Red Alert on the Orange Book: The FTC Continues to Crack Down on Improperly Listed Drug Patents

As reported in an earlier Client Alert, on November 7, 2023, the Federal Trade Commission challenged 100 patents as improperly listed in the Food and Drug Administration’s “Approved Drug Products with Therapeutic Equivalence Evaluations” publication, commonly known as the Orange Book. The FTC sent warning letters to ten drug and medical device manufacturers identifying patents for inhalers, autoinjectors and anti-inflammatory multi-dose bottles that the FTC believes are improperly listed. In the letters, the FTC indicated it is using the FDA’s regulatory dispute process to challenge the listing of these patents in the Orange Book because improperly listed patents may violate antitrust laws and impede competition.    

Under the FDA’s process, the letter recipients had 30 days to either (1) withdraw or amend the identified listings or (2) certify under penalty of perjury that the listings complied with statutory and regulatory requirements. In response to the letters, some manufacturers withdrew their patents, resulting in a “victory lap” of media activity from the FTC. In an interview with The Daily Show on April 1, 2024, FTC Chair Lina Khan noted that the agency had since seen several companies delist inhaler-related patents. In addition, several manufacturers announced that they would cap patient out-of-pocket costs on asthma inhalers to $35 per month. Chair Khan repeated the remarks two days later at a White House event on lowering healthcare costs, citing to a March 21, 2024 press release issued by U.S. Senator Tammy Baldwin. On April 15, 2024, Chair Khan appeared on a livestream hosted by Senator Bernie Sanders, again describing the FTC’s warning letters and crediting the Senate Committee on Health, Education, Labor, and Pensions, on which Senator Sanders serves, for assistance in obtaining these delisting results.

The agency has also continued to assert public pressure on manufacturers who chose to maintain their listings and certify their compliance. On March 22, 2024, the agency filed an amicus brief in support of a motion for judgment on the pleadings in an ongoing patent dispute between two drug manufacturers. The defendant manufacturer had counterclaimed that the patents at issue were improperly listed in the Orange Book. The FTC’s amicus brief supports the defendant’s position, arguing that the patents were device patents that did not mention any drug in their claims. FDA regulations state that patents eligible for listing “consist of drug substance (active ingredient) patents, drug product (formulation and composition) patents, and method-of-use patents.” 21 C.F.R. § 314.53(b)(1) (2003). The patents at issue are, per the FTC, “device or device component patents that claim a dose counter or an inhaler that includes a dose counter. On their face, none of these patents mention any drug in their claims[.]” Thus, because these patents do not mention any drug in their claims, the FTC argues that they are improperly listed. The FTC relies heavily on the First Circuit’s 2020 decision in In re Lantus Direct Purchaser Antitrust Litigation, which reversed a dismissal in part because the plaintiffs adequately alleged that a patent should not have been submitted for an Orange Book listing because it was a device patent that did not claim the drug at issue. 950 F.3d 1, 10 (1st Cir. 2020).

The FTC’s brief also summarizes its history of enforcement against improper Orange Book listings dating back to 2002. The brief emphasizes that this particular defendant had received a warning letter and had re-certified the propriety of the patents listed in the letter, including the five patents at issue in the litigation. The brief explains how improperly listed Orange Book patents can harm competition by deterring and delaying entry of lower-cost generics. The agency concludes by arguing that an improper listing may constitute illegal monopolization under Section 2 of the Sherman Act, because it is an “improper means” of acquiring or maintaining monopoly power. The amicus brief requests not only that the court grant the motion for judgment on the pleadings, but also order the manufacturer to delist the patents at issue.

At the ABA Antitrust Spring Meeting on April 11, 2024, Catherine Sanchez, an Attorney Advisor to FTC Commissioner Alvaro Bedoya, largely withheld comment on the amicus brief, but she expressed concern to the extent companies were using the Orange Book to delay generic entry. She added that the amicus brief was part of the agency’s efforts to use all its available tools to deal with actions impeding the competitive process.

This innovative strategy by the FTC may leave some wondering where the FDA is in all of this. Indeed, in Lantus, the defendant cited the FDA’s failure to respond adequately to requests for advisory opinions to argue that its patent was not improperly listed. The court rejected this, noting that it could “find no warrant to read anything into the FDA’s non-answer” or “even to infer that silence by the FDA indicates that the correct answer is uncertain[.]” The FTC explains in its amicus brief that the FDA “does not directly police the Orange Book” and considers its role “purely ministerial,” as drug manufacturers have the burden of ensuring their Orange Book listings meet statutory requirements. Needless to say, the FDA’s silence has not deterred the FTC from using the FDA’s regulations and procedures to challenge Orange Book patents, and the FTC has signaled that it will continue to be active in this area.