The FTC Is Attacking Drugmakers’ ‘Patent Thickets’

Yves here. The FTC has opened an important new front against Big Pharma price gouging. This article is not as detailed as I would like in explaining the legal theories by which the FTC is seeking to vitiate what amount to patent extensions rather than the protection of bona fide new drug development. Your humble blogger has discussed this for many years, how for over a decade, over 80% of the filed “new drug applications” are actually minor tweaks to add years to patent protection, such as a reformulation so that a drug that needed to be taken every 8 hours instead needs to be administered only once a day. This post does usefully describe that these reworkings include delivery methods, like improvements to inhalers, and their reach is what the FTC is challenging.

By Elisabeth Rosenthal, KFF Health News Senior Contributing Editor, and former Editor-in-Chief and a correspondent with The New York Times. Originally published at KFF Health News

The Federal Trade Commission has challenged the validity of over 100 drug product patents, focusing on devices used to deliver medicines, like inhalers and autoinjectors, in an effort to increase competition and potentially lower some prices.

The FTC says drugmakers illegitimately use the patents to prevent competitors from offering cheaper generic alternatives.

It’s the first time the FTC has tried the tactic, said Hannah Garden-Monheit, director of the FTC’s Office of Policy Planning.

“We are using all the tools we have to bring down drug prices and reduce barriers to generic competition,” she said in an interview.

President Joe Biden has instructed his Federal Trade Commission to be more aggressive in reining in the pharmaceutical industry. Under its chairperson, Lina Khan, the agency is aggressively testing the limits of its powers in pursuit of that goal.

The targeted patents cover devices that propel medicines for asthma and emphysema into the lungs or inject epinephrine to treat a severe allergic attack. Drugmakers list them in the FDA’s “Orange Book,” which can afford the products greater protection from generic competition.

Many of the medicines delivered by the devices are decades old, years off patent. But manufacturers have long tweaked the delivery methods, patenting the changes, in ways that sometimes make the drugs more convenient to administer.

They might, for example, change the propellant in an inhaler or add a counter that tells a patient how many doses are left. Autoinjectors mean patients don’t see a needle or syringe but merely press a device with a hidden needle against the skin to deliver the medicine. Some autoinjectors even talk patients through the process.

Though there has long been a procedure for disputing the validity of Orange Book-listed patents, it is rarely used.

In challenging Orange Book listings, the FTC is trying to cut away at what are known as patent thickets. While a single patent once would cover a single active medicine, many drugs today are protected by half a dozen patents or more, creating additional obstacles for cheaper generics seeking to enter the market.

The move is critically important because drugmakers frequently extend the 20-year patent protection of a drug by changing the delivery device or method. For example, instead of a pill, they make a capsule. Or instead of a dose every six hours, they create a longer-acting, once-a-day version. They can also alter the process by which a drug is made — so-called “process patents.”

Each tweak gets a new patent, which the manufacturer then adds to its official compendium of drug patents. There is no advance scrutiny of listings by regulators.

Generic drugmakers wishing to make a copycat version of a branded drug generally have to challenge the patents in court. But merely listing a patent in the Orange Book automatically triggers a 2½-year delay of FDA approval of a litigating generic competitor.

The FTC says patent law protects active ingredients, not delivery methods.

The pharmaceutical industry, already battling the Biden administration’s plan to negotiate prices of some drugs for Medicare patients, says it wants more clarity about which aspects of its products can be patented.

“The underlying statute is not clear about listing certain types of drug delivery device patents, and the industry has long asked for the FDA to provide guidance,” said Megan Van Etten, a spokesperson for Pharmaceutical Research and Manufacturers of America, the industry trade group, in an email. “We’re disappointed that the FTC has characterized companies as acting inappropriately rather than help seek the clarity the industry needs to ensure compliance.”

After an FTC challenge, companies have 30 days to withdraw or amend the patent or show it is valid. Some have already backed down.

