Fact sheet on S. 54, the Greater Access to Affordable Pharmaceuticals Act of 2003

In the early weeks of the 108th Congress, two Senate bills, S. 54 and S. 7, were introduced that embrace the "Greater Access to Affordable Pharmaceuticals Act of 2003" (GAAP), formerly known in the 107th Congress as S. 812. GAAP raises serious concerns for members of the Biotechnology Industry Organization (BIO). GAAP amends the Drug Price Competition and Patent Term Restoration Act of 1984 (the "Hatch-Waxman" Act) which struck a balance between promoting access to generic drugs and fairly protecting the legitimate rights of the patent holder. It provides an expedited path to market for generic drugs, while ensuring that innovators receive an adequate term of patent life to stimulate new drug development.

GAAP goes far beyond correcting alleged concerns with the application of the 1984 law:

• The bill would completely abolish patent rights if litigation is not initiated within 45 days of notice by a generic that it intends to challenge a patent, or if a new drug applicant failed to list its patent with the FDA within 30 days.
• The bill creates a private right of action for generic manufacturers to attempt to "correct" patent information filed on a listed drug.
• The bill provides the FDA with broad authority to define and apply standards governing bioequivalence - the critical determinant of safety and efficacy of a generic drug - without challenge (or even comment) from affected members of the public.

If enacted, members of BIO unquestionably will be harmed by the GAAP legislation. Many of our companies focus on improving currently marketed drugs regulated under the new drug and abbreviated new drug approval system. These innovations of our companies create new and better medicines for patients that are more effective, easier to administer and open up new opportunities for treating unmet medical needs. These technologies frequently - often by commercial necessity - are licensed to multiple drug manufacturers who have the resources to bring new drug products that use these technologies to market. Perversely, under the legislation passed by the Senate, if our companies elect to not aggressively enforce their patent rights by immediately suing every generic drug applicant, or if one of the marketing partners makes administrative errors in listing patents with the FDA, the patent rights of our companies will be forfeited. This forfeiture will occur without compensation, without a right of appeal and without any recourse. The constitutionality of this provision is highly questionable, and in any event this provision is totally unconscionable.

In addition, creating a private right of action in court to compel a change in patent information filed on a listed drug can be used to harass small companies. The result would be a significant amount of new and unjustified litigation that would detract from our ability to conduct research and development activities on breakthrough drugs.

Finally, Section 7 of GAAP would selectively codify certain regulations governing "bioequivalence" requirements and would legislatively shield the FDA from challenges to its actions in setting approval standards. We understand the purposes of Section 7 to be limited: to confirm the authority of the Food and Drug Administration to use testing methods other than those specifically set forth in current law to establish the bioavailability and bioequivalence of a generic drug, when the methods specified cannot be applied. Types of generic drugs to which alternative testing methods would be applied would include drugs intended to deliver the active moiety locally, such as topical preparations for the skin or oral dosage forms not intended to be absorbed. But Section 7 would do much more: it would codify 15 pages of FDA regulations that include standards for both new drugs and generic drugs - these regulations include provisions in which FDA gives to itself unfettered discretion to create any standard "deemed adequate" by FDA.

BIO Position

We urge the Congress not to act upon S. 54 or S. 7. The implications of the changes being proposed by so called patent reform legislation are far reaching and will significantly and adversely impact biotechnology companies. They would severely diminish the incentives of the patent system for our industry to develop newer, safer, easier to administer and more effective drugs that could help patients lead better lives. The changes being proposed, simply stated, will not yield better results for patients or the biotechnology industry.

BIO represents more than 1,100 biotech companies, academic institutions and state biotech centers in all 50 states. BIO members are involved in the research and development of health-care, agriculture, industrial and environmental biotechnology products.

For more information, please contact Sharon L. Cohen, vice president for Government Relations, at (202) 962-9200 or scohen@bio.org.