Preserve Access to Affordable Generics and Biosimilars Act

IB Union Calendar No. 576 116TH CONGRESS 2D SESSION H. R. 2375 [Report No. 116–693, Part I] 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 29, 2019 Mr. NADLER (for himself, Mr. COLLINS of Georgia, and Mr. CICILLINE) intro- duced the following bill; which was referred to the Committee on the Ju- diciary, 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 com- mittee concerned DECEMBER 24, 2020 Additional sponsors: Mr. COHEN and Mr. MEADOWS DECEMBER 24, 2020 Reported from the Committee on the Judiciary DECEMBER 24, 2020 Committee on Energy and Commerce discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H2375.RH H2375 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 2375 RH 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. VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H2375.RH H2375 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 2375 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 ‘‘Preserve Access to Af- 4 fordable Generics and Biosimilars Act’’. 5 SEC. 2. DECLARATION OF PURPOSES. 6 The purposes of this Act are— 7 (1) to enhance competition in the pharma- 8 ceutical market by stopping anticompetitive agree- 9 ments between manufacturers of brand name and 10 generic drug products or biosimilar biological prod- 11 ucts, or among manufacturers of generic drug prod- 12 ucts or biosimilar biological products, that limit, 13 delay, or otherwise prevent competition from generic 14 drugs and biosimilar biological products; and 15 (2) to support the purpose and intent of anti- 16 trust law by prohibiting anticompetitive practices in 17 the pharmaceutical industry that harm consumers. 18 SEC. 3. UNLAWFUL COMPENSATION FOR DELAY. 19 (a) IN GENERAL.—The Federal Trade Commission 20 Act (15 U.S.C. 44 et seq.) is amended by inserting after 21 section 26 (15 U.S.C. 57c–2) the following: 22 ‘‘SEC. 27. PRESERVING ACCESS TO AFFORDABLE GENERICS 23 AND BIOSIMILARS. 24 ‘‘(a) IN GENERAL.— 25 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2375.RH H2375 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 2375 RH ‘‘(1) ENFORCEMENT PROCEEDING.—The Com- 1 mission may initiate a proceeding to enforce the pro- 2 visions of this section against the parties to any 3 agreement resolving or settling, on a final or interim 4 basis, a patent claim, in connection with the sale of 5 a drug product or biological product. 6 ‘‘(2) PRESUMPTION AND VIOLATION.— 7 ‘‘(A) IN GENERAL.—Subject to subpara- 8 graph (B), in such a proceeding, an agreement 9 shall be presumed to have anticompetitive ef- 10 fects and shall be a violation of this section if— 11 ‘‘(i) an ANDA filer or a biosimilar bi- 12 ological product application filer receives 13 anything of value, including an exclusive li- 14 cense; and 15 ‘‘(ii) the ANDA filer or biosimilar bio- 16 logical product application filer agrees to 17 limit or forgo research, development, man- 18 ufacturing, marketing, or sales of the 19 ANDA product or biosimilar biological 20 product, as applicable, for any period of 21 time. 22 ‘‘(B) EXCEPTION.—Subparagraph (A) 23 shall not apply if the parties to such agreement 24 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2375.RH H2375 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 2375 RH demonstrate by clear and convincing evidence 1 that— 2 ‘‘(i) the value described in subpara- 3 graph (A)(i) is compensation solely for 4 other goods or services that the ANDA 5 filer or biosimilar biological product appli- 6 cation filer has promised to provide; or 7 ‘‘(ii) the procompetitive benefits of the 8 agreement outweigh the anticompetitive ef- 9 fects of the agreement. 10 ‘‘(b) LIMITATIONS.—In determining whether the set- 11 tling parties have met their burden under subsection 12 (a)(2)(B), the fact finder shall not presume— 13 ‘‘(1) that entry would not have occurred until 14 the expiration of the relevant patent or statutory ex- 15 clusivity; or 16 ‘‘(2) that the agreement’s provision for entry of 17 the ANDA product or biosimilar biological product 18 prior to the expiration of the relevant patent or stat- 19 utory exclusivity means that the agreement is pro- 20 competitive. 21 ‘‘(c) EXCLUSIONS.