Preserve Access to Affordable Generics and Biosimilars Act

I 117TH CONGRESS 1ST SESSION H. R. 2891 To prohibit prescription drug companies from compensating other prescription drug companies to delay the entry of a generic drug, biosimilar biological product, or interchangeable biological product into the market. IN THE HOUSE OF REPRESENTATIVES APRIL 28, 2021 Mr. NADLER (for himself, Mr. CICILLINE, Mr. BUCK, and Mrs. CAROLYN B. MALONEY of New York) introduced the following bill; which was referred to the Committee on the Judiciary, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To prohibit prescription drug companies from compensating other prescription drug companies to delay the entry of a generic drug, biosimilar biological product, or inter- changeable biological product into the market. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Preserve Access to Af- 4 fordable Generics and Biosimilars Act’’. 5 VerDate Sep 11 2014 01:15 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2891.IH H2891 kjohnson on DSK79L0C42PROD with BILLS 2 •HR 2891 IH SEC. 2. DECLARATION OF PURPOSES. 1 The purposes of this Act are— 2 (1) to enhance competition in the pharma- 3 ceutical market by stopping anticompetitive agree- 4 ments between manufacturers of brand name and 5 generic drug products or biosimilar biological prod- 6 ucts, or among manufacturers of generic drug prod- 7 ucts or biosimilar biological products, that limit, 8 delay, or otherwise prevent competition from generic 9 drugs and biosimilar biological products; and 10 (2) to support the purpose and intent of anti- 11 trust law by prohibiting anticompetitive practices in 12 the pharmaceutical industry that harm consumers. 13 SEC. 3. UNLAWFUL COMPENSATION FOR DELAY. 14 (a) IN GENERAL.—The Federal Trade Commission 15 Act (15 U.S.C. 44 et seq.) is amended by inserting after 16 section 26 (15 U.S.C. 57c–2) the following: 17 ‘‘SEC. 27. PRESERVING ACCESS TO AFFORDABLE GENERICS 18 AND BIOSIMILARS. 19 ‘‘(a) IN GENERAL.— 20 ‘‘(1) ENFORCEMENT PROCEEDING.—The Com- 21 mission may initiate a proceeding to enforce the pro- 22 visions of this section against the parties to any 23 agreement resolving or settling, on a final or interim 24 basis, a patent claim, in connection with the sale of 25 a drug product or biological product. 26 VerDate Sep 11 2014 01:15 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2891.IH H2891 kjohnson on DSK79L0C42PROD with BILLS 3 •HR 2891 IH ‘‘(2) PRESUMPTION AND VIOLATION.— 1 ‘‘(A) IN GENERAL.—Subject to subpara- 2 graph (B), in such a proceeding, an agreement 3 shall be presumed to have anticompetitive ef- 4 fects and shall be a violation of this section if— 5 ‘‘(i) an ANDA filer or a biosimilar bi- 6 ological product application filer receives 7 anything of value, including an exclusive li- 8 cense; and 9 ‘‘(ii) the ANDA filer or biosimilar bio- 10 logical product application filer agrees to 11 limit or forgo research, development, man- 12 ufacturing, marketing, or sales of the 13 ANDA product or biosimilar biological 14 product, as applicable, for any period of 15 time. 16 ‘‘(B) EXCEPTION.—Subparagraph (A) 17 shall not apply if the parties to such agreement 18 demonstrate by clear and convincing evidence 19 that— 20 ‘‘(i) the value described in subpara- 21 graph (A)(i) is compensation solely for 22 other goods or services that the ANDA 23 filer or biosimilar biological product appli- 24 cation filer has promised to provide; or 25 VerDate Sep 11 2014 01:15 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2891.IH H2891 kjohnson on DSK79L0C42PROD with BILLS 4 •HR 2891 IH ‘‘(ii) the procompetitive benefits of the 1 agreement outweigh the anticompetitive ef- 2 fects of the agreement. 3 ‘‘(b) LIMITATIONS.—In determining whether the set- 4 tling parties have met their burden under subsection 5 (a)(2)(B), the fact finder shall not presume— 6 ‘‘(1) that entry would not have occurred until 7 the expiration of the relevant patent or statutory ex- 8 clusivity; or 9 ‘‘(2) that the agreement’s provision for entry of 10 the ANDA product or biosimilar biological product 11 prior to the expiration of the relevant patent or stat- 12 utory exclusivity means that the agreement is pro- 13 competitive. 14 ‘‘(c) EXCLUSIONS.—Nothing in this section shall pro- 15 hibit a resolution or settlement of a patent infringement 16 claim in which the consideration that the ANDA filer or 17 biosimilar biological product application filer receives as 18 part of the resolution or settlement includes only one or 19 more of the following: 20 ‘‘(1) The right to market and secure final regu- 21 latory approval for the ANDA product or biosimilar 22 biological product at a date, whether certain or con- 23 tingent, in the United States prior to the expiration 24 of— 25 VerDate Sep 11 2014 01:15 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2891.IH H2891 kjohnson on DSK79L0C42PROD with BILLS 5 •HR 2891 IH ‘‘(A) any patent that is the basis for the 1 patent infringement claim; or 2 ‘‘(B) any patent right or other statutory 3 exclusivity that would prevent the marketing of 4 such ANDA product or biosimilar biological 5 product. 