COMMISSIONER LEHMAN:  If not, I would like to ask
       Robert Milanese, President of the National Association of
       Pharmaceutical Manufacturers, to come forward, please.
       MR. MILANESE:  Thank you.  My name is Robert
       Milanese.  I am President of the National Association of
       Pharmaceutical Manufacturers, located at 320 Old Country
       Road, in Garden City, New York.
       NAPM is pleased to present its views concerning
       the potential adverse impact on U.S. generic pharmaceutical
       industry, U.S. consumers, and Federal and State
       pharmaceutical reimbursement agencies, caused by URAA.  
       NAPM is the national trade association
       representing independent generic pharmaceutical
       manufacturers and supplies of bulk drug chemicals to the
       U.S. generic drug manufacturing industry.
       PTO has requested comments regarding the possible
       changes to the U.S. drug approval system related to the
       20-year patent term contained in URAA.  URAA extends the
       patent term for all patents filed with the PTO on or after
       June 8, 1995, to 20 years from the date of application,
       rather than the current patent term of 17 years from date of
       In addition, under a transitional provision, all
       unexpired patents as of June 8, 1995, may be extended to 20
       years from the earliest application filing date, if that
       term is longer than 17 years from the patent issue date. 
       The difference in term between the 17-year term, from the
       date of grant, and the 20-year term, from the date of
       application, is referred to by the PTO as the delta period.
       If the provisions of GATT, as well as PTO and FDA
       operative statutes, are not read in proper context and
       correctly applied by PTO and FDA, the results could very
       well be a de facto injunction against the approval of
       generic drug applications during the qualified patent term
       extensions, i.e., the delta period, which could be granted
       to over 100 brand name pharmaceutical products.
       In essence, brand name pharmaceutical patents
       extended on June 8, 1995, which were issued within the three
       years of filing, will receive certain additional qualified
       protection for the difference between the 20-year measuring
       scheme and the original 17-year measuring scheme.  Under
       URAA transitional provision, however, a company which has
       made substantial investment in developing a competitive
       product prior to June 8, 1995, may market the product
       notwithstanding any additional qualified protection by GATT,
       with payment to the patent holder of equitable remuneration
       for such marketing.
       Under the FD&C Act, the approval of an ANDA or an
       ANADA for a generic equivalent drug product, except when the
       validity of the patent is questioned, will not granted until
       the patent expires on the brand name product.  FDA is
       required to publish patent expiration dates in an official
       publication known as the Orange Book for human
       pharmaceuticals and the Green Book for animal drugs.  One
       possible, but impermissible, interpretation of the law could
       be listing the GATT-extended patents in the Orange Book and
       Green Book which could act as a complete bar to the approval
       of the generic product until the GATT-extended patent date
       This result would be totally inconsistent with the
       qualified patent protection granted under URAA.  
       Under the enabling legislation, a company which
       has made substantial investment in developing the
       competitive product prior to June 8, 1995, is permitted to
       market the product on the date of the original patent
       The patent holder is not allowed to obtain an
       injunction, nor is it allowed actual damages or attorneys'
       fees, as is currently provided for by law for patent
       infringement.  Rather, the patent holders' exclusive remedy
       is equitable remuneration for the marketing of a competitive
       generic product during the delta period.  Nothing more,
       nothing less.
       Thus, it is clear that GATT has created a new
       class of proprietary right in the patent holder which does
       not fall literally within the language of either FDA's or
       PTO's operative statutes.  Notwithstanding this fact, it is
       clear that applying the statutes as written and the
       agencies' implementing regulations would only permit one
       result.  That for patents in effect on June 8, 1995, GATT
       extensions do not and were not intended to operate as a bar
       to the marketing of a generic drug once the original
       pre-GATT period of patent protection had run.
       In this respect, GATT has mandated no change in
       the status of the patented drug product.  Once the original
       patent protection has expired, a generic drug may be
       marketed.  There should be no dispute on this point.
       It is also clear that the exclusive marketing
       granted by the law -- full, unqualified patent protection --
       ends on the date contained in the Orange Book for ANDAs and
       the Green Book for ANADAs, as they exist today.  This was
       true prior to GATT and it remains true under the
       renegotiated treaty.
       It is these dates which determine when a generic
       drug may come on the market.  There should be no dispute on
       this point, either.
       URAA was never intended to be an absolute
       prohibition of the marketing of competitive products during
       the delta period, and does not, in fact, bar such marketing. 
       NPA strongly urges PTO to work with FDA to establish
       policies which will continue the approval of ANDAs and
       ADADAs on the original patent expiration dates as currently
       reflected in the Orange and Green Books.  
       A contrary result would cost the American
       consumer, the Federal and State reimbursement agencies,
       billions of dollars due to the needless delay in the
       introduction of safe and effective, lower-cost equivalent
       generic drug products.
       This result would also provide a substantial
       windfall to the U.S. holders of pharmaceutical patents that
       have structured their pricing over the years to recoup all
       the research and development and other costs by the patent
       term applicable at the time that the patent for the brand
       name product was filed.
       The generic drug industry, through a combination
       of NAPM and NPA has commissioned a study on the economic
       impact of this scenario and will supplement the record of
       this hearing in the very near future, once it is completed.
       We have a preliminary example of just one drug,
       Zantac, ranitidine, which will be extended by over 19
       months, from December of 1995 to July of 1997.  That is
       going to result in a cost to the American consumer of over
       $1 billion.  That is one drug we have identified, over 100.
