[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 754 Reported in Senate (RS)]






                                                       Calendar No. 431
107th CONGRESS
  2d Session
                                 S. 754

                          [Report No. 107-167]

To enhance competition for prescription drugs by increasing the ability 
 of the Department of Justice and Federal Trade Commission to enforce 
 existing antitrust laws regarding brand name drugs and generic drugs.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 6, 2001

    Mr. Leahy (for himself, Mr. Kohl, Mr. Schumer, Mr. Durbin, Mr. 
 Feingold, and Ms. Cantwell) introduced the following bill; which was 
       read twice and referred to the Committee on the Judiciary

                             June 20, 2002

                Reported by Mr. Leahy, with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

_______________________________________________________________________

                                 A BILL


 
To enhance competition for prescription drugs by increasing the ability 
 of the Department of Justice and Federal Trade Commission to enforce 
 existing antitrust laws regarding brand name drugs and generic drugs.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

<DELETED>SECTION 1. SHORT TITLE.</DELETED>

<DELETED>    This Act may be cited as the ``Drug Competition Act of 
2001''.</DELETED>

<DELETED>SEC. 2. FINDINGS.</DELETED>

<DELETED>    Congress finds that--</DELETED>
        <DELETED>    (1) prescription drug costs are increasing at an 
        alarming rate and are a major worry of senior citizens and 
        American families;</DELETED>
        <DELETED>    (2) there is a potential for drug companies owning 
        patents on brand-name drugs to enter into private financial 
        deals with generic drug companies in a manner that could tend 
        to restrain trade and greatly reduce competition and increase 
        prescription drug costs for American citizens; and</DELETED>
        <DELETED>    (3) enhancing competition between generic drug 
        manufacturers and brand name manufacturers can significantly 
        reduce prescription drug costs to American families.</DELETED>

<DELETED>SEC. 3. PURPOSE.</DELETED>

<DELETED>    The purposes of this Act are--</DELETED>
        <DELETED>    (1) to provide timely notice to the Department of 
        Justice and the Federal Trade Commission regarding agreements 
        between companies owning patents on branded drugs and companies 
        who could manufacture generic or bioequivalent versions of such 
        branded drugs; and</DELETED>
        <DELETED>    (2) by providing timely notice, to--</DELETED>
                <DELETED>    (A) enhance the effectiveness and 
                efficiency of the enforcement of the antitrust laws of 
                the United States; and</DELETED>
                <DELETED>    (B) deter pharmaceutical companies from 
                engaging in anticompetitive actions or actions that 
                tend to unfairly restrain trade.</DELETED>

<DELETED>SEC. 4. DEFINITIONS.</DELETED>

<DELETED>    In this Act:</DELETED>
        <DELETED>    (1) Agreement.--The term ``agreement'' means an 
        agreement under section 1 of the Sherman Act (15 U.S.C. 1) or 
        section 5 of the Federal Trade Commission Act (15 U.S.C. 
        45).</DELETED>
        <DELETED>    (2) Antitrust laws.--The term ``antitrust laws'' 
        has the same meaning as in section 1 of the Clayton Act (15 
        U.S.C. 12), except that such term includes section 5 of the 
        Federal Trade Commission Act (15 U.S.C. 45) to the extent that 
        such section applies to unfair methods of 
        competition.</DELETED>
        <DELETED>    (3) ANDA.--The term ``ANDA'' means an Abbreviated 
        New Drug Application, as defined under section 505(j) of the 
        Federal Food, Drug and Cosmetic Act.</DELETED>
        <DELETED>    (4) Brand name drug company.--The term ``brand 
        name drug company'' means a person engaged in the manufacture 
        or marketing of a drug approved under section 505(b) of the 
        Federal Food, Drug and Cosmetic Act.</DELETED>
        <DELETED>    (5) Commission.--The term ``Commission'' means the 
        Federal Trade Commission.</DELETED>
        <DELETED>    (6) FDA.--The term ``FDA'' means the United States 
        Food and Drug Administration.</DELETED>
        <DELETED>    (7) Generic drug.--The term ``generic drug'' is a 
        product that the Food and Drug Administration has approved 
        under section 505(j) of the Federal Food, Drug and Cosmetic 
        Act.</DELETED>
        <DELETED>    (8) Generic drug applicant.--The term ``generic 
        drug applicant'' means a person who has filed or received 
        approval for an ANDA under section 505(j) of the Federal Food, 
        Drug and Cosmetic Act.</DELETED>
        <DELETED>    (9) NDA.--The term ``NDA'' means a New Drug 
        Application, as defined under section 505(b) et seq. of the 
        Federal Food, Drug and Cosmetic Act (21 U.S.C. 355(b) et 
        seq.)</DELETED>

