The Drug Price Competition and Patent Term Restoration Act, known as the Hatch-Waxman Act, was enacted to balance incentives for both pharmaceutical innovation and drug affordability by allowing generic drug manufacturers to challenge patents of brand name drugs via Abbreviated New Drug Applications (“ANDA”) with the Food and Drug Administration (“FDA”). The Hatch-Waxman framework incorporates distinctive rules that allow generic drug manufacturers to lawfully reverse-engineer a brand-name drug while at the same time providing the brand-name manufacturer, or innovator, a period of exclusivity to recoup its investment.

In 2012, the inter partes review (“IPR”) and post-grant review (“PGR”) processes were introduced by the Leahy-Smith America Invents Act (“AIA”) and are administrative trial proceedings conducted by the Patent Trial and Appeal Board (PTAB) to allow any third party to challenge a patent based on a lack of novelty (§ 102) or obviousness (§ 103).  The IPR was created to provide a faster and cheaper way to challenge patent validity than traditional litigation.  An increasing number of generic drug manufacturers have used the IPR and PRG processes to circumvent the Hatch-Waxman Act while taking advantage of the abbreviated processes for drug entry.

On June 13, 2018, Senator Orrin Hatch (R-UT), Chairman of the Senate Republican High-Tech Task Force and co-author of the Hatch-Waxman Act, filed an amendment in the Senate Judiciary Committee to restore the balance the Hatch-Waxman Act struck to incentivize generic drug development.  Senator Hatch’s amendment, the Hatch-Waxman Integrity Act of 2018, would close the loophole created by the AIA and would require generic drug manufacturers wishing to challenge a brand-name drug patent to choose between Hatch-Waxman litigation, which affords certain advantages such as being able to rely on the drug innovator’s safety and efficacy studies for FDA approval, or IPR, which is cheaper and faster than Hatch-Waxman litigation, but does not provide the advantages of a streamlined generic approval process.

For generic drugs, any Paragraph IV certification would have to include the following additional certifications:

  1. Neither the applicant nor any party in privity with the applicant has filed, or will file, a petition to institute inter partes review or post-grant review of that patent under chapter 31 or 32, respectively, of title 35 United State Code
  2. In making the certification required under subparagraph (A), the applicant is not relying in whole or in part on any decision issued by the Patent Trial and Appeal Board in an inter partes review or post-grant review under chapter 31 or 32, respectively, of title 35 United State Code    

A similar provision is designed for biosimilar drugs under the Biologics Price Competition and Innovation Act (BPCIA).

As stated in Senator Hatch’s amendment, the purpose of the Hatch-Waxman Integrity Act is:

To prevent the inter partes review process for challenging patents from diminishing competition in the pharmaceutical industry and with respect to drug innovation.

To promote competition in the market for drugs and biological products by facilitating the timely entry of lower cost generic and biosimilar versions of those drugs and biological products.

Overall, the Hatch-Waxman Integrity Act would prevent generic drug manufacturers from challenging patents in both the PTAB, while seeking FDA approval via the ANDA pathway.