a

preliminary injunction against an ANDA applicant. A few

cases do suggest circumstances in which a preliminary

injunction may be granted. When a patentee establishes a

likelihood of success on the merits, it is entitled to a

rebuttable presumption of irreparable harm. For example,

when the brand-name company is able to show evidence of

price erosion and its expected loss of market share caused

by introduction of a competing drug product, or of a

generic applicant’s likely inability to pay the brand-name

company’s lost profit damages, a preliminary injunction

may be granted. See, e.g., Purdue Pharma L.P., v.

Boehringer Ingelheim GMBH, 2000 U.S. Dist. LEXIS

6563 (S.D.N.Y. 2000), aff’d 237 F.3d 1359, 1363 (Fed.

Cir. 2001); Glaxo Group, Ltd v. Ranbaxy Pharms., Inc.,

262 F.3d 1333, 1338 (Fed. Cir. 2001) (discussing district

court’s decision to grant preliminary injunction because

generic manufacturer could not pay NDA holder’s potential

damages); see Chisum on Patents, § 20.04(e)(iv) (Matthew

Bender).

4

 21 U.S.C. § 355(b)(1).

5

 21 C.F.R. § 314.53(b) (the “listing regulation”).
43

supplement to it and

[2] with respect to which a claim of

patent infringement could reasonably be

asserted if a person not licensed by the owner

of the patent engaged in the manufacture, use

or sale of the drug product. 

This portion of the listing regulation,

requiring that a listed patent satisfy two

independent prongs, is nearly identical to the

governing statute, 21 U.S.C. § 355(b)(1),

except that the regulation substitutes the term

“drug product” for the term “drug” in the

second prong. The FDA interprets the term

“drug” in the statute’s first prong to mean

“drug product.” A district court has

affirmed this interpretation.6

 Thus, it is the

drug product,7

 approved through the NDA,

that controls the listing analysis of the two

prongs ("claims the drug" and "a claim of

patent infringement”).

The remainder of the listing

regulation elaborates on the meaning of the

two independent prongs:

[3] For purposes of this part, such

patents consist of drug substance (ingredient)

patents, drug product (formulation and

composition) patents, and method of use

patents. 

[4] Process patents are not covered by

this section and information on process

patents may not be submitted to FDA. 

[5] For patents that claim a drug

substance or drug product, the applicant shall

submit information only on those patents that

claim a drug product that is the subject of a

pending or approved application, or that

claim a drug substance that is a component of

such a product.

[6] For patents that claim a method of

use, the applicant shall submit information

only on those patents that claim indications or

other conditions of use of a pending or

approved application.

8

Timing of Listing Later-Issued

Patents

Brand-name companies may list

later-issued patents (i.e., patents obtained

from the U.S. Patent and Trademark Office

after obtaining NDA approval) so long as

they do so within 30 days of being granted

the patent.9 Two scenarios are possible,

depending on whether a later-issued patent

is listed prior to or after the generic

applicant files its ANDA. If the later-issued

patent is listed prior to a generic applicant’s

filing of an ANDA, then the generic

applicant will certify regarding that patent

along with all the other listed patents. A

brand-name company’s suit on those patents

within 45 days will generate only one 30-

month stay, despite the fact that multiple

patents are at issue in the litigation. 

If, however, the later-issued patent is

listed after a generic applicant has filed its

6

Pfizer, Inc. v. FDA, 753 F. Supp. 171 (D. Md.

1990).

7

 The FDA’s regulations define “drug product” as

“a finished dosage form, for example, a tablet, capsule,

solution, etc., that contains an active drug ingredient

generally, but not necessarily, in association with inactive

ingredients.” 21 C.F.R. § 210.3(4).

8

 Id.

9

 21 U.S.C. § 355(c)(2). Of course, a brandname company can list a patent more than 30-days after

issuance; however, pending generic applicants do not have

to re-certify to that patent.
44

ANDA with a paragraph IV certification,

then the generic applicant must re-certify

that its ANDA does not infringe the laterissued patent. If the brand-name company

sues within 45 days of the generic

applicant’s re-certification, then a second

30-month stay will issue. Thus, a brandname company can obtain an additional 30-

month stay of FDA approval if it lists

patents in the Orange Book after notice of

an ANDA containing a paragraph IV

certification, and then sues for patent

infringement upon notice of the generic

applicant’s re-certification. It is not

necessary for the multiple 30-month stays to

run consecutively; it is possible for gaps to

exist between the multiple 30-month stays. 

For example, the first stay may have expired

without a decision of a court or FDA

approval of the ANDA, but a later-issued

patent triggers an additional 30-month stay.

Lack of Review of Patents in

the Orange Book

The FDA has stated that it lacks the

resources and the expertise to review patents

submitted with NDAs. The agency does not

ensure that a submitted patent claims the

approved drug before listing it in the Orange

Book.10 Moreover, the FDA has declined to

enact any administrative procedures for

resolving listing disputes. If a party disputes

the accuracy of a listed patent, it may notify

the FDA. The FDA then will request the

brand-name company to confirm the

correctness of the listed patent information. 

Unless the brand-name company voluntarily

withdraws or amends its listed information,

the FDA will not change the patent

information in the Orange Book. If the

information remains unchanged, generic

applicants must certify to the disputed

patent.11 Two courts have upheld this

policy.12

Several generic applicants have

attempted to obtain court orders requiring

the FDA or brand-name companies to delist

certain patents from the Orange Book. 

When a patent is delisted, the 30-month stay

will not run and, hence, the FDA is free to

approve the ANDA, if other regulatory

requirements are met. However, two recent

court decisions have held that there is no

private right of action under HatchWaxman.13

10 59 Fed. Reg. 50338, 50343 (Oct. 3, 1994)

(“FDA does not have the expertise to review patent

information. The agency believes that its resources would

be better utilized in reviewing applications rather than

reviewing patent claims.”); Abbreviated New Drug

Application Regulations, 54 Fed. Reg. 28872, 28910

(1989) (“In deciding whether a claim of patent

infringement could reasonably be asserted . . . the agency

will defer to the information submitted by the NDA

applicant.”). 

11 21 C.F.R. § 314.53(f). 

12 See aaiPharma v. Thompson, 2002 WL

1473429 (4th Cir. Jul. 10, 2002); Watson Pharmaceuticals

v. Henney, Civil Action No. 00-3516 (D. Md. Jan. 17,

2001).

13 Andrx Pharm, Inc. v. Biovail Corp., 276 F.3d

1368 (Fed. Cir. 2002); Mylan Pharm, Inc. v. Thompson,

268 F.3d 1323 (Fed. Cir. 2001). Nor do the patent laws

permit an assertion of improper listing as a defense to

patent infringement. Mylan, 268 F.3d at 1330-32. The

Federal Circuit, however, has suggested that a generic

applicant might sue the FDA under the Administrative

Procedures Act to compel it to delist a patent and to

approve an ANDA subject to a 30-month stay that flows

from an improperly listed patent. Andrx, 276 F.3d at 1378-

79. This suggestion contradicts the FDA’s court-approved

policy of not reviewing patents submitted with NDAs.


47

District Court for the District of Columbia

found the FDA’s interpretation of “court” to

be inconsistent with the statute’s plain

meaning; the FDA was directed to approve

an ANDA upon a decision of a district court

finding a patent invalid, unenforceable, or

not infringed.

To comply with this decision, the

FDA has provided a “Guidance for Industry”

that redefines “court” to be a district court. 

This definition applies, however, only to

ANDAs containing paragraph IV

certifications that were filed with the FDA

after March 2000. If a generic applicant

filed its ANDA with the paragraph IV

certification prior to March 2000, the

definition of a court will remain “the court

that enters final judgment from which no

appeal can be or has been taken.”18

Duration of Patent

Infringement Litigation

Table 4-1 shows the average time it

took to obtain a decision of a district court

and, then, an appellate court in ANDA

patent infringement cases involving the drug

products included within the scope of the

study. On average, the time between

complaint and district court decisions in

litigation with the first generic applicant was

25 months and 21 days. The time between

complaint and an appellate decision was 38

months and 27 days. For ANDA

infringement litigation with the second

generic applicant, the time frames were

slightly shorter as shown in Table 4-1. 

Table 4-119 also shows the average for

litigation involving both first and second

generic applicants.

Table 4-1 Length of Patent Cases

Average Time

Period

First

Generic

Applicant

Second

Generic

Applicant

Weighted

Average

Between

Complaint and

District Court

Decision

25 months,

21 days

(31 cases)

24 months,

29 days

(22 cases)

25 months,

13 days

(53 cases)

Between

Complaint and

Appellate

Decision

38 months,

27 days 

(14 cases)

36 months,

4 days

(12 cases)

37 months,

20 days

(26 cases)

Several observations can be made

from the data. First, patent infringement

litigation over blockbuster drugs

increasingly has involved more patents. 

Prior to 1998, for 8 out of the 9 blockbuster

drug products as to which the brand-name

company filed suit against the first generic

applicant, the brand-name company alleged

infringement of 1 or 2 patents. In the

remaining case, the brand-name company

alleged infringement of 3 patents. Since

1998, for only 3 out of the 8 blockbuster

drug products as to which the brand-name

company filed suit against the first generic

applicant, the brand-name company alleged

Apr. 9, 1998).

18 FDA, Guidance for Industry, Court Decisions,

ANDA Approvals, and 180-Day Exclusivity Under the

Hatch-Waxman Amendments to the Federal Food, Drug,

and Cosmetic Act (Mar 2000). This guidance document

also discusses the definition of a court to trigger the 180-

day exclusivity, see Chapter 5.

19 Table 4-1 contains cases that resulted in a

court opinion, including cases involving the same drug

product, but a different dosage strength or generic applicant

(if different generic applicants were first for different

dosage strengths). It does not include stipulated dismissals

or consent entered by the court pursuant to a patent

settlement agreement.
48

infringement of 1 or 2 patents. In the

remaining 5 instances, the brand-name

company alleged infringement of 3 or more

patents. For example, the brand-name

company for blockbuster drug products such

as Prilosec, Claritin, and Paxil sued the first

generic applicant for patent infringement on

six, three, and six patents, respectively. One

drug product, Lupron, has 12 listed patents

for which the brand-name company has

alleged infringement.

Second, cases involving multiple

patents appear to extend beyond the average

time it took to resolve the patent

infringement cases identified in Table 4-1. 

The data suggest that cases involving

multiple patents take longer to resolve than

those involving fewer patents. As of June 1,

2002, for 6 out of the 7 cases that have been

pending for more than 30 months without a

decision from a district court (see Figure 2-

1), the brand-name company has alleged

infringement of 3 or more patents.

Third, district courts have issued

decisions about non-infringement in a

shorter period of time than decisions of

patent invalidity. The average time between

the filing of the complaint against either the

first or second generic applicant and a

decision of non-infringement was 19

months, 23 days. By contrast, the average

time to obtain a district court decision of

patent invalidity was 33 months, 5 days.

Multiple 30-Month Stays on

Later-Issued Patents For Drug

Products in the Study

The data revealed 8 drug products

(out of 104 in the study) for which the

brand-name company listed a patent in the

Orange Book after the first generic applicant

had filed its ANDA.20 In these cases, the

brand-name company obtained one or more

additional 30-month stays for the drug

product. Table 4-2 shows that the majority

of the second 30-month stays have issued

since 1999.21 In contrast to the discussion in

Chapter 3 concerning settlement agreements,

the discussion here is not anonymous

because the Orange Book listings and patent

information is readily available in the public

domain. 

Table 4-2 Usage of Later-Issued Patents

Year in

Which 2nd

Stay Issued

Number of

Drug

Products

Drug Product(s)

1996 2 Hytrin (tablets);

Platinol*

1997/98 0

1999 1 Paxil

2000 4 Taxol; BuSpar;

Neurontin (capsules);

Neurontin (tablets)

2001 (thru

6/25/01)

1 Tiazac

Total 8

* The earlier-filed ANDAs contained paragraph III

certifications, but the later-issued patent was listed in the

Orange Book shortly before the underlying patents were to

expire.

20 This total does not include instances in which

the brand-name company initiated suit on a different

strength of the same drug product.

21 There may be additional drug products that

have obtained a second 30-month stay that are not included

within this study because the first ANDA with a paragraph

IV certification was filed after January 1, 2001. See

Chapter 1 for the scope of the study.
49

Table 4-3 describes the total time per

drug product during which the FDA was

prohibited from approving a generic

applicant’s ANDA because of one or more

30-month stays generated by a later-listed

patent. In most cases, the brand-name

company companies only obtained one

additional 30-month stay, typically based on

a formulation or method of use patent.

Appendix G describes the relationship of

these additional patents to the brand-name

company’s approved drug product.

Appendix H describes issues about the

listing of these patents in the Orange Book.

Table 4-3 Multiple 30-Month Stays Caused by Patents Later-Issued Patents

Drug Product/

Active

Ingredient

Patent Claims

in Original

Lawsuit

Patent Claims

in Subsequent

Suit(s)

Total

Number

of Stays

Timing of

Subsequent

Stay(s)

Total

Length of

Stays

Net Sales in Year

the Second Stay

was Issued

Platinol

(Cisplatin)

N/A,

Paragraph III

Certification

Formulation 1 Beginning 2

months prior to

the last patent

claiming the drug

expired

30 months Between $100 and

$250 million

Hytrin -- tablets

(Terazosin)

Drug

substance

Drug

Substance

3 Beginning 43

months after the

first stay began

70

months*

Between $500 and

$750 million

Paxil

(Paroxetine

Hydrochloride)

Drug

Substance, 

Formulation,

Method of use

Drug

Substance,

Formulation,

Method of Use

5 Beginning 17

months into the

first stay

65 months Over $1 billion

Taxol

(Paclitaxel)

Method of Use Formulation 2 Beginning after 1st

30-month stay had

expired

Potentially

60

months**

Between $750

million and $1

billion

BuSpar

(Buspirone)

Method of

Use,

Paragraph III

Certification

Method of Use 2 Beginning the day

the last patent

claiming the drug

expired

Potentially

30

months**

Between $500 and

$750 million

Neurontin –

capsules

(Gabapentin)

Drug

Substance,

Method of Use

Formulation 2 Beginning 23

months into first

stay

53 months Between $250 and

$500 million

Neurontin –

tablets

(Gabapentin)

Drug

Substance,

Method of Use

Formulation 2 Beginning 7

months into first

stay

37 months Between $250 and

$500 million

Tiazac

(Diltiazem)

Formulation Formulation 2 Beginning 30

months after first

stay began

Potentially

60

months**

Between $100 and

$250 million

* The time from the beginning of the first stay until the end of the final stay lasted approximately 70 months, but the stays were

not overlapping. See Appendix G for a further discussion of Hytrin.

** The actual total length of the stays were shorter because of the court actions in each of the cases, see discussion in Boxes 4-2,

4-3, and Appendix G.

51

The patent listings involving

GlaxoSmithKline’s (GSK)22 drug product

Paxil illustrate the impact that multiple 30-

month stays can have on the timing of FDA

approval, and thus the beginning of generic

competition. Four additional 30-month

stays have prevented FDA approval of

generic competition against Paxil for

approximately 65 months.23 GSK

manufactures and distributes Paxil, which

the FDA has approved for the treatment of

depression, obsessive compulsive disorder,

panic disorder, and social anxiety disorder.24

The FDA approved Paxil in

December 1992. Patent No. 4,007,196 (the

‘196 patent) covering the active ingredient

paroxetine hydrochloride had expired prior

to this date and, therefore, was not listed in

the Orange Book. However, GSK listed

Patent No. 4,721,723 (the ‘723 patent)

which claims paroxetine hydrochloride

hemihydrate. (A hemihydrate is a form of

the active ingredient that has one water

molecule for every two paroxetine

molecules incorporated into its crystalline

structure.)

Apotex Corporation filed an ANDA

for generic Paxil on March 31, 1998. With

the ANDA, Apotex submitted a paragraph

IV certification for the ‘723 patent, the only

patent listed in the Orange Book at that time. 

GSK’s infringement suit generated the first

30-month stay, which expired in

approximately November 2000. Since

March 1998, however, GSK has listed nine

additional patents in the Orange Book and

brought infringement suits against Apotex

on four of them. The four infringement suits

generated four additional 30-month stays

that created an automatic stay on FDA

approval of generic Paxil totaling over 5

years. Figure 4-1 depicts graphically the

stay on FDA approval of Apotex’s ANDA.

22 Before the merger of Glaxo Wellcome and

SmithKline Beecham, Paxil was manufactured and

distributed by SmithKline Beecham, which was also the

original NDA holder. For simplicity, however, we will

refer throughout to GSK.

23 Apotex Corporation, Novartis (Geneva),

Mylan, Alphapharm, IVAX, and Pentech have all filed

ANDAs for generic Paxil. GSK sued each of them for

infringing at least some of the patents discussed. For

simplicity in demonstrating the effect of the more recently

listed patents and the 30-month stays they generated, we

will focus on the suits GSK brought against Apotex.

24 Physician’s Desk Reference, 55th ed. (2001) at

3114.

53

to be infringed by a bioequivalent generic

product. Conversely, it is possible for a

bioequivalent generic product to infringe a

patent that does not claim the brand-name

drug (and hence should not be listed in the

Orange Book).26

Second, the Hatch-Waxman

Amendments and listing regulations grant

brand-name companies the 30-month stay

only for those patents that claim its approved

drug product or an approved use of that

product. The Amendments do not grant the

protection of the 30-month stay to every

patent that a bioequivalent generic product

may infringe. This does not mean, however,

that a brand-name product is left vulnerable

to infringing generic products. A brandname company may obtain and enforce

patents covering bioequivalent “designaround” formulations of its product. In fact,

the brand-name company may bring its

infringement suit at the time the generic files

its ANDA, even when the patent is not listed

in the Orange Book.27 Moreover, just like

any patent holder, brand-name company

companies may prevent initial marketing of

a generic product by demonstrating

entitlement to a preliminary injunction in

patent infringement litigation. Thus, Orange

Book listings control only whether a brandname company may obtain an automatic 30-

month stay, not whether and when it may

obtain and assert patent protection.

Third, even after a patent satisfies the

first prong of the statute (“claims the drug”),

to be properly listed it must still satisfy the

independent second prong, requiring that a

“claim of patent infringement could

reasonably be asserted” against the NDA

holder’s approved drug product.28 The

analysis depends on whether the branded

and approved drug product, rather than the

generic product, infringes the patent, absent

a license. Whether a patentee can

“reasonably” assert a claim of patent

infringement is not limited to infringement

but also includes the validity and

enforceability of the patent.

Fourth, the listing regulation requires

26 This is especially true for formulation patents,

which cover composition of a drug product, rather than its

active ingredient. A generic drug company may formulate

its drug product differently than the brand-name product,

but still produce a bioequivalent product. The generic’s

different formulation may not infringe the brand’s patent

covering its own formulation. See, e.g., Biovail Corp. v.

Andrx Pharma., Inc., 239 F.3d 1297 (Fed. Cir. 2001)

(Andrx’s formulation did not infringe listed patent). On

the other hand, a generic company’s own formulation may

be sufficiently different to merit its own patent protection. 

See U.S. Patent No. 5,567,441 (patent on diltizem

formulation assigned to Andrx).

27 35 U.S.C. § 271(e)(2) makes it an act of 

infringement to submit an ANDA for a drug “claimed in a

patent.” This statute allows infringement litigation based

on the filing of an ANDA in spite of § 271(e)(1)’s safe

harbor provision protecting activities related to obtaining

FDA approval from infringement allegations. As one

district court has recognized, nothing in the statute limits

suits under § 271(e)(2) to those based on patents listed in

the Orange Book. In re Buspirone Antitrust Litigation, 185

F. Supp. 2d 363, 372 (S.D.N.Y. 2002) (patentee could have

brought its infringement suit without relying on its Orange

Book listing); see also Mylan Pharma., Inc. v. Thompson,

268 F.3d 1323, 1331-32 (Fed. Cir. 2001) (rejecting

argument that Mylan’s challenge to Orange Book listing

could be viewed as a defense to Bristol’s assertion of patent

infringement under 35 U.S.C. § 271(e)(2) suggesting that

an infringement suit under § 271(e)(2) does not require that

the asserted patent be listed in the Orange Book). In spite

of this fact, one recent district court decision suggested that

an Orange Book listing and a paragraph IV certification is a

necessary predicate to a patent suit under § 271(e)(2). 

Allergan Inc. v. Alcon Labs, Inc., 200 F.Supp.2d 1219

(C.D. Cal. 2002). To ensure that litigation can proceed

upon the filing of an ANDA, without such an Orange Book

listing and a paragraph IV certification, this decision

should be overruled.

28 21 C.F.R. § 314.53(b).
54

that the patent “claim” the approved drug

product.29 The Court of Appeals for the

Federal Circuit has explained that the term

“claim” under the Hatch-Waxman

Amendments has the standard meaning as

understood in patent law.30

 A patent

“claims” a product only when the written

section of the issued patent labeled the

“claims” define it. As the Federal Circuit

stated, “the plain meaning of ‘claims’ is not

the same as the plain meaning of

infringement.”31 Even though a drug

product or its use may infringe a patent

under the doctrine of equivalents,32 or

indirectly through theories of contributory

infringement or inducement to infringe, that

patent does not “claim” the product.33

Consequently, a brand-name company may

not list a patent in the Orange Book when its

approved drug product infringes the patent

only indirectly or under the doctrine of

equivalents, and not directly and literally.

