Chapter 2 - Patent Protection and Drug Development Strategies


    Senators Orrin Hatch and Henry Waxman who introduced the Acts to encourage generic drug price competition


    Drug patents are legal devices that grant inventors market exclusivity over their drug product or device.  Patent holders have a huge economic incentive to hold onto patents because this provides them with monopoly over their inventions.  The entities that file patents require this in order to recoup the huge amounts of time and capital to market a drug and to invest in innovative new therapies for a pipeline.  Drug patents typically last for 20 years from the date of filing to the patent office. 

    Typically, the process for obtaining a patent goes like this:  A person or company files their invention to the U.S. Patent and Trademark Office (USPTO).  The inventor must file as soon as possible in order to claim rights to that invention, lest a competitor nabs that claim (which happens more often in science than one would expect).  The patent filer usually asks a registered patent attorney to file a utility patent application with the USPTO.  An examiner at the USPTO then performs a prior art search to determine whether the patent satisfies legal requirements for patentability.  The examiner then sends an “office action” to the applicant asking the applicant to amend any issues with the patent.  The applicant must respond by correcting the patent to prevent a rejection.  This process goes back and forth a few times, a bit like submitting a peer review for a manuscript to journal editors.  Once the patent is deemed eligible, the examiner issues a “Notice of Allowance”.  Following the issue of the patent, the applicant can exclude others from making, selling the claimed invention for 20 years from the date it was filed.  Patent fees must then be paid at year 3.5, 7.5 and 11.5 years.

    Timeline for Patent and Product Approval / Profit Maximizing Options:

    After the patent expires, other companies can submit abbreviated new drug applications (ANDAs) to the FDA for generic drugs - drugs with therapeutically equivalent safety and effectiveness as the original brand-name drug but which are cheaper.  The Hatch-Waxman Amendments to the FD&C Act were introduced in 1984 to ensure that brand-name drug manufacturers could have a fruitful patent protection period and to ensure that consumers would eventually benefit from lower-priced generic versions of the innovative drugs.  However, companies often see the 20-year patent cliff as an obstacle since they have to make as much money as possible from their brand-name drug to cover the costs of development.

    In December 2014 Senator Orrin Hatch (R-UT) introduced the Dormant Therapies Act.  This act was intended to "remove the 'ticking patent clock' that forces companies to prioritize research based on which drugs can be marketed more quickly.  Then in 2015, the 21st Century Cures Act was released which contained a new provision in its Subtitle M, Title I.  Subtitle M creates a guaranteed 15-year "protection period" for new drugs and biologicals approved for "dormant therapies" (as opposed to the current 5 years for new drugs).  Dormant therapies is defined as any medical research being done to treat "unmet medical needs".  Any drug that falls under this protection would have an extended period of exclusivity, rendering the sponsor immune from competition of any ANDAs or new NDAs and BLAs for drugs which contain "forms of the active moiety of the dormant therapy and highly similar active moieties".

    One reading of the provisions of Subtitle M statutory text could be that any old patent which is reasonably related to a drug or biologic classified under dormant therapies could be "protected" for 15 years from any new competition. The sponsor could simply apply for multiple designations of dormant therapies for the same patent and thus create an "everlasting patent".

    However, another reading of the provisions is that a dormant therapy can benefit from only one protection period, "measured from the first day of the first approved indication for a therapy" which cannot be further extended. In such a case the patent cannot be further extended. The applicant sponsor would therefore not gain exclusivity for the patent beyond the initial 15 year protection period. Furthermore according to another provision of Subtitle M, even if the same patent were ever to be extended a second time because a different active moiety was added, the "Hatch-Waxman limitations" would be enforced, limiting the extension terms.

    Thus, while the dream for sponsor companies to retain unlimited exclusivity over all of their most valuable patents remains just that, the 21st Century Cures Act has opened up a new debate over whether patent exclusivity should be extended for longer periods of time for urgent medical treatments and for how long such extensions should be allowed.


