The Abuse of Orange Book Listings by Branded Pharmaceutical Companies

The Abuse of Orange Book Listings by Branded Pharmaceutical CompaniesIn my last post, I highlighted an example of the kind of drug patent representing obvious and trivial modifications of the prior art that sometimes has led to the unjustified extension of patent term to block generic and biosimilar competition in the market for medicines.  In this post, I would like to focus on a particularly potent form of drug-patent abuse that uniquely can afflict those drug patents covering medicines that are subject to the Drug Price Competition and Patent Term Restoration Act of 1984, better known as the “Hatch-Waxman Act”: The tablets and capsules, oral suspensions, sprays, creams, ointments, and gels that typically come to mind when most people think about drugs of the so-called “small-molecule” variety.

The modern pharmaceutical industry has its roots in small-molecule drugs; and they were the original subject of that great compromise between branded and generic drug companies, which is embodied in the Hatch-Waxman Act’s provisions. At the core of these provisions lies what may well-be the most direct link between drug patents and drug prices in the history of American drug-patent legislation: the listing of drug patents in the FDA’s Approved Drug Products with Therapeutic Equivalence Evaluations, better known in the trade as the “Orange Book.”  This is because the patents listed in the Orange Book for a particular drug have the power, by their mere assertion in litigation against a generic drug maker, to automatically block the FDA’s ability to approve a generic version of the drug for a period of 30 months—i.e., 2.5 years.

Some historical background is in order. The Hatch-Waxman Act came about in reaction to the famous decision in 1984 by the Federal Circuit in the case of Roche v. Bolar.  Roche sued Bolar for patent infringement under 35 U.S.C. 271(a), for using its patented sleeping pill, Dalmane, to conduct experimental testing for submission to the FDA for approval to market a generic version of Dalmane after expiration of Roche’s patent.  Bolar pleaded experimental use as a defense.  Notwithstanding that preventing such testing in effect gave Roche an extended period of market exclusivity beyond the existing patent term, the Federal Circuit took a hard line on infringement, and relied upon the decision by the Court of Claims in Pitcairn v. United States, for the proposition that experimental use is not a defense against infringement when consisting of “[t]ests, demonstrations, and experiments . . . [which] are in keeping with the legitimate business of the . . . [alleged infringer].”

Comes along Congress, with a sweeping reaction to the fledgling patent-appeals court’s ruling: The Hatch-Waxman Act, which reversed Roche v. Bolar, and instituted the cottage-industry we know today as ANDA litigation. The Hatch-Waxman Act legislates a specific experimental use exception for generic drug makers to allow for testing of generic versions of a drug for submission of testing results to the FDA, prior to expiration of patents covering the drug (35 U.S.C. § 271(e)(1)).  In return, drug-patent owners received a 30-month period upon submission of a generic drug application to the FDA, in which to vet the patents listed by the drug-patent owner in the Orange Book, before the generic drug application could be approved.

The compromise represented by the Hatch-Waxman Act depends on the good-faith listing of patents by a drug-patent owner in the Orange Book, and a good-faith basis on which to assert such patents against a generic drug maker.  Drug-patent owners are given wide latitude in their ability to list patents in the Orange Book.

Unfortunately, drug-patent owners have not always exercised such good faith in practice.  A particularly egregious case in point is U.S. Patent No. 6,503,894 (“the ‘894 patent”), another AbbVie patent, this one drawn to a testosterone gel formulation, marketed by AbbVie as AndroGel, for the treatment of male testosterone deficiency.

The alleged innovation in the claimed formulation is the inclusion of a specific compound, called isopropyl myristate.  Isopropyl myristate is one of many compounds listed in the ‘894 patent specification (and known in the prior art) as examples of a so-called “penetration enhancer,” but it is the only one claimed.

As originally filed, moreover, claim 1 was drawn to any “penetration enhancer.”  But the patent examiner rejected the broad claim over prior art.  In response, AbbVie limited the claim to the specific compound, isopropyl myristate, as recited in the issued patent; whereupon, the examiner allowed the ‘894 patent to issue.

AbbVie included the ‘894 patent in the Orange Book listing for AndroGel.  Two generic drug companies filed Abbreviated New Drug Applications seeking to make generic versions of AndroGel.  In accordance with the requirements of the Hatch-Waxman Act, both companies filed so-called “paragraph IV” certifications with Notice to AbbVie, providing detailed reasons why their drug products did not infringe the ‘894 patent.

