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Volumn 77, Issue 3, 2011, Pages 947-989

Earning exclusivity: Generic drug incentives and the Hatch-Waxman Act

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EID: 84855401729     PISSN: 00036056     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Conference Paper
Times cited : (50)

References (128)
  • 1
    • 84857181805 scopus 로고    scopus 로고
    • (Fed. Cir.), (point of 180-day period is "to incentivize ANDA filers to challenge the validity of listed patents or design around those patents as early as possible")
    • Caraco Pharm. Labs., Ltd. v. Forest Labs., Ltd., 527 F.3d 1278, 1283 (Fed. Cir. 2008) (point of 180-day period is "to incentivize ANDA filers to challenge the validity of listed patents or design around those patents as early as possible").
    • (2008) Caraco Pharm. Labs., Ltd. v. Forest Labs., Ltd., 527 F.3d , vol.1278 , pp. 1283
  • 2
    • 84857169670 scopus 로고    scopus 로고
    • (D.C. Cir.), (noting that Congress "clearly" "intended to create an incentive to challenge branddrug patents" by means of the 180-day period)
    • Teva Pharm. Indus, v. Crawford, 410 F.3d 51, 53-54 (D.C. Cir. 2005) (noting that Congress "clearly" "intended to create an incentive to challenge branddrug patents" by means of the 180-day period).
    • (2005) Teva Pharm. Indus, v. Crawford, 410 F.3d , vol.51 , pp. 53-54
  • 6
    • 84857176255 scopus 로고
    • (emphasizing the "public interest in permitting full and free competition in the use of ideas," and holding that a licensee was not estopped from attacking patent validity)
    • See, e.g., Lear, Inc. v. Adkins, 395 U.S. 653, 670 (1969) (emphasizing the "public interest in permitting full and free competition in the use of ideas," and holding that a licensee was not estopped from attacking patent validity).
    • (1969) Lear, Inc. v. Adkins, 395 U.S. , vol.653 , pp. 670
  • 7
    • 84857146726 scopus 로고
    • (2d Cir.), (quoting Hand, J., Bresnick v. U.S. Vitamin Corp., 139 F.2d 239, 242 (2d Cir. 1943)) (noting the potential "scarecrow" effect of an invalid patent, even where not litigated, on potential entrants)
    • Wembley, Inc. v. Superba Cravats, Inc., 315 F.2d 87, 89 (2d Cir. 1963) (quoting Hand, J., Bresnick v. U.S. Vitamin Corp., 139 F.2d 239, 242 (2d Cir. 1943)) (noting the potential "scarecrow" effect of an invalid patent, even where not litigated, on potential entrants).
    • (1963) Wembley, Inc. v. Superba Cravats, Inc., 315 F.2d , vol.87 , pp. 89
  • 16
    • 84857157523 scopus 로고    scopus 로고
    • (Morgan Stanley Research Report), Nonetheless, challenging patents frequently pays quite handsomely, either in profits from sales in the market or in the form of reverse payments to stay out of the market
    • Marc Goodman et al., Quantifying the Impact from Authorized Generics 9 (Morgan Stanley Research Report 2004). Nonetheless, challenging patents frequently pays quite handsomely, either in profits from sales in the market or in the form of reverse payments to stay out of the market.
    • (2004) Quantifying the Impact from Authorized Generics , vol.9
    • Goodman, M.1
  • 21
    • 0036864474 scopus 로고    scopus 로고
    • (observing that brand-name drug makers sometimes raise prices upon generic entry, relying on the brand to drive a few sales at the higher price)
    • Cf. Gideon Parchomovsky & Peter Siegelman, Towards an Integrated Theory of Intellectual Property, 88 VA. L. REV. 1455, 1516-1517 (2002) (observing that brand-name drug makers sometimes raise prices upon generic entry, relying on the brand to drive a few sales at the higher price).
    • (2002) Towards an Integrated Theory of Intellectual Property, 88 VA. L. REV. , vol.1455 , pp. 1516-1517
    • Parchomovsky, G.1    Siegelman, P.2
  • 26
    • 84857146776 scopus 로고    scopus 로고
    • Apr. 17, (reporting that Barr's generic version of Prozac had revenue of $366 million during the 180-day period, and $4 million in subsequent six months)
    • Gardiner Harris & Joanna Slater, Bitter Pills: Drug Makers See "Branded Generics" Eating into Profits, WALL ST. J., Apr. 17, 2003, at Al (reporting that Barr's generic version of Prozac had revenue of $366 million during the 180-day period, and $4 million in subsequent six months).