6 ‘‘(2) A payment for reasonable litigation ex- 7 penses not to exceed— 8 ‘‘(A) for calendar year 2019, $7,500,000; 9 and 10 ‘‘(B) for calendar year 2020 and each cal- 11 endar year thereafter, the amount determined 12 for the preceding calendar year adjusted to re- 13 flect the percentage increase (if any) in the 14 Producer Price Index for Legal Services pub- 15 lished by the Bureau of Labor Statistics of the 16 Department of Labor for the then most recent 17 12-month period ending December 31. 18 ‘‘(3) A covenant not to sue on any claim that 19 the ANDA product or biosimilar biological product 20 infringes a United States patent. 21 ‘‘(d) ENFORCEMENT.— 22 ‘‘(1) ENFORCEMENT.—A violation of this sec- 23 tion shall be treated as an unfair method of competi- 24 VerDate Sep 11 2014 01:15 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2891.IH H2891 kjohnson on DSK79L0C42PROD with BILLS 6 •HR 2891 IH tion under section 5(a)(1) of the Federal Trade 1 Commission Act (15 U.S.C. 45(a)(1)). 2 ‘‘(2) JUDICIAL REVIEW.— 3 ‘‘(A) IN GENERAL.—Any party that is sub- 4 ject to a final order of the Commission, issued 5 in an administrative adjudicative proceeding 6 under the authority of subsection (a)(1), may, 7 within 30 days of the issuance of such order, 8 petition for review of such order in— 9 ‘‘(i) the United States Court of Ap- 10 peals for the District of Columbia Circuit; 11 ‘‘(ii) the United States Court of Ap- 12 peals for the circuit in which the ultimate 13 parent entity, as defined in section 14 801.1(a)(3) of title 16, Code of Federal 15 Regulations, or any successor thereto, of 16 the NDA holder or biological product li- 17 cense holder is incorporated as of the date 18 that the NDA or biological product license 19 application, as applicable, is filed with the 20 Commissioner of Food and Drugs; or 21 ‘‘(iii) the United States Court of Ap- 22 peals for the circuit in which the ultimate 23 parent entity of the ANDA filer or bio- 24 similar biological product application filer 25 VerDate Sep 11 2014 01:15 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2891.IH H2891 kjohnson on DSK79L0C42PROD with BILLS 7 •HR 2891 IH is incorporated as of the date that the 1 ANDA or biosimilar biological product ap- 2 plication is filed with the Commissioner of 3 Food and Drugs. 4 ‘‘(B) TREATMENT OF FINDINGS.—In a 5 proceeding for judicial review of a final order of 6 the Commission, the findings of the Commis- 7 sion as to the facts, if supported by evidence, 8 shall be conclusive. 9 ‘‘(e) ANTITRUST LAWS.—Nothing in this section 10 shall modify, impair, limit, or supersede the applicability 11 of the antitrust laws as defined in subsection (a) of the 12 first section of the Clayton Act (15 U.S.C. 12(a)), and 13 of section 5 of this Act to the extent that section 5 applies 14 to unfair methods of competition. Nothing in this section 15 shall modify, impair, limit, or supersede the right of an 16 ANDA filer or biosimilar biological product application 17 filer to assert claims or counterclaims against any person, 18 under the antitrust laws or other laws relating to unfair 19 competition. 20 ‘‘(f) PENALTIES.— 21 ‘‘(1) FORFEITURE.—Each party that violates or 22 assists in the violation of this section shall forfeit 23 and pay to the United States a civil penalty suffi- 24 cient to deter violations of this section, but in no 25 VerDate Sep 11 2014 01:15 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2891.IH H2891 kjohnson on DSK79L0C42PROD with BILLS 8 •HR 2891 IH event greater than 3 times the value received by the 1 party that is reasonably attributable to the violation 2 of this section. If no such value has been received by 3 the NDA holder, biological product license holder, 4 the ANDA filer, or biosimilar biological product ap- 5 plication filer the penalty to the NDA holder, bio- 6 logical product license holder, the ANDA filer, or 7 biosimilar biological product application filer shall be 8 sufficient to deter violations, but in no event greater 9 than 3 times the value given to an ANDA filer or 10 biosimilar biological product application filer reason- 11 ably attributable to the violation of this section. 12 Such penalty shall accrue to the United States and 13 may be recovered in a civil action brought by the 14 Commission, in its own name by any of its attorneys 15 designated by it for such purpose, in a district court 16 of the United States against any party that violates 17 this section. In such actions, the United States dis- 18 trict courts are empowered to grant mandatory in- 19 junctions and such other and further equitable relief 20 as they deem appropriate. 