Patent Litigation and Generic Entry: Why Drug Disputes Delay Affordable Medicines
Stuart Moore 22 December 2025 8

When a new brand-name drug hits the market, it comes with a patent that gives the company exclusive rights to sell it-usually for 20 years. But here’s the catch: by the time the FDA approves the drug and it reaches patients, much of that 20-year clock has already ticked away. That’s why pharmaceutical companies rely on patent litigation to stretch their monopoly far beyond what was originally intended. And the people who pay the price? Patients, pharmacies, and employers trying to afford life-saving medications.

How the system was supposed to work

In 1984, Congress passed the Hatch-Waxman Act to fix a broken system. Before then, generic drugs couldn’t get approved until after the brand-name drug’s patent expired. That meant years of waiting-and high prices-for patients. Hatch-Waxman changed that. It created a faster path for generics by letting companies file an Abbreviated New Drug Application (ANDA) without repeating all the expensive clinical trials. All they had to prove was that their version was bioequivalent to the brand drug.

The law also gave generics a way to challenge weak or fake patents. If a generic company believed a patent was invalid or not being infringed, they could file what’s called a Paragraph IV certification. This was supposed to be a green light for competition. When they did, the brand-name company had just 45 days to sue. If they did, the FDA was legally forced to delay approval of the generic for up to 30 months. That’s the automatic stay.

The idea? Protect real innovation, but let real competition in once the patent was truly expired. Simple. Fair. But that’s not how it played out.

Why the 30-month stay isn’t the end of the story

You might think: once the 30 months are up, the generic launches. But that’s not what happens. In fact, the median time between the end of the 30-month stay and the actual launch of the generic drug is 3.2 years. That’s more than three full years of delay after the legal clock has technically run out.

Why? Because patent litigation doesn’t end when the stay expires. Brand-name companies often file new lawsuits over different patents-sometimes dozens of them. These aren’t always the original compound patents. Many are for delivery methods, dosages, or packaging. And here’s the kicker: 72% of the patents used in these later lawsuits were filed after the FDA approved the original drug. These are called “secondary patents.” They’re not about the medicine itself-they’re about keeping generics out.

The result? A generic drug can be approved by the FDA, but still sit on a shelf for years because the brand company keeps suing. In 2023, the FDA approved 90 first-time generic drugs. But many of them didn’t hit pharmacy shelves for years. Patients were stuck paying $1,200 a month for a drug that could’ve cost $30-if only the patent fights had ended sooner.

Pay-for-delay: the secret deals behind the scenes

Sometimes, the brand company doesn’t even bother to fight in court. Instead, they pay the generic manufacturer to stay away.

These are called “pay-for-delay” agreements. The brand company writes a check-sometimes hundreds of millions of dollars-to the generic maker, asking them not to launch. In exchange, the generic company agrees to delay entry for years. It sounds like a bribe. And the FTC agrees. Since 2010, the agency has challenged dozens of these deals, calling them anticompetitive.

The numbers don’t lie. Only about 24% of patent cases ended with these kinds of settlements. But those 24% cost consumers billions. One study found that pay-for-delay deals alone added $3.5 billion in extra drug costs in a single year.

And here’s the worst part: these deals are legal-at least for now. Courts have been split on whether they violate antitrust laws. But the FTC is pushing hard. In 2023, they challenged over 100 patents tied to big pharma companies like AbbVie and GlaxoSmithKline, many of which were linked to pay-for-delay schemes.

FDA approval stamp sinking in legal documents while a generic bottle climbs out, surrounded by dollar bills with CEO skulls.

Who pays the price?

It’s not just patients. Employers, insurers, and government programs like Medicare and Medicaid are all on the hook.

Take Humira, the top-selling drug in the U.S. for years. When its main patent expired, brand-name company AbbVie filed over 100 patents to block generics. By 2023, the delay cost large employers over $1.2 billion in extra spending. Teva, one of the biggest generic makers, lost $850 million in projected revenue because of prolonged litigation.

Patients are suffering too. Doctors in Chicago and Atlanta report patients rationing insulin because the generic version was approved but blocked by litigation. One Reddit user shared that their patient had to wait two years after FDA approval to get the generic-because the brand company kept filing new lawsuits. Two years. For a drug that should’ve cost $50 a month instead of $1,200.

