FTC Amicus Brief Challenges Abuse of FDA “Orange Book” Listing Procedures to Block Drug Competition

The Federal Trade Commission filed an amicus brief with the U.S. District Court for the District of Delaware in the case of Jazz Pharmaceuticals v. Avadel CNS Pharmaceuticals. The Brief highlights the significant harm to consumers when a brand company improperly lists a patent on a distribution system in the Food and Drug Administration’s “Orange Book” of approved drugs and thereby blocks the introduction of lower-cost generic medications or other follow-on competition.

The FDA’s Orange Book is a list of drugs that are approved by the agency as safe and effective. When a brand pharmaceutical company lists a drug patent in the book it automatically triggers a legal stay that blocks the introduction of competing versions for up to 30 months.

The FTC’s amicus brief explains how the Orange Book listing process can be abused and emphasizes the harm to competition and consumers that can result from that abuse, including depriving consumers of potential competition from lower-cost alternatives and the ability to choose between products. The FTC’s amicus brief further argues that distribution patents should not be listed in the FDA Orange Book because they do not meet the statutory requirement that a listed patent claim either the drug itself or a method of using the drug. To the extent the Jazz patent at issue in the case – known as the ’963 patent – covers only Jazz’s system for distributing Xyrem under FDA regulations rather than a method of using the drug for treatment, the FTC’s amicus brief argues that it should be delisted.

Under FDA regulations Xyrem is subject to a restricted distribution system called a Risk Evaluation and Mitigation Strategies (REMS) program, which restricts distribution of some pharmaceuticals to safeguard the public and prevent potential abuse or diversion. The brief notes that some brand drug manufacturers have a history of using restricted distribution programs to delay the introduction of generic drugs.

Jazz’s ’963 patent appears to cover only a method for distributing Xyrem under a REMS program. After listing it in the Orange Book, Jazz filed a patent infringement lawsuit against Avadel, triggering a 30-month stay and blocking final FDA approval of Avadel’s competing narcolepsy drug.

The FTC amicus brief takes no position on the scope or claim construction of the ’963 patent but argues generally that REMS distribution patents are not properly listed in the Orange Book.

The Commission voted 4-0 to file the amicus brief.