Protecting Consumer Access to Generic Drugs Act of 2019

IB Union Calendar No. 30 116TH CONGRESS 1ST SESSION H. R. 1499 [Report No. 116–52, Part I] To prohibit brand name drug manufacturers from compensating generic drug manufacturers to delay the entry of a generic drug into the market, and to prohibit biological product manufacturers from compensating bio- similar and interchangeable product manufacturers to delay entry of biosimilar and interchangeable products, and for other purposes. IN THE HOUSE OF REPRESENTATIVES MARCH 5, 2019 Mr. RUSH introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on the Judi- ciary, 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 MAY 10, 2019 Additional sponsors: Mr. PALLONE, Mr. RUIZ, Mrs. DINGELL, Mrs. CRAIG, Ms. ESHOO, Mr. KENNEDY, Ms. MATSUI, Mr. VAN DREW, Ms. CLARKE of New York, Mr. KHANNA, Ms. SCHAKOWSKY, Mr. PAPPAS, Mr. COHEN, Mr. WELCH, Mr. LARSON of Connecticut, Mr. HASTINGS, Mr. NEGUSE, Ms. FINKENAUER, Mr. CASE, Mr. QUIGLEY, Ms. WILD, Mr. LANGEVIN, Mr. COOPER, Mr. RASKIN, Mr. DAVID SCOTT of Georgia, Ms. MUCARSEL-POWELL, Mr. THOMPSON of Mississippi, Ms. STEVENS, Mr. CISNEROS, Ms. KELLY of Illinois, Mr. CASTEN of Illinois, Ms. HOULAHAN, Mr. CARSON of Indiana, Mr. CARBAJAL, Ms. DAVIDS of Kansas, Mr. SMITH of Washington, Mr. CONNOLLY, and Ms. UNDER- WOOD VerDate Sep 11 2014 02:13 May 11, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H1499.RH H1499 pamtmann on DSKBFK8HB2PROD with BILLS 2 •HR 1499 RH MAY 10, 2019 Reported from the Committee on Energy and Commerce with an amendment [Strike out all after the enacting clause and insert the part printed in italic] MAY 10, 2019 Committee on the Judiciary discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed [For text of introduced bill, see copy of bill as introduced on March 5, 2019] A BILL To prohibit brand name drug manufacturers from compen- sating generic drug manufacturers to delay the entry of a generic drug into the market, and to prohibit bio- logical product manufacturers from compensating bio- similar and interchangeable product manufacturers to delay entry of biosimilar and interchangeable products, and for other purposes. VerDate Sep 11 2014 02:13 May 11, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H1499.RH H1499 pamtmann on DSKBFK8HB2PROD with BILLS 3 •HR 1499 RH 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 ‘‘Protecting Consumer 4 Access to Generic Drugs Act of 2019’’. 5 SEC. 2. UNLAWFUL AGREEMENTS. 6 (a) AGREEMENTS PROHIBITED.—Subject to sub- 7 sections (b) and (c), it shall be unlawful for an NDA or 8 BLA holder and a subsequent filer (or for two subsequent 9 filers) to enter into, or carry out, an agreement resolving 10 or settling a covered patent infringement claim on a final 11 or interim basis if under such agreement— 12 (1) a subsequent filer directly or indirectly re- 13 ceives from such holder (or in the case of such an 14 agreement between two subsequent filers, the other 15 subsequent filer) anything of value, including a li- 16 cense; and 17 (2) the subsequent filer agrees to limit or forego 18 research on, or development, manufacturing, mar- 19 keting, or sales, for any period of time, of the covered 20 product that is the subject of the application described 21 in subparagraph (A) or (B) of subsection (g)(8). 22 (b) EXCLUSION.—It shall not be unlawful under sub- 23 section (a) if a party to an agreement described in such 24 subsection demonstrates by clear and convincing evidence 25 VerDate Sep 11 2014 02:13 May 11, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H1499.RH H1499 pamtmann on DSKBFK8HB2PROD with BILLS 4 •HR 1499 RH that the value described in subsection (a)(1) is compensa- 1 tion solely for other goods or services that the subsequent 2 filer has promised to provide. 3 (c) LIMITATION.—Nothing in this section shall pro- 4 hibit an agreement resolving or settling a covered patent 5 infringement claim in which the consideration granted by 6 the NDA or BLA holder to the subsequent filer (or from 7 one subsequent filer to another) as part of the resolution 8 or settlement includes only one or more of the following: 9 (1) The right to market the covered product that 10 is the subject of the application described in subpara- 11 graph (A) or (B) of subsection (g)(8) in the United 12 States before the expiration of— 13 (A) any patent that is the basis of the cov- 14 ered patent infringement claim; or 15 (B) any patent right or other statutory ex- 16 clusivity that would prevent the marketing of 17 such covered product. 18 (2) A payment for reasonable litigation expenses 19 not to exceed $7,500,000 in the aggregate. 20 (3) A covenant not to sue on any claim that such 21 covered product infringes a patent. 22 (d) ENFORCEMENT BY FEDERAL TRADE COMMIS- 23 SION.