Wednesday, November 12, 2025
Executive Summary
Fish & Richardson principals Dexter Whitley and Madelyn McCormick surveyed the parallel statutory regimes that govern pharmaceutical patent litigation — the Hatch-Waxman Act for small-molecule drugs and the Biologics Price Competition and Innovation Act (BPCIA) for biologics — concluding that while both statutes share the goal of balancing innovation incentives against generic competition, the BPCIA’s patent dance, absence of a 30-month stay, and portfolios of 20 to 40 patents per biologic make biosimilar litigation structurally more complex and strategically more demanding than its small-molecule counterpart.
Instructor(s)
Madelyn McCormick, Fish & Richardson
Dexter Whitley, PhD, Fish & Richardson
Keywords
Hatch-Waxman Act (Drug Price Competition and Patent Term Restoration Act of 1984) — ANDA, Orange Book, paragraph IV certification, 30-month stay • Biologics Price Competition and Innovation Act (BPCIA), 42 U.S.C. § 262 — biosimilar approval, patent dance, notice of commercial marketing • paragraph IV certification and artificial act of infringement under 35 U.S.C. § 271(e)(2) • Orange Book patent listing requirements and 30-day deadline under 21 U.S.C. § 355(b)(1) • biosimilar vs. interchangeable designation — FDA Purple Book and clinical equivalence standards • patent term extension for FDA regulatory delay under 35 U.S.C. § 156 • 180-day generic exclusivity for first ANDA paragraph IV filers • BPCIA patent dance steps — 42 U.S.C. § 262(l) disclosure and negotiation framework • how does the Hatch-Waxman Act work for pharmaceutical patent litigation? • what is the BPCIA patent dance and how does biosimilar litigation start? • 505(b)(1) NDA vs. 505(b)(2) paper NDA vs. ANDA — drug approval pathway comparison • bioequivalence standard for generic drugs — same rate and amount of absorption as branded drug
Legal Analysis
The Hatch-Waxman Act’s Structural Compromise: Orange Book Listings, Paragraph IV Certifications, and the 30-Month Stay
The Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98-417, 98 Stat. 1585 (codified at 21 U.S.C. § 355 and 35 U.S.C. §§ 156, 271(e)) — universally known as the Hatch-Waxman Act — is, as Whitley described it, “a compromise . . . between two competing interests.” On one side stand branded drug manufacturers, who invest decades and hundreds of millions of dollars to move a single compound from discovery through preclinical testing, three phases of clinical trials, and FDA review before a single dose can be sold. On the other stand generic manufacturers, who seek to bring bioequivalent alternatives to market at lower cost once the branded drug’s foundational patents have expired or been successfully challenged. Whitley characterized the drug development process with a concrete illustration of its scale: starting from between 5,000 and 10,000 candidate compounds, the industry-wide attrition rate leaves approximately one FDA-approved drug, after six to seven years of clinical trials alone, before a separate multi-year NDA review process even begins. The Hatch-Waxman Act addresses this investment disparity for branded companies through two primary mechanisms: a five-year data exclusivity period for new chemical entities that bars any ANDA submission for the drug’s active moiety for five years from NDA approval, and patent term extensions under 35 U.S.C. § 156 that restore to a branded company’s patent term the time consumed by FDA regulatory review — a period Whitley noted can be nine to fifteen years from IND approval to NDA approval.
The Orange Book — formally, the FDA’s Approved Drug Products with Therapeutic Equivalents Evaluations — is the mechanism through which Hatch-Waxman litigation is triggered and structured. Only two categories of patents may be listed in the Orange Book: patents claiming the drug’s active moiety as a chemical entity, and patents claiming a method of using that active moiety. Whitley emphasized that the 2003 reforms to the Orange Book listing rules specifically excluded packaging, metabolites, intermediates, and administration mechanisms from eligibility, confining the listing to the compound and its use. The listing deadlines are unforgiving: a branded NDA holder must submit eligible patents within 30 days of NDA approval, and any patent issued after NDA approval must be listed within 30 days of issuance. As Whitley cautioned, failure to meet those deadlines means generic ANDA applicants need not certify against the unlisted patent, and the branded company “risks losing the ability to sue a generic under the Hatch-Waxman Act.” The significance of that exposure is amplified by the Act’s market-effects data: Whitley noted that the entry of a single generic causes only approximately a 6% drop in branded drug price, but the entry of two generics causes a 50% price decline, with precipitous further drops thereafter — making the integrity of the Orange Book listing and the timeliness of patent enforcement existentially important to a branded manufacturer’s revenue.
The Hatch-Waxman Act creates an “artificial act of infringement” — Whitley’s phrase — by deeming the filing of an ANDA accompanied by a paragraph IV certification to constitute patent infringement under 35 U.S.C. § 271(e)(2), even though no infringing product has yet been sold or offered for sale. A paragraph IV certification is the ANDA applicant’s assertion to the FDA, with notice to the branded company, that the patents listed in the Orange Book for the referenced branded drug are either invalid or not infringed by the proposed generic. Upon receiving that notice, the branded company has 45 days to file suit; if it does so within that window, the FDA is automatically stayed from approving the ANDA for 30 months from the date of suit. Whitley identified the 45-day deadline as critically important: missing it forfeits the 30-month stay entirely, meaning the FDA can approve the ANDA whenever it is otherwise ready. On the generic side, the first ANDA filer to submit a paragraph IV certification earns 180 days of generic market exclusivity, a period during which no other generic may receive final FDA approval — and which is immensely valuable given that all 50 states mandate generic substitution for therapeutically equivalent products, effectively routing all relevant prescriptions to the first-to-market generic.
The BPCIA’s Patent Dance: Biosimilar Disclosure Requirements Under 42 U.S.C. § 262(l) and the Absence of an Orange Book
The Biologics Price Competition and Innovation Act of 2009, Pub. L. No. 111-148, 124 Stat. 804 (codified at 42 U.S.C. § 262), enacted as part of the Affordable Care Act in 2010, creates a parallel but structurally distinct abbreviated approval pathway for biosimilar drugs — biological products that are highly similar to and have no clinically meaningful differences from an FDA-approved reference product. McCormick described the BPCIA’s central goal as mirroring the Hatch-Waxman Act’s dual purpose: “to foster competition, to still encourage innovators to make new drugs for us, and then also potentially lower the cost of biologic drugs.” But the structural differences between the two regimes are significant. The BPCIA has no 30-month stay of regulatory approval equivalent to Hatch-Waxman’s mechanism. It has no Orange Book — the publicly searchable list that tells generic manufacturers precisely which patents they must certify against. Instead, it has a Purple Book, which McCormick described as “a little bit different” and considerably harder to navigate as a first-biosimilar applicant who may be encountering the reference product sponsor’s patent list for the first time. Most distinctively, the BPCIA has the patent dance — a pre-litigation information exchange framework codified at 42 U.S.C. § 262(l) — which McCormick described as “a somewhat intricate scheme for exchanging information before a litigation happens.”
