With that, I would like to call forward our first
       witness this afternoon, who is Don Stone, if he is here.
 
       MR. STONE:  Thank you.  I am Don Stone, with the
       law firm of McKenna and Cunio, at 1575 I Street N.W., in
       Washington, D.C.
 
       I speak to you this afternoon as counsel for the
       National Pharmaceutical Alliance and am presenting their
       position to you.
 
       The NPA is an association of more than 155 firms
       involved in the manufacture and nationwide distribution of
       pharmaceuticals, including proprietary and generic
       prescription drugs, over-the-counter medications, and
       branded proprietary medications.
 
       NPA has members in 28 states, Puerto Rico, and
       Canada.  The primary purpose of NPA is to promote the
       general welfare of the pharmaceutical industry.  The
       Association has a mission of disseminating information
       concerning the pharmaceutical industry to assure the
       availability of pharmaceuticals at efficient prices.
 
       Your agencies are considering actions they should
       take to implement the Uruguay Round Agreements Act, or URAA,
       which made changes to the patent laws that affect brand name
       and generic drugs.
 
       The PTO, in its announcement, has posed seven
       specific issues for comment.  The NPA is pleased to present
       its views on how the PTO and FDA should respond to those
       issues.  The Association recommendations discuss both the
       general philosophy embodied in pertinent legislation and the
       specific statutory language involved.
 
       To begin with, a little bit of background in our
       more general philosophical approach.  As we are all aware,
       numerous nations recently concluded the Uruguay Round of the
       General Agreement on Tariffs and Trade.  Then in December of
       1994, Congress passed and the President signed, the URAA
       legislation implementing those changes.
 
       The purposes of both GATT and URAA are to promote
       competition in international trade and to harmonize relevant
       legal requirements world wide to carry out that promotional
       objective.
 
       GATT and URAA made several changes to the U.S.
       patent law.  One of those changes effects the terms of some
       existing and pending U.S. applications.  Those terms will,
       in some cases, be extended.  Both GATT and URAA recognized
       that the term extensions could adversely affect the rights
       of persons who had begun preparations to compete with
       products that are currently protected by patents nearing
       expiration.
 
       The legislation struck a critical balance between
       the rights of the patent owners and the rights of those who
       had made substantial investment in preparing to compete with
       those patent owners.  That balance granted an extension of
       the term to some issued patents through the transitional
       provisions.  However, it also limited the rights of those
       patent owners against person who have made substantial
       investment by the end of the transitional period, as they
       prepare to compete with the patented technology.
 
       The balance struck allows those persons, which we
       will call, in our remarks, protected infringers, to market
       their products during the patent term extension caused by
       URAA changes.  The patent owners' remedies for infringement
       which occurs, then, are limited to equitable remuneration. 
       Injunctions, damages, and attorneys' fees are not permitted
       against protected infringers.
 
       This balance between patent owners' rights and the
       rights of competitors who have made a substantial investment
       must be maintained in all actions taken by the PTO and the
       FDA, in matters concerning patented brand name and competing
       generic pharmaceutical products.
 
       In 1984, Congress had passed the Drug Price
       Competition and Patent Restoration Act, which is commonly
       known as the Waxman-Hatch Act.  Waxman-Hatch also struck a
       careful balance between the rights of owners of patented
       drug technology and those of competitors producing generic
       drugs.
 
       The Waxman-Hatch Act provides strong protection
       against competition during the original or the Waxman-Hatch
       extended term of a patent on a drug product.  However, the
       Waxman-Hatch Act promotes immediate competition upon
       expiration of that term. 
 
       The Waxman-Hatch Act permits potential generic
       competitors to begin preparations for competition with the
       patented drugs by conducting bioavailability and
       bioequivalent studies and by filing abbreviated new drug
       applications, or ANDAs, prior to the expiration of the
       patent term.
 
       Those actions are defined as non-infringing.  By
       taking those permitted actions, the generic drug
       manufacturers necessarily make a substantial investment in
       preparing to compete with the patented drug.
 
       A similar philosophy and objectives underlay the
       passage of the Generic Animal Drug and Patent Term
       Restoration Act in 1988.  Actions similar to those for
       generic human drugs were established as non-infringing, even
       when they are conducted prior to expiration of the patents.
 
