Affordable Prescriptions for Patients Through Promoting Competition Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 4398 To amend the Federal Trade Commission Act to prohibit anticompetitive behaviors by drug product manufacturers, and for other purposes. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 19, 2019 Mr. CICILLINE introduced the following bill; which was referred to the Committee on the Judiciary A BILL To amend the Federal Trade Commission Act to prohibit anticompetitive behaviors by drug product manufactur- ers, 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 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Affordable Prescrip- 4 tions for Patients Through Promoting Competition Act of 5 2019’’. 6 SEC. 2. PRODUCT HOPPING. 7 (a) IN GENERAL.—The Federal Trade Commission 8 Act (15 U.S.C. 41 et seq.) is amended by inserting after 9 section 26 (15 U.S.C. 57c–2) the following: 10 VerDate Sep 11 2014 21:44 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H4398.IH H4398 kjohnson on DSK79L0C42 with BILLS 2 •HR 4398 IH ‘‘SEC. 27. PRODUCT HOPPING. 1 ‘‘(a) DEFINITIONS.—In this section: 2 ‘‘(1) ABBREVIATED NEW DRUG APPLICATION.— 3 The term ‘abbreviated new drug application’ means 4 an application under subsection (b)(2) or (j) of sec- 5 tion 505 of the Federal Food, Drug, and Cosmetic 6 Act (21 U.S.C. 355). 7 ‘‘(2) BIOSIMILAR BIOLOGICAL PRODUCT.—The 8 term ‘biosimilar biological product’ means a biologi- 9 cal product licensed under section 351(k) of the 10 Public Health Service Act (42 U.S.C. 262(k)). 11 ‘‘(3) BIOSIMILAR BIOLOGICAL PRODUCT LI- 12 CENSE APPLICATION.—The term ‘biosimilar biologi- 13 cal product license application’ means an application 14 submitted under section 351(k) of the Public Health 15 Service Act (42 U.S.C. 262(k)). 16 ‘‘(4) FOLLOW-ON PRODUCT.—The term ‘follow- 17 on product’— 18 ‘‘(A) means a drug approved through an 19 application or supplement to an application sub- 20 mitted under section 505(b) of the Federal 21 Food, Drug, and Cosmetic Act (21 U.S.C. 22 355(c)) or a biological product licensed through 23 an application or supplement to an application 24 submitted under section 351(a) of the Public 25 Health Service Act (42 U.S.C. 262(a)) for a 26 VerDate Sep 11 2014 21:44 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H4398.IH H4398 kjohnson on DSK79L0C42 with BILLS 3 •HR 4398 IH change, modification, or reformulation to the 1 same manufacturer’s previously approved drug 2 or biological product that treats the same med- 3 ical condition; and 4 ‘‘(B) excludes such an application or sup- 5 plement to an application for a change, modi- 6 fication, or reformulation of a drug or biological 7 product that is requested by the Secretary or 8 necessary to comply with law, including sections 9 505A and 505B of the Federal Food, Drug, 10 and Cosmetic Act (21 U.S.C. 355a, 355c). 11 ‘‘(5) GENERIC DRUG.—The term ‘generic drug’ 12 means a drug approved under an application sub- 13 mitted under subsection (b)(2) or (j) of section 505 14 of the Federal Food, Drug, and Cosmetic Act (21 15 U.S.C. 355). 16 ‘‘(6) LISTED DRUG.—The term ‘listed drug’ 17 means a drug listed under section 505(j)(7) of the 18 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 19 355(j)(7)). 20 ‘‘(7) MANUFACTURER.—The term ‘manufac- 21 turer’ means the holder, licensee, or assignee of— 22 ‘‘(A) an approved application for a drug 23 under section 505(c) of the Federal Food, 24 Drug, and Cosmetic Act (21 U.S.C. 355(c)); or 25 VerDate Sep 11 2014 21:44 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H4398.IH H4398 kjohnson on DSK79L0C42 with BILLS 4 •HR 4398 IH ‘‘(B) a biological product license under sec- 1 tion 351(a) of the Public Health Service Act 2 (42 U.S.C. 262(a)). 