Paragraph IV Certifications: How Generic Drug Makers Legally Challenge Brand Patents

When a brand-name drug company holds a patent, it gets a monopoly on selling that drug for years-sometimes over a decade. But what happens when a generic version wants to hit the market before that patent expires? That’s where Paragraph IV certification comes in. It’s not a loophole. It’s a legal tool built into U.S. drug law to force patent disputes into court before generics even start selling. And it’s how billions in savings get passed on to patients.

What Exactly Is a Paragraph IV Certification?

A Paragraph IV certification is a formal statement made by a generic drug company when it files an Abbreviated New Drug Application (ANDA) with the FDA. In this statement, the generic maker claims that one or more patents listed for the brand drug are either invalid, unenforceable, or won’t be infringed by making or selling the generic version.

This isn’t just a guess. The law requires the generic company to lay out the factual and legal reasoning behind this claim. It’s not enough to say, “We think this patent is weak.” You have to show why. That could mean proving the patent covers something already known, or that the generic drug works differently enough to avoid infringement.

The whole system comes from the Hatch-Waxman Act of 1984. Before that, generic companies had to wait until every patent expired-even if those patents were questionable. Hatch-Waxman changed that. It gave generics a legal pathway to challenge patents head-on, but with rules. The result? More competition, lower prices, and a structured way to resolve disputes before drugs hit shelves.

How It Works: The Step-by-Step Process

Here’s how a Paragraph IV challenge plays out in real life:

1. File the ANDA: The generic company submits its application to the FDA, including the Paragraph IV certification and the detailed legal basis for challenging the patent.
2. Send the notice letter: Within 20 days, the generic company must mail a formal notice to the brand-name drug maker and patent holder. This letter isn’t a friendly heads-up-it’s a legal trigger. It says: “We’re challenging your patent. Be ready.”
3. Brand company sues: If the brand company wants to block the generic, it has 45 days to file a patent infringement lawsuit. If they do, the FDA can’t approve the generic for 30 months-or until a court rules otherwise. That’s called a “30-month stay.”
4. Litigation begins: This is where things get expensive. Lawsuits can drag on for years. The median cost? Around $12.7 million per case. But if the generic wins, they get the prize: 180 days of exclusive market rights.
5. First to file wins exclusivity: Only the first company to submit a complete ANDA with a Paragraph IV certification qualifies for the 180-day exclusivity. If someone else files after them, they can’t sell until that exclusivity period ends-even if they also win their case.

It’s a high-risk, high-reward game. Lose the lawsuit? You’re stuck waiting until the patent expires. Win? You get a free pass to be the only generic on the market for half a year.

Why Do Generic Companies Take the Risk?

The answer is simple: money. The 180-day exclusivity period is worth millions-if not billions-on blockbuster drugs.

Take Mylan’s challenge of Gilead’s patent on tenofovir disoproxil fumarate. The patent was set to expire in 2022. Mylan challenged it in 2017. After a long legal battle, they won. Their generic hit the market 27 months early. During their 180-day exclusivity window, they captured nearly all the sales. That’s tens of millions in revenue, all before other generics could even apply.

Apotex did something similar with GlaxoSmithKline’s Paxil. After winning their Paragraph IV challenge, they made over $1.2 billion during their exclusivity period.

But here’s the catch: you have to be first. If you’re second, third, or fifth to file, you get nothing. That’s why companies rush to submit their applications the moment they’re ready. The race isn’t just about science-it’s about timing, paperwork, and legal strategy.

The Other Three Certification Types (And Why They’re Less Common)

Paragraph IV isn’t the only option. There are three others, and they’re far less aggressive:

• Paragraph I: “This drug isn’t patented.” Only about 5% of ANDAs use this. It’s rare because most brand drugs have at least one patent.
• Paragraph II: “The patent will expire soon.” About 15% of applications use this. It’s safe-no lawsuit risk. But you have to wait until the patent ends.
• Paragraph III: “We won’t sell until the patent expires.” Around 20% of applications go this route. It’s the safest path, but it gives up any chance of early entry.

Paragraph IV is the outlier. It’s used in 60-70% of ANDAs filed for drugs with active patents. Why? Because the payoff is huge. The risk is high, but the reward? A six-month monopoly on a $2 billion drug can be worth $500 million.

The Dark Side: Pay-for-Delay and Patent Thickets

It’s not all fair play. The system has been abused.

“Pay-for-delay” deals happen when a brand company pays a generic maker to delay entering the market. In exchange for cash, the generic company agrees to hold off on selling-even after winning their legal challenge. The FTC called these deals “controversial” and found 197 of them between 1999 and 2009. In 2013, the Supreme Court ruled these deals could be illegal under antitrust law. But they still happen.

Another problem? Patent thickets. Brand companies file dozens of patents on the same drug-covering everything from pill shape to manufacturing process. Even if one patent is weak, another might hold up. Generic companies have to fight them all. According to a 2022 survey, 63% of generic manufacturers say patent thickets have made challenges harder since 2018.

And then there’s the “authorized generic” trick. Sometimes, the brand company launches its own generic version during the 180-day exclusivity window. That floods the market and cuts the first filer’s profits. The FTC has challenged this practice, but it’s still legal.

What’s Changing in 2025?

The rules are slowly shifting. In 2023, the Supreme Court’s decision in Amgen v. Sanofi made it harder to invalidate patents by requiring that the patent’s claims be fully “enabled”-meaning the patent must clearly teach how to make and use the invention across its entire scope. That’s a big deal for biologics and complex drugs.

The FDA also updated its Orange Book rules in 2024 to reduce misleading or overly broad patent listings. That should help cut down on patent thickets.

Meanwhile, more generic companies are combining Paragraph IV challenges with Inter Partes Review (IPR) at the Patent Trial and Appeal Board. IPRs are cheaper and faster than court cases. If you can knock out a patent there, you weaken the brand’s case in court.

And the numbers don’t lie: 90% of top-selling brand drugs face at least one Paragraph IV challenge. The FDA estimates these challenges have saved the U.S. healthcare system over $1.7 trillion since 1984. That’s not just corporate profit-it’s lower prices for insulin, heart meds, antidepressants, and cancer drugs.

Who’s Winning? Who’s Losing?

The top five generic manufacturers-Teva, Viatris, Sandoz, Hikma, and Amneal-control nearly 60% of all Paragraph IV filings. They have the legal teams, the resources, and the patience to fight five-year lawsuits.

But small players still win. In 2021, a little-known company called Zydus won a Paragraph IV case against a major brand’s patent on a cholesterol drug. Their generic launched early, and they captured 80% of the market during their exclusivity window.

On the flip side, Teva lost its 180-day exclusivity in 2017 because they didn’t get FDA approval within 30 months of filing their challenge. They thought they were safe. They weren’t. Another generic rushed in the same day. Teva got nothing.

That’s the lesson: even if you win in court, you can still lose in the paperwork.

Final Takeaway: A System Built to Force Competition

Paragraph IV certification isn’t about breaking the law. It’s about using the law to break monopolies. It’s a carefully designed tool that lets generics push back against weak patents, rewards the first mover, and ultimately drives down drug prices.

It’s messy. It’s expensive. It’s full of legal traps. But without it, most generic drugs wouldn’t enter the market until patents expire-even if those patents shouldn’t have been granted in the first place.

Every time a generic company files a Paragraph IV certification, they’re not just trying to make money. They’re trying to make healthcare more affordable for millions of people.