Drugmakers dig in their heels amid FTC's latest patent crackdown. What happens next?

In the U.S. Federal Trade Commission’s (FTC's) latest campaign against what the agency views as “junk” drug patents listed at the FDA, drugmakers have decided not to play ball.

The eight pharma companies that face FTC’s challenges against patents in the FDA’s Orange Book have opted not to remove any of them, according to a Fierce Pharma review of an FDA document (PDF). These include all 17 patents for Novo Nordisk’s popular GLP-1 diabetes med Ozempic that have landed in the antitrust authority’s crosshairs.

GSK, which pulled some patents during a prior FTC crackdown, decided to keep all disputed patents this time. The British drugmaker concluded that the listings are “appropriate and in compliance with applicable law, regulations and guidance,” the company said in a statement to Fierce Pharma.

Diabetes injectable drugs and inhalers for asthma and chronic obstructive pulmonary disease from AstraZeneca, Boehringer Ingelheim, Novartis, Teva, Covis Pharma and Amphastar Pharmaceuticals are also involved in the FTC’s latest campaign. Altogether, the agency is contesting more than 300 so-called “junk” listings at the FDA.

In response to the drugmakers’ reluctance to remove the listings, the FTC is “considering all options as we determine our next steps,” agency spokesperson Douglas Farrar said in a statement.

“Junk patent listings delay the entry of lower-priced generic drugs, ultimately forcing patients to continue paying high costs while pharmaceutical companies reap in record profits,” Farrar said.

Innovative drug developers are required to list patents in the Orange Book, which serves as a reference guide for generic drug developers and others. If a branded drug developer files an infringement lawsuit citing an Orange Book-listed patent within 45 days of a generic drug application, the FDA is barred from approving that generic drug for 30 months.

The FTC argues that some companies are taking advantage of that regulatory mechanism by putting up sham patents to prevent timely generic competition.

“The allegation that we use this listing to keep prices artificially high is simply false,” a Novo Nordisk spokesperson said in a statement. “Novo takes its regulatory obligations very seriously for all its products and patenting activities.”

Separately, Novo Nordisk CEO Lars Fruergaard Jørgensen has agreed to testify during a Senate Committee on Health, Education, Labor and Pensions hearing in September about pricing of its GLP-1 meds Ozempic and its weight-loss sister med Wegovy

Unrelenting antitrust scrutiny

The FTC will likely continue to fight on the junk patent issue, Kevin Noonan, Ph.D., co-chair of the law firm MBHB’s biopharma practice, said in an interview with Fierce Pharma ahead of the latest Orange Book update. He pointed to the agency’s long-lasting crusade against pay-for-delay deals between originator and copycat makers as one example of the agency’s focus on intellectual property issues.

The FTC’s current leadership has maintained a hawkish stance toward the pharma industry and tends to make a big splash of its industry fights, Noonan observed. But the latest crackdown is more of a factor “at the margins,” he said, rather than being “the biggest problem in the world, all capital letters.”

Noonan’s team examined all patents that were challenged by the FTC and found fewer than 10 that have ever been involved in litigation.

Having said that, Noonan acknowledged that “there’s a scenario in which the FTC is correct” that ill-intended patent evergreening does occur in the industry. With that considered, the agency may try to clean up the space before it becomes a bigger problem, he said.

Kevin Noonan, Ph.D. (MBHB)

The FTC has so far targeted autoinjectors and inhalers, and MBHB’s examination found the disputed patents mainly cover drug delivery mechanisms. Noonan views these patents as the low-hanging fruit for the FTC. Compared with patents for drug compounds and new formulations, mechanical devices are “in some ways, a little ancillary,” he said.

Once the FTC deals with the low-hanging fruit, Noonan said the agency could expand its junk patent battle to drug formulations.

“I think the FTC will next say, ‘Oh, you should only put the composition of matter of patents on the Orange Book, and the fact that you’ve made four different formulations […] that’s just manipulative, and it’s a way to reduce competition,’” he explained.

Possible next steps

For the ongoing issue around autoinjectors and inhalers, the FTC and pharma companies will likely duke it out under the FDA’s petition framework, which could take a year or two, Noonan said. After that, Noonan predicted that the FTC could go to the courts if the FDA never acts on the petitions or denies them.

The FTC first warned that it was examining “improper” Orange Book listings back in September 2023. It challenged a batch of more than 100 patent listings in November and then expanded its crackdown this April.

The FTC may try to pull the FDA to its side in the fight, Noonan suggested. The drug regulator has always maintained that its role in the Orange Book is merely as a record-keeper rather than a judge, and Noonan doesn’t see the FDA changing its tune now. However, noting that the FDA is another executive branch of the U.S. government, he admitted that political pressure could come into play.

As for drugmakers, Noonan said companies need to recognize that the FTC will not just let the issue slide.

Some companies may fold for various reasons, Noonan said. A company may decide not to spend money fighting the FTC, or decide that its listed patents are just not worth the fight for a number of reasons.

For companies that decide to keep fighting the FTC, Noonan suggested that they spotlight patents that really make a difference, where studies have shown additional benefits for the drug-device combo. Arguments could be made that the FTC’s policy could be a detriment to patients because, without Orange Book listings, it might not be economically worth it for companies to develop better versions of their existing drugs.