To any member of the patent bar worth their salt, the noninfringement position should have appeared straightforward, and air-tight:  The generic formulations used a different “penetration enhancer,” not isopropyl myristate.  Therefore, they did not literally infringe the patent. And claim 1 was limited explicitly to isopropyl myristate during prosecution, for reasons of patentability, in response to prior-art rejections.  Accordingly, pursuant to the Supreme Court’s decision in the Festo case, there could be no infringement under the doctrine of equivalents, due to the countervailing doctrine of prosecution history estoppel.

The facts of the case appear, indeed, to make-out a textbook example of how this patent-law classic of judicial gloss on 35 U.S.C. § 271 infringement, operates.

Nonetheless, pursuant to the Hatch-Waxman Act, AbbVie sued both generic drug companies, asserting constructive patent infringement under the doctrine of equivalents.  Because the ‘894 patent was listed in the Orange Book, the act of filing suit, itself, automatically invoked a 30-month stay period, during which time the FDA was prohibited by statute from approving the generic drugs for sale to the public—nominally to allow the parties to vet AbbVie’s patent rights under the ‘894 patent, in court.

AbbVie’s maneuver worked like clockwork to induce regulatory gridlock, which prevented generic competition and kept the company’s profits high at public expense, for years.

Fortunately, the FTC would have none of it.  The agency filed suit against AbbVie in the Eastern District of Pennsylvania in 2014, accusing the company of illegal monopolization under the antitrust laws.  The gravamen of the FTC’s complaint was that AbbVie wrongfully filed objectively-baseless sham litigations, to block generic competition.

The FTC moved the court for partial summary judgment on the “objective baselessness” prong of its antitrust claim.  The court granted the agency’s motion in September 2017, agreeing with the FTC that the lawsuits against the generic defendants “were without question objectively baseless,” as it was abundantly clear from the record that prosecution history estoppel precluded assertion of the doctrine of equivalents against either of the generic drug products.

The remainder of the dispute is now at trial to resolve whether AbbVie had the “subjective intent” to illegally monopolize, to warrant injunctive relief and $1.23 billion to compensate consumers.

The FTC v. AbbVie case is the first time in 15 years that the FTC has marshalled its muscle to reign-in abuse of Orange Book listings by branded pharmaceutical companies.  As drug prices continue to skyrocket, the FTC may be signaling that it intends to keep a hawkish focus on abusive Orange Book listings into the future.

In the next installment, I will turn to an example of over-zealous advocacy by drug-patent owners in their representation of alleged inventions before the PTO, as represented by Allergan’s Restasis patents that were invalidated by Judge Bryson last October in the Eastern District of Texas, and which have also been the subject of controversy over the issue of Tribal Immunity before the PTAB.



Warning & Disclaimer: The pages, articles and comments on do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author as of the time of publication and should not be attributed to the author’s employer, clients or the sponsors of

Join the Discussion

20 comments so far.

  • [Avatar for xtian]
    April 9, 2018 09:37 am

    @gene – I don’t want to tar and feather you. What I do want, and is exactly what you honestly provided, is your opinion – And for you, it is that public policy should play a greater role in this scenario. That is fine and we can debate that.

  • [Avatar for Anon]
    April 7, 2018 09:47 am


    I disagree that any such public interest element should impact the innovation dynamics of patent law.

    Innovation should not be so constrained – in part because of the unknowable “cross-fertilization” effect (the late 1970’s show Connections exhibits this effect: ).

    Once one starts intruding with “social engineering” because of “public interest,” and the innovation effect necessarily is constrained away from the optimum. This would be a case of causing less than optimum results because of good intentions.

    Sometimes one must remember that trying for good prevents great.

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 6, 2018 09:15 pm


    It probably isn’t fair, and I’m more than willing for you to tar and feather me for social engineering, but I do think it is different with pharmaceuticals. Legally the analysis shouldn’t be different, but with drugs there is a public interest element that is not present with balloons.

  • [Avatar for xtian]
    April 6, 2018 02:03 pm

    @gene – Reverse payments to generics is a big NO-NO and that practice stopped donkeys years ago. It just far too long to get the issue through the court system.

    For a mental exercise, If Josh paid Telebrands to stay out of the water balloon business would this be such a big deal or do we have a different standard because the subject matter is pharmaceuticals?

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 6, 2018 11:46 am


    You ask: “bribing competitors is illegal regardless of whether there is a patent or not, right?”

