FTC’s Challenge of Improperly Listed PatentsOn November 7, 2023, the Federal Trade Commission (FTC) officially challenged more than 100 patents that brand name drug manufacturers have listed in the Food and Drug Administration’s (FDA) “Approved Drug Products with Therapeutic Equivalence Evaluations," colloquially referred to as the “Orange Book.”“Wrongfully listed patents can significantly drive up the prices Americans must pay for medicines and drug products while undermining fair and honest competition,” said FTC Chair Lina M. Khan.The FTC sent notice letters to 10 New Drug Application (NDA) holders identifying numerous patents as improperly listed in the Orange Book. The FTC also took action under 21 C.F.R. § 314.53(f)(1)[1] and “notified FDA that it disputes the accuracy or relevance of the listed information for these patents, which may require that the manufacturers remove the listing or certify under penalty of perjury that the listings comply with applicable statutory and regulatory requirements.” Pursuant to the FDA’s regulatory dispute process, 21 C.F.R. § 314.53(f)(1), FDA will notify the NDA holders of FTC’s challenge, giving them 30 days to withdraw the patents, amend their listing, or certify that the patents are properly listed.In its letters to NDA holders, FTC also noted that “we retain the right to take any further action the public interest may require, which may include investigating this conduct as an unfair method of competition under Section 5 of the FTC Act, 15 U.S.C. § 45.”FTC’s Policy StatementFTC’s November 7, 2023 notice letters follow on the heels of the FTC’s September 14, 2023 policy statement[2] which was a wake-up call to brand name drug manufacturers to ensure that they a

69580.[6] 21 C.F.R. § 314.53(b)(1).[7]Id.

FDA regulations further identify which patents should be submitted for Orange Book listing—applicants should list “patent[s] that claim[] the drug or a method of using the drug … [which] consist of drug substance (active ingredient) patents, drug product (formulation and composition) patents, and method-of-use patents,” but should exclude process patents and patents claiming packaging. 21 C.F.R. § 314.53(b)(1). FDA regulations also require that applicants declare that a patent submitted for Orange Book listing claims the “drug substance,” “drug product (composition/formulation),” or “one or more methods of using” the drug for which it is listed.

0 days after the date of the postmark on the “paragraph IV acknowledgement letter” (see section V. D.1.a).Removes the requirement for a 505(b)(2) applicant to submit an amendment at the time it sends notice of a paragraph IV certification and permits submission of a single amendment that contains all required information within 30 days of the date on which the last notice is received (see section V.D.3.b).Content of a notice of paragraph IV certification (§ 314.32(c))Omits the proposed requirement that notice of a paragraph IV certification must contain a statement that the 5O5(b)(2) applicant has received the paragraph IV acknowledgement letter (see section V.D.1.a).Amendment or supplement to a 505(b)(2) application (§ 314.52(d))Requires that after the date of filing of a 505(b)(2) application the applicant must send notice of a paragraph IV certification included in an amendment or supplement at the same time that the amendment or supplement is submitted to FDA (see section V.D.1.b).21 C.F.R. § 314.53 General requirements and Reporting Requirements (§ 314.53(b)(1) and (c)(2))Clarifies that if the method(s) of use claimed by the patent does not cover an indication or other approved condition of use in its entirety, the NDA holder’s use code must describe only the specific approved condition of use claimed by the patent for which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner of the patent engaged in the manufacture, use or sale of the drug product (see section V.B.1.c).Clarifies that the NDA ho1der submitting information on the method-of-use patent must identify with specificity the section(s) and subsection(s) of the approved labeling that describes the method(s) of use claimed by the patent submitted (see section V.B.1.c).Other Reporting Requirements (§ 314.53(r)(2))Omits the proposed requirement for an NDA holder to include information on whether a patent is a reissued patent of a patent previously submitted for listing (see sect

n of this with respect to listing a method-of-use patent in the Orange Book. In Jazz v. Avadel, the Federal Circuit affirmed a district court order requiring Jazz to delist from the Orange Book its patent claiming a system to control access to abuse-prone drugs used to treat narcolepsy patients.Listing Patents in FDA’s Orange BookBy statute, an applicant for a new drug application must file with the Secretary of Health and Human Services the patent number and expiration date of each patent for which a claim of patent infringement could reasonably be asserted, “except that a patent that is identified as claiming a method of using such drug shall be filed only if the patent claims a method of use approved in the application.” 21 U.S.C. §355(b)(1)(A)(viii); 21 U.S.C. §355(c)(2). For “patents that claim a method of use, the applicant must submit information only on those patents that claim indications or other conditions of use for which approval is sought or has been granted in the NDA.” 21 C.F.R. §314.53(b)(1).FDA does not verify that a listed patent meets the statutory criteria for listing and does not proactively remove improperly listed patents – its role with respect to the Orange Book is simply ministerial.Jazz holds the approved new drug application for Xyrem®, which contains sodium gamma-hydroxybutyrate as the active pharmaceutical ingredient. Gamma-hydroxybutyrate (GHB) has a history of abuse due to its heavy sedating effects, and Xyrem® is subject to a Risk Evaluation and Mitigation Strategy (REMS) meant to control access to sodium GHB to prevent its abuse or misuse. Jazz also owns U.S. Patent No. 8,731,963 (“the ’963 patent”), entitled Sensitive Drug Distribution System and Method, which Jazz listed in the Orange Book as claiming a method of using Xyrem®. The ’963 patent relates to Jazz’s restricted distribution system and REMS for Xyrem®.Avadel holds its own new drug application for a sodium oxybate product to treat narcolepsy patients, filed with the FDA under Section 505(b)(2).