<DELETED>SEC. 5. NOTIFICATION OF AGREEMENTS AFFECTING THE SALE OR 
              MARKETING OF GENERIC DRUGS.</DELETED>

<DELETED>    A brand name drug manufacturer and a generic drug 
manufacturer that enter into an agreement regarding the sale or 
manufacture of a generic drug equivalent of a brand name drug that is 
manufactured by that brand name manufacturer and which agreement could 
have the effect of limiting--</DELETED>
        <DELETED>    (1) the research, development, manufacture, 
        marketing or selling of a generic drug product that could be 
        approved for sale by the FDA pursuant to the ANDA; or</DELETED>
        <DELETED>    (2) the research, development, manufacture, 
        marketing or selling of a generic drug product that could be 
        approved by the FDA;</DELETED>
<DELETED>both shall file with the Commission and the Attorney General 
the text of the agreement, an explanation of the purpose and scope of 
the agreement and an explanation of whether the agreement could delay, 
restrain, limit, or in any way interfere with the production, 
manufacture or sale of the generic version of the drug in 
question.</DELETED>

<DELETED>SEC. 6. FILING DEADLINES.</DELETED>

<DELETED>    Any notice, agreement, or other material required to be 
filed under section 5 shall be filed with the Attorney General and the 
FTC not later than 10 business days after the date the agreements are 
executed.</DELETED>

<DELETED>SEC. 7. ENFORCEMENT.</DELETED>

<DELETED>    (a) Civil Fine.--Any person, or any officer, director, or 
partner thereof, who fails to comply with any provision of this Act 
shall be liable for a civil penalty of not more than $20,000 for each 
day during which such person is in violation of this Act. Such penalty 
may be recovered in a civil action brought by the United States, or 
brought by the Commission in accordance with the procedures established 
in section 16(a)(1) of the Federal Trade Commission Act (15 U.S.C. 
56(a)).</DELETED>
<DELETED>    (b) Compliance and Equitable Relief.--If any person, or 
any officer, director, partner, agent, or employee thereof, fails to 
comply with the notification requirement under section 5 of this Act, 
the United States district court may order compliance, and may grant 
such other equitable relief as the court in its discretion determines 
necessary or appropriate, upon application of the Commission or the 
Assistant Attorney General.</DELETED>

<DELETED>SEC. 8. RULEMAKING.</DELETED>

<DELETED>    The Commission, with the concurrence of the Assistant 
Attorney General and by rule in accordance with section 553 of title 5, 
consistent with the purposes of this Act--</DELETED>
        <DELETED>    (1) may require that the notice described in 
        section 5 of this Act be in such form and contain such 
        documentary material and information relevant to the agreement 
        as is necessary and appropriate to enable the Commission and 
        the Assistant Attorney General to determine whether such 
        agreement may violate the antitrust laws;</DELETED>
        <DELETED>    (2) may define the terms used in this 
        Act;</DELETED>
        <DELETED>    (3) may exempt classes of persons or agreements 
        from the requirements of this Act; and</DELETED>
        <DELETED>    (4) may prescribe such other rules as may be 
        necessary and appropriate to carry out the purposes of this 
        Act.</DELETED>

<DELETED>SEC. 9. EFFECTIVE DATES.</DELETED>

<DELETED>    This Act shall take effect 90 days after the date of 
enactment of this Act.</DELETED>

SECTION. 1. SHORT TITLE.