And it’s not just small molecules. Biosimilars-generic versions of complex biologic drugs-are facing even longer delays. On average, biosimilar patent fights take 25% longer than regular generic cases. That means more delays, more costs, more pain.

The cost of fighting back

Generic companies aren’t sitting still. But the cost of fighting patent lawsuits is staggering. Defending a single case through trial can cost $3 to $5 million. A full appeal? Over $10 million. That’s why only the biggest generic manufacturers can afford to play.

The top five generic companies now control 45% of the market-not because they make better drugs, but because they have the legal teams to survive the marathon. Smaller companies? They often give up. They can’t afford to risk millions on a case they might lose.

Some generics try to launch “at risk”-meaning they start selling before the court rules. It’s a gamble. If they win, they make millions. If they lose, they pay damages that could bankrupt them. Only a handful of companies dare to do it.

Patient offered cheap generic insulin but chained by patent lawsuits, in vibrant Day of the Dead folk-art style.

What’s being done-and what’s not

There have been attempts to fix this. The CREATES Act, passed in 2023, was meant to stop brand companies from blocking generic companies from getting samples of the drug to test. That was a tactic used to delay approval. But enforcement is weak. The FDA still lists about 15% of patents in its Orange Book incorrectly, leaving generics guessing what’s real and what’s fake.

Congress is considering the Protecting Consumer Access to Generic Drugs Act. It would limit how many patents a company can list in the Orange Book and ban serial litigation-filing multiple lawsuits over the same drug to stretch out delays.

The FTC is also stepping up. Chair Lina Khan said in early 2024 that they’ll keep targeting pay-for-delay deals and other anti-competitive patent tactics. But without new laws, they’re fighting with one hand tied behind their back.

What’s next?

The numbers are clear: patent litigation is no longer about protecting innovation. It’s about protecting profits. The average delay for a generic drug is now 3.2 years after the 30-month stay ends. That’s nearly a decade of monopoly pricing for many drugs.

Without reform, this system will keep costing consumers $15 to $20 billion every year. Patients will keep rationing insulin. Employers will keep paying more for health plans. And the same handful of companies will keep winning-not because their patents are strong, but because the rules let them drag out the fight.

The fix isn’t complicated. Limit secondary patents. Ban pay-for-delay. End serial litigation. Let generics in when the FDA says they’re ready. The law was designed to do that. It’s time we made it work again.

Why do generic drugs take so long to launch after FDA approval?

Even after the FDA approves a generic drug, brand-name companies often file additional patent lawsuits to delay its market entry. The 30-month automatic stay from the Hatch-Waxman Act is just the beginning. On average, generics launch 3.2 years after that stay ends because of new lawsuits over secondary patents, pay-for-delay deals, or procedural delays. The system is designed to allow competition, but in practice, it’s often used to block it.

What is a Paragraph IV certification?

A Paragraph IV certification is a legal statement a generic drug maker files with the FDA when they believe a brand-name drug’s patent is invalid or won’t be infringed. This triggers a 45-day window for the brand company to sue. If they do, the FDA must delay final approval of the generic for up to 30 months. It’s the legal tool that lets generics challenge patents before launch-but it’s also the trigger for the longest delays.

What are pay-for-delay agreements?

Pay-for-delay agreements happen when a brand-name drug company pays a generic manufacturer to delay launching its cheaper version. Instead of fighting in court, the brand pays the generic to stay out of the market. These deals cost consumers billions in higher drug prices and are considered anti-competitive by the FTC. While not illegal yet, they’re under increasing scrutiny and legal challenge.

How do secondary patents delay generics?

Secondary patents cover things like how a drug is delivered, its dosage form, or packaging-not the active ingredient itself. These are often filed years after the original drug is approved. Since the law allows companies to list every patent in the FDA’s Orange Book, brand-name companies use dozens of these to file repeated lawsuits. Even if each patent is weak, the legal process itself becomes a barrier. About 72% of patents used in litigation were filed after FDA approval.

Can a generic company launch before a lawsuit is settled?

Yes, but it’s risky. This is called a “launch at risk.” A generic company can start selling its product after receiving FDA approval-even while lawsuits are still ongoing. If they win the case, they keep the market. If they lose, they must pay damages, which can be massive. Only large, well-funded generic manufacturers with deep legal teams take this gamble. Most avoid it.