FTC fires shot across pharma's bows over 'improper' patents

FTC building

The financial regulator in the US has warned the pharma industry that it may consider legal action against companies that improperly list patents in the FDA's 'Orange Book' in order to block generic rivals.

The Federal Trade Commission (FTC), backed by the FDA, has published a policy statement (PDF) on the issue in response to requests by lawmakers who are concerned about the routine listing of new patents in order to trigger processes that delay the entry of generics into the market.

The Orange Book – or Approved Drug Products with Therapeutic Equivalence Evaluations, as it is otherwise known – is a compendium of patents on drug substances, products, and methods of use that pharma companies by law must keep up to date.

The allegation is that some drug companies list patents that are outside that scope specifically in order to block competition, as the FDA is automatically barred from approving a generic drug for 30 months if a brand-name drug company sues a generic competitor for infringing on an Orange Book-listed patent, regardless of the outcome of the lawsuit.

FTC chair Lina Khan
FTC chair Lina Khan

"Improper patent listings in the Orange Book illegitimately delay or lock out generic manufacturers from entering the market, depriving Americans of access to lower-cost medicines and drug products," said the FTC's chair, Lina Khan.

"Experience shows we have good reason to be concerned about abuse of the Orange Book. For example, the improper listing of certain device patents delayed the entry of competing insulin products, depriving patients of more affordable options," she added.

"Orange Book abuse also delayed patients' access to a key narcolepsy drug that allowed patients to avoid having to wake up in the middle of the night to take a second dose."

FDA Commissioner Robert Califf, meanwhile, said the agency "stands ready to assist the FTC" if it chooses to take action against a company suspected of listing an improper patent.

Representative Pramila Jayapal (D-Wash) and Senator Elizabeth Warren (D-Mass) sent a letter (PDF) to the FTC, urging the regulator to issue the policy statement in which they said the pharma industry has "routinely abused the US patent system, violated antitrust law, and hiked the prices of prescription drugs to widen their own profit margins."

The policy statement is evidence of increasing scrutiny of the activities of the pharma sector by the FTC.

The regulator has recently been taking a tougher stance on antitrust issues resulting from M&A transactions - for example, in the recently-announced takeover of Horizon Pharma by Amgen - and investigations into the role of pharmacy benefit managers in the medicines supply chain.

15 September, 2023