What are the policy considerations behind the Teva v. Amneal decision for Orange Book listed patents?
Zachary Silbersher
The FTC recently challenged scores of pharmaceutical patents as improperly listed in the Orange Book. This was an important because, among the many ways that BigPharma has been accused of abusing the patent system to block lower-cost generic formulations, attacking Orange Book listings has had limited success in the past. In 2020, the First Circuit endorsed antitrust allegations against Sanofi for improperly listed patents. More recently, the Federal Circuit issued a precedential decision limiting the scope of patents that can be permissibly listed in the Orange Book. This is also an important decision because it is one of the few precedential decisions from the Federal Circuit to address this issue. What are the policy implications of the Federal Circuit’s recent ruling regarding Orange Book patent listings?
The Teva v. Amneal case.
The Federal Circuit decision involved a Hatch-Waxman suit brough by Teva against Amneal in connection with Teva’s ProAir HFA inhaler product. Teva asserted patents that covered features of its inhaler device, but did not recite albuterol sulfate, the active ingredient in ProAir, let alone any other active pharmaceutical ingredients. For this reason, Amneal counterclaimed that Teva’s patents were improperly listed in the Orange Book.
Delisting counterclaims are rarely asserted, and even rarer to succeed. Brand pharma has gotten away with asserting device patents in Hatch Waxman cases before. It’s curious because the Listing Statute, (21 US Code § 355(b)(1)(A)(viii), amended in 2021), arguably appears on its face to proscribe listing such patents in the Orange Book. Indeed, a reasonable interpretation of the statute appears to expressly limit the types of patents that can be listed in the Orange Book to those that cover the active ingredient, formulation, composition or method of use.
The statute provides that a patent must be listed 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.
Teva argued that its inhaler device patents each “claims the drug for which the applicant submitted the application” primarily because these patents would be infringed by its ProAir HFA inhaler product. The district court disagreed, and the Federal Circuit upheld. Accordingly, Teva was required to delist the inhaler device patents from the Orange Book.
The Court’s decision clearly sets new boundaries on listing patents in the Orange Books. To arrive at its decision, the Court engaged in extensive analysis parsing the language of the Listing Statute and its legislative history. Yet, before the Court were also numerous amicus briefs filed on behalf of both Teva and Amneal. Those briefs highlighted different policy considerations behind limiting the scope of patents that can be listed in the Orange Book.
The policy debate.
A group of law professors filed an amicus brief arguing in favor of upholding the district court’s decision. Apart from attacking Teva’s legal arguments, they argued from a policy perspective that listing of patents that do not claim the actual active ingredient for which FDA approval was sought should be prohibited. “This is a classic case of ‘evergreening’,” they argued. (Case No. 24-1936 (Fed. Cir.) Dkt. 46 at 1). Even though the patent on the active ingredient in Teva’s inhaler expired in 1989, Teva is using device patents to continue to exclude generics until 2026. They emphasized that falsely listing patents in the Orange Book has direct consequences on consumers:
Listing patents in the Orange Book is not a victimless action. It results in a powerful 30-month stay. Every one of the days making up the 30 months from improperly listed patents is a day that consumers are robbed of lower-cost generic medicines. Given the difficulty many consumers face in their ability to afford critical medicines, this is a real problem.
(Id. at 15).
Another group of amici consisting largely of medical professionals as well as a law professor highlighted that the Teva v. Amneal case primarily concerns device patents for inhalers. Their brief is important in its own right because it gathers considerable data showing that device patents for inhaler products, which have no claims tethered to the actual pharmaceutical ingredient, typically extend patent protection for inhalers by several years. (Case No. 24-1936 (Fed. Cir.) Dkt. 60 at 29) (showing how patents for multiple different inhalers have patents reciting no active ingredient but nevertheless extend patent protection over 10 years, and in some cases up to 20 years.).
The same amici further illustrated that, even though the active ingredients in many inhalers have been off-patent for decades, Orange-Book listings of device patents deprive more than four-million people each year of inhaler products because consumers simply cannot afford them when there are no lower-cost generic alternatives. (Id. at 33). In short, these medical professionals argue that you can draw a straight line between improperly-listed Orange Book patents and millions of people being deprived of healthcare they need, but cannot afford.
