1.This Act may be cited as the
Preserve Access to Affordable Generics
Act
.
2.Congressional findings and declaration of
purposes
(a)The Congress finds that—
(1)prescription drugs make up 11 percent of
the national health care spending but are 1 of the largest and fastest growing
health care expenditures;
(2)56 percent of all prescriptions dispensed
in the United States are generic drugs, yet they account for only 13percent of
all expenditures;
(3)generic drugs, on average, cost 63 percent
less than their brand-name counterparts;
(4)consumers and the health care system would
benefit from free and open competition in the pharmaceutical market and the
removal of obstacles to the introduction of generic drugs;
(5)full and free competition in the
pharmaceutical industry, and the full enforcement of antitrust law to prevent
anticompetitive practices in this industry, will lead to lower prices, greater
innovation, and inure to the general benefit of consumers.
(6)the Federal Trade Commission has determined
that some brand name pharmaceutical manufacturers collude with generic drug
manufacturers to delay the marketing of competing, low-cost, generic
drugs;
(7)collusion by the brand name pharmaceutical
manufacturers is contrary to free competition, to the interests of consumers,
and to the principles underlying antitrust law;
(8)in 2005, 2 appellate court decisions
reversed the Federal Trade Commission’s long-standing position, and upheld
settlements that include pay-offs by brand name pharmaceutical manufacturers to
generic manufacturers designed to keep generic competition off the
market;
(9)in the 6 months following the March 2005
court decisions, the Federal Trade Commission found there were three settlement
agreements in which the generic received compensation and agreed to a
restriction on its ability to market the product;
(10)the FTC found that more than
2/3 of the approximately ten settlement agreements made in
2006 include a pay-off from the brand in exchange for a promise by the generic
company to delay entry into the market; and
(11)settlements which include a payment from a
brand name manufacturer to a generic manufacturer to delay entry by generic
drugs are anti-competitive and contrary to the interests of consumers.
(b)The purposes of this Act are—
(1)to enhance competition in the
pharmaceutical market by prohibiting anticompetitive agreements and collusion
between brand name and generic drug manufacturers intended to keep generic
drugs off the market;
(2)to support the purpose and intent of
antitrust law by prohibiting anticompetitive agreements and collusion in the
pharmaceutical industry; and
(3)to clarify the law to prohibit payments
from brand name to generic drug manufacturers with the purpose to prevent or
delay the entry of competition from generic drugs.
3.Unlawful compensation for
delayThe Clayton Act (15
U.S.C. 12 et seq.) is amended—
(1)by redesignating section 25 as section 29;
and
(2)by inserting after section 27 the
following:
28.Unlawful interference with generic
marketing
(a)It shall be unlawful under this Act for any
person, in connection with the sale of a drug product, to directly or
indirectly be a party to any agreement resolving or settling a patent
infringement claim which—
(1)an ANDA filer receives anything of value;
and
(2)the ANDA filer agrees not to research,
develop, manufacture, market, or sell the ANDA product for any period of
time.
(b)Nothing in this section shall prohibit a
resolution or settlement of patent infringement claim in which the value paid
by the NDA holder to the ANDA filer as a part of the resolution or settlement
of the patent infringement claim includes no more than the right to market the
ANDA product prior to the expiration of the patent that is the basis for the
patent infringement claim.
(c)In this section:
(1)The term agreement
means
anything that would constitute 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).
(2)The term agreement resolving or
settling a patent infringement claim
includes, any agreement that is
contingent upon, provides a contingent condition for, or is otherwise related
to the resolution or settlement of the claim.
(3)The term ANDA means an
abbreviated new drug application, as defined under section 505(j) of the
Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(j)).
(4)The term ANDA filer means a
party who has filed an ANDA with the Federal Drug Administration.
(5)The term ANDA product means
the product to be manufactured under the ANDA that is the subject of the patent
infringement claim.
(6)The term drug product means a
finished dosage form (e.g., tablet, capsule, or solution) that contains a drug
substance, generally, but not necessarily, in association with 1 or more other
ingredients, as defined in section 314.3(b) of title 21, Code of Federal
Regulations.
(7)The term NDA means a new drug
application, as defined under section 505(b) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(b)).