21 ‘‘(2) CEASE AND DESIST.— 22 ‘‘(A) IN GENERAL.—If the Commission has 23 issued a cease and desist order with respect to 24 a party in an administrative adjudicative pro- 25 VerDate Sep 11 2014 01:15 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2891.IH H2891 kjohnson on DSK79L0C42PROD with BILLS 9 •HR 2891 IH ceeding under the authority of subsection 1 (a)(1), an action brought pursuant to para- 2 graph (1) may be commenced against such 3 party at any time before the expiration of 1 4 year after such order becomes final pursuant to 5 section 5(g). 6 ‘‘(B) EXCEPTION.—In an action under 7 subparagraph (A), the findings of the Commis- 8 sion as to the material facts in the administra- 9 tive adjudicative proceeding with respect to the 10 violation of this section by a party shall be con- 11 clusive unless— 12 ‘‘(i) the terms of such cease and de- 13 sist order expressly provide that the Com- 14 mission’s findings shall not be conclusive; 15 or 16 ‘‘(ii) the order became final by reason 17 of section 5(g)(1), in which case such find- 18 ing shall be conclusive if supported by evi- 19 dence. 20 ‘‘(3) CIVIL PENALTY.—In determining the 21 amount of the civil penalty described in this section, 22 the court shall take into account— 23 ‘‘(A) the nature, circumstances, extent, 24 and gravity of the violation; 25 VerDate Sep 11 2014 01:15 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2891.IH H2891 kjohnson on DSK79L0C42PROD with BILLS 10 •HR 2891 IH ‘‘(B) with respect to the violator, the de- 1 gree of culpability, any history of violations, the 2 ability to pay, any effect on the ability to con- 3 tinue doing business, profits earned by the 4 NDA holder, biological product license holder, 5 the ANDA filer, or biosimilar biological product 6 application filer, compensation received by the 7 ANDA filer or biosimilar biological product ap- 8 plication filer, and the amount of commerce af- 9 fected; and 10 ‘‘(C) other matters that justice requires. 11 ‘‘(4) REMEDIES IN ADDITION.—Remedies pro- 12 vided in this subsection are in addition to, and not 13 in lieu of, any other remedy provided by Federal 14 law. Nothing in this paragraph shall be construed to 15 affect any authority of the Commission under any 16 other provision of law. 17 ‘‘(g) DEFINITIONS.—In this section: 18 ‘‘(1) AGREEMENT.—The term ‘agreement’ 19 means anything that would constitute an agreement 20 under section 1 of the Sherman Act (15 U.S.C. 1) 21 or section 5 of this Act. 22 ‘‘(2) AGREEMENT RESOLVING OR SETTLING A 23 PATENT INFRINGEMENT CLAIM.—The term ‘agree- 24 ment resolving or settling a patent infringement 25 VerDate Sep 11 2014 01:15 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2891.IH H2891 kjohnson on DSK79L0C42PROD with BILLS 11 •HR 2891 IH claim’ includes any agreement that is entered into 1 within 30 days of the resolution or the settlement of 2 the claim, or any other agreement that is contingent 3 upon, provides a contingent condition for, or is oth- 4 erwise related to the resolution or settlement of the 5 claim. 6 ‘‘(3) ANDA.—The term ‘ANDA’ means an ab- 7 breviated new drug application filed under section 8 505(j) of the Federal Food, Drug, and Cosmetic Act 9 (21 U.S.C. 355(j)) or a new drug application filed 10 under section 505(b)(2) of the Federal Food, Drug, 11 and Cosmetic Act (21 U.S.C. 355(b)(2)). 12 ‘‘(4) ANDA FILER.—The term ‘ANDA filer’ 13 means a party that owns or controls an ANDA filed 14 with the Food and Drug Administration or has the 15 exclusive rights under such ANDA to distribute the 16 ANDA product. 17 ‘‘(5) ANDA PRODUCT.—The term ‘ANDA 18 product’ means the product to be manufactured 19 under the ANDA that is the subject of the patent 20 infringement claim. 21 ‘‘(6) BIOLOGICAL PRODUCT.—The term ‘bio- 22 logical product’ has the meaning given such term in 23 section 351(i)(1) of the Public Health Service Act 24 (42 U.S.C. 262(i)(1)). 25 VerDate Sep 11 2014 01:15 Jun 09, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2891.IH H2891 kjohnson on DSK79L0C42PROD with BILLS 12 •HR 2891 IH ‘‘(7) BIOLOGICAL PRODUCT LICENSE APPLICA- 1 TION.—The term ‘biological product license applica- 2 tion’ means an application under section 351(a) of 3 the Public Health Service Act (42 U.S.C. 262(a)). 4 ‘‘(8) BIOLOGICAL PRODUCT LICENSE HOLD- 5 ER.—The term ‘biological product license holder’ 6 means— 7 ‘‘(A) the holder of an approved biological 8 product license application for a biological prod- 9 uct; 10 [Text truncated for display. 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