       Again, the intention was to promote competition
       immediately upon expiration of the original or generic
       animal drug extended patent term.
 
       The transitional provisions of both GATT and URAA
       clearly contemplate that competition should and will exist
       during any patent term extended by URAA, if the competitor
       has made a timely substantial investment, which would
       otherwise be detrimentally affected.
 
       Generic drug applicants who have either commenced
       bioequivalents or bioavailability studies, or who have filed
       an ANDA or abbreviated new animal drug application, ANADA,
       by June 8, 1995, should be treated as having made the
       necessary substantial investment.
 
       Their applications, if otherwise satisfactory,
       should be approved to permit them to compete as protected
       infringers during the URAA extended patent term.
 
       The patent owner is not left helpless.  The owner
       is entitled to equitable remuneration for the resulting
       infringement.
 
       We strongly urge that all actions, by both the PTO
       and the FDA, concerning the issues raised for public
       comment, should be consistent with the achievement of GATT
       and URAA objectives.  In particular, PTO and FDA should not
       take any action which would frustrate legitimate competition
       between patent owners and protected infringers during URAA
       extended patent terms.
 
       Let me now move to respond to your specific
       issues.  Issue No. 1, what should be done in the orange and
       Green Books?
 
       NPA believes that FDA should revise the Orange
       Book and the Green Book to provide two critical patent dates
       for each effected, listed patent, granted before December 8,
       1994.  The first date should be the patent expiration date
       under the law prior to URAA.  The second date should be the
       pertinent patent expiration date, taking into account any
       URAA extension.
 
       Both are dates which have been valid, correct
       expiration dates under the patent law.  NPA believes that
       both meet the requirements for publication by FDA,
       established in Sections 505(b)(1) and (c)(2), and 512(b)(1)
       and (c)(3), of the Food, Drug and Cosmetic Act.
 
       Publication of both dates will define clearly that
       portion of the patent term during which competition would be
       allowed under the URAA transitional provisions.  Publication
       of both dates serves the interests of all parties.
 
       Publication of only a single date would be
       misleading to the public, in our opinion.  Permanent
       retention of the original expiration date would not inform
       potential generic drug applicants and others that equitable
       remuneration might be due to a patent owner, if they had
       sales before the extended expiration date.
 
       Revision of the information to provide only the
       extended date would misinform the public and applicants
       about when generic equivalent products might be available or
       approvable.
 
       On your second issue, should the PTO certify, NPA
       believes that the PTO should certify new patent expiration
       dates to NDA and NADA holders.  NPA does not believe that
       the certification should be limited to those patents
       currently listed.
 
       Similar certification should be provided to patent
       owners who wish to list additional patents with FDA in the
       future.
 
       The reason that we believe that certification is
       important is that the determination of patent expiration
       dates under URAA changes will be more complicated than under
       prior law.  Determination of the patent term will require
       references to previously filed applications.
 
       Patents issued on applications filed after June 8,
       1995, of course, will also require reference to term
       extensions caused by interferences, secrecy orders, or
       appellate review.
 
       NPA encourages the Patent Office to develop a
       system for printing the expiration date, assuming of course
       that all applicable fees are paid, on the first page of
       patent copies.
 
       NPA believes that the PTO should certify that date
       for any patent which does not, on its face, already show
       that date.
 
       On your third issue, NPA believes that NDA holders
       and NADA holders should submit revised patent expiration
       dates to FDA for those patents already listed.  Future
       listing information should be required to contain two dates,
       those two dates I spoke of earlier.
 
       We believe that the listing should only be after
       the PTO has certified the dates.  
 
       I will indicate very briefly that the remainder of
       my remarks are in written form before all of you.  I
       apologize that the time has run so fast.  We have also
       submitted written copies to both the PTO and FDA of all of
       these dates, and copies will be available for anyone who
       would like them after the meeting.  Thank you.
 
       COMMISSIONER LEHMAN:  Thank you very much, Mr.
       Stone, for accommodating our time restrictions.
 
       Are there any questions of Mr. Stone?
 
       [No response.]