The Hill report (here) that “Sens. Maggie Hassan (D-N.H.) and Mike Braun (R-Ind.) on Wednesday reintroduced legislation intended to close a loophole that drug companies can exploit to block competition, including from lower-cost generic drugs.”  The bill would permit FDA to approve a drug product for a generic immediately if all other approval requirements are met and the only issue “blocking” approval is a patent on a REMS program.  This would effectively eliminate the 30-month stay if a generic made a paragraph IV challenge to the patent covering the innovator’s REMS program. And while the generic company can still be sued, the suit would not impact when the FDA could take action to approve the application.

The broader issue that is being discussed in the industry and FDA, is whether patents on REMS programs, especially computer-based programs, should be listed in the Orange Book. This debate has been brewing for years and now the FDA and Congress are looking at reevaluating what patents can or should be listed under the Drug Price Competition and Patent Term Restoration Act of 1984. FDA has asked for public comment on this and other issues regarding patent listings in the Orange Book, but any resolution including whether there would be a need for a legislative fix for this specific REMs issue is still likely a long way off.

Giving the green light for generic approval prior to resolution of patent litigation under a paragraph IV challenge may help a generic get to market sooner but at what cost?  The FDA does have authority to approve a generic product with a paragraph IV challenge after a 30-month stay if the generic is sued in a timely manner under the Act. However, this 30-month period gives the generic time to litigate the patent or also to evaluate what their chances look like in court prior to deciding whether to commercially market their product prior to a final court decision on the patent.  In some cases, if the generic decides to risk going to market prior to a court decision on the validity of the innovator’s patent and the innovator or patent holder ultimately wins, the generic applicant could be liable for treble damages.  If the sales of the infringing product are substantial, this could be a “bet the company” decision. Allowing approval of the ANDA prior to the 30-month stay gives the generic much more runway to commercialize, but if they lose the case, they may be too far down the runway and crash and burn.

This is a sticky situation and there is always the chance of law of unintended consequences rearing its ugly head when a legislative “fix” to a perceived problem occurs.  So go slow, figure it out, and remember past tinkering with Hatch-Waxman has not always worked out the way the drafters thought!