Copyright 1999 Federal News Service, Inc.
Federal News Service
JULY 1, 1999, THURSDAY
SECTION: IN THE NEWS
LENGTH:
2523 words
HEADLINE: PREPARED TESTIMONY OF
GORDON
M. BINDER
CHAIRMAN AND CEO
AMGEN
THOUSAND OAKS, CA
BEFORE THE
HOUSE JUDICIARY COMMITTEE
SUBCOMMITTEE ON COURTS AND
INTELLECTUAL PROPERTY
SUBJECT - PATENT REVIEW
BODY:
EXECUTIVE SUMMARY
Legislation is necessary to close an unintended
loophole in the Drug Price Competition and Patent Term Restoration Act of 1984
(commonly known as the Hatch-Waxman law), and in particular the
provisions of Section 271(e) of Title 35, United States Code -- provisions added
by Hatch-Waxman designed to overturn the ruling in Roche
Products, Inc. v. Bolar Pharmaceutical Co., which held that performing tests
necessary to produce a generic copy of a patented drug constituted patent
infringement. Section 271(e)(1) establishes an exception from patent
infringement and was intended to allow generic pharmaceutical companies to
conduct testing on patented approved pharmaceutical products for purposes of
marketing the product as soon as possible following expiration of patent
protection for the product. This provision was a portion of the balance between
the interests of generic and pioneer pharmaceutical companies crafted in 1984.
However, the courts have broadly interpreted the language of Section 271(e)(1)
to include clinical trials and related activities in support of full biologics
license applications (BLAs) and new drug applications (NDAs) within the patent
infringement exception. The legislative history of Hatch-Waxman
makes it clear that this is not the result intended by Congress.
In
addition, remedies were provided to patent owners that would allow them to seek
a determination of their rights if the generic manufacturer were to attempt to
enter the market prior to patent expiration. Unfortunately, the statute does not
provide the same remedies if a party is using the BLA or NDA process to seek FDA
approval and market the product prior to expiration of patent protection for the
product.
Amgen urges this committee to approve a technical change that would
make the patent infringement exemption of the Bolar amendment apply in the case
of human drugs only to persons who conduct activities in support of abbreviated
new drug applications, (i.e. for generic drugs) as originally contemplated by
Congress. Congress should update the law to return it to what clearly was its
original, limited purpose: exempt testing of generic drug products from patent
infringement laws. We are not asking Congress to enforce our patent rights. We
are merely seeking to have the unintended barriers removed to allow companies to
defend their rights against patent infringers.
**************** Introduction
Mr. Chairman and members of the Committee, I am Gordon Binder, Chairman and
Chief Executive Officer of Amgen, a biotechnology company headquartered in
Thousand Oaks, California. As you may know, Amgen is now the largest independent
biotechnology company in the world. The U.S. biotechnology industry is the
source of some of the most exciting science taking place today. Scientists in
biotechnology are translating new knowledge about the cause of diseases into new
medicines to prevent, treat and cure those diseases often diseases that have
plagued humanity for centuries.
California, where our company is located, is
home to onethird of America's biotechnology and medical device companies, which
together with the biosciences community forms the state's third leading
industrial sector. Companies like ours are the engines of growth in our state
and other areas heavy in biotechnology. No other segment of the U.S. economy is
creating as many high-paying and creative jobs as high-tech companies do.The
success of the biotechnology industry over the years may be attributed to two
principal factors: dedication to research leading to development of novel,
innovative products to treat diseases previously untreatable and the ability to
obtain meaningful enforceable patent protection of these products. Without the
expectation to obtain meaningful enforceable patent protection to protect the
fruits of its scientific research, no company can raise the necessary capital to
bring life-saving products from the bench to the bedside.
Background
Amgen
Since its founding in 1980, Amgen has been dedicated to the
development of innovative human therapeutic products, using advances in
molecular biology. Amgen spent eight years and over $300 million to develop an
erythropoietin CEPO") product, a pioneering therapeutic product of enormous
medical value to hundreds of thousands of patients suffering from various forms
of anemia.
When Amgen was formed in 1980, the primary treatment for severe
anemia in kidney dialysis patients was to administer repeated blood
transfusions. Needless to say, this type of treatment presented hazards such as
exposure to AIDS and hepatitis; moreover, it provided only a partial and
temporary increase in the patient's red blood cell level. What clearly was
needed was a replacement of the missing vital protein, erythropoietin. However,
the naturally-occurring human protein itself was only available in miniscule
amounts insufficient for therapeutic applications. Using genetic engineering
technology and molecular biology, Amgen's scientists were able, for the first
time, to produce an erythropoietin product that was therapeutically useful.
