Announced Action for April 7, 2005

For Your Information

Commission response to Food and Drug Administration citizen petition: The Commission has authorized the submission of a response to the U.S. Food and Drug Administration (FDA) regarding a citizen petition filed with the FDA by IVAX Pharmaceuticals, Inc. (IVAX) on January 5, 2005. The petition relates to IVAX’s attempt to gain approval for, and market a generic version of, Merck & Co.’s drug Zocor, which contains the active ingredient simvastatin and is used to treat high cholesterol.

The FTC’s interest in this matter stems from its experience with, and enforcement actions related to, the provisions of the Hatch-Waxman Act. Under the Act, Congress afforded the first filer of a generic drug application – an Abbreviated New Drug Application (ANDA) – that challenged patents covering the branded drug product the incentive of a 180-day marketing exclusivity period. In addition, the Act provides for a 30-month stay on generic approval if the branded company patent holder files suit alleging that the generic applicant infringes its patent for that particular drug. In July 2002, the FTC issued a study entitled “Generic Drug Entry Prior to Patent Expiration” (FTC’s Generic Drug Study) that found that certain provisions of Hatch-Waxman – particularly the 180-day marketing exclusivity period, and the 30-month stay – were susceptible to strategies by drug companies seeking to delay generic entry into the marketplace. Such actions, the FTC alleged, could lead to higher drug prices for consumers. Accordingly, based on recommendations made by the FTC, the FDA amended its Hatch-Waxman regulations. In addition, the Congress enacted legislation adopting the two major recommendations of the FTC’s Generic Drug Study.

In its petition, IVAX objected to the FDA’s delisting of two patents from the Orange Book – the common name for the FDA publication “Approved Drug Products with Therapeutic Equivalence,” which lists patents submitted to the agency by branded drug companies as covering a branded drug or its use. IVAX had been the first ANDA filer to submit Paragraph IV certifications for the delisted patents and claimed entitlement to a 180-day marketing exclusivity period for generic simvastatin tablets on that basis. IVAX contended that the FDA’s regulations required that the patents be relisted, that subsequent ANDAs for simvastatin (from other companies) include certifications for the two patents, and that the FDA not approve those ANDAs until at least 180 days after IVAX’s first commercial marketing of simvastatin tablets.

The Commission’s response, which can be found on the FTC’s Web site as a link to this press release, begins by describing the Commission’s interest in the matter, the role of the Orange Book in the drug-approval process, and the content of IVAX’s petition. It then summarizes the FTC’s concerns about the position taken by IVAX in the petition.

First, it states that were the FDA to adopt IVAX’s interpretation of the pertinent regulations, the NDA holder (the branded company) would no longer be able to correct an improper Orange Book listing following the submission of a Paragraph IV certification, regardless of the motivating reason for the company’s desire to delist the patent. Such a rule, the comment states, “would have significant, negative implications for competition in the pharmaceutical industry, to the detriment of consumers.” If an NDA holder realizes it erred in submitting patents for listing in the Orange Book, according to the letter, “it should be able to correct that error.”

In addition, the FTC’s response states that, in its petition, IVAX is mistaken in its characterization of the 180-day marketing exclusivity period for the generic first filer. According to the FTC, IVAX characterizes its eligibility for the 180-day exclusivity period as a right – based on its filing of a first ANDA containing a Paragraph IV certification for simvastatin – that cannot be divested even when that eligibility is based on an erroneously listed patent. However, the FTC’s response states that Congress intended the 180-day exclusivity period to be viewed as an incentive, rather than a right, as the Hatch-Waxman Act does not guarantee that the first-filer will get the exclusivity period once the FDA approves its generic product. This characterization is similar to that of the FDA, the response states, concluding that “the statute and regulations do not support IVAX’s premise that the 180-day exclusivity be treated as a right that cannot be altered by changed circumstances such as delisting of the patent.”

Based on these concerns, the FTC concludes its response by urging the FDA to reject IVAX’s petition because its proposed rule preventing the delisting of patents from the Orange Book is based on a flawed view of its entitlement to the 180-day exclusivity period, and because the rule would have significant negative implications for competition in the pharmaceutical industry, to the detriment of consumers.

Copies of the documents mentioned in this release are available from the FTC’s Web site at http://www.ftc.gov and also from the FTC’s Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, DC 20580. Call toll-free: 1-877-FTC-HELP.

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