Drug Clashes Continue Amid Crackdown on Registry Patent Listings

No company was hit harder by the US Federal Trade Commission’s crackdown on patents listed on the federal registry of approved drugs than Israeli drugmaker Teva Pharmaceutical Industries Ltd.—and few companies have responded as aggressively.

The FTC warned eight companies to pull dozens of improperly listed entries from the US Food and Drug Administration’s Orange Book registry. Their goal: accelerating the approval of cheaper versions of branded drugs, including asthma inhalers and epinephrine autoinjectors.

Three companies have pulled most or all of their FTC-targeted listings. But Teva—whose listings accounted for nearly 40% of the FTC’s 110 targets—wasn’t deterred.

The FDA’s Orange Book helps generic-drug makers determine which brand-name drugs can be substituted with safe and effective generic alternatives. But makers of generics have long been concerned about the number and nature of patents that brand-drug makers submit for inclusion. They argue some of the patents may be irrelevant or strategically listed to create hurdles for rivals.

Instead of complying with the federal warnings targeting their questionable Orange Book listings, Teva fired off one of the first disputes asserting patents the FTC marked for delisting. Although Teva’s legal strategy flouts the spirit of the FTC’s challenges, the company is risking little more than the cost of litigation, thanks to US patent law, said Arti Rai, an intellectual property professor at Duke Law School.

The Israeli company on Feb. 16 sued Cipla Ltd., an Indian generic-drugs maker, seeking to block its proposed copy of Teva’s Qvar RediHaler for allegedly infringing 12 patents for the asthma treatment. Seven of the patents are among the FTC’s targets.

Central to Teva’s strategy is an aspect of the Hatch-Waxman Act that’s meant to accelerate access to affordable drugs while still rewarding innovation. In this pharmaceutical peace treaty, generics get a shortcut to market using brand research, while branded drugs score what Rai called an “unusual bonus"—a 30-month stay of FDA approval of generic competition while courts consider infringement claims.

Teva is doing just that.

Having submitted patents for listing in the Orange Book, including two in the first three months of 2023, Teva responded to Cipla’s Jan. 4 notice letter by suing within the 45-day window that triggers the FDA delay. That effectively blocked approval of Cipla’s generic until July 4, 2026, unless Cipla prevails before then.

“In other words, the equivalent of a 30-month preliminary injunction with no requirement to prove, as one ordinarily would, that one’s case has merit,” Rai said. Despite the FDA’s warning, what Teva’s doing is “the sort of thing that any aggressive litigator would do given the structure of the Hatch-Waxman scheme.”

Orange Book Counterclaims

Although the FTC is unlikely to sue companies ignoring its warning letters, the agency will want to keep pressure on the brand-drug makers, said Chad Landmon, who chairs the intellectual property and FDA practices at Axinn, Veltrop & Harkrider LLP. Some of that pressure may manifest as patent-delisting counterclaims from generic-drug makers in infringement suits, “because FTC has made these so prominent” in its warning letters, he said.

A unit of Alvogen Group Inc. filed one such counterclaim in October while seeking to produce a copy of a treatment for chronic obstructive pulmonary disease, or COPD.

Boehringer Ingelheim International GmbH sued last July to block Alvogen’s version of Boehringer’s top selling Spiriva HandiHaler. Alvogen in October requested the delisting of Boehringer’s US Patent No. 9,010,323. The filing cited the FTC’s Sept. 14 policy statement but came weeks before its November warning letters.

The same day the FTC sent Boehringer its warning letter, the German drugmaker asked the court to reject Alvogen’s request. A case-status teleconference is set for April 23.

Boehringer last week was hit with a lawsuit by a laborers’ health benefits fund alleging the drugmaker wrongfully listed patents for inhalers in the Orange Book to stifle generic competition and maintain inflated prices, causing overcharges of “many millions, if not billions, of dollars.”

Boehringer announced the next morning it would cap out-of-pocket costs at $35 for eligible patients for all the company’s inhalers starting June 1. The company, when asked whether the move was in response to the lawsuit, said that “conversations about prescription drug prices continue, and we’ve listened.”

“We think it is important to come forward with solutions now that will benefit patients, while we also continue work with policymakers and other stakeholders on broader system reform,” Boehringer’s March 7 statement said.

