[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4398 Introduced in House (IH)]
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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 manufacturers, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Affordable Prescriptions for
Patients Through Promoting Competition Act of 2019''.
SEC. 2. PRODUCT HOPPING.
(a) In General.--The Federal Trade Commission Act (15 U.S.C. 41 et
seq.) is amended by inserting after section 26 (15 U.S.C. 57c-2) the
following:
``SEC. 27. PRODUCT HOPPING.
``(a) Definitions.--In this section:
``(1) Abbreviated new drug application.--The term
`abbreviated new drug application' means an application under
subsection (b)(2) or (j) of section 505 of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C. 355).
``(2) Biosimilar biological product.--The term `biosimilar
biological product' means a biological product licensed under
section 351(k) of the Public Health Service Act (42 U.S.C.
262(k)).
``(3) Biosimilar biological product license application.--
The term `biosimilar biological product license application'
means an application submitted under section 351(k) of the
Public Health Service Act (42 U.S.C. 262(k)).
``(4) Follow-on product.--The term `follow-on product'--
``(A) means a drug approved through an application
or supplement to an application submitted under section
505(b) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355(c)) or a biological product licensed through
an application or supplement to an application
submitted under section 351(a) of the Public Health
Service Act (42 U.S.C. 262(a)) for a change,
modification, or reformulation to the same
manufacturer's previously approved drug or biological
product that treats the same medical condition; and
``(B) excludes such an application or supplement to
an application for a change, modification, or
reformulation of a drug or biological product that is
requested by the Secretary or necessary to comply with
law, including sections 505A and 505B of the Federal
Food, Drug, and Cosmetic Act (21 U.S.C. 355a, 355c).
``(5) Generic drug.--The term `generic drug' means a drug
approved under an application submitted under subsection (b)(2)
or (j) of section 505 of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355).
``(6) Listed drug.--The term `listed drug' means a drug
listed under section 505(j)(7) of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 355(j)(7)).
``(7) Manufacturer.--The term `manufacturer' means the
holder, licensee, or assignee of--
``(A) an approved application for a drug under
section 505(c) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355(c)); or
``(B) a biological product license under section
351(a) of the Public Health Service Act (42 U.S.C.
262(a)).
``(8) Reference product.--The term `reference product' has
the meaning given the term in section 351(i) of the Public
Health Service Act (42 U.S.C. 262(i)).
``(9) Ultimate parent entity.--The term `ultimate parent
entity' has the meaning given the term in section 801.1 of
title 16, Code of Federal Regulations, or any successor
regulation.
``(b) Prohibition on Product Hopping.--
``(1) Prima facie.--Except as provided in paragraph (2), a
manufacturer of a reference product or listed drug shall be
considered to have engaged in an unfair method of competition
in or affecting commerce in violation of section 5(a) if the
Commission demonstrates by a preponderance of the evidence in a
proceeding initiated by the Commission under subsection
(c)(1)(A), or in a suit brought under subparagraph (B) or (C)
of subsection (c)(1), that, during the period beginning on the
date on which the manufacturer of the reference product or
listed drug first receives notice that an applicant has
submitted to the Commissioner of Food and Drugs an abbreviated
new drug application or biosimilar biological product license
application and ending on the date that is 180 days after the
date on which that generic drug or biosimilar biological
product is first marketed, the manufacturer engaged in either
of the following actions:
``(A) The manufacturer engaged in a hard switch,
which shall be established by demonstrating that the
manufacturer engaged in either of the following
actions:
``(i) Upon the request of the manufacturer
of the listed drug or reference product, the
Commissioner of Food and Drugs withdrew the
approval of the application for the listed drug
or reference product or placed the listed drug
or reference product on the discontinued
products list and the manufacturer marketed or
sold a follow-on product.
``(ii)(I) The manufacturer of the listed
drug or reference product--
``(aa) announced withdrawal of,
discontinuance of the manufacture of,
or intent to withdraw the application
with respect to the drug or reference
product in a manner that impedes
competition from a generic drug or a
biosimilar biological product, as
established by objective circumstances;
or
``(bb) destroyed the inventory of
the listed drug or reference product in
a manner that impedes competition from
a generic drug or a biosimilar
biological product, which may be
established by objective circumstances;
and
``(II) marketed or sold a follow-on
product.
``(B) The manufacturer engaged in a soft switch,
which shall be established by demonstrating that the
manufacturer engaged in both of the following actions:
``(i) The manufacturer took actions with
respect to the listed drug or reference product
other than those described in subparagraph (A)
that unfairly disadvantage the listed drug or
reference product relative to the follow-on
product described in clause (ii) in a manner
that impedes competition from a generic drug or
a biosimilar biological product that is highly
similar to, and has no clinically meaningful
difference with respect to safety, purity, and
potency from, the reference product, which may
be established by objective circumstances.
``(ii) The manufacturer marketed or sold a
follow-on product.
