The Food and Drug Administration’s (“FDA”) regulation of drugs and medical devices impacts the everyday lives of Americans in both noticeable and inconspicuous ways. [1] For example, a recall of contaminated food or adulterated pharmaceuticals illustrates how the FDA noticeably affects impacts our everyday lives. [2] Additionally, unobservable consequences springing from the overlap between FDA regulations and patent law also affects the lives of Americans by stimulating market competition and providing incentives for medical research and development. [3]

Attempting to promote continued innovation in medical science, while at the same time provide the public with “more low cost generic drugs,” the U.S. Government amended both FDA regulations and patent laws through the Price-Competition and Patent Term Restoration Act (“the Act”). [4] The Act, commonly known as the Hatch-Waxman Act, consists of two sections, Title I and Title II, which function in tandem “affect[ing the] introduction procedures and patent requirements for certain kinds of generic new drugs.” [5] Title I of the Act provides for a new route of FDA regulatory approval for generic drugs (also known as “generics”), the Abbreviated New Drug Application (“ANDA”). [6] Congress’s intent behind the ANDA process was to allow generic drug manufacturers to get generics on the market sooner and at lower costs. [7] Title II of the Act made several amendments to the U.S. patent laws regarding how they apply to federally regulated products. [8]

The “safe harbor” provision of 35 U.S.C. § 271(e)(1) is a patent law amendment created by Title II of the Act. [9] Utilized in conjunction with the ANDA provision in Title I, Congress believed § 271(e)(1) would aid generics in obtaining market approval “between 18 months and 2 years earlier.” [10] Under § 271(e)(1), the otherwise infringing use of a “patented invention” is immunized from liability if the infringing use is “reasonably related” to the development of data for FDA approval. [11] Although § 271(e)(1) appears to lend itself to a fairly straightforward interpretation, its scope has been the source of much judicial and commentator debate over the last two decades. [12]       Since the enactment of § 27(e)(1), the Supreme Court has weighed in on its scope only twice. [13] In both cases the Court held the plain language and legislative intent behind the Act indicated that § 271(e)(1) was supposed to immunize a broad scope of inventions and actions, related to FDA approval, from patent infringement. [14] Despite the Court’s broad holdings in both cases, the United States Court of Appeals for the Federal Circuit (the “Federal Circuit”) recently narrowed the scope of § 271(e)(1) with its holding in Proveris Scientific Corp. v. Innovasystems, Incorporated. [15] The Federal Circuit employed a narrow test, termed the “perfect product fit” analysis, for determining what constitutes a “patented invention” under § 271(e)(1). [16] Under Proveris’ perfect product fit analysis, in order for infringement of a patented invention to be immunized by § 271(e)(1), the “patented invention” must be eligible for a 35 U.S.C. § 156(e)(1) patent term extension. [17]

While Proveris may appear to comport with sound patent policy, the reasoning of the Federal Circuit fails to properly consider Congress’s overall purpose for the Act. Additionally, Proveris’ new interpretation of “patented invention” flatly contradicts the meaning previously assigned to the statutory phrase by the Supreme Court in Eli Lilly & Company v. Medtronic, Incorporated. [18] Further, the Federal Circuit misinterprets Lilly’s discussion of statutory symmetry (between § 271(e)(1) and § 156), through which the Court intended to broaden the § 271(e)(1) term “drugs,” not narrow the phrase “patented invention.” [19]

By reducing the scope of “patented inventions” within § 271(e)(1) to only inventions comporting with the “perfect product fit” analysis, Proveris has drastically altered the function of § 271(e)(1) and potentially impairs the ability of generic manufactures to fully utilize the ANDA process created in Title I of the Act. [20] Adherence to Proveris’ “perfect product fit” rule risks establishing loopholes that potentially allows patent holders of pioneer drugs and medical devices to delay generic manufacturers from bringing less expensive generics to the market. [21]

This Note critiques the Federal Circuit’s recent narrowing of § 271(e)(1) in Proveris. Part I provides a historical overview of FDA regulations on drugs and medical devices, the promulgation of the Act, and judicial interpretations of § 271(e)(1). Part II furnishes an in-depth review of the Federal Circuit’s holding in Proveris, and discusses the reasons cited as supporting the court’s narrowing of § 271(e)(1). Part III analyzes the Federal Circuit’s “perfect product fit” test, found to control the scope of § 271(e)(1), and discusses how the “perfect product fit” test contradicts the judicial precedent cited by the court as supporting its holding. Part IV illustrates how Proveris operates contrary to Congress’s intention for the Act, and suggests a “sliding scale” analysis for Federal courts when faced with a § 271(e)(1) defense….

