FTC’s aggressive questions on patents registered with FDA is harmful overreach, expert says

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The Federal Trade Commission (FTC) challenge of more than 100 patent listings registered with the Food and Drug Administration, mostly for devices used to deliver drugs, causes unnecessary instability in the industry, an expert says.

Since at least 2005, drug makers and the Biotechnology Innovation Organization (BIO) have been asking FDA for regulatory clarity of the patents listed in the “Approved Drug Products with Therapeutic Equivalence Evaluations,” commonly known as the “Orange Book”. The FTC’s decision to start regulating in the FDA’s space, and threaten possible legal action, is neither needed nor helpful, BIO argued in Sept. 12 comments sent to the FTC.

“Before thinking about enforcement, we recommend that the Commission give the FDA an opportunity to conduct its work and provide greater clarity for stakeholders. BIO’s members take seriously their obligation to file patents in the Orange Book in a correct and timely manner,” BIO says in its comments, written by Hans Sauer, BIO VP for Intellectual property. “Premature threats of enforcement action on that basis would raise serious uncertainty and due process concerns.”

The aggressive tactics by the FTC cast uncertainty on patents, which can chill appetite for investment in the drug market, ultimately harming drug development and patient access to new treatments, according to Sauer.

Longstanding calls for Orange Book clarity

The Orange Book identifies FDA approved drugs, as well as related patent and exclusivity information. Several times over the last 20 years, drug makers have requested greater clarity on the patents outlined in the Orange Book—particularly regarding the complex question of devices for drug delivery, such as asthma inhalers and injection pens for insulin injection, according to Sauer.

While the FDA has been slow to act, it held consultations and public comment periods in 2020-2021 and has reportedly begun taking steps toward forming a working group that would address these questions. This progress is something that the industry wants, according to a March 2023 Government Accountability Office (GAO) report to Congress on improving FDA’s information on patents in the Orange Book.

FTC’s aggressive approach

The FTC has written to 10 companies warning them that it questions several of the patents they hold. The FTC said in a Nov. 7 press release that when a drug maker wrongly lists a patent on one of these devices, it unfairly prevents generic drug makers from using the technology for their own products.

“The FTC’s action today identifies over 100 patents that we believe are improperly listed, affecting products ranging from inhalers to EpiPens. We will continue to use all our tools to protect Americans from illegal business tactics,” said FTC Chair Lina M. Khan in an FTC press release.

Sauer questioned the need for the FTC’s aggressive approach and its accusations of “illegal business tactics,” when drug makers have been asking for action in this area.

“FDA has said that patents that claim ‘metered aerosols, capsules, metered sprays, gels, and pre-filled drug delivery systems,’ and other finished dosage forms, should be listed in the Orange Book, but it appears that FTC thinks otherwise,” Sauer said. “We would have hoped for an explanation from FTC why it thinks such patents are improperly listed, but FTC has not provided an explanation, choosing instead to threaten enforcement without providing specifics about the alleged transgressions.” 

“Ironically, some of the exact same companies that have asked the FDA for clarification without receiving an answer for 18 years are now being threatened with enforcement by the FTC.“

The FDA, meanwhile, seems no closer to providing guidance, citing resource constraints. A recent GAO report finding widespread agreement on the need for further regulatory clarification has likewise gone without action by the FDA. “Disappointingly, despite its own regulatory inaction, FDA has issued statements that it ‘appreciates and supports’ the FTC’s aggressive but unfounded threats of enforcement against drugmakers in a space that FDA should have addressed long ago,” Sauer said.

When a federal agency creates uncertainty about patents, it has a strong negative impact on investment in the drug market, ultimately making it harder to find investments and develop new drugs for patients, Sauer said.

“What is needed at this point is not the threat of enforcement or legal liability, but rather, increased regulatory clarity and a forum for stakeholders and regulators to jointly and proactively address new patent listing questions that are likely to arise with further technological advances,” he wrote in his comments to FTC. “BIO would be pleased to engage in further dialogue with the Commission about this ongoing work.”

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