Is the Hatch-Waxman Act Immune from Encompassing Generic Biologics? - Fordham Intellectual Property, Media & Entertainment Law Journal
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Is the Hatch-Waxman Act Immune from Encompassing Generic Biologics?

Is the Hatch-Waxman Act Immune from Encompassing Generic Biologics?

by Elysa Brooke Goldberg, Ph.D.

Proteins are essential parts within every organism, engaging in every regulated process within our cells. Each protein has a highly specific function within the cell; as such, each protein is required to perform its intended job perfectly. When a protein fails at performing its function, the individual cell and the organism suffer. For example, when the cells within the pancreas fail to produce insulin, the person suffers from Type 1 diabetes mellitus. The only way to reverse the disease is to reintroduce insulin into the person’s body. Insulin is produced within a cell line, harvested, and purified before being injected into the patient. This illustration reveals how the specificity of insulin controls a patient’s complete health, as well as the importance for biological products in saving lives.

Biologics in the Eyes of the Public Health Service Act (PHSA)

A biological product, as defined by the Public Health Service Act, is “a virus, therapeutic serum, toxin, antitoxin, vaccine, blood, blood component or derivative, allergenic product, or analogous product, or arsphenamine or derivative of arsphenamine (or any other trivalent organic arsenic compound), applicable to the prevention, treatment, or cure of a disease or condition of human beings.”1 Some examples of biologics include insulin, some vaccines, and monoclonal antibodies, which can aid in the treatment of cancer, anemia, diabetes, hepatitis, and multiple sclerosis.2

Biologic product sales are continually increasing, with American product sales jumping from $32.8 billion to $56 billion from 2005 to 2006. Global sales are expected to reach $105 billion by 2010.3 In the past ten years, the patents of more than a dozen high-profit biologics have expired, creating $11.5 billion in combined annual sales of off-patent biologics.4

With a few exceptions, generic biologics have not been able to enter the market due to the current regulatory scheme. Current market entry for chemical entities via the Hatch-Waxman Act is being strongly pushed to encompass such biologics. However, because biological products are highly complex and vary vastly from generic drugs, a new regulatory scheme would need to be put in place for generic biologics to compete.

Public Health Service Act Compared to the Food, Drug, and Cosmetic Act

The regulation of biological products is unique from small-molecule drugs. Most biologics are not regulated as drugs under the Food, Drug, and Cosmetic Act (FDCA), but are instead licensed under § 351 of the Public Health Service Act (PHSA) and then evaluated by the Center of Biologics Evaluation and Research (CBER).5 Under the PHSA, each biologic must secure a license, which validates the product as safe and pure.6 The PHSA does not contain a provision for follow-on biologic approval.

The FDCA has decided to regulate a small number of biologics, such as insulin and human growth hormone (HGH).7 Despite there not being any clear explanation as to why only these biologics are regulated by the FDCA, such regulation is encompassed under the FDCA. The FDCA’s definition of a “drug” includes “articles intended for use in the diagnosis, cure, mitigation, treatment, or prevention of disease in man.”8 Thus, this language suggests that the FDCA’s regulation encompasses biological materials.

The Hatch-Waxman Act

The Hatch-Waxman Act was passed in 1984 to balance the competing interests of generic pharmaceutical companies and brand-name pharmaceutical companies. To promote competition with the brand-name drug manufacturers, the generic pharmaceutical companies need to gain immediate approval for selling the follow-on drug. Thus, these companies required a reduced process for drug approval and accelerated patent litigation process.9 Meanwhile, brand-name pharmaceutical companies must preserve their profit margins to be able to afford research and development of drugs.10

To balance the competing interests of the brand-name and generic pharmaceutical companies, the Hatch-Waxman Act permits the filing and evaluation of “Abbreviated New Drug Applications” (ANDAs). By securing an ANDA, a company is permitted to generate a generic version of a patented drug.11 The company needs to prove that the drug is safe and effective to secure an ANDA; to do this, the applicant merely needs to submit experimental proof that the brand-name drug and the replicated generic are equivalent.12

An ANDA certifies one of four possibilities: 1) the drug has not been patented; 2) that the patent has expired; 3) the date on which the patent will expire and the generic will not be sold on the market until after that date; and 4) the patent is not infringed or is invalid.13 If the ANDA is filed under the circumstance that the patent is not infringed or is invalid, the applicant must give notice to the patent holder that it has filed an ANDA. The patent holder is notified under these conditions because filing the ANDA constitutes literal infringement.14 Thus, the ANDA’s processing is suspended for both parties to litigate the allegation of invalidity and/or non-infringement.