    That is a question that has dogged Hatch-Waxman litigation for decades and why the Supreme Court finally a few years ago said that reverse payments (i.e., payments to generics not to enter the market) may be antitrust violations. They may be far more than that really. Illegal, however, they are not. Hatch-Waxman allows them, and Congress well knows they go on. If you are interested take a look at:

    Particularly the section on Hatch-Waxman gaming.

  • [Avatar for Josh Malone]
    Josh Malone
    April 5, 2018 06:47 pm

    I have reread the article and comments and still don’t see that the ‘894 patent caused any harm here. The 30 month Hatch-Waxman embargo expired on 13-Nov-2005. So doctors and patients (or insurers) are anxiously awaiting for that date to arrive so they can afford the treatment, right? But it doesn’t come until 10 weeks later on 27-Jan-2006. Why? It could not have been the allegedly bogus ‘849 patent. It seems that something else was holding it up.

    @Arie, is this a bad example or are we missing something?

    @Gene, bribing competitors is illegal regardless of whether there is a patent or not, right? I still don’t see how an allegedly invalid patent has anything at all to do with generic drug prices. If Telebrands can flood the market with copies of my water balloons worth hundreds of millions, then pharmaceutical companies can flood the market with copies of name brand drugs worth billions, winning attorneys’ fees on top if the patent is so clearly invalid.

  • [Avatar for Gene Quinn]
    Gene Quinn
    April 5, 2018 04:06 pm

    Josh @9

    You say: “If the patents are bogus then they are not going to stop the competition.”

    I don’t think that is actually true. That is the theory. That is what the infringers want everyone to believe. But when confronted with a bogus patent rather than fight in court or challenge with an IPR they still settle from what I hear because it is so much cheaper to pay a few thousand dollars than to do anything else. So the post grant challenges are all about killing patents on which there is real liability, not about killing bogus or bad patents.

    Also, with respect to Hatch-Waxman, the gaming allowed with pharma patents is legendary. There historically was a race to be the first to challenge a brand name drug in court and then to accept a settlement (or bribe) to give up the litigation and not enter the market. Only the first challenger could receive any real benefit from challenging the patent. So there has been all kinds of collusion in the pharma market over the years. The PTAB may have changed that to some extent, but the judges assigned to instituting pharma IPRs always seemed to have a higher threshold than those assigned to other technology areas.

  • [Avatar for Anon2]
    April 5, 2018 02:16 pm

    Josh Malone @ 11

    To the extent the Orange book abuse caused the delay of a competitor from entering a market as early as they “rightfully” “should” have, then in some sense a wrong has been perpetrated ON that competitor.

    As far as I can tell there is no restitution available for the “lost profits” of the additional month which would have been earned by the makers of AndroGel and which were collected by AbbVie but for the shenanigans of AbbVie.

    THE REAL ISSUE then is as between these two parties how should the above wrong be remedied?

  • [Avatar for xtian]
    April 5, 2018 12:20 pm

    @Mr. V 10

    To emphasize your point 1, CFR 314.53 Mandates listing of OB listable patents. The repercussions of not listing are that the patent cannot be later asserted. While the first generic may not, in the Abbvie situation, have used the specifically claimed penetration enhancer, whose to say the 2nd generic filer would?

    As you have said, if there is any abuse at all, its in the assertion of the patent, not the listing. However, also as you point out, if the issue were so clear cut, summary judgment should take care of it.

  • [Avatar for Josh Malone]
    Josh Malone
    April 4, 2018 10:44 pm

    @xtian has postulated that absent the alleged orange book abuse generic AndroGel would have been available on 27-Jan-2006.

    Due to AbbVie’s alleged orange book abuse, generic AndroGel was not available until….27-Jan-2006.

    What is the concern here?

  • [Avatar for Mr. V]
    Mr. V
    April 4, 2018 10:44 pm

    A few reactions to this article:

    1. AbbVie didn’t abuse the orange book. They are required to list all patents covering an approved product. The FDA approved the new formulation which in-turn required that AbbVie list all patents covering the formulation. The “abuse” was the filing of the suit by AbbVie notwithstanding that their assertion of infringement via DOE was estopped by the prosecution history.