The patent dance is triggered by the biosimilar applicant’s filing of a biologics license application (BLA) with the FDA, upon acceptance of which the biosimilar must notify and provide a copy of the BLA to the reference product sponsor. The reference product sponsor must then provide the biosimilar with a list of all patents it believes could be asserted if the biosimilar were sold in the United States. McCormick emphasized the strategic significance of this step: unlike the Hatch-Waxman context, in which the Orange Book publicly identifies the relevant patents before any ANDA is filed, a first-time BPCIA biosimilar applicant often receives its first comprehensive view of the reference product sponsor’s patent position only upon receiving that list. Subsequent steps in the dance involve the exchange of infringement contentions, validity positions, and patent-by-patent dispute resolution, with the theoretical objective of narrowing the patents that will be the subject of litigation before suit is filed. McCormick noted, however, that in practice, “we see more biosimilar and reference product sponsors skipping some of these steps and just getting straight to litigation.” The statute also provides for a notice of commercial marketing — a separate mechanism by which the biosimilar notifies the reference product sponsor of its intent to launch within 180 days, triggering what McCormick described as a potential “second wave of litigation” in which the branded company may seek to enjoin launch on the basis of patents not resolved in the first wave.
The BPCIA also distinguishes between biosimilars and a more demanding designation: interchangeables. While a biosimilar must demonstrate that it is highly similar to the reference product with no clinically meaningful differences, an interchangeable must additionally demonstrate that it produces the same clinical result as the reference product in any given patient and, for drugs administered more than once, that switching between the reference product and the interchangeable does not present greater risk than remaining on the reference product. McCormick noted that the FDA has recently signaled it may eliminate the interchangeable designation, expressing concern that physicians treat biosimilars as clinically inferior when they are not, and observed that “while we’re giving you this presentation, this law is still evolving.” Interchangeable status has carried separate 180-day exclusivity benefits for the first applicant to achieve it — either by being first to launch or first to reach a court decision on all patents — but the future of that framework remains uncertain pending FDA’s guidance.
Patent Portfolio Strategy Under the BPCIA: Why Biologics Generate 20 to 40 Asserted Patents and What That Means for Biosimilar Applicants
The most consequential structural difference between Hatch-Waxman and BPCIA litigation is not procedural but substantive: the size of the patent portfolios at issue. Whitley observed that small-molecule drugs covered by the Hatch-Waxman Act are “typically protected by a small number of patents” — perhaps two to ten — covering the compound and its method of use. Biologics, by contrast, generate patent portfolios of a categorically different magnitude, because the difficulty of manufacturing them creates innovation opportunities at every stage of production. McCormick enumerated the categories: patents on the therapeutic indications (methods of treatment), on the host cell lines used to grow the biologic, on the cell culture and fermentation processes, on purification methods, on formulation, on delivery devices such as prefilled syringes, and on packaging. As she explained, “all of these are something, if you’re working in biologic space, you want to be thinking, is there something here that I can patent . . . to help us protect our innovation.” The practical consequence for biosimilar manufacturers is that a single BPCIA patent infringement suit can encompass 20 to 40 asserted patents, as McCormick illustrated with a live example from the program showing patents ranging from decades-old composition claims to patents issued only three months before the litigation was filed.
The manufacturing complexity that generates this patent density also raises the bar for biosimilar development significantly compared to generic small-molecule development. Whereas a generic manufacturer’s primary technical burden is demonstrating bioequivalence — that its product enters the body at the same rate and in the same amount as the branded drug — a biosimilar manufacturer must navigate the challenge of replicating a product grown in living cells. McCormick described the manufacturing process: biologic drugs are grown in large bioreactors using living host cells, and then refined and formulated for clinical administration, a process that may require intravenous delivery because the large molecular size of the biologic makes other routes of administration impractical. Each of those stages — cell line selection and modification, cell culture conditions, purification, formulation, and delivery — represents an area in which both the reference product sponsor and the biosimilar applicant may independently develop patentable innovations. Reference product sponsors who do not patent across all of these dimensions, McCormick cautioned, leave their manufacturing processes and formulation know-how exposed to competition even when their composition-of-matter and method-of-treatment patents remain in force.
The drug approval pathways themselves add a further layer of strategic complexity for startup life sciences companies operating in either the branded or biosimilar space. Under the Hatch-Waxman Act, branded drug companies submit full NDAs under the 505(b)(1) pathway, requiring complete clinical trial packages; a hybrid 505(b)(2) or “paper NDA” route allows reliance on published data or data generated by another party, and is most commonly used for grandfather drugs that predated systematic FDA approval. Under the BPCIA, both reference product sponsors and biosimilar applicants submit biologics license applications (BLAs), though practitioners sometimes refer to the biosimilar’s application as an “aBLA” to distinguish it from the reference product’s original BLA. Whitley predicted — and McCormick reinforced — that the commercial stakes on both sides of these approval processes make the patent portfolio and Orange/Purple Book strategy decisions among the highest-value legal determinations a life sciences startup can make, because a branded company’s revenue, once generic or biosimilar competition arrives, drops by 50% with the entry of just the second competitor and continues falling precipitously thereafter. For biosimilar entrants, understanding the full scope of the patent dance obligations and the reference product sponsor’s patent list before committing to a biosimilar development program is equally critical, given the litigation risk McCormick characterized as potentially encompassing dozens of concurrently asserted patents.
Generated by AI based on the Interview/Transcript below.
Key Takeaways
- Orange Book listing deadlines are non-negotiable. Whitley cautioned that a branded NDA holder that fails to list an eligible patent within 30 days of NDA approval — or within 30 days of the issuance of any later patent — loses the ability to trigger Hatch-Waxman litigation on that patent, forfeiting the 30-month stay and the full suite of enforcement rights the Act otherwise provides.
- Two generics cause a 50% branded price decline. Whitley’s market-effects data demonstrated that one generic entering the market reduces branded drug price by only about 6%, but the entry of a second generic causes a 50% price drop, with a precipitous further decline thereafter — making the Hatch-Waxman enforcement timeline existentially important for branded revenue.
- The paragraph IV certification is an artificial act of infringement. Under 35 U.S.C. § 271(e)(2), the filing of an ANDA with a paragraph IV certification constitutes patent infringement before any generic product is sold, enabling the branded company to litigate validity and infringement before launch, and triggering the 30-month FDA approval stay if suit is filed within 45 days of paragraph IV notice.
- The 45-day suit deadline forfeits the 30-month stay. Whitley identified the branded company’s obligation to file suit within 45 days of receiving paragraph IV notice as the most time-critical deadline in Hatch-Waxman practice: missing it means the FDA may approve the ANDA at any time, eliminating the branded manufacturer’s primary regulatory shield against generic entry.
- BPCIA litigation involves 20 to 40 asserted patents. McCormick illustrated that because biologics are manufactured through complex living-cell processes, reference product sponsors accumulate patents on host cell lines, cell culture methods, purification, formulation, delivery devices, and therapeutic indications, producing patent portfolios that dwarf the small number of patents typically at issue in Hatch-Waxman cases.
- The patent dance provides the reference product sponsor’s full list. For a first-time biosimilar applicant, the BPCIA patent dance — codified at 42 U.S.C. § 262(l) — often represents the first opportunity to see the reference product sponsor’s complete patent position, because there is no Orange Book equivalent publicly listing the patents that cover a biologic drug before litigation commences.
- Patent term extension can recover 9 to 15 years of patent life. Whitley explained that because a branded company typically files its patent application during drug discovery — years before FDA approval — the Hatch-Waxman Act’s patent term extension mechanism under 35 U.S.C. § 156 allows recovery of the patent term consumed by the FDA regulatory process, which can span nine to fifteen years from IND approval to NDA approval.