The patent-holder has forty-five days to file suit for infringement, and during this period, the ANDA’s approval is suspended.15 If the patent-holder chooses to file suit, the ANDA will not be processed for the duration of thirty months in order to permit litigation between the parties.16 The brand-name pharmaceutical companies could win patent term extensions and market exclusivity provisions, while the generic company could win 180 days of market exclusivity for the generic equivalent of the drug.17 Thus, while ANDAs give the generic companies the ability to quickly begin marketing and selling a bioequivalent product, the brand-name companies enjoy the notice requirement with the possibilities of term extensions and market exclusivity.

Hatch-Waxman Act Application to Generic Biologics

Legislation has been attempting to apply the Hatch-Waxman Act to biologics. Biologics are complex proteins that are manufactured within cells (in vivo), not in test tubes (in vitro). Filing an ANDA through section 505(j) of the Hatch-Waxman Act is one of the two ways in which a biologic could be approved, but is not the most sought-after methodology. The more commonly used section of the Hatch-Waxman Act is section 505(b)(2) of the Food, Drug, and Cosmetic Act (FDCA). Some examples of generic biologics that have enjoyed approval through use of this section are recombinant follitropin beta (Follistim®), recombinant human glucogon (GlucaGen®), and human growth hormone (Omnitrope). Section 505(b)(2) is essentially a hybrid between a new drug application (NDA) and an ANDA, as applicants are permitted to rely on the experimentation conducted by a third party, including the innovative manufacturer, to show the safety of their own products.18 The applicant need not perform many of the trials himself if he proves the “relevance and applicability” of any previous clinical findings.19 Thus, the applicant can evade much of the cost associated with seeking FDA approval of a new drug, and sometimes a new biologic.

The FDA is hesitant to approve more complex biological therapies under 505(b)(2). Therefore, the use of this pathway within the Hatch-Waxman Act is limited. Use of this provision would require biologics to gain approval as new drugs under the FDCA or the Hatch-Waxman provision extend to biologics approved under the Public Health Service Act (PHSA). However, this is unlikely, as the FDA has recently stated, “there is no abbreviated approval pathway… for produce products licensed under section 351 of the PHSA.”20 Thus, section 505(b)(2) is not a practical pathway to pursue to gain generic approval of biologics.

An Overview of Regulating Biologics

Because of the chemical differences between small-molecule drugs and biological compounds, several problems arise when trying to apply the Hatch-Waxman provisions to biological compounds. As described earlier, biologic compounds are larger and more complex than the small-molecule drugs, requiring a more sophisticated and regulated methodology of production. Because of the intricacies in producing sensitive biologics, small changes in production could have severe and far-reaching consequences in a patient’s health.21

Besides the health concerns associated with taking generic forms of biologic compounds, there are general concerns about the impact of biologic legislation on United States patent law.22 “First, if it is impossible to synthesize an identical compound the effect could be to preclude patentability on the grounds of ‘enablement.’”23 The patent-holders, the brand-name pharmaceutical companies, must not be permitted to argue the conflicting ideas that their product is enabled and yet it is impossible to replicate due to the nature of production.24 Second, patentability is questioned because many biologics are compounds already produced in vivo, in every living person. Thus, while the process of generating large quantities of any biologic can be novel, the biological compound may not meet the patentability requirement of novelty.25 The legislators must consider these problems before they assume that the parameters set in place by the Hatch-Waxman Act, written for competition of small-molecule drugs, will directly apply to biologics.