One general concern overlays all four

points. One function of the Orange Book is

to provide notice to ANDA applicants of

relevant patents. There is, however, a tradeoff between using the Orange Book to

provide notice of all relevant patents and

implementing a methodology that grants the

protection of the 30-month stay to a defined

class of patents, as does the current statutory

methodology. One consequence of

restricting the patents listed in the Orange

Book is that the Orange Book would then

not provide notice of every patent that an

ANDA filer might infringe. For example,

beyond those patents that do not claim the

brand-name company’s drug product, the

Orange Book also provides no notice of

process patents. The importance of the

notice function of the Orange Book is

unclear, however. Many companies may not

need an Orange Book listing to provide

notice, given the sophistication of their

patent searching techniques and the common

practice of monitoring newly listed patents

on a regular basis.34

The analysis identified three broad

categories of patents that raise questions

about whether they fall within the class the

Hatch-Waxman Amendments defines as

listable in the Orange Book. These

categories, which are more fully explained

in Appendix H, are:

1. Patents that may not be

29 Id.

30 Hoechst-Roussel Pharms., Inc. v. Lehman, 109

F.3d 756 (Fed. Cir. 1997) (interpreting the term “claims” in

the Patent Term Restoration portion of the Hatch-Waxman

Amendments at 35 U.S.C. § 156(a)). A district court has

held that this interpretation of “claims” applies to the

listing statute. Mylan Pharma., Inc. v. Thompson, 139 F.

Supp. 2d 1, 19-21 (D.D.C. 2001), rev’d on other grounds,

268 F.3d 1323 (Fed. Cir. 2001).

31 Hoechst-Roussel Pharms., Inc., 109 F.3d at

759.

32 If an accused device does not literally infringe

a patent claim because it lacks some element of that claim,

it may infringe under the doctrine of equivalents if it

contains some element that is insubstantially different from

the claim element which it lacks. Warner-Jenkinson Co.,

Inc. v. Hilton Davis Chemical Co., 520 U.S. 17, 35-36

(1997).

33 Hoechst-Roussel Pharms., Inc., 109 F.3d at

759 (“The relationship between infringement and the

claims becomes even more tenuous under the doctrine of

equivalents, where a product is deemed to infringe the

patentee’s right to exclude even though the product does

not fall within the scope of the patent’s claims.”).

34 See, e.g., Testimony of Michael Kirschner,

Immunex Corp., FTC Public Hearings: Competition and

Intellectual Property Law and Policy in the

Knowledge-Based Economy (Feb. 26, 2002) available at

<http://www.ftc.gov/opp/intellect/020226trans.pdf>.
55

considered to claim the drug formulation or

method of use approved through the NDA. 

For example:

a. Metabolite patents that claim

the chemical compound into

which a patient’s body

converts the approved drug

product;

b. Drug intermediate patents

that claim a chemical

compound used during

production of the active

ingredient, but not appearing

in the final drug product; and

c. Polymorph patents that claim

a crystalline form of the

active ingredient that differs

from the approved crystalline

form;

2. Product-by-process patents

that claim a drug product produced by a

specified process; and

3. Patents that constitute

double-patenting because they claim subject

matter that is obvious in view of the claims

of another patent invented by the same

person.

Several points emerge from the

analysis in Appendices G and H comparing

these patents to the class of patents defined

as listable by the statute. The large majority

of patents creating an additional 30-month

stay raise some kind of listing issue. It is

important to note that this patent analysis

applies not only to late-issued patents, but

also potentially to patents listed prior to the

filing of ANDA. The patents generating the

first or sole 30-month stay have, on

occasion, raised similar listability issues. 

Determining whether these patents

are appropriately listed sometimes involves

an analysis of chemistry, patent law, and

FDA law. Many of the listing issues

concern the FDA’s listing regulations,

however, rather than interpretations of

patent scope. For instance, the question of

whether metabolite, drug intermediate,

polymorph, and product-by-process patents

may be listed appears to depend on

interpretations of the listing regulations. As

Appendix H details, the identification of

individual patents as falling into one of

those categories is usually relatively straightforward. 

To the degree there is uncertainty

about the scope of the listing regulations,

they could be clarified by regulation or

guidance. The FDA's clarification of these

issues is important to antitrust challenges to

improper Orange Book listings. The

question of whether a patent claims some

unapproved aspect (and hence should not be

listed) may depend more on an interpretation

of the NDA’s scope of approval than an

interpretation of the patent. A mechanism

by which the FDA could comment on the

scope of an NDA would be helpful in

resolving some listing disputes, as occurred

in the Tiazac situation described in Box 4-4. 

An antitrust suit involving complex

elements beyond the propriety of the listing

is the only current mechanism to challenge

an Orange Book listing.

To clarify some of these issues (but

not all), the FTC staff has submitted a

Citizen Petition to the FDA that seeks

guidance concerning the criteria that a patent
56

must meet before it can be listed in the

Orange Book.35 The requested guidance

could eliminate uncertainty surrounding the

appropriateness of listing some types of

patents, in particular polymorph patents, in

the Orange Book, but it will leave other

issues unaddressed. The FTC staff Citizen

Petition is pending.

35 Appendix F contains a copy of the FTC Staff

Citizen Petition, available at

<http://www.fda.gov/ohrms/docket/dailys/01/May01/05290

1/cpa.pdf>.
57

Chapter 5 180-Day Marketing Exclusivity Under the Hatch-

 Waxman Amendments

Introduction

The Hatch-Waxman Amendments

provide 180 days of marketing exclusivity to

the first generic application that seeks entry

prior to expiration of the patents listed for

the relevant brand-name drug product. The

exclusivity allows this first generic applicant

to sell the only generic substitute for a

brand-name drug product for 180 days after

either i) first commercial marketing by the

first generic applicant, or ii) a decision of a

court holding the relevant patents to be

invalid or not infringed.1 The grant of 180-

day exclusivity to the first generic applicant

creates an incentive for a generic company

to challenge a brand-name company’s drug

product patents. One court has explained

that 180-day exclusivity rewards the first

generic applicant for the expense and effort

involved with challenging a listed patent.2

 

If the 180-day exclusivity for the first

generic applicant does not run, then the FDA

may not approve any subsequent eligible

generic applicants. Thus, if the first generic

applicant agrees not to trigger the 180-day

exclusivity, the possibility exists that no

generic applicant may enter the market. The

Commission’s interest in 180-day

exclusivity has focused on the agreements

between brand-name and generic companies

that have affected whether and when first

generic applicants have triggered the running

of 180-day exclusivity. The Commission’s

antitrust law enforcement actions have

alleged that certain brand-name and generic

companies have entered into agreements

that, among other things, have had the effect

of delaying entry by the first generic that

otherwise would trigger the running of the

180-day exclusivity, thereby creating a

bottleneck for any subsequent eligible

generic entry.3 

The regulatory landscape

implementing the 180-day exclusivity

provision has shifted over the last several

years, and this may have affected the

frequency with which generic applicants

obtain 180-day exclusivity. Before 1992 (a

time period not included in the FTC’s

study), the FDA granted 180-day exclusivity

to 3 generic applicants. From 1992 until

1998, the FDA granted 180-day exclusivity

to no generic applicants. Since 1998, when

the FDA changed its regulations in response

to a court ruling,4

 and more ANDAs

containing paragraph IV certifications have

been filed, the FDA has granted 180-day

exclusivity to the first generic applicant for

31 drug products.

For the drug products within the

1

 21 U.S.C. § 505(j)(5)(B)(iv).

2

 Mova v. Shalala, 140 F. 3d 1060, 1074 (D.C.

Cir. 1998).

3

See Abbott Laboratories, No. C-3945 (May 22,

2000) (consent order), available at

<http://www.ftc.gov/os/2000/03/abbott.do.htm> (this

consent order related to 2 drug products: Hytrin tablets and

Hytrin capsules).

4

See Mova, supra n. 2.
58

scope of this study, the generic applicant’s

commercial marketing has triggered the 180-

day exclusivity in 19 of 31 instances. The

data show that when the brand-name

company did not sue the first generic

applicant for patent infringement (29 drug

products, see Table 2-1), the first generic

applicant began commercial marketing soon

after receiving FDA approval.

The data show that 14 of the 20 final

settlements obtained through the study

(discussed in Chapter 3) had the potential, at

the time they were executed, to “park” the

first generic applicant’s 180-day exclusivity

for some period of time, thus preventing

FDA approval of any eligible subsequent

applicants. In addition to the 20 final

settlement agreements, there were 4 interim

settlement agreements pursuant to which the

patent litigation continued, but the parties

agreed upon certain conditions in the

meantime. The Commission, as noted

above, has challenged interim settlements

for 3 drug products. 

This chapter describes the 180-day

provision in the Hatch-Waxman

Amendments and details how FDA’s rules

governing 180-day exclusivity have evolved. 

The chapter examines how the 180-day

exclusivity has been triggered, and it also

reviews the agreements that were obtained

through the study that affect the triggering of

the 180-day exclusivity. 

The Shifting Regulatory

Landscape Implementing the

180-Day Exclusivity Period

FDA rules implementing the 180-day

exclusivity have changed over the last

several years. This section describes the

FDA’s initial approach to implementing the

180-day exclusivity through the “successful

defense” requirement and the current rules

that no longer require a successful defense. 

The section then discusses the FDA’s

regulations governing what constitutes a

decision of a “court” and “commercial

marketing” sufficient to trigger the first

generic applicant’s 180-day exclusivity. 

Finally, it discusses recent developments

surrounding the awarding of “shared”

exclusivity to multiple generic applicants.

Successful Defense Requirement

In October 1994, the FDA issued

final regulations governing how it would

award the 180-day exclusivity period to

generic applicants.5

 FDA regulations

required that, to obtain the 180-day

exclusivity, the first generic applicant had to

defend successfully against a patent claim of

the brand-name company.6

 The FDA

asserted that only those generic applicants

that had devoted considerable time and

money to defend successfully the patent

infringement lawsuit were entitled to be the

first and only generic company on the

market for 180 days. The FDA reasoned

that a first generic applicant that a brand5

See 59 Fed. Reg. 50338 et seq. (Oct. 3, 1994). 

Prior to this time, the FDA used an approach similar to that

outlined in these regulations.

6

 See id.
59

name company had not sued might have an

incentive to delay marketing. This delay

would prolong the period of no generic

competition, because other generic products

may not be approved until the first generic

product begins commercial marketing.7

These regulations were challenged in

Mova v. Shalala, a case involving the brandname drug product Glynase.8

 Mova

Pharmaceuticals was the first generic

applicant for Glynase. Pharmacia &

Upjohn, the brand-name company, sued

Mova for patent infringement within the

requisite 45-day period, thus initiating the

30-month stay on FDA approval of Mova’s

application. Pharmacia did not sue the

second generic applicant, Mylan

Pharmaceuticals, for the same drug product

within 45 days of being notified; thus, the

30-month stay was not triggered. FDA was

about to approve Mylan’s ANDA prior to

the expiration of Mova’s 30-month-stay, but

before the district court had ruled on the

merits of patent infringement case against

Mova, the first generic applicant. Mova

therefore sued the FDA to delay the effective

date of the approval of Mylan’s application

until Mova had won its patent infringement

suit or begun commercial marketing of its

generic product.

The district court granted a

preliminary injunction against the FDA on

January 23, 1997, requiring the FDA to

delay approval of Mylan until after Mova’s

180 days of exclusivity took effect. This

ruling rejected FDA’s “successful defense”

requirement as inconsistent with the plain

language of the Hatch-Waxman

Amendments.9 The Court of Appeals for the

District of Columbia Circuit affirmed the

District Court’s ruling in its April 1998

decision.10

The FDA revoked the “successful

defense” requirement and now makes

exclusivity decisions on a case-by-case basis

applying the literal words of the statute.11

The FDA also has proposed new regulations

to address issues that these court decisions

have raised.12 This rulemaking proceeding

has been pending since August 1999. 

Definition of the “Court” As

Used in the 180-Day Marketing

Exclusivity Provision

The FDA originally interpreted the

definition of a court that would trigger 180-

day exclusivity to be “the court that enters

final judgment from which no appeal can be

or has been taken.”13 In Mylan

7

See 54 Fed. Reg. 28872 (Jul. 10, 1989).

8

 955 F. Supp. 128 (D.D.C. 1997), aff’d, 140 F.

3d 1060 (D.C. Cir. 1998). 

9

See Mova, 140 F.3d at 1069.

10 The Court of Appeals also referenced

Granutec Inc. v. Shalala, 139 F.3d 889, 1998 WL 153410

(4th Cir. 1998); 46 USPQ2d 1398 (4th Cir. 1998)

(unpublished opinion), in dicta, “We note that the Fourth

Circuit recently came to the same conclusion in an

unpublished opinion.” Mova, 140 F.3d at 1069.

11 The FDA also subsequently published

guidance for industry entitled “180-Day Generic Drug

Exclusivity Under the Hatch-Waxman Amendments to the

Federal Food, Drug, and Cosmetic Act” (June 1998),

describing its approach to 180-day exclusivity in light of

Mova and Granutec. 

12 64 Fed. Reg. 42873 (Aug. 6, 1999).

13 21 CFR 314.107(e)(1) (1999).
60

Pharmaceuticals, Inc. v. Shalala,

14 the

District Court for the District of Columbia

found FDA’s interpretation of “court” to be

incorrect; the court instead held that “court”

means “district court.” The FDA amended

its rules to implement the Mylan decision by

defining the “court” decision that triggers

the running of the 180-day marketing

exclusivity period as the decision of a

district court. This definition applies,

however, only to ANDAs containing

paragraph IV certifications filed with the

FDA after March 2000. Thus, if a generic

applicant filed its ANDA with the paragraph

IV certification prior to March 2000, the

definition of a court will remain “the court

that enters final judgment from which no

appeal can be or has been taken.”15

Triggers for the 180-Day

Exclusivity Period

Prior to the Mova court of appeals

decision on April 14, 1998, the FDA had

granted the 180-day exclusivity to 3 generic

applicants for drug products covered by 3

NDAs.16 In each case, a court had decided

that the patent was invalid or not infringed

such that the generic applicant had

“successfully defended” the patent litigation

suit. Each of these grants of the 180-day

exclusivity occurred prior to 1991 and

involved drugs not included in the scope of

the study. 

Since Mova, the FDA has granted the

180-day exclusivity to the first generic

applicant for 31 drug products.17 Table 5-1

categorizes these grants of exclusivity by the

triggering mechanism (either by commercial

marketing or the decision of a court) as of

June 1, 2002.

Table 5-1: Marketing Exclusivity

Triggering Event Since 199818

Triggering Event Number of

ANDAs

Commercial Marketing 19

Court Decision of Patent Invalidity

or Non-Infringement

12 

Total 31

14 Mylan Pharmaceuticals, Inc. v. Shalala, 81

F.Supp.2d 30 (D.D.C. 2000).

15 FDA, Guidance for Industry, Court Decisions,

ANDA Approvals, and 180-Day Exclusivity Under the

Hatch-Waxman Amendments to the Federal Food, Drug,

and Cosmetic Act (Mar 2000). This guidance document

also discusses the definition of a court for purposes of

when the 30-month stay expires, see Chapter 4.

16 This information was provided by the FDA to

the FTC staff.

17 For 8 drug products, the FDA has provided

two or more generic applicants the 180-day exclusivity for

drug products covered by the same NDA, because different

generic applicants had the first ANDA for a particular

strength of the drug product (e.g., 30mg, 60 mg, and 90 mg

tablets). To ensure no overcounting, the totals referred to

in this section (and throughout the report unless otherwise

noted) relate only to the number of NDAs for which 180-

day exclusivity has been granted. For each drug product

where this occurred, the same 180-day exclusivity was

activated by the same trigger (i.e., commercial marketing or

a court decision). 

18 For 2 drug products not included in Table 5-1

but within the scope of this study, the first generic

applicant relinquished its eligibility for the 180-day

exclusivity, thus eliminating any delay for subsequent

generic applicants to market their generic products. In

addition, for 3 other drug products not included in Table 5-

1, but within the scope of the study, the FDA has indicated

that certain generic applicants are eligible for 180-day

exclusivity, but the period has not yet started to run,

because neither trigger has been activated.
61

Trigger: Commercial

Marketing

For 19 of the 31 drug products in

Table 5-1, the first generic applicant’s

commercial marketing triggered the running

of the 180-day exclusivity period. 

In 5 of the 19 instances, commercial

marketing occurred when the FDA did not

consider a district court decision sufficient

to trigger the 180-day exclusivity. In these 5

instances, the generic applicants had

prevailed at the district court and the 30-

month stay period had expired, so that the

FDA approved the generic applicant’s

ANDA. Rather than waiting for an appellate

decision, the generic applicants began

commercial marketing. In each of these

instances, the generic applicant ultimately

prevailed in the appellate court, but

commercial marketing, not a court decision,

triggered the 180-day exclusivity.

For another 5 of the 19 drug products

in Table 5-1, the first generic applicant was

not sued. Thus, the only available trigger for

the 180-day exclusivity period was the first

generic applicant’s commercial marketing.19

In each of these instances, the first generic

applicant began commercial marketing soon

after receiving FDA approval. For 3 of

these 5 drug products, the second generic

applicant was approved at the end of the

180-day exclusivity period, and there was

not a second generic applicant for the other 2

drug products. 

In 8 of the 19 instances, the brandname company and the generic applicant

settled the patent litigation and the generic

applicant’s commercial marketing triggered

the 180-day exclusivity. These 8 settlements

can be grouped into 4 categories:

• For 3 drug products, the generic

applicant entered an interim settlement with

the brand-name company. Following

termination of the settlement and FDA

approval, the generic applicant was granted

180-day exclusivity.20

• For 2 drug products, the generic

applicant obtained a license to use the

patents that were subject to the paragraph IV

certification prior to the patent’s expiration. 

The generic applicant then obtained FDA

approval and began marketing the generic

product that was the subject of its ANDA

19 There was one other drug product for which

the first applicant was not sued, but its 180-day exclusivity

was triggered by a court decision favorable to the second

generic applicant. In this case, the FDA had not approved

the first applicant’s ANDA, but the second generic

applicant appeared to be ready to market – except that it

had to wait for the running of the first applicant’s 180-day

period. That the 180-day exclusivity had not run for the

first generic applicant, because its ANDA had not yet been

approved, delayed FDA approval of the second generic

applicant’s ANDA. To remedy this problem, the second

generic applicant sought a court decision of noninfringement to activate the “court decision” trigger. The

district court hearing this declaratory judgment action

dismissed the case for lack of case or controversy, because

the brand-name company indicated that it would not sue

the generic applicant for infringement. The second generic

applicant argued that this constituted a “court decision”

sufficient to trigger the 180-day period. The Court of

Appeals for the District of Columbia agreed and ruled that

a district court’s earlier dismissal of the second generic

applicant case for lack of case or controversy activated the

court decision trigger and, thus, started the running of the

first generic applicant’s 180-day exclusivity. See Teva

Pharmaceuticals, USA, Inc. v. FDA, 182 F.3d 1003 (D.C.

Cir. 1999). There is some uncertainty regarding whether

this reasoning would apply to trigger the 180-day

exclusivity in the future.

20 See Abbott Labs., supra n 3.
62

(see drug products A and C in Table 3-2).21

• For 2 drug products, the settlement

involved a supply agreement allowing the

generic applicant to market the brand-name

company’s product as a generic prior to

patent expiration (see drug product K in

Table 3-3,22 and the description of the

second supply agreement in the text of

Chapter 3).23

• For 1 drug product, the settlement

specified a date on which entry of the

generic product could occur, which was

prior to patent expiration (see drug product

L in Table 3-3).24

In the last of the 19 instances in

which commercial marketing triggered the

180-day exclusivity, commercial marketing

began after the brand-name company

dismissed the patent suit upon determining

the ANDA did not infringe the brand-name

product.

Trigger: Court Decision

For 12 out of the 31 drug products,

the FDA granted 180-day exclusivity to a

generic applicant following a court decision

of patent invalidity or non-infringement. 

Other than the 2 drug products involved in

the challenge to the FDA’s successful

defense requirement,25 in most instances the

court that activated the court decision trigger

was an appellate court decision. More

recently, in 2 of the 12 cases, a district court

decision has triggered the running of the

180-day exclusivity. In one case, the FDA

approved the ANDA after 21 days of the

180-day period had already run, and in the

other case, FDA approval came 120 days

into the 180-day period, thus shortening the

effective life of the 180-day period.

Effect of 180-Day Exclusivity

on FDA Approval of

Subsequent Eligible Generic

Applicants

As noted in the introduction, in

addition to encouraging entry by the first

generic applicant, the 180-day exclusivity

can delay when the FDA approves any

subsequent eligible generic application that

also contains a paragraph IV certification. If

the 180-day exclusivity for the first generic

applicant does not run, then the FDA may

not approve any subsequent eligible generic

applicants. Once the 180-day exclusivity

21 The generic applicant that was party to the

remaining license agreements in Table 3-2 did not receive

the 180-day exclusivity for one of 2 reasons: (1) the

agreement was executed at a time when the FDA required

the first applicant to defend successfully the patent

infringement suit; having failed to do so, they were

ineligible for 180-day exclusivity, or (2) the license has not

yet taken effect, because of a waiting period in the

agreement, such that commercial marketing has not yet

occurred.

