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February 19, 2000

SECTION: CONGRESS; Pg. 548; Vol. 32, No. 8

LENGTH: 909 words

HEADLINE: No Easy Prescription on No-Name Drugs

BYLINE: Marilyn Werber Serafini

BODY:

Members of Congress on both sides of the aisle and in both
chambers are taking the first steps toward revising the 1984 law
that established standards for the federal government's approval
of generic drugs and its granting of patent extensions for brand-
name prescription drugs.

The law, the Drug Price Competition and Patent Term
Restoration Act, was intended to strike a balance between
promoting innovation (by guaranteeing makers of brand-name drugs
a certain number of patent years) and ensuring that consumers
have timely access to lower-cost generic medicines (by
guaranteeing makers of generic drugs that those patents would
eventually end). It is commonly called the Hatch-Waxman Act after
its authors, Sen. Orrin G. Hatch, R-Utah, and Rep. Henry A.
Waxman, D-Calif.

Since the law was enacted 16 years ago, the
pharmaceutical industry has changed greatly. Cutting-edge but
expensive "biologics," such as human growth hormones, are now
prevalent, and generic medicines are in wider use. So in recent
months, Hatch and Waxman have separately met with various players
in the pharmaceutical industry and with consumer groups who want
the law updated.

Thus far, there is little consensus among lawmakers or
other interested parties about which areas of the pharmaceutical
industry should benefit from any congressional changes to the
act, which are probably years off. Still, the matter of
escalating consumer costs appears to be an emerging theme.

"We need to look for ways to make (medicines) more
affordable," Sen. James M. Jeffords, R-Vt., chairman of the
Senate Health, Education, Labor, and Pensions Committee, said in
an interview. "The cost of prescription drugs to our people is
too high, and we have to do something to get them down."

Waxman believes that several areas of the 1984 law need
attention. In a speech to an industry group in late January, he
said most pressing is "the need to stop-once and for all-the
numerous efforts to obtain patent extensions benefiting a few at
the expense of the many. I am talking about efforts to secure
special patent extensions and special extensions of market
exclusivity, in direct contravention of the Waxman-Hatch Act and
its underlying purpose."

One such case involves legislation sought by seven drug
companies-including Schering-Plough, the makers of Claritin, the
nation's top-selling allergy drug
-that would allow them to seek patent extensions from the Patent
and Trademark Office. Supporters of the proposal argue that
delays by the Food and Drug Administration in approving the
marketing of Claritin wasted several years of its patent. A
patent extension would delay the introduction of cheaper generic
versions of Claritin into the marketplace.

Hatch, for his part, has boasted that the Hatch-Waxman
Act increased the market share of generic prescription drugs from
19 percent in 1983 to 43 percent in 1996. The Congressional
Budget Office has estimated that generic substitutions were
saving consumers $ 8 billion to $ 10 billion a year by 1994. All
the while, says Hatch, investment in pharmaceutical research and
development has grown.

"These statistics help explain why many believe that my
1984 legislation successfully balanced the interests of American
consumers in obtaining both innovative and affordable medicines,"
Hatch said in a statement late last year. "However, I believe it
is timely for Congress to revisit this issue so consumers may
continue to receive quality pharmaceuticals at affordable
prices."

As the debate unfolds, generic drugmakers are looking for
assurances that brand-name patents expire when they are supposed
to. They complain that their brand-name counterparts have
resorted to unfair tactics to extend patents. Generic industry
representatives also want the ability to produce generic
alternatives to biologics. Current law makes it difficult, if not
impossible, for them to do so.

The budding biologics industry isn't very worried about
potential competition from generic drugmakers. Biologics are
extremely complex and difficult to produce because they involve
the growth of a biological, rather than synthetic, component.

Instead, the biologics industry wants the Hatch-Waxman
Act reopened because it is seeking the guarantee of enough patent
years to make its investments worthwhile. The industry lost $ 5
billion last year, and officials at the Biotechnology Industry
Organization, the Washington association representing companies
that develop and produce biologics, have complained that it is
difficult to attract investors because of uncertainties
surrounding the patent process.

The Biotechnology Industry Organization welcomed a patent
reform bill enacted last year. The new law guarantees that the
Patent and Trademark Office, which calculates patents based on
the date of application, will assign 17-year patent terms, unless
the patent-seeker itself attempts to delay the process.

But then the FDA, which must approve a drug or biologic
before it can be marketed, takes over the process. There are no
guarantees on how long the FDA's review will take, which is
something that the biologics and pharmaceutical producers would
like to rectify.

LOAD-DATE: February 22, 2000

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