Guest Column | January 23, 2025

Court Ruling Alters the Calculus for Orange Book Patent Listings

By Chad Landmon and Andrew Solomon

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When a brand pharmaceutical company develops a new drug product, one of its early key considerations is whether it has any patents protecting the drug and if those patents should be listed in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, commonly known as the Orange Book. In the last few years, we have seen increased scrutiny on the types of patents that are listed in the Orange Book, including FTC starting to take notice and attempting a “public shaming” campaign to convince certain companies to delist their patents. At long last, we have a decision by the Federal Circuit Court of Appeals affirming a decision to delist certain delivery device patents that do not specifically claim the active ingredient. Although there may be further review of this decision, it is certain to set off a wave of further activity in this area that should be closely watched by both brand and generic companies.

The Hatch-Waxman Regime

The listing of a patent in the Orange Book by a brand company upon FDA approval of its drug product is the first step in a unique litigation regime between brand and generic pharmaceutical companies known as Hatch-Waxman litigation. Months or years later, if a generic drug applicant wishes to market its generic version of the brand product before the patent expires, it must “challenge” the patent when it files its generic drug application by alleging that either its product does not infringe the patent, or the patent is invalid or unenforceable. Once the FDA has initially reviewed the generic drug application and accepted it for filing, the generic applicant must thereafter notify the brand company of its patent challenge. If the brand company responds by filing a timely patent infringement suit, the FDA is prohibited from approving the generic drug application for the earlier of 30 months from when it received notice of the patent challenge, or until the litigation is resolved in the generic drug company’s favor (which seldom occurs prior to the end of the 30-month period). This period is commonly known as the “30-month stay.” (If the brand drug also has “New Chemical Entity” exclusivity that lasts for five years from the brand drug’s approval, the 30-month stay will commence at the end of the exclusivity period, providing seven- and one-half years of market exclusivity.) The 30-month stay applies even if the generic drug application has otherwise satisfied all other regulatory criteria and, accordingly, provides significant value to the brand manufacturer.

Patent Listing

The Hatch-Waxman statutes set forth three types of patents that should be listed in the Orange Book. These are patents directed to the drug substance, the drug composition/formulation, and the approved methods of using the drug. For traditional drug dosage forms such as tablets, capsules and oral solutions, it is generally easy to determine whether a patent falls within one of these three types. However, more complex dosage forms, such as metered dose inhalers and auto injectors, often include device elements as part of their commercial product, and patents can be issued for these device elements.

Whether these patents should be listed in the Orange Book has been subject to debate for over twenty years. Some brand manufacturers have elected to list device element patents in the Orange Book. FDA has never fully addressed whether such listings are appropriate because FDA takes the position that its role vis-à-vis patents is primarily ministerial. Other than having a process whereby FDA is willing to request that a brand manufacturer confirm the accuracy of the Orange Book listing, FDA will otherwise defer to the brand manufacturer’s listing submissions on patent issues.

Congressional Action

In January 2021, the Orange Book Transparency Act of 2020 was signed into law. The Act affirmatively states that patents that are not drug substance patents, drug compound patents, and approved methods of use patents should not be listed in the Orange Book. However, the Act failed to address whether a patent that cannot easily be classified as a drug substance, drug product, or approved method of use should be listed in the Orange Book.

FTC Action

In September 2023, the Federal Trade Commission issued a policy statement advising it would be putting market participants on notice that it intended to scrutinize improper Orange Book listings to determine whether such actions constitute unfair methods of competition in violation of antitrust laws. It followed up by issuing warning letters to the manufacturers of thirty-seven different drug products, questioning the appropriateness of certain patents that were listed, including device component patents. The FTC also commenced so-called Patent Listing Dispute proceedings under the auspices of FDA wherein the patents in question could be subject to delisting from the Orange Book. While the specific Patent Listing Dispute proceedings are confidential, the impact of the FTC’s action appeared to be relatively minimal as all patents for thirty-one of the thirty-seven products remained listed in the Orange Book and unchanged.

Judicial Action

On December 20, 2024, the landscape changed when the United States Court of Appeals for the Federal Circuit weighed in on this issue by affirming the United States District Court for the District of New Jersey’s decision that certain device patents should not have been submitted for Orange Book listing and, therefore, would be delisted. Teva Branded Pharmaceutical Products R&D, Inc. et al. v. Amneal Pharmaceuticals of New York, LLC et al., (Fed. Cir Case 2024-1936, Dec. 20, 2024).

In that case, Teva had listed nine patents in the Orange Book for its ProAir HFA albuterol inhaler. Five of the patents were directed to a dose counter used for the delivery device or the canister used to store the active ingredient, albuterol sulfate. However, the claims of these patents did not recite the albuterol sulfate active ingredient. These five patents were asserted against Amneal in Hatch-Waxman litigation.

