Litigation in Generic Markets: How Patent Disputes Delay Affordable Medicines

When a brand-name drug’s patent expires, generics should step in-cheaper, faster, and just as effective. But in reality, many patients wait years longer than they should. Why? Because patent litigation has become a tool to block competition, not just protect innovation. In the U.S., generic drug entry now takes an average of 28 months after brand approval-double what it was in 2005. For cancer drugs, delays stretch to over five years past patent expiration. This isn’t accidental. It’s systemic.

The Hatch-Waxman Act: A System Designed to Balance Competition and Innovation

The Hatch-Waxman Act of 1984 was meant to create a fair middle ground. It gave brand-name companies extra patent time to make up for delays in FDA approval. At the same time, it gave generic manufacturers a clear path to enter the market by filing an Abbreviated New Drug Application (ANDA). The key? The Paragraph IV certification. When a generic company says, “Your patent is invalid or we don’t infringe it,” they’re legally challenging the brand’s monopoly. That triggers a 30-month clock. During that time, the FDA can’t approve the generic-unless the court rules in the generic’s favor.

This system was supposed to encourage early challenges. But over time, it became a bottleneck. Instead of one clean fight, brand companies now file multiple patents, sometimes years apart, to reset the clock again and again. This is called serial patent litigation. And it’s working.

The Orange Book: Where Patents Are Listed-And Sometimes Abused

The FDA’s Orange Book is the official list of patents tied to brand-name drugs. Only certain patents belong there: those covering the active ingredient, formulation, or method of use. But companies have found loopholes. They list patents for things like inhaler devices, packaging, or manufacturing equipment-even when those aren’t part of the actual drug.

In 2025, a landmark case involving Teva and Amneal over the asthma inhaler ProAir® HFA changed the game. Judge Chesler ruled that patents on the dose counter in the inhaler didn’t qualify for Orange Book listing because they didn’t claim “the drug for which the application was approved.” The drug was albuterol sulfate. The counter? Just a piece of hardware. That ruling could invalidate 15-20% of currently listed patents.

The FDA is now proposing new rules requiring brand companies to certify under penalty of perjury that every listed patent meets the legal standard. That’s a big deal. Right now, there’s little consequence for listing junk patents. Under the new rules, false claims could mean fines or even criminal liability.

Where Lawsuits Are Fought: The Eastern District of Texas

Not all courts are created equal. In 2024, 38% of all patent lawsuits were filed in the Eastern District of Texas. Why? Because it’s known for being fast, predictable, and favorable to patent holders. After the TC Heartland decision briefly shifted cases away, the district bounced back-thanks to experienced judges and local rules that favor plaintiffs.

Compare that to the District of Delaware, which used to be the go-to for pharmaceutical cases. Now it’s third in filings. Generic companies hate this. They argue it’s forum shopping-brand companies choosing courts where they’re more likely to win, not where the case belongs. But until Congress or the Supreme Court steps in, the Eastern District remains the battlefield.

Pay-for-Delay: The Settlement That Isn’t a Settlement

Here’s the twist: sometimes, brand and generic companies don’t fight to the end. They settle. And in many cases, the brand pays the generic to stay off the market. That’s called a “pay-for-delay” agreement. The FTC calls it anticompetitive. The industry calls it smart business.

The FTC has challenged over 300 improper Orange Book listings in 2024 alone. But here’s the contradiction: according to IQVIA’s 2025 report, patent settlements actually speed up generic entry-on average, by more than five years before patent expiration. How? Because without the chance to settle, generics might not file Paragraph IV challenges at all. Why risk a $10 million lawsuit if you can’t win? The fear of losing keeps many off the field.

So the real problem isn’t just the settlements. It’s the system that forces them. If generics can’t settle, they file fewer applications. And fewer applications mean fewer generics on the market.

Patent Thickets: When One Drug Has Over 150 Patents

Oncology drugs are the worst offenders. Semaglutide (Ozempic, Wegovy, Rybelsus) has 152 patents protecting it. Eliquis has 67. That’s not innovation-it’s a legal maze. Dr. Rachel Sachs of Washington University calls this a “patent thicket.” Each patent is weak on its own. But together, they create a wall.

Generic companies can’t challenge them all at once. They pick one. Win it? The brand files another. Win that? Another pops up. The process drags on for years. By the time a generic finally wins, the original patent has expired-but the market has already moved on. Patients didn’t get cheaper drugs. The brand kept its profits.

The I-MAK 2025 report found that the average number of patents per small molecule drug has jumped from 37 in 2010 to 78 today. For biologics? Even higher. This isn’t about protecting inventions. It’s about extending monopolies.

What’s Changing? Regulatory Pressure and New Tools

The FTC isn’t sitting still. In May 2025, they sent warning letters to 200+ patents across 17 brand-name drugs. Companies like Teva and Amgen were named. The message: stop gaming the system.

Generic manufacturers are also fighting back with inter partes review (IPR) at the Patent Trial and Appeal Board (PTAB). These are administrative challenges-faster and cheaper than court. IPR filings against pharma patents rose 47% from 2023 to 2024. But the Supreme Court’s April 2025 decision in Smith & Nephew v. Arthrex made it harder for generics to file IPRs unless they’ve been directly threatened with litigation. That’s a setback.

Meanwhile, the FDA’s new certification rule, expected in Q2 2026, could force companies to be honest about which patents they list. If they lie, they could face real consequences.

Who Pays the Price?

The cost isn’t just legal fees. It’s money patients lose. The FTC estimates improper patent listings delay generic competition for about 1,000 drugs each year. That costs the U.S. healthcare system $13.9 billion annually. That’s billions in higher prices for insulin, blood thinners, asthma inhalers, and cancer drugs.

For patients on fixed incomes, that’s not a statistic. It’s a choice: pay for your medicine or skip it. For pharmacies, it’s inventory problems and insurance disputes. For insurers, it’s skyrocketing premiums.

The system was meant to bring down drug prices. Instead, it’s become a legal arms race-with patients caught in the crossfire.

What Comes Next?

The trend isn’t slowing. Lex Machina predicts pharmaceutical patent litigation will grow 25-30% per year through 2027. More biologics. More patents. More lawsuits.

But change is possible. Congress could amend Hatch-Waxman to limit serial litigation. Courts could crack down on improper Orange Book listings. The FDA could enforce its new rules with teeth. And generics? They’re learning to fight smarter-with IPRs, strategic settlements, and public pressure.

The question isn’t whether the system can be fixed. It’s whether anyone has the will to fix it.