Pharmaceutical Patent

All patent applications for all industries are reviewed by trained Examiners at the Patent and Trademark Office (PTO) and only approved after the Examiners determine that they meet rigorous requirements for patentability set forth by the patent law. Pharmaceutical Patent expiration dates are firmly set by law and are not extendable beyond their expiration date. The effective pharmaceutical patent life – the time from market entry to patent expiration – is 11.7 years.

An unexpired pharmaceutical patent can be defended because it adheres to the current law. The only time pharmaceutical patent litigation takes place under the Hatch-Waxman Act is when a generic drug manufacturer is attempting to bring its product to market before all of the patents on the branded version of the drug expire. If the patent holder believes that the generic is violating its un-expired patent its only remedy is to sue to enforce the patent – the procedure expressly created by Congress in the Hatch-Waxman Act.

Patent litigation can only take place inside the life of an un-expired pharmaceutical patent. Hatch-Waxman litigation only happens when a generic drug manufacturer attempts to enter the market before the pharmaceutical patent on the brand-name drug expires. If the pharmaceutical patent expires during the course of litigation, the lawsuit ends. A lawsuit is only filed to enforce an un-expired pharmaceutical patent.

FDA reports that of 8259 generic applications filed between 1984 and January 2001, only 6% raised a patent issue, the necessary, but by no means obligatory, condition for pharmaceutical patent litigation. 94 percent, or 7781, of generic drug applications raise no pharmaceutical patent issues, and thus at least 94 percent of generic drug applicants are not involved in Hatch-Waxman pharmaceutical patent litigation.

According to data from IMS HEALTH, prior to the passage of the Hatch-Waxman Act, generics accounted for about 19% of all prescriptions. Today, generics account for nearly half of all prescription drugs dispensed. Wall Street analysts and economists expect the generic share of the market to reach nearly 60 percent by 2005. Previous to passage of the Hatch-Waxman Act, only about one third of top-selling innovator drugs with expired pharmaceutical patent had generic copies, today nearly all top selling drugs with expired pharmaceutical patent have generic competitors. The increased number of generic copies on top-sellers, and managed care's aggressive promotion of generics leads to a substantial erosion of the branded drug's market the day pharmaceutical patent expire or are broken by generic manufacturers.

Recent research by Columbia University economist Frank R. Lichtenberg found that newer drugs save more money than older drugs.  In a 2001 study, he demonstrated that replacing older drugs with newer drugs yields an $18 increase in spending on prescription drugs but reduces non-drug spending by $71.09, resulting in a net savings of $53.09.