- 180-day exclusivity rewards first paragraph IV filers. The first generic ANDA applicant to file a paragraph IV certification earns 180 days of generic market exclusivity during which no other generic may receive final FDA approval, an “immensely valuable” benefit, as Whitley noted, given that all 50 states mandate generic substitution for therapeutically equivalent products.
- The BPCIA interchangeable designation is under review. McCormick flagged that the FDA has signaled it may eliminate the interchangeable designation because physicians may incorrectly treat biosimilars as clinically inferior, and she cautioned that “while we’re giving you this presentation, this law is still evolving,” making real-time monitoring of FDA guidance essential for any company developing in the biologic space.
- Patent portfolio strategy must track manufacturing innovation. McCormick urged biologic developers to assess at every stage of manufacturing — from cell line development through formulation and delivery device design — whether innovations are patentable, because reference product sponsors who do not patent across all manufacturing dimensions leave commercially valuable processes unprotected against biosimilar and competing reference product manufacturers
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Interview/Transcript
This transcript was session seven of an eight-part BCLT-Oregon Start Up Series. On November 12, 2025, expert presenters, Madelyn McCormick, Fish & Richardson and Dexter Whitley, Fish & Richardson discussed the Hatch-Waxman Act and the Biologics Price Competition and Innovation Act (BPCIA).
Hello everyone, and welcome to today’s Startup Series program. Today we’re going to be exploring the biologics, price competition, and innovation act — BPCIA — and Hatch-Waxman 101. So you may be looking at these terms and thinking, what is this and why do I care about it? Well, by the end of this webinar, you’re going to have a very good understanding of why you should care about this. And so I’m delighted to have our two speakers with us today who are both experts in these topics from Fish and Richardson. Madelyn McCormick, who is a Principal at Fish is a patent litigator, and she’s represented leading pharmaceutical, biomedical, medical device and life sciences companies as part of her practice, as well as new and emerging entities. So she can bring that experience to the table as well. She’s highly engaged in Fish’s Life Sciences litigation practice, and so she both asserts and defends patent and trade secret claims, and technology related disputes in federal district court and arbitration forums. Joining her is Dexter Whitley, who’s also a member of Fish and Richardson’s litigation team. He is also a Principal at Fish and Richardson. His practice focuses on complex patent cases involving a range of technical areas. His particular focus is Life Sciences, pharmaceutical, biotech and Hatch-Waxman litigation. So both Maddie and Dexter have been involved in litigation from the very beginning to the very end, and they’re going to be able to provide that perspective to you as very experienced litigators who have dealt with the ins and outs of these areas that we’re going to be talking about today, and who think very strategically about these issues. So with that, I’m turn things over to our speakers.
Dexter Whitley 02:07
Thank you, Allison. Thank you all for joining us here today. As Allison mentioned, my name is Dexter Whitley. I’m a principal in Fish’s Atlanta office, and I will be covering the Hatch-Waxman portion of today’s discussion. Maddie is going to cover the BPCIA and all the intricacies and differences there, but I want to focus our conversation for today with respect to the Hatch-Waxman Act by talking about some of the key differences or some of the significant portions of the Hatch-Waxman act. So the Hatch-Waxman Act covers drugs, and these are molecules that, in the past decade, decade and a half, we have considered it as drugs. Small molecules that are easy to manufacture are the types of drugs that are covered by the Hatch-Waxman Act, as opposed to the BPCIA, which covers larger types of molecules that have different efficacies for different types of disorders. One important requirement for a generic entering the market under the Hatch-Waxman Act is this ideal of bioequivalence. Bioequivalence simply means that the generic drug enters and reaches the body at the same rate and in the same amount as the branded drug upon which it’s based, right? So the drug has to become available to the body at the same rate and in the same amount as the branded drug. An important benefit of the Hatch-Waxman act to the branded drug manufacturer, is this idea of a 30 month stay. So if a Hatch-Waxman litigation is instituted, if the branded drug manufacturer — within the statutorily required timeframe — the FDA is stayed from approving any other drug application for that drug, for 30 months after the filing of the suit. A benefit of the Hatch-Waxman act for the generic is this idea of generic exclusivity. The first generic to file for a generic drug application has a period of exclusivity where they are the only generic that is allowed on the market. So that’s a great benefit to the generic. Another key feature of the Hatch-Waxman Act is the orange book. This is a listing of patents that covers the branded drug. And these are the patents upon which at Hatch-Waxman litigation can be instituted. So it’s very important that the branded drug manufacturer is aware of its entire patent portfolio and that it lists all patents within a certain type that covers this drug within the orange book, or it risks losing the ability to sue a generic under the Hatch-Waxman act. So it’s very important that branded drug manufacturers are aware of the orange book and the requirements around it. Specific to the orange book, there are only two types of patents that can be listed in the orange book to cover a branded drug, patents on the active moiety on the drug chemical itself and patterns on the method of using that active moiety. Those are the only types of patents, unlike the BPCIA, that can be brought in a Hatch-Waxman suit. And related to those patents is this idea of patent certifications, so a branded drug company seeking approval for a generic drug has to certify that it is aware of the patents in the orange book that covers the branded drug and makes certain representation to the FDA, and also provide notice to the branded drug manufacturer of its knowledge of the patents and how it feels that it can proceed with its generic approval process in light of the patents. And we’ll talk about patent certifications in detail in a bit. And also, this ideal of carve outs. As some of you may know, a drug comes with a label, a label that are the instructions for the use of the drug, and there are certain indications and other information in the label, and infringement can be based upon the information that’s described in the label. So one avenue for generics is to carve out or remove certain indications from the label, and that gives them a basis of non infringement by carving out certain portions of the label, and we can talk about that in more detail later in our conversation today. So a key thing to understand about the Hatch-Waxman Act is that it’s a compromise. It’s a compromise between two competing interests, right? It’s the compromise on the branded side to continue to incentivize branded drug companies to make the large financial and research investments into coming up with new drugs to treat disorders and diseases amongst a certain patient population. Drug development is not easy. Drug development is not cheap. Costs a lot of money to develop a new drug, and we want to continue to incentivize that innovation in the pharmaceutical space through the Hatch-Waxman act. While at the same time, branded companies are interested in bringing generic drugs to market at a lower cost, and this is a benefit to that same patient population, where they have options in the market to purchase life saving, in some instances, drugs at a lower cost compared to the branded drug. So there are two competing interests here: continued investment in making new drugs, which is very expensive, but also offering low cost alternatives to patients, so that there’s an evenness in the market. So the Hatch-Waxman Act was designed to address both of these competing interests. So what exactly were the results of this compromise? For the branded industry, they receive a five year filing exclusivity for their new chemical entities. So if a branded company has developed a new drug that evolves into an approved drug that enters the market, the Hatch-Waxman act bars a generic from entering the market for five years after the approval date. Now there’s a key exception to that that we will talk about later in this discussion, but essentially this five years of market exclusivity for the branded drug company. The branded drug company also receives a three year marketing exclusivity based on new clinical trials. So this three year marketing exclusivity is tied to the information and the drug label and the new data that was generated via clinical trials, right? So the five year exclusivity is tied strictly to the filing and approval of the new drug. The three year market marketing exclusivity is tied to the label and the indications and the data in the label. So there’s two separate avenues for exclusivity for the branded drug company. And importantly, the branded drug companies also receive — as part of the compromise — patent term extensions on their patents. So as we may know, some of you may know, the term for a patent is 20 years from the filing of the patent application. However, in most cases, a patent is filed on a new drug entity before that drug receives FDA approval. So what the Hatch-Waxman allows is for the branded drug company to retain some of the time that was spent in the regulatory process before they can even market their drug through these patent term extensions, so the time that the drug spent in the FDA under the regulatory process, that time can be added back to the full term of the patent, which is very important, since there was not an actual product on the market at the time. So the patent was less useful during that regulatory timeframe. The generic industry gained, through the Hatch-Waxman Act, the ability to come onto market and have their drugs approved through an abbreviated new drug application and ANDA. And what’s significant and important about an ANDA is that ANDAs do not require clinical trial data, so that removes about six and seven years of the approval process from the application. So by removing the need for clinical trials, the application and approval process is sped up by about six or seven years. So that is a great boom to the generic industry. The generics also receive 180 days of generic drug exclusivity for paragraph four filers. I’ll explain what a paragraph four filer is a little bit later, but essentially, the first generic to file for generic drug with the FDA receives 180 days of market exclusivity where they are the only generic drug on the market. So that’s a great benefit to the generics. The generics also receive the ability to develop a drug product, a generic product, without worry of infringement through the safe harbor components of the Hatch-Waxman act. So essentially, research and development for the purpose of receiving FAA approval is not an infringing act under the Hatch-Waxman act. So generics can do all the research and development that otherwise would be or could be infringing activities under the Hatch-Waxman act without worry of infringement. The infringement comes into play once they file their ANDA and certify against the patents in the Orange Book, which we’ll discuss a little bit later. And a benefit to both the branded industry and the generic industry is the ability to have a court decide patent issues prior to launch. This is a benefit for the branded industry because they can bring a patent infringement suit prior to the launch of an infringing product, and this is a benefit to the generic industry, because they will know whether or not they have the freedom to launch and the ability to do the large scale investment and marketing prior to FDA approval, so they know whether or not they should start investing in marketing prior to their approval of their drugs, and it clears away some of the roadblocks that would otherwise be in place without the Hatch-Waxman act.
