Litigation in Generic Markets: How Patent Disputes Delay Affordable Medicines

When a brand-name drug’s patent expires, patients and insurers expect cheaper generic versions to hit the market. But in reality, that’s not always what happens. Instead, a legal maze of patent lawsuits, settlement deals, and questionable patent listings often delays generics for years - even after the original patent runs out. This isn’t just a legal issue. It’s a public health issue. Every month a generic is held back, Americans pay billions more for medicines they could be getting at a fraction of the cost.

How the System Was Supposed to Work

The Hatch-Waxman Act of 1984 was designed to balance two goals: reward innovation and speed up access to affordable drugs. It gave brand-name companies a limited window of exclusivity - usually 20 years from patent filing - while creating a clear path for generics to enter the market. Generic manufacturers file what’s called an Abbreviated New Drug Application (ANDA). If they believe a brand’s patent is invalid or won’t be infringed, they file a Paragraph IV certification. That’s the trigger. Once that’s filed, the brand company has 45 days to sue. If they do, the FDA can’t approve the generic for up to 30 months, no matter how strong the case.

This 30-month stay was meant to give courts time to sort out real disputes. But over time, it became a tool for delay. Instead of protecting genuine innovation, it’s often used to block competition through legal tactics that have little to do with the actual drug.

The Orange Book: A Legal Tool Turned Weapon

The FDA’s Orange Book lists patents tied to brand-name drugs. Only certain patents belong there - those covering the active ingredient, how it’s made, how it’s used, or the formulation. But companies have found loopholes. They list patents for things like inhaler caps, dose counters, packaging, or even manufacturing equipment. These have nothing to do with the drug’s effectiveness, but they still trigger the 30-month stay.

In 2025, a landmark case between Teva and Amneal over the asthma inhaler ProAir® HFA changed that. Judge Chesler ruled that patents on the inhaler’s dose counter 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 - not the plastic part you hold. That ruling is now being used to challenge hundreds of similar patents. Skadden’s analysis estimates 15-20% of all Orange Book listings could be invalid under this standard.

Meanwhile, the FDA is moving to require brand companies to certify under penalty of perjury that every patent they list meets the legal standard. That change, expected in mid-2026, could wipe out thousands of questionable listings overnight.

Serial Litigation: The Patent Thicket Strategy

Brand companies don’t just file one patent. They file dozens - sometimes over a hundred - on a single drug. Oncology drugs like Keytruda and Opdivo have more than 200 patents each. The average small molecule drug now has 78 patents, up from 37 just a decade ago. This is called a “patent thicket.”

Here’s how it works: When one patent expires or gets invalidated, the brand company sues again using a different patent - often one they held back, waiting for the right moment. This creates a chain of lawsuits. One case ends, another begins. The generic manufacturer spends millions defending itself. The FDA sits idle. Patients wait.

According to the Association for Accessible Medicines (AAM), some drugs have seen generic entry delayed by 7 to 10 years after the original patent expired. Eliquis, a blood thinner, has 67 patents protecting it. Semaglutide (Ozempic, Wegovy) has 152. These aren’t breakthroughs - they’re tweaks. But they’re enough to keep generics off shelves.

Settlements: Are They Helping or Hurting?

When a brand company sues a generic, they can settle. Sometimes, the generic agrees to delay its market entry in exchange for cash or other benefits. These are called “pay-for-delay” deals - and the FTC has spent years trying to stop them.

But here’s the twist: a June 2025 report from the IQVIA Institute, commissioned by AAM, found that patent settlements actually sped up generic entry by more than five years on average. Why? Because without the option to settle, many generic companies simply don’t file Paragraph IV challenges at all. They can’t afford the risk. So instead of one delayed entry, you get zero.

That’s the real problem. The FTC sees pay-for-delay as anti-competitive. But the industry sees it as a necessary compromise. If you remove settlements, you don’t get more generics - you get fewer filings. And that means fewer patients get access.

Where the Lawsuits Are Happening

Not all courts are the same. The Eastern District of Texas has become the go-to venue for pharmaceutical patent cases. In 2024, 38% of all patent lawsuits were filed there - more than double the number in Delaware or California. Why? Because judges there are experienced in patent law, procedures favor plaintiffs, and juries tend to side with patent holders.

That’s made it a magnet for brand companies. It’s also drawn criticism for “forum shopping” - picking the court most likely to rule in your favor. But despite calls to limit venue choice, the trend continues. The Federal Circuit has upheld the practice, and with no major reform in sight, the Eastern District of Texas remains the epicenter of pharmaceutical litigation.

The Financial Cost

This isn’t just about legal strategy. It’s about money. The FTC estimates that improper patent listings delay generic entry for about 1,000 drugs every year. That costs the U.S. healthcare system $13.9 billion annually. Patients pay more. Insurers pay more. Medicare and Medicaid pay more.

And the delays are getting longer. In 2005, the average time from brand drug approval to first generic entry was 14 months. By 2024, it had doubled to 28 months. For cancer drugs, it’s worse - an average of 5.7 years after patent expiry before a generic even appears.

Meanwhile, law firms like Fish & Richardson and Quinn Emanuel are seeing 35-40% annual revenue growth in their patent litigation practices. The system is working - just not for patients.

What’s Changing Now?

There are signs the tide may be turning. The FTC issued over 300 warnings in 2024 against improper Orange Book listings. In May 2025, they sent 200 more, targeting major companies like Teva and Amgen. The Department of Justice held listening sessions with generic manufacturers in March 2025, documenting how device patents are being misused.

Generic companies are also fighting back with inter partes review (IPR) - a faster, cheaper way to challenge patents at the Patent Trial and Appeal Board. IPR filings against pharma patents jumped 47% from 2023 to 2024. But the Supreme Court’s April 2025 ruling in Smith & Nephew v. Arthrex made it harder for some generics to qualify for IPR, adding another layer of complexity.

The real game-changer may be the FDA’s new certification rule. If brand companies must swear under penalty of perjury that their patents meet the legal standard, many won’t risk it. That could clear the path for hundreds of generics to enter the market within months.

What’s Next?

The number of pharmaceutical patent lawsuits is expected to grow 25-30% per year through 2027, according to Lex Machina. Biosimilars - cheaper versions of complex biologic drugs - are entering the mix, and they come with even more patents. A single biologic can have over 100 patents. That means more lawsuits, more delays, and more money spent on legal fees instead of medicine.

For now, the system is broken. The Hatch-Waxman Act was meant to bring down drug prices. Instead, it’s become a legal shield for price gouging. The tools to fix it exist - tighter Orange Book rules, fewer serial lawsuits, better IPR access. But without political will, patients will keep paying the price.