Marketing Exclusivity in US

An innovator pharma company invests millions of dollars for the development and placing the new lifesaving medicine into the market. By provide the exclusivity to innovator for specified duration in the market governments encourage the research and development in pharmaceutical at the same time approving the lower cost generic for the same medicine after expiration of the exclusivity.

Under the article 39.3 of TRIPS Agreement, WTO Members States requires to protect pharmaceutical test data but only undisclosed test data originated from new chemical entities and that required considerable effort to generate.

Before 1984 in the United States pharmaceutical test data was protected as a trade Secret. The basis for protecting trade secrets is unfair competition. There was no legal prohibition against relying upon published data to establish safety and efficacy of drugs.

Under the current US exclusivity approach, generic drug manufacturers and national drug regulatory authorities cannot rely upon the originator’s test data to approve generic applications during a pre-determined period of time.

The current U.S. data exclusivity regulations are quite complex and co-exist with a number of other non-patent provisions that extend marketing exclusivities, including:

1. New Drug Product exclusivity

2. Supplementary product exclusivity

3. Orphan drug exclusivity

4. Paediatric drug exclusivity

5. Generic drug exclusivity

6. Rx to Over the counter switch

7. Patent term extension

All the above exclusivity is discussed in below:

1. A 5 year period of data exclusivity from the date of the FDA approval is granted to new drug products containing new chemical entities. The main condition is that the approved new drug application must contain a new active ingredient that is a New Chemical Entity or new active moiety, never approved previously by the FDA alone or in combination. The effect of this exclusivity is that no ANDA or 505(b)(2) applications are not be submitted during the 5 year exclusivity period.

There is an exception: the five-year period may be reduced to 4 years if the generic application contains a certification of patent invalidity or noninfringement (Paragraph IV Certification).

2. A 3 year period of marketing exclusivity from the date of the FDA approval is granted to new uses or indications of drug products containing an active moiety that has been previously approved, when the application contains new clinical investigations (other than bioavailability studies) which were essential for the approval of the new drug application or supplement. Contrary to the 5 year exclusivity, this three-year exclusivity allows the FDA to receive and review ANDA or 505(b)(2) applications before it has expired. The FDA can even grant tentative approval, but the approval becomes effective only after 3 year period has elapsed. The second applicant can thus market its product immediately following expiry of the three-year exclusivity.

3. A 7 years of exclusivity is granted to drugs or biologics intended to treat rare or orphan diseases or conditions which has the disease prevalence of <200,000 cases per year in US. This exclusivity prevents approval of another version of the same drug for the same indication for 7 years called as Orphan drug exclusivity.

4. Pediatric exclusivity or extended exclusivity of 6 months is granted in case where Sponsor conducts FDA requested pediatric studies. This exclusivity extends any applicable patent or regulatory exclusivity by an additional 6 months. Two separate 6 month extensions are possible. Pediatric studies can also support 3 year exclusivity.

5. Under the Drug price competition and patent term restoration act 1984 (Hatch Waxman Act) 180 days of marketing exclusivity is grated to the first application contains a certification of patent invalidity or noninfringement (Paragraph IV Certification).

6. The USPTO grants patent extensions to compensate for delays in USPTO examinations and prosecution that extend past three years. Thus the average 1.4 years past the three year mark during prosecution may be tacked onto the 20 year patent term. The Hatch Waxman act provides a maximum 5 year extension, and is limited to a 14 year term from the time of FDA approval. The calculation of extension is complex and depends on patent prosecution and approval factors.