Strategies Employed For the Extension of Patent Term-Market Exclusivity For Pharmaceutical Products

In the pharmaceutical industry, a lot of research, time, manpower and money goes into R&D for the development of novel drugs and bringing them into market. If the innovations are not protected with a proper fence of integrated technologies then generic companies would exploit the invention without giving much benefit to the innovator company. Hence, it is mandatory for the innovator company to apply for patent protection at least in those geographical areas where the innovator company wishes to market their product, retain monopoly and refrain their competitors entering into the market till the patent term for the innovation expires. This article discusses various strategies employed by the innovator companies in US to extend the life of the patent and gaining market exclusivity for the pharmaceutical product.

It is estimated that around 7 to 12 years of extensive research is involved to bring the innovation into a shape, which can be marketed. Apart from product development there are hassles regarding approval of the pharmaceutical product by respective drug authorities. Considering the patent term or the protection offered by the patent to be 20 years from the filing date of the patent, effectively a period of 8 to 10 years would be available with the innovator company to get benefits of their developed product. Innovator companies execute various strategies to extend the life of the patent as well as the product.

On grant of patent for the invented drug and regular payment of maintenance fees gives the patent holder monopoly over the drug and rights to exclude other from manufacturing, using and selling the patented invention for a stipulated time. On expiration of the patent, generic competitors would exploit the market, which would lead to reduction of market share and revenue loss for the innovator company. Hence, additional patents are filed in order to fence the invented drug or product. These additional patents for the extension of invention / product protection could comprise of method of preparation, new formulation, method of preparation of formulation, drug derivatives and its metabolites, polymorphs, stereo-selective enantiomers etc. Additional patents filed could also cover improvements to the invention or new uses, which are not mentioned in the initial granted patent.

We will discuss in brief various strategies employed by the innovator companies in US to extend the life of the patent and reap maximum fruits for an extended period of time.

The Hatch-Waxman Act provides a system wherein the New Drug Applicant (NDA) holder could apply to have extension of its patent. The extension was meant to compensate the applicant for a portion of any time lost after the issuance of a patent during which the testing and approval phases of the FDA’s regulatory review process commenced.

Following are the paths by which patent term can be extended:

1) Patent term adjustments – delay during patent prosecution

The patent term adjustment is provided in case of United States Patent and Trademark Office (USPTO) fails to act to patent application from patent filing or fail to reply to applicant’s appeal in a stipulated time.
The purpose of the patent term adjustment provision was to guarantee that patent applicants would still have a patent term of at least seventeen years from grant under the twenty-year patent term system.

2) Patent extensions – delays due to regulatory approval

USPTO can restore the term of a patent that is lost due to delays during regulatory approval by Federal Food and Drug Administration (FDA). Patents relating to drug products, medical devices, food additives, and color additives are eligible for patent extension. The maximum of patent term that may be restored is five years.

3) Interim term extensions

If the term of the patent expires before the certificate of extension is given to the application, then the Director extends the term of the patent up to one year under Interim term extension. This extension is only possible if the director feels that the patent should be considered for extension.

Apart from patent term extensions, market exclusivities can be gained separately. Exclusivity gives FDA approved drugs market exclusivity which does not allow the generic competitors to enter into the market till the exclusivity is valid.

Following are the market exclusivities offered by FDA:

1) New Chemical Entity (NCE) exclusivity

NCE exclusivity is awarded for 5 years to NDA applicant who receives the first approval for a drug product. No salt or ester of the novel chemical entity should have ever received FDA approval. During this 5-year period, the FDA is stopped from accepting an Abbreviated New Drug Application (ANDA) for review. The only exception is that if a patent is also listed on the NDA product subject to NCE exclusivity, the FDA may accept an ANDA after 4 of the 5-year period has expired, if the ANDA contains a Paragraph IV certification challenging the patent. NCE exclusivity can be considered as a total exclusivity as generic competitors cannot submit or approve their product while the exclusivity is valid.

2) New Use / New Clinical Studies exclusivity

This kind of exclusivity is granted for a period of three years to NDA holder who applies for new use of approved drug. New clinical studies are to be carried out to get approval from FDA for use of the approved drug for its use for new indication. Exclusivity can be granted for new dosage form (Sustained release dosage form, Controlled release dosage form), a new use or indication, a new salt or ester of a drug product, change in concentration, novel drug delivery etc. The 3-year exclusivity may block FDA approval of a generic version until after the exclusivity expires. It is also possible that the FDA approves generic version if approval does not infringe on the protected change.

3) Orphan Drug exclusivity

Seven-year orphan drug exclusivity is granted to promote research and marketing for the development of drugs to treat rare diseases. US FDA had defined Orphan drug / rare diseases as those diseases affecting 200,000 or fewer patients in the US. This exclusivity period can block the FDA from approving competing generics of a drug product for the orphan use. Applicant may request orphan drug designation for a previously unapproved drug or for an already marketed drug. One or more applicants may receive orphan drug status for the same drug for the same orphan disease.

4) Pediatric exclusivity

Pediatric exclusivity gives an incremental 6 months exclusivity to an existing marketing exclusivity that has been earlier granted or to a patent protection. This type of exclusivity is granted to clinical studies of drugs for pediatric population. This type of exclusivity ensures an incentive for an NDA applicant for the clinical studies carried out specifically for pediatric patients. Products with no patent life or exclusivity remaining cannot qualify for pediatric exclusivity.

Hence, it is seen that various methods are adopted by the innovator companies to extend the term of their patent to extend their monopoly in the filed of pharmaceuticals.