Duane C. Marks*

Unlike traditional pharmaceutical drugs, which are small molecule compounds synthesized by chemists, biologics are typically large molecules that are produced in living things. [1] [2] Breakthroughs in the life sciences over the last two decades have led to new biologically derived treatments for debilitating diseases including autoimmune diseases, metabolic disorders, degenerative diseases, blood disorders, and cancer. [3] Several new biological treatments for diseases presently untreatable by other means are currently under development. [4] Despite these advances, new biologics come at a substantial cost for developers, consumers, and health care payers and providers. For developers, internal research, development, and production costs often exceeds a billion dollars per product brought to market. [5] For consumers, the purchase price of any given biologic treatment can be up to several thousand dollars per year. [6] For example, the cost per year per patient for Avastin®, a biologic used to treat colon cancer, is $100,000, and the cost for Cerezyme®, which is used to treat the metabolic disorder Gaucher Disease, is over $300,000. [7] On average, across treatments, the cost of medicinal biologics per patient is over $16,000 per year. [8]

For health care payers, the cost of biotech products is rising dramatically. According to IMS Health Inc., a provider of business intelligence for biotech and pharmaceutical companies, expenditures on biologics in the United States was over $40.3 billion dollars in 2006, which marks an increase of 20% from 2005. [9] Public and private insurance companies have declared that a continued increase is not sustainable without cuts to health care coverage. [10] Biologic medicines are of little benefit if they are too expensive for patients to afford.

Although Congress has made efforts to make biologics more affordable for the consumer market, such legislation must be carefully balanced to maintain incentives for innovators as they develop new therapeutic regimens. [11] [12] Without adequate incentives for biotechnology companies to discover new market-viable biologic medicine, there would be a dearth of breakthrough products available to patients. The majority of new biologics are discovered by small to medium-sized innovative biotechnology companies. [13] Research and development of biologics is an extraordinarily high risk endeavor requiring a great deal of up-front capital investment, [14] and returns are often not realized for several years due to the length of time required for the product to be developed and go through the stringent regulatory approval process of the Food and Drug Administration (“FDA”). [15]

In an effort to reduce the costs of medicine for patients, Congress must be especially careful not to impair the ability of the biotechnology industry to thrive by substantially diminishing profitability. Currently, the biotechnology industry is “still relatively nascent” and is largely fueled by venture capital investment. [16] Of the approximately 1400 biotechnology companies operating in the United States today, only twenty are profitable. [17] Many of these companies are small, with revenues of under a million dollars per year, and do not even have a product on the market yet. [18] Leaders in the biotechnology industry have expressed concern over the ability to secure investments in the wake of new biologics legislation:

Biotechnology researchers must have some certainty that they can protect their investment in the development of new breakthrough therapies for a sufficient period of time in order to secure necessary financial resources. If … legislation were to fail to provide adequate protections, it could jeopardize the ability of biotechnology researchers to continue to innovate. [19]

In June 2007, a bipartisan bill sponsored by Edward Kennedy (D- Mass.), and co-sponsored by Hillary Clinton (D- N.Y.), Orrin Hatch (R- Utah), Mike Enzi (R-Wyo.), and Charles Schumer (D- N.Y.), titled the Biologics Price Competition and Innovation Act of 2007 (“BPCIA”), was introduced to and unanimously passed by the Senate Committee on Health, Education, Labor, and Pensions. [20] The BPCIA seeks to balance patients’ needs for affordable biologic medicine with the needs for innovation in the biotechnology industry to continue to develop new therapeutics. [21]

This Note will discuss key provisions of the BPCIA and will analyze the likely impact of its passage on innovation in the biotechnology industry and patient access to lower cost biologic medicine. Part I will provide a brief background on biologics and the complexity of their manufacture. Part II will describe the regulation of small molecule drugs under the Food Drug and Cosmetic Act (“FDCA”) [22] and the regulation of biologics under the Public Health Services Act (“PHSA”). In addition, the Hatch-Waxman amendments to the FDCA that allow for abbreviated new drug applications (e.g., generics) will be discussed. [23] Part III will explain why legislative action is necessary for a viable path forward to abbreviated FDA approval of biologics. Part IV will describe key provisions of the BPCIA that lay the framework for regulation of follow-on biologics. Finally, in Part V, this Note will analyze the impact that enactment of the BPCIA might have on innovation in the biotechnology industry and patient access to lower cost biologic medicine….

Robert N. Sahr*

On the heels of their ubiquitous and controversial decision in Harvard College v. Canada (Commissioner of Patents) (the so-called ‘Harvard Mouse’ case), [1] the Canadian Courts were soon asked to re-consider the issues surrounding the patentability of biotechnological inventions in Monsanto v. Schmeiser. [2] Unlike Harvard Mouse, this matter was an infringement action. At the Trial Division, the crux of the action lay with Schmeiser’s alleged failure to obtain a license Monsanto’s patented [3] “Roundup Ready Canola” (a canola seed tolerant of glyphosate herbicides including Monsanto’s own “Roundup”). [4]

“The infringement alleged is by the defendants using, reproducing and creating genes, cells and canola seeds and plants containing genes and cells claimed in the plaintiffs’ patent, and by selling the canola seed they harvested, all without the consent or licence of the plaintiffs.” [5]…

Emir A. C. Mohammed