Dexter Whitley 13:09
Okay, so I want to go through a few key concepts of the Hatch-Waxman act to orient us as we as we discuss the act and how litigation plays out under the act. So the Hatch-Waxman act amended both the Patent Act and the Federal Food, Drug and Cosmetic Act. So two different statutory regimes were amended with the passing of the Hatch-Waxman Act. The Hatch-Waxman Act allows for several different routes of approval for a new drug or a generic drug, which are important and there are some key distinctions between the various pathways where a patent can be approved through the Hatch-Waxman act — well, excuse me — where drug approval can be achieved through the Hatch-Waxman Act. The Hatch-Waxman Act also provided these patent term extensions that I just mentioned, and it gives both the branded drug manufacturer and the generic drug manufacturer certain exclusivities which are there to incentivize continued development of both new drugs and generic drugs. The Orange Book is a key part of Hatch-Waxman litigations. The Hatch-Waxman litigations are triggered by the patents listed in the orange book. And the Hatch-Waxman created these safe harbors for research and development for the generics. And then we have the certification process, where the generic company must give notice to the branded company that they are filing an ANDA for approval of a drug that is covered by patent. Then we have the patent challenges that allows the generic to come on to market sooner than they otherwise would be able to, if they are able to prove that they are 1) either not infringing the patents listed in the orange book or 2) the patents listed in the orange book are invalid. And again, we have the 30 day state of approval, which is a huge boon to the branded manufacturers, and a 100 day exclusivity, which is a huge boon to the generics. So as I mentioned before, the Hatch-Waxman act concerns drugs, right? And again, we’re typically thinking about drugs in the way that we have traditionally thought about them — small molecules such as such as acetaminophen, right? That are relatively easy to manufacture and are governed by the Food, Drug and Cosmetic Act. And the key thing about these types of drugs is that they are typically protected by a small number of patents. You don’t have a huge universal patents on different aspects of the drug or the container. Are there methods of administration, are the methods of manufacture that we see with some of the drugs that Maddie is going to discuss with the BPCIA, right? Typically a very small universal patent, which makes these Hatch-Waxman litigations typically easier to manage than the BPCIA for a variety of reasons. And these drugs that are covered — that the Hatch-Waxman Act covers — are distinct from biologics, which are typically much larger molecules. And most cases, we’re talking about monoclonal antibodies like adalimumab, which are huge. The biologics are much harder to make than these small molecules. They require living tissues and living organisms to reproduce the drug. And the biologics are governed by the BPCIA, which Maddie will discuss, and frequently protected by a very large number of patents that covers a variety of different subject matters that are not eligible for the Hatch-Waxman act. So I thought it would be useful to put things in context by discussing the lifeline, or timeline for drug development, with respect to the branded drug manufacturer, which is at the top in the light gray, and for the generic competition, which is at the bottom in dark gray, and where the patent protection falls into these timeframes, right? So drug discovery can be a decades long process. It’s very labor intensive, very research intensive, very financially intensive. So it is incumbent upon Congress to continue to incentivize companies to undergo this costly and time consuming process, right? So drug discovery can take up to a decade to find a candidate drug that a company feels is worthy of filing for FAA approval. So once a candidate drug has been discovered through the drug discovery process, the branded manufacturer reaches out to the FDA and files an investigational new drug application, an IND, right? So once the IND has been approved, and what’s contained in the IND, it’s all the preclinical testing that has been done on the candidate drug, all of the in vitro testing, all of the in vivo animal testing, and all of the information that has been gathered to date to show that the drug is both safe and efficacious — to a certain extent — the branded company then files the IND, if it’s approved, they can begin to start clinical trials, or phase one through three clinical trials, where they collect data showing that the drug is safe and efficacious and a specific human patient population. If those clinical trials are successful, the branded company then files an NDA with the FDA to seek approval. Then there’s the NDA review process, and then the NDA is ultimately approved. But the branded drug company is not off the hook. They must continue to monitor and test and study the drug after it’s entered the market to ensure that it’s continued safety and efficacy. The generic competition timeframe is truncated compared to the branded drug, and usually the generic starts to accumulate resources and start its research and development process right around the time that the branded drug is approved by the FDA, or maybe somewhere in between. Somewhere before their approval process. The primary focus of the generics at this point in their research and development activities is to determine whether or not their candidate generic is bio equivalent to the branded drug. Again, that it enters and acts in the body in the same way as the branded drug. Once they have accumulated enough data where they think they’re in a good position to file for approval, they file the abbreviated new drug application with the FDA. If that is approved, then the generic can enter the market if there are no patent hurdles preventing their entry into the market. And this is where the patents come in. The branded drug company typically files their patent application during the drug discovery process, at least pre-IND process, right? Because now they’ve discovered a drug that they think is useful and it’s eligible for pattern protection, they want to make sure that they’re in line to have that pattern protection. And the patent approval process can take up to two to three years, so you want to get a head start on that. So eventually a patent is going to issue on the new drug, but that may happen while the drug is still undergoing FDA review for approval, and that’s time that’s lost on the patent, which is why the patent term extensions available through the Hatch-Waxman Act are so important for a branded drug manufacturer. And this entire process for the branded drug manufacturer could take up to three decades. Drug Discovery takes a long time. The clinical trials can take up to six to seven years, and the approval process can take two to three years. So this is a very long term investment for the branded drug company.
