Affordable Prescriptions for Patients Through Promoting Competition Act of 2019

IB Union Calendar No. 578 116TH CONGRESS 2D SESSION H. R. 5133 [Report No. 116–695] To amend the Federal Trade Commission Act to prohibit anticompetitive behaviors by drug product manufacturers, and for other purposes. IN THE HOUSE OF REPRESENTATIVES NOVEMBER 18, 2019 Mr. CICILLINE (for himself, Mr. COLLINS of Georgia, Mr. NADLER, and Mr. SENSENBRENNER) introduced the following bill; which was referred to the Committee on the Judiciary DECEMBER 24, 2020 Additional sponsors: Mrs. MCBATH and Mr. CLINE DECEMBER 24, 2020 Reported from the Committee on the Judiciary; committed to the Committee of the Whole House on the State of the Union and ordered to be printed VerDate Sep 11 2014 18:12 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H5133.RH H5133 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 5133 RH A BILL To amend the Federal Trade Commission Act to prohibit anticompetitive behaviors by drug product manufactur- ers, and for other purposes. VerDate Sep 11 2014 18:12 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H5133.RH H5133 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 5133 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 ‘‘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 ‘‘SEC. 27. PRODUCT HOPPING. 11 ‘‘(a) DEFINITIONS.—In this section: 12 ‘‘(1) ABBREVIATED NEW DRUG APPLICATION.— 13 The term ‘abbreviated new drug application’ means 14 an application under subsection (b)(2) or (j) of sec- 15 tion 505 of the Federal Food, Drug, and Cosmetic 16 Act (21 U.S.C. 355). 17 ‘‘(2) BIOSIMILAR BIOLOGICAL PRODUCT.—The 18 term ‘biosimilar biological product’ means a biologi- 19 cal product licensed under section 351(k) of the 20 Public Health Service Act (42 U.S.C. 262(k)). 21 ‘‘(3) BIOSIMILAR BIOLOGICAL PRODUCT LI- 22 CENSE APPLICATION.—The term ‘biosimilar biologi- 23 cal product license application’ means an application 24 VerDate Sep 11 2014 18:12 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5133.RH H5133 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 5133 RH submitted under section 351(k) of the Public Health 1 Service Act (42 U.S.C. 262(k)). 2 ‘‘(4) FOLLOW-ON PRODUCT.—The term ‘follow- 3 on product’— 4 ‘‘(A) means a drug approved through an 5 application or supplement to an application sub- 6 mitted under section 505(b) of the Federal 7 Food, Drug, and Cosmetic Act (21 U.S.C. 8 355(c)) or a biological product licensed through 9 an application or supplement to an application 10 submitted under section 351(a) of the Public 11 Health Service Act (42 U.S.C. 262(a)) for a 12 change, modification, or reformulation to the 13 same manufacturer’s previously approved drug 14 or biological product that treats the same or a 15 related indication; 16 ‘‘(B) excludes such an application or sup- 17 plement to an application for a change, modi- 18 fication, or reformulation of a drug or biological 19 product that is requested by the Secretary or 20 necessary to comply with law, including sections 21 505A and 505B of the Federal Food, Drug, 22 and Cosmetic Act (21 U.S.C. 355a, 355c); 23 ‘‘(C) excludes such an application or sup- 24 plement to an application submitted under sec- 25 VerDate Sep 11 2014 18:12 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5133.RH H5133 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 5133 RH tion 505(b) of the Federal Food, Drug, and 1 Cosmetic Act (21 U.S.C. 355(c)) that has been 2 granted New Chemical Entity exclusivity (21 3 U.S.C. 355(c)(3)(E)(ii)) by the Food and Drug 4 Administration; and 5 ‘‘(D) excludes such an application or sup- 6 plement submitted under section 351(a) of the 7 Public Health Service Act (42 U.S.C. 262(a)) 8 that has been granted exclusivity pursuant to 9 section 351(k)(7) of such Act (42 U.S.C. 10 262(k)(7)). 11 ‘‘(5) COMMISSION.—The term ‘Commission’ 12 means the Federal Trade Commission 13 ‘‘(6) DISADVANTAGE.—The term ‘disadvantage’ 14 means to impede the listed drug or reference prod- 15 uct’s ability to compete on the merits with the fol- 16 low-on product. This term excludes actions that con- 17 sist solely of— 18 ‘‘(A) truthful, non-misleading promotional 19 marketing; or 20 ‘‘(B) ceasing promotional marketing for 21 the listed drug or reference product. 22 ‘‘(7) GENERIC DRUG.—The term ‘generic drug’ 23 means a drug approved under an application sub- 24 mitted under subsection (b)(2) or (j) of section 505 25 VerDate Sep 11 2014 18:12 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5133.RH H5133 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 5133 RH of the Federal Food, Drug, and Cosmetic Act (21 1 U.S.C. 355). 2 ‘‘(8) LISTED DRUG.—The term ‘listed drug’ 3 means a drug listed under section 505(j)(7) of the 4 Federal Food, Drug, and Cosmetic Act (21 U.S.C. 5 355(j)(7)). 