I'm not a lawyer, but my understanding is, it has to do with the Hatch-Waxman Act and generic "skinny labeling" where generics are allowed to "carve out" parts of the entire label that are not protected by patents.
For example, if a drug label is indicated for (A) erectile dysfunction, and (B) Curing HIV, given that the patents for (A) has expired, generics are allowed to submit for approval through the ANDA process, a label that includes only (A) but not (B).
In occasions where patents for (A) has not expired, generics can submit a Paragraph IV declaration asserting that they believe the patents for (A) are invalid. Under the Hatch-Waxman Act, such a declaration by generics is considered an "infringement event" that opens up the generics to be sued for infringement by the NDA holder (i.e. Brand pharma company).
The reason we have this system is to allow for patent infringement cases to be litigated expeditiously, and to balance the interest of the public in having access to cheaper drugs.
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