22 See Letter to Deborah A. Jaskot, Teva

Pharmaceuticals USA, FDA Docket No. 00P-1446/CP1

(Feb. 6, 2001).

23 Although the 180-day exclusivity has run in

these 2 instances, there is some uncertainty as to whether

commercial marketing by the first generic applicant of the

brand-name company’s product will always activate the

commercial marketing trigger.

24 In most cases, the generic applicant that was

the party to the remaining settlements in Table 3-3

(settlements with brand payments), did not obtain the 180-

day exclusivity because entry did not occur until patent

expiration, thus the generic applicant was ineligible for the

180-day exclusivity.

25 See Mova and Granutec, supra n. 8-10 and

accompanying text.
63

runs, the FDA may approve any additional

generic ANDAs that have been filed and

meet regulatory requirements. 

As discussed in Chapter 3, 14 of the

20 of the settlement agreements obtained

through the study, at the time they were

executed, had the potential to “park” the first

generic applicant’s 180-day exclusivity for

some period of time, thus preventing FDA

approval of any subsequent eligible

applicants.26 These agreements include the 4

license agreements with a waiting period

before the license took effect (drug products

A, E, F, and H in Table 3-2), the 2 supply

agreements described in the text of Chapter

3, and settlements with brand payments

(drug products I through P in Table 3-3). 

Ten brand-name companies and 10 generic

companies used agreements with respect

to14 drug products.

In addition to the 20 final settlement

agreements, there were 4 interim settlement

agreements pursuant to which the patent

litigation continued, but the parties agreed

upon certain conditions until the patent

litigation was resolved. The Commission

has challenged interim settlements for 3

drug products. In those agreements, the

Commission alleged that the brand-name

drug company paid the first generic

applicant not to enter the market, thereby

retaining its (unused) 180-day marketing

exclusivity and precluding the FDA from

approving any eligible subsequent generic

applicants.27 

Between April 1999 (shortly after

FTC investigations in this area became

public) and the end of the period covered by

this study, brand-name companies and first

generic applicants have not entered

agreements similar to the interim agreements

challenged by the FTC.

26 Whether FDA was actually prevented from

approving subsequent eligible generic applicants depends

on a number of factors, including whether there were

subsequent generic applicant(s) and the result of any patent

litigation with those applicants. 27 See supra. n. 3.
64
65

Chapter 6 FDA Citizen Petitions and Generic Drug Applications

Introduction

This chapter reviews FDA

regulations concerning the use of citizen

petitions. It also examines the citizen

petitions that brand-name companies have

filed about drug products in this study, and

discusses their effect on the development of

generic drug competition for these drug

products.

The FDA has generally resolved the

issues raised by the citizen petitions that

brand-name companies file about drug

products in this study in a timely manner,

and in most instances prior to a district court

ruling on the merits of the patent

infringement litigation. Thus, for drug

products in the study, citizen petitions that

have been answered by the FDA have not

delayed generic competition.

No general conclusions about the use

of citizen petitions can be drawn from this

study, however, because it did not examine

citizen petitions filed in connection with

ANDAs that contained paragraph I, II, or III

certifications. Citizen petitions may have a

greater potential to delay generic

competition in those circumstances, in

which no 30-month stay would be

applicable.

FDA Regulations Governing

Citizen Petitions

The FDA has several informal and

formal mechanisms by which it can be

contacted on a particular issue (including via

letter, fax, email or meeting). A formal

procedure, which has been used by both

brand-name and generic pharmaceutical

companies, is the filing of a citizen petition.1

The FDA can be petitioned on any matter or

issue which is within the Agency's

jurisdiction.

The petition can request that the

Commissioner issue, amend, or revoke a

regulation or order, or take or refrain from

taking any other form of administrative

action. The Commissioner must furnish a

response to a petitioner within 180 days of

receipt of the petition.2

 The FDA's reply

must approve, deny, or provide a tentative

response. If the FDA provides a tentative

response, it must indicate why the agency

has been unable to reach a decision on the

petition and may indicate when a final

response may be furnished.3

 Unlike

ordinary correspondence, the FDA treats the

response to a citizen petition as the official

position of the agency.4

Individuals and companies often use

the formal citizen petition process to raise

issues regarding the safety and efficacy of

pharmaceuticals. Brand-name companies,

for example, have petitioned the FDA on

issues relating to bioequivalence for

particular generic drugs.

The FTC staff has commented to the

1

 21 C.F.R. § 10.30.

2

Id. at 10.30(e)(2).

3

 Id.

4

Id. at § 10.45(d).
66

FDA on the potential for such petitions, on

occasion, to mask anticompetitive strategies. 

The FTC staff has suggested changes to the

FDA’s proposed rules governing citizen

petitions that might reduce the potential for

regulatory abuse.5

 The FTC staff comment

explained there is a potential for

anticompetitive abuse of nearly any

regulatory process.

6

 To delay competition

may be a lucrative strategy for an incumbent,

especially in an industry in which entry is

regulated, such as pharmaceuticals. 

Improper petitioning may be appealing in

part because it can be used against any size

firm, regardless of relative resources of the

parties. The cost of filing an improper

citizen petition may be trivial compared to

the value of securing a delay in a rival’s

entry into a lucrative market.7

 

The Noerr-Pennington doctrine often

protects participation in the regulatory

process from antitrust scrutiny.8 As

discussed in Chapter 4, in its simplest terms,

the Noerr-Pennington doctrine shields

private parties from antitrust liability when

they engage in concerted but genuine efforts

to influence governmental action, even

though the conduct is undertaken with an

anticompetitive intent and purpose. If

regulatory intervention (or a series of

interventions) is used, however, to impede

competition, antitrust concerns may be

raised if not shielded by Noerr-Pennington.9 

One of the recommendations in the

FTC Staff Comment on Citizen Petitions

was that the FDA consider requiring

notification of whether the citizen petitioner

has received, or will receive, consideration

for filing the citizen petition and

identification of the party furnishing the

consideration. This information may be

important in evaluating the competitive

effect of the petition.

The Use of Citizen Petitions

About Drug Products for

Which an ANDA Containing a

Paragraph IV Certification

Was Filed

Each brand-name company was

required to state, for each drug product

included in the study for which the company

has been notified that an ANDA containing

a paragraph IV certification has been filed

with the FDA, whether the company has

filed, or contributed to the filing of, in whole

or in part (e.g., provided funds, legal or

regulatory assistance to support the filing), a

citizen petition with FDA concerning an

ANDA related to that drug product and to

identify the FDA docket number assigned to

such citizen petition. 

5

 Comment of the Staff of the Bureau of

Competition and the Office of Policy Planning of the

Federal Trade Commission, Citizen Petitions; Actions That

Can be Requested by Petition; Denials, Withdrawals, and

Referrals for Other Administrative Action, FDA Docket

No. 99N-2497 (Mar. 2, 2000) (FTC Staff Comment on

Citizen Petitions).

6

 Robert H. Bork, The Antitrust Paradox 347

(1978) (“The modern profusion of [. . .] governmental

authorities offers almost limitless possibilities for abuse.”). 

7

 Id. at 348.

8

Eastern Railroad Presidents Conference v.

Noerr Motor Freight, Inc., 365 U.S. 127 (1961); United

Mine Workers v. Pennington, 381 U.S. 657 (1965). 

9

Professional Real Estate Investors, Inc. v.

Columbia Pictures Indus. Inc., 508 U.S. 49 (1993); see

also Bork, see n. 5, at 354.
67

Of the 104 drug products included in

this study, brand-name companies filed

citizen petitions relating to generic versions

of 12 drug products. The data showed that

for 1 drug product, the brand-name company

filed 3 citizen petitions against different

generic applicants; each petition sought

different relief. For 2 other drug products,

the brand-name company filed 2 citizen

petitions, each seeking different relief. 

Thus, brand-name companies filed a total of

16 separate citizen petitions relating to the

104 drug products included in the study. 

In each case, the brand-name

company was the author of the petition and

there was no effort on behalf of the company

to withhold its identity from the FDA. 

For 11 of the 12 drug products

covered by citizen petitions, the brand-name

company that had filed the citizen petition

also had either settled the patent

infringement litigation with an agreement

that contained a brand payment (see Chapter

3), filed a late-issued patent to obtain a

second 30-month stay (see Chapter 4), or has

patent litigation pending in which the brand

company has claimed the ANDA infringes

more than one patent (see Chapter 4). 

Table 6-1 breaks down the type of

request that was included in each petition. 

Table 6-1 Brand-Name Company Use of

 Citizen Petitions

Relief Requested by the Brand-name

Company in the Citizen Petition

Number of

Citizen

Petitions

Additional bioequivalence studies or

safety studies

7

Additional patent certifications 3

FDA to classify the NDA as a different

dosage form

2

Other 4

Almost 50 percent of the citizen

petitions requested that the FDA require

additional bioequivalence studies before

approving the generic applicant’s ANDA. 

Of these 7 petitions regarding

bioequivalence, the FDA denied 3 of these

petitions, granted 1, granted and denied 1 in

part, and 2 petitions were pending as of June

1, 2002. In each case in which the petition

was denied, the brand-name company also

had initiated patent infringement litigation

against the generic applicant. 

In the 5 cases in which the FDA

ruled on the merits of the bioequivalence

issues raised by the petition, it did so prior to

a district court ruling on the merits of the

infringement litigation and prior to the

expiration of the 30-month stay. Thus, the

filing of the citizen petition in these cases

did not affect the generic product’s entry. 

For the other 2 bioequivalence petitions, the

FDA has not yet approved the generic

applicant’s ANDA. 

In the second category of citizen

petitions described in Table 6-1, brand-name

companies requested the FDA refrain from

approving a generic version of the drug

product unless the generic company certified
68

to a new patent that was listed after the

generic applicant had filed its ANDA. The

FDA denied one of the petitions, and in the

other two, the petitions were withdrawn

because of a merger or because the generic

applicant made the requisite patent

certification. In each case, the citizen

petition did not affect when the FDA

approved (if it did) the generic applicants’

ANDAs.

In the third category of citizen

petitions described in Table 6-1, brand-name

companies requested FDA redefine dosage

forms with varying release mechanisms as

distinct dosage forms. If the FDA were to

grant this category of petitions, the generic

applicant also would have been required to

file a suitability petition that sought an FDA

ruling that the two dosage forms were

bioequivalent. In other words, it would have

been procedurally more difficult for the

generic applicant to have its ANDA

approved in a timely manner. 

The FDA denied both of these

petitions. In each case, the brand-name

company had sued the generic applicant for

patent infringement, and the citizen petition

was resolved by the FDA within the 30-

month stay period. Thus, the petition had no

effect on the timing of generic drug

approval. 

The last 4 citizen petitions dealt with

issues unique to the underlying drug

product. In one case, the petition was

withdrawn, in another the FDA responded to

the petition in an informal manner that

satisfied the parties involved, in the third

instance, the petition was denied, and in the

fourth case, the petition was pending as of

June 1, 2002. In the first 3 cases, the

resolution of the citizen petition did not

effect market entry by the generic applicant. 

Conclusions

The citizen petitions related to drug

products in the study that have been resolved

did not affect the timing of generic entry. 

The FDA has addressed the issues raised by

those citizen petitions in a timely manner

and prior to the expiration of the 30-month

stay related to the underlying patent

infringement litigation.

No general conclusions about the use

of citizen petitions, however, can be drawn

from this study, however, because it only

examined citizen petitions filed in

connection with ANDAs that contained

paragraph IV certifications.
A-1

 Appendix A:

Glossary of Terms

“ANDA” means Abbreviated New Drug Application.

“Drug product” means the finished dosage form of a drug approved through an NDA or ANDA. 

“Generic applicant” means those companies that have filed an ANDA containing a paragraph IV

certification.

“Brand-name company” is synonymous with the NDA holder.

“180-day exclusivity” is the grant of 180 days of exclusive marketing to the first generic applicant

that files an ANDA containing a paragraph IV certification after either i) first commercial marketing

by the first generic applicant, or ii) a decision of a court holding the relevant patents to be invalid or

not infringed.

“NDA” means New Drug Application. Pursuant to the Federal Food, Drug, and Cosmetic Act, a

brand-name company seeking to market a new drug product must first obtain FDA approval by filing

an NDA. 

“Orange Book” means the FDA’s publication entitled “Approved Drug Products with Therapeutic

Equivalence,” in which the patents claiming a drug product approved through an NDA are listed.

“Paragraph I certification” means a certification that a generic applicant seeks FDA approval of its

ANDA for a relevant NDA for which no patent information has been filed in the Orange Book.

“Paragraph II certification” means a certification that a generic applicant seeks FDA approval of its

ANDA for a relevant NDA for which a patent filed in the Orange Book has expired.

“Paragraph III certification” means a certification that a generic applicant seeks FDA approval of its

ANDA as of the date a patent listed in the Orange Book for a relevant NDA expires.

“Paragraph IV certification” means a certification that a patent listed in the Orange Book is invalid or

will not be infringed by the generic drug for which the ANDA applicant seeks approval. 

“Settlements” means agreements settling patent litigation between brand-name companies and a

generic applicant that has filed an ANDA containing a paragraph IV certification.

“30-month stay” prohibits the FDA from approving an ANDA with a paragraph IV certification for 30

months if the relevant brand-name company brings a patent infringement suit within 45 days of notice

of the generic applicant’s paragraph IV certification. The 30-month stay is terminated by (1) the

expiration of the patents; (2) a final determination of non-infringement or patent invalidity by a court

in the patent litigation; or (3) the expiration of thirty months from the receipt of notice of the

Paragraph IV certification.
A-2

Appendix B:

Relevant Provisions of the Hatch-Waxman Amendments

21 USCA § 355 (a), (b) and (j)

 (a) Necessity of effective approval of application 

No person shall introduce or deliver for introduction into interstate commerce any new drug, unless an approval of

an application filed pursuant to subsection (b) or (j) of this section is effective with respect to such drug. 

 (b) Filing application; contents 

(1) Any person may file with the Secretary an application with respect to any drug subject to the provisions of

subsection (a) of this section. Such person shall submit to the Secretary as a part of the application

(A) full reports of investigations which have been made to show whether or not such drug is safe for

use and whether such drug is effective in use;

(B) a full list of the articles used as components of such drug;

(C) a full statement of the composition of such drug;

(D) a full description of the methods used in, and the facilities and controls used for, the manufacture,

processing, and packing of such drug;

(E) such samples of such drug and of the articles used as components thereof as the Secretary may

require; and

(F) specimens of the labeling proposed to be used for such drug. The applicant shall file with the

application the patent number and the expiration date of any patent which claims the drug for

which the applicant submitted the application or which claims a method of using such drug and

with respect to which a claim of patent infringement could reasonably be asserted if a person not

licensed by the owner engaged in the manufacture, use, or sale of the drug. If an application is filed

under this subsection for a drug and a patent which claims such drug or a method of using such

drug is issued after the filing date but before approval of the application, the applicant shall amend

the application to include the information required by the preceding sentence. Upon approval of

the application, the Secretary shall publish information submitted under the two preceding

sentences. The Secretary shall, in consultation with the Director of the National Institutes of Health

and with representatives of the drug manufacturing industry, review and develop guidance, as

appropriate, on the inclusion of women and minorities in clinical trials required by clause (A). 

(2) An application submitted under paragraph (1) for a drug for which the investigations described in clause

(A) of such paragraph and relied upon by the applicant for approval of the application were not conducted

by or for the applicant and for which the applicant has not obtained a right of reference or use from the

person by or for whom the investigations were conducted shall also include - 

(A) a certification, in the opinion of the applicant and to the best of his knowledge, with respect to each

patent which claims the drug for which such investigations were conducted or which claims a use

for such drug for which the applicant is seeking approval under this subsection and for which

information is required to be filed under paragraph (1) or subsection (c) of this section - 

(i) that such patent information has not been filed, 

(ii) that such patent has expired, 

(iii) of the date on which such patent will expire, or 

(iv) that such patent is invalid or will not be infringed by the manufacture, use, or sale of the
A-3

new drug for which the application is submitted; and 

(B) if with respect to the drug for which investigations described in paragraph (1)(A) were conducted

information was filed under paragraph (1) or subsection (c) of this section for a method of use

patent which does not claim a use for which the applicant is seeking approval under this

subsection, a statement that the method of use patent does not claim such a use. 

(3) 

(A) An applicant who makes a certification described in paragraph (2)(A)(iv) shall include in the

application a statement that the applicant will give the notice required by subparagraph (B) to - 

(i) each owner of the patent which is the subject of the certification or the representative of

such owner designated to receive such notice, and 

(ii) the holder of the approved application under subsection (b) of this section for the drug

which is claimed by the patent or a use of which is claimed by the patent or the

representative of such holder designated to receive such notice. 

(B) The notice referred to in subparagraph (A) shall state that an application has been submitted under

this subsection for the drug with respect to which the certification is made to obtain approval to

engage in the commercial manufacture, use, or sale of the drug before the expiration of the patent

referred to in the certification. Such notice shall include a detailed statement of the factual and

legal basis of the applicant's opinion that the patent is not valid or will not be infringed. 

(C) If an application is amended to include a certification described in paragraph (2)(A)(iv), the notice

required by subparagraph (B) shall be given when the amended application is submitted. 

(4) 

(A) The Secretary shall issue guidance for the individuals who review applications submitted under

paragraph (1) or under section 262 of title 42, which shall relate to promptness in conducting the

review, technical excellence, lack of bias and conflict of interest, and knowledge of regulatory and

scientific standards, and which shall apply equally to all individuals who review such applications. 

(B) The Secretary shall meet with a sponsor of an investigation or an applicant for approval for a drug

under this subsection or section 262 of title 42 if the sponsor or applicant makes a reasonable

written request for a meeting for the purpose of reaching agreement on the design and size of

clinical trials intended to form the primary basis of an effectiveness claim. The sponsor or

applicant shall provide information necessary for discussion and agreement on the design and size

of the clinical trials. Minutes of any such meeting shall be prepared by the Secretary and made

available to the sponsor or applicant upon request. 

(C) Any agreement regarding the parameters of the design and size of clinical trials of a new drug

under this paragraph that is reached between the Secretary and a sponsor or applicant shall be

reduced to writing and made part of the administrative record by the Secretary. Such agreement

shall not be changed after the testing begins, except - 

(i) with the written agreement of the sponsor or applicant; or 

(ii) pursuant to a decision, made in accordance with subparagraph (D) by the director of the

reviewing division, that a substantial scientific issue essential to determining the safety or

effectiveness of the drug has been identified after the testing has begun. 

(D) A decision under subparagraph (C)(ii) by the director shall be in writing and the Secretary shall

provide to the sponsor or applicant an opportunity for a meeting at which the director and the

sponsor or applicant will be present and at which the director will document the scientific issue
A-4

involved. 

(E) The written decisions of the reviewing division shall be binding upon, and may not directly or

indirectly be changed by, the field or compliance division personnel unless such field or

compliance division personnel demonstrate to the reviewing division why such decision should be

modified. 

(F) No action by the reviewing division may be delayed because of the unavailability of information

from or action by field personnel unless the reviewing division determines that a delay is necessary

to assure the marketing of a safe and effective drug. 

(G) For purposes of this paragraph, the reviewing division is the division responsible for the review of

an application for approval of a drug under this subsection or section 262 of title 42 (including all

scientific and medical matters, chemistry, manufacturing, and controls). 

 (j) Abbreviated new drug applications 

(1) Any person may file with the Secretary an abbreviated application for the approval of a new drug. 

(2) 

(A) An abbreviated application for a new drug shall contain - 

(i) information to show that the conditions of use prescribed, recommended, or suggested in

the labeling proposed for the new drug have been previously approved for a drug listed

under paragraph (7) (hereinafter in this subsection referred to as a ''listed drug''); 

(ii) 

(I) if the listed drug referred to in clause (i) has only one active ingredient,

information to show that the active ingredient of the new drug is the same as that

of the listed drug; 

(II) if the listed drug referred to in clause (i) has more than one active ingredient,

information to show that the active ingredients of the new drug are the same as

those of the listed drug, or 

(III) if the listed drug referred to in clause (i) has more than one active ingredient and

if one of the active ingredients of the new drug is different and the application is

filed pursuant to the approval of a petition filed under subparagraph (C),

information to show that the other active ingredients of the new drug are the

same as the active ingredients of the listed drug, information to show that the

different active ingredient is an active ingredient of a listed drug or of a drug

which does not meet the requirements of section 321(p) of this title, and such

other information respecting the different active ingredient with respect to which

the petition was filed as the Secretary may require; 

(iii) information to show that the route of administration, the dosage form, and the strength of

the new drug are the same as those of the listed drug referred to in clause (i) or, if the

route of administration, the dosage form, or the strength of the new drug is different and

the application is filed pursuant to the approval of a petition filed under subparagraph (C),

such information respecting the route of administration, dosage form, or strength with

respect to which the petition was filed as the Secretary may require; 

(iv) information to show that the new drug is bioequivalent to the listed drug referred to in

clause (i), except that if the application is filed pursuant to the approval of a petition filed

under subparagraph (C), information to show that the active ingredients of the new drug
A-5

are of the same pharmacological or therapeutic class as those of the listed drug referred to

in clause (i) and the new drug can be expected to have the same therapeutic effect as the

listed drug when administered to patients for a condition of use referred to in clause (i); 

(v) information to show that the labeling proposed for the new drug is the same as the

labeling approved for the listed drug referred to in clause (i) except for changes required

because of differences approved under a petition filed under subparagraph (C) or because

the new drug and the listed drug are produced or distributed by different manufacturers; 

(vi) the items specified in clauses (B) through (F) of subsection (b)(1) of this section; 

(vii) a certification, in the opinion of the applicant and to the best of his knowledge, with

respect to each patent which claims the listed drug referred to in clause (i) or which

claims a use for such listed drug for which the applicant is seeking approval under this

subsection and for which information is required to be filed under subsection (b) or (c) of

this section - 

(I) that such patent information has not been filed, 

(II) that such patent has expired, 

(III) of the date on which such patent will expire, or 

(IV) 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; and 

(viii) if with respect to the listed drug referred to in clause (i) information was filed under

subsection (b) or (c) of this section for a method of use patent which does not claim a use

for which the applicant is seeking approval under this subsection, a statement that the

method of use patent does not claim such a use. 