    2. The holder of the patents listed in the OB must file suit within 45 days of receiving notice of generic ANDA filing if they want to at least try to prevent their drug from being genericized. In reality, this is not a lot of time for the big legal departments at huge pharma companies to gain internal alignment with the key business stake holders w/in the company in addition to their outside counsel. The value proposition is this: Do we (big pharma company) just roll over and allow the FDA to approve a generic version of our drug thereby crushing our market share or do we file suit and at least buy ourselves up to a 30 month extension of our market share? The latter prevails almost always. Lawyers don’t have the final say in these decisions in big pharma companies, the C-suite does and the concept of “sham litigation” is an abstract one. What’s a billion dollar fine to company whose market cap is in the hundreds of billions? Peanuts.

    3. I’ll also point out that a recent post on this blog regarding the St. Regis Mohawk case discussed the PTAB’s legal theory that if patent owner facing an IPR challenge has already filed an infringement suit in federal court then they have essentially waived any available sovereign immunity defense. This is by design (the PTAB thinks they are so slick don’t they) as the AIA allows for generics to challenge the OB patents both in the district court and before the PTAB via IPR. So it will almost always be the case that if the IPR petitioner is a generic company they are already being sued by the OB patent holder because the OB patent holder had to file suit w/in 45 days per Hatch Waxman; the PTAB would effectively be destroying the viability of Allergan’s strategy in assigning the OB patents to a sovereign entity. I’ll also point out that generic companies are incentivized to file suit in federal court because the first successful ANDA filer/generic will be granted 180 days of market exclusivity meaning that the FDA will not approve subsequent ANDA applications for 180 days which means hundreds of millions of dollars for the first generic. Because Hatch Waxman does not contemplate the AIA, this 180 day exclusivity would not be afforded to generics who are the first to invalidate the OB patents at the PTAB without also being the first generic challengers in-line at the District Court.

    I did take issue with some of the “spin” you put on this but other than that I think this was a pretty good post, Arie.

  • [Avatar for Josh Malone]
    Josh Malone
    April 4, 2018 10:11 pm

    “to enforce a patent on what it must have known was not a reasonable claim of infringement.”

    But this will not prevent the generic from coming to market. If the patents are bogus then they are not going to stop the competition.

    I have rock solid AIA / Enhanced Patent Quality Initiative / Master Review Form / Post Grant Outcomes approved patents and even that did not stop the copies from flooding the market.

    Is the problem you are access to affordable drugs or something else?

  • [Avatar for Arie Michelsohn]
    Arie Michelsohn
    April 4, 2018 09:24 pm

    @Josh: Assertion of constructive infringement under the doctrine of equivalents is necessarily a possible pleading only in the Hatch-Waxman context. AbbVie thus appears to have affirmatively commandeered the statutory regime as its means to enforce a patent on what it must have known was not a reasonable claim of infringement. ‘Nuff said. Note as well that according to recent PTAB statistics in the recent “Chat with the Chief,” Orange Book patents have, overall, fared reasonably well at the PTAB. When a patent drawn to the little tiny things on the end of shoelaces is asserted to block market entry for the shoes altogether however, that, is a problem–and that is what can (and in the FTC v AbbVie case did) happen in the Orange Book context. Disincentivizing that kind of behavior is, to my mind, a good thing.

  • [Avatar for Josh Malone]
    Josh Malone
    April 4, 2018 06:55 pm

    @Arie, there is a disconnect. Your article is about abuse of orange book listings. But you and @xtian agree that could not have been the reason consumers were deprived of cheaper generics. It was the FDA approval, not the patent that delayed the alternative. Not to mention whatever came before the 1% gel was available to the public (maybe @xtian can enlighten us to that treatment option). Now you say the problem is not the delay, but simply any assertion of a patent that you personally believe to be invalid.

    I think that you are confusing issues. Any patent owner that brings an objectively baseless suit is going to lose on summary judgment and pay attorneys fees. Under Octane Fitness they don’t even have to be objectively baseless to be severely punished.

    The patents are not the problem. The problem is that Hatch-Waxman combined with PTAB eliminated every last incentive to innovate rather than freeload/knock-off/copy.

    Perhaps allowing special interest groups to lobby for malleable patent rights is the whole of the problem.

  • [Avatar for Arie Michelsohn]
    Arie Michelsohn
    April 4, 2018 05:05 pm

    @xtian: the drug-patent abuse was in knowingly bringing objectively-baseless lawsuits against generic drug companies based on a patent that could not possibly have been infringed by the ANDA applicants.

