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Statement of Need: In recent years, FDA has seen new drug application (NDA) applicants submit patent information to FDA shortly before other patents for the drug are to expire. Disputes have arisen whether the later-filed patents are appropriately submitted to FDA. The Federal Trade Commission (FTC) has also asked FDA to clarify whether NDA applicants can or should list various types of patents at FDA. The FTC has also issued a report questioning whether NDA applicants have used later-filed patents to seek unwarranted delays in the approval of generic drugs.

Summary of the Legal Basis: The principal legal authority for this rule is found at sections 505 and 701 of the Federal Food, Drug, and Cosmetic Act (the Act). Section 505(b) of the Act describes the contents of an NDA and 505(b)(2) application, including the patent listing and patent certification requirements. Section 505(j) of the Act describes the contents of an ANDA, including patent certification requirements. Both sections 505(c) and 505(j) of the Act also describe the 30-month stay of approval dates for ANDA's and 505(b)(2) applications if the ANDA or 505(b)(2) application applicant had certified that a patent was invalid or would not be infringed, and a timely suit for patent infringement ensued. Section 701(a) of the Act gives FDA the authority to issue regulations for the efficient enforcement of the Act.

Alternatives: With respect to patent listing, one alternative would be to remain silent and defer to NDA applicants as to the appropriateness of any particular patent. This alternative, however, would not deter the submission of inappropriate patent information and could lead to unnecessary patent disputes between patent owners, NDA holders, and ANDA or 505(b)(2) application applicants. As for the 30-month stay, there are alternative arguments to justify a single 30-month stay, but those alternative theories could also result in no notice to the patent owner or NDA holder and no opportunity for even a single 30-month stay. Such results would be contrary to the Act's desire to balance generic drug approvals against a need to preserve incentives for innovation. Another alternative would be to continue allowing multiple 30-month stays, but this would have the effect of delaying the introduction of generic drugs into the market.

Anticipated Costs and Benefits: The one-year benefits of the regulation will include the increase in revenues to generic firms and the savings to consumers from the earlier availability of less expensive pharmaceuticals. The estimated total one-year benefit is approximately $3.2 billion. Adjusting this benefit to account for the expected increase in baseline pharmaceutical expenditures, the total benefit for the years 2002 through 2011 is expected to be approximately $53.9 billion. Eliminating multiple 30-month stays per ANDA will prevent delays in generic drug competition. Generic drug companies gain through additional sales, and, to the extent that generic prices are lower than innovator prices, consumers benefit from the "price gap." While the quantified benefits do exceed the quantified costs, this rule has the additional important benefit of preserving the balance struck in the Hatch-Waxman amendments.

Risks: The regulation would deter misuse of the patent listing and patent certification process to obtain unwarranted, multiple 30-month delays in the approval of an ANDA or 505(b)(2) application. Court decisions indicate that ANDA applicants and 505(b)(2) applicants have no private right of action to have inappropriate patents removed from FDA's lists, and the FTC report suggests that some patents submitted to FDA have been inappropriately listed.