FDA proposing new rules to adjudicate Orange Book patent disputes

At long last, FDA proposed rules to implement the 2003 Medicare Prescription Drug, Improvement, and Modernization Act (MMA). For the most part, the new rules codify amendments to Hatch-Waxman dealing with brand patents and generic entry; however, they also implement FDA policies and emerging case law over the past decade dealing with Orange Book abuses. One area of particular interest involves method of use patents that claim approved indications or other uses of brand drugs. Abbreviated New Drug Application (ANDA) applicants carve Orange Book use patents out of their labels to avoid infringement and then go to market with an AB rated drugs that are fully substitutable for the brand. In response, brands have manipulated Use Codes filed with their patents to stop or delay generic entry.

In Caraco v. Novo Nordisk (2012) the Supreme Court ruled that is unlawful for a brand to submit a Use Code that prevents a generic from marketing a drug for an approved use that is not claimed in the brand patent. The FDA's new rules explicitly codify this decision; nonetheless, the FDA apparently thinks a Supreme Court admonition does not go far enough. To ensure that brands do not manipulate use codes in the future, the FDA is proposing rules that will allow it to adjudicate disputes. In other words, for the first time in Hatch-Waxman's 30 year history, the FDA is proposing to read and construe patent claims. Where FDA gets this sudden expertise is nowhere explained. Brand drug manufacturers should be very worried.

Under current regulations, if a generic challenges Orange Book information submitted by the brand, the FDA will pass information back and forth but otherwise, it stays out of the fight. As the FDA has stated on numerous occasions, it does not have the expertise to adjudicate patent disputes which are legal matters better left to the courts. This is no longer the case. Under the new proposals, if a generic challenges a patent Use Code, the FDA will request the brand to confirm the correctness of the Use Code (existing law); and to provide information on the specific use claimed by the patent to enable the FDA to make a carve out determination (new law). This is where it gets interesting because the new rule also says that if there is insufficient information for the FDA to make a carve out determination and the brand has confirmed the correctness of its Use Code description, the FDA will review the proposed generic labeling with deference to the generic applicant's interpretation of the scope of the patent.

In other words, if the FDA is uncertain as to a patent carve out and the brand does not alter its Use Code to remove the uncertainty, the FDA will let the generic applicant determine the scope of the brand patent. Presumably, the brand will learn about its new Use Code post-generic launch.