    @CP in DC: I do not disagree that it would be helpful to have clearer rules on listings in the Orange Book to begin with; but the FTC taking an active role in enforcement of abusive actions is still a welcome development.

  • [Avatar for Ted Mayle]
    Ted Mayle
    April 4, 2018 03:05 pm

    Another great article by Arie

  • [Avatar for xtian]
    April 4, 2018 12:56 pm

    There are two approved androgel forms approved under to NDAs.

    NDA #021015 – 1% gel approved in 7 June 2000 and granted three years new dosage form exclusivity. On 13 May 2003, the first ANDA 076737 was filed. (The application could have been filed sooner. NDF exclusivity only prevents the FDA from approving an ANDA, it doesn’t prevent the office of generic drugs from accepting an ANDA application and begin the review process thereof.) The 30 month stay from the HW litigation would have expired in 13 Nov. 2005, at which time the generic, if it had an approvable ANDA, could have launched the product at risk if the ‘894 patent was such crap as the author asserts. The ANDA, however, was not approved until 27 Jan 2006, after the expiration of the 30 month stay. So, the 30 month stay becuase of hte ‘894 patent could not have been the reason for the delay in launch of a generic of a 1% Androgel product.

    NDA #022309 – 1.62% gel approved in 2011 was granted three years new dosage strength exclusivity. The first ANDA 204268 was filed 6 April 2012 (prior to the expiration of the regulatory exclusivity). The 30 month stay from the HW litigation would have expired in 6 Oct. 2014. In this case, the ANDA was approved 2 months before the end of the 30 month stay, on 4 Aug. 2015. For this NDA, however, there are substantially more patents listed that cover this product than just the ‘894 patent. The list of patent is included in the ANDA applicant’s approval letter.

    They are below, all of which expire 12 Oct. 2026:


    Accordingly, the author’s use of the ‘894 patent as an example of abuse by Pharma companies to game the 30 month stay is not supported by the actual events in either of the ANDROGEL products.

    I welcome all to double check all my dates and facts.

    Note that I am not an Abbvie employee. I am not associated with, or represent in anyway or otherwise affiliated with Abbvie.

  • [Avatar for CP in DC]
    CP in DC
    April 4, 2018 11:52 am


    Absent a clear demarcation such as prosecution history estoppel, as in this case, the abuse will continue. The case was brought in 2014, the Hatch-Waxman act had been in effect for 30 years. The FDA has been sued numerous times to get them to fix Orange Book listings, but they refuse stating that patent law is not their area of expertise.

    It is difficult for the FTC to prove that a company committed illegal monopolization under the antitrust laws by asserting their patents. That is every infringer’s claim, patent assertion leads to monopolization. However, market monopolization and patent monopolization are two different issues, which courts don’t always get right.

    Keep in mind that the pay-for-delay cases took over a decade for the FTC to get a circuit split so the Supreme Court would look at it.

    I would be thankful if the FDA set clear guidelines and enforced them to prevent the abuse. I understand absent FDA action, I have to be grateful the FTC stepped in. I just can’t expect the FTC to sue every time abuse (including citizen petitions) happens.

  • [Avatar for Arie Michelsohn]
    Arie Michelsohn
    April 4, 2018 11:27 am

    @CP in DC: That is why we should be thankful the FTC stepped in and used its authority to bring an action in this case. Such enforcement could provide sufficient disincentive to branded companies to refrain from engaging in such shenanigans.

  • [Avatar for CP in DC]
    CP in DC
    April 4, 2018 08:42 am

    Orange Book abuse happens because the FDA, the organization that publishes and maintains the Orange Book, refuses to police the listings. In the past, brand names have listed many patents with little or minimal coverage of the drug product only to increase the number of patents a generic must traverse in their ANDA filing. Don’t get me started on the delistings or changes to listings, which are also a problem.

    In the Abbvie case, like others, the non-infringement is straightforward. There is no need to argue invalidity. The ANDA paragraph IV certification is either invalidity or non-infringement or both. Yet, the operating ANDA rules allow the brand name (upon notice from the generic) to sue and get the 30-month stay. This is an enormous advantage in the market place. Couple this with dragging out the district court proceedings and every month you keep the generic on the market the profits pay for litigation costs.

    I like the Hatch-Waxman act for many reasons. I think both sides benefit and both sides play the game. What I don’t like is how the FDA operates and maintains the listings in the Orange Book. Their refusal to take any action is simply unacceptable.

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