    From a drug development point of view the best way to preserve market exclusivity and ensure the patent does not expire is to expedite the drug approval process at the FDA.  Ever since 1997 after the FDA Modernization Act, the agency has been building pathways for fast-tracking drugs to the market, particularly for drugs designed to target serious illnesses for which there are no clinical treatments available.  There are now four established expedited review processes for drug manufacturers to speed up development and availability of their drugs: Fast Track designation, Breakthrough Therapy designation, Accelerated-Approval Pathway, Priority-Review designation.  Here is a breakdown of what each pathway does to speed things up and how to qualify for each pathway:

    4 Different expedited drug review processes at the FDA (Sherman et al., 2013):


    4 Different expedited review processes at the FDA (Hwang et al., 2017):



    A list of drugs with Breakthrough Designations from 2013:


    Drug candidates that qualify for these expedited pathways usually fall into the Orphan Drug category, for which treatment is targeted at a disease population smaller than 200,000 people in the US.  Increasingly these drugs are large molecular entities, diagnostics and biologics.  Sometimes the beneficial effects of the drug in clinical trials are so obvious in early stage clinical trials that there is no necessity to continue testing a larger patient group (Exondys 51 is an example).  Once a drug is placed onto an expedited pathway the FDA will commit to working closely with the sponsor to do things as efficiently as possible.  Certain pathways even come with added incentives, such as the “voucher” system for drugs designated in a Priority Review.  These vouchers (already granted to drugs for Duchenne Muscular Dystrophy and Zika virus) can be sold by the sponsor for up to $125 million to other biotech companies vying to geth their non-expedited drugs to the market. A fifth expedited pathway has recently been issued by the FDA called the Regenerative Medicine Advanced Therapy Designation.  This is the newest pathway for cell and gene therapy products designed to treat rarer genetic disorders.  Given the rise in popularity of gene therapy and stem cell therapy as novel treatment strategies, companies are clambering over each other to apply for this pathway.

    There is no shortage of strategies for biotech and pharma companies to license their therapeutic technologies quickly and gain the largest market while their patents are still valid.  Expedited drug review pathways at the FDA are not without their flaws and disadvantages.  A common risk is that drug candidates are not put through rigorous trials lasting longer than 6 months or tested in more than 100 patients.  This leads to the possibility of adverse events affecting patients in years to come.  Another issue is that surrogate endpoints are often used to interpret short-term data and these results do not always correlate with patient survival or quality of life outcome.  

    However, it is important for every institution developing novel drug therapies to understand these pathways, to come up with a way of using them while developing a product that is safe and efficacious.  In today’s environment where so many drugs have high price tags and public money from Medicare or Medicaid programs are needed in order to give patients affordability, the onus is on industry to develop drugs quickly before costs of development skyrocket.


    Hatch-Waxman Amendments 1984:

    FDA Law Blog, ever lasting patent renewal:

    RAPs Regulatory Explainer: The (Updated) 21st Century Cures Act:

    Gupta H, Kumar S, Roy SK, Gaud RS. Patent Protection Strategies; J Pharm Bioallied Sci. 2010 Jan;2(1):2-7. doi: 10.4103/0975-7406.62694.

    Sherman RE, Li J, Shapley S, Robb M, Woodcock J. Expediting drug development--the FDA's new "breakthrough therapy" designation; N Engl J Med. 2013 Nov 14;369(20):1877-80. doi: 10.1056/NEJMp1311439.

    FDA Expedited review programs, 2012-2016:
    Hwang TJ, Darrow JJ, Kesselheim AS.  The FDA's Expedited Programs and Clinical Development Times for Novel Therapeutics, 2012-2016; JAMA. 2017 Dec 5;318(21):2137-2138. doi: 10.1001/jama.2017.14896.

    FDA’s Traditional Expedited Pathways:

    FDA’s RMAT Designation:

    Risks and Benefits of Expedited Review: