Litigation in Generic Markets: How Patent Disputes Delay Affordable Medicines

When a brand-name drug’s patent expires, you’d expect generics to flood the market and prices to drop. But in reality, many of these drugs stay expensive for years longer than they should. Why? Because of a legal chess game played out in courtrooms, not pharmacies. Patent litigation in the generic drug market isn’t just about protecting innovation-it’s become a tool to block competition, delay savings, and keep patients paying more than they should.

The Hatch-Waxman Act: A System Designed to Balance Interests

The foundation of all this legal activity is the Hatch-Waxman Act of 1984. It was meant to strike a balance: reward drug companies for inventing new medicines while making it easier for generics to enter the market after patents expire. The system gave generic manufacturers a shortcut: instead of running full clinical trials, they could file an Abbreviated New Drug Application (ANDA) proving their product is the same as the brand-name drug.

But here’s the twist. If a generic company believes a patent is invalid or won’t be infringed, they can file what’s called a Paragraph IV certification. That’s a legal challenge. And when they do, the brand-name company has 45 days to sue. Once they do, the FDA can’t approve the generic for up to 30 months. That’s not a review delay-it’s a legal pause button. And it’s been used, repeatedly, to keep prices high.

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

The FDA’s Orange Book is supposed to be a simple list: patents that cover the active ingredient, how the drug is made, or how it’s used. That’s it. But in practice, companies have stretched the rules. They list patents for things like inhaler buttons, pill coatings, or packaging designs-anything that can delay a generic.

In 2025, a key ruling in Teva v. Amneal changed that. Judge Chesler ruled that patents on the dose counter in ProAir® HFA inhalers didn’t qualify because they didn’t claim the actual drug-albuterol sulfate. That decision is now being used as a template to challenge hundreds of similar listings. Skadden’s analysis suggests 15-20% of all Orange Book patents might be invalid under this standard.

The FDA is finally catching up. New rules, expected in mid-2026, will require brand companies to certify under penalty of perjury that every patent they list actually meets the legal standard. That’s a big deal. Right now, there’s no real penalty for listing junk patents.

Serial Litigation: The Slow-Motion Blockade

One patent expires? No problem. The brand company just files another lawsuit with a different patent. And another. And another.

The Association for Accessible Medicines tracked ten cases where this happened. In one, a drug’s original patent expired in 2012-but generic versions didn’t hit the market until 2021. That’s nine years of lost savings. Patients kept paying $300 for a prescription that could’ve cost $30.

This isn’t rare. It’s standard. Oncology drugs are the worst offenders. One drug, semaglutide (used in Ozempic and Wegovy), has 152 patents protecting it. That’s not innovation-it’s a legal fortress. The average number of patents per small-molecule drug has jumped from 37 in 2015 to 78 for biologics today. Each patent is a new chance to sue, delay, and distract.

Where the Lawsuits Happen: The Eastern District of Texas

Not all courts are created equal. Since 2023, the Eastern District of Texas has become the go-to venue for patent lawsuits. In 2024, 38% of all pharmaceutical patent cases were filed there. Why? Because judges there are experienced, procedures favor plaintiffs, and juries tend to side with big pharma.

Compare that to the District of Delaware, which used to be the hotspot. Now it’s just 15% of cases. The shift matters. When a company knows it can file in Texas, it’s more likely to sue-even if the patent is weak. The cost of defending a lawsuit is so high that many generic companies settle just to avoid the risk.

Patent Settlements: Are They Good or Bad?

Here’s where things get messy. The FTC says patent settlements between brand and generic companies are often “pay-for-delay” deals: the brand pays the generic to stay off the market. They’ve challenged over 300 improper patent listings in 2024 alone.

But here’s the counterargument: IQVIA’s 2025 report found that settlements actually get generics to market faster-on average, more than five years before the patent expires. Why? Because without the option to settle, generics might never file a Paragraph IV challenge at all. The fear of losing a multi-million-dollar lawsuit is too high.

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 ANDAs.” In other words, the threat of litigation discourages entry altogether.

So are settlements good or bad? It depends. Some are shady. Others are the only way a small generic company can survive.

The Financial Cost: Billions Lost, Patients Suffering

The FTC estimates that 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 money that could’ve gone to insulin, cancer drugs, or heart medications for people who can’t afford them.

Take Eliquis, the blood thinner. It has 67 patents. The original patent expired in 2026, but generic versions still aren’t approved. Why? Because lawsuits keep piling up. The same thing happened with Humira-160 patents, over a decade of delays.

The average time from brand approval to first generic entry has doubled since 2005-from 14 months to 28 months. For cancer drugs, it’s worse: an average of 5.7 years after patent expiry before generics arrive.

Meanwhile, law firms like Fish & Richardson and Quinn Emanuel are seeing 35-40% annual revenue growth in patent litigation. That’s not a sign of a healthy system. It’s a sign of a system rigged to benefit lawyers and big pharma.

What’s Changing? IPRs, Regulations, and Court Rulings

Generic companies aren’t sitting still. They’re turning to the Patent Trial and Appeal Board (PTAB) for inter partes reviews (IPRs). These are cheaper, faster ways to challenge patents outside of court. IPR filings against pharma patents jumped 47% from 2023 to 2024.

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

The FTC and DOJ held joint listening sessions in March 2025, where 12 generic manufacturers testified about how patent thickets are used to block entry. The message was clear: the system is broken.

The FDA’s new certification rule in 2026 could be the biggest change in decades. If brand companies have to swear under oath that their patents are valid, many won’t risk it. That could clear the way for hundreds of generics to enter the market.

What’s Next?

The numbers don’t lie. Patent litigation is growing. The Lex Machina 2025 report predicts a 25-30% annual increase through 2027. Biologics and biosimilars are the new battleground. The stakes are higher. The patents are more complex. The delays will be longer.

Unless Congress acts, the system will keep favoring the companies with the deepest pockets. Patients will keep paying more. Generics will keep getting delayed. And the only ones winning are the lawyers.

The fix isn’t complicated. Strip out junk patents. Enforce the rules. End serial litigation. Let generics in when the patent expires. Simple. Fair. Long overdue.