(8)The term NDA holder
means—
(A)the party that received FDA approval to
market a drug product pursuant to an NDA;
(B)a party owning or controlling enforcement
of the patent listed in the Approved Drug Products With Therapeutic Equivalence
Evaluations (commonly known as the FDA Orange Book
) in
connection with the NDA; or
(C)the predecessors, subsidiaries, divisions,
groups, and affiliates controlled by, controlling, or under common control with
any of the entities described in subclauses (i) and (ii) (such control to be
presumed by direct or indirect share ownership of 50 percent or greater), as
well as the licensees, licensors, successors, and assigns of each of the
entities.
(9)The term patent infringement
means infringement of any patent or of any filed patent application, extension,
reissue, renewal, division, continuation, continuation in part, reexamination,
patent term restoration, patents of addition and extensions thereof.
(10)The term patent infringement
claim means any allegation made to an ANDA filer, whether or not
included in a complaint filed with a court of law, that its ANDA or ANDA
product may infringe any patent held by, or exclusively licensed to, the NDA
holder of the drug
product.
.
4.Notice and certification of
agreements
(a)Section 1112(c)(2) of the Medicare
Prescription Drug, Improvement, and Modernization Act of 2003 (21 U.S.C. 3155
note) is amended by—
(1)striking the Commission the
and inserting the Commission (1) the
; and
(2)inserting before the period at the end the
following: ; and (2) a description of the subject matter of any other
agreement the parties enter into within 30 days of an entering into an
agreement covered by subsection (a) or (b)
.
(b)Certification of agreementsSection 1112 of such Act is amended by
adding at the end the following:
(d)The Chief Executive Officer or the company
official responsible for negotiating any agreement required to be filed under
subsection (a), (b), or (c) shall execute and file with the Assistant Attorney
General and the Commission a certification as follows: I declare under
penalty of perjury that the following is true and correct: The materials filed
with the Federal Trade Commission and the Department of Justice under section
1112 of subtitle B of title XI of the Medicare Prescription Drug, Improvement,
and Modernization Act of 2003, with respect to the agreement referenced in this
certification: (1) represent the complete, final, and exclusive agreement
between the parties; (2) include any ancillary agreements that are contingent
upon, provide a contingent condition for, or are otherwise related to, the
referenced agreement; and (3) include written descriptions of any oral
agreements, representations, commitments, or promises between the parties that
are responsive to subsection (a) or (b) of such section 1112 and have not been
reduced to
writing.
.
.
5.Forfeiture of 180-day exclusivity
periodSection 505 of the
Federal Food, Drug and Cosmetic Act (21 U.S.C. 355(j)(5)(D)(i)(V)) is amended
by inserting section 28 of the Clayton Act or
after that
the agreement has violated
.
6.Study by the Federal Trade
Commission
(a)Not later than 180 days after the date of
enactment of this Act and pursuant to its authority under section 6(a) of the
Federal Trade Commission Act (15 U.S.C. 46(a)) and its jurisdiction to prevent
unfair methods of competition, the Federal Trade Commission shall conduct a
study regarding—
(1)the prevalence of agreements in patent
infringement suits of the type described in section 28 of the Clayton Act, as
added by this Act, during the last 5 years;
(2)the impact of such agreements on
competition in the pharmaceutical market; and
(3)the prevalence in the pharmaceutical
industry of other anticompetitive agreements among competitors or other
practices that are contrary to the antitrust laws, and the impact of such
agreements or practices on competition in the pharmaceutical market during the
last 5 years.
(b)In conducting the study required under this
section, the Federal Trade Commission shall consult with the Antitrust Division
of the Department of Justice regarding the Justice Department’s findings and
investigations regarding anticompetitive practices in the pharmaceutical
market, including criminal antitrust investigations completed by the Justice
Department with respect to practices or conduct in the pharmaceutical
market.
(c)Not later than 1 year after the date of
enactment of this Act, the Federal Trade Commission shall submit a report to
the Judiciary Committees of Senate and House of Representatives, and to the
Department of Justice regarding the findings of the study conducted under
subsection (a). This report shall contain the Federal Trade Commission’s
recommendation as to whether any amendment to the antitrust laws should be
enacted to correct any substantial lessening of competition found during the
study.
(d)Federal agency considerationUpon receipt of the report required by
subsection (c), the Attorney General or the Chairman of the Federal Trade
Commission, as appropriate, shall consider whether any additional enforcement
action is required to restore competition or prevent a substantial lessening of
competition occurring as a result of the conduct or practices that were the
subject of the study conducted under subsection (b).
7.Authorization of
appropriationsThere are
authorized to be appropriated to the Federal Trade Commission such sums as may
be necessary to carry out the provisions of this Act.
February 27, 2007
Reported without amendment