By contrast, Astrazeneca filed an amicus brief arguing that innovation in generic medicines will be discouraged if brands cannot list patents that read upon the drug product, but don’t actually claim a specific active ingredient. The Hatch-Waxman Act is itself a statutory mechanism intended to act as a clearance of all potential patent challenges before a generic comes to market. Yet, according to Astrazeneca, the clearance mechanism depends upon broadly interpreting the scope of patents that can be listed in the Orange Book. If drug patents such as Teva’s, which are infringed by generic products, but don’t claim any specific active ingredient, cannot be listed in the Orange Book, that will allegedly open up generics to patent liability after they launch. According to Astrazeneca, more generic launches will therefore be at-risk, and more generics will have to contend with post-launch patent suits that threaten not only damages but an injunction. (Case No. 24-1936 (Fed. Cir.) Dkt. 40 at 13-16). That, in turn, according to Astrazeneca, will supposedly suppress the availability of generic drugs.
Similarly, Sanofi filed an amicus brief arguing that generic competition would be improved by permitting listing any patent in the Orange Book that reads upon an FDA-approved drug product. Any patent that is listed would be swept into the 30-month stay, and courts have already held that only a single 30-month stay can be imposed per generic application. Sanofi also argued that the 180-day exclusivity period for generics is only available for patents listed in the Orange Book. (Case No. 24-1936 (Fed. Cir.) Dkt. 42 at 27).
This reasoning from the brands is suspect for a few reasons. Brands already have patents that purportedly read upon generic products but are not listed in the Orange Book. Despite this, there does not exist an epidemic of post-launch challenges, as cautioned by Astrazeneca, which are crippling generic launches with preliminary injunctions or potential damages liability. Indeed, courts have held that unlisted patents can be asserted alongside listed patents during Hatch-Waxman cases. See e.g., Merck Sharp & Dohme Corp. v. Sandoz Inc., No. 12-cv-3289, 2013 WL 591976 (D.N.J. Feb. 14, 2013) (holding unlisted patents can be asserted in Hatch-Waxman litigation alongside timely-listed patents). And because of that, brands may be compelled to assert unlisted patents during a Hatch-Waxman case at risk of waiving the right to do so in a subsequent litigation involving the same parties and the same product.
Though not itself a policy argument, it is also telling of something that the amici brands are contending that their reading of the Listing Statute will improve access to generic drugs given that the brands are literally in the business of denying access to generic drugs. Stock prices rise all the time on brand pharma’s success in denying or delaying access to generic drugs. If the brands believed that their tactics would improve access to healthcare, they why are they arguing their tactics would supposedly favor their direct competition?
Will the final word on Orange Book listing have to wait another day?
Much of this may become moot given that the Federal Circuit’s decision did not address a broader question. In 2021, the statute governing Orange Book listings was amended to require that the only patents that can be listed are those that claim “a drug substance (active ingredient)” or “a drug product (formulation or composition).” Amneal argued that this statute, on its face, considerably narrows the field of listable patents and necessarily excludes device patents that may be used to administer a drug.
The Federal Circuit passed on this question given that its conclusion that Teva’s patents do not claim at least the active ingredient. Yet, by doing so, the Federal Circuit arguably identified a clear loophole through which the holding in Teva v. Amneal could be circumvented. Faced with the Federal Circuit’s decision, brand pharmaceutical companies that still wish to list device patents within the Orange Book may simply start adding claims to their device patent applications that recite an active ingredient. Better yet, add claims that claim scores of different active ingredients that could be used or administered by the patented device or inhaler.
Yet, if Amneal’s argument is correct, namely, the statute proscribes listing in the Orange Book even device patents that claim an active ingredient, that would necessarily be a more powerful decision implicating the very same policy considerations discussed above. Alas, such is likely the next big battle in the war over Orange Book-listed patents, and its outcome will have to wait another day.