Dexter Whitley 21:17
I’ve gone through this, but I just want to key into the timeline for the branded drug manufacturer and point out some key time points. So again, the drug discovery period can be extended. And then you have the preclinical testing. You apply for the investigational new drug, and then you go through your three phases of clinical trials. And then this is at the point where at the point of filing the investigational new drug application, is where the recoverable pattern term period starts. So if it takes 9 to 15 years from the approval of the IND application to the approval of the actual new drug application, you could recover those 9 to 15 years on your patent term. So that’s very substantial and very significant. Outlined here also is the safe harbor period, and this is for the generic. So the generic company is not liable for patent infringement, for the acts that it is conducting to do the research necessary to bring an ANDA application to file through the provisions of the Hatch-Waxman act. So these are all within the safe harbor. These will ordinarily be infringing activities, but the Hatch-Waxman statute allows for these research and development type activities that are strictly for approval of the generic drug application. And just to take an idea of what we’re dealing with here when we’re talking about drug discovery, right? So the drug discovery period can be from three to six years just to find a good candidate for the submission of an investigational new drug application. Drug Discovery starts with around 5 to 10,000 different compounds that need to be tested and assayed before you even have a good candidate for FDA approval. Then you reach the preclinical studies, which again, are the in vitro and animal type studies that are conducted, and you have about 250 candidates at this point. And by the time you reach the point where you’re confident that you can file an IND, you’ve whittled that number down to about five potential drug candidates you want to go to clinical trials. That’s a six to seven year process before you’re confident that you have the data required to file a NDA. And then once we’re at the NDA submission point in our timeline, we’re down to one FDA approved drug, if it passes the scrutiny by the FDA and is found to be safe and efficacious. And then you have to deal with the large scale manufacturing of the drug so that you can enter the market and that you have enough of the drug to serve the relevant patient population. So I mean, this is a very, very, very intensive process. It’s starting with a lot of compounds and a lot of work just to get to one FDA approved drug, which is why the branded drug companies were really seeking to continue to have a mechanism and a regulatory pathway that will allow them to continue to invest the millions upon millions of dollars that it takes to get to this one approved drug. And again, focusing in on the generic competitors on the timeline. They’re accumulating resources during the NDA approval process. They want to make sure that their drug is bio equivalent. Once they are confident that they have bio equivalency, they file the abbreviated new drug application that will allow them to enter the market as a generic, and the FDA approval process from the following of the end to the generic actually entering the market is between 18 and 36 months. So it’s a very truncated timeframe compared to what the branded companies are facing from the beginning, from the start of development to entering the market. Alright, so the Hatch-Waxman Act allows for several different routes of drug approval. Most important for the branded drug company is the 505 b1, or the NDA route of approval. And the NDA route, as we just discussed, requires full clinical trials to determine the safety and efficacy of the drug, and also a declaration in the Orange Book of the patents that cover the drug. There’s also an intermediate hybrid route that drug manufacturers can follow. That’s the 505 b2 or the paper NDA route. The paper NDAs do not require the extensive full phase one, two and three clinical trials. When filing a paper NDA, the filer can rely on safety and efficacy data, and published articles are also data that was generated by another company, so they don’t have to do their own testing on safety and efficacy. They may be required to do partial clinical trials on any aspect of the drug that has changed from what is known about the drug previously. So if they’ve changed some inactive ingredient, they may need to run smaller clinical trials to make sure that there isn’t some issue with the inactive ingredient. We see paper NDAs most commonly in the context of what we call grandfather drugs. These are drugs that were on the market prior to the FDA approving drugs. So think — prior to 1950 — drugs that were already on the market prior to 1950 and I could have the exact date incorrect, but these were drugs that were already being sold but had never gone through the FDA approval process. And there are benefits to being the first company to have an FDA approved older drug, because some hospitals only allow the administration of FDA approved drugs. So if you have a drug that that’s been out there forever, but has no FDA approval, and you’re the first to get FDA approval, there can be some benefits to that. The third pathway is the ANDA pathway. This is for the true generics. Again here, because we want an abbreviated approval period that doesn’t require the cost and time investment required with clinical trials, there’s clinical trials are typically not required for the ANDA pathway, and you can rely on the data previously generated on the approved drug. You must be an ANDA filer You must certify against the patents in the orange book and make certain statements as to how you’re going to avoid those patents, whether or not you’re going to take them on directly, either saying that they that you do not infringe or the patents are invalid. That’s a paragraph for certification. Are there other types of certifications where you tell the FDA, you know, we will wait until the power patents expire? Or other avenues that we’ll talk about in detail a little bit later in our discussion here. So if you petition for an ANDA, you can ask the FDA if you can change certain ingredients are the route or dosage or strength right to in some cases, generic companies do this in order to avoid infringement. So these are attempts at designing around the patents that cover the the branded drug, and in some instances that you can change the inactive ingredient in some cases, right? But this is the avenue for the generic companies to bring a generic drug on the market. Okay? So the benefits that are elicited through the Hatch-Waxman Act are these exclusivities, right? These are incentives to companies to go through this pathway for drug approval, because they are going to be granted certain exclusivities. We mentioned some of these already, the five year data, new chemical entity exclusivity for the branded company, the 100 and 180 day generic exclusivity for the generic and the three year marketing label exclusivity for the branded company. And there are also some follow on exclusivity. These that I won’t discuss in great detail today, but there’s a pediatric exclusivity that is granted if you can show that your drug is efficacious and safe for our pediatric population. So the FDA will give you some extended the Hatch-Waxman Act gives you some extended exclusivity if you can show that. And there’s also the orphan drug exclusivity, where the Hatch-Waxman act incentivizes companies to develop drugs for diseases or disorders that are relatively rare and has a and have a very small patient population. So the financial incentive may not be as large as a drug that for a drug that’s for a disorder that’s more commonly seen, right? But we still want incentivize companies to treat these disorders, even though a large patient population is not affected. So you there are certain exclusivity surrounding orphan drugs also.
