© 2008 Dechert LLP Pharma v. Pharma or Pharma & Pharma: The Legal Interface Between the Makers of Original and Copied Versions of Medicines AIPLA Antitrust, Biotechnology and Chemical Practice Committees October 23, 2008 Innovators, Generic Drug Makers, Exclusivity Provisions, Antitrust Prohibitions, New Biologics Regulatory Pathways: Policy Alternatives for Navigating the Maze

22 What is a “generic drug” and what makes generic drug competition unique? What is a “generic drug” and how does it get to market? –ANDAs, bioequivalence, and substitutability. How does generic drug competition differ from other types of competition? –Pricing differences after generic launch. –Market share changes. –Residual value of trademarks & goodwill. –Role of third-party payors in healthcare.

33 Will “follow-on biologics” (FOBs) differ from “generic drugs,” if Congress authorizes them? Why might the FDA approval pathway for biologics differ from the Hatch-Waxman (H-W) pathway for drugs? –Bioequivalence for drugs v. interchangeability for biologics. –Data package needed for follow-on products. –Would a standard less than interchangeability suffice? Should a law today account for new technology developed in the future? –Explicit statutory standards vs. FDA regulatory flexibility. –What will change by 2020? 2030?

44 FDA approval of full NDAs and Abbreviated NDAs (ANDAs): Non-patent “exclusivity” Key provisions that delay FDA approvals: –Orphan drug: First NDA approval for an “orphan indication” bars approval of the same drug for the indication for 7 years. –Pediatric: All patent or non-patent exclusivity periods that otherwise exist are extended for a further 6 months. –ANDA moratorium: No ANDA can be filed during the 4-year period after the NDA approval for an NCE drug. –Linkage stay: If a patent challenge is made in an ANDA and a lawsuit filed within 45 days, the ANDA approval is stayed for up 30 months if needed to resolve infringement issues. –First-filing generic: No other ANDA can be approved until 180 days after the first-filing generic company starts marketing.

55 Would H-W exclusivity, linkage provisions provide the best model for FOBs? Has non-patent exclusivity for drugs under Hatch- Waxman worked well enough to be a model? –Data package exclusivity: ANDA moratorium periods. –Linkage exclusivity: 30-month litigation stays. What other options might Congress consider? –Eliminate data & linkage exclusivity: depend only on patents. –14+ years of data exclusivity, tied to H-W patent term restoration cap. Should non-patent exclusivity period under H-W for small molecules be re-visited?

66 Should generic/FOB manufacturers have registration exclusivity periods? How does generic/FOB exclusivity registration differ from data package exclusivity? –What policy goals should registration exclusivity achieve? –What problems does Hatch-Waxman 180-day exclusivity create? How would elimination of market exclusivity change generic business models? –Would 14+ years of DPE change the equation?

77 What are “authorized generics”; why do they exist; and what policy issues do they raise? What is an “authorized generic”? –H-W loopholes; successful defense, failure-to-sue. What are the antitrust and policy issues with authorized generics? –Does generic exclusivity provide an incentive or disincentive to challenge innovator patents? –What if generic exclusivity were abolished? –Is the FTC correct that an exclusive authorized generic is an illegal “reverse payment”?

88 Should H-W patent settlements be treated differently from other civil litigation resolution? Should some line be drawn between an acceptable value to the generic company and an anticompetitive “reverse payment”? –OK, but only if anticompetitive effect operates within the scope of the patent? –OK, but only if “value” produces a pro-competitive effect in the market affected by the settlement? –OK, but only if payment doesn’t exceed reasonable litigation costs? –OK, but only if value to the generic company does not exceed what the generic would have received on entry?

9 Should there be a prohibition on “side deals”? OK, if procompetitive in the relevant market –Example: settlement of foreign patent dispute with early entry OK, but only at full value (no subsidy to the generic)? Not OK: Illegal if it provides some value to the generic and would not have been done “but for” the settlement? –See FTC Cephalon complaint