Amgen was the first to identify the EPO gene and use the knowledge thus obtained
to produce EPO. EPOGEN was Amgen's first product approved for sale after eight
years of costly investment in research and development.1/ Since this
groundbreaking work by Amgen, many other companies have attempted to develop EPO
products. Because Amgen has been able to enforce its U.S. patents, these other
companies have come to respect Amgen's patents.
Patent and Regulatory Status
Clinical trials of EPO began in 1985. In June 1989, the Food and Drug
Administration ("FDA") approved Amgen's Product License Application for EPOGEN.
In late 1983, Amgen filed its first patent application on the several
inventions that were responsible for the development of EPOGEN. A first patent
issued in 1987, but uncertainty over the meaning of a 1985 court decision, In re
Durden,2/ as well as attempts of our competitors to prevent issuance of
additional patents using litigation and patent office procedures, delayed the
issuance of additional patents. As this Committee is well aware from previous
testimony, Amgen campaigned vigorously throughout the 1990s to remove
bureaucratic barriers and obtain these patents as early as possible.
During
this period, while Amgen was frustrated in its attempts to obtain additional
patent protection, foreign competitors sought to exploit loopholes in the United
States patent laws that would allow them to manufacture biotechnology products
offshore using technology patented in the U.S. and then import and market the
product in this country. Under the leadership of this Committee, Congress
enacted Biotechnology Process Patent Legislation in 1995 (P.L. 104-41) which
closed most loopholes and updated the law to protect against foreign competitors
using technology claimed by U.S. biotechnology patents.
In addition, we
strongly support the Committee's current efforts to enact Patent and Trademark
(PTO) Office Reform (H.R. 1907) which will contribute significantly to stronger
patent protection in the U.S. We and our colleagues in the biotechnology
community remain most grateful to this Committee for this legislation which
sends a clear message that the U.S. biotechnology industry should be protected
from unfair foreign competition.
Today, Mr. Chairman, a new issue that
threatens the U.S. biotechnology industry similarly deserves the immediate
attention of this Committee and the Congress. Like the issue resolved by the
1995 law, it threatens the ability of the United States biotechnology industry
to protect its products from the unfair and predatory tactics of foreign
competitors. This issue is easy to resolve, and in fact, requires onlythat
Congress revise the language of the so-called Bolar Amendment in a 1984 law to
return it to its original intent.
Misapplication of the Bolar Amendment
Mr. Chairman, as you know, the 1984 Waxman-Hatch legislation represented a
carefully crafted balance between the competing interests of the pioneering
pharmaceutical industry and the generic manufacturers. In exchange for
additional patent life due to regulatory delays, one provision amended the
patent laws for the purpose of authorizing generic pharmaceutical companies to
conduct tests necessary to file abbreviated new drug applications (ANDAs) during
the patent term of the pioneer drug being copied by the generic firm and allow
the generic company to enter the market as soon as patent protection expired.
The provision -- Section 271(e)(1) of Title 35 U.S. Code -- was designed to
overturn the Federal Circuit ruling in Roche v. Bolar3/which held that
performing tests necessary to produce a generic copy of a patented drug
constituted patent infringement. Additional safeguards were added to the statute
to prevent a partyfrom using this so - called Bolar "clinical trial exemption"
and then enter the market prior to patent expiration.4
As enacted, the Bolar
Amendment provides as follows:
"It shall not be an act of infringement to
make, use, or sell a patented invention --- solely for uses reasonably related
to the development and submission of information under a Federal law which
regulates the manufacture, use, or sale of drugs." 5 Attached to this statement
is an analysis of the legislative history of section 271(e)(1), which clearly
confirms that the intention of its framers was solely to authorize generic
pharmaceutical companies to conduct testing on patented products prior to
expiration of a dominating patent for the purpose of submitting an ANDA. This
intent is demonstrated by the intricate remedial provisions of 271e which only
apply to ANDA filings. However, courts have held that the Bolar Amendment
language exempts activities in support of, or in relation to any drug or medical
device product, and not just those in support of ANDA filings. 6/ In the case of
human pharmaceutical products, the result of judicial interpretation of the
broad language of section 271(e)(1) has been to allow the conduct of clinical
trials in support of FDA applications for products that will not go off patent
for many years. This allows these infringers to hide behind this exemption as
they prepare to market these products prior to patent expiration. However, the
statute does not provide any remedy to patent owners to take legal action except
against those truly generic products filed as ANDAs. And so we have the clearly
unintended grant of any exemption from infringement for products which were not
even included in the original legislation.