    This Act may be cited as the ``Drug Competition Act of 2001''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) prescription drug prices are increasing at an alarming 
        rate and are a major worry of many senior citizens and American 
        families;
            (2) there is a potential for companies with patent rights 
        regarding brand name drugs and companies which could 
        manufacture generic versions of such drugs to enter into 
        financial deals that could tend to restrain trade and greatly 
        reduce competition and increase prescription drug expenditures 
        for American citizens; and
            (3) enhancing competition among these companies can 
        significantly reduce prescription drug expenditures for 
        Americans.

SEC. 3. PURPOSES.

    The purposes of this Act are--
            (1) to provide timely notice to the Department of Justice 
        and the Federal Trade Commission regarding agreements between 
        companies with patent rights regarding brand name drugs and 
        companies which could manufacture generic versions of such 
        drugs; and
            (2) by providing timely notice, to enhance the 
        effectiveness and efficiency of the enforcement of the 
        antitrust and competition laws of the United States.

SEC. 4. DEFINITIONS.

    In this Act:
            (1) ANDA.--The term ``ANDA'' means an Abbreviated New Drug 
        Application, as defined under section 201(aa) of the Federal 
        Food, Drug, and Cosmetic Act (21 U.S.C. 321(aa)).
            (2) Assistant attorney general.--The term ``Assistant 
        Attorney General'' means the Assistant Attorney General in 
        charge of the Antitrust Division of the Department of Justice.
            (3) Brand name drug.--The term ``brand name drug'' means a 
        drug approved under section 505(c) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 355(c)).
            (4) Brand name drug company.--The term ``brand name drug 
        company'' means the party that received Food and Drug 
        Administration approval to market a brand name drug pursuant to 
        an NDA, where that drug is the subject of an ANDA, or a party 
        owning or controlling enforcement of any patent listed in the 
        Approved Drug Products With Therapeutic Equivalence Evaluations 
        of the Food and Drug Administration for that drug, under 
        section 505(b) of the Federal Food, Drug, and Cosmetic Act (21 
        U.S.C. 355(b)).
            (5) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (6) Generic drug.--The term ``generic drug'' means a 
        product that the Food and Drug Administration has approved 
        under section 505(j) of the Federal Food, Drug, and Cosmetic 
        Act (21 U.S.C. 355(j)).
            (7) Generic drug applicant.--The term ``generic drug 
        applicant'' means a person who has filed or received approval 
        for an ANDA under section 505(j) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355(j)).
            (8) NDA.--The term ``NDA'' means a New Drug Application, as 
        defined under section 505(b) et seq. of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 355(b) et seq.)

SEC. 5. NOTIFICATION OF AGREEMENTS.

    (a) In General.--
            (1) Requirement.--A generic drug applicant that has 
        submitted an ANDA containing a certification under section 
        505(j)(2)(vii)(IV) of the Federal Food, Drug, and Cosmetic Act 
        (21 U.S.C. 355(j)(2)(vii)(IV)) and a brand name drug company 
        that enter into an agreement described in paragraph (2), prior 
        to the generic drug that is the subject of the application 
        entering the market, shall each file the agreement as required 
        by subsection (b).
            (2) Definition.--An agreement described in this paragraph 
        is an agreement regarding--
                    (A) the manufacture, marketing or sale of the brand 
                name drug that is the subject of the generic drug 
                applicant's ANDA;
                    (B) the manufacture, marketing or sale of the 
                generic drug that is the subject of the generic drug 
                applicant's ANDA; or
                    (C) the 180-day period referred to in section 
                505(j)(5)(B)(iv) of the Federal Food, Drug, and 
                Cosmetic Act (21 U.S.C. 355(j)(5)(B)(iv)) as it applies 
                to such ANDA or to any other ANDA based on the same 
                brand name drug.
    (b) Filing.--
            (1) Agreement.--The generic drug applicant and the brand 
        name drug company entering into an agreement described in 
        subsection (a)(2) shall file with the Assistant Attorney 
        General and the Commission the text of any such agreement, 
        except that the generic drug applicant and the brand-name drug 
        company shall not be required to file an agreement that solely 
        concerns--
                    (A) purchase orders for raw material supplies;
                    (B) equipment and facility contracts; or
                    (C) employment or consulting contracts.
        (2) Other agreements.--The generic drug applicant and the brand 
        name drug company entering into an agreement described in 
        subsection (a)(2) shall file with the Assistant Attorney 
        General and the Commission the text of any other agreements not 
        described in subsection (a)(2) between the generic drug 
        applicant and the brand name drug company which are contingent 
        upon, provide a contingent condition for, or are otherwise 
        related to an agreement which must be filed under this Act.
            (3) Description.--In the event that any agreement required 
        to be filed by paragraph (1) or (2) has not been reduced to 
        text, both the generic drug applicant and the brand name drug 
        company shall file written descriptions of the non-textual 
        agreement or agreements that must be filed sufficient to reveal 
        all of the terms of the agreement or agreements.