Dexter Whitley 31:01
So the five year data exclusivity, for which is a benefit for the branded companies, prevents the submission of an ANDA generic drug application for the same act of more loyalty for five years, right? And this covers the drug only. Doesn’t cover anything surrounding the drug’s container to the packaging, or anything like that. This is only on the chemical compound that is covered by a patent that is the active ingredient of the new drug. So again, a generic application can be filed for five years unless the ANDA applicant submits a paragraph four certification, and a paragraph four certification is a notice to the FDA that the ANDA filer believes that their version of the generic does not infringe upon the patents that covers the drug in the orange book, or that the patents that cover the drug in Orange Book are invalid. And if a branded company timely file suit upon the filing of an ANDA via the paragraph four route, the FDA is prevented from approving that ANDA for 30 months from the five year date. So there’s a 30 month stay on approval of any competing drugs on the market if the branded company files suit within a statutorily designated time frame. The benefit for the generics is the 180 day exclusivity. It protects the first generic to challenge a listed patent, no other ANDA application can be approved until the expiration of the 180 days from the filing of the first ANDA application. Interestingly, something that generic companies should be well aware of, is that this date can be shared. There can be more than one first to file applicant. So it is incumbent upon the generic companies to be aware of when the first date for filing an ANDA is available that four year period if you’re going to file a paragraph four certification to be the first generic or one of the first generics to file an ANDA on blockbuster branded drugs. You know, the generic companies are typically well aware of the first day that they can file an ANDA because they all want to be first in line to receive the 180 day exclusivity. So it’s important that generic companies are aware of the first day that they can file the ANDA applications. And this 180 day exclusivity is immensely valuable to generics because all states have a mandatory substitution law where hospitals and doctors and prescribers must substitute a therapeutically equivalent generic product for a branded product to lower costs, and so that that is a requirement in all 50 states. So if you are the first branded company to enter the market, you have this 180 day exclusivity. All prescriptions must be on your — for the most part 00 must be on your generic version. So you’re the only you’re the market leader for that 180 day period. Alright, so that brings us to the orange book. So the Orange Book is shorthand for the approved drug products with therapeutic equivalents evaluations. So call it the orange book because people don’t want to say all of that all the time. And the Orange Book is where patents that cover the branded drugs are listed. So for a patent to be eligible to be listed in the orange book, it must claim a drug, a chemical entity, or a method of using that drug or chemical industry, for which a claim of patent infringement could be reasonably asserted. In 2003 there were reforms to the orange book so patents that cover packaging, metabolites, intermediates, mechanisms for administration, those types of patents are not eligible to be listed in the orange book, and those types of patents cannot trigger patent suit under the Hatch-Waxman Act. Only patents that cover the drug and their method of use. So it’s extremely important that a branded drug manufacturer be aware of the timing requirements for listing patents in the orange book, because if they miss these deadlines, they are at risk of not being able to avail themselves of the Hatch Waxman Act and the special type of litigations that it allows. So the NDA sponsor, the branded drug company, must submit within 30 days of approval of their NDA the patents that cover their drug. Any patents that are submitted after that 30 day deadline, ANDA’s do not have to certify for. So that you don’t have access those patents will not trigger a Hatch Waxman litigation. And if a branded company receives a new patent after approval, it must be filed within 30 days of issuance in order to be listed in the orange book. So you have your drug approved, and two months later you have a new patent that’s eligible for listing and covers that drug, you must list that patent in the orange book within 30 days of issuing or you’re not allowed to and you can’t avail yourself of the Hatch Waxman litigations or patent litigations. So what’s interesting about the Hatch Waxman Act is that it has created an artificial act of infringement, typically for patent litigation, there must be an allegedly infringing product on the market or available for sale at some point — a theoretical product or product is still in development but is not actually being offered for sale typically does not trigger a cause of action for patent infringement. However, the Hatch Waxman Act, since we’re talking about a generic drug that is undergoing the FDA approval process, it can’t be sold or marketed until it receives FDA approval. It allows a branded company that has patents in the orange book that covers its drugs to bring an infringement suit before that generic drug is being offered for sale. So it creates an artificial act of infringement. So for each patent listed in the orange book, a generic must certify to one of the following conditions, right? And these are the various paragraph certifications that the branded drug company must submit to the FDA and give the — excuse me — the generic drug company must submit to the FDA and give notice to the branded company. So a paragraph one, certification is that no patent information exists in the orange book on that drug, right? So the FDA can approve that ANDA whenever it’s ready. So a paragraph two, certification means that all of the patents in the orange book that covers the branded drug have expired again. FDA is free to approve that ANDA whenever it’s ready to. Paragraph three certification is a certification by the generic company that it will not market its drug until all of the patents in Orange Book expire, right? So it can go through the approval process. It can receive approval from the FDA, but it is not allowed to actually market that drug until all patents in Orange Book for it have expired. So the certification that initiates Hatch Waxman patent litigations, is the paragraph for certification, and that is a certification where the generic company is saying that the patent is either invalid or their generic product will not infringe the patents that are listed in the orange book. So in this complicates the approval window window, because now what’s going to happen is that the branded company is going to bring a Hatch-Waxman litigation against the generic once they file a paragraph four certification. So for paragraph four certification, the generic applicant must state that the application contains data from a bio equivalent drug. So again, it meets the bio equivalents requirement of the Hatch-Waxman act, and that the generic is seeking approval to engage in the commercial manufactured use or sale of the listed drug before the expiration dates of the list of patents. So the patents are still active and it’s still enforceable, but they’re seeking approval in spite of those patents and the factual and legal basis that the ANDA applicant believes that the patent is invalid or will not be infringed right? So in their paragraph four certification, the generic applicant must state their factual and legal reasons for why they don’t think they are infringing the patents, or why those patents are invalid.
Dexter Whitley 40:48
So when a generic files a patent paragraph four certification, the generic must send notice to the branded company within 20 days from the end of receipt acknowledgement letter from the FDA. So the generic company will file for it and but not until they receive notification of receipt from the FDA, are they in a position where they can then send notice to the branded company that they are filing an and they are challenging the patents listed in the orange book for that drug. Importantly, the FDA does not police the sufficiency of the notice letter. So the FDA is not going to do a legal analysis of the paragraph for certification. They’re not going to determine whether or not the argument is for non infringement or invalidity or actually valid, right this they are just going to accept the paragraph for a letter, and then it’s incumbent upon the parties to then file suit and work out the various patent issues that relates to the end of filing. So again, so for the actual patent challenge that is initiated by a paragraph for filing a paragraph four certification. So again, the filing of the anda itself is an artificial active infringement, since there is no product on the market and the NDA sponsor, the branded company, can sue when it’s receives the paragraph four notice from the generic company, the infringement suit will begin before the end of end is approved again. There’s no product on the market, and the branded company must bring suit within 45 days of receipt of the paragraph for notice. This is important, like they can the branded company can no longer avail itself to the hatch Waxman act if it misses this 45 day deadline, right? And the consequence of missing the 45 day deadline, 45 day deadline is that they are no longer eligible for the 30 month stay. So that means the FDA can approve the end application whenever it Deans it’s ready right where in the context, if a suit is brought within 45 days, the FDA cannot approve the end application until 30 months after the start of the litigation. And again, the lit the stay. The 30 month stay is tied to the patents in the orange book. If the patents in the orange book that initiated the litigation are dismissed, then the 30 month stay goes away, right? So that it’s important and incumbent upon the branded drug manufacturer to keep the patents that initiated the suit in play in the case if they want to maintain the 30 month stay of approval. And so this approval is stayed pending the outcome of the suit up to 30 months this time. 30 month time frame can be shortened or extended by the court at its discretion, and you only get 130 month stay. So if you receive FDA approval for a new drug, for a new branded drug, and then three months later, you receive a new patent but but a lawsuit has already been instituted that later issued patent cannot sustain the 30 month state. It’s only on the patents that were at play when the lawsuit was initiated. So while all of this is going on, the FDA is still reviewing the generic application, the and the application, and it can get to the point of approving the end application. And the only thing that will prevent the FDA from approving that application is the patent lawsuit, right? So the FDA is allowed. To give an anda application tentative approval, which essentially says that this application is ready to be approved. We’re simply waiting for the resolution of the lawsuit so and the FDA cannot grant an anda application full approval until the lawsuit has in some way resolve itself, and the generic applicant must request full approval. So even if the lawsuit has resolved, it is still incumbent upon the generic to reach out to FDA and explain to the FDA why it can now grant full approval to their and to applicate application. And full approval will not be given until any blocks resulting from the litigation are clear. That’s either the expiration of the 30 month stay, what the generic wins the lawsuit, or the case is settled. And just so as in closing, on the hatch Waxman portion of the presentation, I just want to illustrate the effect of a generic company, entering a generic product, entering the market on the price of the branded product. So this chart shows the percent decrease in price of the branded product based upon the number of generics in the market. And we see that if one generic is in the market, there’s only about a 6% drop in the price of the of the branded drug. So it’s, you know, it’s not as detrimental as it could be, but as soon as there are two generics in the market, the price of the branded drug drops by 50% right? And then there’s just precipitous drop as the number of generics that are in the market increases, right? So again, it is very important that branded companies are aware of the time frames surrounding the hatch Waxman act when and does can be filed. It is essential that the branded companies have good and valid patents that cover the drug drug products, because once the generic start to enter the market, the price of their drug drops substantially. So the revenue from that drug is also going to drop substantially. So it’s very important that both generics and branded companies are well aware of the statutory deadlines and time and timing required by the hash wax Mack, so I will leave you with that, and I will now turn the discussion over to Maddie to discuss the bpcia, thank you.
