FTC Supports Rule Change to Expose Anticompetitive Drug Patent Deals

The U.S. Federal Trade Commission (FTC) has proposed a rule change that will require pharmaceutical companies to file all pre-institution patent settlements with the Patent and Trademark Office (USPTO), with the ruling aimed at enhancing the FTC's ability to detect anticompetitive settlements that delay generic drug competition and keep drug prices high. The FTC also criticized tactics like meritless lawsuits, anticompetitive loyalty programs, and product-hopping. The Office said it will continue to scrutinize improper patent listings in the FDA's Orange Book to deter lower-cost generic entry.

The following article originally appeared in FirstWord Pharma.

US antitrust regulators have put their support behind a proposed rule change that would require pharmaceutical companies to file all "pre-institution" patent settlements with the Patent and Trademark Office (USPTO). These are the settlement agreements that are reached before the USPTO's Patent Trial and Appeal Board (PTAB) has decided whether to institute a case review.

The new disclosure would amend the current requirement for companies to disclose settlement agreements only if their dispute settles after a PTAB trial proceeding has been initiated. In comments supporting the move, the Federal Trade Commission (FTC) stated Tuesday that the rule change would enhance the agency's ability "to identify and investigate potentially unlawful settlements in the pharmaceutical sector" and other industries.

"The broader disclosure requirements in the proposed rule would help the FTC detect reverse payment settlements between pharmaceutical companies that raise antitrust concerns by preventing competition from lower-cost generic drugs and keeping drug prices high," the agency said.

The FTC also criticised a range of tactics it views as "unfair methods of competition," from filing meritless patent lawsuits to anticompetitive "loyalty programmes" that impede generic entry, as well as "product-hopping" schemes where pharma firms make minor tweaks to a product in order to extend patent life.

The agency said it continues to scrutinise patentholders that can delay and deter entry of lower-cost generic competitors, including pharmaceutical companies' improper listing of patents in the FDA's Orange Book. In September, the FTC warned drugmakers that it would take legal action against these so-called "junk" patent listings, and more recently challenged a number of drug companies, including AstraZeneca and Novo Nordisk, disputing the accuracy or relevance of more than 300 patents listed in the Orange Book.

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