Washington Editor

WASHINGTON - FDA officials believe President Bush's new rule correcting imperfections in the Hatch-Waxman Act will save prescription drug consumers $35 billion over the next decade by increasing access to generic drugs.

When Bush's rule went into effect Aug. 18, innovator or brand-name drug companies, which might have gamed the generic drug system a time or two by stacking 30-month extensions on multiple patents, lost access to a loophole that allowed such abuses. While it's been widely reported that abuses, including payoffs to generic companies to keep generics from entering the market, are the exception not the rule, Bush and others in Congress view snags in Hatch-Waxman serious enough to warrant certain revisions.

At the Generic Drugs Summit, sponsored by the Institute for International Research (IIR) in Washington, Daniel Troy, FDA chief counsel, Tuesday morning took up the topic of the new rule, with a few added points about pending legislation that would reform Hatch-Waxman.

The Hatch-Waxman Act of 1984 created the generic drug industry. It does not include biologics. However, trade associations like the Washington-based Biotechnology Industry Organization are careful to note any changes to the law out of concern that eventually it will be expanded to cover biologics.

But for now, the new rule affecting pharmaceuticals and generics makes a few changes, all designed to balance goals of both industries.

"Hatch-Waxman was intended to be a compromise, but over time, it appears to favor one side or the other," Troy said.

The FDA said the rule limits innovator companies to one 30-month stay per generic drug application and it prohibits the submission of patents claiming packaging, intermediates or metabolites. It also requires the submission of certain patents claiming a different polymorphic form of the active ingredient described in the new drug application, and it adds a requirement that, for submission of polymorph patents, the NDA holder must have test data demonstrating that a drug product containing the polymorph will perform the same as the drug product described in the NDA. It makes changes to the patent information required to be submitted and provides declaration forms for submitting that information to the FDA; it does not require claim-by-claim listing on the declaration form except for method-of-use patents claiming approved methods of use. (See BioWorld Today, June 16, 2003.)

Also, the rule prohibits innovators from listing drug packaging, drug metabolites and intermediate forms of a drug in the Orange Book (FDA's official register of approved pharmaceutical products).

With constant pressure to resolve the prescription drug issues creating financial problems for senior citizens, Congress took up Hatch-Waxman reform earlier this year. Both the House and Senate have their own versions of reform, neither of which the FDA has taken a stand on, Troy told attendees at the IIR conference. (See BioWorld Today, July 7, 2003.)

The Senate version, authored by Sens. Judd Gregg (R-N.H.) and Chuck Schumer (D-N.Y.), also limits innovator companies to one 30-month stay per generic drug application. Also it takes up the 180-day exclusivity provision given to the first generic to file its application with the FDA. It carries a forfeit provision if the generic does not enter the market within a certain period of time, and it applies the exclusivity to the product, not the patent, Troy said. The House bill is similar in that regard. Both are in a conference committee being merged as part of Medicare reform.