The Waxman-Hatch Act was enacted in part to encourage generic companies by offering limited market exclusivity if a bio-equivalent product is developed. According to the law, when a generic company files an abbreviated new drug application (ANDA), either the brand-name product must not be patent protected, or the company must claim the patent is not infringed or is invalid. If the latter, the patent holder has 45 days to file a patent infringement suit, in which case the FDA is required to wait 30 months before approving the generic. As an incentive to bear the cost of litigation by filing an ANDA prior to the expiration of a patent, the federal law gives the first company to file for the generic drug a 180-day monopoly where FDA may not approve other generic forms of the drug.
The FTC proposes to subpoena and examine records relating to all agreements or patent settlements between a drug company and any other person involved with an ANDA filed after January 1, 1991 to determine if any are being used to delay generic drug competition. Specifically, investigators are looking to see if companies are exploiting the 30-month stay or the 180-day exclusivity provision in Waxman-Hatch. They also plan to examine a broad range of undefined documents such as “all studies, surveys and reports. . .that evaluate or analyze the reasons for making the agreement.” The FTC estimates that compliance will cost each company about $50,000 in labor and supplies.
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