An extract from The Pharmaceutical Intellectual Property and Competition Law Review, 1st Edition

Overview

This chapter provides an overview of the United States' frameworks for drug and biologic approvals, exclusivities and patent linkages, as well as the processes for addressing intellectual property disputes associated with applications for generic and biosimilar products. We also provide an overview of how these processes and associated strategies may come under antitrust scrutiny. Overall, the complex US legal frameworks in these areas are designed to strike a balance between encouraging innovation while incentivising timely patent challenges and market entry of competitors.

Legislative and regulatory framework

In the US, the primary legislation governing the regulation of drug products is the Federal Food, Drug, and Cosmetic Act (the FD&C Act), codified at Title 21 of the US Code, while the primary legislation governing biologic products is the Public Health Service Act (the PHS Act), codified at Title 42 of the US Code. The Food and Drug Administration's (FDA) implementing regulations are published in Title 21, Chapter I of the Code of Federal Regulations. As discussed herein, Congress has also passed significant legislation to encourage innovation and incentivise development of new drug products, and to lower costs, including the Drug Price Competition and Patent Term Restoration Act of 1984 (the Hatch-Waxman Amendments), which amended the FD&C Act to establish the generic drug approval pathway, and the Biologics Price Competition and Innovation Act (BPCIA), which amended the PHS Act and established an abbreviated licensure pathway for biologic products.

In addition to incentives in the form of statutory exclusivities, the US patent system grants exclusive rights to make, use, sell or import into the US inventions for which a patent has been granted. Section 35 of the US Code governs the US Patent and Trademark Office (USPTO), and the rights and remedies available under the patent system. The Leahy-Smith America Invents Act, signed into law in 2011, amended Section 35 of the US Code to implement, among other changes, a first-to-file system. The nominal term of a US patent is 20 years from date of filing of the earliest priority application filed in the USPTO.

In the US, participants in the pharmaceutical sector are also subject to the antitrust laws, which influence how participants may contract with each other, how they may enforce and acquire patents, how they may settle litigation and how they may market their products, as well as how they act in regard to a number of other areas. The key antitrust laws impacting the pharmaceutical sector are: Section 1 of the Sherman Antitrust Act (15 USC Section 1), which bans unreasonable contracts or conspiracies in restraint of trade; Section 2 of the Sherman Antitrust Act (15 USC Section 2), which outlaws 'monopolization or attempts at monopolizing any aspect of interstate trade or commerce'; Section 7 of the Clayton Antitrust Act (15 USC Section 18), which bans mergers or acquisitions that may 'substantially lessen competition or tend to create a monopoly'; and Section 5 of the Federal Trade Commission Act (15 USC Section 45), which outlaws 'unfair methods of competition' and 'unfair or deceptive acts or practices'.