Litigation in Generic Markets: How Patent Disputes Delay Affordable Medicines

When a brand-name drug’s patent runs out, generic versions should flood the market-cheaper, faster, and just as effective. But in reality, that rarely happens on time. Instead, a complex web of lawsuits, hidden patents, and court delays keeps prices high and patients waiting. This isn’t just legal noise. It’s a system that costs Americans billions every year and blocks access to life-saving medicines.

How the System Was Supposed to Work

The Hatch-Waxman Act of 1984 was designed to balance two goals: reward innovation and speed up affordable generics. It created a clear path for generic manufacturers to file an Abbreviated New Drug Application (ANDA). But here’s the key part: if a generic company believes a brand-name patent is invalid or doesn’t apply, they can file a Paragraph IV certification. That’s a legal challenge. And when they do, the brand company has 45 days to sue.

If they do, the FDA can’t approve the generic for 30 months. That’s not a trial deadline. It’s a regulatory pause. Even if the case drags on for years, the clock doesn’t stop. This stay was meant to protect legitimate patents-not to be used as a delay tactic.

The Orange Book: Where Patents Get Listed (and Abused)

The FDA’s Orange Book is supposed to be a simple list: patents that cover the actual drug, its formulation, or how it’s used. But in practice, it’s become a battleground. Brand companies now list patents for things like inhaler valves, packaging designs, or manufacturing equipment-anything that can delay a generic.

In 2025, Judge Chesler in New Jersey ruled in Teva v. Amneal that patents on a dose counter for an albuterol inhaler didn’t qualify. The drug was albuterol sulfate. The counter wasn’t part of the drug. That ruling was a win for generics. But it’s still the exception, not the rule. According to Skadden’s analysis, 15-20% of patents listed in the Orange Book today might not meet legal standards.

The Association for Accessible Medicines found that brand companies routinely list patents covering ancillary components to stretch exclusivity. One drug might have 67 patents. Another, like semaglutide (Ozempic, Wegovy), has 152. That’s not innovation. That’s legal armor.

Serial Litigation: The Hidden Game

Brand companies don’t always sue all at once. They play a long game. They file one lawsuit. Wait. Then, when that case ends or settles, they file another-using a different patent, often one they held back. This is called serial litigation. And it’s working.

AAM’s 2025 analysis tracked ten cases where this tactic delayed generic entry by 7 to 10 years after the original patent expired. One drug, a common heart medication, saw its first generic arrive 9 years late. Patients paid more. Insurers paid more. The system paid nothing.

The FTC has been fighting back. In 2024, they challenged over 300 improper Orange Book listings. In May 2025, they sent warning letters to 200 more patents across 17 drugs-targeting companies like Teva and Amgen. Their message: if your patent doesn’t cover the actual drug, it doesn’t belong in the Orange Book.

Where Lawsuits Are Fought: The Eastern District of Texas

Not all courts are created equal. In 2024, the Eastern District of Texas handled 38% of all patent cases-more than double the next busiest district. Why? Because it’s fast, predictable, and known for siding with patent holders. Generic companies avoid it. Brand companies flock to it.

After the TC Heartland decision briefly shifted cases away from Texas, brand companies found ways back. Their lawyers know the judges. They know the procedures. They know how to make a case feel like a sure win. That’s not justice. It’s forum shopping.

Meanwhile, the District of Delaware and the Western District of Texas are catching up-but they still lag far behind. For generics, this means litigation isn’t just expensive. It’s location-dependent. Your odds of winning depend on which courthouse you’re stuck in.

Settlements: Are They Helping or Hurting?

When a brand company sues a generic, they often settle. And those settlements? They’re controversial. The FTC calls them “pay-for-delay” deals-where the brand pays the generic to stay off the market. That’s illegal. But not all settlements are like that.

IQVIA’s 2025 report found that when settlements happen, they often bring generics to market five years earlier than if the case went to trial. Why? Because trials take forever. A settlement gives both sides a win: the brand gets some revenue, the generic gets market access sooner.

But here’s the catch: if you ban settlements, generics don’t just stop settling. They stop filing Paragraph IV challenges altogether. John T. O’Donnell, an industry analyst, put it bluntly: “If you limit a generic drug manufacturer’s ability to settle cases, that manufacturer does not settle fewer cases, it submits fewer ANDAs.”

So the real problem isn’t settlements. It’s the imbalance that forces them. When brand companies hold 140 patents per drug-and sometimes over 200 for cancer drugs-generics can’t afford to fight them all. Settlement becomes the only way out.

The Cost of Delay

This isn’t abstract. It’s money. Real money. 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.

Think about that. For every drug that should’ve gone generic in 2020 but didn’t until 2025, patients paid 80% more. Medicare paid more. Medicaid paid more. Families paid more.

Oncology drugs are the worst. The average delay between patent expiry and generic entry? 5.7 years. One cancer drug, Eliquis (apixaban), has 67 patents protecting it. That’s not innovation. That’s a legal blockade.

And the cost isn’t just financial. It’s human. People skip doses. They ration pills. They go without because they can’t afford the brand version.

What’s Changing? And What’s Next?

The FDA is finally stepping in. New rules are coming in Q2 2026 that will require brand companies to certify under penalty of perjury that every patent listed in the Orange Book actually covers the drug. No more hiding behind inhaler parts or packaging.

Generic companies are also turning to the Patent Trial and Appeal Board (PTAB) for inter partes reviews (IPRs). These are faster, cheaper ways to challenge patents outside of court. IPR filings against pharma patents jumped 47% from 2023 to 2024.

But the Supreme Court’s 2025 ruling in Smith & Nephew v. Arthrex made it harder for generics to file IPRs by tightening standing rules. Now, you need to show direct harm. That’s a barrier for many small manufacturers.

Meanwhile, litigation is only getting worse. Lex Machina predicts 25-30% annual growth in pharmaceutical patent cases through 2027. Biologics and biosimilars-more complex, more expensive-are the new frontier. One biologic drug now averages 78 patents. That’s more than double the average for small-molecule drugs.

Where Do We Go From Here?

The system isn’t broken. It was built this way. The Hatch-Waxman Act gave brand companies a powerful tool. And they’ve used it-not to protect innovation, but to protect profits.

The solution isn’t to scrap the system. It’s to fix it. Congress needs to close the loopholes. The FDA needs to enforce its own rules. Courts need to stop treating ancillary patents like core patents. And the FTC needs to keep pushing back.

Patients aren’t asking for miracles. They just want access. Access to medicine that works. At a price they can afford. Right now, the law is standing in the way.