The Secretary may not require that an abbreviated application contain information in addition to that required by

clauses (i) through (viii). 

(B) 

(i) An applicant who makes a certification described in subparagraph (A)(vii)(IV) shall

include in the application a statement that the applicant will give the notice required by

clause (ii) to - 

(I) each owner of the patent which is the subject of the certification or the

representative of such owner designated to receive such notice, and 

(II) the holder of the approved application under subsection (b) of this section for the

drug which is claimed by the patent or a use of which is claimed by the patent or

the representative of such holder designated to receive such notice. 

(ii) The notice referred to in clause (i) shall state that an application, which contains data

from bioavailability or bioequivalence studies, has been submitted under this subsection

for the drug with respect to which the certification is made to obtain approval to engage in

the commercial manufacture, use, or sale of such drug before the expiration of the patent

referred to in the certification. Such notice shall include a detailed statement of the factual

and legal basis of the applicant's opinion that the patent is not valid or will not be

infringed. 

(iii) If an application is amended to include a certification described in subparagraph

(A)(vii)(IV), the notice required by clause (ii) shall be given when the amended
A-6

application is submitted. 

(C) If a person wants to submit an abbreviated application for a new drug which has a different active

ingredient or whose route of administration, dosage form, or strength differ from that of a listed

drug, such person shall submit a petition to the Secretary seeking permission to file such an

application. The Secretary shall approve or disapprove a petition submitted under this

subparagraph within ninety days of the date the petition is submitted. The Secretary shall approve

such a petition unless the Secretary finds - 

(i) that investigations must be conducted to show the safety and effectiveness of the drug or

of any of its active ingredients, the route of administration, the dosage form, or strength

which differ from the listed drug; or 

(ii) that any drug with a different active ingredient may not be adequately evaluated for

approval as safe and effective on the basis of the information required to be submitted in

an abbreviated application. 

(3) 

(A) The Secretary shall issue guidance for the individuals who review applications submitted under

paragraph (1), which shall relate to promptness in conducting the review, technical excellence, lack

of bias and conflict of interest, and knowledge of regulatory and scientific standards, and which

shall apply equally to all individuals who review such applications. 

(B) The Secretary shall meet with a sponsor of an investigation or an applicant for approval for a drug

under this subsection if the sponsor or applicant makes a reasonable written request for a meeting

for the purpose of reaching agreement on the design and size of bioavailability and bioequivalence

studies needed for approval of such application. The sponsor or applicant shall provide

information necessary for discussion and agreement on the design and size of such studies.

Minutes of any such meeting shall be prepared by the Secretary and made available to the sponsor

or applicant. 

(C) Any agreement regarding the parameters of design and size of bioavailability and bioequivalence

studies of a drug under this paragraph that is reached between the Secretary and a sponsor or

applicant shall be reduced to writing and made part of the administrative record by the Secretary.

Such agreement shall not be changed after the testing begins, except - 

(i) with the written agreement of the sponsor or applicant; or 

(ii) pursuant to a decision, made in accordance with subparagraph (D) by the director of the

reviewing division, that a substantial scientific issue essential to determining the safety or

effectiveness of the drug has been identified after the testing has begun. 

(D) A decision under subparagraph (C)(ii) by the director shall be in writing and the Secretary shall

provide to the sponsor or applicant an opportunity for a meeting at which the director and the

sponsor or applicant will be present and at which the director will document the scientific issue

involved. 

(E) The written decisions of the reviewing division shall be binding upon, and may not directly or

indirectly be changed by, the field or compliance office personnel unless such field or compliance

office personnel demonstrate to the reviewing division why such decision should be modified. 

(F) No action by the reviewing division may be delayed because of the unavailability of information

from or action by field personnel unless the reviewing division determines that a delay is necessary

to assure the marketing of a safe and effective drug. 

(G) For purposes of this paragraph, the reviewing division is the division responsible for the review of
A-7

an application for approval of a drug under this subsection (including scientific matters, chemistry,

manufacturing, and controls). 

(4) Subject to paragraph (5), the Secretary shall approve an application for a drug unless the Secretary finds - 

(A) the methods used in, or the facilities and controls used for, the manufacture, processing, and

packing of the drug are inadequate to assure and preserve its identity, strength, quality, and purity; 

(B) information submitted with the application is insufficient to show that each of the proposed

conditions of use have been previously approved for the listed drug referred to in the application; 

(C) 

(i) if the listed drug has only one active ingredient, information submitted with the

application is insufficient to show that the active ingredient is the same as that of the

listed drug; 

(ii) if the listed drug has more than one active ingredient, information submitted with the

application is insufficient to show that the active ingredients are the same as the active

ingredients of the listed drug, or 

(iii) if the listed drug has more than one active ingredient and if the application is for a drug

which has an active ingredient different from the listed drug, information submitted with

the application is insufficient to show - 

(I) that the other active ingredients are the same as the active ingredients of the

listed drug, or 

(II) that the different active ingredient is an active ingredient of a listed drug or a

drug which does not meet the requirements of section 321(p) of this title, 

or no petition to file an application for the drug with the different ingredient was approved under paragraph

(2)(C); 

(D) 

(i) if the application is for a drug whose route of administration, dosage form, or strength of

the drug is the same as the route of administration, dosage form, or strength of the listed

drug referred to in the application, information submitted in the application is insufficient

to show that the route of administration, dosage form, or strength is the same as that of the

listed drug, or 

(ii) if the application is for a drug whose route of administration, dosage form, or strength of

the drug is different from that of the listed drug referred to in the application, no petition

to file an application for the drug with the different route of administration, dosage form,

or strength was approved under paragraph (2)(C); 

(E) if the application was filed pursuant to the approval of a petition under paragraph (2)(C), the

application did not contain the information required by the Secretary respecting the active

ingredient, route of administration, dosage form, or strength which is not the same; 

(F) information submitted in the application is insufficient to show that the drug is bioequivalent to the

listed drug referred to in the application or, if the application was filed pursuant to a petition

approved under paragraph (2)(C), information submitted in the application is insufficient to show

that the active ingredients of the new drug are of the same pharmacological or therapeutic class as

those of the listed drug referred to in paragraph (2)(A)(i) and that the new drug can be expected to

have the same therapeutic effect as the listed drug when administered to patients for a condition of
A-8

use referred to in such paragraph; 

(G) information submitted in the application is insufficient to show that the labeling proposed for the

drug is the same as the labeling approved for the listed drug referred to in the application except

for changes required because of differences approved under a petition filed under paragraph (2)(C)

or because the drug and the listed drug are produced or distributed by different manufacturers; 

(H) information submitted in the application or any other information available to the Secretary shows

that

(i) the inactive ingredients of the drug are unsafe for use under the conditions prescribed,

recommended, or suggested in the labeling proposed for the drug, or

(ii) the composition of the drug is unsafe under such conditions because of the type or

quantity of inactive ingredients included or the manner in which the inactive ingredients

are included; 

(I) the approval under subsection (c) of this section of the listed drug referred to in the application

under this subsection has been withdrawn or suspended for grounds described in the first sentence

of subsection (e) of this section, the Secretary has published a notice of opportunity for hearing to

withdraw approval of the listed drug under subsection (c) of this section for grounds described in

the first sentence of subsection (e) of this section, the approval under this subsection of the listed

drug referred to in the application under this subsection has been withdrawn or suspended under

paragraph (6), or the Secretary has determined that the listed drug has been withdrawn from sale

for safety or effectiveness reasons; 

(J) the application does not meet any other requirement of paragraph (2)(A); or 

(K) the application contains an untrue statement of material fact. 

(5) 

(A) Within one hundred and eighty days of the initial receipt of an application under paragraph (2) or

within such additional period as may be agreed upon by the Secretary and the applicant, the

Secretary shall approve or disapprove the application. 

(B) The approval of an application submitted under paragraph (2) shall be made effective on the last

applicable date determined under the following: 

(i) If the applicant only made a certification described in subclause (I) or (II) of paragraph

(2)(A)(vii) or in both such subclauses, the approval may be made effective immediately. 

(ii) If the applicant made a certification described in subclause (III) of paragraph (2)(A)(vii),

the approval may be made effective on the date certified under subclause (III). 

(iii) If the applicant made a certification described in subclause (IV) of paragraph (2)(A)(vii),

the approval shall be made effective immediately unless an action is brought for

infringement of a patent which is the subject of the certification before the expiration of

forty-five days from the date the notice provided under paragraph (2)(B)(i) is received. If

such an action is brought before the expiration of such days, the approval shall be made

effective upon the expiration of the thirty-month period beginning on the date of the

receipt of the notice provided under paragraph (2)(B)(i) 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 shall be made effective on the date of the
A-9

court decision, 

(II) if before the expiration of such period the court decides that such patent has been

infringed, the approval shall be made effective on such date as the court orders

under section 271(e)(4)(A) of title 35, or 

(III) if before the expiration of such period the court grants a preliminary injunction

prohibiting the applicant from engaging in the commercial manufacture or sale

of the drug until the court decides the issues of patent validity and infringement

and if the court decides that such patent is invalid or not infringed, the approval

shall be made effective on the date of such court decision. 

In such an action, each of the parties shall reasonably cooperate in expediting the action. Until the

expiration of forty-five days from the date the notice made under paragraph (2)(B)(i) is received, no action

may be brought under section 2201 of title 28, for a declaratory judgment with respect to the patent. Any

action brought under section 2201 shall be brought in the judicial district where the defendant has its

principal place of business or a regular and established place of business. 

(iv) If the application contains a certification described in subclause (IV) of paragraph

(2)(A)(vii) and is for a drug for which a previous application has been submitted under

this subsection continuing such a certification, the application shall be made effective not

earlier than one hundred and eighty days after - 

(I) the date the Secretary receives notice from the applicant under the previous

application of the first commercial marketing of the drug under the previous

application, or 

(II) the date of a decision of a court in an action described in clause (iii) holding the

patent which is the subject of the certification to be invalid or not infringed,

whichever is earlier. 

(C) If the Secretary decides to disapprove an application, the Secretary shall give the applicant notice

of an opportunity for a hearing before the Secretary on the question of whether such application is

approvable. If the applicant elects to accept the opportunity for hearing by written request within

thirty days after such notice, such hearing shall commence not more than ninety days after the

expiration of such thirty days unless the Secretary and the applicant otherwise agree. Any such

hearing shall thereafter be conducted on an expedited basis and the Secretary's order thereon shall

be issued within ninety days after the date fixed by the Secretary for filing final briefs. 

(D) 

(i) If an application (other than an abbreviated new drug application) submitted under

subsection (b) of this section for a drug, no active ingredient (including any ester or salt of

the active ingredient) of which has been approved in any other application under

subsection (b) of this section, was approved during the period beginning January 1, 1982,

and ending on September 24, 1984, the Secretary may not make the approval of an

application submitted under this subsection which refers to the drug for which the

subsection (b) application was submitted effective before the expiration of ten years from

the date of the approval of the application under subsection (b) of this section. 

(ii) If an application submitted under subsection (b) of this section for a drug, no active

ingredient (including any ester or salt of the active ingredient) of which has been

approved in any other application under subsection (b) of this section, is approved after

September 24, 1984, no application may be submitted under this subsection which refers

to the drug for which the subsection (b) application was submitted before the expiration

of five years from the date of the approval of the application under subsection (b) of this
A-10

section, except that such an application may be submitted under this subsection after the

expiration of four years from the date of the approval of the subsection (b) application if it

contains a certification of patent invalidity or noninfringement described in subclause

(IV) of paragraph (2)(A)(vii). The approval of such an application shall be made effective

in accordance with subparagraph (B) except that, if an action for patent infringement is

commenced during the one-year period beginning forty-eight months after the date of the

approval of the subsection (b) application, the thirty-month period referred to in

subparagraph (B)(iii) shall be extended by such amount of time (if any) which is required

for seven and one-half years to have elapsed from the date of approval of the subsection

(b) application. 

(iii) If an application submitted under subsection (b) of this section for a drug, which includes

an active ingredient (including any ester or salt of the active ingredient) that has been

approved in another application approved under subsection (b) of this section, is

approved after September 24, 1984, and if such application contains reports of new

clinical investigations (other than bioavailability studies) essential to the approval of the

application and conducted or sponsored by the applicant, the Secretary may not make the

approval of an application submitted under this subsection for the conditions of approval

of such drug in the subsection (b) application effective before the expiration of three years

from the date of the approval of the application under subsection (b) of this section for

such drug. 

(iv) If a supplement to an application approved under subsection (b) of this section is

approved after September 24, 1984, and the supplement contains reports of new clinical

investigations (other than bioavailability studies) essential to the approval of the

supplement and conducted or sponsored by the person submitting the supplement, the

Secretary may not make the approval of an application submitted under this subsection

for a change approved in the supplement effective before the expiration of three years

from the date of the approval of the supplement under subsection (b) of this section. 

(v) If an application (or supplement to an application) submitted under subsection (b) of this

section for a drug, which includes an active ingredient (including any ester or salt of the

active ingredient) that has been approved in another application under subsection (b) of

this section, was approved during the period beginning January 1, 1982, and ending on

September 24, 1984, the Secretary may not make the approval of an application submitted

under this subsection which refers to the drug for which the subsection (b) application

was submitted or which refers to a change approved in a supplement to the subsection (b)

application effective before the expiration of two years from September 24, 1984. 

(6) If a drug approved under this subsection refers in its approved application to a drug the approval of which

was withdrawn or suspended for grounds described in the first sentence of subsection (e) of this section or

was withdrawn or suspended under this paragraph or which, as determined by the Secretary, has been

withdrawn from sale for safety or effectiveness reasons, the approval of the drug under this subsection shall

be withdrawn or suspended - 

(A) for the same period as the withdrawal or suspension under subsection (e) of this section or this

paragraph, or 

(B) if the listed drug has been withdrawn from sale, for the period of withdrawal from sale or, if

earlier, the period ending on the date the Secretary determines that the withdrawal from sale is not

for safety or effectiveness reasons. 

(7) 

(A) 

(i) Within sixty days of September 24, 1984, the Secretary shall publish and make available
A-11

to the public - 

(I) a list in alphabetical order of the official and proprietary name of each drug

which has been approved for safety and effectiveness under subsection (c) of this

section before September 24, 1984; 

(II) the date of approval if the drug is approved after 1981 and the number of the

application which was approved; and 

(III) whether in vitro or in vivo bioequivalence studies, or both such studies, are

required for applications filed under this subsection which will refer to the drug

published. 

(ii) Every thirty days after the publication of the first list under clause (i) the Secretary shall

revise the list to include each drug which has been approved for safety and effectiveness

under subsection (c) of this section or approved under this subsection during the thirtyday period. 

(iii) When patent information submitted under subsection (b) or (c) of this section respecting a

drug included on the list is to be published by the Secretary, the Secretary shall, in

revisions made under clause (ii), include such information for such drug. 

(B) A drug approved for safety and effectiveness under subsection (c) of this section or approved

under this subsection shall, for purposes of this subsection, be considered to have been published

under subparagraph (A) on the date of its approval or September 24, 1984, whichever is later. 

(C) If the approval of a drug was withdrawn or suspended for grounds described in the first sentence of

subsection (e) of this section or was withdrawn or suspended under paragraph (6) or if the

Secretary determines that a drug has been withdrawn from sale for safety or effectiveness reasons,

it may not be published in the list under subparagraph (A) or, if the withdrawal or suspension

occurred after its publication in such list, it shall be immediately removed from such list - 

(i) for the same period as the withdrawal or suspension under subsection (e) of this section or

paragraph (6), or 

(ii) if the listed drug has been withdrawn from sale, for the period of withdrawal from sale or,

if earlier, the period ending on the date the Secretary determines that the withdrawal from

sale is not for safety or effectiveness reasons. 

A notice of the removal shall be published in the Federal Register. 

(8) For purposes of this subsection: 

(A) The term ''bioavailability'' means the rate and extent to which the active ingredient or therapeutic

ingredient is absorbed from a drug and becomes available at the site of drug action. 

(B) A drug shall be considered to be bioequivalent to a listed drug if - 

(i) the rate and extent of absorption of the drug do not show a significant difference from the

rate and extent of absorption of the listed drug when administered at the same molar dose

of the therapeutic ingredient under similar experimental conditions in either a single dose

or multiple doses; or 

(ii) the extent of absorption of the drug does not show a significant difference from the extent

of absorption of the listed drug when administered at the same molar dose of the

therapeutic ingredient under similar experimental conditions in either a single dose or

multiple doses and the difference from the listed drug in the rate of absorption of the drug
A-12

is intentional, is reflected in its proposed labeling, is not essential to the attainment of

effective body drug concentrations on chronic use, and is considered medically

insignificant for the drug. 

(9) The Secretary shall, with respect to each application submitted under this subsection, maintain a record of - 

(A) the name of the applicant, 

(B) the name of the drug covered by the application, 

(C) the name of each person to whom the review of the chemistry of the application was assigned and

the date of such assignment, and 

(D) the name of each person to whom the bioequivalence review for such application was assigned and

the date of such assignment. 

The information the Secretary is required to maintain under this paragraph with respect to an application

submitted under this subsection shall be made available to the public after the approval of such application. 

 (k) Records and reports; required information; regulations and orders; access to records 

(1) In the case of any drug for which an approval of an application filed under subsection (b) or (j) of this

section is in effect, the applicant shall establish and maintain such records, and make such reports to the

Secretary, of data relating to clinical experience and other data or information, received or otherwise

obtained by such applicant with respect to such drug, as the Secretary may by general regulation, or by

order with respect to such application, prescribe on the basis of a finding that such records and reports are

necessary in order to enable the Secretary to determine, or facilitate a determination, whether there is or

may be ground for invoking subsection (e) of this section. Regulations and orders issued under this

subsection and under subsection (i) of this section shall have due regard for the professional ethics of the

medical profession and the interests of patients and shall provide, where the Secretary deems it to be

appropriate, for the examination, upon request, by the persons to whom such regulations or orders are

applicable, of similar information received or otherwise obtained by the Secretary. 

(2) Every person required under this section to maintain records, and every person in charge or custody thereof,

shall, upon request of an officer or employee designated by the Secretary, permit such officer or employee

at all reasonable times to have access to and copy and verify such records. 

 (l) Public disclosure of safety and effectiveness data 

Safety and effectiveness data and information which has been submitted in an application under subsection (b) of this 

section for a drug and which has not previously been disclosed to the public shall be made available to the public,

upon request, unless extraordinary circumstances are shown - 

(1) if no work is being or will be undertaken to have the application approved, 

(2) if the Secretary has determined that the application is not approvable and all legal appeals have been

exhausted, 

(3) if approval of the application under subsection (c) of this section is withdrawn and all legal appeals have

been exhausted, 

(4) if the Secretary has determined that such drug is not a new drug, or 

(5) upon the effective date of the approval of the first application under subsection (j) of this section which

refers to such drug or upon the date upon which the approval of an application under subsection (j) of this

section which refers to such drug could be made effective if such an application had been submitted. 
A-13

 (m) ''Patent'' defined 

 For purposes of this section, the term ''patent'' means a patent issued by the United States Patent and Trademark 

 Office. 

 (n) Scientific advisory panels 

(1) For the purpose of providing expert scientific advice and recommendations to the Secretary regarding a

clinical investigation of a drug or the approval for marketing of a drug under this section or section 262 of

title 42, the Secretary shall establish panels of experts or use panels of experts established before November

21, 1997, or both. 

(2) The Secretary may delegate the appointment and oversight authority granted under section 394 of this title

to a director of a center or successor entity within the Food and Drug Administration. 

(3) The Secretary shall make appointments to each panel established under paragraph (1) so that each panel

shall consist of - 

(A) members who are qualified by training and experience to evaluate the safety and effectiveness of

the drugs to be referred to the panel and who, to the extent feasible, possess skill and experience in

the development, manufacture, or utilization of such drugs; 

(B) members with diverse expertise in such fields as clinical and administrative medicine, pharmacy,

pharmacology, pharmacoeconomics, biological and physical sciences, and other related

professions; 

(C) a representative of consumer interests, and a representative of interests of the drug manufacturing

industry not directly affected by the matter to be brought before the panel; and 

(D) two or more members who are specialists or have other expertise in the particular disease or

condition for which the drug under review is proposed to be indicated. 

