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U.S. Supreme Court Declines to Overturn Barriers to Generic Competition

AARP asked the U.S. Supreme Court to take up Apotex Inc. v. Sebelius, a case that addresses competition in the marketplace for pharmaceuticals, but the Court did not agree to review the case, allowing a prior adverse ruling to stand.


The Competition and Patent Term Restoration Act, known as the "Hatch-Waxman Act," created a pathway for generic drugs to enter the market. The generic drug maker files an Abbreviated New Drug Application (ANDA) with the Federal Drug Administration (FDA) for approval to market its generic. The first to file an ANDA certifying that its generic drug will not infringe the patent rights of the brand manufacturer (called a Paragraph IV certification) is entitled to 180 days exclusivity to sell its drug. The intent of this law is to give an incentive to encourage the entry of generic drugs into the marketplace.

In 2003, concerned with ensuring access to low-cost generics, Congress amended Hatch-Waxman by providing "forfeiture events" by which an ANDA could lose the 180-day exclusivity. One "forfeiture event" occurs when the challenged patent expires. Under the FDA's long-standing interpretation of this statute, once a patent expires, the generic's eligibility for 180 days of exclusivity is extinguished.

In Apotex, the brand-name manufacturer of two hyptertension drugs was challenged by Teva Pharmaceuticals, a generic drug manufacturer. Teva's application was approved and sought the 180-day period of exclusivity. However, shortly after the court's decision, the FDA found that the brand-name drug manufacturer's patent had previously expired because of the manufacturer's non-payment of registration fees. The FDA found that its expiration did not affect Teva's subsequent 180-day period of exclusivity.

Two other competing generic manufacturers (Apotex and Roxane) sued alleging that the 180-day period of exclusivity is not applicable because it was pinned to an underlying invalid patent. A federal appeals court ruled in favor of the FDA and kept the 180-day exclusivity in place. Apotex appealed to the Supreme Court.

AARP, along with the Consumer Federation of America, asked the Supreme Court to take up the dispute. The scope of the "expiration" provision must be defined and applied in such a way so as to better ensure full competition in the market, even among generic companies. Because prices are artificially high during the generic's exclusivity period, the limiting provisions help ensure full competition and lower prices, when exclusivity is not warranted.  

What's at Stake

For many patients, paying for medicines is a daily struggle and one that forces them to either do without other necessities, skip doses, or split pills. This has serious ramifications for their health; patient compliance is one of the central issues in keeping hospital readmissions down, in reducing antibiotic resistance, and in avoiding medical complications.


The Supreme Court denied Apotex's Petition for Writ of Certiorari on Jan. 18, 2011.

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