Helping Protect US Drug Patents with the Hatch-Waxman Integrity Act

Senator Orrin Hatch has been a central figure in essentially all patent legislation over the past 40 years (he joined the Senate in 1977).  As he nears retirement (Jan 2019), Hatch has proposed one additional change — an amendment to provide pharma with some protection from Inter Partes Review challenges titled the Hatch-Waxman Integrity Act of 2018.

The basics of the amendment is that the results of an IPR/PRG proceeding cannot serve as its Paragraph IV certification that the patent is invalid.  A parallel provision is designed for biologics under the BCPIA.  In addition – as Dan Feigelson explains in the comments – The proposal would also require an ANDA applicant to certify that it will not (and has not) filed an IPR/PRG petition against Orange Book listed patents for the related drug.

In addition, the provision would modify the Securities Exchange Act to make it a manipulative or deceptive trade practice to an IPR petition and short-selling the patent owner’s stock within 90-days (before or after).

More info from the Senator.

33 thoughts on “Helping Protect US Drug Patents with the Hatch-Waxman Integrity Act

  1. 4

    As for vacuous statements…

    in many political contexts where “the ends” and “the means” converge (intentionally).

    Ends do not “converge” with means.

    All that you are (attempting) to do here is kick dust and attempt to obfuscate that the phrase is not only clear, it is clearly paramount when it comes to Ends in the legal arena.

    Even the noblest of Ends simply do not justify a “by any means” mentality. Left or Right – what that leads to is simply E v i 1 in sheep’s clothing. And by Left or Right, this is the type of thing that makes you the Trump of these boards, as you are far more like him and his tactics than anyone else that posts here.

  2. 3

    News flash: The phrase “the ends don’t justify the means” is vacuous in many political contexts where “the ends” and “the means” converge (intentionally).

    For example, a statute that singles out Pharma for an “exception” (e.g., relating some aspect of patent procedure to a special procedure already uniquely associated with Pharma) does so because Pharma has already been deemed to be exceptional. Why is Pharma exceptional? Goodness knows. Online bingo management software and methods for buying bitcoins while driving in a robot car are, objectively, at least as important and fundamental to the well-being of most people as their physical health. So it’s all a huge mystery.

    1. 3.1

      For instance:

      the problem when one engages in Ends-justify-the-means type of thinking (that went into the AIA), is that when the careless means actually bites you in your own backyard,

      Huge difference between “using means to reach an end” (shocking!), on one hand, and “writing a statute (a type of “means”) imperfectly” or “failing to consider all the possible consequences”, on the other hand.

      I know this is super nuanced.

      1. 3.1.1

        or “failing to consider all the possible consequences”, on the other hand.

        I know this is super nuanced

        Nice miss. Have you read the congressman’s bleatings?

        This is NOT “oops, we failed to consider all the possible consequences.”
        This IS “oops, my constituents want to be exempt from what I wanted – and STILL want (just for everyone else).

    2. 3.2

      There is nothing at all vacuous about the phrase, nor its application to patent law.

      What IS vacuous are your replies.

      Here – it is not the exceptionality of Pharma at issue – it is the duplicitous NIMBY effect that has been engendered by a congressperson “fully” supportive of IPRs – except when the rules of those very same IPRs hits his constituents.

      Open your eyes, son.

      1. 3.2.1

        There is nothing at all vacuous about the phrase

        LOL

        It’s one of the most vacuous cliches in the English language.

        1. 3.2.1.1

          Once again, your Accuse Others meme at work, as your replies are easily one of the most vacuous things around.

      2. 3.2.2

        it is the duplicitous NIMBY effect that has been engendered by a congressperson “fully” supportive of IPRs – except when the rules of those very same IPRs hits his constituents.

        You mean Rep u k k k e Orrin Hatch is a hypocrite?

        Oh my goodness that is truly shocking.

        1. 3.2.2.1

          You doing that “one-bucketing” thing again…

  3. 2

    Wait a minute, I thought that IPRs were a “good thing”…

    I thought that not requiring standing was a good thing…

    I thought that helping generics was a good thing…

    Now all of those good things are not good (and not good to only one specific art)…?

    What happened to all that (implicit) understanding that “any means” was OK because the End of “patents that should have never issued” was what the IPR was to take care of…?

    Somehow, now because the “art” is Pharma, those Ends do not suffice?

    (a minimal amount of critical thinking here shows what is really going on: divide and conquer; make it easy for Pharma to not care about the law that is applied to everyone else, and thus remove the [monied] objections that Pharma would have with the enacted means)

    1. 2.1

      …as an example for the less critically minded, the “no standing” aspect provides that “shorting” is possible, as that is entirely legal process in and of itself.

      This bill does NOT provide that shorting and then IPRing is – across the board – a “manipulative or deceptive trade practice,” it is ONLY so for the art of Pharma.

