The Streams Have Been Crossed: FTC Enters FDA Territory

“Human sacrifice! Dogs and cats living together! Mass hysteria!”  At least that’s this blogger’s reaction to the recent news that FTC sent out Notice letters to 10 different drug companies about the patent information they list in the Orange Book.  It’s so exciting that we might actually have an answer to some lingering questions about listability!  Maybe I’m overreacting, but it’s been almost 20 years since industry first asked FDA if it could list device patents in the Orange Book, and FTC’s intervention here is the closest thing we’ve seen to an answer to that question.  This is only by implication though: FTC did not provide an explanation as to why it thinks the patents listed are improperly listed—at least in the Notice letters made publicly available.  While I’m not a patent lawyer, these patents appear to be mostly device patents, which signals that FTC not only thinks REMS patent-listings are anti-competitive, but it also thinks device patents are.  My rudimentary and cursory review of some of these patents (NB: I’m not a patent lawyer) suggest that they aren’t all device component patents but are patents that cover entire devices in some cases.

As FTC explains in a Press Release, the Agency “challenged more than 100 patents” that it believes are improperly or inaccurately listed in the Orange Book.  Using FDA’s process for such disputes, codified at 21 C.F.R. § 314.53(f)(1), FTC notified FDA that it disputes “the accuracy or relevance of patent information submitted to . . . and published by FDA.”  As part of that requirement, FTC must have described the specific grounds for disagreement for each patent, which FDA will send to the NDA holder.  The NDA holder then must confirm the correctness of the patent and sign a verification of accuracy, or the NDA holder must amend the patent information within 30 days of FDA’s dissemination of the statement of dispute.  So ultimately whether the patent is delisted is up to the applicant, and we should know more in about 30 days, but it’s really not the effect of the activity that’s so notable—it’s that it happened at all.

As we have recounted a number of times, most recently here, FDA has been reluctant to comment on the types of patents that should be listed in the Orange Book.  FDA has asked for comments and published a report, but really nothing has come of that other than repeated requests from industry for guidance in this space.  As noted, the statute says that only drug formulation, composition, or method of use patents are listable, but FDA has said 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 must be listed.  But whether a patent that only claims a device constituent of a combination product has been unclear.  And there have been no signs that FDA is planning to opine on that issue.

So instead of FDA getting involved, FTC has taken a vested interest and issued a Policy Statement lamenting the anticompetitive listing of patents in the Orange Book.  But FTC failed to explain exactly what type of patents are anticompetitive, leaving the industry waiting with bated breath to find out what exactly FTC would do, to whom, and for what—and of course whether FTC would actually do anything or leave it to FDA, who has statutory authority over the List (AKA the Orange Book).

Well, what FTC apparently did was review hundreds of patents in the Orange Book and utilize FDA’s regulatory processes.  But there’s no telling what the implicated manufacturers will do, because again, it is legally unclear whether the listing of the device patents is actually anticompetitive.  And this is the first inkling we have about the government’s position.  And we still haven’t heard anything substantive from FDA.

It also is notable that FTC reserved the right to take further action, including under Section 5 of the FTC Act, which suggests that FTC is ready to take further enforcement action against companies that don’t de-list.  Indeed, that one line in the Notice letters FTC sent may end up being really critical if companies don’t willingly de-list.  But if FTC takes this further, it’s going to be interesting from a legal perspective to see how this will be handled given that neither FTC nor FDA has given a clear answer about whether device patents are listable in the Orange Book.  Requests for delisting likely don’t count as Notice and Comment…

Anyway, it’s going to be some time before there’s any movement here.  The companies who received the Notices will need some time to assess, and FTC will need time to review the resulting activity.  But, given how quickly FTC moved after issuing its Policy Statement, it seems like there’s a big appetite for this issue at FTC.  I’m guessing that FTC is going to continue to cross FDA’s streams, and that really raises the risk of gooey marshmallow everywhere.