6 ‘‘(9) MANUFACTURER.—The term ‘manufac- 7 turer’ means the holder, licensee, or assignee of— 8 ‘‘(A) an approved application for a drug 9 under section 505(c) of the Federal Food, 10 Drug, and Cosmetic Act (21 U.S.C. 355(c)); or 11 ‘‘(B) a biological product license under sec- 12 tion 351(a) of the Public Health Service Act 13 (42 U.S.C. 262(a)). 14 ‘‘(10) REFERENCE PRODUCT.—The term ‘ref- 15 erence product’ has the meaning given the term in 16 section 351(i) of the Public Health Service Act (42 17 U.S.C. 262(i)). 18 ‘‘(11) ULTIMATE PARENT ENTITY.—The term 19 ‘ultimate parent entity’ has the meaning given the 20 term in section 801.1 of title 16, Code of Federal 21 Regulations, or any successor regulation. 22 ‘‘(b) PROHIBITION ON PRODUCT HOPPING.— 23 ‘‘(1) PRIMA FACIE.—Except as provided in 24 paragraph (2), a manufacturer of a reference prod- 25 VerDate Sep 11 2014 18:12 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5133.RH H5133 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 5133 RH uct or listed drug shall be considered to have en- 1 gaged in an unfair method of competition in or af- 2 fecting commerce in violation of section 5(a) of the 3 Federal Trade Commission Act if complaint counsel 4 or the Commission demonstrates by a preponderance 5 of the evidence in a proceeding initiated by the Com- 6 mission under subsection (c)(1), or in a suit brought 7 under subparagraph (B) or (C) of subsection (c)(1), 8 that, during the period beginning on the date on 9 which the manufacturer of the reference product or 10 listed drug first receives notice that an applicant has 11 submitted to the Commissioner of Food and Drugs 12 an abbreviated new drug application or biosimilar bi- 13 ological product license application and ending on 14 the date that is the earlier of 180 days after the 15 date on which that generic drug or biosimilar bio- 16 logical product or another generic drug or biosimilar 17 biological product referencing the listed drug or ref- 18 erence product is first marketed or 3 years after the 19 date on which the follow-on product is first mar- 20 keted, the manufacturer engaged in either of the fol- 21 lowing actions: 22 ‘‘(A) The manufacturer engaged in a hard 23 switch, which shall be established by dem- 24 VerDate Sep 11 2014 18:12 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5133.RH H5133 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 5133 RH onstrating that the manufacturer engaged in ei- 1 ther of the actions described in clause (i) or (ii): 2 ‘‘(i) Upon the request of the manufac- 3 turer of the listed drug or reference prod- 4 uct, the Commissioner of Food and Drugs 5 withdrew the approval of the application 6 for the listed drug or reference product or 7 placed the listed drug or reference product 8 on the discontinued products list; and 9 ‘‘(I) the manufacturer marketed or 10 sold a follow-on product. 11 ‘‘(ii)(I) The manufacturer of the listed 12 drug or reference product— 13 ‘‘(aa) withdrew, discontinued the 14 manufacture of, or withdrew the ap- 15 plication with respect to, or an- 16 nounced withdrawal of, discontinuance 17 of the manufacture of, or withdrawal 18 of the application with respect to, the 19 drug or reference product in a manner 20 that impedes competition from a ge- 21 neric drug or a biosimilar biological 22 product, as established by objective 23 circumstances, unless such actions 24 were taken by the manufacturer pur- 25 VerDate Sep 11 2014 18:12 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5133.RH H5133 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 5133 RH suant to a request of the Commis- 1 sioner of Food and Drugs; or 2 ‘‘(bb) destroyed the inventory of 3 the listed drug or reference product in 4 a manner that impedes competition 5 from a generic drug or a biosimilar bi- 6 ological product, which may be estab- 7 lished by objective circumstances; and 8 ‘‘(II) marketed or sold a follow-on 9 product. 10 ‘‘(B) The manufacturer engaged in a soft 11 switch, which shall be established by dem- 12 onstrating that the manufacturer engaged in 13 both of the following actions: 14 ‘‘(i) The manufacturer took one or 15 more actions with respect to the listed 16 drug or reference product other than those 17 described in subparagraph (A) that un- 18 fairly disadvantage the listed drug or ref- 19 erence product relative to the follow-on 20 product described in clause (ii) in a man- 21 ner that impedes competition from either a 22 generic drug or a biosimilar biological 23 product, which may be established by ob- 24 jective circumstances. 25 VerDate Sep 11 2014 18:12 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5133.RH H5133 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 5133 RH ‘‘(ii) The manufacturer marketed or 1 sold a follow-on product. 