Order Code RS21129
January 31, 2002
CRS Report for Congress
Received through the CRS Web
Pharmaceutical Patent Term Extensions: A
Wendy H. Schacht
Specialist in Science and Technology
Resources, Science, and Industry Division
John. R. Thomas
Visiting Scholar in Economic Growth and Entrepreneurship
Resources, Science, and Industry Division
The pharmaceutical industry appears to place a high value on patents and drug
companies frequently obtain patent protection and enforce patent rights. Patents permit
the owner to exclude others from making, using, importing, or selling the patented
invention. Patents are issued by the U.S. Patent and Trademark Office (USPTO),
generally for a term of 20 years from the date of filing. However, certain circumstances
permit extensions to the term of the patent, including delays in the initial administrative
process at the USPTO. More significantly, the Drug Price Competition and Patent Term
Restoration Act of 1984, commonly known as the “Hatch-Waxman” Act, permits
limited extensions to compensate for market time lost during the drug approval process
undertaken by the Food and Drug Administration (FDA). Independent of the patent
term, the FDA may provide market exclusivity to pharmaceuticals meeting specific
conditions under the Hatch-Waxman Act, the Orphan Drug Act, and the Best
Pharmaceuticals for Children Act.
Patents are issued by the United States Patent and Trademark Office (USPTO),
generally for a term of 20 years from the date of filing. The patent grants its owner the
right to exclude others from making, using, selling, offering to sell, or importing into the
United States the patented invention. To be afforded patent rights, an invention must be
judged to consist of patentable subject matter, possess utility, and be novel and
nonobvious. The application must fully disclose and distinctly claim the invention for
which protection is sought.
U.S. Patent and Trademark Office-Related Extensions
Patent terms have been extended by several legislative means. The American
Inventors Protection Act (P.L. 106-113) requires that certain deadlines be met by the
Congressional Research Service ˜ The Library of Congress
USPTO in the issuance of a patent. Among these deadlines are 14 months for the first
Patent and Trademark Office action, 4 months for a subsequent action, and 4 months
between payment of an issuance fee and the grant of a patent. The original patent
application process must be completed within 3 years of actual filing except if the delays
resulted from continuing applications and appeals on behalf of the filing party. If these
time constraints are not met, the patent holder may receive a day-for-day extension of the
patent term.1 Patentees may also obtain day-for-day term extensions due to delays caused
by the declaration of an interference, the imposition of a secrecy order, or the successful
pursuit of an appeal to the Board of Patent Appeals and Interferences or federal court.2
These provisions cover patents in general and are not specific to patents on
The grant of a patent does not provide the owner with an affirmative right to market
the invention. Pharmaceutical products are also subject to marketing approval by the
Food and Drug Administration (FDA). Federal laws generally require that pharmaceutical
manufacturers show their products are safe and effective in order to bring these drugs to
the marketplace.3 USPTO issuance of a patent and FDA marketing consent are distinct
events that depend upon different criteria.4
Significant delays may accompany the marketing approval process. The Drug Price
Competition and Patent Term Restoration Act of 1984 (P.L. 98-417), commonly known
as the “Hatch-Waxman” Act, permits extensions of pharmaceutical patents to reflect
regulatory delays encountered in obtaining FDA permission to market the drug. This term
extension is equal to the time between the effective date of the investigational new drug
application (NDA) and its submission, plus the entire time lost during FDA approval of
the NDA. However, some caps are placed on the length of the term restoration. The
entire patent term extension may not exceed 5 years. Further, the remaining term of the
restored patent following FDA approval of the NDA may not exceed 14 years. The
patentee must exercise due diligence to seek patent term restoration from the USPTO, or
the period of lack of diligence will be offset from the augmented patent term.5
See: CRS Report RL30451, Patent Law Reform: An Analysis of the American Inventors
Protection Act of 1999 and Its Effect on Small, Entrepreneurial Firms, by John R. Thomas.
35 U.S.C. sec. 154(b).
21 U.S.C. § 355(b). Prior to 1962, the drug approval process was solely directed towards safety.
See Mossinghoff, Gerald J., “Overview of the Hatch-Waxman Act and Its Impact on the Drug
Development Process,” 54 Food and Drug Law Journal (1998), 187.
See In re Brana, 51 F.3d 1560 (Fed. Cir. 1995).
For additional information see: CRS Report RL30756, Patent Law and Its Application to the
Pharmaceutical Industry: An Examination of the Drug Price Competition and Patent Term
Restoration Act of 1984, by Wendy H. Schacht and John R. Thomas.
Market Exclusivity Provisions
In addition to, and separate from, the rights conveyed by a patent, several laws permit
the Food and Drug Administration to provide market exclusivity for an approved drug.
Under the Hatch-Waxman Act, 2 years of exclusivity are extended to pharmaceuticals in
clinical testing when the 1984 Act was passed. Applications for a generic version of a
new chemical entity will not be considered by the FDA for 5 years after approval of the
original. This applies even if the pharmaceutical is not patented.
The FDA also is permitted to grant a 3 year exclusivity period if a new drug
application (or supplemental application) necessitates additional clinical investigation.
