Stop STALLING Act

II Calendar No. 130 116TH CONGRESS 1ST SESSION S. 1224 To enable the Federal Trade Commission to deter filing of sham citizen petitions to cover an attempt to interfere with approval of a competing generic drug or biosimilar, to foster competition, and facilitate the effi- cient review of petitions filed in good faith to raise legitimate public heath concerns, and for other purposes. IN THE SENATE OF THE UNITED STATES APRIL 29, 2019 Ms. KLOBUCHAR (for herself and Mr. GRASSLEY) introduced the following bill; which was read twice and referred to the Committee on the Judiciary JUNE 28 (legislative day, JUNE 27), 2019 Reported by Mr. GRAHAM, with an amendment and an amendment to the title [Strike out all after the enacting clause and insert the part printed in italic] A BILL To enable the Federal Trade Commission to deter filing of sham citizen petitions to cover an attempt to interfere with approval of a competing generic drug or biosimilar, to foster competition, and facilitate the efficient review of petitions filed in good faith to raise legitimate public heath concerns, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 21:07 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1224.RS S1224 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 1224 RS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Stop Significant and 2 Time-wasting Abuse Limiting Legitimate Innovation of 3 New Generics Act’’ or the ‘‘Stop STALLING Act’’. 4 SEC. 2. FEDERAL TRADE COMMISSION ENFORCEMENT 5 AGAINST SHAM PETITIONS. 6 (a) DEFINITIONS.—In this section: 7 (1) COMMISSION.—The term ‘‘Commission’’ 8 means the Federal Trade Commission. 9 (2) COVERED APPLICATION.—The term ‘‘cov- 10 ered application’’ means an application filed pursu- 11 ant to subsection (b)(2) or (j) of section 505 of the 12 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 13 355) or section 351(k) of the Public Health Service 14 Act (42 U.S.C. 262(k)). 15 (3) COVERED PETITION.—The term ‘‘covered 16 petition’’ means a petition, or a supplement to a pe- 17 tition, filed under section 505(q) of the Federal 18 Food, Drug, and Cosmetic Act (21 U.S.C. 355(q)). 19 (4) PERSON.—The term ‘‘person’’— 20 (A) means an individual or entity; and 21 (B) includes— 22 (i) a director, officer, employee, agent, 23 representative, successor, and assign of an 24 entity; 25 VerDate Sep 11 2014 21:07 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6401 E:\BILLS\S1224.RS S1224 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 1224 RS (ii) a joint venture, subsidiary, part- 1 nership, division, group, and affiliate con- 2 trolled by an entity; and 3 (iii) a director, officer, employee, 4 agent, representative, successor, and assign 5 of a joint venture, subsidiary, partnership, 6 division, group, and affiliate controlled by 7 an entity. 8 (5) SERIES OF COVERED PETITIONS.—The 9 term ‘‘series of covered petitions’’ means any group 10 of more than 1 covered petition. 11 (6) SHAM.—The term ‘‘sham’’ means a covered 12 petition that is objectively baseless and that at- 13 tempts to use a governmental process, as opposed to 14 the outcome of that process, to interfere with the 15 business of a competitor, or a series of covered peti- 16 tions that attempts to use a governmental process, 17 as opposed to the outcome of that process, to inter- 18 fere with the business of a competitor. 19 (b) VIOLATION.—A person submitting or causing the 20 submission of a covered petition or a series of covered peti- 21 tions that is a sham shall be liable for engaging in an 22 unfair method of competition under section 5(a)(1) of the 23 Federal Trade Commission Act (15 U.S.C. 45(a)(1)). 24 (c) CIVIL ACTION.— 25 VerDate Sep 11 2014 21:07 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6401 E:\BILLS\S1224.RS S1224 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 1224 RS (1) IN GENERAL.—If the Commission has rea- 1 son to believe that the submission of a covered peti- 2 tion or a series of covered petitions constitutes a vio- 3 lation of section 5(a)(1) of the Federal Trade Com- 4 mission Act (15 U.S.C. 45(a)(1)), the Commission 5 may commence a civil action to recover a civil pen- 6 alty and seek other appropriate relief in a district 7 court of the United States against any person that 8 submitted or caused to be submitted such covered 9 petition or such series of covered petitions, including 10 successors or assigns. 11 (2) PRESUMPTION.—In a civil action under 12 paragraph (1), a covered petition shall be presumed 13 to be part of a series of covered petitions that is a 14 sham under subsection (b) of this section if the Sec- 15 retary of Health and Human Services has deter- 16 mined that the covered petition was submitted with 17 the primary purpose of delaying the approval of a 18 covered application and was part of a series of cov- 19 ered petitions, and has referred such determination 20 to the Federal Trade Commission in writing, with a 21 reasoned basis for the determination. 