Litigation in Generic Markets: How Patent Disputes Delay Affordable Medicines

When a brand-name drug’s patent expires, you’d expect generic versions to hit the market quickly-cheaper, just as effective, and available to patients who need them. But in reality, it’s not that simple. In 2024, the average time from a brand drug’s patent expiration to the first generic entry was 28 months. That’s more than two years of patients paying higher prices while legal battles drag on. This isn’t a glitch in the system-it’s how the system was designed to work, and it’s being exploited.

The Hatch-Waxman Act: A Deal That Broke Down

The Drug Price Competition and Patent Term Restoration Act of 1984, better known as the Hatch-Waxman Act, was meant to balance innovation and access. It gave brand-name drugmakers extra patent time to make up for delays in FDA approval. In return, it created a fast-track path for generic manufacturers to bring cheaper versions to market. That path? The Abbreviated New Drug Application, or ANDA.

Here’s where it gets tricky. Generic companies can file what’s called a Paragraph IV certification. That’s their legal notice saying: “Your patent is invalid, or we don’t infringe it.” Once they do that, the brand-name company has 45 days to sue. If they do, the FDA can’t approve the generic for up to 30 months-no matter how clear the case is. That’s not a trial delay. It’s a regulatory pause built into the law.

This wasn’t supposed to be a delay tactic. But over time, it became one.

The Orange Book: A Legal Weapon in Plain Sight

The FDA’s Orange Book is supposed to be a simple list: which patents cover which drugs? But it’s become a battleground. Brand companies list patents that don’t even relate to the actual medicine. Take ProAir® HFA, an asthma inhaler. Teva filed a generic version. The brand company, Merck, listed six patents-not on the albuterol sulfate drug, but on the dose counter inside the inhaler. In early 2025, Judge Chesler in New Jersey ruled those patents didn’t qualify. The law says only patents covering the drug itself, its formulation, use, or manufacturing can be listed. A dose counter? That’s hardware. Not the drug.

That ruling was a wake-up call. Skadden’s analysis estimates 15-20% of patents in the Orange Book might be invalid under this standard. But those patents are still being used to block generics. The Association for Accessible Medicines found that brand companies often file patents on packaging, delivery devices, or even software used in the inhaler-anything to stretch exclusivity.

Serial Litigation: The 10-Year Delay Strategy

It’s not enough to file one patent. Some companies file dozens. Eliquis, the blood thinner, has 67 patents. Semaglutide (Ozempic, Wegovy) has 152. Oncology drugs? On average, 237 patents per product. That’s not innovation-it’s a patent thicket.

When one patent expires or gets invalidated, another one pops up. Generic companies spend years fighting one case after another. Some drugs have seen delays of 7 to 10 years past their original patent expiration. That’s not a legal process. That’s a business strategy.

The FTC has flagged this. In 2024 alone, they challenged over 300 improper Orange Book listings. In May 2025, they sent warning letters to 200 more patents across 17 drugs, naming big names like Teva and Amgen. Their message: stop gaming the system.

Where Lawsuits Are Fought: The Eastern District of Texas

Not all courts are created equal. Since the TC Heartland decision in 2017 shifted patent litigation away from plaintiff-friendly venues, the Eastern District of Texas quietly reclaimed its spot as the top court for pharmaceutical cases. In 2024, 38% of all patent suits were filed there. That’s more than double the Western District of Texas and more than twice the number in Delaware.

Why? Because judges there are experienced in patent law. Because juries are perceived as sympathetic to patent holders. Because procedures favor the plaintiff. Generic companies hate it. Brand companies love it. It’s the legal equivalent of choosing your home field advantage-and it’s working.

Settlements: Are They Helping or Hurting?

You’ve probably heard of “pay-for-delay” settlements-where brand companies pay generics to stay off the market. The FTC calls them anticompetitive. Courts have blocked them. But here’s the twist: not all settlements are bad.

The IQVIA Institute found that when brand and generic companies settle, generics enter the market five years earlier on average than if they went to trial. Why? Because trials are expensive and risky. A generic company might spend $50 million on litigation and still lose. Settling means they get a date to launch-sometimes even before the patent expires.

John T. O’Donnell, an industry analyst, put it bluntly: “If you limit a generic manufacturer’s ability to settle, that manufacturer does not settle fewer cases-it submits fewer Paragraph IV ANDAs.” Translation: if you scare them off settlements, they won’t even try to challenge the patents.

The FTC disagrees. They argue that even “early entry” settlements still delay competition. But the data shows that without settlements, many generics never enter at all.

What’s Changing? IPRs, Perjury, and New Rules

Generic manufacturers are fighting back with inter partes review (IPR) at the Patent Trial and Appeal Board. These are administrative challenges to patents-faster and cheaper than court. IPR filings against pharma patents jumped 47% from 2023 to 2024.

But the Supreme Court’s April 2025 decision in Smith & Nephew v. Arthrex made it harder. Now, only companies that are actually planning to sell a generic can challenge a patent. That’s a win for brand companies.

The FDA is stepping in, too. New rules are coming in Q2 2026. Brand companies will have to certify under penalty of perjury that every patent they list in the Orange Book meets the legal standard. No more hiding behind packaging patents.

The Real Cost: $13.9 Billion a Year

This isn’t just about legal technicalities. It’s about money-and lives.

The FTC estimates 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. Taxpayers pay more.

Imagine a diabetic who can’t afford insulin because the brand company is still blocking generics with a patent on the pen’s button. Or a cancer patient waiting for a cheaper version of a drug that’s been off-patent for five years. That’s not hypothetical. That’s happening right now.

What’s Next?

The system is under pressure. Courts are starting to strike down improper listings. Regulators are cracking down. Generic manufacturers are using new tools like IPRs. But the incentives are still skewed. Brand companies profit from delays. Generic companies face huge risks to enter.

The real solution? Simplify the rules. Remove patents that don’t belong in the Orange Book. Limit the 30-month stay to only the first challenge. And stop letting patent thickets become legal barriers to affordable medicine.

Until then, patients will keep paying more-while lawyers and pharmaceutical companies settle their battles in courtrooms.