      This is an unjustified – and unjustifiable – carve out. If “shorting” is “bad,” then it is bad for ALL.

      1. 2.1.1

        This is an unjustified – and unjustifiable – carve out. If “shorting” is “bad,” then it is bad for ALL.

        I withdraw this, as now having a copy of the bill, I see that the change to the Sec section of law is made for ALL.

        1. 2.1.1.1

          I withdraw this, as now having a copy of the bill, I see that the change to the Sec section of law is made for ALL.

          Nobody could have predicted that.

          1. 2.1.1.1.1

            LOL – as if you have EVER withdrawn something after finding out on your own that you hade made an error…

            Oh wait, Malcolm is incapable of ever finding out that he has made an error, because in his mind, he is the only one that is correct, and EVERY ONE else is some other “one bucket”



            1. 2.1.1.1.1.1

              Oh, I’ve made all kinds of errors and admitted to them.

              But you gotta admit that the frothy belly flop you made here with respect to the short-selling provision was pretty spectacular. You just about emptied the pool.

              1. 2.1.1.1.1.1.1

                Except not.

                On both accounts.

                But don’t let reality get in your way…

    2. 2.2

      Exactly, Bio already got the special Orange Book provision to get the AIA passed in the first place. Even that is not enough. The AIA, for a startup, has turned an issued patent into a net liability (at anytime, by anyone, you can get sucked into an expensive and risky IPR) in contrast to what was a net positive asset of the company pre-AIA.

      1. 2.2.1

        has turned an issued patent into a net liability

        I have to wonder if those pesky Tax Law scriviners have made the connection and used what you post here as a write-down mechanism…

        Even if not so used, as you implicate, the threat of such losses are undoubtedly real. Are companies complying with other legal requirements in their tax-related filings? Are these types of warnings being supplied in annual reports?

        1. 2.2.1.1

          Interesting point. Also to the point of filing amended returns. Maybe some LES expert can opinion on how it effects the offshore parking of patents and internal license by the internationals – tax planing. That’s patent/tax law 601 for you nubes.

      2. 2.2.2

        “Special OB provision” what doe s that mean? You mean the provision where the government allows your competitor to copy your product design, get government approval, and force you assert your patents to a willful infringer without any compensation?

    3. 2.3

      Your last paragraph above is interesting. Even though it is unlikely to have been intended, it is certainly possible that the unintended consequence of such special interest legislation would be to reduce that part of the important lobbying efforts of that major industry in both Congress and patent organizations which has been in opposition to lobbying efforts of some major software and internet related companies.
      Eliminating IPRs just for drugs and imposing standing requirements that would preclude patent validity challenges by consumer organizations and public interest organizations could of course enable some higher drug costs and consequent increased Medicare and Medicare taxpayer burdens, so this proposed legislation by a departing senator is unlikely to gain sufficient traction in Congress.

      1. 2.3.1

        Even though it is unlikely to have been intended

        You clearly have not been paying attention.

        So while you seem to be agreeing with me, in reality, you are not, and appear to be merely trying some soft spin for damage control.

    4. 2.4

      (implicit) understanding that “any means” was OK

      ROTFLMAO

  4. 1

    Dennis, thanks for posting this.

    You state that, “The basics of the amendment is that the results of an IPR/PRG proceeding cannot serve as its Paragraph IV certification that the patent is invalid.”

    That’s true, and it’s an important step, because the inability to rely on a PTAB finding of invalidity would mean that generic drug companies will still need to rely on court proceedings to prove the invalidity of an Orange Book-listed patent. In cases in which the litigation is instituted by the innovator as part of the Hatch-Waxman process, that litigation would be attended by the standard 30-month stay of approval of the ANDA by the FDA. The alternative will be for generic drug companies to certify that will wait out what would have been the lifetime of the patent, but for the PTAB’s invalidity finding, before launching their drugs.

    But there’s another important prong to the bill that you didn’t mention: if adopted, the amendment would effectively foreclose IPR/PGR challenges from generic drug companies altogether. That’s because the bill will require a party submitting a New Drug Application (NDA) or an Abbreviated New Drug Application (ANDA, the type of application invariably submitted by generic drug companies) to certify that it has not and will not file an IPR/PGR petition against an innovator’s Orange Book-listed patents for that drug.

    So a generic drug company could file an IPR/PGR against an Orange Book-listed patent, but then it would have no way to get its drug approved because it wouldn’t be able to submit an NDA/ANDA containing the necessary certifications.

    It’s a cleverly designed fix to the law of unintended consequences. But what are the odds Congress enacts this legislation before Senator Hatch retires?

    1. 1.1

      It’s a cleverly designed fix to the law of unintended consequences. But what are the odds Congress enacts this legislation before Senator Hatch retires?

