It just got tougher for drugmakers to protect patents listed in the FDA’s “Orange Book” of approved drug products when they don’t explicitly cover medication or methods of use, following a First Circuit ruling in a case against Sanofi.
The U.S. Court of Appeals for the First Circuit on Thursday revived an antitrust suit against Sanofi-Aventis U.S. LLC, requiring the company to face claims that it improperly used the Food and Drug Administration’s patent-listing process to hold off competition.
The opinion provides clarity on what patents are appropriately listed in the Orange Book—and which ones have been providing unfair cover for drugmakers seeking to drag out litigation and delay market entry by generic drugs, Zachary Silbersher, an intellectual property lawyer with Kroub Silbersher & Kolmykov PLLC in New York, said.
“For a drug manufacturer, the more patents you list, the longer it takes to litigate them, and the greater the chances that one of them will keep out a generic,” Silbersher said. “Because of that prior history, the implications of this opinion could be significant.”
Listing a patent in the Orange Book—formally known as the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations list—allows drugmakers to trigger an automatic, 30-month suspension of the FDA’s approval of competing generic products.
“If blockbuster drugs can face antitrust liability due to improper Orange Book listings, that could potentially chill drug manufacturers’ leniency to list as many patents as possible,” Silbersher said.
In other words: Fewer listed patents could eventually lead to faster entry by generics, and, ultimately, lower-cost drugs for consumers.
The FDA’s guidance historically hasn’t been clear about whether patents could be included in the Orange Book if they didn’t cover chemical-formulas for compounds and administrative instructions.
“While the opinion does not go so far as to suggest that only patents covering chemical-formulas for compounds and indicated uses for administering those compounds can be properly listed in the Orange Book, it does set forth some fairly straightforward guidance on patents that would be improperly listed,” Silbersher said.
Sanofi submitted patents for the Lantus SoloSTAR, an insulin glargine disposable injector pen device, for Orange Book listing in 2013. The “principal questions” on appeal are whether one of those patents was improperly submitted and whether that triggers potential antitrust liability, Judge William J. Kayatta Jr. wrote in the court’s opinion.
“We answer ‘yes’ to both questions,” he said.
The investors adequately alleged that the drugmaker shouldn’t have submitted one of the patents because it “neither claims nor even mentions insulin glargine or the Lantus SoloSTAR,” according to the opinion.
Sanofi argued that it shouldn’t be held liable for antitrust violations because its later Orange Book submission was a “reasonable mistake,” Kayatta said. But “further proceedings” are necessary to determine whether antitrust liability is appropriate, he said.
While the case lends more clarity on appropriate Orange Book listings, it remains to be seen how the latest decision will play out among drugmakers.
“There have not been many antitrust cases involving improper Orange Book listings in the past, but this decision may open up an avenue for antitrust actions going forward and may lead to brand companies being more careful when listing patents in the Orange Book,” Chad Landmon, who chairs Axinn Veltrop & Harkrider LLP’s IP and FDA practice groups, said.
Much of Kayatta’s decision focused on Sanofi’s argument that the company can’t be held liable for antitrust liability because its actions were reasonable based on several factors: the current statute’s ambiguity, the FDA’s lack of clarity on the issue, and how such conduct has become standard in the drug industry.
“Sanofi is essentially arguing, ‘Hey, even if we improperly listed this patent, and it delayed generic drugs, we acted reasonably because, basically, everybody else was doing it and the FDA wasn’t telling us to stop,’” Silbersher said.
Ultimately the court didn’t decide on that issue. Instead it said that, given the circumstances, Sanofi acted in bad faith so it can still be liable. Claiming the company acted “reasonably” doesn’t necessarily protect it in antitrust cases.
“That holding alone may compel drug companies to be more circumspect about how many patents they list in the Orange Book,” Silbersher said. “On the other hand, exactly what would constitute bad faith in this context will likely be hashed out in both this case and future cases.”
Future rulings on the issue will “likely impact how much antitrust liability will eventually curb improper patent listings in the Orange Book, and thus reduce drug prices,” he said.
The case is In re Lantus Direct Purchaser Antitrust Litig., 1st Cir., No. 18-02086, 2/13/20.