Para Iv Filing Faq Ipr

Para IV_Note_ Nitin Mehetre_ April 2008 A Para I filing is made when the innovator has not made the required patent information in the Orange Book. A Para II filing for the launch of a generic drug is made when the drug is already off patent. A Para III filing is made when the ANDA applicant does not have any plans to sell the generic drug until the original drug is off patent. A Para IV filing is made when the ANDA applicant believes its product or the use of its product does not infringe on the innovator's patents listed in the Orange Book or where the applicant believes such patents are not valid or enforceable. In the case of Para IV filings, patents are validly circumvented. This involves a lot of research to find out the loopholes in the patents. But the gains are also the most in this case. The Hatch Waxman Act 1984 allows 180 days of exclusive marketing rights to the first ANDA filed and approved. For instance, Dr Reddy's Laboratories' Fluxotene (a 40 mg generic version of Pfizer's blockbuster drug Prozac) was cleared by the FDA and it made $10 million per month in the exclusivity period. Litigation is inevitable if a company wants to make a Para IV filing by targeting an existing patent holder (on the basis of certain loopholes in the patents filed in the Orange Book, which may allow the company to launch a generic in the new drug dosage form or a different drug delivery form). Litigations can cost $15-18 million for a single Para IV filing. If successful the generic drug company gets an exclusive marketing right (EMR) for 180 days to sell the drug if not the entire amount invested in litigation goes waste. Para IV filings are risky business and cannot be depended on always to bring in the revenue. The Global R&D process It can be safely said that the pharmaceutical industry is more research-intensive, as compared to the any other industry. One of the activities of research and development of the companies is directed towards finding newer molecules as a cure for diseases. The innovator company synthesizes a New Chemical Entity (NCE), which can probably be a cure for a disease. The synthesis of a NCE takes place in the pre-clinical testing period. The innovator company, after synthesizing a NCE, files an Investigational New Drug (IND) application, prior to commencing clinical trials. The FDA grants patent to the NCE at this stage.

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Para IV_Note_ Nitin Mehetre_ April 2008 The drug discovery process

Source: PhRMA As can be seen above, after the IND filing it takes around 10 years for a NCE to pass through the three phases of clinical trials, attain the final FDA (Food & Drug Administration) review approval and post marketing tests to ultimately launch the product. As already mentioned, the FDA grants patent to the NCE at the time of the IND filing and the duration of such patent is around 20 years. In this context, a drug ultimately enjoys patent protection after its market launch for only around 10 years, to recover its costs. After the expiry of a patent, generic companies immediately launch the products and consequently, there is a sharp downward correction in the price of the particular drug. The fall in prices can be as much as 90% depending upon the number of generic manufacturers and the nature of the drug. The fall in prices also result in a fall in the margins for the branded drug. The generic market has witnessed significant growth over the years. While generics account for around half of the prescriptions in the US, it accounts for only around 10% of the pharmaceutical market in the US in value terms. The reason for the same is low realizations of generics vis-à-vis patented drugs. Generics A generic drug has similar effects in terms of its rate and extent of absorption of an approved product, which has to be proved by the generic company. In other words the generic drug has similar effects in curing a disease as the approved product. The generic approval process is called Abbreviated New drug Application (ANDA). While filing an ANDA, the generic company has to choose one of the following four options (referred to as paras) •

Para I - The drug has not been patented

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Para IV_Note_ Nitin Mehetre_ April 2008 • • •

Para II - The patent for the drug has already expired Para III - The patent for the product exists but the generic company wants to enter the markets after the date of patent expiry passes. Para IV - Patent is not infringed upon or is invalid

In a Para III filing the company acknowledges the patent of the approved drug and intends to enter the market after the patent for the approved product expires and there exists a scenario of falling prices for the drug, whereas in Para IV filing the company claims that the generic product of the company does not infringe upon the existing patent or the patent of the branded product is invalid and the company strives to win an exclusivity of 180 days during which the margins for the product are very high. For instance, recently Dr. Reddy's filed an application with the US FDA to market a generic form of Eli Lilly's schizophrenia drug ‘Olanzapine’ in the United States. In all the generic filings, the FDA has 180 days to deem the generic application complete and accept it for review, or incomplete and reject for filing. In case of Para I and Para II filing, once the application is deemed complete, it is simply processed for approval. In case of Para III the application is processed for approval, however its approval status depends upon the products patent expiry. Apparently Para IV filings are the most lucrative, tedious, time consuming and expensive of the above. The approval process of the Para IV is as provided below:

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Para IV_Note_ Nitin Mehetre_ April 2008

Post 2005 scenario After the patent regime is implemented in India in 2005 no company would be allowed to launch products patented after 1995. In other words Indian companies will still be allowed to launch NCE patented before 1995 in the market. As already discussed it takes around 10 years for a NCE to be commercially launched, as a result of which the Indian companies will have additional cushion in terms of time to gear up fully for the patented regime Already Indian companies have forayed into basic research and their success has so far been very very limited. However, as it is said, the secret of getting ahead is getting started and every small step by Indian companies will raise their probability to succeed in the future.

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