—Nothing in this section shall pro- 22 hibit a resolution or settlement of a patent infringement 23 claim in which the consideration that the ANDA filer or 24 biosimilar biological product application filer receives as 25 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2375.RH H2375 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 2375 RH part of the resolution or settlement includes only one or 1 more of the following: 2 ‘‘(1) The right to market and secure final regu- 3 latory approval for the ANDA product or biosimilar 4 biological product at a date, whether certain or con- 5 tingent, in the United States prior to the expiration 6 of— 7 ‘‘(A) any patent that is the basis for the 8 patent infringement claim; or 9 ‘‘(B) any patent right or other statutory 10 exclusivity that would prevent the marketing of 11 such ANDA product or biosimilar biological 12 product. 13 ‘‘(2) A payment for reasonable litigation ex- 14 penses not to exceed— 15 ‘‘(A) for calendar year 2019, $7,500,000; 16 and 17 ‘‘(B) for calendar year 2020 and each cal- 18 endar year thereafter, the amount determined 19 for the preceding calendar year adjusted to re- 20 flect the percentage increase (if any) in the 21 Producer Price Index for Legal Services pub- 22 lished by the Bureau of Labor Statistics of the 23 Department of Labor for the then most recent 24 12-month period ending December 31. 25 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2375.RH H2375 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 2375 RH ‘‘(3) A covenant not to sue on any claim that 1 the ANDA product or biosimilar biological product 2 infringes a United States patent. 3 ‘‘(d) ENFORCEMENT.— 4 ‘‘(1) ENFORCEMENT.—A violation of this sec- 5 tion shall be treated as an unfair method of competi- 6 tion under section 5(a)(1) of the Federal Trade 7 Commission Act (15 U.S.C. 45(a)(1)). 8 ‘‘(2) JUDICIAL REVIEW.— 9 ‘‘(A) IN GENERAL.—Any party that is sub- 10 ject to a final order of the Commission, issued 11 in an administrative adjudicative proceeding 12 under the authority of subsection (a)(1), may, 13 within 30 days of the issuance of such order, 14 petition for review of such order in— 15 ‘‘(i) the United States Court of Ap- 16 peals for the District of Columbia Circuit; 17 ‘‘(ii) the United States Court of Ap- 18 peals for the circuit in which the ultimate 19 parent entity, as defined in section 20 801.1(a)(3) of title 16, Code of Federal 21 Regulations, or any successor thereto, of 22 the NDA holder or biological product li- 23 cense holder is incorporated as of the date 24 that the NDA or biological product license 25 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2375.RH H2375 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 2375 RH application, as applicable, is filed with the 1 Commissioner of Food and Drugs; or 2 ‘‘(iii) the United States Court of Ap- 3 peals for the circuit in which the ultimate 4 parent entity of the ANDA filer or bio- 5 similar biological product application filer 6 is incorporated as of the date that the 7 ANDA or biosimilar biological product ap- 8 plication is filed with the Commissioner of 9 Food and Drugs. 10 ‘‘(B) TREATMENT OF FINDINGS.—In a 11 proceeding for judicial review of a final order of 12 the Commission, the findings of the Commis- 13 sion as to the facts, if supported by evidence, 14 shall be conclusive. 15 ‘‘(e) ANTITRUST LAWS.—Nothing in this section 16 shall modify, impair, limit, or supersede the applicability 17 of the antitrust laws as defined in subsection (a) of the 18 first section of the Clayton Act (15 U.S.C. 12(a)), and 19 of section 5 of this Act to the extent that section 5 applies 20 to unfair methods of competition. Nothing in this section 21 shall modify, impair, limit, or supersede the right of an 22 ANDA filer or biosimilar biological product application 23 filer to assert claims or counterclaims against any person, 24 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2375.RH H2375 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 2375 RH under the antitrust laws or other laws relating to unfair 1 competition. 2 ‘‘(f) PENALTIES.— 3 ‘‘(1) FORFEITURE.—Each party that violates or 4 assists in the violation of this section shall forfeit 5 and pay to the United States a civil penalty suffi- 6 cient to deter violations of this section, but in no 7 event greater than 3 times the value received by the 8 party that is reasonably attributable to the violation 9 of this section. If no such value has been received by 10 the NDA holder, biological product license holder, 11 the ANDA filer, or biosimilar biological product ap- 12 plication filer the penalty to the NDA holder, bio- 13 logical product license holder, the ANDA filer, or 14 biosimilar biological product application filer shall be 15 sufficient to deter violations, but in no event greater 16 than 3 times the value given to an ANDA filer or 17 biosimilar biological product application filer reason- 18 ably attributable to the violation of this section. 