Can Trade Secrets and Biologic Equivalence Coexist?

Innovator and generic pharmaceutical companies have agreed that there is a need for follow-on biologics, however, the exclusivity period has been the difficult parameter to agree upon. Generic companies favor shorter periods of exclusivity, approximately seven years, while innovative pharmaceutical companies support bills providing 12-14 years of exclusivity.

There were three congressional bills that were introduced in 2007 that began a thoughtful discussion regarding generic biologics. These bills amend section 351 of the PHSA to establish a route for approval of an abbreviated biological product application for products that contain the same or similar active ingredients as previously licensed biological products.26

The Access to Life-Saving Medicine Act, H.R. 1038, was introduced Feb. 14, 2007 by Henry Waxman and stipulated that the biosimilar and reference must have the same mechanism of action for the same condition of use, but did not mention the provisions for data and market exclusivity. The Patent Protection and Innovative Biologic Medicines Act, H.R. 1956, was introduced April 19, 2007 by Jay Inslee and stated that biosimilar and reference material must merely show comparative results in health-related assays for the same dosage. H.R. 1956 took a bold move and provided twelve years of data exclusivity and just two years of market exclusivity. The Biologics Price Competition Innovation Act, S. 1695, was introduced on June 26, 2007 as a bipartisan effort guided by Ted Kennedy and Orin Hatch, suggesting that the biosimilar and reference must have the identical route of administration, dosage form, and strength, as well as utilizing the same mechanism of action for the same condition of use. S. 1695, additionally called for four years of data exclusivity and eight years of market exclusivity. H.R. 5629, the Pathway for Biosimilars Act would have provided four years of data exclusivity and eight years of market exclusivity. None of these bills were passed in the 110th Congress.

A Teva-funded study (Teva is a leading company that specializes in follow-on drugs) suggested that an exclusivity period of seven years would be “sufficient for maintaining strong incentives to innovate while fostering a competitive marketplace.”27 Teva also questioned the need for exclusivity provisions that would add an additional 7-12 years of protection.28 However, innovator companies have been supportive of bills that provide 12-14 years of exclusivity.29 Thus, these studies illustrate the disconnect between innovative and generic companies regarding exclusivity periods.

A passable bill should adequately compensate generic manufacturers by providing some exclusivity for biologic products.30 All of the proposed Congressional bills have had their drawbacks, either having too much exclusivity (H.R. 1038 and S. 1695) or not having any (H.R. 1956). Until there is a thoughtful negotiation between both of these stances, the innovative pharmaceutical companies will enjoy a market without competition from follow-on biologics. Considering that both innovative and generic pharmaceutical companies have the identical interest of gross revenue, it is encouraging that a thoughtful discussion has already ensued via the 110th Congress.

Brand-Name Perspective: Impossibility of Duplication and the Question of Patentability

Although the patent protection is available for biologics in may circumstances, there may be a limited scope of protection.31 Legal principles may restrict the availability of patent rights because the proteins are naturally-occurring macromolecules.32 The 110th Congress reviewed legislation that would permit an expedited marketing approval pathway. The Access to Life-Saving Medicine Act, H.R. 1038 and S. 623, would permit the Secretary of Health and Human Service to monitor what studies were needed to establish comparability.33 Comparable biologics would be required to maintain the same chemical reaction, the same mechanism of performing this reaction, as well as the same dosage form, strength, etc. As discussed above, while the identical chemical reaction and mechanism for reaction would be relatively easy to prove, the same dosage form and strength could be very tricky to establish. If all of these parameters were to be met, then the generic form of the brand-name biologic would be deemed “interchangeable.” An interchangeable product would be required to produce the same clinical results as the brand-name innovative drug.34

There is a formidable lobby against approval of follow-on biologics. This lobby strongly asserts the impossibility of replicating a brand-name pharmaceutical’s work exactly, due to technological limitations. The crux of this argument lies in health and safety, advocating against an accelerated approval process for follow-on biologics. These pharmaceutical companies assert that an end product is unpredictable, even by guidance through patent disclosures, including deposited biological samples.35