For generic products trying to
enter the market prior to patent expiration, a procedure is provided to resolve
the dispute prior to product approval and market entry. 7
Conclusion
We
should not allow an entity to avoid the time, expense and risk of developing
novel products, and instead employ a strategy that involves developing a low
risk "copycat" product that has been shown to be effective both therapeutically
and commercially by seeking to exploit loopholes in the law to avoid the
consequences of issued U.S. patents until after they entered the market. If
successful today, what would stop other large financially rich pharmaceutical
companies from copying the same strategy to the disadvantage of small
biotechnology companies?
Amgen urges this committee to approve a simple
change that would make the patent infringement exemption of the Bolar amendment
apply in the case of human drugs only to persons who conduct activities in
support of abbreviated new drug applications, i.e. for generic drugs as
originally contemplated by Congress. Congress should update the law to return it
to what clearly was its original, limited purpose; exempt testing of generic
drug products from patent infringement laws. We are not asking Congress to
enforce our patent rights. We are merely seeking to have the unintended barriers
removed to allow companies like us to defend their rights against infringers.
Finally, Mr. Chairman, let me make a point about the U.S. global position
of, and the high rate of innovation in, the biotechnology industry today. To my
knowledgre are approximately 40 major biotechnology drugs on the market today
worldwide. Virtually all of these breakthrough medicines were researched and
developed by U.S. companies. In the research and development of breakthrough
drugs,
the U.S. is number one .... no other nation is number two. If we are
to maintain our medical research dominance in biotechnology, Congress can ensure
that our industry will not be threatened if we are vigilant in ensuring
meaningful and enforceable patent protection, without which the biotechnology
industry in the U.S. will disappear and that disappearance would include
billions of dollars in medical research andhundreds of thousands of the highest
paid and best jobs in the U.S. In this way, Congress will once again send a
clear message that it does not condone or support patent infringement and that
foreign competitors must compete fairly with the United States biotechnology
industry.
FOOTNOTES:
l/ Amgen received FDA approval in February 1991 for
its second product, a Granulocyte-Colony Stimulating Factor,, NEUPOGEN.
2/
In Re Durden, 763 F.2d 1406 (Fed. Cir., 1985.)
3 / Roche Products, Inc. v.
Bolar Pharmaceutical Co., Inc., 733 F.2d 858 (Fed. Cir.), cert. denied, 469 U.S.
856 (1984).
4 / 35 U.S.C. Section 271(e)(2) and (4).
5 / 35 U.S.C.
Section 271(3)(1)(1982 ed., Supp. II)(emphasis supplied). The Generic Animal
Drug and Patent Term Restoration Act of 1988 amended this provision to make it
applicable to new animal drugs and veterinary biological products that are not
produced by biotechnology.
6/ See, e.g., Eli Lilly & Co. v. Medtronic,
Inc., 496 U.S. 661 (1990); NeoRx Corp. v. Immunomedics, Inc., 877 F. Supp. 202
(D.N.J., 1994). In Lilly v. Medtronic, the Supreme Court stated that "(n)o
interpretation we can imagine can transform Section 271(e)(1) into an elegant
piece of statutory draftsmanship". 496 U.S. at 679.
7/ If the Amgen v.
TKT/Hoechst case involved research and development activities in support of a
generic drug application, Amgen would be entitled to invoke a 30month stay of
FDA approval until patent infringement issues are resolved. This is because
corollary Waxman- Hatch provisions - authorize such a stay in cases in which the
generic applicant denies patent infringement and intends to commercialize the
product during the pioneer's patent term. See Section 505(j)(4)(B)(iii) of the
Federal Food, Drug and Cosmetic Act. These provisions are not available in the
case of the alleged infringer's intent to file a full NDA or BLA, however. Thus,
the Amgen v. TKT/Hoechst litigation demonstrates the absurdity of applying the
patent infringement exception to NDAs or BLAs -- the competitor can rely on an
exemption intended only for companies intending to file an abbreviated new drug
application, yet it is not subject to procedural guarantees designed to resolve
patent litigation prior to approval of the second application.
END
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