“FTC Urged to Address Big Pharma’s Exploitation of FDA’s Orange Book to Block Generic Drug Competition”
FTC to Address Improper Patent Listings in Open Meeting
In a move that could significantly impact the pharmaceutical industry, the Federal Trade Commission (FTC) is set to hold an open meeting to discuss the improper listing of drug-related patents in the Food and Drug Administration’s (FDA’s) Orange Book. This comes in response to a letter from U.S. Representative Pramila Jayapal (D-Wash.) and U.S. Senator Elizabeth Warren (D-Mass.), urging the FTC to issue a policy statement on the matter.
Big Pharma’s Exploitation of the Orange Book
The lawmakers’ letter highlights how brand-name pharmaceutical companies have been exploiting the Orange Book to block competition and prevent lower-cost drugs from entering the market. This practice has been instrumental in keeping drug prices high and increasing Big Pharma’s profits.
“Brand-name pharmaceutical companies have routinely abused the U.S. patent system, violated antitrust law, and hiked the prices of prescription drugs to widen their own profit margins. We urge the FTC to take steps to end Big Pharma’s routine exploitation of the Orange Book and hold drug companies accountable for their anti-competitive business practices that are ‘imposing costs on individuals and society alike,”’ wrote the lawmakers.
The Role of the Orange Book
The FDA’s Orange Book is a list of FDA-approved drugs and their related patent and exclusivity information. It is considered to contain some of the “most valuable patents in the world.” Brand-name drug companies are required to list patent information in the Orange Book that covers drug substances, drug products, and method of use. However, Big Pharma regularly lists patents outside these categories, even when courts have ruled they are outside the scope of the Orange Book.
Impact of Improper Patent Listings
“Improper ‘sham’ patents serve the primary purpose of blocking competitors from introducing lower-costs generic drugs. That’s because FDA is automatically barred from approving a generic drug for 30 months if a brand-name drug company sues a generic competitor for infringing on an Orange Book-listed patent. Pharmaceutical companies are therefore incentivized to list more patents in the Orange Book, whether they’re valid or not, to hold off generic competition for multiple years and extend their own monopolies regardless of the outcome of any litigation,” the lawmakers continued.
The FTC has previously raised concerns about these activities, highlighting the harms to consumers from pharmaceutical companies that improperly list patents in the Orange Book and block generics or follow-on competition. An FDA study found that the introduction of even a single generic drug can lower a drug’s price by almost 40%, and with two generic options available, prices drop by over half.
Call to Action
“Unjustified delays in generic competition are costing patients and taxpayers billions of dollars, just to pad Big Pharma’s profits… The FTC now has the chance to hold Big Pharma accountable for these anti-competitive business tactics. We support your decision to discuss this critical issue at tomorrow’s open meeting and encourage you to release a strong policy statement declaring that the listing of sham patents in the Orange Book is an unfair method of competition that is reducing access to essential drugs and hurting patients,” concluded the lawmakers.
This open meeting and the potential policy statement could mark a significant step towards holding pharmaceutical companies accountable for their patent practices, and could pave the way for increased competition and lower drug prices in the future.
Issues: Health Care, Science, Technology, & Antitrust