Authors Revisit Hatch-Waxman Act

One of the Hatch-Waxman Act's authors opposes proposed changes to the 1984 legislation. At a Senate hearing last month, Senator Orrin Hatch (R, Utah) said he disagrees with proposals to eliminate the 30-month "stay" on FDA approval of contested generic products or to revise the 180-day exclusivity period for new generics. Those provisions are key elements of a bill sponsored by Senators Charles Schumer (D, New York) and John McCain (R, Arizona) that aims to end tactics allegedly used by innovator companies to delay generic competition.

However, Representative Henry Waxman (D, California) indicated that he may not agree with Hatch. Such abuses of the system by brand-name companies have upset the "appropriate balance" established in the original bill, Waxman states in a letter to the Senate Health, Education, Labor and Pensions (HELP) Committee.

Hatch says Congress must go slow in determining "how to restore that balance." At the HELP panel hearing chaired by Senator Ted Kennedy (D, Massachusetts), Schumer blasted brand-name companies for filing weak or invalid patents and for making anticompetitive deals designed to extend monopolies. The main charge is that innovators file late patents on minor innovations, such as new dosing methods, largely to keep generics off the market.

Industry lawyers counter that such patents seldom prevent generic competitors from making original products, just from making the new formulations. The charges and countercharges have generated a good deal of skepticism about all claims in the debate.

Hatch's call for Congress to get the facts before changing the law is likely to carry the day. Hatch suggests other possible changes to the generics bill, such as dropping the 180-day exclusivity policy and linking elimination of the 30-month stay with that of the Bolar amendment, which permits generics makers to access innovators' data before patent expiration. Hatch wants hard information about the occurance of multiple consecutive 30-month stays and about the frequency of suits that challenge later-issued patents.

The Federal Trade Commission is expected to issue a report on those issues this summer. One question is whether Hatch-Waxman should be revised to include generic biologicals, a move opposed by innovator companies. Despite Hatch's call for proceeding thoughtfully, sponsors of McCain-Schumer are promoting the bill as a way to reduce expenditures for prescription therapies. This fall, members of Congress may jump on the generic reform bandwagon as an easy way to do "something" about soaring medical costs.