    • (2003) Bitter Pills: Drug Makers See "Branded Generics" Eating into Profits, WALL ST. J. , vol.A1
    • Harris, G.1    Slater, J.2
  • 28
    • 84857157526 scopus 로고    scopus 로고
    • Dec. 27, noting, at the end of the exclusivity period, that 20-milligram Zocor sold for $4.53 per pill, compared to $4.16 for Teva's generic version
    • Shannon Pettypiece & Justin Blum, Merck's Zocor Gets Additional Generic Competition, BLOOMBERG NEWS, Dec. 27, 2006 (noting, at the end of the exclusivity period, that 20-milligram Zocor sold for $4.53 per pill, compared to $4.16 for Teva's generic version).
    • (2006) Merck's Zocor Gets Additional Generic Competition, BLOOMBERG NEWS
    • Pettypiece, S.1    Blum, J.2
  • 30
    • 84857176260 scopus 로고    scopus 로고
    • [hereinafter GENERIC DRUG ENTRY] (reporting three awards between 1984 and 1992), available at
    • See also FED. TRADE COMM'N, GENERIC DRUG ENTRY PRIOR TO PATENT EXPIRATION vi (2002) [hereinafter GENERIC DRUG ENTRY] (reporting three awards between 1984 and 1992), available at http://www.ftc.gov/os/2002/07/genericdrugstudy.pdf.
    • (2002) Fed. Trade Comm'n, Generic Drug Entry Prior to Patent Expiration , vol.6
  • 32
    • 84857176259 scopus 로고    scopus 로고
    • Ctr. for Drug Evaluation & Research, FDA, Guidance for Industry: 180-Day Generic Drug Exclusivity Under the Hatch-Waxman Amendments to the Federal Food, Drug, and Cosmetic Act 4, (stating that "FDA will not enforce the 'successful defense' provisions" and "intends to formally remove" them from Code of Federal Regulations), available at
    • Ctr. for Drug Evaluation & Research, FDA, Guidance for Industry: 180-Day Generic Drug Exclusivity Under the Hatch-Waxman Amendments to the Federal Food, Drug, and Cosmetic Act 4 (1998) (stating that "FDA will not enforce the 'successful defense' provisions" and "intends to formally remove" them from Code of Federal Regulations), available at http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/ Guidances/ucm079342.pdf.
    • (1998)
  • 68
    • 84857176272 scopus 로고    scopus 로고
    • (D.N.J.), (generic firm lacks standing as to some patents), order vacated on reconsideration, 2009 WL 3241699 (D.N.J. 2009) (denying dismissal)
    • See also Dr. Reddy's Labs., Ltd. v. AstraZeneca AB, No. 08-2496, 2008 WL 4056533 (D.N.J. 2008) (generic firm lacks standing as to some patents), order vacated on reconsideration, 2009 WL 3241699 (D.N.J. 2009) (denying dismissal).
    • (2008) Dr. Reddy's Labs., Ltd. v. AstraZeneca AB, No. 08-2496, 2008 WL 4056533
  • 76
    • 84857157550 scopus 로고    scopus 로고
    • (E.D. Pa.), (denying motion to dismiss, in part, because plaintiffs alleged that agreement created a bottleneck that blocked subsequent filers)
    • See, e.g., King Drug Co. of Florence, Inc. v. Cephalon, Inc., 702 F. Supp. 2d 514, 535-536 (E.D. Pa. 2010) (denying motion to dismiss, in part, because plaintiffs alleged that agreement created a bottleneck that blocked subsequent filers).
    • (2010) King Drug Co. of Florence, Inc. v. Cephalon, Inc., 702 F. Supp. 2d , vol.514 , pp. 535-536
  • 82
    • 84857146753 scopus 로고    scopus 로고
    • (SSRN Working Paper Series), available at
    • For a proposal along these lines, see Gregory Dolin, Reverse Settlements as Patent Invalidity Signals (SSRN Working Paper Series, 2010), available at http://ssrn.com/abstract=1675947.
    • (2010) Reverse Settlements as Patent Invalidity Signals
    • Dolin, G.1
  • 86
    • 84857176279 scopus 로고
    • FDA, [hereinafter 1988 FDA Guidance] (taking view that Congress intended 180-day provision to be limited to instances of successful litigation), available at
    • See, e.g., FDA, Guidance for Industry 1 (1988) [hereinafter 1988 FDA Guidance] (taking view that Congress intended 180-day provision to be limited to instances of successful litigation), available at http://www.fda.gov/downloads/ Drugs/GuidanceComplianceRegulatoryInformation/Guidances/ucm075007.pdf.
