On November 7, 2023, the Federal Trade Commission (“FTC”) announced that it had issued notice letters to 10 life sciences companies regarding 100 patents that the FTC contends are improperly listed in the Orange Book, the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations. The announcement comes of the heels of the FTC’s policy statement warning drug companies that improper listing of patents in the Orange Book could violate Section 5 of the FTC Act. Pursuant to the FTC’s policy, the companies have 30 days to either withdraw or amend their listings or certify under penalty of perjury that the listings are proper.
The FTC believes that improper listings in the Orange Book could constitute an unfair method of competition under Section 5 of the FTC Act because a patent listed in the Orange Book could lead to a statutory stay that generally blocks the introduction of competing products for 30 months. According to the FTC, costs associated with challenging patents could frustrate innovation and/or market entry. The FTC has said that even a brief delay in generic entry harms consumers in the form of artificially high drug prices.
We will be watching how companies choose to respond to the recent notice letters and the policy’s impact on Orange Book listings and competition with respect to brand drugs going forward.
Duane Morris Takeaways: On Thursday September 14, 2023, the FTC issued a policy statement warning brand drug companies that improper listing of patents in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly referred to as the “Orange Book” could violate Section 5 of the FTC Act. The Hatch-Waxman Act and FDA regulations outline the criteria that brand drug companies must follow for listing patents in the Orange Book. Brand drug manufacturers that list patents in the Orange Book may obtain a 30-month stay of generic competition. According to the FTC, certain brand drug manufacturers have failed to follow that criteria, in some cases by submitting patents for listing in the Orange Book that claim neither the reference listed drug nor a method of using it. Under the new policy statement, FTC will scrutinize improper listings as a potential method of unfair competition under Section 5 of the FTC Act.
The policy statement is required reading for any corporate counsel involved in the submission of patent information in the Orange Book.
Implications for Brand Drug Manufacturers: Under the regulatory processes set up by Congress, the person who submits the patent information in the Orange Book listing must attest under penalty of perjury that the submission complies with the regulations. Drug manufacturers and individuals responsible for submitting such information are now on notice that the FTC intends to scrutinize improper Orange Book listings to determine whether they constitute an unfair methods of competition under Section 5 of the FTC Act or illegal monopolization. The policy statement also warns that individuals who submit or cause the submission of improper Orange Book patent listings may be held individually liable, including potentially having such cases referred to the U.S. Department of Justice for further investigation.