2 ‘‘(2) JUSTIFICATION.— 3 ‘‘(A) IN GENERAL.—Subject to paragraph 4 (3), the actions described in paragraph (1) by 5 a manufacturer of a listed drug or reference 6 product shall not be considered to be an unfair 7 method of competition in or affecting commerce 8 if— 9 ‘‘(i) the manufacturer demonstrates to 10 the Commission or a district court of the 11 United States, as applicable, by a prepon- 12 derance of the evidence in a proceeding ini- 13 tiated by the Commission under subsection 14 (c)(1), or in a suit brought under subpara- 15 graph (B) or (C) of subsection (c)(1), 16 that— 17 ‘‘(I) the manufacturer would 18 have taken the actions regardless of 19 whether a generic drug that ref- 20 erences the listed drug or biosimilar 21 biological product that references the 22 reference product had already entered 23 the market; and 24 VerDate Sep 11 2014 18:12 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5133.RH H5133 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 5133 RH ‘‘(II)(aa) with respect to a hard 1 switch under paragraph (1)(A)(i), the 2 manufacturer took the action for rea- 3 sons relating to the safety risk to pa- 4 tients of the listed drug or reference 5 product; 6 ‘‘(bb) with respect to an action 7 described in item (aa) or (bb) of para- 8 graph (1)(A)(ii)(I), there is a supply 9 disruption that— 10 ‘‘(AA) is outside of the con- 11 trol of the manufacturer; 12 ‘‘(BB) prevents the produc- 13 tion or distribution of the appli- 14 cable listed drug or reference 15 product; and 16 ‘‘(CC) cannot be remedied 17 by reasonable efforts; or 18 ‘‘(cc) with respect to a soft 19 switch under paragraph (1)(B), the 20 manufacturer had legitimate pro-com- 21 petitive reasons, apart from the finan- 22 cial effects of reduced competition, to 23 take the action. 24 VerDate Sep 11 2014 18:12 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5133.RH H5133 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 5133 RH ‘‘(B) RULE OF CONSTRUCTION.—Nothing 1 in subparagraph (A) may be construed to limit 2 the information that the Commission may oth- 3 erwise obtain in any proceeding or action insti- 4 tuted with respect to a violation of this section. 5 ‘‘(3) RESPONSE.—With respect to a justifica- 6 tion offered by a manufacturer under paragraph (2), 7 complaint counsel or the Commission, as applicable, 8 will prevail in its case if it establishes by a prepon- 9 derance of the evidence that— 10 ‘‘(A) the conduct described in subsection 11 (b)(1) is not reasonably necessary to address or 12 achieve the justifications claimed under para- 13 graph (2)(A)(II)(aa–cc), or such justifications 14 could be reasonably addressed or achieved 15 through less anticompetitive means; or 16 ‘‘(B) the pro-competitive benefits from the 17 conduct described in subparagraph (A) or (B) 18 of paragraph (1), as applicable, do not outweigh 19 any anticompetitive effects of the conduct, even 20 in consideration of the justification so offered. 21 ‘‘(c) ENFORCEMENT.— 22 ‘‘(1) ENFORCEMENT BY THE FEDERAL TRADE 23 COMMISSION.—Except as provided in paragraph (2), 24 the Commission shall enforce this section in the 25 VerDate Sep 11 2014 18:12 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H5133.RH H5133 pbinns on DSKJLVW7X2PROD with BILLS 13 •HR 5133 RH same manner, by the same means, and with the 1 same jurisdiction, powers, duties, and remedies pro- 2 vided for by all applicable terms and provisions of 3 the Federal Trade Commission Act (15 U.S.C. 45 et 4 seq.). 5 ‘‘(2) JUDICIAL REVIEW.— 6 ‘‘(A) IN GENERAL.—Notwithstanding any 7 provision of section 5 of the Federal Trade 8 Commission Act, any manufacturer that is sub- 9 ject to a final order of the Commission that is 10 issued in a proceeding initiated under para- 11 graph (1) may, not later than 30 days after the 12 date on which the Commission issues the order, 13 petition for review of the order in— 14 ‘‘(i) the United States Court of Ap- 15 peals for the District of Columbia Circuit; 16 or 17 ‘‘(ii) the court of appeals of the 18 United States for the circuit in which the 19 ultimate parent entity of the manufacturer 20 is incorporated. 21 ‘‘(B) TREATMENT OF FINDINGS.—In a re- 22 view of an order issued by the Commission con- 23 ducted by a court of appeals of the United 24 States under subparagraph (A), the factual 25 VerDate Sep 11 2014 18:12 Dec 26, 2020 Jkt 019200 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\H5133.RH H5133 pbinns on DSKJLVW7X2PROD with BILLS 14 •HR 5133 RH findings of the Commission shall be conclusive 1 if those facts are supported by the evidence. 2 ‘‘(3) RULES OF CONSTRUCTION.—Nothing in 3 this subsection may be construed as— 4 ‘‘(A) requiring the Commission to bring a 5 sui [Text truncated for display. 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