The Indian patent regime before the 2005 amendment granted only process patents on drugs. This led to creation of a robust generic pharmaceutical industry in India which off late has gained a strong global presence owing to their strategy of market presence through filing for an Abbreviated New Drug Application (ANDA) under paragraph IV of the Hatch-Waxman Act of United States. Hatch-Waxman employs a unique procedural framework to manage the interplay between pioneer New Drug Application (NDA) and their generic Abbreviated New Drug Application counterparts (ANDA). Upon filing an NDA, a pioneer firm must provide a list of relevant patents, which are then listed in an FDA (US Food & Drug Authority) publication known as the Orange Book. Subsequent ANDAs must reference these Orange Book listings and make one of four certifications for each patent:

1. The required patent information has not been filed;
2. The patent has already expired;
3. The patent has not yet expired, but will do so prior to FDA approval of the ANDA; or
4. The patent is invalid or will not be infringed by the ANDA.

The most contentious of these is the Paragraph IV certification as it grants a market entry to a generic firm prior to patent expiration. Generic applicants making Paragraph IV certifications must notify the pioneer firm, which then has forty-five days to initiate a patent infringement lawsuit. Pioneer drug makers typically pursue litigation, automatically triggering a thirty-month stay that prevents FDA approval of the ANDA until the earliest of the following dates

• Patent expiration
• A final resolution of the patent litigation, or
• Expiration of the thirty-month period.

If the generic drug manufacturer prevails in the Paragraph IV patent litigation, it is rewarded with a 180-day marketing exclusivity period, during which the FDA cannot approve subsequent generic versions of that drug.

This 180-day monopoly can be immensely profitable, and in rewarding the first Paragraph IV filer for bearing the risks and expenses of patent litigation. Lately, according to a leading economic daily, three Indian drug manufacturers have been sued by various pharmaceutical companies in the US as a part of patent litigations against companies vying for a share of blockbuster patented drugs in the US market. Orchid and Dr. Reddy’s Labs are alleged to have infringed US patent no. 7,410,957 for Roche’s osteoporosis drug ‘Boniva’. Both the firms were also sued in 2007. Orchid was accused of infringing US patent nos. 7,192,938 (method of treatment using bisphosphonic acid) and 6,294,196 (pharmaceutical composition containing diphosphonic acid or salt) following its paragraph IV ANDA submission to manufacture a generic version of Boniva. Dr. Reddy’s Labs was sued for alleged infringement of US patent no. 6,294,196 following its paragraph IV ANDA submission. ‘Boniva’ achieved sales of $305 million for the first six months of 2008. Sun Pharma has been sued by Biovail for infringing the latter’s US patent for Cardizem, used to treat hypertension, with Sun’s proposed generic version of Cardizem. In the first half of 2008, Cardizem generated revenues of $20.7 million, compared with $46.6 million in the first half of 2007.

The potential of US generic pharmaceutical market is the reason for all this activity to get a marketing approval for a generic version using the Paragraph IV filing route under Hatch-Waxman Act. The US generic market has grown from 63% in 2006 to 67% in 2007. With the end of patent protection on drugs worth $20 billion in 2008 and, as per IMS data, $ 130 billion of prescription drugs going off patent by 2012, a huge opportunity for generic firms is in store. This has led the Indian generic firms to focus increasingly on the US market despite the costs of patent litigations soaring up. According to experts, on an average, Para IV ANDA filing with the USFDA costs about $2 million including bio-studies preparation and ANDA draft. In addition, it costs on average about $15 million to litigate drug patent case through appeal.