These situations include new dosage forms for already approved drugs, a new use for a
drug, or for over-the-counter marketing of a drug. This market exclusivity only pertains
to the new indication and does not prevent the approval of a generic drug for other uses
not covered by a patent or an existing exclusivity.6
Another mechanism established by the Hatch-Waxman Act extends market
exclusivity if the FDA accepts a new claim for an existing pharmaceutical. When
approved by the FDA, the changes made permit 3 years of exclusivity on the marketing
of the pharmaceutical if a new patent is not forthcoming and an additional 20 years if a
patent issues. If the original drug is removed from the market, however, a generic for that
pharmaceutical cannot be introduced.7
Market exclusivity provisions are also included in the Orphan Drug Act (P.L. 97414). A company that develops a drug to treat a disease that affects fewer than 2,000
people annually may receive sole market rights for 7 years from the date of product
approval by the FDA. The Food and Drug Administration Modernization Act of 1997
(P.L.105-115), as amended by P.L. 107-109, the Best Pharmaceuticals for Children Act,
provides pediatric exclusivities to encourage drug manufacturers to conduct research
concerning the effectiveness of their drugs in children. Pediatric exclusivity attaches to
any children’s drug products with the same “active moiety” which is that portion of the
drug that causes its physiological or pharmacological reaction. It typically extends the
approved manufacturer’s existing marketing protection for an additional 6 months. The
product must be one for which studies on a pediatric population are submitted at the
request of the Secretary of Health and Human Services and does not require that the study
successfully demonstrate safety and effectiveness in the pediatric population.
Extensions for Specific Pharmaceuticals
Additional patent term extensions for specific pharmaceuticals have been enacted
by the U.S. Congress in both public and private bills. Since 1980, 7 different products
Elizabeth H. Dickinson. “FDA’s Role in Making Exclusivity Determinations,” Food and Drug
Law Journal, 1999, 201.
Feliza Mirasol. “Generic Drug Industry Faces Regulatory and Patent Issues,” Chemical Market
Reporter, April 12, 1999.
had their patents extended in this manner.8 Six of these are for human use, while the
seventh was a pharmacological composition with veterinary applications. Claims of
unwarranted regulatory delays provided the motivation for extending the terms of patents
associated with each of these products. The pharmaceuticals and the extensions are as
Aspartame, an artificial sweetener regulated as a food additive, was
developed by G.D. Searle & Co. Searle petitioned Congress for a term
extension based upon FDA approval times that Searle believed to be
excessive. Congress responded by extending the aspartame patent by just
under 6 years.9
Forane, an anesthetic drug, was produced by Ohio Medical Anesthetics,
Inc. The FDA marketing approval process consumed over 10 years.
According to Ohio Medical Anesthetics, a deficient study claiming that
Forane had carcinogenic potential significantly contributed to this
delay.10 The term of the extension was 5 years, 3 months.11
Impro, a veterinary product used to increase production in dairy cows,
was developed by Impro Products. Impro Products claimed that the
United States Department of Agriculture prevented Impro Products from
performing the tests needed to obtain marketing approval from 1967
through 1984.12 Impro received a 15-year term extension.13
Glyburide, and its variant glipizide, are oral hypoglycemic drugs useful
as anti-diabetes therapeutics. They were created by Hoechst AG. Citing
FDA marketing approval delays, Congress set the expiration date of 5
patents to the uniform date of April 21, 1992. The resulting term
extension ranged from nearly three months to nearly 6 years and 3
Lopid is a cardiovascular drug developed by Warner-Lambert. In 1981,
Warner-Lambert and FDA agreed that if Warner-Lambert financed a
heart attack prevention study, it would obtain exclusive benefits from any
resulting data. During the course of the Warner-Lambert study, Congress
Private bill permitting patent term extensions through 1979 are discussed in The History of
Private Patent Legislation in the House of Representative, H. Comm. on the Judiciary, Subcomm.
on Courts, Civil Liberties, and the Administration of Justice, 96th Cong., 1st Sess. (1979)
(Christine P. Benagh, American Law Division, Congressional Research Service, U.S. Library of
96 Stat. 2065 (4 Jan. 1983); P.L. 97-414.
Sen. East, remarks in the Senate, 129 Congressional Record, daily ed.,(9 May 1983), S6313.
97 Stat. 831, 832 (13 Oct. 1983); P.L. 98-127.
S.Rept.98-389, 98th Cong., 2d sess., 1984.
98 Stat. 3430 (19 Oct. 1984); Private Law 98-34.
98 Stat. 3434 (19 Oct. 1984); Private Law 98-46.
enacted the Drug Price Competition and Patent Term Restoration Act of
1984. Warner-Lambert argued that by creating a streamlined generic
drug approval process, the 1984 Act destroyed its expected interest in the
study data.15 The term extension totaled 3 years and 6 months.16
Olestra, originated by Proctor & Gamble Co, was the subject of a FDA
approval process that took 12 years. The term extension for Olestra was
rather complex. The legislation allowed two one-year extensions on one
of the three Proctor & Gamble patents concerning Olestra. If the FDA
granted market approval to Olestra within this extension period, Proctor
& Gamble was allowed to request another two years of life for that
patent.17 The FDA did grant market approval in a timely fashion,
allowing Proctor & Gamble to benefit from the two-year extension.18
Daypro, marketed by G.D. Searle & Co, is an anti-inflammatory agent.
Searle claimed that the drug was the subject of an unusually lengthy FDA
approval process. The term of the patent was extended for two years.19
S. Rep. No. 100-83, 100th Congress, 1st Ses. 73 (1987).
102 Stat. 1107, 1569 (23 Aug. 1988); P.L. 100-418.
107 Stat. 2040 (3 Dec. 1993); P.L. 103-179.
Post, Patrick Larkin, “P&G’s olestra finally wins FDA approval,” The Cincinnati Post 1A (25
110 Stat. 1321 (26 Apr. 1996); P.L. 104-134.