FTC Employs New Tactic in Effort Against Drug Makers Alleged to Have Improperly Listed Patents in the FDA’s Orange Book

By: Steve Albertson , Thomas Ensign , Carl A. Morales, Ph.D. , Erica R. Sutter

On Nov. 7, 2023, the Federal Trade Commission (FTC) announced it is disputing the listing of more than 100 patents in the Food and Drug Administration’s (FDA) “Approved Drug Products with Therapeutic Equivalence Evaluations,” known as the “Orange Book.” The FTC’s announcement follows its Sept. 14 release of a policy statement outlining the Commission’s views the ways in which allegedly improper Orange Book patent listings may constitute violations of the antitrust laws, and committing the FTC to stepped-up enforcement in these instances.

Despite the high-profile nature of this move by the FTC, it does not actually constitute any sort of enforcement action under either the antitrust laws or the statutes and rules governing FDA processes. Rather, it serves as an additional indication of the FTC’s heightened scrutiny of the pharmaceutical industry in general, and the competition-related consequences of patent or regulatory processes in particular.

Orange Book Background

A developer of a new drug must seek FDA approval for its product by filing a New Drug Application (NDA). As part of filing an NDA, applicants must identify patents relevant to the drug to be listed in the Orange Book if the NDA is approved. This listing puts competing drug makers, including generic drug companies, on notice of the specific intellectual property rights relevant to the new drug. Specifically, NDA applicants must submit for listing a patent that:

“(I) claims the drug for which the applicant submitted the application and is a drug substance (active ingredient) patent or a drug product (formulation or composition) patent; or

(II) claims a method of using such drug for which approval is sought or has been granted in the application.” [1]

Makers of generic drugs are typically able to rely on portions of the branded drug’s NDA for an accelerated path to market via an Abbreviated New Drug Application (ANDA). An ANDA filer must certify that its generic version either does not infringe patents listed in the Orange Book for the branded drug, or that a particular listed patent is invalid. If the branded drug maker then files an action for patent infringement against the ANDA applicant within 45 days, that triggers an automatic statutory stay of up to 30 months, and in some cases significantly longer, on the FDA’s authority to approve the ANDA, thus delaying the generic drug’s launch while the patent dispute plays out in court. [2]

The FTC’s September Policy Statement

With the publication of its policy statement “Brand Pharmaceutical Manufacturers’ Improper Listing of Patents in the Orange Book” on Sept. 14, the FTC indicated that it would be undertaking vigorous scrutiny of certain Orange Book patent listings, asserting that branded drug makers have intentionally used such listings as a means of delaying and discouraging competition from generic drugs. The FTC reiterated its long-standing position that improper Orange Book listings and the attendant potential of automatic stays of FDA approval could constitute violations of Section 2 of the Sherman Act governing monopolization offenses. However, the FTC gave particular emphasis to its view that an improper listing may also constitute an “unfair method of competition” in violation of Section 5 of the FTC Act.

The FTC went on to warn that individuals who submit or cause the submission of improper Orange Book patent listings may be held individually liable, and that if the FTC encounters criminal violations, such as perjury when certifying improper patent listing, it may refer such cases to the Department of Justice (DOJ).

FTC’s Nov. 7, 2023, Press Release and Notice Letters

The FTC’s Nov. 7 press release indicated that it sent 10 notice letters to makers of pharmaceutical products it alleges have made improper Orange Book listings. The notice letters indicate that the FTC is choosing to investigate the Orange Book listing by means of the FDA patent listing dispute process which, pursuant to 21 C.F.R. § 314.53(f)(1), allows any interested party to question the accuracy or relevance of the information for patents listed in the Orange Book. According to the dispute process regulations, the FDA will send the statement of dispute filed by the FTC to each company. Each company will then have 30 days to confirm—under penalty of perjury—the correctness of the patent information, or to withdraw or amend the information in the patent listing.

In the November notice letters the FTC indicated that although it is initially utilizing the FDA’s procedure for disputed listings, it reserved the ability to investigate and potentially bring enforcement actions under the antitrust laws—in particular, Section 5 of the FTC Act.


The FTC’s public communications around the FDA-disputed listings process have not explicitly revealed a rationale for why they chose to initiate the actions in connection with these specific patent listings. However, in FTC Chair Lina Khan’s public statement in support of the September announcement, she noted that one of the problems the Commission was seeking to address in the policy statement was the listing of certain patents that did not claim the underlying drug that was the subject of the NDA, citing a 2020 opinion of the First Circuit Court of Appeals. See, In re Lantus Direct Purchaser Antitrust Litig., 950 F.3d 1 (1st Cir. 2020). Khan’s statement appears to have previewed the initial focus of the FTC’s renewed efforts.

However, the FDA disputed listing process is not itself a mechanism by which the FTC can seek to have an improperly listed patent stricken, or to otherwise directly punish or deter anticompetitive behavior. It merely requires the NDA holder to either withdraw the listing or recertify that it is accurate and relevant, a decision that is not subject to review or oversight by the FDA. From a substantive perspective, the only potential increased liability associated with the disputed listing process relates to exposure to perjury claims on either the recertification or, if the patent is de-listed by the NDA holder, the original certification. The FTC likely expects that such risk exposure on listings that are clearly under FTC focus may induce more conservative, risk-averse behavior from recipients of FTC listing disputes, both in deciding how and whether to recertify the listing, and in launching any future infringement actions involving the listed patents that would trigger statutory automatic stays.

To achieve its broader enforcement aims, however, the FTC must still resort to the antitrust statutory framework, and ultimately the courts, which, depending on the facts of a particular Orange Book listing, could present a difficult path for the FTC, as illustrated in the Lantus case cited by Khan herself. Although courts have in some circumstances been open to assigning antitrust liability for allegedly improper Orange Book listings—and the First Circuit in Lantus found that the challenged patent had been improperly listed—the court declined to conclude that an improper listing was automatically unlawful under the Sherman Act. Instead, the First Circuit held that defenses to antitrust liability in such circumstances “include proving that the submission was the result of a reasonable, good-faith attempt to comply” with the relevant regulatory requirements. In a system where an NDA filer is obligated to list all relevant patents and where failure to do so could “arguably have an anticompetitive effect by depriving potential competitors of notice and the other procedural benefits that result from an Orange Book listing,” and where the FDA has declined to provide requested guidance on how NDA filers should interpret their statutory obligations, convincing a court to assign Sherman Act liability could be difficult for the FTC.

This points to a broader policy agenda being advanced by the Biden administration on questions related to competition. In July 2021, just three weeks after he appointed Khan as FTC chair, the president issued an “Executive Order on Promoting Competition in the American Economy,” pursuant to which federal agencies (not just the FTC and DOJ) are directed to assess their statutory and regulatory authorities to find creative ways to protect competition through a comprehensive “whole-of-government” approach. In keeping with the administration’s push to reinvigorate antitrust enforcement, Khan and the FTC issued a policy statement in 2022 alleging a “longstanding failure [of prior administrations] to investigate and pursue” claims under Section 5 of the FTC Act and pledging to revive the Commission’s Section 5 authority, which in much recent precedent had been treated as essentially coterminous with the Sherman Act. Khan argues that Congress intended for Section 5 to reach much further than the Sherman Act, which was enacted decades prior to the FTC Act.

Thus, the strong emphasis on Section 5 in the new policy statement on Orange Book listings likely reflects an acknowledgment of the potential difficulties the FTC faces under the Sherman Act. However, it also likely reflects a perception by FTC leadership that patent listings could provide an opportunity for the FTC to test its new approach to enforcement under Section 5. Further, utilizing the FDA dispute process despite no clear legal benefit to doing so, and including the FDA in public announcements of the action, also serves as a “tip of the hat” to engaging in a whole-of-government approach consistent with the president’s order.

For additional questions, reach out to counsel or your Fenwick team to assist in evaluation of relevant issues in light of the FTC’s recent actions.


[1] 21 U.S.C. § 355(b)(1)(A)(viii); see also 21 C.F.R.§ 314.53 et seq.

[2] 21 U.S.C. §§ 355(c)(3)(C), (j)(5)(B)(iii).

*Daniel Klaeren contributed to this alert

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