Which Company Will be the First to Launch a Generic Drug?
There are many reasons to find out which companies will be first to launch generic drugs.
- Payers need to know who the first generic entrants will be so they can prepare to adjust their co-payment tiers, inform partners, and ensure that their budgetary estimates are aligned with market conditions.
- Wholesalers and distributors must be able to avoid overstock of branded drug in anticipation of generic entry, and they must also know which parties to contact to establish contracts for generic drugs
- Branded and generic firms need to be aware of generic entrants so they can make informed decisions based on historic knowledge of drug pricing strategies, market entry approaches, and opportunities for competition.
Starting With Patent Challenges
When patents and regulatory protections expire the market for generic entry is open. But, generics can enter prior to anticipated patent expiration dates — they can do this by challenging patents and either invalidating them or demonstrating that the patented claims are not infringed by the generic drug.
In the US market patent challenges are formalized through the “Paragraph IV” process:
…the applicant shall provide the patent number and certify, in its opinion and to the best of its knowledge, …that the patent is invalid, unenforceable, or will not be infringed by the manufacture, use, or sale of the drug product for which the abbreviated application is submitted. The applicant shall entitle such a certification “Paragraph IV Certification”.
Tracking Paragraph IV challenges is a quick and effective way to anticipate generic entry in advance of patent expiration dates.
While Paragraph IV challenges can help anticipate early generic entry opportunities, they do not name the potential first generic entrant. Because the Food and Drug Administration (FDA) does not disclose the contents of Paragraph IV Certifications, nor the contents of drug applications, it is not possible to directly ascertain the name of the Paragraph IV patent challenger. There are, however, other ways to anticipate first generic entrants:
- Tentative approvals (see below)
- Patent litigation
- Press releases and public disclosures
Tentative approvals are clearances for drugs to be marketed, but for the existence of patents or market exclusivities.
According to the FDA:
If a generic drug product is ready for approval before the expiration of any patents or exclusivities accorded to the reference listed drug product, FDA issues a tentative approval letter to the applicant. The tentative approval letter details the circumstances associated with the tentative approval. FDA delays final approval of the generic drug product until all patent or exclusivity issues have been resolved. A tentative approval does not allow the applicant to market the generic drug product.
Because successful Paragraph IV challengers often want to launch as soon as possible following a successful outcome (and, potentially to demonstrate confidence in the strength of their case), they will often obtain tentative approvals for the drugs for which they have launched patent challenges. So, looking at the recent tentative approvals can provide an indication of who the Paragraph IV filer is.
Note: an added feature of tentative approvals is that drugs being distributed under the President’s Emergency Plan for AIDS Relief (PEPFAR) must either have traditional FDA approval, or a tentative approval. Therefore tentative approvals can, even in the absence of impending patent expiration or invalidation, provide market entry opportunities.
There are two methods of challenging patents in the United States. Regardless of the method used to challenge a patent, the parties involved will be named and the proceedings will be made public, so examining the litigants can identify the patent challenger, and therefore the first potential generic entrant.
The older, and more comprehensive, method is conventional litigation in district courts. While PTAB cases (below) focus on the validity of patents, district court cases can address patent infringement, contractual disputes, or any other dispute (an excellent overview is available here).
The newer method is to challenge the validity of a patent before the Patent Trial and Appeal Board (PTAB). Some of the common reasons to prefer a PTAB over a district court challenge are:
- The opportunity to present a case before judges who are technically training and have a focused understanding of patents and patent law
- Broader claim interpretation
- Lower evidentiary standards
- PTAB trials tend to be faster and less expensive than traditional court litigation
Press Releases and Public Disclosures
Another approach is to examine press releases mentioning the drug for which a patent challenge has been filed. Publicly-traded companies are required to promptly publicly disclose many types of information, and this often means that challengers and defendants in patent invalidity suits will often be compelled to disclose the existence of patent litigation, along with the names of the parties involved. So even if only one party is publicly-traded, their disclosures can still name the other party.
Additionally, even private companies (not subject to the same disclosure requirements as publicly-traded companies) have an incentive to announce Paragraph IV challenges — issuing early press releases announcing their patent challenges can help establish distribution and supply-chain relationships in anticipation of generic launch.
Anticipate and Prepare for Generic Entry
There are many ways to identify early generic entry and the companies which will be first to launch. Reliance on a single method may fail to properly identify the company which will be the first to launch, and the methods presented here illustrate how to obtain additional information to provide broader insights. DrugPatentWatch offers the tools to continuously track patents covering drugs, litigations, tentative generic approvals, and other factors essential to making better decisions. For more information, request a demo and learn more about our subscription options.
Copyright © DrugPatentWatch. Originally published at How to Use Tentative Drug Approvals to Anticipate Generic Entry
Also published on Medium.