22 (3) EXCEPTION.—The presumption in para- 23 graph (2) shall not apply if the defendant estab- 24 lishes, by a preponderance of the evidence, that the 25 VerDate Sep 11 2014 21:07 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6401 E:\BILLS\S1224.RS S1224 pamtmann on DSKBFK8HB2PROD with BILLS 5 •S 1224 RS series of covered petitions that includes the covered 1 petition referred to the Commission by the Secretary 2 of Health and Human Services is not a sham. 3 (4) CIVIL PENALTY.—In an action under para- 4 graph (1), any person that has been found liable for 5 a violation of section 5(a)(1) of the Federal Trade 6 Commission Act (15 U.S.C. 45(a)(1)) shall be sub- 7 ject to a civil penalty for each violation of not more 8 than the greater of— 9 (A) any revenue earned from the sale by 10 such person of any drug product, referenced in 11 a covered application that was the subject of a 12 covered petition or a series of covered petitions 13 that is a sham, during the period in which the 14 covered petition or series of covered petitions 15 was under review by the Secretary of Health 16 and Human Services; or 17 (B) $50,000 for each calendar day that 18 each covered petition that is a sham or that was 19 part of a series of covered petitions that is a 20 sham was under review by the Secretary of 21 Health and Human Services. 22 (5) ANTITRUST LAWS.—Nothing in this section 23 shall modify, impair, limit, or supersede the applica- 24 bility of the antitrust laws as defined in subsection 25 VerDate Sep 11 2014 21:07 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6401 E:\BILLS\S1224.RS S1224 pamtmann on DSKBFK8HB2PROD with BILLS 6 •S 1224 RS (a) of the first section of the Clayton Act (15 U.S.C. 1 12(a)), and of section 5 of the Federal Trade Com- 2 mission Act (15 U.S.C. 45) to the extent that it ap- 3 plies to unfair methods of competition. 4 (6) RULE OF CONSTRUCTION.—The civil pen- 5 alty provided in this subsection is in addition to, and 6 not in lieu of, any other remedies provided by Fed- 7 eral law, including under section 16 of the Clayton 8 Act (15 U.S.C. 26) or under section 13(b) of the 9 Federal Trade Commission Act (15 U.S.C. 53(b)). 10 Nothing in this paragraph shall be construed to af- 11 fect any authority of the Commission under any 12 other provision of law. 13 (d) APPLICABILITY.—This section shall apply to any 14 covered petition submitted on or after the date of enact- 15 ment of this Act. 16 SEC. 3. SEVERABILITY. 17 If any provision of this Act or the application of such 18 provision to any person or circumstance is held to be un- 19 constitutional, the remainder of this Act and the applica- 20 tion of the provisions of such Act to any person or cir- 21 cumstance shall not be affected. 22 VerDate Sep 11 2014 21:07 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6401 E:\BILLS\S1224.RS S1224 pamtmann on DSKBFK8HB2PROD with BILLS 7 •S 1224 RS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Stop Significant and 2 Time-wasting Abuse Limiting Legitimate Innovation of 3 New Generics Act’’ or the ‘‘Stop STALLING Act’’. 4 SEC. 2. FEDERAL TRADE COMMISSION ENFORCEMENT 5 AGAINST SHAM PETITIONS. 6 (a) DEFINITIONS.—In this section: 7 (1) COMMISSION.—The term ‘‘Commission’’ 8 means the Federal Trade Commission. 9 (2) COVERED APPLICATION.—The term ‘‘covered 10 application’’ means an application filed pursuant to 11 subsection (b)(2) or (j) of section 505 of the Federal 12 Food, Drug, and Cosmetic Act (21 U.S.C. 355) or sec- 13 tion 351(k) of the Public Health Service Act (42 14 U.S.C. 262(k)). 15 (3) COVERED PETITION.—The term ‘‘covered pe- 16 tition’’ means a petition, or a supplement to a peti- 17 tion, filed under section 505(q) of the Federal Food, 18 Drug, and Cosmetic Act (21 U.S.C. 355(q)). 19 (4) PERSON.—The term ‘‘person’’— 20 (A) means an individual or entity; and 21 (B) includes— 22 (i) a successor and an assign of an en- 23 tity; and 24 VerDate Sep 11 2014 21:07 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6203 E:\BILLS\S1224.RS S1224 pamtmann on DSKBFK8HB2PROD with BILLS 8 •S 1224 RS (ii) a joint venture, subsidiary, part- 1 nership, division, group, and affiliate con- 2 trolled by an entity, and 3 (iii) a successor and an assign of a 4 joint venture, subsidiary, partnership, divi- 5 sion, group, and affiliate controlled by an 6 entity. 7 (5) SERIES OF COVERED PETITIONS.—The term 8 ‘‘series of covered petitions’’ means any group of more 9 than 1 covered petition relating to the same covered 10 application. 11 (6) SHAM.—The term ‘‘sham’’ means a covered 12 petition that is objectively baseless and that attempts 13 to use a governmental process, as opposed to the out- 14 come of that process, to interfere with the business of 15 a competitor, or a series of covered petitions that at- 16 tempts to use a governmental process, as opposed to 17 the outcome of that process, to interfere with the busi- 18 ness of a competitor. 