ad problem, particularly with inhaler device and device components patents.”5The FTC’s brief follows on the heels of two agency initiatives from late 2023.In September 2023, the agency issued a policy statement to “put market participants on notice” that the FTC would be scrutinizing patents listed in the Orange Book because, in the FTC’s view, improperly listing patents in the Orange Book may constitute illegal monopolization under Section 2 of the Sherman Act as well as an unfair method of competition under Section 5 of the FTC Act.Shortly thereafter, in November 2023, the FTC sent warning letters to ten pharmaceutical companies “challenging more than 100 patents held by manufacturers of brand-name asthma inhalers, epinephrine autoinjectors, and other drug products as improperly or inaccurately listed” in the Orange Book. The letters informed the companies that the FTC was disputing certain of their Orange Book patent listings pursuant to the FDA’s administrative process provided in 21 CFR 314.53(f).6In addition, the FTC’s amicus brief notes that two of the ten warning letters the FTC issued in November 2023 were sent to the brand name manufacturer that is the plaintiff in the subject suit, identifying five of the inhaler patents at issue in the litigation as improperly listed. The FTC argued that, “[r]ather than heed this warning,” the company recertified the patent listings identified in the warning letters.The FDA contextThe FTC’s argument that the patents are improperly listed in the Orange Book relies on the language of the statute, 21 USC 355(b)(1)(A)(viii), the corresponding regulations, 21 CFR 314.53(b) and 21 CFR 314.3, and FDA’s 2003 preamble to the patent listing regulations. The FTC argues that the statute requires that sponsors list only patents that claim the drug, drug product, or method of using the drug. According to the FTC, this requirement, in combination with FDA’s regulation defining drug product as the “finished dosage form, e.g., tablet, capsule, or soluti

On November 7, 2023, the Federal Trade Commission (FTC) sent notice lettersto 10 brand drug manufacturers of drug-device combination products, including drugs delivered by asthma inhalers, epinephrine autoinjectors, and cyclosporine dropper bottles. The FTC announced that the agency intends to avail itself of the regulatory process under 21 C.F.R. § 314.53(f)(1) and submitted patent listing dispute communications to the U.S. Food and Drug Administration (FDA) regarding more than 60 unique patents in over 100 Orange Book listings as improperly or inaccurately listed. The FTC’s actions follow its recent policy statement issued on September 14, 2023, warning pharmaceutical companies that they could face enforcement actions by the FTC for improperly listing patents in the Orange Book as an unfair method of competition in violation of Section 5 of the FTC Act.In general, patents that include claims that cover the drug substance (active ingredient), drug product (formulation and composition), or method of use are eligible for listing in the Orange Book.Under 21 C.F.R. § 314.3, FDA defines a “drug product” as “a finished dosage form, e.g., tablet, capsule, or solution, that contains a drug substance, generally, but not necessarily, in association with one or more other ingredients.” In the 2003 Final Rule, while the FDA did not expressly address dev

ial of automatic stays of FDA approval could constitute violations of Section 2 of the Sherman Act governing monopolization offenses. However, the FTC gave particular emphasis to its view that an improper listing may also constitute an “unfair method of competition” in violation of Section 5 of the FTC Act.The FTC went on to warn that individuals who submit or cause the submission of improper Orange Book patent listings may be held individually liable, and that if the FTC encounters criminal violations, such as perjury when certifying improper patent listing, it may refer such cases to the Department of Justice (DOJ).FTC’s Nov. 7, 2023, Press Release and Notice LettersThe FTC’s Nov. 7 press release indicated that it sent 10 notice letters to makers of pharmaceutical products it alleges have made improper Orange Book listings. The notice letters indicate that the FTC is choosing to investigate the Orange Book listing by means of the FDA patent listing dispute process which, pursuant to 21 C.F.R. § 314.53(f)(1), allows any interested party to question the accuracy or relevance of the information for patents listed in the Orange Book. According to the dispute process regulations, the FDA will send the statement of dispute filed by the FTC to each company. Each company will then have 30 days to confirm—under penalty of perjury—the correctness of the patent information, or to withdraw or amend the information in the patent listing.In the November notice letters the FTC indicated that although it is initially utilizing the FDA’s procedure for disputed listings, it reserved the ability to investigate and potentially bring enforcement actions under the antitrust laws—in particular, Section 5 of the FTC Act.AnalysisThe FTC’s public communications around the FDA-disputed listings process have not explicitly revealed a rationale for why they chose to initiate the actions in connection with these specific patent listings. However, in FTC Chair Lina Khan’s public statement in support of the September a