Scientific, trade, and consumer organizations shall be afforded an opportunity to nominate individuals for

appointment to the panels. No individual who is in the regular full-time employ of the United States and engaged in

the administration of this chapter may be a voting member of any panel. The Secretary shall designate one of the

members of each panel to serve as chairman thereof. 

(4) Each member of a panel shall publicly disclose all conflicts of interest that member may have with the work

to be undertaken by the panel. No member of a panel may vote on any matter where the member or the

immediate family of such member could gain financially from the advice given to the Secretary. The

Secretary may grant a waiver of any conflict of interest requirement upon public disclosure of such conflict

of interest if such waiver is necessary to afford the panel essential expertise, except that the Secretary may

not grant a waiver for a member of a panel when the member's own scientific work is involved. 

(5) The Secretary shall, as appropriate, provide education and training to each new panel member before such

member participates in a panel's activities, including education regarding requirements under this chapter

and related regulations of the Secretary, and the administrative processes and procedures related to panel

meetings. 

(6) Panel members (other than officers or employees of the United States), while attending meetings or

conferences of a panel or otherwise engaged in its business, shall be entitled to receive compensation for

each day so engaged, including traveltime, at rates to be fixed by the Secretary, but not to exceed the daily

equivalent of the rate in effect for positions classified above grade GS-15 of the General Schedule. While

serving away from their homes or regular places of business, panel members may be allowed travel

expenses (including per diem in lieu of subsistence) as authorized by section 5703 of title 5, for persons in

the Government service employed intermittently. 
A-14

(7) The Secretary shall ensure that scientific advisory panels meet regularly and at appropriate intervals so that

any matter to be reviewed by such a panel can be presented to the panel not more than 60 days after the

matter is ready for such review. Meetings of the panel may be held using electronic communication to

convene the meetings. 

(8) Within 90 days after a scientific advisory panel makes recommendations on any matter under its review, the

Food and Drug Administration official responsible for the matter shall review the conclusions and

recommendations of the panel, and notify the affected persons of the final decision on the matter, or of the

reasons that no such decision has been reached. Each such final decision shall be documented including the

rationale for the decision.
A-15

Appendix C:

New Drug Applications Examined in Study

NDA

Number

Active Ingredient Proprietary Name Dosage Form

1 019872 Acetaminophen Tylenol 650 mg extended-release tablets

2 020802 Acetaminophen/Aspirin/Caffeine Excedrin 250/65 mg tablets

3 018603 Acyclovir Sodium Zovirax injection

4 020560 Alendronate Sodium Fosamax 5, 10, 40 mg tablets

5 018276 Alprazolam Xanax 0.25, 0.5, 1, 2 mg tablets

6 018240 Atenolol Tenormin 25, 50, 100 mg tablets

7 020711 Bupropion Hydrochloride Zyban 150 mg extended-release tablets

8 020358 Wellbutrin SR 150 mg extended-release tablets

9 018644 Wellbutrin 100 mg tablets

10 018731 Buspirone HCl Buspar 5, 10, 15, 30 mg tablets

11 019890 Butorphanol Tartrate Stadol nasal spray

12 018874 Calcitriol Calcijex injection

13 018343 Captopril Capoten 50, 100 mg tablets

14 020234 Carbamazepine Tegretol XR 100, 200, 400 mg extended-release tablets

15 019856 Carbidopa/ Levodopa Sinemet 25/100 and 50/200 mg extended-release tablets

16 012365 Carisoprodol/ASA Soma compound 325/200 mg tablets

17 012366 Carisoprodol/ASA/Codeine

Phosphate 

Soma compound w/

Codeine

325/200/16 mg tablets

18 019537 Ciprofloxacin Hydrocholoride Cipro 100, 200, 500, 750 mg tablets

19 018057 Cisplatin Platinol & Platinol AQ injection

20 018938 Desmopressin Acetate DDAVP injection

21 017922 DDAVP nasal spray

22 020713 Desogestrel; Ethinyl Estradiol Mircette 0.01, 0.02, 0.15 mg tablets

23 019471 Diltiazem Hydrochloride Cardizem SR 60, 90, 120 mg extended-release capsules

24 020092 Dilacor XR 120, 180, 240 mg extended-release capsules

25 020062 Cardizem CD 120, 180, 240, 300 mg extended-release capsules

26 020401 Tiazac 120, 180, 240, 300, 360, 420 mg extendedrelease capsules

27 018723 Divalproex Sodium Depakote 125, 250, 500 mg delayed-release tablets

28 019668 Doxazosin Mesylate Cardura 1, 2, 4, 8 mg tablets

29 018998 Enalapril Maleate Vasotec 2.5, 5, 10, 20 mg tablets

30 020375 Estradiol Climara transdermal

31 020584 Etodolac Lodine XL 400, 500, 600 mg extended-release tablets

32 019462 Famotidine Pepcid 20, 40 mg tablets

33 020325 Pepcid AC 10 mg tablets

34 020801 10 mg chewable tablets

35 019834 Felodipine Plendil ER 2.5, 5, 10 mg extended-release tablets

36 019304 Fenofibrate Tricor 67, 134, 200 mg capsules

37 018830 Flecainide Acetate Tambocor 50, 100, 150 mg tablets

38 019949 Fluconazole Diflucan 50, 100, 150, 200 mg tablets

39 018148 Flunisolide Nasalide nasal spray

40 018936 Fluoxetine Hydrochloride Prozac 10, 20, 40 mg capsules

41 020974 10 mg tablets

42 020101 oral solution

43 018554 Flutamide Eulexin 125 mg capsules

44 020235 Gabapentin Neurontin 100, 300, 400 mg capsules

45 020882 600, 800 mg tablets

46 020051 Glyburide Glynase 1.5, 3, 6 mg tablets

47 020716 Hydrocodone Bitartrate and

Ibuprofen

Vicoprofen 7.5/200 mg tablets

48 020516 Ibuprofen Children’s Motrin oral suspension

49 019842 Motrin oral suspension

50 020476 oral drops
NDA

Number

Active Ingredient Proprietary Name Dosage Form

A-16

51 019771 Ibuprofen and Pseudoephedrine

Hydrochloride

Advil Cold & Sinus 200/30 mg tablets

52 019763 Ifosfamide / Mesna IFEX Mesna Kit injection

53 074464 Indomethacin Indocin SR 75 mg extended-release capsule

54 019732 Leuprolide Acetate Lupron Depot injection 

55 020606 Loperamide Hydrochloride and

Simethicone

Imodium Advanced 2/125 mg chewable tablets

56 019658 Loratadine Claritin 10 mg tablets

57 020641 oral syrup

58 020704 Claritin Reditabs 10 mg disintegrating tablets

59 020470 Loratadine Pseudoephedrine

Sulfate

Claratin D-24 Hour 10/240 mg extended–release tablets

60 019670 Claratin-D 5/120 mg extended-release tablets

61 020264 Megestrol Acetate Megace oral suspension

62 019583 Nabumetone Relafen 500, 750 mg tablets

63 020353 Naproxen Sodium Naprelan 375, 500, 750 mg extended-release tablets

64 020152 Nefazodone Hydrochloride Serzone 50, 100, 150, 200, 250 mg tablets

65 020076 Nicotine Habitrol extended-release transdermal film 

66 020198 Nifedipine Adalat CC 30, 60, 90 mg extended-release tablets

67 019684 Procardia XL 30, 60, 90 mg extended-release tablets

68 020144 Nitroglycerin Transderm-Nitro extended-release transdermal film

69 020145 Transderm/Nitro-Dur extended-release transdermal film

70 019508 Nizatidine Axid 150, 300 mg capsules

71 018985 Norethindrone/ Ethinyl Estradiol Ortho-Novum 7/7/7-21 0.035/0.035/0.035/0.5/1/0.75 mg tablets

72 019697 Norgestimate/ Ethinyl Estradiol Ortho Tri-Cyclen 0.035/0.035/0.035/0.18/0.215/0.25 mg tablets

73 020592 Olanzapine Zyprexa 2.5, 5, 7.5, 10, 15, 20 mg tablets

74 019810 Omeprazole Prilosec 10, 20, 40 mg delayed-release capsules

75 015539 Oxazepam Serax 10, 15, 30 mg capsules

76 020553 Oxycodone Hydrochloride Oxycontin 10, 20, 40, 80 mg extended-release tablets

77 020262 Paclitaxel Taxol injection

78 020036 Pamidronate Disodium Aredia injection

79 020031 Paroxetine Hydrochloride Paxil 10, 20, 30, 40 mg tablets

80 019385 Pergolide Mesylate Permax 0.25, 0.5, 1 mg tablets

81 019439 Potassium Chloride K-Dur 10, 20 meq extended-release tablets

82 019898 Pravastatin Sodium Pravachol 10, 20, 40, 80 mg tablets

83 019157 Prednisolone Sodium Phosphate Pediapred oral solution

84 019627 Propofol Diprivan injection

85 019885 Quinapril Hydrochloride Accupril 5, 10, 20, 40 mg tablets

86 019090 Ranitidine Zantac injection

87 019675 oral syrup

88 020095 Zantac 150 & 300 300 mg capsule

89 018703 150, 300 mg tablets

90 020520 Zantac 75 75 mg tablets

91 019839 Sertraline Hydrochloride Zoloft 25, 50, 100 mg tablets

92 020478 Sevoflurane Ultane liquid inhalation

93 019766 Simvastatin Zocor 5, 10, 20, 40, 80 mg tablets

94 017970 Tamoxifen Citrate Nolvadex 10, 20 mg tablets

95 019057 Terazosin Hydrochloride Hytrin 1, 2, 5, 10 mg tablets

96 020347 1, 2, 5, 10 mg capsules

97 018949 Terfenadine Seldane tablets

98 019979 Ticlopidine Hydrochloride Ticlid 250 mg tablets

99 018086 Timolol Maleate Timoptic ophthalmic drops

100 018207 Trazodone Hydrochloride Desyrel 50, 100, 150, 300 mg tablets

101 018776 Vecuronium Bromide Norcuron injection

102 019614 Verapamil Hydrochloride Verelan 120, 180, 240, 360 mg extended-release capsules

103 014103 Vincristine Sulfate Oncovin injection

104 019655 Zidovudine Retrovir 100 mg capsules
A-17

Appendix D:

Brand-Name Companies Served Special Orders

Abbott Laboratories

Alcon Laboratories, Inc.

American Home Products Corporation

AstraZeneca, PLC

Aventis Pharmaceuticals, Inc.

Bayer Corporation

Berlex Laboratories, Inc.

Biovail Corporation

Bristol-Myers Squibb Company

Carter-Wallace, Inc.

Celltech Americas, Inc.

Elan Pharmaceutical Research Corporation

Eli Lilly and Company

Glaxo Wellcome, Inc.

Hoffman-La Roche Inc.

Johnson & Johnson

Knoll Pharmaceutical Company

Merck & Company, Inc.

Minnesota Mining and Manufacturing Company

Novartis Pharmaceuticals Corporation

Organon Inc.

Pfizer Inc.

Pharmacia Corporation

The Proctor & Gamble Company

Purdue Pharma L.P.

Schering-Plough Corporation

SmithKline Beecham, Inc.

TAP Pharmaceutical Products, Inc.
A-18

Generic Companies Served Special Orders

Aesgen, Inc.

Alphapharm Pty Ltd

Alpharma USPD Inc.

American Pharmaceutical Partners, Inc.

Amide Pharmaceutical, Inc.

Andrx Corporation

Ascent Pediatrics, Inc.

Barr Laboratories, Inc.

Bausch and Lomb, Inc.

Baxter Healthcare Corporation

Ben Venue Laboratories, Inc.

Brightstone Pharma, Inc.

Duramed Pharmaceuticals, Inc.

Elan Corporation, PLC

Endo Pharmaceuticals Inc.

Eon Labs Manufacturing, Inc.

Faulding Pharmaceuticals Inc.

Geneva Pharmaceuticals, Inc.

Genpharm Inc.

Gensia Sicor Pharmaceuticals, Inc.

Hi Tech Pharmacal Company Inc.

IMPAX Laboratories, Inc.

Invitrogen Corporation

Inwood Laboratories, Inc.

IPR Pharmaceuticals, Inc.

IVAX Corporation

Kremers Urban Development Company

L. Perrigo Company

Lek USA, Inc.

Morton Grove Pharmaceuticals, Inc.

MOVA Laboratories, Inc.

Mutual Pharmaceutical Company, Inc.

Mylan Pharmaceuticals, Inc.

Oakwood Laboratories, L.L.C.

Ohm Laboratories, Inc.

Par Pharmaceutical, Inc.

Pentech Pharmaceuticals, Inc.

Person and Covey, Inc.

Pharmaceutical Formulations, Inc.

Pharmachemie U.S.A., Inc.

Ranbaxy Pharmaceuticals, Inc.

Reddy-Cheminor, Inc. 

Roxane Laboratories, Inc.

Sano Corporation

Stason Pharmaceuticals, Inc.
A-19

Teva Pharmaceuticals USA, Inc.

TorPharm, Inc.

Upsher-Smith Laboratories, Inc.

Warner Chilcott, Inc.

Watson Pharmaceuticals, Inc.

WE Pharmaceuticals, Inc.

Whitney Pharmaceuticals Inc.
1

 The term “person” means any natural person, corporate entity, partnership, association, joint venture, or trust which

is engaged in research and development, planning and design, production and manufacturing, distribution, or sales and marketing

of any Drug Product.

2

 As well as such agreements that were executed prior to January 1, 1995 but remain in force as of the date of the

information collection request.

3

 The term “relating to” means in whole or in part constituting, containing, concerning, discussing, describing,

analyzing, identifying or stating.

4

 The term “Drug Product” means each finished dosage form of the drug the company has listed in the publication

“Approved Drug Products with Therapeutic Equivalence Evaluations” (the “Orange Book”) (regardless of whether the Drug

Product is currently listed in the Orange Book) and specifically includes those Drug Products including the following active

ingredients: (a list of such active ingredients will be tailored specifically for each company).

A-20

Appendix E:

Specifications in the Special Orders Sent to Brand-Name Companies

In addition to routine questions about the name, address, and incorporation date of the responding company

and its subsidiaries, and the name, business address, and official capacity of the official supervising the

company’s response, the FTC asked brand-name companies (the company) to provide answers to the

following five questions about specific drugs:

1. Submit all agreements between the company and any person1

 (including corporations or

other business entities acquired since the agreement(s) was (were) executed) executed after December

31, 1994,2 relating to3 an ANDA involving any Drug Product,4 where the company holds the rights to the

NDA corresponding to the ANDA that is the subject of the agreement. Examples of such agreements

include, but are not limited to: (a) patent litigation settlements (full or partial) between the company and

persons that have filed an ANDA involving any Drug Product; (b) agreements related to the filing (or

non-filing) of an ANDA by any applicant (or potential applicant) involving any Drug Product; (c)

licensing agreements between the company and persons that have filed an ANDA involving any Drug

Product; and (d) agreements related to any acquisition, divestiture, joint venture, alliance, license or

merger by the company of any business involving the research, development, manufacture or sale of any

Drug Product that is the subject of an ANDA. The company is not required to submit purchase orders

for raw material supplies, equipment and facility contracts, or employment or consulting contracts, nor is

the company required to submit agreements executed after the generic manufacturer had begun

commercial marketing of the generic Drug Product corresponding to the ANDA for which it had

received FDA approval. The company also is not required to submit information that has already been

submitted to the Commission pursuant to the Premerger Notification Rules (16 CFR 801-803 (1998))

and Section 7A of the Clayton Act (15 U.S.C. 18a), or Sections 6, 9, 13, and 20 of the Federal Trade

Commission Act (15 U.S.C. 46, 49, 53, and 57b-1), although the company must identify such

information as having been previously submitted. For any such agreement submitted, also submit all

studies, surveys, analyses and reports which were prepared by or for any officer(s) or director(s) of the

company (or, in the case of unincorporated entities, individuals exercising similar functions) that

evaluate or analyze the reasons for making such agreement (or any of the provisions in such agreement),

and indicate (if not contained in the document itself) the date of preparation, and the name and title of

each individual who prepared each such document. 
5

 The term “sales” means net sales, i.e., total sales after deducting discounts, returns, allowances and excise taxes. 

“Sales” includes sales of the Drug Product whether manufactured by the company itself or purchased from sources outside the

company and resold by the company in the same manufactured form as purchased.

A-21

2. Identify all patents that the company has filed in the Orange Book and the date of listing

(regardless of whether currently listed in the Orange Book) relating to each Drug Product for which the

company has been notified of the filing of an ANDA by another person. Also indicate if the patent(s)

was (were) filed in the Orange Book after the company received approval of the New Drug Application,

as defined under 21 U.S.C. 355(b) et seq., for the Drug Product. Also submit a copy of each such patent

identified and identify whether the patent is owned by, assigned to, or licensed to the company.

3. Identify and list all lawsuits (including the court, date filed, docket number, parties,

current or final status (including dates), current or final docket sheet, any reporter cites; and any

appellate history relating to the lawsuit) to which the company is or was a party that involve an ANDA

paragraph IV certification related to any Drug Product. Submit the complaint, the answer, any motion(s)

for summary judgment, any pretrial memoranda, and any court orders and opinions on any dispositive

issue for each such lawsuit.

4. For each Drug Product for which the company has been notified that an ANDA

containing a paragraph IV certification had been filed with the FDA, state the company’s sales,5

 in units

and dollars, by each finished dosage form for each calendar year since, and including, the year the

company was notified of the filing of such ANDA. If the company has its own generic version of the

Drug Product, separate the sales for the brand-name product and the generic product.

5. For each Drug Product for which the company has been notified that an ANDA

containing a paragraph IV certification has been filed with FDA, state whether the company has filed, or

contributed to the filing of, in whole or in part (e.g., provided funds, legal or regulatory assistance to

support the filing), a citizen petition with FDA concerning an ANDA related to that Drug Product and

identify the FDA docket number assigned to such citizen petition. 
6

 The term “person” means any natural person, corporate entity, partnership, association, joint venture, or trust which

is engaged in research and development, planning and design, production and manufacturing, distribution, or sales and marketing

of any Drug Product.

7

 As well as such agreements that were executed prior to January 1, 1995 but remain in force as of the date of the

information collection request.

8

 The term “relating to” means in whole or in part constituting, containing, concerning, discussing, describing,

analyzing, identifying or stating.

9

 The term “Drug Product” means each finished dosage form of the drug listed in the publication “Approved Drug

Products with Therapeutic Equivalence Evaluations” (the “Orange Book”) (regardless of whether the Drug Product is currently

listed in the Orange Book) and specifically includes those Drug Products including the following active ingredients: (a list of

such active ingredients will be tailored specifically for each company).

10

 The term “Brand-Name Company” means each person or company (including its predecessors in interest,

subsidiaries, affiliates, successors, and assigns) that has filed a New Drug Application (NDA), as defined under 21 U.S.C. §

355(b) et seq. for any Drug Product, or holds the rights to any such NDA.

A-22

Specifications in the Special Orders Sent to Generic Companies

In addition to routine questions about the name, address, and incorporation date of the responding company

and its subsidiaries, and the name, business address, and official capacity of the official supervising the

company’s response, the FTC asked generic companies (the “company”) to provide answers to the following

five questions:

1. Submit all agreements between the company and any person6 (including corporations or

other business entities acquired since the agreement(s) was (were) executed after December 31, 1994,7

relating to8 any ANDA involving any Drug Product.9 Examples of such agreements include, but are not

limited to: (a) patent litigation settlements (either full or partial) between the company and any BrandName Company10; (b) agreements between the company and any other person related to the filing (or

non-filing) of an ANDA by the company involving any Drug Product; (c) licensing agreements entered

into with any Brand-Name Company; and (d) agreements related to any acquisition, divestiture, joint

venture, alliance, license or merger by the company of any business involving the research, development,

manufacture or sale of any Drug Product that is the subject of an ANDA. The company is not required

to submit purchase orders for raw material supplies, equipment and facility contracts, or employment or

consulting contracts, nor is the company required to submit agreements executed after the company had

begun commercial marketing of the generic Drug Product corresponding to the ANDA for which it had

received FDA approval. The company also is not required to submit information that has already been

submitted to the Commission pursuant to the Premerger Notification Rules (16 CFR 801-803 (1998))

and Section 7A of the Clayton Act (15 U.S.C. 18a), or Sections 6, 9, 13, and 20 of the Federal Trade

Commission Act (15 U.S.C. 46, 49, 53, and 57b-1), although the company must identify such

information as having previously submitted. For any such agreement submitted, also submit all studies,

surveys, analyses and reports which were prepared by or for any officer(s) or director(s) (or, in the case

of unincorporated entities, individuals exercising similar functions) that evaluate or analyze the reasons

for making such agreement (or any of the provisions in such agreement), and indicate (if not contained in

the document itself) the date of preparation, and the name and title of each individual who prepared each

such document. 
11

 The term “sales” means net sales, i.e., total sales after deducting discounts, returns, allowances and excise taxes. 

“Sales” includes sales of the Drug Product whether manufactured by the company itself or purchased from sources outside the

company and resold by the company in the same manufactured form as purchased.

A-23

2. Identify and list all lawsuits (including the court, date filed, docket number, parties,

current or final status (including dates), current or final docket sheet, and any reporter cites) to which the

company is or was a party involving an ANDA containing a paragraph IV certification. In those cases in

which the company is not the sole defendant, describe how litigation expenses are or have been

distributed among the defendants. 

