FEBRUARY 01, 2007

In a significant legal victory for the generic drug industry, the Supreme Court struck down a key strategy used by branded pharmaceutical manufacturers to delay competition from lower-cost generics. The high court's decision in MedImmune v Genentech effectively nullified the Federal Circuit's controversial "reasonable apprehension" test—a standard that critics claim had made it more difficult and time-consuming for generic firms to prevail in drug patent disputes.

In 2003, Congress closed a loophole in the original Hatch-Waxman generic drug law by allowing generic manufacturers to seek declaratory judgments from the courts as an alternative to lengthy patent litigation. The Federal Circuit, however, created a new stumbling block by ruling that generic firms must "have a reasonable apprehension of suit by the patentee" before securing such a declaratory judgment. This was the legal barrier removed by the high court in the Genentech case.

Generic Pharmaceutical Association President and Chief Executive Officer Kathleen Jaeger called the new ruling "a victory for consumers and the entire health care system in the fight to reduce health care costs while improving care. By striking down the Federal Circuit's ‘reasonable apprehension'test, the Supreme Court has ruled in favor of American consumers by making it harder for brand companies to delay generics from coming to market," she said.