The Federal Trade Commission on Thursday will consider issuing a policy statement regarding the “improper” listing of patents in the FDA’s Orange Book, a publication that lists drug products the agency approved and deems safe and effective.
The FTC’s discussion comes as Congress recently highlighted the anti-competitive business practices in the pharmaceutical industry and soaring drug prices for consumers.
The Orange Book, also known as the gateway for generic brand drugmakers, allows generic manufacturers to determine which drugs can be substituted for particular name-brand drugs.
Generic drugmakers have long been concerned about the way name-brand drugmakers enter their products into the book, which often results in patent infringement lawsuits and rival drugs barred from joining the list.
The FTC will discuss whether improper listing of patents increases the cost of essential prescription drugs and reduces drug access, and if the naming of patents that don’t meet listing requirements constitutes an unfair method of competition.
“As a branded pharmaceutical company, you traditionally want to maintain your exclusivity on your marketing of your branded drug for as long as possible,” said Shashank Upadhye, a patent attorney at Upadhye Tang LLP.
“People take the view that the listings in the Orange Book were improper—there were too many patents, they were the wrong kinds, maybe say, the wrong flavors,” Upadhye added.
The FTC declined to comment before it votes on an official statement at its open meeting Sept. 14.
Legal Wars for Drug Patents
Manufacturers that apply for FDA approval of a generic version of a name-brand drug must inform the agency they won’t infringe enforceable patents already listed in the Orange Book. Competing drug companies use the information in the book to determine whether they will seek FDA approval for a generic drug they want to market.
Generic drugmakers usually wait until the branded companies’ patent nears expiration, but tensions can arise during the FDA application process that triggers patent infringement suits.
The challenges come when a listing can apply to “various extents by putting patents on the Orange Book that may not actually cover the drug product for which the generic is seeking generic approval,” said Arti Rai, a law professor at Duke University.
Name-brand drugmakers can list patents that might keep generic drugs off the market for longer than expected, which complicates moves for competitors bringing in cheaper versions of drugs.
“Brand companies will be assertive and aggressive in what patents they list in the Orange Book, erring on the side of listing more, if there’s a gap, or there’s an uncertainty, or maybe lack of clarity,” Upadhye said.
“It’s very important that we have a patent system that protects branded companies for their development, because if they don’t do development, there’s no new medicines that come along,” Upadhye added.
The FDA can’t approve potential rivals for the next two and half years once a patent is listed in the book. Branded drug companies that sue generic competitors for infringing on an Orange Book-listed patent automatically trigger a 30-month bar on the FDA’s ability to approve the competitor’s drug.
Litigation between brand drug and generic companies regarding patents is nothing new to the FTC.
The commission late last year filed a brief in support of Avadel CNS Pharmaceuticals against
“The FTC has long been concerned about Orange Book listing abuses,” the counsel for the FTC said in the brief.
“Although this case involves a dispute between private parties, it may have much broader implications for the Commission’s competition mission and for consumers,” the counsel said.
Congress Chimes In
FTC Chair Lina Khan has used her tenure to police consumer and competition issues that critics argue are beyond the agency’s authority. Some Republicans in Congress have criticized the commission for probing pharmacy benefit managers. Sen.
Changes for actions in the Orange Book are also being pushed by some members of Congress.
Rep.
“Pharmaceutical companies, especially brand-name companies, have routinely abused the Orange Book system by improperly listing patents to block the introduction of lower-cost generics,” Warren and Jayapal said in the letter.
The two Congress members say the 30-month wait after a patent is listed creates an incentive for companies to list “sham” patents in the publication and “hold off generic competition for at least 2.5 years, regardless of the outcome of any litigation.”
Despite Warren and Jayapal asking the FDA to “close loopholes” in the pharmaceutical patent system, the request might not immediately yield results because the FDA doesn’t interpret or determine the patents in the Orange Book.
The “FDA has taken the position that they’re not in the business of evaluating patents, and that’s maybe an area where there is a lack of a gatekeeping function, there’s a lack of policing,” said Neal Seth, a partner at Wiley Rein LLP.
The “FDA has been open for a long time about saying, ‘Well, we were not really equipped to play that role,’” Seth added.
Action after exploring ways to reform patent listings in the Orange Book would most likely need to come from lawmakers, Rai said.
“At the end of the day, Congress has to act,” Rai said.
“The FTC is just trying to draw attention to the issue and perhaps get some momentum in Congress to do something about this so that agencies like the FDA can just delist if they’re told that a patent doesn’t cover the generic,” she said.
—With assistance from Dan Papscun
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