[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1416 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
1st Session
S. 1416
To amend the Federal Trade Commission Act to prohibit anticompetitive
behaviors by drug product manufacturers, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 9, 2019
Mr. Cornyn (for himself and Mr. Blumenthal) introduced the following
bill; which was read twice and 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 Act of 2019''.
SEC. 2. PRODUCT HOPPING; PATENT THICKETING.
(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; PATENT THICKETING.
``(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) Competition window.--The term `competition window'
means--
``(A) with respect to a listed drug, the period
between--
``(i) the date that is the earlier of--
``(I) 8 years before any patent or
marketing exclusivity granted under
chapter V of the Federal Food, Drug,
and Cosmetic Act (21 U.S.C. 351 et
seq.) with respect to such listed drug
expires; and
``(II) the date on which the first
abbreviated new drug application that
references such listed drug is filed;
and
``(ii) the later of--
``(I) the date that is 180 days
after the first abbreviated new drug
application that references such listed
drug is filed; and
``(II) the date that is 1 year
after the date on which the generic
drug that is the subject of the
abbreviated new drug application
described in subclause (I) enters the
marketplace; or
``(B) with respect to a reference product, the
period between--
``(i) the date that is the earlier of--
``(I) 6 years before any patent or
marketing exclusivity (including any
extension of such exclusivity) granted
under section 351 of the Public Health
Service Act (42 U.S.C. 262) or section
527 of the Federal Food, Drug, and
Cosmetic Act (21 U.S.C. 360cc) with
respect to such reference product
expires; and
``(II) the date on which the first
biosimilar biological product license
application that references such
reference product is filed; and
``(ii) the later of--
``(I) the date that is 180 days
after the date on which the first
biosimilar biological product license
application that references such
reference product enters the
marketplace; and
``(II) the date that is 1 year
after the date on which the biosimilar
biological product that is the subject
of the biosimilar biological product
license application described in
subclause (I) enters the marketplace.
``(5) Expected revenue.--The term `expected revenue', with
respect to a follow-on product, means the financial value
represented by the number of individuals in the target
population multiplied by the financial revenue generated by
each member of the target population over the 3-year period
beginning--
``(A) on the day that 3 generic drugs referencing
the same listed drug or 2 or more biosimilar biological
products referencing the same reference product would
have been widely available in the market; or
``(B) if 3 or more generic drugs referencing the
same listed drug or 2 or more biosimilar biological
products referencing the same reference product are
already widely available in the market, the day that
the follow-on product enters the market.
``(6) Follow-on product.--The term `follow-on product'
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.
``(7) Generic drug.--The term `generic drug' means a drug
approved 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) Patent family.--The term `patent family' means a
group of related patents that continue the priority date of the
underlying composition of matter patent, all of which claim the
same drug or biological product or a use of the same drug or
biological product.
``(10) Patent portfolio.--The term `patent portfolio' means
a group of related patents covering the same or similar
technical content.
``(11) Patent thicketing.--
``(A) In general.--The term `patent thicketing'
means an action taken to limit competition by a
patentee with respect to a drug approved under section
505(c) of the Federal Food, Drug, and Cosmetic Act (21
U.S.C. 355(c)) or a biological product licensed under
section 351(a) of the Public Health Service Act (42
U.S.C. 262(a)) in which--
``(i)(I) the patentee obtains patents in
the same patent family or patent portfolio--
``(aa) that claim the drug or
biological product or a use of the drug
or biological product, a form of the
drug or biological product, a method of
use of the drug or biological product,
or a method of manufacture of a drug or
biological product; and
``(bb) whose effective filing date
does not precede the date of filing the
application under section 505(b) of the
Federal Food, Drug, and Cosmetic Act
(21 U.S.C. 355(b)) or section 351(a) of
the Public Health Service Act (42
U.S.C. 262(a)); or
``(II) the underlying composition of matter
patent is found invalid and the patentee
obtains patents in the same patent family or
patent portfolio that claim the drug or
biological product or a use of the drug or
biological product, a form of the drug or
biological product, a method of use of the drug
or biological product, or a method of
manufacture of the drug or biological product;
``(ii) an abbreviated new drug application
referencing such approved drug or a biosimilar
biological product license application
referencing such licensed biological product
could not be marketed without practicing one or
more of the inventions claimed in the
additional patents described in subclause (I)
or (II) of clause (i); and
``(iii) the Commission determines that the
patentee improperly limited competition by
obtaining patents described in subclause (I) or
(II) of clause (i).
