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:

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 or a related indication; (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); (C)excludes such 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)) that has been granted New Chemical Entity exclusivity (21 U.S.C. 355(c)(3)(E)(ii)) by the Food and Drug Administration; and (D)excludes such an application or supplement submitted under section 351(a) of the Public Health Service Act (42 U.S.C. 262(a)) that has been granted exclusivity pursuant to section 351(k)(7) of such Act (42 U.S.C. 262(k)(7)). (5)

Commission

The term Commission means the Federal Trade Commission (6)

Disadvantage

The term disadvantage means to impede the listed drug or reference product’s ability to compete on the merits with the follow-on product. This term excludes actions that consist solely of— (A)truthful, non-misleading promotional marketing; or (B)ceasing promotional marketing for the listed drug or reference product. (7)

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). (8)

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)). (9)

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)). (10)

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)). (11)

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) of the Federal Trade Commission Act if complaint counsel or the Commission demonstrates by a preponderance of the evidence in a proceeding initiated by the Commission under subsection (c)(1), 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 the earlier of 180 days after the date on which that generic drug or biosimilar biological product or another generic drug or biosimilar biological product referencing the listed drug or reference product is first marketed or 3 years after the date on which the follow-on 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 actions described in clause (i) or (ii): (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 (I)the manufacturer marketed or sold a follow-on product. (ii) (I)The manufacturer of the listed drug or reference product— (aa)withdrew, discontinued the manufacture of, or withdrew the application with respect to, or announced withdrawal of, discontinuance of the manufacture of, or withdrawal of 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, unless such actions were taken by the manufacturer pursuant to a request of the Commissioner of Food and Drugs; 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 one or more 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 either a generic drug or a biosimilar biological 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), 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)(i), 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), complaint counsel or the Commission, as applicable, will prevail in its case if it establishes by a preponderance of the evidence that— (A)the conduct described in subsection (b)(1) is not reasonably necessary to address or achieve the justifications claimed under paragraph (2)(A)(II)(aa–cc), or such justifications could be reasonably addressed or achieved through less anticompetitive means; or (B)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)

Enforcement by the Federal Trade Commission

Except as provided in paragraph (2), the Commission shall enforce this section in the same manner, by the same means, and with the same jurisdiction, powers, duties, and remedies provided for by all applicable terms and provisions of the Federal Trade Commission Act (15 U.S.C. 45 et seq.). (2)

Judicial review

(A)

In general

Notwithstanding any provision of section 5 of the Federal Trade Commission Act, any manufacturer that is subject to a final order of the Commission that is issued in a proceeding initiated under paragraph (1) 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)

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).