    • (1988) Guidance for Industry , vol.1
  • 87
    • 84857169648 scopus 로고    scopus 로고
    • Letter from Gary Buehler, Dir. of Office of Generic Drugs, FDA, to [Unnamed] ANDA Applicant (Oct. 28, 2008) (interpreting "lawfully maintains" in the course of determining 180- day exclusivity for generic version of Cosopt), available at
    • Letter from Gary Buehler, Dir. of Office of Generic Drugs, FDA, to [Unnamed] ANDA Applicant (Oct. 28, 2008) (interpreting "lawfully maintains" in the course of determining 180- day exclusivity for generic version of Cosopt), available at http://www.fda.gov/downloads/AboutFDA/ CentersOffices/CenterforDrugEvaluationandResearch/ucml19602.pdf.
  • 89
    • 80955123688 scopus 로고    scopus 로고
    • The hatch-waxman act
    • (Practising Law Institute), (noting this "conceivablfe]" interpretation)
    • See, e.g., David Bickart, The Hatch-Waxman Act, in DEVELOPMENTS IN PHARMACEUTICAL AND BIOTECH PATENT LAW 205, 274 (Practising Law Institute 2008) (noting this "conceivablfe]" interpretation).
    • (2008) Developments in Pharmaceutical and Biotech Patent Law , vol.205 , pp. 274
    • Bickart, D.1
  • 91
    • 84857157563 scopus 로고    scopus 로고
    • Letter from Gary J. Buehler, Dir., ( Jan. 17), available at
    • See Letter from Gary J. Buehler, Dir., Office of Generic Drugs, FDA, to Marc A. Goshko, Executive Dir., Teva N. Am. 5 (Jan. 17, 2008), available at http://www.fda.gov/downloads/Drugs/DevelopmentApprovalProcess/ HowDrugsareDevelopedandApproved/ApprovalApplications/ AbbreviatedNewDrugApplicationANDAGenerics/UCM151237.pdf.
    • (2008) Office of Generic Drugs, FDA, to Marc A. Goshko, Executive Dir., Teva N. Am. , vol.5
  • 92
    • 84857169665 scopus 로고    scopus 로고
    • 14.11, (arguing that the provision, "while verbose, has no teeth because . . . the forfeit will only occur after a ridiculously long period of time")
    • See SHASHANK UPADHYE, GENERIC PHARMACEUTICAL PATENT AND F D A LAW § 14.11 (2010) (arguing that the provision, "while verbose, has no teeth because . . . the forfeit will only occur after a ridiculously long period of time").
    • (2010) Generic Pharmaceutical Patent and FDA Law
    • Upadhye, S.1
  • 95
    • 84857175164 scopus 로고
    • (proposing a set of threshold filters to minimize false positives, on the grounds that the cost of condemning a beneficial practice is much higher than the harm of allowing an anticompetitive practice to continue)
    • See Frank H. Easterbrook, The Limits of Antitrust, 63 TEX. L. REV. 1 (1984) (proposing a set of threshold filters to minimize false positives, on the grounds that the cost of condemning a beneficial practice is much higher than the harm of allowing an anticompetitive practice to continue).
    • (1984) The Limits of Antitrust, 63 TEX. L. REV. , pp. 1
    • Easterbrook, F.H.1
  • 97
    • 84857157565 scopus 로고    scopus 로고
    • (overruling precedent to hold that the per se rule is inapplicable to vertical agreements to fix minimum resale prices)
    • See Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. 877, 907 (2007) (overruling precedent to hold that the per se rule is inapplicable to vertical agreements to fix minimum resale prices).
    • (2007) Leegin Creative Leather Prods., Inc. v. PSKS, Inc., 551 U.S. , vol.877 , pp. 907
  • 98
    • 84857146771 scopus 로고    scopus 로고
    • (requiring proof of market power in patent tying cases)
    • Tool Works, Inc. v. Indep. Ink, Inc., 547 U.S. 28, 42-43 (2006) (requiring proof of market power in patent tying cases).