``(B) Factors to consider.--The Commission may
establish that an action described in subparagraph (A)
improperly limits competition if the Commission
establishes a reasonable number of the following
factors in a manner that is sufficient to demonstrate
anticompetitive intent:
``(i) The additional patents described in
subparagraph (A)(i) (referred to in this
subparagraph as the `additional patents') stem
from few patent families.
``(ii) The additional patents have common
specifications.
``(iii) The additional patents did not
issue on an application with respect to which a
requirement for restriction under section 121
of title 35, United States Code, has been made,
or on an application filed as a result of such
a requirement.
``(iv) The additional patents have
overlapping or identical claims.
``(v) The additional patents have been
granted to the patentee on formulations or
compositions of the product and not used.
``(vi) One or more of the additional
patents have been invalidated in an inter
partes review conducted under chapter 31 of
title 35, United States Code, or a post-grant
proceeding conducted under chapter 32 of that
title.
``(vii) Litigation with applicants under
section 351(k) of the Public Health Service Act
has been extended based on the additional
patents.
``(viii) The applications with respect to
the additional patents described in subclause
(I) or (II) of subparagraph (A)(i) are
submitted not more than 36 months before the
expiration of the underlying composition of
matter patent.
``(ix) A public or internal statement, a
shareholder call, or another demonstration of
purpose that the patentee intended to use the
number of patents or length of extended patent
protection in order to unduly limit
competition.
``(12) 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)).
``(13) Target population.--The term `target population',
with respect to a drug, means the population of individuals
that--
``(A) would experience a significant health
improvement from a follow-on product; and
``(B) would have bought the follow-on product
solely because of the significant health improvement
that those individuals would experience.
``(14) 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.
``(15) Underlying composition of matter patent.--The term
`underlying composition of matter patent' means a patent with
respect to the molecules, compounds, or new formulations of the
active ingredient of a drug or biological product.
``(b) Prohibitions.--
``(1) Patent thicketing.--
``(A) Prima facie.--Except as provided in
subparagraph (B), an action by a drug manufacturer that
constitutes patent thicketing shall be considered to be
an unfair method of competition in or affecting
commerce in violation of section 5(a).
``(B) Rebuttal.--
``(i) In general.--Subject to subparagraph
(C), an action that constitutes patent
thicketing shall not be considered to be an
unfair method of competition in or affecting
commerce in violation of section 5(a) if the
manufacturer described in that paragraph
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 the anticompetitive effects of the action
do not outweigh the pro-competitive effects of
the action.
``(ii) Evidence.--In making a demonstration
under clause (i) that the anticompetitive
effects of patent thicketing do not outweigh
the pro-competitive effects of that behavior, a
manufacturer described in subparagraph (A)--
``(I) may present evidence that--
``(aa) the inventions
claimed in the additional
patents described in subclauses
(I) and (II) of subsection
(a)(11)(A)(i) resulted in--
``(AA) clinically
meaningful and
significant therapeutic
or safety benefits;
``(BB)
significantly improved
product purity or
potency;
``(CC) significant
gained efficiencies in
manufacturing; or
``(DD) other
improved product
attributes having
substantial benefits
for consumers or
patients;
``(bb) a generic drug or
biosimilar biological product
could be marketed commercially
without incorporating the
improvements claimed in the
additional patents described in
item (aa); or
``(cc) for each of the
later filed patents, the
manufacturer had substantial
financial reason, apart from
the financial effects of
reduced competition, to file
each of the patents; and
``(II) in making a demonstration
under subclause (I), shall submit to
the Commission or the court, as
applicable, all research and
development, manufacturing, marketing,
and other costs associated with
approval of the original drug under
section 505(c) of the Federal Food,
Drug, and Cosmetic Act (21 U.S.C.
355(c)) or licensure of the original
biological product under section 351(a)
of the Public Health Service Act (42
U.S.C. 262(a)), which--
``(aa) shall include--
``(AA) any
documents relating to
the costs and benefits
of the later filed
patents with respect to
patients who use the
drug; and
``(BB) any
applications for
patents that were filed
and rejected; and
``(bb) shall not be
construed to limit the
information that the Commission
or the court, as applicable,
may otherwise obtain in any
proceeding or action instituted
with respect to a violation of
this section.
``(C) Response.--The Commission may rebut any
evidence presented by a drug manufacturer under
subparagraph (B) by establishing by a preponderance of
the evidence that the harm to consumers from the action
that is the subject of that presentation is greater
than the benefits to consumers from that action.