3 ‘‘(8) REFERENCE PRODUCT.—The term ‘ref- 4 erence product’ has the meaning given the term in 5 section 351(i) of the Public Health Service Act (42 6 U.S.C. 262(i)). 7 ‘‘(9) ULTIMATE PARENT ENTITY.—The term 8 ‘ultimate parent entity’ has the meaning given the 9 term in section 801.1 of title 16, Code of Federal 10 Regulations, or any successor regulation. 11 ‘‘(b) PROHIBITION ON PRODUCT HOPPING.— 12 ‘‘(1) PRIMA FACIE.—Except as provided in 13 paragraph (2), a manufacturer of a reference prod- 14 uct or listed drug shall be considered to have en- 15 gaged in an unfair method of competition in or af- 16 fecting commerce in violation of section 5(a) if the 17 Commission demonstrates by a preponderance of the 18 evidence in a proceeding initiated by the Commission 19 under subsection (c)(1)(A), or in a suit brought 20 under subparagraph (B) or (C) of subsection (c)(1), 21 that, during the period beginning on the date on 22 which the manufacturer of the reference product or 23 listed drug first receives notice that an applicant has 24 submitted to the Commissioner of Food and Drugs 25 VerDate Sep 11 2014 21:44 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H4398.IH H4398 kjohnson on DSK79L0C42 with BILLS 5 •HR 4398 IH an abbreviated new drug application or biosimilar bi- 1 ological product license application and ending on 2 the date that is 180 days after the date on which 3 that generic drug or biosimilar biological product is 4 first marketed, the manufacturer engaged in either 5 of the following actions: 6 ‘‘(A) The manufacturer engaged in a hard 7 switch, which shall be established by dem- 8 onstrating that the manufacturer engaged in ei- 9 ther of the following actions: 10 ‘‘(i) Upon the request of the manufac- 11 turer of the listed drug or reference prod- 12 uct, the Commissioner of Food and Drugs 13 withdrew the approval of the application 14 for the listed drug or reference product or 15 placed the listed drug or reference product 16 on the discontinued products list and the 17 manufacturer marketed or sold a follow-on 18 product. 19 ‘‘(ii)(I) The manufacturer of the listed 20 drug or reference product— 21 ‘‘(aa) announced withdrawal of, 22 discontinuance of the manufacture of, 23 or intent to withdraw the application 24 with respect to the drug or reference 25 VerDate Sep 11 2014 21:44 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H4398.IH H4398 kjohnson on DSK79L0C42 with BILLS 6 •HR 4398 IH product in a manner that impedes 1 competition from a generic drug or a 2 biosimilar biological product, as estab- 3 lished by objective circumstances; or 4 ‘‘(bb) destroyed the inventory of 5 the listed drug or reference product in 6 a manner that impedes competition 7 from a generic drug or a biosimilar bi- 8 ological product, which may be estab- 9 lished by objective circumstances; and 10 ‘‘(II) marketed or sold a follow-on 11 product. 12 ‘‘(B) The manufacturer engaged in a soft 13 switch, which shall be established by dem- 14 onstrating that the manufacturer engaged in 15 both of the following actions: 16 ‘‘(i) The manufacturer took actions 17 with respect to the listed drug or reference 18 product other than those described in sub- 19 paragraph (A) that unfairly disadvantage 20 the listed drug or reference product rel- 21 ative to the follow-on product described in 22 clause (ii) in a manner that impedes com- 23 petition from a generic drug or a bio- 24 similar biological product that is highly 25 VerDate Sep 11 2014 21:44 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H4398.IH H4398 kjohnson on DSK79L0C42 with BILLS 7 •HR 4398 IH similar to, and has no clinically meaningful 1 difference with respect to safety, purity, 2 and potency from, the reference product, 3 which may be established by objective cir- 4 cumstances. 