Teva Pharmaceutical Industries Ltd. saw a 2% drop in its stock on Monday following reports that the Federal Trade Commission (FTC) has launched an investigation into the company’s patent practices. The investigation focuses on Teva’s refusal to withdraw approximately two dozen patents related to its asthma and COPD inhalers.
According to the Washington Post, the FTC issued a civil investigative demand to Teva last week. This type of subpoena requires the company to provide specific internal communications and data concerning the patents, which are registered in the federal Orange Book.
The FTC has raised concerns that companies like Teva are making minor modifications to their products to maintain their Orange Book listings and delay generic competition. This claim is supported by confidential agency documents reviewed by the Post.
Teva charges significantly higher prices for its inhalers in the U.S. compared to international markets. Despite the FTC’s allegations, a Teva spokeswoman told MarketWatch via email that the company believes its patents are appropriately listed in the Orange Book and stands by its intellectual property.
Teva has until July 24 to comply with the FTC’s requests. The agency has been cracking down on what it considers “junk” patent listings, challenging hundreds of them as of April, according to the Wall Street Journal.
The FTC contends that drugmakers are unnecessarily listing additional patents in the Orange Book to delay the introduction of generic alternatives, thereby keeping prices artificially high. The agency has sent letters to 10 companies, including Teva, warning that some of their patent listings are invalid. These letters addressed patents for various drug products, including the diabetes treatment Ozempic.
Other companies targeted by the FTC include AstraZeneca PLC, Boehringer Ingelheim, Covis Pharma, GSK Ltd., Novartis Pharmaceuticals, Novo Nordisk, Amphastar Pharmaceuticals Inc., and their subsidiaries.
Congressional Democrats, including Sen. Bernie Sanders of Vermont, have also been pressuring companies to voluntarily withdraw patents. Sanders, chairman of the Senate Health, Education, Labor, and Pensions Committee, has joined other lawmakers in investigating the high prices of inhalers.
According to the Washington Post, Teva has refused to reduce the prices of its devices. Despite this, Teva’s stock has risen 54% year-to-date, compared to a 14.5% increase in the S&P 500.
Source: Market Watch
