##Pharmaceutical Patents and Generic Drugs#
Pharmaceutical companies obtain patents on novel drugs so that they will have market exclusivity as long as the patent remains valid and has not expired. The Drug Price Competition and Patent Term Restoration Act is an act of Congress that sets forth the process by which generic drugs can enter the market before the patent covering the branded drug has expired.
For any generic drug to enter the market, the company manufacturing it must submit an Abbreviated New Drug Application (ANDA) to the FDA. This application contains information about the composition and manufacturing process for the drug, as well as comparisons between the generic product and the original. The application must also specify whether or not the original drug is patented, and if it is, whether or not the company intends to launch their product before the patent term expires.
If the company intends to sell the generic product before the expiration of the patent covering the original, they must declare that the patent is invalid or has not been infringed and notify the patent holder of their intentions and the legal basis for their claims. The patent holder then usually files suit against the generic company for patent infringement. Once the suit has been brought, the generic company is prohibited from launching their product for thirty months to allow time for litigation. If the litigation has not ended once the thirty months have passed, the generic company is permitted to launch their product, but they risk paying damages to the patent holder if they lose.
The act also provides incentive for generic companies to apply to market a drug before the patent covering it has expired. The first company to file an ANDA and claim invalidity or non-infringement receives six months of generic exclusivity on the market.
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