Medicare Prescription Drug, Improvement, and Modernization Act of 2003-Conference Report

MEDICARE PRESCRIPTION DRUG, IMPROVEMENT, AND MODERNIZATION ACT OF 2003-CONFERENCE REPORT

Mr. SCHUMER. Thank you, Mr. President. Let my just say, before I ask my question, that I want to thank the Senator from Massachusetts, and the senior Senator from New Hampshire, for their leadership on this issue. The Senator from Massachusetts, as chair of the HELP Committee last year, took up the generic drug bill authored by the senior Senator from Arizona and myself, saw it through the HELP Committee, and managed its passage by the full Senate. This year, the senior Senator from New Hampshire approached me to work together to come up with the generic drug bill that served as the basis for what is in this bill, and he brought it through the HELP Committee, offered it as an amendment to the prescription drug bill in the Senate, where it was accepted 94-1, and defended it very ably in conference with the House. So, again, I
would like to thank both distinguished chair and ranking member of the HELP Committee for their leadership on this issue.

Of course, I also want to thank the senior Senator from Arizona, without whose leadership over the past several years we would not be where we are today on such an important consumer issue.

As for my question, I understand that a generic applicant that has the 180-day exclusivity will forfeit the exclusivity if it has failed to market its product 75 days after certain events have happened with respect to itself or another generic applicant and with respect to each of the patents that gives the generic applicant its generic exclusivity. Is that correct?

Mr. KENNEDY. That is correct.

Mr. SCHUMER. And am I correct that one of these events is when "a court enters a final decision" that the patent is invalid or not infringed by the drug of the generic applicant?

Mr. KENNEDY. The Senator is correct.

Mr. SCHUMER. And am I correct that a final court decision under this provision includes the kind of court decision recognized in the Teva v. Shalala opinion?

Mr. KENNEDY. Yes, I very much appreciate your question on this point. We do intend that a court decision like the one in the D.C. Circuit's 1999 decision in Teva v. Shalala-a decision dismissing a declaratory judgment action for lack of subject matter jurisdiction because the patent owner has represented that the patent is not infringed-will count as a court decision under the new "failure to market" provision. Under the failure to market provision, the conditions for forfeiture are intended to be satisfied when a generic company has resolved patent disputes on all the patents that earned the first-to-file its exclusivity. After a court decision such as that at issue in Teva v. Shalala, the patent owner is estopped from suing the generic applicant in the future and the patent dispute is resolved. So these sorts of decisions should be recognized as court decisions under the failure to market provision.

I'd also like to point out the importance of the declaratory judgment provisions that are in the Senate bill and are retained in modified form by the conferees in the conference report now before the Senate. Amendments made by this bill to both the Federal Food, Drug, and Cosmetic Act and Title 35 clarify that generic applicants may bring declaratory judgment acts to ensure timely resolution of patent disputes. These provisions authorize a generic applicant to bring a declaratory judgment action to obtain a judicial determination that a listed patent is invalid or is not infringed if the applicant is not sued within 45 days of having given notice to the patent owner and brand-name drug company that it is challenging the patent. This clarification of a generic applicants right to bring a declaratory judgment action is crucial to ensuring prompt resolution of patent issues, which is essential to achieve our goal of speeding generic drugs to market.

It's worth pointing out that the Hatch-Waxman Act has always provided that patent owners and brand drug companies can bring patent infringement suits against a generic applicant immediately upon receiving notice that the generic applicant is challenging a patent. The declaratory judgment provisions in Title XI of this bill simply level the playing field by making it clear that the generic applicant can also seek a prompt resolution of these patent issues by bringing a declaratory judgment action if neither the patent owner nor the brand drug company brings such a suit within 45 days after receiving notice of the patent challenge.