Speaker 1 47:42
Okay, great. Thank you, Dexter. And I’m happy to be talking to you all about the bpcia, which is the biologics price competition and Innovation Act. And this was a law enacted by Congress in 2010 as part of the Affordable Care Act, and like with the hatch Waxman act that Dexter was talking about, the goal here with the bpcia is to create an abbreviated pathway for approval of biosimilar drugs, which we’ll talk about what that is in a moment, the same way that the hatch Waxman Act does for generic small molecule drugs. So again, similar goal, somewhat of a little bit different setup, but the goal here to foster competition, to still encourage innovators to make new drugs for us, and then also potentially lower the cost of biologic drugs that are available in the market. So the bpcia provides a legal framework for biosimilar manufacturers to navigate this regulatory process, while at the same time allowing the branded biologic manufacturers to protect their innovations. So I have the same slide here that Dexter did comparing the characteristics of the hatch Waxman Act and the bpcia. So I’m just going to highlight a few differences here. We’re talking about a different type of drug. We’re talking about a regulatory scheme that does not have a 30 month stay of regulatory approval for the biosimilar or the generic. We don’t have a nifty Orange Book. We do have a purple book, but it’s a little bit different. And then we have something that you might associate going forward with the bpcia, which is called the patent dance. And whether that sounds fun to you or not, we’ll get into some of the details there. It’s a somewhat of a intricate scheme for exchanging information before a litigation. Happens. And then we’ll talk about a couple other aspects, like notice of commercial marketing and what that means in the in the scheme of bpcia. So what is the bpcia? We have a QR code here that you can use to look at the text of it. It is a US statute, and it’s at 42 USC Section 262, normally, I would not give you the numbers for that, but we actually refer to some of the characteristics of the bpca by their statute name. So it can be helpful and important to know what the actual statute is like. I mentioned the bpcia provides an abbreviated regulatory pathway, so an ability to navigate the FDA process in a streamlined manner for biosimilar applicants. And then I’ll say it again. I’ll probably say it a couple of times. The PPCA lays out a patent intellectual property dispute resolution framework so specifically for patents, and this framework is referred to as the patent dance. And then there’s also a framework for the bio similar manufacturer to notify the branded or biologic manufacturer of when they intend to launch their drug. So some terms here, so you can become conversant in the names under the bpcia scheme, biologics, as Dexter mentioned. These are large molecules. They tend to be antibodies. They can be antivirals. Other things that are, you know, kind of grown instead of made so small molecules can be manufactured in the lab fairly easily. Biologic drugs usually need to be made with cells or some other sort of living vector, as Dexter mentioned. So that’s the biologic drug, biosimilars. That’s the term used to refer to a biological product that is highly similar to and has no clinically meaningful differences from an existing biologic drug. And that bio existing biologic drug is usually can be called the reference product, and that reference product has been approved by the FDA and is generally in use in the market. That’s your humerus, Elia Remicade. All of those are biologic drugs. Some of those have biosimilars also on the market, and then interchangeable. Is another designation for a biosimilar type drug. An interchangeable is going to reference a biologic, a reference product, and an interchangeable has a few more steps clinically that that drug has to go through. It is a biosimilar, plus. That’s kind of how you can think of it. It’s expected to produce the same clinical result as the reference product in any given patient. So biosimilars have no clean, clinically meaningful differences with their reference product, and interchangeable will have have been tested in the clinic to show that it’s going to get the same result as that reference product. So because the bpcia was enacted relatively recently, the US market, Congress, FDA are still evaluating here the biosimilars versus interchangeable designation, and FDA recently has has issued some guidance that they’re thinking of getting rid of the interchangeable designation. I think FDA is concerned that doctors view biosimilars as somehow less and that’s not the intention here. So just to note, while we’re giving you this presentation, this law is still evolving. Okay, so who are the players in this bpcia scheme? We have the reference product sponsor, the RPS that is also referred to as the branded manufacturer. They are the ones who have created the initial biologic drug that a biosimilar will be directed to. So that’s the HUMIRA of the world. And then biosimilars will create a biosimilar to HUMIRA. So the biosimilar applicant, or also, as I mentioned, we refer to separate sections of the statute. It can also be called a subsection K applicant, because that subsection of the statute refers to this bio, similar applicant and what they need to do to get their products approved and. Um, both the reference product sponsor and the biosimilar applicant submit what’s called a biologics license application, the bla so, as Dexter explains in the hatch Waxman scheme, there is an NDA, the new drug application. That’s what the branded submits in under hatch Waxman and the generic under hatch Waxman submits an A, NDA, the abbreviated new drug application here, we don’t have that nifty, sort of helpful abbreviation some people will call the BL, A, that a biosimilar submits the A, B, L, A, but that actually is not a term used in the statute, but it can be helpful to refer to the biosimilar application to FDA as an Abla. Okay, so a biosimilar can it’s submitted to FDA. A biosimilar application, it must demonstrate biosimilar bio similarity to the reference product, the biosimilar bla, can set out the fewer number of diseases that they intend to have on their prescribing information, whereas the interchangeable bla, you have to have all the same methods of treatment on your label or prescribing information as the reference product.
