FTC Orange Book Patent Challenges

In September 2023, the FTC published a policy statement warning that they would be scrutinizing the Orange Book for improper patent claims. They stated that brand name drug manufacturers may be harming generic competition through the improper listing of patents and in addition to violating FDA regulations, improper orange book listings may also be a violation of section 5 of the FTC Act¹. They followed up in November 2023 with warning letters to 10 companies, including AbbVie, AstraZeneca, Boehringer Ingelheim Pharmaceuticals, Impax Laboratories, Kaleo, Mylan Specialty, as well as subsidiaries of GSK and Teva Pharmaceuticals². The November 2023 warnings resulted in retracted patents and commitments by some to keep the cost of chronic obstructive pulmonary disease (COPD) inhalers under $35³.

In April 2024, the FTC expanded their patent challenges of alleged junk patent listings, this time including blockbuster drugs such as Ozempic⁴.

What was Challenged in April? ¶

The FTC sent 10 more warning letters⁵ about patents they deemed improperly listed. We condensed the patents challenged by the FTC and calculated the fraction of total patents covering an application that were challenged.

::: table-container

The patents disputed by FTC focused on treatments for diabetes, weight loss, asthma, and COPD. In each warning letter, the FTC notes:

We have opted to use the FDA’s regulatory dispute process to address the improper listings, but we retain the right to take any further action the public interest may require, which may include investigating this conduct as an unfair method of competition under Section 5 of the FTC Act, 15 U.S.C. § 45, and as described in the Policy Statement.

The table above shows the total number of patents currently claimed in the orange book for each drug, as well as the percentage that were challenged by the FTC. Novo Nodrisk Inc. had a shocking 50-89% of claimed patents challenged for Victoza, Ozempic, and Saxenda, respectively⁶.

Patent Webs ¶

A drug’s exclusivity is defined by both patent exclusivity and by additional exclusivities granted by the FD&C Act. We looked at the latest patent expiration date listed in the orange book for each drug⁷, and asked, how much exclusivity time are companies gaining from these challenged patents?

For many of the drugs, unchallenged patents expire after those that were challenged, so even if the challenged patents were removed, the exclusivity date wouldn’t necessarily change. We plotted only those products that gain exclusivity due to the challenged patents.

While some drugs, like Glaxo Group Limited’s Incruse Ellipta would lose nearly 3 years of exclusivity if the FTC prevails, this isn’t the case for some of the most heavily challenged products like Novo Nodrisk’s Ozempic. Instead, the FTC appears to be targeting “patent webs”⁸, or groups of overlapping patents and claims applied to a product to discourage competition. Patent webs have been blamed for increasing drug costs by delaying generic entry and increasing litigation costs.

What’s Next? ¶

When a patent listed in the Orange Book is challenged, FDA notifies the affected application holder, who then has 30 days to amend, remove, or certify under penalty of perjury that the entry is accurate⁹.

As of June 2024, the 30 day window has closed, and according to FDA’s patent dispute list¹⁰ none of the notices sent in April and May 2024 have resulted in updates to the Orange Book.

The next move depends on the FTC. If they choose, they can challenge the patent listings in court and/or take further enforcement action.

In the case of Teva, the FTC has already filed an amicus brief supporting Amneal in a patent dispute with Teva over some of the patents described above. The FTC is also supporting new rules proposed by USPTO requiring companies to disclose all patent related settlement agreements in an effort to better monitor for anti-competitive behavior. Under Commissioner Lina Khan, it is clear that the FTC is taking a more active role in policing the the pharmaceutical industry to increase competition and lower drug prices. We’ll keep a close eye on further FTC action and industry responses.