3. Identify when the company first began commercial marketing of a generic version of any

Drug Product approved by the FDA, by each finished dosage form (or, if applicable, indicate that no

such commercial marketing has occurred). Identify when the company received tentative and final

approvals from the FDA for such Drug Product. 

4. Identify each instance in which the company has asserted before a court or before the

FDA that a patent was improperly or untimely listed in the Orange Book as defined in 21 U.S.C. 355(b)

or (c). For each such assertion, submit the pleading(s) in which such assertion was made and any

responsive pleading(s).

5. For each Drug Product for which the company has filed an ANDA containing a paragraph

IV certification, state the company’s sales

11 (if any), in units and dollars, by each finished dosage form

for each calendar year since, and including, the year the company received FDA approval of such

ANDA.
A-24

Appendix F:

FTC Staff’s Citizen Petition on the Listability of 

Certain Patents in the Orange Book

May 16, 2001

Dockets Management Branch

Food and Drug Administration

Department of Health & Human Services

Room 1-23

12420 Parklawn Drive

Rockville, MD 20857

CITIZEN PETITION

The Bureau of Competition and Policy Planning Staff of the Federal Trade Commission (“FTC”)

submit this Citizen Petition to the Commissioner of Food and Drugs pursuant to 21 C.F.R. §§ 10.25(a)

and 10.30 concerning certain issues relating to patent listings in the FDA’s Approved Drug Products

with Therapeutic Equivalence Evaluations (the “Orange Book”). We request that the FDA clarify these

issues, on an expedited basis, via industry guidance or other means that the FDA considers appropriate.

In recent years, the FTC has gained significant experience concerning competition in the

pharmaceutical industry. In particular, the Commission has brought a number of antitrust enforcement

activities affecting both the branded and generic drug industries. Last year, the Commission announced

plans to conduct an extensive study – pursuant to Section 6(b) of the FTC Act, 15 U.S.C. § 46(b) – of

U.S. generic drug competition (the “Study”). The Study will enable the FTC to provide a more complete

picture of how generic drug competition has developed under the Hatch-Waxman Act. See 66 Fed. Reg.

12512 (Feb. 27, 2001); 65 Fed. Reg. 61334 (Oct. 17, 2000); “FTC to Study Generic Drug Competition,”

(Oct. 11, 2000) 

<http://www.ftc.gov/opa/2000/10/genericdrug.htm>. The Office of Management and Budget (“OMB”)

cleared the Study on April 6, 2001, following the closure of two public comment periods. The FTC will

obtain factual information for the Study from name-brand pharmaceutical and generic drug

manufacturers through interrogatories and document requests.

The Study seeks information concerning a variety of practices that may have an impact on

competition in the pharmaceutical industry, including the possible improper or untimely listing of

patents by name-brand pharmaceutical companies in the Orange Book. In this connection, the Study

requests name-brand companies to “[i]dentify all patents that the company has filed in the Orange Book

and the date of listing (regardless of whether currently listed in the Orange Book) relating to each Drug

Product for which the company has been notified of the filing of an ANDA by another person [, and

indicate] if the patent(s) was (were) filed in the Orange Book after the company received approval of the

New Drug Application. . . .” 66 Fed. Reg. at 12520. The Study also requests generic drug companies to
1

 The interpretation in this regulation of the term “drug” as meaning the “drug product” is consistent with the FDA’s

position in Pfizer v. FDA. 753 F. Supp. 171 (D. Md. 1989).

A-25

“[i]dentify each instance in which the company has asserted before a court or before the FDA that a

patent was improperly or untimely listed as defined in 21 U.S.C. § 355(b) or (c).” Id. at 12521. This

information is crucial to determine how often and when name-brand companies have filed new patents

after the FDA has approved the drug product. Id. at 12517. The consequences of such filings are

significant, because as “long as the patent remains listed, ANDA applicants must still make a paragraph

IV certification, potentially triggering the 30-month stay of FDA approval of generic drug applications.” 

Brief of Federal Trade Commission as Amicus Curiae In American Bioscience, Inc., v. Bristol-Myers

Squibb Company (Sept. 1, 2001) at 10, <http://www./ftc.gov/os/2000/09/amicusbrief.pdf>. Thus, such

listings can affect when generic competition starts. 66 Fed. Reg. at 12517.

During the public comment period prior to OMB approval of the Study, the FTC received several

comments that supported the Commission’s proposed examination of Orange Book patent listing

practices. For example, Microbix indicated that generic competition can be delayed on name-brand drug

products if name-brand companies newly list “irrelevant and undefendable” patents in the Orange Book

near the expiration of the name-brand drug product’s original patents. Generic competition is delayed

because the FDA is prohibited from approving a generic version of the name-brand product for 30

months in order to resolve litigation over the newly-listed patents. Microbix Comment at 2 (Dec. 18,

2000). See also General Motors Comment (Dec. 18, 2000) at 2, NACDS Comment at 1-2 (Dec. 18,

2000). These comments are available on the FTC’s website at

<http://www.ftc.gov/os/comments/genericdrugstudy/index.htm>. 

As the FTC proceeds with the Study and continues to investigate methods of competition in the

pharmaceutical industry, it would be helpful if the FDA provided further guidance concerning the proper

application of its regulations that require certain patents to be listed in the Orange Book. We describe

below our interpretation of the pertinent statutory provisions, regulations, and the FDA statements

regarding particular drug products. We seek your views on our interpretations. For example, we seek

clarification of the FDA’s response to a prior Citizen Petition submitted on behalf of Apotex concerning

its pending abbreviated new drug application (“ANDA”) for the marketing of a generic form of Paxil,

which is marketed by GlaxoSmithKline (“GSK”, formerly SmithKline Beecham). The Apotex Citizen

Petition was submitted to the FDA on February 3, 2000 in Docket No. 00P-0499/CP1. The FDA

responded to that petition on November 21, 2000 (the “Citizen Petition Response” (attached)). 

Two-Prong Listing Test

First, we seek guidance concerning the criteria that a patent must meet before it can be listed in

the Orange Book. We understand that the governing regulation, 21 C.F.R. § 314.53(b), and the statutes

on which it is based, 21 U.S.C. §§ 355(b)(1), (c)(2), require that a patent satisfy both of two independent

prongs before qualifying for Orange Book listing. To satisfy the first prong, a patent must claim a drug

product1 or method of using a drug product that is the subject of a new drug application (“NDA”) or an

amendment or supplement to it. To satisfy the second prong, the patentee must be able to reasonably

assert a claim for infringement of the listed patent against someone who manufactures, uses or sells the

drug product that is the subject of the NDA. In addition, we understand that the language in 21 C.F.R.
2

 See “Federal Defendant’s Notice of Change in Position,” Andrx Pharmaceuticals, Inc., v. Biovail Corp. (Case No.

01-6194-CV-DIMITROULEAS) (S.D. Fla.) (pleading filed on Feb. 28, 2001).

A-26

§ 314.53(b) that follows the two-prong test (i.e., the text following the first full sentence of that section)

is merely explanatory language and does not expand the scope of this regulation. Please comment on

whether our understanding comports with the FDA’s interpretation of 21 C.F.R. § 314.53(b) and 21

U.S.C. §§ 355(b)(1), (c)(2).

Listing of Patents Claiming an Unapproved Aspect of an Approved Drug

Second, we seek guidance concerning whether under the first prong, an NDA holder can list a

patent claiming an unapproved aspect of an approved drug. The regulation requires that a patent must

“claim[] the drug or a method of using the drug that is the subject of the new drug application . . . .” 21

C.F.R. § 314.53 (b). We read this provision to require that after a drug is approved, a listed patent must

claim the drug product as approved by the FDA in all respects. We understand that any patent claiming

only an unapproved component, an unapproved formulation, or an unapproved use of a drug product

cannot satisfy the first prong. Similarly, we understand that any patent claiming an aspect of an

approved drug that would require prior FDA approval (e.g., a supplemental NDA) before incorporation

or implementation in a marketed drug product – such as a component of the drug, its formulation, a

condition of use, an indication, or labeling information – cannot satisfy the first prong.

 We note that the FDA made statements consistent with this position in a recent patent listing

dispute in federal court between Biovail (name-brand) and Andrx (generic) concerning Biovail’s Tiazac

product.2

 In that court proceeding, the FDA stated its preliminary conclusion that Biovail was required

to file a supplement to its NDA for a change in manufacturing process and formulation that had not been

previously approved. The FDA further clarified that the patent at issue must claim the approved

formulation of Tiazac to be properly listed in the Orange Book. According to the FDA, to the extent the

patent claimed only the new, unapproved formulation, it was not properly listed.

With respect to the listing of patents on unapproved aspects of an approved drug product, we also

are seeking elaboration concerning the statement in the Citizen Petition Response that “[p]atents must be

listed if they claim the drug substance, or active ingredient, of an approved drug product, or if they claim

a drug substance that is the component of such a product.” (Response at 6.) We understand the FDA’s

statement to be simply a restatement of the first prong and consistent with our understanding of the first

prong and the criteria for listing drug substance patents set forth above. We understand that any patent

claiming only an unapproved component cannot satisfy prong one. Likewise, we understand that if a

drug substance patent claims only a chemical compound which the FDA has not approved as a

component of an approved drug product, that patent may not be listed. In particular, we understand this

to be the case even when the claimed unapproved chemical compound differs only in its water of

hydration from an approved component. 

Please comment on whether our understanding comports with the FDA’s interpretation of 21

C.F.R. § 314.53(b) and 21 U.S.C. §§ 355(b)(1), (c)(2), and the related statements in the Citizen Petition

Response. 
A-27

Definition of “Drug Product”

Third, we seek guidance on the meaning of the term “drug product” as defined in 21 C.F.R.

§ 314.3(b) and as applied in 21 C.F.R. § 314.53(b), and the effect of that definition on the analysis of the

second prong. We understand that the relevant “drug product” is only that product which is the subject

of the NDA as approved by the FDA. Consequently, in analyzing “whether a claim of patent

infringement can reasonably be asserted” against a drug product, one may only consider the drug product

in the form approved by the FDA. We understand that for any aspect of a drug product which is subject

to FDA approval – including for instance, a drug product’s components, formulation, a condition of use,

an indication, or labeling information – only the aspects as approved may be considered in the

infringement analysis of the second prong. Please comment on whether our understanding comports

with the FDA’s interpretation of 21 C.F.R. § 314.53(b) and 21 U.S.C. §§ 355(b)(1), (c)(2).

Listing of Drug Substance Patents

Finally, we seek guidance on whether a patent claiming only a chemical compound that the FDA

has not approved for use as the drug substance in an approved drug product may be listed. The

regulation requires that in order for a drug substance patent to be listed, it must claim a drug substance

that is a component of a drug product that is the subject of a pending or approved NDA. See 21 C.F.R.

§ 314.53(b) and 21 U.S.C. §§ 355(b)(1), (c)(2). We understand that if a drug substance patent claims

only a chemical compound which the FDA has not approved as a component of an approved drug

product, that patent may not be listed. 

For example, the Citizen Petition Response states “[p]lease note that for purposes of the same

active ingredient requirement in 505(j), FDA considers anhydrous and hemihydrous forms of drug

substances to be pharmaceutical equivalents and to contain the same active ingredient.” (Response at 6,

n. 16.) We understand the FDA’s statement to be limited to the issue of whether a drug product,

submitted for approval through an ANDA, satisfies the requirement of 21 U.S.C. § 355(j) that it contain

the “same active ingredient” as the reference listed drug, even when the active ingredient of the ANDA

product and the listed drug differ by water of hydration. For example, in the case of Paxil, the statement

is limited to whether the anhydrate and hemihydrate forms of paroxetine hydrochloride are

pharmaceutically equivalent and considered to be the same active ingredient for purposes of 21 U.S.C.

§ 355(j).

We do not read this statement in the Citizen Petition Response as having any bearing on the

requirements for listing patents in the Orange Book as set out in 21 U.S.C. §§ 355(b)(1), (c)(2) and 21

C.F.R. § 314.53 (b). In particular, we understand the fact that the FDA may consider one chemical

compound pharmaceutically equivalent to, or the same active ingredient as, another chemical compound

for purposes of 21 U.S.C. § 355(j) does not alter the requirement of 21 C.F.R. § 314.53(b) that a listed

drug substance patent must claim a component of an approved drug product. We further understand that

it is possible for a chemical compound to be pharmaceutically equivalent to an approved active

ingredient and considered the same active ingredient for purposes of 21 U.S.C. § 355(j), but not itself be

approved as a component of the drug product. For example, although the FDA considers the anhydrous

form of paroxetine hydrochloride to be the same active ingredient as the hemihydrous form of paroxetine
A-28

hydrochloride for purposes of 21 U.S.C. § 355(j), the anhydrous form is not an approved component of

the drug product, Paxil. 

Please comment on our understanding of 21 C.F.R. § 314.53(b) and 21 U.S.C. §§ 355(b)(1),

(c)(2), and the related statements in the Citizen Petition Response.

We appreciate your consideration of this matter.

Respectfully submitted,

Molly S. Boast

Director

Bureau of Competition

Susan S. DeSanti

Director

Policy Planning
1

 Physician’s Desk Reference, 55th ed. (2001), hereinafter “PDR” at 461.

2

 Id.; see also Abbott Labs. v. Geneva Pharma., 182 F.3d 1315, 1316 (Fed. Cir. 1999).

A-29

Appendix G:

Orange Book Listing and Analysis

This appendix describes the patent listing and litigation history for each of the eight drug

products listed in Tables 4-2 and 4-3 that obtained multiple 30-month stays. The relationship of the

litigated patents creating the stays to the approved drug product (as detailed in the Physician’s Desk

Reference) is also described.

BuSpar (buspirone)

Box 4-2 describes Bristol-Myer Squibb’s listing of Patent No. 6,150,365 (the ‘365 patent), which

caused the additional 30-month stay for BuSpar, and the ensuing litigation. Reported court decisions

related to this listing can be found at:

C Watson Pharm., Inc. v. Henney, Civil Action No. 00-3516 (D. Md. Jan. 17, 2001)

(dismissing suit against the FDA seeking delisting because the FDA need not review

Orange Book listings);

C Mylan Pharmaceuticals, Inc. v. Thompson, 139 F. Supp. 2d 1 (D.D.C. 2001), rev’d 268

F.3d 1323 (Fed. Cir. 2001) (ordering delisting of ‘365 patent because patent did not

satisfy statutory listing criteria);

C Mylan Pharmaceuticals, Inc. v. Thompson, 268 F.3d 1323 (Fed. Cir. 2001) (reversing

district court decision ordering delisting of ‘365 patent because ANDA filer had no

private right of action to challenge listing);

C In re Buspirone Patent Litigation, 185 F. Supp.2d 340 (S.D.N.Y. 2002) (holding that

ANDAs did not infringe ‘365 patent);

C In re Buspirone Antitrust Litigation, 185 F. Supp. 2d 363 (S.D.N.Y. 2002) (holding that

Orange Book listings were not petitioning activity subject to Noerr-Pennington

immunity).

Hytrin (terazosin hydrochloride)

Abbott Laboratories (“Abbott”) distributes terazosin hydrochloride (known by the brand name

Hytrin), which is approved for the treatment of hypertension and symptomatic benign prostatic

hyperplasia.1

 The FDA approved the Hytrin tablet NDA on August 7, 1987, and the capsule NDA on

December 14, 1994. Abbott sells the dihydrate form of terazosin hydrochloride (having two associated

water molecules).2
3

 Id. at 1317.

4

 A priority dates is the earliest filing date to which the patent is entitled.

5

 Presumably the second suit, Abbott Labs. v. Geneva Pharma., Civil Action No. 94-5634 (N.D. Ill.), related to U.S.

Patent No. 5,294,615 (the ‘615 patent), which claimed an anhydrous form of terazosin hydrochloride, not the dihydrate form sold

by Abbott. Because the ‘615 patent was untimely listed in the Orange Book after Geneva had filed its tablet ANDA, any suit by

Abbott on the patent would not generate a 30-month stay as to Geneva’s tablet ANDA. 21 C.F.R. §314.94(a)(12)(vi); see Abbott

Labs. v. Zenith Labs., Inc., 934 F. Supp.2d 925, 935-36 (N.D. Ill. 1995)(discussing Abbott’s late listing of ‘615 patent and its

effect on pending ANDAs).

6

 The FDA’s Approval Letter to Geneva Pharma. for ANDA No. 74-315 (indicating dismissal date of suit related to

‘095 patent), posted at <www.fda.cder.approval.index.htm>

7

 Abbott Labs. v. Novopharm, Ltd., 104 F.3d 1305 (Fed. Cir. 1997).

8

 Docket Sheet for Abbott Labs. v. Geneva Pharma., Civil Action No. 96-1762 (N.D. Ill.)(indicating dismissal of Civil

Action 96-1762 in May 1996); FDA’s Approval Letter to Geneva Pharma. for ANDA No. 74-823 (indicating dismissal of Civil

Action No. 96-1762 on ‘615 patent), posted at <www.fda.cder.approval.index.htm> 

A-30

Geneva Pharmaceuticals, Inc. filed its ANDAs for terazosin hydrochloride tablets in January

1993 and for capsules in December 1995, seeking approval to market “Form IV” anhydrous (having no

associated water) terazosin hydrochloride.3 Over the course of several years, Abbott brought five

lawsuits involving several patents that it had listed in the Orange Book. The priority dates4 of patents-atissue in the third, fourth and fifth suits are later than Abbott’s first marketing of Hytrin, suggesting that

these patents might not cover Hytrin and be valid, because of the “on-sale bar” of patent law. 

Initially Abbott sued Geneva in February 1992, alleging infringement of U.S. Patent No.

4,251,532 (the ‘532 patent), thereby generating the first 30-month stay. The ‘532 patent claims the

dihydrate form of terazosin hydrochloride approved by the FDA for sale as Hytrin. Almost nine months

later, in November 1993, the court dismissed the suit without prejudice, ending the stay. Abbott brought

another suit against Geneva in September 1994, although it dismissed that suit less than a year later.5

Abbott filed its third suit in November 1995, alleging infringement of U.S. Patent Nos. 4,112,097 (the

‘097 patent) and 5,412,095 (the ‘095 patent), presumably generating another stay. The ‘097 patent

claimed a pharmaceutical composition containing terazosin hydrochloride, while the ‘095 patent claims

the Form III anhydrate of terazosin hydrochloride (not the dihydrate). Shortly thereafter, in February

1996, the court dismissed the ‘095 patent from the suit without prejudice.6 Litigation continued with

respect to the ‘097 patent, however, for nearly another year. Although the ‘097 patent had originally

expired in 1995, before Abbott filed suit, Abbott argued that the Uruguay Round Agreements Act

extended its term to January 21, 1997. Geneva ultimately prevailed in district court and on appeal by

asserting that the patent expired October 14, 1995.7

 

Abbott filed its fourth suit against Geneva in March 1996, alleging infringement of U.S. Patent

No. 5,294,615 by Geneva’s capsule ANDA. The ‘615 patent claims an anhydrous form of terazosin

hydrochloride, not the dihydrate form sold by Abbott. Again, shortly after filing, the court dismissed the

suit without prejudice.8

 Abbott’s listing of the ‘615 patent and other patents claiming the anhydrous
9

 See Abbott, 182 F.3d at 1318.

10

 In re Terazosin Hydrochloride Antitrust Litigation, 164 F. Supp. 1340, 1346 (D.C. Fla. 2000).

11

 Abbott Laboratories, No. C-3945 (May 22, 2000) (consent order), complaint available at

<http://www.ftc.gov/os/2000/05/c3945complaint.htm>

12

 Before the merger of Pfizer and Warner-Lambert Co., Parke Davis, a division of Warner-Lambert, distributed

Neurontin. PDR. at 2459. We refer to Pfizer Warner-Lambert (Pfizer) throughout, but some of the activity discussed was carried

out by its predecessor Warner-Lambert.

13

 PDR at 2459.

A-31

form of terazosin hydrochloride raises questions concerning the listing of polymorph patents described

in Appendix H.

Abbott filed its fifth suit on June 4, 1996, alleging infringement of U.S. Patent No. 5,504,207

(the ‘207 patent) by Geneva’s tablet ANDA. The ‘207 patent claimed the Form IV anhydrate of

terazosin, used by Geneva in its tablets and capsules, but not by Abbott in Hytrin. Although Geneva had

filed a paragraph IV certification with respect to the ‘207 patent for both its capsule and tablet ANDAs,

Abbott failed to sue based on the capsule ANDA. Accordingly, the suit only initiated a 30-month stay

on FDA approval of Geneva’s tablet ANDA. That stay expired in October 1998, nearly 70 months after

Abbott initiated its first suit against Geneva. The district court held the ‘207 patent invalid under the

statutory on-sale bar, and the Federal Circuit affirmed on July 1, 1999.9 

Because no 30-month stay prevented it, the FDA approved Geneva’s capsule ANDA in March

1998. Rather than begin marketing, Geneva entered an agreement with Abbott whereby Geneva agreed

not to market its generic tablets or capsules until the ‘207 patent litigation was finally concluded. In

exchange, Abbott paid Geneva $4.5 million per month.10 Ultimately, Geneva began marketing its

capsules in August 1999. The Geneva-Abbott agreement, however, gave rise to an FTC investigation,

which concluded in a consent agreement with both Geneva and Abbott.11

Neurontin (gabapentin) Tablets and Capsules

Pfizer Warner-Lambert (Pfizer) distributes gabapentin tablets and capsules12 (known by the brand

name Neurontin), which is approved for treating seizures caused by epilepsy.13 Pfizer’s patent listings in

the Orange Book and related patent infringement suits demonstrate that the lengthy pendency of a patent

application can generate overlapping 30-month stays that prevent FDA approval of generic products for

more than 30 months – in the case of Neurontin capsules, about 53 months.