oper Orange Book-Listed Patents for Atrovent HFA, Combivent Respimat, Spiriva, and Spiriva Respimat (Nov. 7, 2023); Letter from FTC to Glaxo Group Ltd. re: Improper Orange Book-Listed Patents for Advair HFA and Flovent HFA (Nov. 7, 2023); Letter from FTC to GlaxoSmithKline Intellectual Prop. Dev. Ltd. re: Improper Orange Book-Listed Patents for Arnuity Ellipta and Ventolin HFA (Nov. 7, 2023); Letter from FTC to Impax Laboratories LLC re: Improper Orange Book-Listed Patents for Adrenaclick (Nov. 7, 2023); Letter from FTC to Kaleo Inc. re: Improper Orange Book-Listed Patents for AUVI-Q (Nov. 7, 2023); Letter from FTC to Mylan Specialty LP re: Improper Orange Book-Listed Patents for EPIPEN and EPIPEN JR (Nov. 7, 2023); Letter from FTC to Norton (Waterford) Ltd. re: Improper Orange Book-Listed Patents for QVAR RediHaler (Nov. 7, 2023); Letter from FTC to Teva Branded Pharm. Products R&D, Inc. re: Improper Orange Book-Listed Patents for QVAR 40, ProAir HFA, ProAir DigiHaler (Nov. 7, 2023). 21 C.F.R. § 314.53(f)(1). Brenda Sandburg, FTC's Rahul Rao On Why Agency Targeted Drug-Device Orange Book Patents, pink sheet, Nov. 12, 2023.Policy Statement Regarding the Scope of Unfair Methods of Competition Under Section 5 of the Federal Trade Commission Act Commission File No. P221202.FTC Meeting Signals Aggressive and Novel Enforcement to Come; FTC Takes Unprecedented Enforcement Actions Against Non-Compete Restrictions. Federal Trade Commission, Statement Concerning Brand Drug Manufacturers’ Improper Listing of Patents in the Orange Book (Sept. 14, 2023), FTC Policy Statement Concerning Brand Drug Manufacturers' Improper Listing ofPatents in Orange Book.In re Lantus Direct Purchaser Antitrust Litig., 950 F.3d 1, 7 (1st Cir. 2020).United Food & Com. Workers Local 1776 v. Takeda Pharm. Co., 11 F.4th 118, 134–136 (2d Cir. 2021). 21 C.F.R. § 314.53(b). GlaxoSmithKline Request for Advisory Opinion Concerning “Orange Book” Listing of Patents, Docket No. FDA-2005-A-0476 (Jan. 10, 2005); Ropes & Gray on behalf

here was no evidence that Congress imported patent-law concepts into the delisting provisions and that patent law did not provide the correct framework for determining whether a patent should be Orange Book listed. The Federal Circuit explained that a premise to Jazz’s position was that the statutory delisting provisions were at some level functionally coupled with the statutory and regulatory listing provisions. The Court disagreed, finding that patent law is controlling when the Federal Food, Drug, and Cosmetic Act and its subsequent amendments require assessing the scope of patent claims and plays a significant role in construing at least the Orange Book delisting and listing statutory provisions and regulations. The Court noted that the relevant statutory provisions and regulations recite conjugations of “claim.” For example, the listing provision 21 U.S.C. § 355(b)(1)(A)(viii)(II) is concerned with whether a patent “claims a method of using [the] drug,” and the listing regulation 21 C.F.R. § 314.53(b)(1) is concerned with patents that “claim[] the drug or a method of using the drug.” The Court concluded that the answer to these questions—regarding what a patent claims—“should be derived using the tools and framework of patent law, including claim construction.”The Federal Circuit then addressed the language of the delisting provision that stated “an approved method of using the drug.” The Court rejected Jazz’s argument that the language of listing regulation expanded the meaning of “method” beyond that given to “method” under patent law. The Court found that nothing in the relevant rule contradicted applying patent law principles to interpret “method” as recited in the Orange Book delisting and listing statutory provisions and regulations.Finally, the Federal Circuit concluded that the REMS patent was directed to a system, not a method. The Court found that the claims described the components of a whole (a “computer-implemented system” that comprises “one or more computer memories” an