5 ‘‘(ii) The manufacturer marketed or 6 sold a follow-on product. 7 ‘‘(2) JUSTIFICATION.— 8 ‘‘(A) IN GENERAL.—Subject to paragraph 9 (3), the actions described in paragraph (1) by 10 a manufacturer of a listed drug or reference 11 product shall not be considered to be an unfair 12 method of competition in or affecting commerce 13 if— 14 ‘‘(i) the manufacturer demonstrates to 15 the Commission or a district court of the 16 United States, as applicable, by a prepon- 17 derance of the evidence in a proceeding ini- 18 tiated by the Commission under subsection 19 (c)(1)(A), or in a suit brought under sub- 20 paragraph (B) or (C) of subsection (c)(1), 21 that— 22 ‘‘(I) the manufacturer would 23 have taken the actions regardless of 24 whether a generic drug that ref- 25 VerDate Sep 11 2014 21:44 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H4398.IH H4398 kjohnson on DSK79L0C42 with BILLS 8 •HR 4398 IH erences the listed drug or biosimilar 1 biological product that references the 2 reference product had already entered 3 the market; and 4 ‘‘(II)(aa) with respect to a hard 5 switch under paragraph (1)(A), the 6 manufacturer took the action for rea- 7 sons relating to the safety risk to pa- 8 tients of the listed drug or reference 9 product; 10 ‘‘(bb) with respect to an action 11 described in item (aa) or (bb) of para- 12 graph (1)(A)(ii)(I), there is a supply 13 disruption that— 14 ‘‘(AA) is outside of the con- 15 trol of the manufacturer; 16 ‘‘(BB) prevents the produc- 17 tion or distribution of the appli- 18 cable listed drug or reference 19 product; and 20 ‘‘(CC) cannot be remedied 21 by reasonable efforts; or 22 ‘‘(cc) with respect to a soft 23 switch under paragraph (1)(B), the 24 manufacturer had legitimate pro-com- 25 VerDate Sep 11 2014 21:44 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H4398.IH H4398 kjohnson on DSK79L0C42 with BILLS 9 •HR 4398 IH petitive reasons, apart from the finan- 1 cial effects of reduced competition, to 2 take the action. 3 ‘‘(B) RULE OF CONSTRUCTION.—Nothing 4 in subparagraph (A) may be construed to limit 5 the information that the Commission may oth- 6 erwise obtain in any proceeding or action insti- 7 tuted with respect to a violation of this section. 8 ‘‘(3) RESPONSE.—With respect to a justifica- 9 tion offered by a manufacturer under paragraph (2), 10 the Commission may— 11 ‘‘(A) rebut any evidence presented by a 12 manufacturer during that justification; or 13 ‘‘(B) establish by a preponderance of the 14 evidence that, on balance, the pro-competitive 15 benefits from the conduct described in subpara- 16 graph (A) or (B) of paragraph (1), as applica- 17 ble, do not outweigh any anticompetitive effects 18 of the conduct, even in consideration of the jus- 19 tification so offered. 20 ‘‘(c) ENFORCEMENT.— 21 ‘‘(1) IN GENERAL.—If the Commission has rea- 22 son to believe that any manufacturer has violated, is 23 violating, or is about to violate this section, the 24 Commission may take any of the following actions: 25 VerDate Sep 11 2014 21:44 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H4398.IH H4398 kjohnson on DSK79L0C42 with BILLS 10 •HR 4398 IH ‘‘(A) Institute a proceeding— 1 ‘‘(i) that, except as provided in para- 2 graph (2), complies with the requirements 3 under section 5(b); and 4 ‘‘(ii) in which the Commission may 5 impose on the manufacturer any penalty 6 that the Commission may impose for a vio- 7 lation of section 5. 