While the safety and health of patients is a strong aspect of this argument, it undercuts the patentability of the biologic. Enablement is a fundamental step in securing patentability. If it is impossible to replicate the patented invention, then this serves as a prima facie case against the invention due to nonenablement. Is this a fair catch-22? If brand-name pharmaceuticals were unable to be patented, companies would instead use the power of trade secrets to insulate them from competition. If this movement occurred, then it would drive down the amount of information available to any pharmaceutical company regarding any type of technique. Because of this, it would be unlikely that competitors would be able to manufacture follow-on biologics. Additionally, reverse-engineering would be near impossible, so trade secrets would be a workable way to protect such intellectual property.

A major flaw with reversing the patentability for innovations that are very difficult to reproduce is that the innovators no longer have the protection of a patent. Losing the availability of patent rights could very likely be a large disincentive to continue structuring pharmaceutical companies and their goods as is. The rights of patents extend from literal infringement through the doctrine of equivalence (DOE). The DOE is only available to patented products, not to those covered via trade secret. The DOE allows a court to hold a party liable for patent infringement for an equivalent to the claimed invention.36

An underlying priority must be to promote continued research and development in the fields of biotechnology. Thus, American patents must be strong and reliable, protecting the intellectual property that they breed. If American patents are not as strong as foreign patents or if there is significant inquiry as to how American patents will be interpreted, inventors will quickly lose incentive to continue filing in the United States. Thus, protecting innovation by approving patents for biologics is mandatory for continued industry and research growth.37

In addition to enablement for patent eligibility, novelty is also required. To be novel, a minimum of one limitation of the claimed invention must be anticipated by prior art. Diamond v. Chakrabarty is a landmark Supreme Court case that allowed biotechnology innovation to fall within the scope of statutorily patentable inventions.38 The Court allowed a living organism to be patentable as long as it was not naturally-occurring. In this way, discoverable matter is not patentable, while inventions are patentable. This principle extends to the biological therapies that would be encompassed by the Biologics Act, if the legislation passes.

“Deducing the steps required to purify and produce insulin, for example, took considerable work by some of the top scientists in the field.”39 The example of insulin highlights why patent protection is so important for biological research, as it took almost 20 years for Eli Lilly to purify insulin and successfully obtain approval to market its this therapy.40 Now, if the leaders within Eli Lilly knew that ultimately their purified insulin would never be granted patent protection, would they have still invested almost two decades of research in this field? Additionally, would Eli Lilly still pursue purification of naturally occurring biological proteins while knowing that patent rights were abbreviated; thus, engaging generics to replicate the purification process and compete with their 20 years of hard work and effort?

A final issue that needs to be addressed is an unconstitutional taking without just compensation.41 If pharmaceutical companies manufacturing generics are permitted to take and use the discoveries of innovative pharmaceuticals, it is a strong argument for an unconstitutional taking. Being that huge amounts of money are invested by brand-name pharmaceuticals for research and development, there needs to be some reasonable compensation for the discoveries.

The Biologics Act attempts to mold the Hatch-Waxman Act into a vehicle previously encompassing tiny, simple drugs into an extension for large, complex biological molecules. However, the question remains whether it would be beneficial to apply biosimilars to the established Hatch-Waxman process of approval and generic manufacture. The Biologics Act seeks further requirements to be satisfied by the generic biologics manufacturer, such as extensive clinical studies, which will increase the biosimilar’s costs and decrease the margin between the price of the innovative biologic and the follow-on generic.

An additional concern, besides higher manufacturing costs and decreased profits, is the actual market for biologics. Unlike small-molecule drugs, biologics function in one biochemical process, which translates to a smaller population of people who need them. So, a lingering question is whether there is a significantly sized market for each generic biologic. Because of these concerns, it is unclear whether the follow-on biologic market will be as competitive as the generic small-molecule market.


1 Regulation of Biological Products, 42 U.S.C. § 262(i) (2004).

2 Kathleen R. Kelleher, FDA Approval of Generic Biologics: Finding a Regulatory Pathway,14 MICH. TELECOMM. TECH. L. REV. 245, 247 (2007).

