The Hatch-Waxman Act (HWA) defines a package of market exclusivities intended both to spur innovators and to incentivize commercialization of less costly generic drugs. Although 20 years old, HWA continues to spawn issues involving huge stakes. Corporate counsel advising drug/ biotech companies should be aware of cutting-edge HWA issues, which can potentially affect acquisitions, licensing arrangements and product development.
Illustrative of creative HWA lawyering is the "authorized generics" route, whereby an innovator starts its own generic company before other generics can enter the market, in order to capture early market share. This can have an enormous financial impact on a generic challenger poised to enter the market with a 180-day exclusivity, ceded by HWA to the first entrant.
On the generics side, the tactic of "multidistrict" litigation transfers may reduce delays in HWA-related litigation. Also, generics companies are increasingly willing to launch "at risk," after a 30-month stay imposed by HWA on FDA approval, even if the related litigation is unresolved.
There is no regulatory scheme, à la Hatch- Waxman, for drugs produced biologically ("biologics"). But Congress is under pressure to create a "son of Hatch-Waxman" for biologics, given their high cost and the billions of dollars in annual sales that go off-patent in this decade. How biologics should be handled turns on whether a "follow-on" biologic must be identical or only "similar" (and, if so, how similar) to a previously approved, branded biologic. A requirement for identity will discourage follow-on biologics manufacturing.
Understanding these issues will help corporate counsel to identify potential strategies early.
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