``(2) Justification.--
``(A) In general.--Subject to paragraph (3), the
actions described in paragraph (1) by a manufacturer of
a listed drug or reference product shall not be
considered to be an unfair method of competition in or
affecting commerce if--
``(i) the manufacturer demonstrates to the
Commission or a district court of the United
States, as applicable, by a preponderance of
the evidence in a proceeding initiated by the
Commission under subsection (c)(1)(A), or in a
suit brought under subparagraph (B) or (C) of
subsection (c)(1), that--
``(I) the manufacturer would have
taken the actions regardless of whether
a generic drug that references the
listed drug or biosimilar biological
product that references the reference
product had already entered the market;
and
``(II)(aa) with respect to a hard
switch under paragraph (1)(A), the
manufacturer took the action for
reasons relating to the safety risk to
patients of the listed drug or
reference product;
``(bb) with respect to an action
described in item (aa) or (bb) of
paragraph (1)(A)(ii)(I), there is a
supply disruption that--
``(AA) is outside of the
control of the manufacturer;
``(BB) prevents the
production or distribution of
the applicable listed drug or
reference product; and
``(CC) cannot be remedied
by reasonable efforts; or
``(cc) with respect to a soft
switch under paragraph (1)(B), the
manufacturer had legitimate pro-
competitive reasons, apart from the
financial effects of reduced
competition, to take the action.
``(B) Rule of construction.--Nothing in
subparagraph (A) may be construed to limit the
information that the Commission may otherwise obtain in
any proceeding or action instituted with respect to a
violation of this section.
``(3) Response.--With respect to a justification offered by
a manufacturer under paragraph (2), the Commission may--
``(A) rebut any evidence presented by a
manufacturer during that justification; or
``(B) establish by a preponderance of the evidence
that, on balance, the pro-competitive benefits from the
conduct described in subparagraph (A) or (B) of
paragraph (1), as applicable, do not outweigh any
anticompetitive effects of the conduct, even in
consideration of the justification so offered.
``(c) Enforcement.--
``(1) In general.--If the Commission has reason to believe
that any manufacturer has violated, is violating, or is about
to violate this section, the Commission may take any of the
following actions:
``(A) Institute a proceeding--
``(i) that, except as provided in paragraph
(2), complies with the requirements under
section 5(b); and
``(ii) in which the Commission may impose
on the manufacturer any penalty that the
Commission may impose for a violation of
section 5.
``(B) In the same manner and to the same extent as
provided in section 13(b), bring suit in a district
court of the United States to temporarily enjoin the
action of the manufacturer.
``(C) Bring suit in a district court of the United
States, in which the Commission may seek--
``(i) to permanently enjoin the action of
the manufacturer;
``(ii) any of the remedies described in
paragraph (3); and
``(iii) any other equitable remedy,
including ancillary equitable relief.
``(2) Judicial review.--
``(A) In general.--Notwithstanding any provision of
section 5, any manufacturer that is subject to a final
order of the Commission that is issued in a proceeding
initiated under paragraph (1)(A) may, not later than 30
days after the date on which the Commission issues the
order, petition for review of the order in--
``(i) the United States Court of Appeals
for the District of Columbia Circuit; or
``(ii) the court of appeals of the United
States for the circuit in which the ultimate
parent entity of the manufacturer is
incorporated.
``(B) Treatment of findings.--In a review of an
order issued by the Commission conducted by a court of
appeals of the United States under subparagraph (A),
the factual findings of the Commission shall be
conclusive if those facts are supported by the
evidence.
``(3) Equitable remedies.--
``(A) Disgorgement.--
``(i) In general.--In a suit brought under
paragraph (1)(C), the Commission may seek, and
the court may order, disgorgement of any unjust
enrichment that a person obtained as a result
of the violation that gives rise to the suit.
``(ii) Calculation.--Any disgorgement that
is ordered with respect to a person under
clause (i) shall be offset by any amount of
restitution ordered under subparagraph (B).
``(iii) Limitations period.--The Commission
may seek disgorgement under this subparagraph
not later than 5 years after the latest date on
which the person from which the disgorgement is
sought receives any unjust enrichment from the
effects of the violation that gives rise to the
suit in which the Commission seeks the
disgorgement.
``(B) Restitution.--
``(i) In general.--In a suit brought under
paragraph (1)(C), the Commission may seek, and
the court may order, restitution with respect
to the violation that gives rise to the suit.
``(ii) Limitations period.--The Commission
may seek restitution under this subparagraph
not later than 5 years after the latest date on
which the person from which the restitution is
sought receives any unjust enrichment from the
effects of the violation that gives rise to the
suit in which the Commission seeks the
restitution.
``(4) Rules of construction.--Nothing in this subsection
may be construed as--
``(A) requiring the Commission to bring a suit
seeking a temporary injunction under paragraph (1)(B)
before bringing a suit seeking a permanent injunction
under paragraph (1)(C); or
``(B) affecting any other authority of the
Commission under this Act to seek relief or obtain a
remedy with respect to a violation of this Act.''.
(b) Applicability.--Section 27 of the Federal Trade Commission Act,
as added by subsection (a), shall apply with respect to any--
(1) conduct that occurs on or after the date of enactment
of this Act; and
(2) action or proceeding that is commenced on or after the
date of enactment of this Act.
(c) Antitrust Laws.--Nothing in this section, or the amendments
made by this section, shall modify, impair, limit, or supersede the
applicability of the antitrust laws as defined in subsection (a) of the
first section of the Clayton Act (15 U.S.C. 12(a)), and of section 5 of
the Federal Trade Commission Act (15 U.S.C. 45) to the extent that it
applies to unfair methods of competition.
(d) Rulemaking.--The Federal Trade Commission may issue rules under
section 553 of title 5, United States Code, to carry out section 27 of
the Federal Trade Commission Act, as added by subsection (a), including
by defining any terms used in such section 27 (other than terms that
are defined in subsection (a) of such section 27).
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