“We’ve had some significant wins,” Garden-Monheit said. After the FTC’s challenge, drugmaker GSK, formerly GlaxoSmithKline, withdrew all patents on two popular inhalers for asthma, Advair and Flovent, both of which contained old off-patent medicines but nonetheless cost hundreds of dollars. Amneal Pharmaceuticals withdrew patents on its epinephrine injector.

Still, the deadline for companies to respond to the first set of warning letters has passed and only about 30% of those that received them answered, leaving the commission to ponder its next steps. The FTC could take a drugmaker to court to seek a cease-and-desist order.

And Garden-Monheit said the agency is poised to look at other types of patents that may be invalid, which pile up to add to the thicket. There are thousands of patents in the Orange Book.

“We are taking a close and active look at this,” Garden-Monheit said. “Companies who haven’t received a letter from us challenging a patent shouldn’t think they’re off the hook.”

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  1. Pat

    Glad they are going after the hardware tweaks. To me those should be a no brainer. And thank goodness for the one saving Grace of Biden’s administration, Lina Khan.
    Unfortunately at least some of the methods used with insulin are not as straightforward. Time release methods, for instance, have been one of the things that have put a stranglehold on insulin generics and bio similars. I hope they are on the agenda.

  2. Mark Gisleson

    I’d like to think that this is an actual effort to give relief to overcharged healthcare consumers, but I suspect the real story is that some of the swells are tired of being gouged. I’d like to think that some of this will ding Pfizer hard, but I’m not holding my breath.

    These reforms seem to me to be necessary only because of previous failure to properly regulate an industry that [very long and angry un family blog friendly rant — @#$!]

  3. Terry Flynn

    Thanks, very important issue. I am “on board” with the fight against spurious “patent shenanigans”. However, and to play devil’s advocate, I must mention one thing.

    Generics must conform to rules specifying the active ingredient. In many cases, “non-active” ingredients (often the kind of things that keep a pill from oxidizing etc) are specified too. However I have gone from being one of the “generic warriors” to being more pragmatic. To be clear, I still believe the vast majority of people who insist that Nurofen beats generic ibuprofen would, if subjected to a blinded test, show no difference.

    However there are medications and dietary supplements that can and do get approved by using cheap preservatives etc that can potentially affect some people. Apologies for the anecdote but my chronic Vitamin D deficiency became apparent after I moved back to the UK from Sydney. For a year I got orally administered vit D drops. Then the “vit D deficiency crisis” hit the news. Suddenly the govt didn’t want to be funding this treatment for 65 million people every 2 months between September and April.

    My GP said “nope, just go buy it yourself using this website”. The website required a GMC number. In other words I was told to use a source only accessible to accredited medical doctors. My GP wasn’t actively doing anything wrong…. She just had no idea that the supplements all her colleagues took were not available to the general public.

    During my time in Sydney the long standing “avoid the sun” campaign was dropped due to the huge surge in conditions linked to vitamin D deficiency. We were now told to get 10 mins sunshine on way to work and on way back (fairly sensible since it’s not peak sun). Getting adequate vitamin D orally is very very difficult….. And if (like me) you have to resort to a certain giant online retailer that provides the adequate dose at a reasonable price you also open up yourself (excuse the pun) to GI opening…. Hourly…..

    We need publicly owned generic providers. Who understand issues regarding preservatives etc and can produce variants that genuinely help people who have genuinely shown they have issues with certain non active ingredients.

  4. Yaiyen

    It’s hard to believe this is real fight, they had years to do this that you have to wonder is it because of election season

    1. JBird4049

      >>>…they had years to do this that you have to wonder is it because of election season

      I don’t think so. Lina Khan is in her third year as head of the FTC. Having an actual non-ghoul in charge is a strange thing.

  5. wendigo

    ” Owning the Sun” by Alexander Zaitchik is about how patents, especially drug patents, followed the money.

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