— 24 VerDate Sep 11 2014 02:13 May 11, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H1499.RH H1499 pamtmann on DSKBFK8HB2PROD with BILLS 5 •HR 1499 RH (1) GENERAL APPLICATION.—The requirements 1 of this section apply, according to their terms, to an 2 NDA or BLA holder or subsequent filer that is— 3 (A) a person, partnership, or corporation 4 over which the Commission has authority pursu- 5 ant to section 5(a)(2) of the Federal Trade Com- 6 mission Act (15 U.S.C. 45(a)(2)); or 7 (B) a person, partnership, or corporation 8 over which the Commission would have authority 9 pursuant to such section but for the fact that 10 such person, partnership, or corporation is not 11 organized to carry on business for its own profit 12 or that of its members. 13 (2) UNFAIR OR DECEPTIVE ACTS OR PRACTICES 14 ENFORCEMENT AUTHORITY.— 15 (A) IN GENERAL.—A violation of this sec- 16 tion shall be treated as an unfair or deceptive 17 act or practice in violation of section 5(a)(1) of 18 the Federal Trade Commission Act (15 U.S.C. 19 45(a)(1)). 20 (B) POWERS OF COMMISSION.—Except as 21 provided in subparagraph (C) and paragraphs 22 (1)(B) and (3)— 23 (i) the Commission shall enforce this 24 section in the same manner, by the same 25 VerDate Sep 11 2014 02:13 May 11, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H1499.RH H1499 pamtmann on DSKBFK8HB2PROD with BILLS 6 •HR 1499 RH means, and with the same jurisdiction, 1 powers, and duties as though all applicable 2 terms and provisions of the Federal Trade 3 Commission Act (15 U.S.C. 41 et seq.) were 4 incorporated into and made a part of this 5 section; and 6 (ii) any NDA or BLA holder or subse- 7 quent filer that violates this section shall be 8 subject to the penalties and entitled to the 9 privileges and immunities provided in the 10 Federal Trade Commission Act. 11 (C) JUDICIAL REVIEW.—In the case of a 12 cease and desist order issued by the Commission 13 under section 5 of the Federal Trade Commission 14 Act (15 U.S.C. 45) for violation of this section, 15 a party to such order may obtain judicial review 16 of such order as provided in such section 5, ex- 17 cept that— 18 (i) such review may only be obtained 19 in— 20 (I) the United States Court of Ap- 21 peals for the District of Columbia Cir- 22 cuit; 23 (II) the United States Court of 24 Appeals for the circuit in which the ul- 25 VerDate Sep 11 2014 02:13 May 11, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6203 E:\BILLS\H1499.RH H1499 pamtmann on DSKBFK8HB2PROD with BILLS 7 •HR 1499 RH timate parent entity, as defined in sec- 1 tion 801.1(a)(3) of title 16, Code of 2 Federal Regulations, or any successor 3 thereto, of the NDA or BLA holder (if 4 any such holder is a party to such 5 order) is incorporated as of the date 6 that the application described in sub- 7 paragraph (A) or (B) of subsection 8 (g)(8) or an approved application that 9 is deemed to be a license for a biologi- 10 cal product under section 351(k) of the 11 Public Health Service Act (42 U.S.C. 12 262(k)) pursuant to section 7002(e)(4) 13 of the Biologics Price Competition and 14 Innovation Act of 2009 (Public Law 15 111–148; 124 Stat. 817) is submitted 16 to the Commissioner of Food and 17 Drugs; or 18 (III) the United States Court of 19 Appeals for the circuit in which the ul- 20 timate parent entity, as so defined, of 21 any subsequent filer that is a party to 22 such order is incorporated as of the 23 date that the application described in 24 subparagraph (A) or (B) of subsection 25 VerDate Sep 11 2014 02:13 May 11, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\H1499.RH H1499 pamtmann on DSKBFK8HB2PROD with BILLS 8 •HR 1499 RH (g)(8) is submitted to the Commis- 1 sioner of Food and Drugs; and 2 (ii) the petition for review shall be 3 filed in the court not later than 30 days 4 after such order is served on the party seek- 5 ing review. 6 (3) ADDITIONAL ENFORCEMENT AUTHORITY.— 7 (A) CIVIL PENALTY.—The Commission may 8 commence a civil action to recover a civil pen- 9 alty in a district court of the United States 10 against any NDA or BLA holder or subsequent 11 filer that violates this section. 12 (B) SPECIAL RULE FOR RECOVERY OF PEN- 13 ALTY IF CEASE AND DESIST ORDER ISSUED.— 14 (i) IN GENERAL.—If the Commission 15 has issued a cease and desist order in a pro- 16 ceeding under section 5 of the Federal Trade 17 Commission Act (15 U.S.C. 45) for viola- 18 tion of this section— 19 (I) the Commission may com- 20 mence a civil action under subpara- 21 graph (A) to recover a civil penalty 22 against any party to such order at any 23 time before the expiration of the 1-year 24 period beginning on the date on which 25 VerDate Sep 11 2014 02:13 May 11, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\H1499.RH H1499 pamtmann on DSKBFK8HB2PROD with BILLS 9 •HR 1499 RH such order becomes final under section 1 5(g) of such Act (15 U.S.C. 45(g)); and 2 (II) in such civil action, the find- 3 ings of the Commission as to the mate- 4 rial facts in such proceeding shall be 5 conclusive, unless— 6 (aa) the terms of such order 7 expressly provide that the Com- 8 mission’s findings shall not be 9 conclusive; or 10 (bb) such order became final 11 by reason of section 5(g)(1) of 12 such Act (15 U.S.C. 45(g)(1)), in 13 which case such findings shall be 14 conclusive if supported by evi- 15 dence. 