19 Such penalty shall accrue to the United States and 20 may be recovered in a civil action brought by the 21 Commission, in its own name by any of its attorneys 22 designated by it for such purpose, in a district court 23 of the United States against any party that violates 24 this section. In such actions, the United States dis- 25 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2375.RH H2375 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 2375 RH trict courts are empowered to grant mandatory in- 1 junctions and such other and further equitable relief 2 as they deem appropriate. 3 ‘‘(2) CEASE AND DESIST.— 4 ‘‘(A) IN GENERAL.—If the Commission has 5 issued a cease and desist order with respect to 6 a party in an administrative adjudicative pro- 7 ceeding under the authority of subsection 8 (a)(1), an action brought pursuant to para- 9 graph (1) may be commenced against such 10 party at any time before the expiration of 1 11 year after such order becomes final pursuant to 12 section 5(g). 13 ‘‘(B) EXCEPTION.—In an action under 14 subparagraph (A), the findings of the Commis- 15 sion as to the material facts in the administra- 16 tive adjudicative proceeding with respect to the 17 violation of this section by a party shall be con- 18 clusive unless— 19 ‘‘(i) the terms of such cease and de- 20 sist order expressly provide that the Com- 21 mission’s findings shall not be conclusive; 22 or 23 ‘‘(ii) the order became final by reason 24 of section 5(g)(1), in which case such find- 25 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2375.RH H2375 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 2375 RH ing shall be conclusive if supported by evi- 1 dence. 2 ‘‘(3) CIVIL PENALTY.—In determining the 3 amount of the civil penalty described in this section, 4 the court shall take into account— 5 ‘‘(A) the nature, circumstances, extent, 6 and gravity of the violation; 7 ‘‘(B) with respect to the violator, the de- 8 gree of culpability, any history of violations, the 9 ability to pay, any effect on the ability to con- 10 tinue doing business, profits earned by the 11 NDA holder, biological product license holder, 12 the ANDA filer, or biosimilar biological product 13 application filer, compensation received by the 14 ANDA filer or biosimilar biological product ap- 15 plication filer, and the amount of commerce af- 16 fected; and 17 ‘‘(C) other matters that justice requires. 18 ‘‘(4) REMEDIES IN ADDITION.—Remedies pro- 19 vided in this subsection are in addition to, and not 20 in lieu of, any other remedy provided by Federal 21 law. Nothing in this paragraph shall be construed to 22 affect any authority of the Commission under any 23 other provision of law. 24 ‘‘(g) DEFINITIONS.—In this section: 25 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2375.RH H2375 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 2375 RH ‘‘(1) AGREEMENT.—The term ‘agreement’ 1 means anything that would constitute an agreement 2 under section 1 of the Sherman Act (15 U.S.C. 1) 3 or section 5 of this Act. 4 ‘‘(2) AGREEMENT RESOLVING OR SETTLING A 5 PATENT INFRINGEMENT CLAIM.—The term ‘agree- 6 ment resolving or settling a patent infringement 7 claim’ includes any agreement that is entered into 8 within 30 days of the resolution or the settlement of 9 the claim, or any other agreement that is contingent 10 upon, provides a contingent condition for, or is oth- 11 erwise related to the resolution or settlement of the 12 claim. 13 ‘‘(3) ANDA.—The term ‘ANDA’ means an ab- 14 breviated new drug application filed under section 15 505(j) of the Federal Food, Drug, and Cosmetic Act 16 (21 U.S.C. 355(j)) or a new drug application filed 17 under section 505(b)(2) of the Federal Food, Drug, 18 and Cosmetic Act (21 U.S.C. 355(b)(2)). 19 ‘‘(4) ANDA FILER.—The term ‘ANDA filer’ 20 means a party that owns or controls an ANDA filed 21 with the Food and Drug Administration or has the 22 exclusive rights under such ANDA to distribute the 23 ANDA product. 24 VerDate Sep 11 2014 18:10 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2375.RH H2375 pbinns on DSKJLVW7X2PROD with BILLS 13 •HR 2375 RH ‘‘(5) ANDA PRODUCT.—The term ‘ANDA 1 product’ means the product to be manufactured 2 under the ANDA that is the subject of the patent 3 infringement claim. 4 ‘‘(6) BIOLOGICAL PRODUCT.—The term ‘bio- 5 logical product’ has the meaning given such term in 6 section 351(i)(1) of the [Text truncated for display. 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