Alvogen’s counterclaim seeks the delisting of a patent that covers an inhaler and its sieve. The patent, set to expire in April 2030, is one of two included in the FTC’s Orange Book-removal list for Boehringer. But “there has been no improvements with inhaler efficacy or compliance over the last 40 years, despite countless design changes,” according to the proposed class-action suit against Boehringer. “In the end, these inhaler switches and maneuvers serve only one end—to prolong manufacturers’ monopoly profits.”

‘Considering Next Steps’

Not all recipients of warning letters have ignored the FTC’s overtures.

Like Teva and Boehringer, GlaxoSmithKline Plc also had patent listings for four products in the FTC’s crosshairs. By mid-December, though, GSK had agreed to pull Orange Book listings related to three of them. That left the asthma inhaler Arnuity Ellipta as the only GSK product still among the FTC’s targets.

Amneal Pharmaceuticals Inc.'s Impax unit and Kaleo Inc. also asked the FDA to remove their Orange Book-listed patents in the wake of the FTC’s letters. Amneal pulled two patents for Adrenaclick and Kaleo withdrew eight patents for Auvi-Q. Both products are epinephrine auto-injectors.

Prior to the FTC’s “historic” November actions, the agency said, an average of 10 patents had been challenged each year since 2017, according to the FDA’s database.

“We strongly encourage manufacturers to follow the law, and to voluntarily de-list patents that do not meet the listing criteria established by the applicable statutory and regulatory scheme,” an FTC spokesperson told Bloomberg Law last week. “Not only is the FTC considering next steps under its authorities, there may also be legal consequences from parties outside the FTC.”

That specter became Boehringer’s reality last week with the Massachusetts labor fund’s antitrust suit. But companies that haven’t received a warning letter shouldn’t assume they’re off the hook, the FTC said. The agency “may take further enforcement action” as it scrutinizes additional patents for improper Orange Book listings.”

While some companies are voluntarily withdrawing listings, others are stepping up to justify the legitimacy of theirs. Boehringer said last week that the technology in inhaler devices “has advanced greatly” and includes “improvements in the way the drug is delivered in a patient’s lungs, making the devices easier to use and cleaner for the environment.”

Both the device and the active ingredient “are critical for the safe and effective use of inhalers by patients,” it said. “Drug-and-device combination products are complex and costly to develop and manufacture, and we file patents to protect our investment in innovations like these that benefit patients and improve their lives.”

Boehringer said it launches infringement suits to protect its innovations and its ability to create new treatments. It also said it complies “with all federal laws and guidelines for the proper listing of the drug and the drug delivery device patents"and that it takes “this responsibility seriously.”

“Should FDA regulations governing the Orange Book requirements change in the future, Boehringer remains fully committed to complying with regulations related to patent listings.”

‘Great Deal of Mischief’

Landmon, head of Axinn’s IP and FDA practices, said the industry is “definitely” focused on the delisting issue. In the end, the effects will be “product- and patent-specific,” he said, and companies likely will spend more time reviewing each patent, product, and Orange Book listing.

The FDA has described its patent-listing role as “ministerial” for more than 20 years, Landmon said. He said he and a lot of people in the industry don’t necessarily agree with that stance, but it makes it “very unlikely” that the FDA will take action—other than “potentially clarifying” the rules of the patent-listing process.

“If the FDA hasn’t made clear that the patents cannot be listed in the Orange Book, it’s not clear that the FTC’s actions will help the defendants,” said Michael Carrier, an antitrust professor at Rutgers Law School.

Until the agency is “willing to bring an antitrust case against them,” Teva—already facing antitrust allegations over Orange Book-listed patents—won’t be dissuaded from filing infringement disputes like its case against Cipla, he said. Cipla’s response to Teva’s infringement allegations were due Tuesday in the Qvar RediHaler dispute.

Neither Teva nor Cipla responded to requests for comments.

Richard G. Frank, a senior fellow in economic studies at the Brookings Institution and director of its Center on Health Policy, welcomed the FTC’s moves. “Certainly, the listing of invalid and other improperly listed patents has created a great deal of mischief with respect to delaying generic entry and maintaining elevated prices,” he said.

Frank, also a professor emeritus of health economics at Harvard Medical School, said some companies that received warning letters “will want to test how the courts view the delisting issue.” That’ll depend in part on how important certain drugs are to their revenues, he said, though “in the end this is largely a legal thing.”

“For a company like Teva,” Frank said, “the few branded products they have may be sufficiently important to make setting aside the delisting worth the risk.”