In a landmark move, the Federal Trade Commission (FTC) has issued warnings to ten leading pharmaceutical companies, including industry giants AbbVie and AstraZeneca, for the improper listing of patents within the Food and Drug Administration’s (FDA) “Orange Book.” This action follows the FTC’s policy statement from two months prior, which aimed to target the misuse of pharmaceutical patents that could potentially stifle competition and inflate drug prices.
The FTC’s recent announcement reveals a challenge to over 100 patents that the commission believes were wrongfully included in the FDA’s patent registry. The companies implicated, which also encompass Boehringer Ingelheim, GSK, and Teva, are accused of listing dubious patents for a range of products, from asthma inhalers to EpiPens. Notably, Teva alone accounted for approximately 35 patents related to its inhaler devices.
FTC Chair Lina Khan has articulated the commission’s stance, asserting that such erroneously listed patents can lead to significant price hikes for medications, thereby disrupting the integrity of market competition. “We will continue to use all our tools to protect Americans from illegal business tactics that are hiking the cost of drugs and drug products,” Khan stated.
The strategic value of a patent’s presence in the Orange Book lies in its ability to delay the market entry of generic drugs for up to 30 months. The FTC’s September policy statement highlighted this issue, accusing pharmaceutical companies of using sham patents to obstruct generic manufacturers and maintain high drug prices.
In a recent NPR interview, Khan emphasized that the pharmaceutical companies are now formally on notice. She explained that these companies must legally defend the validity of their patents or face the prospect of having them delisted. This could pave the way for increased market competition and the availability of more affordable generic alternatives.
Despite anticipating industry pushback and concerns over stifling innovation, Khan remains steadfast in her belief that the FTC’s actions will ultimately foster a more competitive market and encourage innovation. She pointed out that despite the longstanding existence of products like inhalers, the lack of generic options due to improper patent listings remains a significant issue.
The FTC’s focus on questionable patents is not new; it dates back over two decades, with the first complaint lodged against Biovail Corporation in 2002. The current enforcement efforts are bolstered by calls from lawmakers, such as Sen. Elizabeth Warren (D-Mass.), for stricter drug patent regulations.
This initiative is part of a broader FTC crackdown on the pharmaceutical and healthcare industries, with heightened national attention on the issue of high drug prices. The agency has been scrutinizing major healthcare mergers and acquisitions and investigating pharmacy benefit managers.
While the FTC has faced challenges, including the approval of Amgen’s acquisition of Horizon Therapeutics and the unsuccessful attempt to block Microsoft’s acquisition of Blizzard, Khan assures that the commission will persist in its patent challenges. “We won’t hesitate to use all our tools to combat illegal practices that are inflating the price of healthcare, including medicines,” she emphasized.
