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A recent article published in Health Affairs, delves into the Federal Trade Commission’s (FTC) concerns regarding the inclusion of improper patents in the FDA’s Orange Book by pharmaceutical manufacturers. The Orange Book, which lists FDA-approved drugs along with associated patents, serves to notify generic drug manufacturers of existing intellectual property rights. However, the FTC expressed worry about the potential anticompetitive impact of such listings.
The piece advocates for a proactive, ex ante approach to address the issue, proposing collaboration between the FDA and the US Patent and Trademark Office (USPTO) to assess patents before inclusion. The authors argue that this method, already employed in patent pools for industry standards, could efficiently prevent improper listings, requiring only minor legislative adjustments.
The Hatch-Waxman Act of 1984, requiring branded firms to disclose patents covering new drugs to the FDA, forms the regulatory backdrop. The article emphasizes the detrimental effects of improperly listed patents, such as delayed entry of generic drugs, decreased patient access to affordable prescriptions, and increased healthcare costs. Senator Elizabeth Warren and Representative Pramila Jayapal raised concerns about intentional patent submissions to block generic drug competition.
Drawing parallels with the Information and Communication Technology (ICT) sector, where over-declaration issues have been addressed through mechanisms like patent pools, the article suggests applying similar lessons to the pharmaceutical industry. It notes that the FDA’s task, involving a smaller number of patents, could be facilitated by collaboration with the USPTO.
The authors highlight the inefficiency of ex post enforcement by the FTC and advocate for legislative action to empower the FDA to reject inappropriate patents before publication in the Orange Book. They propose a minor amendment to the Hatch-Waxman Act and suggest that the FDA could shift the cost of patent review to branded firms seeking new drug approval.