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Jayapal, Warren Urge FTC to Rein in Big Pharma Abuses of Patent System

FTC To Hold Open Meeting To Consider Key Policy Statement on Improper Patent Listings

Big Pharma Exploits FDA’s “Orange Book” to Prevent the Entry of Lower-Cost Generics and Block Competition

Text of Letter (PDF)

Washington, D.C. – U.S. Representative Pramila Jayapal (D-Wash.) and U.S. Senator Elizabeth Warren (D-Mass.) sent a letter to Federal Trade Commission (FTC) Chair Lina Khan, ahead of the Commission’s open meeting later today, urging the FTC to issue a policy statement about the improper listing of drug-related patents in the Food and Drug Administration’s (FDA’s) Orange Book. Big Pharma’s exploitation of the Orange Book blocks competition and prevents lower-cost drugs from entering the market, keeping drug prices high and padding Big Pharma’s profits. 

“Brand-name pharmaceutical companies have routinely abused the U.S. patent system, violated antitrust law, and hiked the prices of prescription drugs to widen their own profit margins. We urge the FTC to take steps to end Big Pharma’s routine exploitation of the Orange Book and hold drug companies accountable for their anti-competitive business practices that are ‘imposing costs on individuals and society alike,”’ wrote the lawmakers. 

The FDA’s Orange Book contains a list of FDA-approved drugs and their related patent and exclusivity information, considered some of the “most valuable patents in the world.” Brand-name drug companies are required to list patent information in the Orange Book that covers drug substances, drug products, and method of use. However, Big Pharma regularly lists patents outside these categories, even when courts have ruled they are outside the scope of the Orange Book. 

“Improper ‘sham’ patents serve the primary purpose of blocking competitors from introducing lower-costs generic drugs. That’s because FDA is automatically barred from approving a generic drug for 30 months if a brand-name drug company sues a generic competitor for infringing on an Orange Book-listed patent. Pharmaceutical companies are therefore incentivized to list more patents in the Orange Book, whether they’re valid or not, to hold off generic competition for multiple years and extend their own monopolies regardless of the outcome of any litigation,” continued the lawmakers. 

The lawmakers note that the FTC has previously raised concerns about these activities, highlighting an amicus brief outlining the harms to consumers from pharmaceutical companies that improperly list patents in the Orange Book and block generics or follow-on competition. An FDA study found that the introduction of even a single generic drug can lower a drug’s price by almost 40%, and with two generic options available, prices drop by over half. 

“Unjustified delays in generic competition are costing patients and taxpayers billions of dollars, just to pad Big Pharma’s profits… The FTC now has the chance to hold Big Pharma accountable for these anti-competitive business tactics. We support your decision to discuss this critical issue at tomorrow’s open meeting and encourage you to release a strong policy statement declaring that the listing of sham patents in the Orange Book is an unfair method of competition that is reducing access to essential drugs and hurting patients,” concluded the lawmakers. 

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