To List or Not to List; That is the Question – The FTC Signals the Potential for Greater Scrutiny of Patent Information Submissions to FDA

Listing patent information in the Orange Book is a matter of judgment, but that judgment call is about to get a bit more scrutiny.  On the heels of its powerful (and unprecedented) amicus brief in Paragraph IV litigation between Jazz and Avadel concerning a patent covering a Risk Evaluation and Mitigation Strategy (“REMS”) listed in the Orange Book, the Federal Trade Commission (“FTC”) is gearing up to tackle anticompetitive Orange Book listing practices.  Last week, the FTC held a Listening Session about the listing of patents in the Orange Book, which concluded with a unanimous vote to issue a Policy Statement.  That Policy Statement, issued on September 14, 2023, warns companies that improper listing of patents in the Orange Book could be “an unfair method of competition in violation of the FTC Act”.

The six-page statement explains that “Brand drug manufacturers may be harming generic competition through the improper listing of patents in the . . . Orange Book” and thus, the Policy Statement serves “to put market participants on notice that the FTC intends to scrutinize improper Orange Book listings to determine whether these constitute unfair methods of competition in violation of Section 5 of the Federal Trade Commission Act.”  The FTC expressed concern that patent listings that do not meet the statutory criteria undermine the competitive process, may disincentivize investment in developing generic and follow-on products, and reduce patient access to more affordable drugs thereby increasing costs to the healthcare system.  This is so, says the FTC, because, after improperly listing a patent and timely filing an infringement suit, “a brand can generally rely on the automatic stay to block FDA approval of a competing drug product, generally for 30 months, regardless of the validity or scope of the patent and regardless of whether the patent meets the statutory listing criteria.”  Thus, “FTC intends to use its full legal authority” to take action “against companies and individuals that improperly list patents in the Orange Book that do not meet the statutory listing criteria.”  The FTC thus directs NDA holders to “ensure that [existing] patent listings comply with the law” and “immediately remove any patents that fail to meet listing requirements.”  Failure to do so may result in liability under the FTC Act, and the FTC may also dispute patent listings through FDA’s correction process.

Importantly though, the Policy Statement does not provide any insight into the types of listings that do not meet the statutory criteria and thus would be considered anticompetitive.  It merely says that “[t]he Hatch-Waxman Act and FDA regulations set forth the criteria for listing patents in the Orange Book” and that “Brand manufacturers are responsible for ensuring their patents are properly listed.”  But it is not always clear which types of patents are eligible for listing in the Orange Book.

Industry has long requested input from FDA about the types of patents that can be listed in the Orange Book, and, in response, FDA asked for comments on the types of patents that should be listed.  But FDA has never made an affirmative statement as to the types of patents that can be listed in the Orange Book.  Of course, the statute says that only drug formulation, composition, or method of use patents are listable, but FDA has not defined the scope of the “drug” that must be covered by the patent.  The closest FDA has come is in a 2003 preamble noting that patents that claim finished dosage forms—which can include “metered aerosols, capsules, metered sprays, gels, and pre-filled drug delivery systems”—should be listed in the Orange Book, suggesting that a patent that claims both the drug substance and the delivery device should be listed.  But whether a patent that only claims a device constituent of a combination product, however, was not addressed.  And FDA did not provide a substantive response to 5 Requests for Advisory Opinions seeking clarification of the issue.  Further, FDA has not opined on whether REMS patents can be listed in the Orange Book (though the FTC did not mince words in saying that such listings were anticompetitive in the Jazz v. Avdel amicus brief).

The FTC notes in its Press Release that FDA supports the FTC Policy Statement, but there’s no further discussion of FDA’s role here.  The FDA Commissioner is quoted as saying that “[t]he FDA stands ready to assist the FTC . . . to help identify and address efforts to block or delay generic drug and biosimilar competition,” but, given FDA’s ministerial role in administering the Orange Book and FDA’s insistence that it will not review patents before they’re listed, it is unclear what FDA role will play.  Raising further questions is how the FTC will monitor Orange Book listings to take enforcement action.  And, of course, what “improper listing” actually means requires some further interpretation from either the FTC or FDA.  While we now know that REMS patents may be anticompetitive—and the First Circuit told us in 2020 that listing a patent covering only a component of a device constituent is (apparently) anticompetitive—the listing of other device patents remains a judgment call.  Hopefully, we’ll see the further direction that industry has been seeking for almost 20 years in the near future.

In other Orange Book (and Purple Book) news, on September 13, 2023, Representative Annie Kuster (D-NH), alongside Senators Maggie Hassan (D-NH) and Mike Braun (R-IN), announced the introduction of H.R. 5429, the “Medication Affordability and Patent Integrity Act.”  The bill proposes to amend FDC Act § 505(b) and PHS Act § 351(a)(2) with respect to patent information submitted to FDA for Orange Book and Purple Book listing.  Specifically, the statute would be amended to require NDA sponsors to:

(i) certify to the Food and Drug Administration that the information described in subparagraph (B) that is submitted to the Secretary is complete and consistent with the information such sponsor or holder provided to the United States Patent and Trademark Office and any communications such sponsor or holder had with the United States Patent and Trademark Office; and

(ii) (I) submit to the United States Patent and Trademark Office any information material to patentability with respect to such applicable patent that the sponsor or holder submits to the Food and Drug Administration, and any communications with the Food and Drug Administration that are related to such submissions; and

(II) certify to the United States Patent and Trademark Office that the information provided under subclause (I) is complete and consistent with the information such sponsor or holder provided to the Food and Drug Administration and any communications such sponsor or holder had with the Food and Drug Administration.

Similar requirements would apply to BLA sponsors.  The “information” referred to above includes (for both NDA and BLA sponsors):

(i) any statement or characterization of analytical or clinical data disclosed by the sponsor of the application or holder of the approved application under this section to the United States Patent and Trademark Office that has been, or will be, submitted to the Food and Drug Administration to support the approval of an application under this section;

(ii) any statement or characterization with respect to an applicable patent, including any statement or characterization of prior art, submitted by the sponsor of the application or holder of the approved application to the United States Patent and Trademark Office in support of patentability; and

(iii) other information, as the Secretary or the Secretary of Commerce may require.

Importantly, a sponsor that violates the proposed NDA and BLA patent listing/information provisions above would not be able to assert in an action involving the validity or infringement of a patent the defenses at 35 U.S.C. § 282(b).

Whether the FTC (and FDA) ultimately take action with respect to alleged Orange Book (and Purple Book) improprieties remains to be seem.  Until then, it all looks like a lot of parental finger-wagging.