3 Gregory Roumeliotis, FDA Under Pressure to “Open the Floodgates” for Biogenerics (2006),; supra note 2.

4 Meredith Wadman, Copycats Gear up to Dog Biotech Brands, NATURE, OCT. 5, 2006, at 496; supra note 2.

5 42 U.S.C. § 262 (2007).

6 Id.

7 Kathleen R. Kelleher, FDA Approval of Generic Biologics: Finding a Regulatory Pathway,14 MICH. TELECOMM. TECH. L. REV. 245, 249 (2007).

8 Federal Food, Drug, and Cosmetic Act, 21 U.S.C. § 321(g)(1)(B) (2004).

9 A. Taylor Corbitt, The Pharmaceutical Frontier: Extending Generic Possibilities to Biologic Therapies in the Biologics Price Competition and Innovation Act of 2007, 18 DEPAUL J. ART TECH. & INTELL. PROP. L. 365, 372 (2008).

10 Id.

11 Id.

12 Id.

13 Gerald J. Mossinghoff, Overview of the Hatch-Waxman Act and Its Impact on the Drug Development Process, 54 FOOD & DRUG L.J. 187, 189 (1999).

14 Id.

15 A. Taylor Corbitt, The Pharmaceutical Frontier: Extending Generic Possibilities to Biologic Therapies in the Biologics Price Competition and Innovation Act of 2007, 18 DEPAUL J. ART TECH. & INTELL. PROP. L. 365, 373.

16 Id.

17 Id.

18 Kathleen R. Kelleher, FDA Approval of Generic Biologics: Finding a regulatory Pathway, 14 Mich. Telecomm. Tech. L. Rev. 245, 250.

19 Id.

20 See Omnitrope Questions and Answers, (last visited April 4, 2009).

21 A. Taylor Corbitt, The Pharmaceutical Frontier: Extending Generic Possibilities to Biologic Therapies in the Biologics Price Competition and Innovation Act of 2007, 18 DePaul J. Art Tech. & Intell. Prop. L 365, 367-68.

22 Id. at 367.

23 Id.

24 Id. at 367-68.

25 Id. at 368.

26 H.R. 1038, 110th Cong. (2007); H.R. 1956, 110th Cong. (2007); S. 1695, 110th Cong. (2007); H.R. 5629, 110th Cong. (2008).

27 Patent Docs: Biotech & Pharma Patent Law & News Blog: Follow-on Biologics Debate Continues, (last visited April 5, 2009).

28 Id.

29 Id.

30 Kathleen R. Kelleher, FDA Approval of Generic Biologics: Finding a regulatory Pathway, 14 MICH. TELECOMM. TECH. L. REV. 245, 262.

31 Follow-On Biologics: Intellectual Property and Innovation Issues, Policy Archive, March 2007 available at (last visited on April 5, 2009).

32 Id.

33 Id.

34 Id.

35 The Law of Biologic Medicine: Hearing Before the S. Comm. on the Judiciary, 108th Cong. (2004) (statement of Dr. William Hancock, chair of Bioanalytical Chemistry, Northeastern University).

36 Royal Typewriter Co. v. Remington Rand, Inc., 168 F.2d 691, 692 (2d Cir. 1948).

37 A. Taylor Corbitt, The Pharmaceutical Frontier: Extending Generic Possibilities to Biologic Therapies in the Biologics Price Competition and Innovation Act of 2007, 18 DEPAUL J. ART TECH. & INTELL. PROP. L. 365, 400.

38 Diamond v. Chakrabarty 447 U.S. 303, 315-16 (1980).

39 A. Taylor Corbitt, The Pharmaceutical Frontier: Extending Generic Possibilities to Biologic Therapies in the Biologics Price Competition and Innovation Act of 2007, 18 DEPAUL J. ART. TECH. & INTELL. PROP. L. 365, 402.

40 Id.

41 Id. at 402-03.

Chris Reid