8 ‘‘(B) In the same manner and to the same 9 extent as provided in section 13(b), bring suit 10 in a district court of the United States to tem- 11 porarily enjoin the action of the manufacturer. 12 ‘‘(C) Bring suit in a district court of the 13 United States, in which the Commission may 14 seek— 15 ‘‘(i) to permanently enjoin the action 16 of the manufacturer; 17 ‘‘(ii) any of the remedies described in 18 paragraph (3); and 19 ‘‘(iii) any other equitable remedy, in- 20 cluding ancillary equitable relief. 21 ‘‘(2) JUDICIAL REVIEW.— 22 ‘‘(A) IN GENERAL.—Notwithstanding any 23 provision of section 5, any manufacturer that is 24 subject to a final order of the Commission that 25 VerDate Sep 11 2014 21:44 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H4398.IH H4398 kjohnson on DSK79L0C42 with BILLS 11 •HR 4398 IH is issued in a proceeding initiated under para- 1 graph (1)(A) may, not later than 30 days after 2 the date on which the Commission issues the 3 order, petition for review of the order in— 4 ‘‘(i) the United States Court of Ap- 5 peals for the District of Columbia Circuit; 6 or 7 ‘‘(ii) the court of appeals of the 8 United States for the circuit in which the 9 ultimate parent entity of the manufacturer 10 is incorporated. 11 ‘‘(B) TREATMENT OF FINDINGS.—In a re- 12 view of an order issued by the Commission con- 13 ducted by a court of appeals of the United 14 States under subparagraph (A), the factual 15 findings of the Commission shall be conclusive 16 if those facts are supported by the evidence. 17 ‘‘(3) EQUITABLE REMEDIES.— 18 ‘‘(A) DISGORGEMENT.— 19 ‘‘(i) IN GENERAL.—In a suit brought 20 under paragraph (1)(C), the Commission 21 may seek, and the court may order, 22 disgorgement of any unjust enrichment 23 that a person obtained as a result of the 24 violation that gives rise to the suit. 25 VerDate Sep 11 2014 21:44 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H4398.IH H4398 kjohnson on DSK79L0C42 with BILLS 12 •HR 4398 IH ‘‘(ii) CALCULATION.—Any disgorge- 1 ment that is ordered with respect to a per- 2 son under clause (i) shall be offset by any 3 amount of restitution ordered under sub- 4 paragraph (B). 5 ‘‘(iii) LIMITATIONS PERIOD.—The 6 Commission may seek disgorgement under 7 this subparagraph not later than 5 years 8 after the latest date on which the person 9 from which the disgorgement is sought re- 10 ceives any unjust enrichment from the ef- 11 fects of the violation that gives rise to the 12 suit in which the Commission seeks the 13 disgorgement. 14 ‘‘(B) RESTITUTION.— 15 ‘‘(i) IN GENERAL.—In a suit brought 16 under paragraph (1)(C), the Commission 17 may seek, and the court may order, res- 18 titution with respect to the violation that 19 gives rise to the suit. 20 ‘‘(ii) LIMITATIONS PERIOD.—The 21 Commission may seek restitution under 22 this subparagraph not later than 5 years 23 after the latest date on which the person 24 from which the restitution is sought re- 25 VerDate Sep 11 2014 21:44 Sep 20, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H4398.IH H4398 kjohnson on DSK79L0C42 with BILLS 13 •HR 4398 IH ceives any unjust enrichment from the ef- 1 fects of the violation that gives rise to the 2 suit in which the Commission seeks the 3 restitution. 4 ‘‘(4) RULES OF CONSTRUCTION.—Nothing in 5 this subsection may be construed as— 6 ‘‘(A) requiring the Commission to bring a 7 suit seeking a temporary injunction under para- 8 graph (1)(B) before bringing a suit seeking a 9 permanent injunction under paragraph (1)(C [Text truncated for display. 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