Pfizer’s patents covering the gabapentin molecule and the only approved use of gabapentin have

expired. The generic applicants did not challenge the validity of either patent or attempt to enter before

their expiration. Pfizer had already listed Patent Nos. 4,894,476 (the ‘476 patent) and 5,084,479 (the

‘479 patent) in the Orange Book at the time the generic applicants first filed ANDAs for the capsule
14

 Presumably, the FDA did not require the generic applicants to file paragraph IV certifications for the ‘479 patent,

which claims a method of treating neurodegenerative diseases, such as Alzheimer’s, Huntington’s and Parkinson’s diseases,

because the generic applicants did not seek approval for these uses. 21 U.S.C. § 355(j)(2)(A)(viii) (if an ANDA applicant does

not seek approval for a method of use claimed in a listed patent, he may submit a statement to that regard, rather than certify to

the patent). Apotex did submit a paragraph IV certification for the ‘479 patent and Pfizer brought suit. Warner-Lambert, Co. v.

Apotex Corp, 2001 U.S. Dist. LEXIS 14592 (N.D. Ill. Sept. 14, 2001). Pfizer also sued Purepac for infringement of the ‘479

patent. Warner-Lambert Co. v. Purepac Pharmaceutic, Docket No. 98-CV-2749 (D. N.J.).

15

 At least three other generic companies have filed ANDAs for generic gabapentin following Purepac and Apotex.

Pfizer has sued most for patent infringement.

16

 The district court granted summary judgment of no infringement for Apotex on April 2, 2001 for the ‘476 patent

and on September 13, 2001 for the ‘479 patent. Warner-Lamber v. Apotex, 2001 U.S. Dist. LEXIS 14592 (N.D. Ill. Sept. 14,

2001). Pfizer’s appeal of the ‘479 decision is pending. Warner-Lambert Co. v. Apotex Corp., Docket No. 98-CV-4293 (N.D.

Ill.). Pfizer’s case against Purepac for infringement of the ‘476 and ‘479 patents is pending. Warner-Lambert Co. v. Purepac

Pharmaceutic, Docket No. 98-CV-2749 (D. N.J.).

17

 PDR at 2458.

18

 A continuation patent is one filed during the pendency of another, earlier patent application, which contains the

same disclosure as the earlier application. The continuation refers back to the earlier application and receives the benefit of its

earlier filing date for purposes of identifying prior art and determining patentability. 35 U.S.C. § 120; Transco Prods., Inc. v.

Performance Contr., Inc., 38 F.3d 551, 555-56 (Fed. Cir. 1994).

19

 Faulding also was the first generic applicant for the tablet form of gabapentin, which is approved by the FDA under

a different NDA. Faulding filed its ANDA for tablets 16 months later than the one for capsules. When Pfizer listed the ‘482

patent in the Orange Book, it did so for both capsules and tablets. Thus the additional 30-month stay relating to tablets resulted

in a shorter total stay period, 37 months, than the one for capsules of 53 months.

A-32

form of gabapentin in 1998. Pfizer’s suits for infringement of the ‘476 patent,14 brought against

Faulding and Apotex Corp.15 in June and July 1998, generated the first 30-month stays, which expired in

about December 2000.16 

The subject matter claimed in the ‘476 and the ‘479 patents differs from Neurontin as

manufactured and sold by Pfizer. Pfizer sells the anhydrate form of gabapentin (having no associated

water molecules),17 but the ‘476 patent claims a monohydrate form of gabapentin (having one associated

water molecule). The patent explains that the monohydrate is a “novel” form of gabapentin as compared

to the known, anhydrate form. Thus, Pfizer obtained the ‘476 patent by asserting that the new

monohydrate is patentably distinct from the anhydrate that it has FDA approval to sell. The listed ‘479

patent claims “a method for treating neurodegenerative diseases” such as Alzheimer’s, Huntington’s and

Parkinson’s diseases with gabapentin, even though the FDA has approved gabapentin only for treatment

of epilepsy.

 Pfizer received Patent No. 6,054,482 (the ‘482 patent) on April 25, 2000, based on the fourth in

a string of continuation applications18 claiming priority back to 1989, and listed it in the Orange Book. 

Consequently, FDA regulations required the ANDA filers to re-certify to the ‘482 patent.19 The

infringement suits Pfizer brought in June and July 2000 based on those paragraph IV certifications

generated second 30-month stays that extended nearly two years beyond the first stay, until
20

 Pfizer’s suits for infringement of the ‘482 patent have been consolidated in multi-district litigation and are pending. 

In re Gabapentin Patent Litigation, MDL No. 1384 (D.N.J.).

21

 Before the merger of Glaxo Wellcome and SmithKline Beecham, Paxil was manufactured and distributed by

SmithKline Beecham, which was also the original NDA holder. For simplicity, we will refer throughout to GSK.

A-33

approximately December 2002.20 The relationship between the ‘482 patent, which claims a purified

formulation of gabapentin, and Neurontin as sold by Pfizer cannot be determined from public sources

such as the Physician’s Desk Reference. 

Paxil (paroxetine hydrochloride)

The section of Chapter 4 entitled “Orange Book Patent Listing Practices and Use of Multiple 30-

Month Stays” describes GlaxoSmithKline’s (GSK)21 patent listings and infringement suits that caused

the multiple 30-month stays for Paxil. As explained in Chapter 4, GSK has sued an ANDA filer,

Apotex, for infringement of five patents, thereby generating five overlapping 30-month stays totaling

over five years. This appendix examines the Orange Book listings by comparing the scope of the five

patents-in-suit to Paxil.

The first patent which GSK listed and sued on was Patent No. 4,721,723 (the ‘723 patent), which

claims paroxetine hydrochloride hemihydrate, the form of the active ingredient contained in Paxil. (The

hemihydrate has one water molecule for every two paroxetine molecules incorporated into its crystalline

structure.)

The second and third patents on which GSK sued Apotex were anhydrate patents. The second

was Patent No. 5,872,132 (the ‘132 patent), which claims paroxetine hydrochloride anhydrate (having

no associated water molecules) and so differs from the hemihydrate form sold by GSK. In fact, the

hemihydrate form is prior art to this patent and, thus, GSK represented to the Patent Office that the

anhydrate is patentably distinct from the hemihydrate. GSK also sued on Patent No. 6,080,759 (the ‘759

patent), which claims the anhydrate made according to a specified process. The ‘132 and ‘759 patents

raise the issue of whether polymorph patents should be listed in the Orange Book, discussed in Appendix

H.

The fourth and fifth patents on which GSK sued Apotex were product-by-process patents, raising

the listing issues described in Appendix H. GSK’s fourth suit was for infringement of Patent No.

6,113,944 (the ‘944 patent), which claims tablets containing paroxetine made according to a specified

process. The fifth suit was for infringement of Patent No. 6,172,233 (the ‘233 patent), which claims

paroxetine hydrochloride made according to specified processes. The ‘233 patent acknowledges that

paroxetine hydrochloride was well known at the time GSK applied for the patent. Likewise the ‘944

patent acknowledges that paroxetine tablets were known. In both cases, only the recited process for

making the tablets or compound is asserted to be new. Moreover, GSK applied for the ‘233 patent
22

 Sale of a product made by a process, even when the process cannot be discerned from the product, raises the onsale bar of 35 U.S.C. § 102 with regard to a claimed process. Woodland Trust v. Flowertree Nursery, Inc., 148 F.3d 1368,

1370-71 (Fed. Cir. 1998). 

23

 Platinol is sold as a freeze-dried (lyophilized) form of cisplatin, which is dissolved in water prior to injection. 

Platinol AQ is a sold as a solution of cisplatin with the water already added. Bristol received approval to market Platinol in 1978

and Platinol AQ in 1988.

24

 PDR at 1055-56.

25

 Research Corp. Tech. v. Gensia Labs., Inc., 2001 U.S. App. LEXIS 4444 (Fed. Cir. 2001) (unpublished).

26

 Pharmachemie BV, American Pharmaceutical Partners, Inc. and Ben Venue Laboratories, Inc. filed ANDAs prior

to expiration of the ‘263 patent. Gensia Laboratories, Inc. filed an ANDA shortly thereafter.

27

 This first suit was against American Pharmaceutical Partners, Inc., which received FDA approval on July 16, 1999

and began marketing its generic cisplatin in November 1999. American Pharmaceutical Partners Announces Exclusive Cisplatin

Launch,; Bristol’s Cisplatin Patent Ruled Invalid, PR Newswire (Nov. 13, 1999).

A-34

several years after it began marketing Paxil. Therefore, Paxil is prior art to this patent, and it can only be

valid if it claims a process other than the FDA-approved process used to make Paxil.22

Platinol (cisplatin)

Bristol-Myers Squibb Co. (Bristol) distributes cisplatin (known by the brand names of Platinol

and Platinol-AQ23), which is approved for treatment of testicular, ovarian and bladder cancer.24 Bristol’s

patent listings in the Orange Book and related patent infringement suits demonstrate that doublepatenting and lengthy pendency of a patent application can generate an automatic 30-month stay on FDA

approval of generic products close to their otherwise expected approval date.

Bristol holds the exclusive license25 to two patents related to cisplatin, Patent Nos. 4,177,263 (the

‘263 patent) and 5,562,925 (the ‘925 patent). The ‘263 patent issued on December 4, 1979, and Bristol

eventually listed it in the Orange Book. That patent claims a method of treating tumor cells by

administering cisplatin. Prior to expiration of the ‘263 patent on December 4, 1996, three generic

companies26 filed ANDAs for cisplatin containing paragraph III certifications stating that they did not

seek FDA approval for their generic versions until the ‘263 expired. On October 8, 1996, shortly before

the ‘263 expired, however, the Patent Office issued the ‘925 patent. Bristol listed this patent in the

Orange Book, which forced the generic applicants to file paragraph IV certifications. Bristol then

brought infringement suits against the generic applicants, triggering an automatic 30-month stay lasting

until approximately May 1999.27

The ‘925 patent issued from the tenth application in a series of continuation applications

originating with an application filed on April 20, 1970, more than 26 years before the ‘925 patent’s

issuance. The ‘263 patent issued from the fourth application in the same family, making the ‘925 patent
28

 Pursuant to section 534 of Pub. L. 103-465, the term of a patent granted on an application filed on or after June

8, 1995, that is a continuation of an earlier filed application, will be 20 years from the date on which the earliest such

application was filed. 35 U.S.C. § 154. The application which issued as the ‘925 patent was filed June 2, 1994, prior to the

effective date of this provision. Therefore, the term of the ‘925 patent is 17 years from the date of issuance (October 8, 2013),

but the term of the patent extending beyond May 8, 2012 was disclaimed.

29

 In re Research Corporation Technologies, Inc. Patent Litigation, 1999 U.S. Dist. LEXIS 22589 (D.N.J. Oct. 21,

1999), aff’d Research Corp. Tech. v. Gensia Labs., Inc., 2001 U.S. App. LEXIS 4444 (Fed. Cir. 2001) (unpublished).

30

 PDR at 1062.

31

 Bristol-Myers Squibb Co. v. IVAX Corp., 77 F. Supp. 2d 606, 609 (D.N.J. 2000).

32

 Bristol-Myers Squibb Co. v. Ben Venue Labs., 90 F. Supp. 2d 522, 524 (D.N.J. 2000).

33

 21 U.S.C. § 355(j)(5)(D)(ii) states that the FDA may not accept an ANDA for a generic version of any approved

drug product containing a “new chemical entity” (i.e., an active ingredient for which the FDA has never before granted marketing

approval) until five years after the approval of that NCE. The expectation that generic taxol would be available was created, in

part, by Bristol’s statements before Congressional committees in 1991 and 1993 that “near-term generic competition for Taxol is

a certainty because Taxol is not a patented product.” Bristol-Myers Squibb Co., 77 F. Supp. 2d at 616. 

A-35

a direct decedent of the ‘263. Because of its lengthy pendency, the ‘925 was able to issue and generate a

30-month stay just as its direct predecessor, the ‘263, was about to expire.28

The generic applicants successfully defended the patent infringement suits by asserting that the

‘925 patent was invalid for “obviousness-type double patenting” in light of the ‘263 patent. The ‘925

patent claims “a therapeutic composition comprising” cisplatin. The generics argued that this

“therapeutic composition” was obvious in light of the method of treating tumors using cisplatin claimed

by the ‘263 patent. (Appendix H explains double-patenting and the surrounding listing issues.) The

district court agreed, and the Court of Appeals for the Federal Circuit affirmed on March 23, 200129

(after the 30-month stays had expired).

Taxol (paclitaxel)

Bristol-Myers Squibb Co. manufactures and distributes paclitaxel (brand name, Taxol, and

generically known as taxol), which the FDA has approved for treatment of ovarian, breast and lung

cancers and AIDs-related Kaposi’s sarcoma.30 Bristol’s patent listings in the Orange Book and the

related patent infringement suits demonstrate that invalid patents in combination with the lengthy

pendency of a patent application can potentially generate an additional 30-month stay.

During the 1980's, the National Cancer Institute (NCI) sponsored research and clinical trials of

taxol’s effects on numerous cancers. Eventually, the agency sought a commercial partner to bring a

taxol-based drug to market, and in 1991 the NCI entered a Cooperative Research and Development

Agreement (“CRADA”) with Bristol.

31 Bristol filed an NDA for taxol on July 22, 1992, which the FDA

approved five months later.32 At that time, it was widely expected that generic pharmaceutical

companies would submit ANDAs for generic taxol in December 1997, at the conclusion of Bristol’s

five-year new chemical entity (NCE) exclusivity awarded by the Hatch-Waxman Amendments.

33
34

 Bristol-Myers Squibb Co. v. Boehringer Ingelheim Corp., 86 F. Supp. 2d 433 (D.N.J. 2000).

35

 Bristol-Myers Squibb Co. v. Ben Venue Labs. Inc., 246 F.3d 1368 (Fed. Cir. 2001). The Federal Circuit vacated

the district court’s invalidity decision regarding the remaining asserted claims with a suggestion that those too might be held

invalid after further development of the record. Bristol chose not to pursue these remaining claims.

36

 See claims 31, 36, 39, 41 and 42 of the ‘331 patent. American Biosciences, Inc. v. Baker Norton Pharmaceuticals,

Inc., 2000 WL 54627 (C.D. Cal. 2002), aff’d on reconsideration, 2000 WL 655272.

37

 American Bioscience, 142 F. Supp. 2d at 4-5.

A-36

In August 1992, Bristol filed a patent application, which resulted in Patent Nos. 5,641,803 (the

‘803 patent) and 5,670,537 (the ‘537 patent). Those patents claim an FDA-approved method of

administering a specified amount of taxol to a patient over the course of three hours. Bristol listed both

patents in the Orange Book and sued the generic ANDA applicants, who had filed paragraph IV

certifications. The patent infringement suit against IVAX Corp., the first paragraph IV filer, triggered a

30-month stay on FDA approval that lasted until June 2, 2000. In March 2000, the district court hearing

the infringement suit entered summary judgment that both patents were invalid in light of references

reporting on government-sponsored clinical trials of taxol.34 The Court of Appeals for the Federal

Circuit affirmed that decision as to the majority of asserted claims in April 2001.35

Although the ‘803 and ‘537 patents no longer blocked generic competition at the time the 30-

month stay expired in June 2000, the FDA had not yet approved any generic version of taxol for

marketing. For that reason, when American Biosciences, Inc. (ABI) obtained Patent No. 6,096,331 (the

‘331 patent) on August, 1, 2000, and Bristol listed it in the Orange Book as explained below, the patent

had the potential to create a second 30-month stay on generic entry. Due to a series of tangled legal

maneuvers, this never came to pass, however, and the ‘331 patent delayed FDA approval of a generic

product for only a few weeks.

The story of the ‘331 patent is complex. It claims priority back to an original application filed in

1993, seven years before its issuance. The majority of the claims in the patent cover taxol “substantially

free of cremophor,” the solvent used for dissolving and administering the FDA-approved version of

taxol. Hence, these claims do not cover the approved version of taxol and cannot support listing. 

However, a small number of broad claims recite a “vessel” containing a specified amount of a taxol

ranging from 33 mg to 3000 mg. These claims arguably cover, for instance, a bag for intravenous

administration of taxol as approved by the FDA, but a district court has also invalidated the claims based

on this interpretation.36

At the time the ‘331 patent issued, ABI approached Bristol, asking that it list the ‘331 patent in

the Orange Book. Bristol initially refused, so ABI sought and obtained a temporary restraining order on

August 11, 2000 from the district court for the Central District of California requiring Bristol to list the

patent.37 Bristol later agreed to list the patent, and the parties requested that the court enter their

settlement agreement, but on September 7, 2000, the district court refused, and instead dismissed the

case on the grounds that ABI had no private right of action seeking listing of a patent in the Orange

Book. Thus, the district court dissolved the TRO and ordered Bristol to delist the patent by September
38

 American Bioscience, Inc. v. Bristol Myers Squibb Co., 2000 WL 1278348 (C.D. Cal. 2000) (an action to enforce

the FDCA may only be brought by the United States pursuant to 21 U.S.C. § 337(a)).

39

 A recounting of this history can be found in American Bioscience, Inc. v. Shalala, 142 F. Supp. 2d 1 (D.D.C.

2000), vacated, 243 F.3d 579 (D.C. Cir. 2001).

40

 Id. at 6.

41

 21 U.S.C. § 355(c)(2) requires that an NDA holder submit a patent for listing within 30 days of the date of issue. If

the NDA holder lists a patent more than 30 days after issuance, any ANDAs on file need not certify to the patent. 21 C.F.R. §

314.94(a)(12)(vi).

42

 The FDA had granted “tentative approval” to IVAX two weeks earlier, on August 28, because it had completed its

substantive review of the ANDA, but could not issue final approval until the questions about the ‘331 patent had been resolved. 

American Bioscience, Inc.,142 F. Supp. 2d at 6. Thus, the dispute over the ‘331 patent delayed final approval of generic taxol

about 18 days.

43

 American Bioscience, Inc., 142 F. Supp. 2d 1.

44

 American Biosciences, Inc. v. Thompson, 269 F.3d 1077 (D.C. Cir. 2001).

45

 FDA Status Resolved - IVAX’ Generic Paclitaxel On the Market to Stay, Business Wire, Jan. 25, 2002.

A-37

14.38 Also on September 7, ABI brought a patent infringement suit against IVAX and asserted to the

FDA that the suit barred approval of IVAX’s ANDA for 30 months.39

On September 11, 2000, Bristol, without referring to the earlier listing, informed the FDA that it

wished to list the ‘331 patent. Bristol again communicated with the FDA on September 14, this time

stating that it was de-listing the ‘331 patent “to the extent that listing was compelled by the TRO,” but

that it did not mean to “affect the continued and continuous listing of the patent.”40 The FDA considered

Bristol’s August 11 listing ineffective and its September 11 listing to be late, because it occurred more

than 30 days after the patent issued.41 For that reason, the FDA did not require the ANDA applicants to

submit paragraph IV certifications regarding the ‘331 patent or view ABI’s infringement suit as creating

a 30-month stay. On September 15, the FDA granted final approval to IVAX’s generic taxol.42 ABI

sought review of this decision in the D.C. district court, which sided with the FDA on October 3, 2000.43

IVAX began marketing about three weeks later and remains on the market. At least two other generic

manufacturers have subsequently entered.

In November 2001, the D.C. Circuit Court of Appeals reversed the district court’s affirmance of

FDA’s decision to consider Bristol’s September 11 listing untimely and to grant final approval to IVAX. 

Moreover, the Court of Appeals ordered the FDA to vacate its approval of IVAX’s ANDA, effective

January 24, 2002.44 This never occurred, however, because Bristol decided against relisting the ‘331

patent45 following the January 11, 2002 decision by the district court holding that the asserted patents
46

 The court held that the use of Taxol as marketed by Bristol prior to the effective filing date of the ‘331 patent

anticipated the claims and rendered them invalid under 35 U.S.C. § 102. American Biosciences, Inc. v. Baker Norton

Pharmaceuticals, Inc., 2000 WL 54627 (C.D. Cal. 2002), aff’d on reconsideration, 2000 WL 655272 (holding claims 31, 36,

39, 41 and 42 of the ‘331 patent invalid). 

47

 The ‘463 patent claims a diltiazem formulation containing both slow-release beads, of the type found in Tiazac, and

“at least 1% free diltiazem.” Because Tiazac is prior art to the ‘463 patent, the patent cannot cover Tiazac and be valid See In re

Buspirone Patent Litigation, 185 F. Supp. 2d at 360-62.

48

 Id. at 1374. The district court rejected Biovail’s argument that the court’s authority to limit the 30-month stay

could be based only on the filing of the ‘463 infringement action because “[s]uch a myopic approach to each listed patent would

lead to a potentially endless listing of patents to prolong FDA approval of a generic competitor.” Id. at 1375.

