Tuesday, May 31, 2005

Hatch-Waxman background

The Hatch-Waxman Act provides a procedure for a generic drug company to challenge the patent of a proprietary company. If the proprietary company disagrees with the assertions of the generic, the proprietary company becomes the plaintiff in a patent litigation.

Cutting Edge released the following:

Patent litigation remains the most commonly used generic defense strategy among pharmaceutical companies. 71% of drug companies have used legal battles to defend their patents in the past three years, according to research from pharmaceutical business intelligence firm Cutting Edge Information.

The pharmaceutical industry faces a significant threat from generics companies who challenge existing patents and erode branded product sales. While patent defense constitutes a very costly strategy, failing to react may lead to a bleaker outcome. On average, branded drugs lose 15-30% of their market share when a first generic version reaches the market. Sales decline by as much as 75-90% when companies introduce subsequent generics.


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