BioInsights, June 2003 - Issue 6: Patent Term Extensions Extend Revenues

June 1, 2003 Advisory

Patent Term Extensions Extend Revenues

Even with recent steps taken by the FDA to "fast track" the new drug application and approval process, the period between application and approval remains lengthy. As a result, patent holders may be deprived of the full benefit of their patent. To remedy this loss of patent protection, many countries have adopted patent term extension laws allowing patent holders to recover the vital time lost to the regulatory review process. Even one additional day of patent protection can mean over a million dollars in revenues on a blockbuster drug product. This article describes the patent term extension process in the United States, Europe and Japan, summarizes two recent judicial decisions interpreting the laws and suggests strategies for drafting patent claims and licenses to take advantage of patent term extensions.

United States

In 1984 Congress enacted the Drug Price Competition and Patent Term Restoration Act (the "Hatch-Waxman Act"), codified at 35 U.S.C. §156. The Hatch-Waxman Act counteracts the lengthy regulatory approval process for new drug products by increasing the life of the patent for a term equal to the regulatory review period, which is defined as one-half of the period commencing on the effective date of the Investigational New Drug Application ("IND") to the filing of the New Drug Application ("NDA"), plus the time from the submission of the NDA to the date of FDA approval of the NDA. Extensions are limited to 5 years, and no product shall have more than 14 years marketing exclusivity after it receives NDA approval.

Term extensions are available under the Hatch-Waxman Act for patented drug products and methods of using or manufacturing the products. The application for term extension must be filed within 60 days of receipt of marketing approval, and prior to expiration of the patent. In addition, the patent owner (or the owner's agent) filing for extension must have participated in the regulatory review process, which should be properly documented.

The Hatch-Waxman Act only extends the term of the patent claims that are directly covered by the FDA's authorization; other claims in the patent are not subject to extension. The Hatch-Waxman Act also limits the number of patents eligible for term extension to one extension per product and one extension per patent. Thus, if a patent contains claims relevant to more than one product, extension is available for only one of those products.

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