SEC. 6. FILING DEADLINES.

    Any filing required under section 5 shall be filed with the 
Assistant Attorney General and the Commission not later than 10 
business days after the date the agreements are executed.

SEC. 7. DISCLOSURE EXEMPTION.

    Any information or documentary material filed with the Assistant 
Attorney General or the Commission pursuant to this Act shall be exempt 
from disclosure under section 552 of title 5, and no such information 
or documentary material may be made public, except as may be relevant 
to any administrative or judicial action or proceeding. Nothing in this 
section is intended to prevent disclosure to either body of Congress or 
to any duly authorized committee or subcommittee of the Congress.

SEC. 8. ENFORCEMENT.

    (a) Civil Penalty.--Any brand name drug company or generic drug 
applicant which fails to comply with any provision of this Act shall be 
liable for a civil penalty of not more than $11,000, for each day 
during which such entity is in violation of this Act. Such penalty may 
be recovered in a civil action brought by the United States, or brought 
by the Commission in accordance with the procedures established in 
section 16(a)(1) of the Federal Trade Commission Act (15 U.S.C. 56(a)).
    (b) Compliance and Equitable Relief.--If any brand name drug 
company or generic drug applicant fails to comply with any provision of 
this Act, the United States district court may order compliance, and 
may grant such other equitable relief as the court in its discretion 
determines necessary or appropriate, upon application of the Assistant 
Attorney General or the Commission. Equitable relief under this 
subsection may include an order by the district court which renders 
unenforceable, by the brand name drug company or generic drug applicant 
failing to file, any agreement that was not filed as required by this 
Act for the period of time during which the agreement was not filed by 
the company or applicant as required by this Act.

SEC. 9. RULEMAKING.

    The Commission, with the concurrence of the Assistant Attorney 
General and by rule in accordance with section 553 of title 5 United 
States Code, consistent with the purposes of this Act--
            (1) may define the terms used in this Act;
            (2) may exempt classes of persons or agreements from the 
        requirements of this Act; and
            (3) may prescribe such other rules as may be necessary and 
        appropriate to carry out the purposes of this Act.

SEC. 10. SAVINGS CLAUSE.

    Any action taken by the Assistant Attorney General or the 
Commission, or any failure of the Assistant Attorney General or the 
Commission to take action, under this Act shall not bar any proceeding 
or any action with respect to any agreement between a brand name drug 
company and a generic drug applicant at any time under any other 
provision of law, nor shall any filing under this Act constitute or 
create a presumption of any violation of any antitrust or competition 
laws.

SEC. 11. EFFECTIVE DATE.

    This Act shall--
            (1) take effect 30 days after the date of enactment of this 
        Act; and
            (2) shall apply to agreements described in section 5 that 
        are entered into 30 days after the date of enactment of this 
        Act.




                                                       Calendar No. 431

107th CONGRESS

  2d Session

                                 S. 754

                          [Report No. 107-167]

_______________________________________________________________________

                                 A BILL

To enhance competition for prescription drugs by increasing the ability 
 of the Department of Justice and Federal Trade Commission to enforce 
 existing antitrust laws regarding brand name drugs and generic drugs.

_______________________________________________________________________

                             June 20, 2002

                       Reported with an amendment