16 (ii) RELATIONSHIP TO PENALTY FOR 17 VIOLATION OF AN ORDER.—The penalty 18 provided in clause (i) for violation of this 19 section is separate from and in addition to 20 any penalty that may be incurred for viola- 21 tion of an order of the Commission under 22 section 5(l) of the Federal Trade Commis- 23 sion Act (15 U.S.C. 45(l)). 24 (C) AMOUNT OF PENALTY.— 25 VerDate Sep 11 2014 02:13 May 11, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\H1499.RH H1499 pamtmann on DSKBFK8HB2PROD with BILLS 10 •HR 1499 RH (i) IN GENERAL.—The amount of a 1 civil penalty imposed in a civil action 2 under subparagraph (A) on a party to an 3 agreement described in subsection (a) shall 4 be sufficient to deter violations of this sec- 5 tion, but in no event greater than— 6 (I) if such party is the NDA or 7 BLA holder (or, in the case of an 8 agreement between two subsequent fil- 9 ers, the subsequent filer who gave the 10 value described in subsection (a)(1)), 11 the greater of— 12 (aa) 3 times the value re- 13 ceived by such NDA or BLA hold- 14 er (or by such subsequent filer) 15 that is reasonably attributable to 16 the violation of this section; or 17 (bb) 3 times the value given 18 to the subsequent filer (or to the 19 other subsequent filer) reasonably 20 attributable to the violation of 21 this section; and 22 (II) if such party is the subse- 23 quent filer (or, in the case of an agree- 24 ment between two subsequent filers, the 25 VerDate Sep 11 2014 02:13 May 11, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6203 E:\BILLS\H1499.RH H1499 pamtmann on DSKBFK8HB2PROD with BILLS 11 •HR 1499 RH subsequent filer who received the value 1 described in subsection (a)(1)), 3 times 2 the value received by such subsequent 3 filer that is reasonably attributable to 4 the violation of this section. 5 (ii) FACTORS FOR CONSIDERATION.— 6 In determining such amount, the court shall 7 take into account— 8 (I) the nature, circumstances, ex- 9 tent, and gravity of the violation; 10 (II) with respect to the violator, 11 the degree of culpability, any history of 12 violations, the ability to pay, any effect 13 on the ability to continue doing busi- 14 ness, profits earned by the NDA or 15 BLA holder (or, in the case of an 16 agreement between two subsequent fil- 17 ers, the subsequent filer who gave the 18 value described in subsection (a)(1)), 19 compensation received by the subse- 20 quent filer (or, in the case of an agree- 21 ment between two subsequent filers, the 22 subsequent filer who received the value 23 described in subsection (a)(1)), and the 24 amount of commerce affected; and 25 VerDate Sep 11 2014 02:13 May 11, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6203 E:\BILLS\H1499.RH H1499 pamtmann on DSKBFK8HB2PROD with BILLS 12 •HR 1499 RH (III) other matters that justice re- 1 quires. 2 (D) INJUNCTIONS AND OTHER EQUITABLE 3 RELIEF.—In a civil action under subparagraph 4 (A), the United States district courts are empow- 5 ered to grant mandatory injunctions and such 6 other and further equitable relief as they deem 7 appropriate. 8 (4) REMEDIES IN ADDITION.—Remedies provided 9 in this subsection are in addition to, and not in lieu 10 of, any other remedy provided by Federal law. 11 (5) PRESERVATION OF AUTHORITY OF COMMIS- 12 SION.—Nothing in this section shall be construed to 13 affect any authority of the Commission under any 14 other provision of law. 15 (e) FEDERAL TRADE COMMISSION RULEMAKING.—The 16 Commission may, in its discretion, by rule promulgated 17 under section 553 of title 5, United States Code, exempt 18 from this section certain agreements described in subsection 19 (a) if the Commission finds such agreements to be in fur- 20 therance of market competition and for the benefit of con- 21 sumers. 22 (f) ANTITRUST LAWS.—Nothing in this section shall 23 modify, impair, limit, or supersede the applicability of the 24 antitrust laws as defined in subsection (a) of the first sec- 25 VerDate Sep 11 2014 02:13 May 11, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6203 E:\BILLS\H1499.RH H1499 pamtmann on DSKBFK8HB2PROD with BILLS 13 •HR 1499 RH tion of the Clayton Act (15 U.S.C. 12(a)), and of section 1 5 of the Federal Trade Commissi [Text truncated for display. 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