    • (2006) Tool Works Inc. v. Indep. Ink, Inc., 547 U.S. , vol.28 , pp. 42-43
  • 99
    • 84857153884 scopus 로고    scopus 로고
    • (declining to apply the per se rule to a boycott case involving only a single buyer)
    • NYNEX Corp. v. Discon, Inc., 525 U.S. 128, 135 (1998) (declining to apply the per se rule to a boycott case involving only a single buyer).
    • (1998) NYNEX Corp. v. Discon, Inc., 525 U.S. , vol.128 , pp. 135
  • 100
    • 84857157566 scopus 로고    scopus 로고
    • (overturning precedent to remove vertical agreements on maximum prices from the scope of the per se rule)
    • State Oil Co. v. Khan, 522 U.S. 3, 18 (1997) (overturning precedent to remove vertical agreements on maximum prices from the scope of the per se rule).
    • (1997) State Oil Co. v. Khan, 522 U.S. , vol.3 , pp. 18
  • 101
    • 84857176293 scopus 로고
    • (holding that the per se rule does not apply to non-price-related forms of vertical agreement)
    • Bus. Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. 717, 735-736 (1988) (holding that the per se rule does not apply to non-price-related forms of vertical agreement).
    • (1988) Bus. Elecs. Corp. v. Sharp Elecs. Corp., 485 U.S. , vol.717 , pp. 735-736
  • 102
    • 84857169667 scopus 로고    scopus 로고
    • (determining that a joint venture that set the prices its members would charge was not per se illegal)
    • See Texaco, Inc. v. Dagher, 547 U.S. 1, 5-6 (2006) (determining that a joint venture that set the prices its members would charge was not per se illegal).
    • (2006) Texaco Inc. v. Dagher, 547 U.S. , vol.1 , pp. 5-6
  • 103
    • 84857174846 scopus 로고
    • (holding that an act of expulsion from a wholesale cooperative does not fall under the per se rule)
    • Nw. Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co., 472 U.S. 284, 298 (1985) (holding that an act of expulsion from a wholesale cooperative does not fall under the per se rule).
    • (1985) Nw. Wholesale Stationers Inc. v. Pac. Stationery & Printing Co., 472 U.S. , vol.284 , pp. 298
  • 104
    • 84857146775 scopus 로고
    • (refusing to apply the per se rule to the NCAA's footballtelevising plan because horizontal restraints were necessary for the product to be available at all)
    • NCAA v. of Regents of Univ. of Okla., 468 U.S. 85, 100-01 (1984) (refusing to apply the per se rule to the NCAA's footballtelevising plan because horizontal restraints were necessary for the product to be available at all).
    • (1984) NCAA v. of Regents of Univ. of Okla., 468 U.S. , vol.85 , pp. 100-101
  • 105
    • 84857169669 scopus 로고
    • (holding that the per se rule should not be used when analyzing blanket licenses issued by performing rights organizations)
    • Broad. Music, Inc. v. CBS, Inc., 441 U.S. 1, 7 (1979) (holding that the per se rule should not be used when analyzing blanket licenses issued by performing rights organizations).
    • (1979) Broad. Music, Inc. v. CBS, Inc., 441 U.S. , vol.1 , pp. 7
  • 106
    • 84857170088 scopus 로고    scopus 로고
    • (imposing a heightened pleading requirement on a plaintiff attempting to use parallel conduct as the initial basis for a claim of anticompetitive conspiracy)
    • See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007) (imposing a heightened pleading requirement on a plaintiff attempting to use parallel conduct as the initial basis for a claim of anticompetitive conspiracy).
    • (2007) Bell Atl. Corp. v. Twombly, 550 U.S. , vol.544 , pp. 570
  • 107
    • 84857180214 scopus 로고
    • (requiring more direct evidence for a conspiracy claim to survive summary judgment, including evidence showing a rational motive to conspire)
    • Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 595 (1986) (requiring more direct evidence for a conspiracy claim to survive summary judgment, including evidence showing a rational motive to conspire).
    • (1986) Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. , vol.574 , pp. 595
  • 108
    • 84857151711 scopus 로고
    • (holding that a conspiracy case must be supported by evidence that tends to exclude the possibility of independent action and indicates a conscious commitment to an unlawful common scheme)
    • Monsanto Co. v. Spray- Rite Serv. Corp., 465 U.S. 752,764 (1984) (holding that a conspiracy case must be supported by evidence that tends to exclude the possibility of independent action and indicates a conscious commitment to an unlawful common scheme).