A-38

claims were invalid.46 (The same claims supported the listing.) Had Bristol not delisted, the D.C.

Circuit court’s decision might have forced generic taxol off the market. 

Tiazac (diltizem hydrochloride) 

Box 4-4 describes Biovail’s listing of Patent No. 6,162,463 (the ‘463 patent),47 which caused the

second 30-month stay for Tiazac, and the FTC’s related enforcement action. Court decisions related to

this listing can be found at:

C Biovail Corp., Int’l v. Andrx Pharm., Inc., 2000 WL 33354427 (S.D. Fla. March 6, 2000),

aff’d 239 F.3d 1297 (Fed. Cir. 2001) (holding that Andrx’s ANDA did not infringe Patent

No. 5,529,791 (the ‘791 patent), the first listed patent covering the Tiazac formulation).

C Andrx Pharm., Inc. v. Biovail Corp., 175 F. Supp. 2d 1362 (S.D. Fla. 2001) vacated, 276

F.2d. 1368 (Fed. Cir. 2002) (dismissing Andrx’s challenge to the ‘463 listing because it

had no private right of action, but shortening the 30-month stay because Biovail’s actions

“were done to impede or delay the expeditious resolution of the patent actions between

Biovail and Andrx . . . .”).48

C Andrx Pharm., Inc. v. Biovail Corp., 276 F.2d. 1368 (Fed. Cir. 2002) (holding that the

district court had no authority to shorten 30-month stay based on Biovail’s allegedly

improper conduct before the FDA).

C <www.ftc.gov/opa/2002/04/biovailtiazac.html> (FTC proposed consent decree requiring

delisting).
49

 Andrx Pharm., Inc. v. Biovail Corp., 276 F.3d 1378, 1376 (Fed. Cir. 2002).

50

 21 C.F.R. § 314.70(b).

51

 The FTC accepted for public comment a proposed consent order on April 23, 2002, available at

<http://www.ftc.gov/opa/2002/04/biovailtiazac.htm>.

A-39

Appendix H:

Orange Book Patent Analysis

This appendix describes and analyzes three categories of patents that raise Orange Book

listability questions and provides examples of patents falling into those categories. The appendix also

suggests ways in which the listability questions might be addressed. The FTC Staff identified the patent

categories and examples by reviewing all patents listed for drug products for which the responding

generic companies indicated that they had challenged a listing in some way. The cited examples are not

exhaustive. They only illustrate a category. Chapter 4 of this report describes the statutory and

regulatory scheme governing Orange Book listings and underlying this analysis.

Patents Not Claiming the Approved Drug Substance, Drug Formulation or Use

As explained in Chapter 4, the listing regulation requires that those patents listed in the Orange

Book claim the drug product that is the subject of the NDA, or an approved use of that product. The

regulation allows the listing of drug substance patents, drug formulation patents, and method of use

patents. One court has pointed out that the scope of the NDA, and not the brand-name company’s drug

as marketed, controls the listing analysis.49 Normally, the scope of the approved NDA will closely align

with the marketed drug, given that almost all changes to a drug’s formulation or labeling require

supplemental FDA approval.50 Therefore, in most cases, one can compare a patent with the FDA

approved, marketed drug to analyze whether the patent listing is appropriate. In this analysis, the FTC

Staff compared the listed patent to the drug product as described in the Physician’s Desk Reference, 55th

ed. (2001). It is possible, however, that resolution of a listing dispute might depend on an interpretation

of the scope of approval granted through the NDA, and a mechanism for addressing this issue could be

valuable.

Some patents listed in the Orange Book claim a formulation that differs from the formulation

approved through the NDA. For instance, the FTC has alleged that Patent No. 6,162,463, listed for

Tiazac (diltiazem) claims a formulation comprising slow release beads and free diltiazem but that the

Tiazac formulation approved through the NDA contains only slow release beads.51 Other listed patents

claim only unapproved uses of the drug. For example, Patent No. 5,084,479, listed for Neurontin

(gabapentin), claims the use of gabapentin to treat neurodegenerative diseases. The FDA has approved

gabapentin only for treating epilepsy, which is not a neurodegenerative disease. Other patents falling

into this category are those that claim a method of using a drug substance other than the approved drug

substance, such as Patent No. 4,621,077, listed for Fosamax (alendronate sodium), which claims a

method of using the acid form of alendronate. Only the sodium form of alendronate is sold.
52

 Two examples are Prilosec (omeprazole, Patent No. 4,636,499) and BuSpar (buspirone Patent No. 6,150,365). 

The generic applicants in the omeprazole litigation moved for summary judgment that they did not contribute to or induce

infringement of the ‘499 patent. The district court granted that motion based, in part, on the argument of the generic applicants

that the patent could not cover a patient’s ingesting and metabolizing omeprazole because that activity was prior art to the patent.

In re Omeprazole Patent Litigation, 2001 WL 585534 (S.D.N.Y. 2001).

53

 In re Omeprazole Patent Litigation, 2001 WL 585534 (S.D.N.Y. 2001); see also, Zenith Labs. v. Bristol-Myers

Squibb, 10 F.3d 1418, 1422 (Fed. Cir. 1994) (infringement may occur if the administered product is converted in vivo in to the

claimed product); 35 U.S.C. § 271(b), (c) (one who induces or contributes to infringement of a patent is liable as an infringer). 

54

 Mylan Pharmaceuticals, Inc. v. Thompson, 139 F. Supp. 2d 1, 19-21 (D.D.C. 2001), rev’d on other grounds, 268

F.3d 1323 (Fed. Cir. 2001).

55

 109 F.3d 756 (Fed. Cir. 1997).

A-40

Brand-name companies also have listed patents that claim a drug substance differing from the

approved drug substance in some way. These patents generally fall into three subcategories: metabolites,

polymorphs, and intermediates. Each subcategory raises its own specific issues, as elaborated below.

(i) Metabolite Patents

Of the drug products for which the FTC Staff examined listed patents, there are at least two

instances where brand-name companies have listed and sued generic companies for infringement of

metabolite patents.52 A metabolite is the chemical compound into which a patient’s body metabolizes or

converts the active ingredient of a drug product. Often the metabolite, rather than the active ingredient

itself, produces the drug’s therapeutic effect in the body. Only patients, and not the generic applicant,

can directly infringe a metabolite patent; they do so by ingesting the approved drug product and then

metabolizing it into the claimed compound. Typically, the patentee charges that the generic applicant

will induce or contribute to the infringement of the metabolite patent by selling its drug to patients who

then metabolize it.53

One district court explicitly has held that a brand-name company may not list a metabolite patent

in the Orange Book, because the metabolite patent does not “claim the drug,” as required by the listing

statute.54 The court looked to the precedent, Hoechst-Roussel Pharms., Inc. v. Lehman,

55 which

interpreted the term “claims” in the Patent Term Restoration portion of the Hatch-Waxman Amendments

at 35 U.S.C. § 156(a) and concluded that a metabolite patent does not “claim” the approved drug

product. 

Whether a brand-name company appropriately may list patents claiming metabolites or the use of

metabolites in the Orange Book could be clarified through FDA regulation or guidance.

(ii) Polymorph Patents

Another category of patents that raises listing questions includes those patents claiming a

chemical compound that differs by water-of-hydration or that forms a crystalline structure different from

the active ingredient approved by FDA through the NDA. For instance, the FDA has approved the

anhydrate form of gabapentin (having no water) but the Orange Book contains a patent claiming the
56

 See FDA, Preface to Twenty First Edition of Approved Drug Products with Therapeutic Equivalence Evaluation,

available at <http://www.fda.gov/cder/orange/adp.htm>.

57

 One district court addressed the issue and agreed. In Zenith Laboratories, Inc. v. Abbott Laboratories, 1996 WL

33344963 (D.N.J. 1996), the court denied Zenith’s request that the court order Abbott, the holder of an approved NDA on

terazosin dihydrate (Hytrin), to de-list four patents claiming anhydrous terazosin. Contrary to FDA regulations stating that the

agency does not review the propriety of a listing, the court stated, “the FDA approved Abbott’s [anhydrate] patents for listing. 

Such approval demonstrates that the FDA believed that those patents are covered by an approved drug product.” Id. at *9. Zenith

appealed that decision to the Court of Appeals for the Federal Circuit, but the parties settled following oral argument and before

the court issued an opinion, with Abbott paying Zenith, who agreed to stay off the market. In re Terazosin Antitrust Litigation,

164 F. Supp.2d 1340, 1346 (S.D. Fla. 2000). 

A-41

monohydrate form of gabapentin (having one water molecule in its crystalline structure for each

gabapentin molecule). Compounds differing in this way, or by the way in which the individual

molecules arrange in a crystalline structure, are called polymorphs. Some drugs having patents listed

which claim a form of the active ingredient differing by water of hydration from the approved form

include Hytrin (terazosin hydrochloride), Paxil (paroxetine hydrochloride) and Neurontin (gabapentin). 

The FDA typically grants approval through an NDA to a brand-name company to sell only one

polymorph of an active ingredient. The company may not sell other versions of the active ingredient

without FDA approval. Thus, one view is that these different polymorphs of the approved active

ingredient are not part of the approved drug product, and patents claiming the different polymorphs do

not claim the approved drug product, thus making the listing of such patents questionable. 

An alternative view recognizes that under certain circumstances, the FDA will treat a compound

differing by water-of-hydration or crystalline structure from an approved active ingredient as the same

active ingredient. The FDA will allow the active ingredient of a generic product to differ in these ways

if the generic applicant demonstrates that its product is bioequivalent to the brand-name company’s

product.56 For this reason, some have argued that patents claiming compounds that differ by water-ofhydration or crystalline structure from the approved active ingredient claim the “same” active ingredient

and therefore should be listable.57

A response to this argument is based on the fact that often the form of the active ingredient used

in the approved drug product is prior art to the later-issued polymorph patent. This is the case for

Hytrin, Paxil, and Neurontin. That means that the patentee argued, and the Patent Office agreed, that the

different polymorph was sufficiently distinct from the FDA-approved polymorph to be patentable. This

fact highlights the difficulty in treating the two compounds as the “same” for purposes of the patent

analysis required by Orange Book listings. Listable patents are those that “claim” the approved drug

product (a concept based on patent principles), and not every patent that a bioequivalent product might

infringe. The listing analysis is rooted in patent concepts, and the ability of two polymorphs to form

bioequivalent products is not decisive to that analysis. If the ability of two polymorphs to form

bioequivalent products made them the “same” for patent purposes (as opposed to FDA purposes), the

brand-name company could never obtain the later polymorph patent in the first place because the earlier,

approved polymorph would invalidate it.
58

 The brand-name company admitted that Aredia was sold as the anhydrous (lacking water) form of pamidronate, not

the pentahydrate form , which contains five water molecules for every pamidronate molecule. Ben Venue Labs., Inc. v. Novartis

Pharm. Corp., 10 F. Supp. 2d 446, 454 (D. N.J. 1998) (the court did not address whether the generic applicant had a private right

of action to challenge the listing).

59

 Id. at 457-58.

60

 Id. at 455-58; see 21 C.F.R. § 314.53(b) (“For patents that claim a drug substance or drug product, the applicant

shall submit information only on those patents that claim a drug product that is the subject of a pending or approved application,

or that claim a drug substance that is a component of such a product.”).

61

 Id. at 456 (quoting 21 C.F.R. § 210.3(b)(3)).

A-42

Whether a brand-name company may appropriately list polymorph patents, or those claiming a

use or formulation containing a polymorph, could be clarified through FDA regulation or guidance. This

is the subject of the FTC Staff’s Citizen Petition.

(iii) Drug Intermediate Patents

The “intermediate” patents listed in the Orange Book present a category that may not literally

claim the approved drug product. An intermediate patent claims a chemical compound that is used

during the production of an active ingredient, but is not present in the final, marketed form of the drug

product. The claimed compound is an “intermediate” on the pathway to the approved drug. 

In the patent litigation concerning Aredia (pamidronte disodium), the district court held that a

brand-name company may list intermediate patents in the Orange Book. The generic applicant

challenged the listing of a patent claiming a compound used in the manufacture of its product, which the

brand-name company admitted was not present in Aredia.58 The district court held that the brand-name

company could maintain the listing, however, on the basis that the claimed compound was a

“component” of Aredia because it was used in the manufacture of that drug product.59 For support, the

court looked to the FDA’s listing regulations that allow listing of a patent claiming a “component” of an

approved drug product,60 and the FDA’s regulations on good manufacturing practices defining

“component” to mean “any ingredient for use in the manufacture of a drug product, including those that

may not appear in such a drug product.”61 The court did not address whether a patent claiming an

intermediate compound claims the approved drug product.

Whether a brand-name company may appropriately list intermediate patents could be clarified

through FDA regulation or guidance.

Product-by-Process Patents

A simple example of the claims of a chemical product-by-process patent, and a comparison with

product and process patents, is necessary to understanding the listing issues surrounding these patents. 

A product patent claim would recite “such and such substance.” A related process patent claim would

recite “a process for making such and such substance by performing steps (a) and (b).” A corresponding
62

 21 C.F.R. § 314.53(b). Examples of “product-by-process” patents are the three patents listed for Paxil (paroxetine

hydrochloride). 

63

 Atlantic Thermoplastics Co. v. Faytex Corp., 970 F.2d 834, 844 (Fed. Cir. 1992).

64

 A process claim covers performance of the process steps, but it also provides patent coverage to products made

according to the recited process. 35 U.S.C. § 271(g) (“ Whoever without authority imports into the United States or offers to

sell, sells, or uses within the United States a product which is made by a patented process in the United States shall be liable as

an infringer . . . .” ).

65

 A counter-argument is that, based on a statement in the Federal Circuit opinion, Scripps Clinic & Research

Foundation v. Genentech, Inc., the process limitations of these patent claims must be ignored, effectively making them listable

product claims. In that case the court stated “the correct reading of product-by-process claims is that they are not limited to a

product prepared by the process set forth in the claims.” 927 F.2d 1565, 1583 (Fed. Cir. 1991). A later case, Atlantic

Thermoplastics, held that process limitations must be considered. 970 F.2d 834, 844 (Fed. Cir. 1992). However, the two cases

can be reconciled in this context. If the patentee depended on the novelty of the process limitations in obtaining these patents, it

is then estopped from ignoring those limitations. Atlantic Thermoplastics Co. v. Faytex Corp., 974 F.2d 1279, 1280 (J. Rich,

dissent from denial of reh’g en banc) (patentee admitted that product-by-process claim was limited to the process and claim must

be interpreted accordingly); Id. at 1299 (J. Lourie, same). When the product is old, but the process is new, as is generally the

case with patents related to small-molecule pharmaceutical compounds, the claim is a process claim, not a true product-byprocess claim of the type discussed in Scripps. “The Scripps class of product-by-process claims is quite different from claims

[which are] allowed when the process is found patentable.” Id. at 1282 (J. Newman, same). Under this analysis, an

interpretation of the listed product-by-process patents as process patents is completely consistent with the Scripps case. 

Moreover, any argument that ignores the process limitations in an attempt to support the Orange Book listing on the grounds that

these are product patents would necessarily invalidate the patents, thereby suggesting that a claim of patent infringement could

not “reasonably be asserted” under this claim interpretation, as required for listing under 21 U.S.C. § 355(b)(1).

A-43

product-by-process patent claim would simply rearrange words of the process claim to recite “such and

such substance made by the process of performing steps (a) and (b).” 

 Two arguments support the position that product-by-process claims may not be listed. First,

although the FDA’s listing regulation does not address product-by-process patents, it specifically defines

three categories of listable patents: drug substance (ingredient) patents, drug product (formulation and

composition) patents, and method of use patents. Product-by-process patents do not comprise a category

of listable patents under the FDA’s listing regulation. Second, the listing regulation and HatchWaxman’s legislative history prohibit the listing of process patents,62 and product-by-process claims are

arguably similar to process patents than are product patents. As seen above, the wording of the productby-process claim more closely resembles that of the process claim, not the product claim. Moreover, the

scope of patent coverage afforded by a product-by-process patent for small-molecule pharmaceuticals

typically is identical to that afforded by the corresponding process patent.

An examination of two listed product-by-process patents illustrates this latter point. Patent Nos.

6,063,927 (the ‘927 patent) and 6,172,233 (‘233) both claim paroxetine hydrochloride made according to

specified processes. In each case, the patent itself acknowledges that paroxetine hydrochloride was well

known at the time the brand-name company applied for the patents. The brand-name company

represented to the Patent Office in the patent document that the recited process was new and made the

claims patentable. Therefore, if valid, these patents cover only those products (paroxetine

hydrochloride) made according to the specified process,63 just as process patents cover products made

according to the specified process.64 In contrast, product patents, such as listable drug substance and

formulation patents, cover a product regardless of the process by which it is made.65 Thus, product-by-
66

 In re Lonardo, 119 F.3d 960, 965 (Fed. Cir. 1997); See In re Goodman, 11 F.3d 1046, 1052 (Fed. Cir. 1993). 

The Patent Office allows a terminal disclaimer to cure an obviousness-type double patenting rejection only when the same entity

owns both patents.

67

 Research Corp. Techs. v. Gensia Labs., Inc., 10 Fed. Appx. 856 (Fed. Cir. 2001)(unpublished).

68

 A continuation patent is one filed during the pendency of another, earlier patent application, which contains the

same disclosure as the earlier application. The continuation refers back to the earlier application and receives the benefit of its

earlier filing date for purposes of identifying prior art and determining patentability. A continuation application generally claims

the same invention claimed in the earlier application, although there may be some variation in the scope of the subject matter

claimed. The term "parent" refers to the immediately preceding application upon which a continuing application claims priority. 

35 U.S.C. § 120; Transco Prods., Inc. v. Performance Constr., Inc., 38 F.3d 551, 555-56 (Fed. Cir. 1994).

A-44

process patents in which only the novelty of the process supports patentability arguably are characterized

more accurately as process patents. 

Whether a brand-name company may appropriately list such patents could be clarified through

FDA regulation or guidance.

Double Patenting 

When a patent applicant obtains a second patent claiming subject matter that is the same as or

obvious in light of the claims of an earlier issued patent, it is called “double-patenting.” The patent

statute and the judicially-created doctrine of “obviousness-type double patenting” renders such patents

invalid. The doctrine of double patenting prevents the patentee from extending the patent right beyond

the statutorily granted time limit.66 The Platinol example, as described in Appendix G, provides an

example of a 30-month stay created by a patent invalid for double-patenting. The brand-name company

obtained a 30-month stay by obtaining, listing and suing on Patent No. 5,562,925. The Federal Circuit

eventually invalidated that patent for double patenting -- 45 months after the generic applicant

challenged the validity of the patent.67 The ‘925 patent effectively generated an additional 30 months of

exclusivity even though it claimed nothing new.

In some circumstances a patentee may obtain a second patent that is obvious in view of its own

earlier patent. The Patent Office typically allows a patent applicant to obtain such a patent only if the

applicant files a “terminal disclaimer” for the later patent, disclaiming the term of the later patent that

extends beyond the term of original patent, so that both patents expire on the same day. In those cases in

which the brand-name company files a terminal disclaimer for the later patent, the later patent does not

provide rights beyond those of the earlier patent because both expire on the same day. This is the

rationale behind the Patent Office’s allowing the later patent. The later patent does provide additional

protection from generic competition, however, if it generates a second, later-expiring 30-month stay. 

Fosamax provides an example of how double-patenting with a terminal disclaimer may result in

multiple 30-month stays. The brand-name company listed and initially sued on the earlier patent, No.

5,849,726 (the ‘726 patent), which claims “a method for treating and/or preventing bone loss” using the

anhydrate form of alendronate sodium. The later patent, No. 6,008,207 (the ‘207 patent), was a

continuation of the ‘726 patent.68 It claims “a method for treating bone resorption” and “a method for
69

 Specifically, the patents state, “The term ‘inhibition of bone resorption’ as used herein, refers to treatment and

prevention of bone loss . . . .” U.S. Patent No. 6,008,207, col. 2, lines 28-29. 

70

 Publicly available information does not provide a reason for the stipulated dismissal.

A-45

inhibiting bone resorption” using the anhydrate form. As the patents explain, however, “a method for

treating and/or preventing bone loss” is the same thing as “a method for treating and/or inhibiting bone

resorption.”69 The brand-name company filed a terminal disclaimer on the ‘207 patent, presumably to

overcome or avoid a rejection based on double patenting. The brand-name company sued for

infringement of the ‘207 patent based on a paragraph IV certification approximately four months after

suing based on the ‘726 patent. 

In theory, the later-issued ‘207 patent provides no additional patent protection beyond the ‘726

patent because both expire on the same day. However, the ‘207 patent generated a second, later-expiring

30-month stay because it issued later, thus triggering a later paragraph IV certification and a later suit. 

Consequently, the later-issued ‘207 patent did provide an additional exclusionary right beyond the ‘726

patent that potentially had the ability to delay generic entry by an additional four months. That delay

never materialized because the court dismissed the suits on both patents by stipulation of the parties

before the first 30-month stay expired, thereby extinguishing the 30-month stays generated by both the

‘207 and the ‘726 patents.70 

Whether a brand-name company may appropriately list additional patents claiming subject matter

that is the same as or obvious in light of the claims of an earlier-issued patent for the same drug product

could be clarified through FDA regulation or guidance.