FDA Rules Against Generics On GATT

The US Food and drug Administration has ruled that the Uruguay Round Agreement Act (the General Agreement on Tariffs and Trade implementing legislation) provides no basis for it to treat the period of patent extension furnished by the Act differently than it treats "other patient protection asserted by New Drug Approval holders," and has told brand-name companies to submit new patent information on patent extension arising from the GATT by July 8, in order to block generic approvals.

The FDA statement came in response to a citizen's petition presented by Glaxo (Marketletter May 8), urging it to enforce the law and block any generics until the extended patents expire. However, the FDA also suggests that Congress might not have intended this outcome and should act to clarify the law. Senator David Pryor said he will introduce a bill to restore the 17-year time limit for drugs now under patent or in application, and called "obscene" any profits that might result from the extra patent life. "It will create enormous and unintended profits for the brand-name companies," he said. Representative Henry Waxman said the ruling was "very bad policy, even though the FDA felt it could go no other way legally."

Glaxo's Zantac (ranitidine) and Bristol-Myers Squibb's Capoten (captopril) are seen as the major beneficiaries of the ruling. Analyst Hemant Shah of HKS & Co said he did not think generic makers would have much luck with the Republican-led Congress, and any relief from the courts could take as long as three years.