Amneal contended that the five patents should not have been listed in the Orange Book because they were not directed to the types of patents that qualify for listing and asserted counterclaims requesting a court order that the patents be delisted from the Orange Book. In addition, Amneal counterclaimed for antitrust liability, arguing that the listing of these patents wrongfully delayed approval of their ANDA because of the 30-month stay. The lower court agreed with Amneal but the Federal Circuit stayed the delisting order pending resolution of the appeal.

On December 20, 2024, the Federal Circuit affirmed the lower court’s decision because the claims of the patents in the lawsuit did not include the active ingredient:

 . . . to qualify for listing, a patent must claim at least what made the product approvable as a drug in the first place – its active ingredient. In other words, Teva cannot list its patents just because they claim the dose-counter and canister parts of the ProAir HFA.

The Court further explained that, where a product includes both drug and device elements, it is what causes it to be a drug that is critical to whether a patent should be listed:

One touchstone of the distinction between drugs and devices is that the former are “composed of complex chemical compounds or biological substances” and the latter are “characterized more by their purely mechanical nature.” . . . Put differently, “what distinguishes a drug from a device under the FDCA is that a device excludes a product that achieves its primary intended purposes through either chemical action or metabolism.”

As the Teva patents did not claim the active ingredient, the Court determined that the only conclusion they could reach was:

To list a patent in the Orange Book, the patent must, among other things, claim the drug for which the applicant submitted the application and for which the application was approved. And to claim that drug, the patent must claim at least the active ingredient. Thus, patents claiming just the device components of the product approved in an NDA do not meet the listing requirement of claiming the drug for which the applicant submitted the application.

Finally, the Court determined that the drug/device combination nature of the product did not alter its reasoning:

. . . a combination product being approved with an NDA does not necessarily make every part of the NDA a drug. That is, a drug-device combination product being approved with an NDA does not make the device parts a drug. The fact that the combination product was approved with an NDA just means that the drug mode of action predominated. On the facts of this case, the drug for which the application was submitted and approved is thus not every component of Teva’s ProAir HFA. Instead, it is the part of the drug-device combination that made it regulatable as a drug in the first place. And that is the active ingredient.

Although this decision appeared to put to bed the dispute over listing patents in the Orange Book for drug/device combination products that are directed solely to a delivery device, Teva had asked for and the Federal Circuit has now agreed to reinstitute the stay of the delisting order while Teva seeks rehearing en banc (review by all judges in the Circuit) of the December 20 ruling with the Federal Circuit. In addition, it is possible that Teva could also file a certiorari petition to have the decision reviewed by the United States Supreme Court.

What’s Next?

While the fate of the rehearing request will provide more insight into this issue, the following are predictions on what may happen next:

  • The pharmaceutical industry will likely be in a little bit of a holding pattern, waiting to see whether Teva gets any traction with its petition for a rehearing en banc from the Federal Circuit. Although those petitions are rarely granted, this case raises some significant issues that may warrant a review by the full court.
  • If the decision stands, brand-side companies may do a careful review of their patent portfolio, and we can expect to see some companies delisting their patents from the Orange Book.
  • The decision will embolden FTC to potentially be more aggressive in this area, and the private class action bar will likely consider bringing antitrust claims against companies who have had Orange Book patent listings for similar patents.
  • Because of the risk of antitrust liability, Brand-side companies may be more reluctant to file Hatch-Waxman suits against generic companies when the only patents being asserted do not recite an active ingredient, drug formulation, or approved method of use.
  • Antitrust counterclaims will become more commonly pled by generic drug company defendants in Hatch-Waxman cases when patents that cannot easily be classified as active ingredient, drug formulation, or approved method of use types are asserted by the Brand-side company.
  • Even if device patents are not listed in the Orange Book, Brand-side and generic drug companies may seek to include them in Hatch-Waxman litigation (where there are patents in such litigation that fall within the statutory types). If courts refuse to add these patents to Hatch-Waxman litigation for jurisdictional reasons, we will likely see companion patent cases brought outside of the Hatch-Waxman litigation procedures (and potentially at a later date), which will create some interesting strategic considerations for both brand and generic companies.
  • There may be pressure applied to FDA to expand its role when considering patent listings.

While we await further developments on this case, the recent Teva decision certainly highlights the importance for both brand and generic companies to fully evaluate the statutory patent listing criteria for each relevant patent.

About The Authors:

Chad Landmon chairs Polsinelli’s Hatch-Waxman & Biologics Practice and is a first chair trial lawyer known for his adept handling of patent litigation, the FDA approval processes, and Administrative Procedure Act litigation, ensuring clients can efficiently and profitably bring their products to market. Beyond his primary focus, Chad manages cases involving the cross-section of antitrust and patent law, particularly those arising from settlements of patent disputes and Hatch-Waxman Act exclusivity disputes.

Andrew Solomon utilizes his 35-plus years of diversified experiences to provide clients in the life sciences and chemical industries the opportunity to achieve an appropriate return on their investment. Andy has spent the majority of his career as an in-house practitioner, handling both intellectual property and commercial matters and utilizes his in-house experience to deliver advice in a straightforward, pragmatic, business-sensitive way.