Pharmaceutical and biotechnology companies face long development timelines. It often takes 10–15 years to bring a new medicine to market, and by the time regulatory approval is granted, much of the patent’s 20-year term may already be gone.

To address this challenge, the United States introduced the Patent Term Extension (PTE) mechanism under the Hatch-Waxman Act. PTEs help innovators regain valuable patent life lost during regulatory review—ensuring more time to benefit from exclusivity before generic competition begins.

This article explains how PTEs work, who is eligible, and why they remain a critical part of U.S. intellectual property strategy in 2025.

What Is a Patent Term Extension (PTE)?

A Patent Term Extension (PTE) is a legal provision under the Hatch-Waxman Act that allows the term of certain U.S. patents to be extended by up to five years.

PTEs compensate innovators for time lost during the Food and Drug Administration (FDA) regulatory approval process for:

  • Human and veterinary drugs
  • Medical devices
  • Food or color additives

Why the Hatch-Waxman Act Created PTE

The Drug Price Competition and Patent Term Restoration Act of 1984—commonly known as the Hatch-Waxman Act—was designed to strike a balance between:

  • Encouraging pharmaceutical innovation by compensating for regulatory delays.
  • Promoting generic competition once the exclusivity period ends.

PTE was the “restoration” piece of this balance, giving originators extra time while ensuring eventual market access for generics.

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Duration and Limitations of PTE

  • Maximum Extension: Up to five years.
  • Total Market Exclusivity Limit: A patent cannot be extended beyond 14 years from FDA approval.
  • Calculation: The extension is based on the time the product was under FDA review, minus certain periods (such as applicant delays).
  • One Patent Rule: Only one patent per approved product can receive a PTE.

Eligibility Criteria for PTE

To qualify for a PTE under Hatch-Waxman:

  1. The product must be subject to FDA regulatory review before commercialization.
  2. The patent must claim the product, a method of using the product, or a method of manufacturing the product.
  3. The PTE application must be filed within 60 days of FDA approval.
  4. The patent must still be in force at the time of filing.

PTE vs. SPCs in Europe

While the U.S. uses PTE, the European Union relies on Supplementary Protection Certificates (SPCs). Both serve the same purpose: compensating innovators for regulatory delay.

Key differences include:

  • Jurisdiction: PTE is U.S.-specific; SPCs are EU-based.
  • Duration Rules:
    • PTE → up to 5 years, capped at 14 years post-FDA approval.
    • SPC → up to 5 years, plus 6 months for pediatric medicines.
  • Scope: SPCs apply mainly to medicinal and plant protection products, while PTEs also cover medical devices and additives.

Case Examples of PTE

Several blockbuster drugs have benefited from PTEs, securing billions in extended revenue:

  • Lipitor (atorvastatin): Gained extended exclusivity through PTE.
  • Key biologics: Many biologics approved in the 2000s leveraged PTE to offset long FDA timelines.

These cases highlight the commercial stakes—one extra year of exclusivity can represent billions of dollars in additional revenue.

Strategic Considerations for Corporates

For in-house IP and legal teams, PTEs are a critical part of lifecycle management. Key considerations include:

  • Coordinating FDA and patent timelines to ensure eligibility.
  • Choosing the right patent to extend (composition vs. method of use).
  • Global alignment: Understanding how U.S. PTEs fit alongside EU SPCs and other regional extensions.

The most successful corporates plan their patent strategies early—often years before FDA approval—to maximize exclusivity across jurisdictions.

Conclusion

Patent Term Extensions under Hatch-Waxman remain a vital safeguard for pharmaceutical, biotech, and medical device innovators in 2025. By compensating for lengthy FDA review, PTEs ensure companies have adequate time to recover their massive R&D investments.

But navigating PTEs requires careful timing, technical expertise, and strategic coordination across global markets. At Azami, we work with corporates and law firms to align regulatory, patent, and commercial strategies—helping innovators capture every available protection.

Frequently Asked Questions About PTEs

1. How long can a PTE extend a patent?

Up to five years, but no patent can exceed 14 years of exclusivity from FDA approval.

2. What products qualify for PTE?

Human/veterinary drugs, medical devices, and food/color additives subject to FDA review.

3. Can more than one patent on a product receive PTE?

No. Only one patent per approved product may be extended.

4. How is a PTE calculated?

Based on time spent in FDA regulatory review, minus certain excluded periods.

5. How does PTE compare to SPCs in Europe?

Both extend exclusivity, but the rules, scope, and duration caps differ.