19 (b) VIOLATION.—A person submitting or causing the 20 submission of a covered petition or a series of covered peti- 21 tions that is a sham shall be liable for engaging in an un- 22 fair method of competition under section 5(a)(1) of the Fed- 23 eral Trade Commission Act (15 U.S.C. 45(a)(1)). 24 (c) CIVIL ACTION.— 25 VerDate Sep 11 2014 21:07 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6203 E:\BILLS\S1224.RS S1224 pamtmann on DSKBFK8HB2PROD with BILLS 9 •S 1224 RS (1) IN GENERAL.—If the Commission has reason 1 to believe that the submission of a covered petition or 2 a series of covered petitions constitutes a violation of 3 section 5(a)(1) of the Federal Trade Commission Act 4 (15 U.S.C. 45(a)(1)), the Commission may commence 5 a civil action to recover a civil penalty and seek other 6 appropriate relief in a district court of the United 7 States against any person that submitted or caused to 8 be submitted such covered petition or such series of 9 covered petitions, including successors or assigns. 10 (2) PRESUMPTION.—In a civil action under 11 paragraph (1), a covered petition shall be presumed 12 to be part of a series of covered petitions that is a 13 sham under subsection (b) of this section if— 14 (A) the Secretary of Health and Human 15 Services— 16 (i) has determined that the covered pe- 17 tition was submitted with the primary pur- 18 pose of delaying the approval of a covered 19 application; and 20 (ii) has referred such determination to 21 the Federal Trade Commission in writing, 22 including a reasoned basis for the deter- 23 mination; and 24 VerDate Sep 11 2014 21:07 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6203 E:\BILLS\S1224.RS S1224 pamtmann on DSKBFK8HB2PROD with BILLS 10 •S 1224 RS (B) the covered petition was part of a series 1 of covered petitions. 2 (3) EXCEPTION.—The presumption in paragraph 3 (2) shall not apply if the defendant establishes, by a 4 preponderance of the evidence, that the series of cov- 5 ered petitions that includes the covered petition re- 6 ferred to the Commission by the Secretary of Health 7 and Human Services is not a sham. 8 (4) CIVIL PENALTY.—In an action under para- 9 graph (1), any person that has been found liable for 10 a violation of section 5(a)(1) of the Federal Trade 11 Commission Act (15 U.S.C. 45(a)(1)) shall be subject 12 to a civil penalty for each violation of not more than 13 the greater of— 14 (A) any revenue earned from the sale by 15 such person of any drug product, referenced in 16 a covered application that was the subject of a 17 covered petition or a series of covered petitions 18 that is a sham, during the period in which the 19 covered petition or series of covered petitions was 20 under review by the Secretary of Health and 21 Human Services; or 22 (B) $50,000 for each calendar day that each 23 covered petition that is a sham or that was part 24 of a series of covered petitions that is a sham 25 VerDate Sep 11 2014 21:07 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6203 E:\BILLS\S1224.RS S1224 pamtmann on DSKBFK8HB2PROD with BILLS 11 •S 1224 RS was under review by the Secretary of Health and 1 Human Services. 2 (5) ANTITRUST LAWS.—Nothing in this section 3 shall modify, impair, limit, or supersede the applica- 4 bility of the antitrust laws as defined in subsection 5 (a) of the first section of the Clayton Act (15 U.S.C. 6 12(a)), and of section 5 of the Federal Trade Commis- 7 sion Act (15 U.S.C. 45) to the extent that it applies 8 to unfair methods of competition. 9 (6) RULE OF CONSTRUCTION.—The civil penalty 10 provided in this subsection is in addition to, and not 11 in lieu of, any other remedies provided by Federal 12 law, including under section 16 of the Clayton Act 13 (15 U.S.C. 26) or under section 13(b) of the Federal 14 Trade Commission Act (15 U.S.C. 53(b)). Nothing in 15 this paragraph shall be construed to affect any au- 16 thority of the Commission under any other provision 17 of law. 18 (d) APPLICABILITY.—This section shall apply to any 19 covered petition submitted on or after the date of enactment 20 of this Act. 21 SEC. 3. SEVERABILITY. 22 If any provision of this Act or the application of such 23 provision to any person or circumstance is held to be uncon- 24 stitutional, the remainder of this Act and the application 25 VerDate Sep 11 2014 21:07 Jun 28, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6203 E:\BILLS\S1224.RS S1224 pamtmann on DSKBFK8HB2PROD with BILLS 12 •S 1224 RS of the provisions of such Act to any person or circumstance 1 shall not be affected. 2 Amend the title so as to read: ‘‘A bill to enable the Federal Trade Commission to deter filing of sham ci [Text truncated for display. Full text available on Congress.gov.]