On November 7, 2023, the Federal Trade Commission (FTC) sent notice letters1 to 10 brand drug manufacturers of drug-device combination products, including drugs delivered by asthma inhalers, epinephrine autoinjectors, and cyclosporine dropper bottles. The FTC announced that the agency intends to avail itself of the regulatory process under 21 C.F.R. § 314.53(f)(1) and submitted patent listing dispute communications to the U.S. Food and Drug Administration (FDA) regarding more than 60 unique patents in over 100 Orange Book listings as improperly or inaccurately listed. The FTC’s actions follow its recent policy statement issued on September 14, 2023, warning pharmaceutical companies that they could face enforcement actions by the FTC for improperly listing patents in the Orange Book as an unfair method of competition in violation of Section 5 of the FTC Act.
In general, patents that include claims that cover the drug substance (active ingredient), drug product (formulation and composition), or method of use are eligible for listing in the Orange Book.2 Under 21 C.F.R. § 314.3, FDA defines a “drug product” as “a finished dosage form, e.g., tablet, capsule, or solution, that contains a drug substance, generally, but not necessarily, in association with one or more other ingredients.” In the 2003 Final Rule, while the FDA did not expressly address device-related patents, the FDA noted the distinction between “patents claiming a package or container,” which are not eligible for Orange Book listing, and drug delivery devices that are “integral” to the dosage forms, noting that the “Orange Book lists current dosage forms for approved drug products. The list includes metered aerosols, capsules, metered sprays, gels, and pre-filled drug delivery systems. The key factor is whether the patent being submitted claims the finished dosage form of the approved drug product. Patents must not be submitted for bottles or containers and other packaging, as these are not ‘dosage forms.’”3 The FTC’s notice letters raise questions regarding the scope of patents that are eligible for listing in the Orange Book, which may lead to more patent litigation between brand drug manufacturers and generic manufacturers.
The patents submitted by brand manufacturers for listing in the Orange Book are not reviewed substantively by the FDA, as the FDA has repeatedly noted that its role in patent listing is purely ministerial. Under the Hatch-Waxman Act, a brand drug manufacturer may benefit from an automatic 30-month stay of FDA approval of a competitor’s generic drug product when the brand drug manufacturer timely files a patent infringement suit based on an Orange Book-listed patent.
In the September FTC Policy Statement, which was supported by the FDA, the FTC stated its intent to scrutinize improper listings of patents in the Orange Book. The FTC stated that improperly listed patents may harm competition by disincentivizing investments in developing a competing product and increasing the risk of delayed generic entry. The FTC took the position that improperly listing patents may be an unfair method of competition, violating Section 5 of the FTC Act, and may constitute illegal monopolization. The FTC warned that the FTC may dispute a patent listing under 21 C.F.R. § 314.53(f)(1), as it has done now through its November 7th announcement. The FTC also noted that a failure to remove improperly listed patents from the Orange Book promptly may result in a legal liability under the FTC Act for the company and individuals who submit or cause the improper submission. In the past, the FTC has filed lawsuits and amicus briefs alleging the anticompetitive impacts of improper patent listings, including a recent amicus brief4 in the Jazz Pharms., Inc. v, Avadel CNS Pharms case, which involved a patent that claimed risk evaluation and mitigation strategies.
In the notice letters, the FTC opted to address the alleged improper listing through the FDA’s regulatory dispute process but reserves the right to take further actions under Section 5 of the FTC Act, consistent with its September policy statement.
While the current FTC leadership has been aggressive with regard to the concept of enforcement pursuant to Section 5, prior actions by the FTC pursuant to this authority have been subject to significant scrutiny in the courts. In addition, any FTC action would solely be for injunctive relief, as the FTC does not have damages authority under the FTC Act and its disgorgement authority was recently struck down by the U.S. Supreme Court in AMG Capital Management v. FTC, 141 S. Ct. 1341 (2021).
When a patent listing in the Orange Book is disputed, the FDA will send the statement of dispute to the New Drug Application (NDA) holder (i.e., brand drug manufacturer). The NDA holder will then have 30 days to withdraw or amend the listing or certify under penalty of perjury that the listing complies with applicable statutory and regulatory requirements. Since the FDA does not engage in substantive review of patents under the current regulatory process, the responsibility for proper patent listing rests primarily with the NDA holders.
In the absence of clear guidance from the FDA or the FTC on the scope of patents eligible for Orange Book listing, these actions by the FTC increase uncertainty for NDA holders. The results from these patent disputes and any patent litigation arising from such disputes may, however, increase the pressure on the FDA, FTC, and/or Congress to take further action to provide more clarity on the scope of patents eligible for Orange Book listing.
Practice Points
These FTC actions warrant a careful consideration of patents currently listed or that will be submitted for Orange Book listing, especially patents submitted for drug-device combination products. These patent disputes also highlight the importance of a total product life cycle approach that coordinates patent strategies with FDA regulatory strategies throughout the product development process to ensure robust patent protection while mitigating risks of patent litigation and disputes after the NDA approval. Companies with Orange Book listings may consider reviewing their listed patents to assess potential exposure to patent disputes or challenges and/or evaluating their patent portfolios to consider whether additional patent filings, including continuation filings, reexamination, or reissue can be used to obtain additional patent claims with nexus to the drug product, drug substance, or a method of use subject to FDA approval, especially in light of recent comments by the FTC’s deputy director of Bureau of Competition.5
[1] FTC, FTC Challenges More Than 100 Patents as Improperly Listed in the FDA’s Orange Book, available at https://www.ftc.gov/news-events/news/press-releases/2023/11/ftc-challenges-more-100-patents-improperly-listed-fdas-orange-book; Notice Letters to Companies, available at https://www.ftc.gov/legal-library/browse/warning-letters/81927.
[2] See 21 U.S.C. 355; see also 21 CFR 314.53.
[3] FDA, Final Rule, 68 Fed. Reg. 36676 at 36680 (June 18, 2003), available at https://www.govinfo.gov/content/pkg/FR-2003-06-18/pdf/03-15065.pdf; see also FDA Report to Congress, available at https://www.fda.gov/media/155200/download.
[4] Brief for Fed. Trade Comm’n as Amicus Curiae, Jazz Pharms., Inc. v, Avadel CNS Pharms. No. 1:21-cv00691 (D. Del. Nov. 10, 2022) (Doc. No. 22-3). https://www.ftc.gov/system/files/ftc_gov/pdf/P163500JazzPharmaAmicusBrief.pdf.
[5] See Brenda Sandburg, FTC’s Rahul Rao On Why Agency Targeted Drug-Device Orange Book Patents, Pink Sheet, Nov. 12, 2023, (FTC’s deputy director of Bureau of Competition Rahul Rao commenting that that “only patents that claim the active ingredient should be listed in the Orange Book” and “drug-device patents that do not claim the active ingredient should not be listed.”), http://pink.citeline.com/PS149338.
