Biotechs Beware: Safe Harbor No More?

June 16, 2012

The Presidential election of 2000 forever will be known as one of the most highly contested elections in United States’ history. After the final tally, a mere 537 votes decided the presidency. One of the key issues at the heart of the election was the high cost of prescription drugs, especially for senior citizens. Both candidates hoped to lower prescription drug prices and, at the same time, facilitate the entry of generic drugs into the marketplace to drive down prices. Coincidentally, nearly twenty years earlier, Congress faced a similar debate. That debate led to the creation of The Drug Price Competition and Patent Term Restoration Act (“Hatch-Waxman Act”), which dramatically affected the patent and food and drug laws as well as the manner in which the pharmaceutical industry operated.
Generic drug manufacturers perform bioequivalency testing to ensure that the generic drug contains the same amount of active ingredient as the patented drug. To this end, Congress enacted 35 U.S.C. § 271(e)(1), which created a safe harbor by exempting from infringement all conduct “reasonably related to the development and submission of information” necessary to obtain regulatory approval. As a result, it was estimated that, by the end of 2002, generic drugs would account for over two-thirds of all prescriptions written and approximately twenty billion dollars in retail.
This Recent Development examines the Federal Circuit’s recent decision in Integra Lifesciences I, Ltd. v. Merck KGaA and argues that the Federal Circuit properly narrowed the scope of the exemption provided by the § 271(e)(1) safe harbor provision. Additionally, this Recent Development proposes that the Supreme Court should grant certiorari and affirm the Integra decision because it is consistent with the legislative intent of § 271(e)(1). Moreover, this Recent Development proposes that Congress should enact a statute codifying the common law research exemption to bring the state of patent law in accord with twenty-first century principles.