      Pharma/Bio vs. the Googleplex lobby death match. I would say close to zero, since the swamp will collect contributions from both sides, while pulling the Hamlet act.

    2. 1.2

      Dan,

      It is even more insidious than iwasthere notes.

      The actual language of the bill (emphasis added) includes:

      ‘‘(ii) in making the certification required
      under subparagraph (A), the applicant is not
      relying in whole or in part on
      any decision
      issued by the Patent Trial and Appeal Board in
      an inter partes review or post-grant review
      under chapter 31 or 32, respectively, of title 35,
      United States Code.’’.

      In other words – even those challenges rightfully brought (and won) by others would be off-limits.

      How “1984” to redefine “integrity” this way, to redefine “competition” this way, to have a sub-statement of purpose of “To promote competition in the market for drugs and biological products by facilitating the timely entry of lower cost generic [] versions…” when what this bill does is the opposite of any and all of those things.

      1. 1.2.1

        I disagree. I see nothing insidious here. What I see is a rollback for pharma patents that relate to FDA-approved drugs to the pre-AIA status.

        To put it as simply as possible: Hatch-Waxman worked. It did a very good (not perfect, but very good) job of balancing the costs of drug innovators in developing new drugs with the need for eventual lower prices for those drugs down the road.

        Then along came the AIA with IPR/PGR and violated the maxim “If it ain’t broke, don’t fix it” by skewing the balance of factors in a way that reduces incentives to invest in new drug development.

        Senator Hatch now proposes a re-set. I think that’s a good thing.

        1. 1.2.1.1

          The insidiousness comes from the fact that “patents that should have never been issued in the first place” is OFF LIMITS even to those who did not bring the IPR action – but this is ONLY benefiting Pharma.

          This has nothing to do with whether or not Hatch-Waxman worked.

          This has everything to do with a special – and undeserved carve-out.

          Part and parcel of the problem when one engages in Ends-justify-the-means type of thinking (that went into the AIA), is that when the careless means actually bites you in your own backyard, the NIMBY “answer” of special carve-out defeats the mantra engaged in passing the bill in the first place.

          1. 1.2.1.1.1

            A good clear rebuttal anon.
            Even more so considering that pharma patent claims have had the least adverse IPR decisions of any technology – reportedly nearly as low a % of adverse decisions as they would in litigation.

          2. 1.2.1.1.2

            “This has everything to do with a special – and undeserved carve-out.” I agree wholeheartedly.

            In fact, why don’t we eliminate all carve-outs for pharma? Why don’t we get rid of H-W for generics (including the Bolar exemption) and let pharma assert its patents against their competitors just non-pharma companies do?

          3. 1.2.1.1.3

            In a nut shell people if Pharma/Bio gets this carve out, you can forget ever seeing PTAB reform – it will remain a death panel for everyone else. Game over if you lose the biggest pro-patent industry working over the Hill. It’s the only counter balance to the network effect companies anti-patent effort on the Hill.

        2. 1.2.1.2

          [W]hat are the odds Congress enacts this legislation before Senator Hatch retires?

          Yeah, this is the really apt question. My Bayesian priors are that this Congress does not pass anything unless there is some inescapable enforcement mechanism (e.g. debt ceiling extension, budget appropriations, etc). Obviously that is not strictly true, so when I predict that nothing will get passed, I am occasionally wrong. I am right about the prediction “this will not pass” much more often than I am wrong, however. Therefore, I predict that this will not pass before Sen. Hatch retires.

          [A]long came the AIA with IPR/PGR and… skew[ed] the balance of factors in a way that reduces incentives to invest in new drug development. Senator Hatch now proposes a re-set. I think that’s a good thing.

          I take no exception to Sen. Hatch’s proposed bill, but I am going to push back against the idea that the AIA had much of any effect on Hatch-Waxman litigation. Chemical patents as a whole account for only about a sixth of all IPRs filed. Obviously, pharma is only a subset of those chemical patents, so pharma is even less than a sixth. That subset is, in turn, disproportionately unlikely to be instituted. In short, just by the numbers, IPRs have had fairly little effect on the pharma industry, so a bill to undue the effect of IPRs on the pharma industry cannot have much practical effect in the end.

          Moreover, a substantial chunk of those few IPRs that have been filed against pharma patents are brought by Kyle Bass’ hedge fund. Bass, of course, does not make his money by going long on generics, but rather by going short on innovator companies. Nothing about this proposed legislation would affect a business model built on shorting innovators’ stocks.

          In the end, I expect that a world in which Sen. Hatch’s bill were to pass would not look appreciably different from a world in which the bill does not pass.

      2. 1.2.2

        Yes that bill language would preclude any reliance on an IPR which had a final decision affirmed by the Fed. Cir. and thus the subject claims requisitely cancelled from the patent and being no longer even in existence!
        [Draft legislation drafted by a patent-law-challenged lobbyist?]

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