    • (1984) Monsanto Co. v. Spray- Rite Serv. Corp., 465 U.S. , vol.752 , pp. 764
  • 109
    • 84857172774 scopus 로고
    • (requiring proof of below-cost pricing and probability of recoupment in predatory pricing claims)
    • Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. 209, 222-27 (1993) (requiring proof of below-cost pricing and probability of recoupment in predatory pricing claims).
    • (1993) Brooke Group Ltd. v. Brown & Williamson Tobacco Corp., 509 U.S. , vol.209 , pp. 222-227
  • 110
    • 84857172461 scopus 로고    scopus 로고
    • (holding that the stringent standard for predatory pricing also applies to predatory bidding claims
    • see also Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., Inc., 549 U.S. 312, 326 (2007) (holding that the stringent standard for predatory pricing also applies to predatory bidding claims).
    • (2007) Weyerhaeuser Co. v. Ross-Simmons Hardwood Lumber Co., Inc., 549 U.S. , vol.312 , pp. 326
  • 111
  • 112
    • 84857181934 scopus 로고    scopus 로고
    • (contending that the rule of reason has become "reinvigorated" in recent years, leading to more wins for plaintiffs)
    • But see Daniel A. Crane, Rules Versus Standards in Antitrust Adjudication, 64 WASH. & LEE L. REV. 49, 65 (2007) (contending that the rule of reason has become "reinvigorated" in recent years, leading to more wins for plaintiffs).
    • (2007) Rules Versus Standards in Antitrust Adjudication, 64 WASH. & LEE L. REV. , vol.49 , pp. 65
    • Crane, D.A.1
  • 113
    • 84857179188 scopus 로고
    • (holding that antitrust plaintiffs must prove that their injury resulted from harm to the competitive process)
    • See Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. 328, 3 4 1 ^ 5 (1990) (holding that antitrust plaintiffs must prove that their injury resulted from harm to the competitive process).
    • (1990) Atl. Richfield Co. v. USA Petroleum Co., 495 U.S. , vol.328 , pp. 341-345
  • 114
    • 84857180970 scopus 로고
    • ("Plaintiffs must prove antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful.")
    • Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. 477, 489 (1977) ("Plaintiffs must prove antitrust injury, which is to say injury of the type the antitrust laws were intended to prevent and that flows from that which makes defendants' acts unlawful.").
    • (1977) Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., 429 U.S. , vol.477 , pp. 489
  • 118
    • 0346226402 scopus 로고    scopus 로고
    • ("While the FTC cannot afford compensation to the private parties favored by non-Chicagoans, it may be more likely than the current federal judiciary to prohibit the practices that concern Chicago's critics.")
    • see Thomas C. Arthur, A Workable Rule of Reason: A Less Ambitious Antitrust Role for the Federal Courts, 68 ANTITRUST L.J. 337, 384-85 n.285 (2000) ("While the FTC cannot afford compensation to the private parties favored by non-Chicagoans, it may be more likely than the current federal judiciary to prohibit the practices that concern Chicago's critics.").
    • (2000) A Workable Rule of Reason: A Less Ambitious Antitrust Role for the Federal Courts, 68 ANTITRUST L.J. , vol.337 , Issue.285 , pp. 384-385
    • Arthur, T.C.1
  • 126
    • 84857157568 scopus 로고    scopus 로고
    • (E.D. Pa.), (noting such clauses in settlements between Cephalon and four generic firms)
    • See, e.g., King Drug Co. of Florence, Inc. v. Cephalon, Inc., 702 F. Supp. 2d 514, 532-33 (E.D. Pa. 2010) (noting such clauses in settlements between Cephalon and four generic firms).
    • (2010) King Drug Co. of Florence, Inc. v. Cephalon, Inc., 702 F. Supp. 2d , vol.514 , pp. 532-533
  • 127
    • 0023676438 scopus 로고
    • (article by FDA official describing an early controversy involving the exclusivity period, and noting that "[t]his section has not been highlighted in any speeches or guidance letters because the agency did not expect it to be of much significance")
    • See, e.g., James C. Morrison, Update on the Waxman-Hatch Amendment Implementation, 43 FOOD DRUG & COSMETIC L.J. 553, 554 (1988) (article by FDA official describing an early controversy involving the exclusivity period, and noting that "[t]his section has not been highlighted in any speeches or guidance letters because the agency did not expect it to be of much significance").
    • (1988) Update on the Waxman-Hatch Amendment Implementation, 43 FOOD DRUG & COSMETIC L.J. , vol.553 , pp. 554
    • Morrison, J.C.1


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