Extending Exclusivity for Biopharmaceuticals to Deter Competing Generics: A Review of Strategies, Potential Mitigation, and Similarities to Infringement

Abstract

Some patents confront infringement—unauthorized use of the inventions in the patent—thus violating the exclusive use intent of the U.S. Constitution's creation of the patent system to encourage innovation. In other situations, the reverse occurs—patent holders seek to extend their exclusivity period to prevent competitive entrants. This commonly occurs in biopharmaceutical products markets, where annual revenues on many patented drugs exceed $1 billion per year and (most importantly) where several pathways allow extension of exclusivity. This paper reviews the relevant legislation (Bayh-Dole Act, Orphan Drug Act, Hatch-Waxman Act, and Food and Drug Administration (FDA) Modernization Act) as well as the safety and efficacy regulations of the FDA that control marketing of biopharmaceutical products. The paper then assesses methods used to extend patent exclusivity—some legal, some clearly illegal, and some with ambiguous legal status—in order to deter generic entrants. These methods include using FDA "citizen's petitions," creating generic equivalents of branded drugs to block other generic entrants, deterring potential generic competitors from gaining samples to prove bioequivalence to original formulations, seeking additional patents to extend exclusivity (sometimes for trivial changes), paying potential entrants to delay entry, subdividing the potential patient population to qualify for extensions granted by "orphan drug" status, and (most recently) selling patents to Native American tribes to prevent challenges to their validity. The paper concludes by discussing remedies—primarily legislative—that could either eliminate these actions and/or clarify their legality. Then follows a comparison between these entry-delaying strategies and patent infringement itself.