Orange Book Patents and Anti-competitive Legal Barriers

“Sham patents” – that is to say, patents that exist for the purpose of culling potential competition and thus artificially increasing revenue – have been the target of a crackdown in recent weeks by both the Federal Drug Administration and the Federal Trade Commission. This effort to identify any existing sham patents, and then have them rendered invalid in the eyes of the law, serves to promote the development of pharmaceutical generics, and drive down the sky-high cost of healthcare in the United States.

As of November 7, 2023, the FTC has challenged well over 100 patents held by the manufacturers of several drug products listed in the FDA’s publication of “Approved Drug Products with Therapeutic Equivalence Evaluations,” more commonly known as the FDA’s “Orange Book.” With only some degree of variability, these challenges, in tandem with increased FDA awareness of and hostility towards the issue, will result in many of these restrictive patents being overturned.

But to what end? Much of what is to come seems esoteric, as the steady hand of the federal government is never swift. Certainly, though, we can expect competition among drug producers to increase as these anti-competitive legal barriers are overturned. Provided these companies can meet bioavailability thresholds in order to have their products reach the market, it would hardly be a logical leap to assume more generics would become available.

As for whether or not this will drive down the functional cost of healthcare, as it relates to long term-drug prescription is a bit difficult to say, unfortunately. Much of what concerns that particular aspect of the pharmaceutical economic cycle is left out of the hands of the FDA and FTC. What is apparent, however, is the willingness, and more importantly, the active desire by the American government to bring down unreasonable prescription prices. 

The FTC wrote in a policy statement that “…certain manufacturers have submitted patents for listing in the Orange Book that claim neither the reference listed drug nor a method of using it. When brand drug manufacturers abuse the regulatory processes set up by Congress to promote generic drug competition, the result may be to increase the cost of and reduce access to prescription drugs.”

With many of these restrictive patents being challenged, the market is looking promising for startup companies focusing on generics, as there are many more avenues for competition. We at WiTii encourage these smaller companies to reach out for a free consultation so that we can be there for you every step of the way. At WiTii, we strive to help you pave the path to success, so we can walk it side by side.