Speaker 1 56:29
Okay, so Dexter went in depth into the framework the timeline, the history for launching small molecule drugs, essentially the same timeline from invention to launch, and then when the generic is going to get involved, applies to the bpcia, right? It takes a lot of investment to come up with a new drug. It takes slightly less investment to create a biosimilar to that drug, or a generic version of that drug. And so the timelines essentially apply across both. So you start with developing a biologic, or if you are a biosimilar manufacturer, you’re going to work on developing your bio similar. A little more work goes into develop developing a biosimilar, because the manufacturing process is more difficult and more involved. So you’re going to develop the manufacturing processes, the formulation, the indications, meaning the methods of treatment that your drug will apply to. And you are going to perform maybe some preclinical work, if you’re the biologic, certainly clinical test thing for both the biologic and the biosimilar. Once that’s done, you file a bla with the FDA. That’s your biologics license application. You’re asking FDA, giving them all the information, asking FDA to approve your drug, whether it’s a biologic or a biosimilar, if the biosimilar submits a bla, this triggers the patent dance, which we’ll talk about in a minute. And triggering a patent dance or submitting a biosimilar, bla is what gets the litigation started. So this litigation happens in US federal courts. It can happen throughout the country, but certainly in federal court, and the patent dance that’s triggered from the bla filing can be a lot of effort or a little bit of effort or no effort, and we’ll talk about those options a little bit. There’s also the regulatory framework of bpcia has something that the hatch Waxman Act does not, and that’s called the notice of commercial marketing. So this notice of commercial marketing is something that the bio similar will give to the reference product sponsor to say, hey, we submitted our drug to FDA. It’s either approved, or it will be approved by a certain date, or we intend it to be improved by a certain date, and then we want to launch our drug, our biosimilar drug, in the US market, within 180 days. And this puts the branded, the biologic company, the reference product sponsor, all those names, same thing on notice that they can file us what’s called a second wave of litigation, or it might end up being the first wave, but it’s a mechanism for the branded to say, hey, we think you infringe our patents. We don’t think you should be allowed to launch in the US. Do. Okay, so the biosimilar, at some point during this process, will attain approval for their bla from the FDA, and the biosimilar will either decide to launch, decide to wait for resolution of the litigation, or. Or some combination of that, a lot of times during bpcia litigation, or any of these processes, the parties will settle. So it could be that they litigate for a little bit, but then they settle, and then the biosimilar will launch, okay, like with the hatch Waxman Act, the bpcia has some exclusivities. They’re here on the slide. I don’t think the details of them is super important. It’s just important that you know that they exist. These are statutory exclusivities, not like the 30 month stay that’s triggered in hatch Waxman. And then there are some benefits to the bio similar applicant, of going after this kind of harder to achieve interchangeable designation. An interchangeable can get exclusivity on the market if they do any of these things. They they either I they have they launched earlier, or they’re the first one to reach a court decision on all patents. That’s just an option for the interchangeable designation. Okay, so as Dexter mentioned, the hatch Waxman act, small molecule drugs usually involve what I would think of as a reasonable number of patents, maybe eight, maybe 10, maybe two, right? These can cover the compound the and the method of treatment. There might be some relevant manufacturing patents, but those are usually not as common. Whereas in the biologic context, because these are difficult to make, difficult to grow and can be hard to formulate, there is a lot of opportunity for innovation. And so the process you have modifying host cells, these are the live organism that is going to manufacture your drug for you. You have to grow these live organisms in huge bioreactors to get enough product. That is a whole process in and of itself, that involves a lot of work, and can involve innovation, meaning that there’s something there you might want to patent, and then refining the drug down out of the that live, you know, kind of casing or that cell, also can be a lot of work, and then to formulate this drug that is pretty big and something that you want to have be stable from the time it’s made in these huge vats to the time it gets to you in the clinic, can also be room for improvements and innovation. So that’s the formulation stage, the formula of the drug that’s going into the patient. So all of these are something, if you’re working in biologic space, you want to be thinking, Is there something here that I can patent, or that my company can patent to help us protect our innovation and all of our work? So here, you know, talking about that process, I mentioned some of these types of patents, and these can be both from the reference product sponsor, what we think of as the branded or they can be from the biosimilar applicant, again, because the biosimilar applicant has to grow the drug in a way that that can be difficult. So okay, so going through this list of patents here indications that usually means, as Dexter mentioned, the method of treatment, the the use of the drug in the patient. So like for HUMIRA and psoriasis, so the use of HUMIRA in the treatment of psoriasis, that’s an indication there can be other methods of use, like a method of imaging, or some other method of using the drug that maybe is not on your label, or maybe it is. It can be something that the doctor does with it, or someone else does that kind of covers that method of manufacture we talked about. These are grown in huge vats with cells, there could be a certain cell line that you have discovered that produces a drug in a certain way. You might patent those host those are the host cells. Methods to grow those cells, methods to extract the biologic drug, how to purify the drug substance delivery system. So a lot of these drugs, they’re IV infused, because they are so big, it’s hard to get it into your body in a usable way. But there could be pre filled syringes or different methods of administration that might be. New, novel and non obvious delivery devices, packaging, just all sorts of things that surround these biologic drugs that could be patentable and that a lot of reference product sponsors may want to get patents on to protect their intellectual property. All right, so as promised, the dance. These are just at a high level, the steps of the dance. And here in gray, I’ve kind of put in here the section of the statute that this can be found. Again, we refer to it as the patent dance, but it’s laid out in 42 USC 262, subsection L. And so when those who are doing this type of litigation are familiar with it, they start referring to things as like the three a list or the 3b disclosures, it kind of ends up sounding like you’re talking in code, but it’s really just a reference to the statute that lays out these requirements. I’m not going to go in detail into these. I just wanted to highlight a couple.
Speaker 1 1:06:16
The the way this start starts is the biosimilar files their B L A, their application with the FDA. It gets accepted. So the FDA says, Yes, I received this. It looks like you have all the parts. And that triggers the biosimilars requirement to let the reference product sponsor knows that they have filed a biosimilar application. So when that happens, the biosimilar provides their bla to the reference product sponsor. And then some more steps are triggered. And the other step that I think is worth highlighting here is the the next step after providing your bla is that the reference product sponsor then has to provide the biosimilar with a list of patents that it thinks can be asserted against the biosimilar if that biosimilar drug were sold in the US. So this is going to be most likely and usually a long list of patents that cover all aspects of the drug. This is based on what the reference product sponsor can see in the bla or it’s what it thinks the biosimilar has to do, like packaging or methods of treatment, things like that. So that list, unlike in hatch Waxman, there is no orange book. There is no publicly available list of patents that cover a biologic drug, at least not until there’s a litigation, and then those patents get listed in what’s called the purple book. But it’s a little bit harder to find. If, say you’re the first biosimilar applicant, this is going to be your first opportunity to see the list of patents that the reference product sponsor alleges covers their drug and therefore would cover the biosimilar drug. And then all of the rest of these exchanges deal with pre suit contentions. So we’re dealing with patents here. We’re dealing with infringement of the patent, and we’re dealing with the validity of the patent, and the patent dance is all about exchanging some of those validity infringement contentions before you get into a suit, with the idea that maybe the parties could say, okay, yes, I agree this patent is valid. We’ll wait until that patent expires to launch our drug or Dear reference product sponsor. We don’t think we infringe any of these patents, and here’s why. And the reference product sponsor might say, okay, you know, we won’t sue. Not very often in our experience, has that happened? Now we see more biosimilar and reference product sponsors skipping some of these steps and just getting straight to litigation. But again, this is a new statute and a new way of doing it. So we don’t know the full impact of of this patent dance here, which is something very unique to the bpcia, okay? And then finally here, I think it’s become clear in talking about all the types of different patents, patent litigation which happens after the dance can be huge when you’re talking about bpcia litigation, because we’re talking about maybe 20 to 40 patents that can be brought in a suit. Here on the screen, we have an example of a bpcia patent infringement suit that was brought with 20 patents. And these, you know, there are some decently old patents and then some patents that maybe were achieved three months before this litigation was brought. So you can see the importance of making sure that as you’re developing your drug you are getting the appropriate protections for your innovation. Is, and then also, if you’re the biosimilar drug manufacturer, understanding the scope of the litigation that you could be walking into, maybe at the time of developing your biosimilar, so that you might be able to get out from under some of the infringement claims for these patents. Now this is just a high level overview of the bpcia. There’s a lot more detail that we could go into here, but we hope that this has provided you to at least be conversant and maybe have some understanding of both hatch Waxman and bpcia. Thank you. I
Allison Schmitt 1:10:42
want to thank Maddie and Dexter so much for this one wonderful presentation that you’ve put together. They’ve put up their emails. So I’m gonna they should stop me if they don’t want me to make this invitation, but if you want to continue the conversation with them, I really encourage you to do so. Maddie and Dexter are real experts in the space, and they are eager to hear from you if you if you have questions, so please don’t hesitate to reach out for them. I hope it’s okay. I did that on your behalf. So have a wonderful rest. Have a wonderful rest of your day, and we look forward to you joining us for our next program. You.