FTC Warns on Improper Orange Book Patent Listings

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The Federal Trade Commission has issued a policy statement, which is supported by FDA, warning brand-name pharmaceutical companies that they could face legal action if they improperly list patents in FDA’s Orange Book.

“Improperly listing patents in the Orange Book may harm competition from less expensive generic alternatives and keep prices artificially high,” according to the policy statement. “The FTC will scrutinize improper Orange Book patent listings as potential unfair methods of competition in violation of Section 5 of the FTC Act. The FTC is making clear that improper Orange Book listings may be an unfair method of competition in violation of the FTC Act. We won’t hesitate to use all our tools to combat illegal practices that are inflating the price of health care, including medicines.”

FTC noted that a 2002 study identified numerous instances in which the automatic 30-month approval stay was used to block competition. Since then, the commission has filed several lawsuits and amicus briefs in court alleging the anticompetitive impacts of improper Orange Book patent listings.

In May, the American Economic Liberties Project and the Initiative for Medicines, Access, and Knowledge (I-MAK) issued a report that found the “illegal and anticompetitive tactics used by the pharmaceutical industry to perpetuate monopolies — in the form of government-backed patents over brand drugs — and block competition from more affordable generic drugs” cost final payers $40.07 billion in 2019. “This implies an average cost of about $120 in 2019 for every American, solely because of antitrust violations by the pharmaceutical industry,” the two groups said.

FDA Commissioner Robert M. Califf had this to says about the new FTC policy: “The FDA stands ready to assist the FTC as part of our long history of collaboration to protect American consumers, including our continued engagement under the Executive Order on Competition in the American Economy to help identify and address efforts to block or delay generic drug and biosimilar competition.”

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