       Let's address some of the questions.  Should FDA
       revise the patent term expiration dates currently listed in
       the Orange Book and the Green Book?  NAPM submits that no
       dates may be changed from those currently in the Orange Book
       and the Green Book.  We feel that FDA is required to utilize
       the current patent term dates in the Orange Book and Green
       Book as effective dates of approval for ANDA and ANADA
       applicants prior to which the product may not be marketed.
       The primary difficulty with using GATT-extended
       patent termination dates for the list of patents in the
       Orange Book and the Green Book is that, in contravention to
       the terms of GATT, these GATT-extended dates would become
       the effective dates of generic drug approvals and thereby
       operate as an absolute bar to marketing.
       GATT, however, clearly indicates that the patent
       extensions granted to it do not operate as a bar to
       marketing, but rather to the contrary, permit the marketing
       of generic drug products in which the applicant has made a
       substantial investment.
       The only condition established by GATT for such
       marketing during the GATT extension period is the payment of
       equitable remuneration to the patent holder.  In our view,
       it would substantially exceed the mandate of GATT to change
       the current Orange Book and Green Book dates to
       GATT-extended dates, which would, under FDA's drug approval
       scheme, operate as a full bar to marketing.
       NAPM submits that if companies submit such
       GATT-extended dates to FDA as dates of patent expiration,
       that such dates, if placed into the Orange Book or Green
       Book, be clearly marked with a notation that they represent
       GATT extensions which do not operate as a bar to marketing
       and that such dates representing only a qualified patent
       extension do not constitute the type of full patent
       protection which the statute requires FDA to utilize in
       setting approval-effective dates.
       Second question.  Should PTO, at the request of
       NDA or NADA holders, certify?  As previously stated, there
       is only one type of patent certification which is operative
       for FDA in setting the approval-effective date, and that is
       the date of expiration of the full, unqualified patent
       GATT extensions do not constitute such unqualified
       patent protection and therefore cannot be certified through
       FDA as dates of patent expiration for purposes of setting a
       drug approval date.
       Question three.  Should NDA and NADA holders be
       required to submit to FDA revised patent expiration dates
       for those patents currently listed in the Orange Book and
       Green Book that will have a longer term under URAA?
       GATT-extended patent term expiration dates are not
       relevant to the drug approval process and therefore have no
       place in FDA's regulatory scheme.  FDA is charged by law to
       render ANDA and ANADA approvals effective on the date first
       allowed by law for marketing.  These dates were not changed
       by GATT.
       GATT merely provided for certain potential
       periods.  The ANDA applicant who has made a substantial
       investment would be required to provide equitable
       remuneration to the patent holder.
       The issue of such equitable remuneration and the
       conditions and amount of its payment are not issue subject
       to FDA's determination or jurisdiction.  Accordingly, such
       extension dates should not be a required part of the FDA
       I am just going to jump to question number six,
       because my time is up.
       I think we wanted to get in the concept of what we
       would consider substantial investment.  We submit that, at a
       minimum, any substantially complete application filed before
       June 8, 1995, would automatically qualify as a substantial
       investment.  Moreover, if a firm has manufactured pilot
       batches or has commenced a bioequivalency study prior to
       June 8, 1995, and subsequently files a substantially
       complete ANDA, after June 8, 1995, that expenditure of
       resources should qualify as substantial investment.
       In conclusion, NAPM respectfully submits that GATT
       extensions for patents in effect on June 8, 1995, confer not
       a true, unqualified patent right, but a commercial royalty
       right which is not subject to FDA's jurisdiction, nor should
       it properly determine FDA's approval dates, which have been
       and which continue to be determined by statute, unaffected
       by GATT.  Thank you.
       COMMISSIONER LEHMAN:  I want to ask a question
       because I am a little confused about the position of the
       We have heard some discussion here in the last two
       days about a bill, H.R. 359, in the House of
       Representatives, which actually would modify the URAA by
       actually extending indefinitely a provision which would
       require that a patentee would receive a 17- or 20-year term,
       whichever is longer.
       You seem to be concerned about the impact of the
       transitional provisions here, and yet I am surprised that we
       haven't heard anything from you about H.R. 359.
       MR. MILANESE:  Well, we were concerned primarily
       about FDA's quandary about what to do with approvals, and we
       thought that the focus of this hearing --
       COMMISSIONER LEHMAN:  So you don't have any
       problem with the pharmaceutical companies then having under
       the new system, the benefit of H.R. 359, which is 17 years
       or 20 years, whichever is longer?
       MR. MILANESE:  We think that a lot of products are
       going to be impacted by this extension.  We are very
       concerned about it.
       COMMISSIONER LEHMAN:  I am not aware that anybody
       has heard about that.  You know, there are 120 sponsors of
       that bill in the House of Representatives.  I would suggest,
       if you are concerned about this, you might want to let them
       know about it because, I think, that is probably
       considerably more long-term interest to you than these
       transitional provisions are.
       MR. MILANESE:  They be hearing about it.  Yes,
       thank you.
       COMMISSIONER LEHMAN:  Thank you.  By the way, you
       know, for some strange reason, I think the Pharmaceutical
       Research and Manufacturing Association actually is opposed
       to the Rohrabacher bill, so it is sort of surprising that
       they are in favor of restricting their term and the generic
       industry isn't.
       But, there are stranger things that happen.