``(2) Product hopping.--
``(A) Prima facie.--Except as provided in
subparagraph (B), any of the following actions by a
manufacturer of a reference product or listed drug
shall be considered to be an unfair method of
competition in or affecting commerce in violation of
section 5(a):
``(i) If, during the period beginning on
the date on which the manufacturer of the
reference drug 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
first enters, or could enter, the market, or is
denied--
``(I) upon the request of the
manufacturer of the listed drug or
reference product, the Commissioner of
Food and Drugs--
``(aa) withdraws the
approval of the application for
the listed drug or reference
product; or
``(bb) places the listed
drug or reference product on
the discontinued products list;
or
``(II) the manufacturer of the
listed drug or reference product
announces discontinuance of, or intent
to withdraw, the application for the
reference product.
``(ii) The manufacturer of a previously
approved drug or biological product markets or
sells a follow-on product during the
competition window.
``(B) Rebuttal.--
``(i) In general.--Subject to subparagraph
(C), an action described in subparagraph (A)
shall not be considered to be an unfair method
of competition in or affecting commerce if--
``(I) with respect to an action
described in subparagraph (A)(i), the
manufacturer of the listed drug or
reference product 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 the
manufacturer removed such drug from the
market for significant and documented
safety reasons; or
``(II) with respect to an action
described in subparagraph (A)(ii)--
``(aa) 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--
``(AA) the follow-
on product described in
such subparagraph
(A)(ii) (referred to in
this subclause as the
`follow-on product')
provides a clinically
meaningful and
significant additional
health benefit to the
target population
beyond that provided by
the previously approved
drug or biological
product;
``(BB) the follow-
on product was the
available means that
was least likely to
reduce competition; and
``(CC) the
manufacturer had
substantive financial
reasons, apart from the
financial effects of
reduced competition, to
introduce the follow-on
product to the market;
and
``(bb) in making the
demonstration required under
item (aa), the manufacturer
provides to the Commission--
``(AA) all research
and development,
manufacturing,
marketing, and other
related costs
associated with the
drug or biological
product previously
approved under section
505(c) of the Federal
Food, Drug, and
Cosmetic Act (21 U.S.C.
355(c)) or section
351(a) of the Public
Health Service Act (42
U.S.C. 262(a)) and the
follow-on product,
including all
documents, memos, or
other business
documents that explain,
mention, or otherwise
justify the decision of
the manufacturer to
develop and manufacture
the follow-on product;
and
``(BB) the revenue
obtained by the
manufacturer with
respect to the drug or
biological product
previously approved
under section 505(c) of
the Federal Food, Drug,
and Cosmetic Act (21
U.S.C. 355(c)) or
section 351(a) of the
Public Health Service
Act (42 U.S.C. 262(a))
and the expected
revenue of the
manufacturer with
respect to the
previously approved
drug or biological
product and the follow-
on product.
``(ii) Rule of construction.--Nothing in
clause (i) 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.
``(C) Response.--The Commission may rebut any
evidence presented by a drug manufacturer under
subparagraph (B) by establishing by a preponderance of
the evidence that--
``(i) the harm to consumers of the drug or
biological product that is the subject of the
product from the action that is the subject of
that presentation is greater than the benefits
to consumers of the drug or biological product
that is the subject of challenged action; or
``(ii) a primary purpose of the
manufacturer in pursuing the challenged action
was to block or otherwise hinder the entry into
the market of a generic drug or biosimilar
biological product.
``(c) Enforcement.--
``(1) In general.--If the Commission has reason to believe
that any drug 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 drug manufacturer.
``(C)(i) Bring suit in a district court of the
United States to permanently enjoin the action of the
drug manufacturer.
``(ii) In a suit brought under clause (i), the
Commission may seek--
``(I) any of the remedies described in
paragraph (3); and
``(II) any other equitable remedy,
including ancillary equitable relief.
``(2) Judicial review.--
``(A) In general.--Notwithstanding any provision of
section 5, any drug 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, as of the date on which the
manufacturer obtains the underlying composition
of matter patent with respect to the proceeding
or files a new drug application under section
505(b) of the Federal Food, Drug, and Cosmetic
Act (21 U.S.C. 355(b)) or biological product
license application under section 351(a) of the
Public Health Service Act (42 U.S.C. 262(a))
that is the subject of the proceeding, as
applicable.
``(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 in
which the Commission seeks the claim.
``(ii) Calculation.--Any disgorgement that
is ordered with respect to a person under
clause (i) shall be offset by any amount of
restitution that the person is ordered to pay
under subparagraph (B).
``(iii) Limitations period.--The Commission
may bring a claim for disgorgement under this
subparagraph not later than 5 years after the
latest date on which the person against which
the claim is brought receives any unjust
enrichment from the effects of the violation
that gives rise to the suit in which the
Commission seeks the claim.
``(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 in
which the Commission seeks the claim.
``(ii) Limitations period.--The Commission
may bring a claim for restitution under this
subparagraph not later than 5 years after the
latest date on which the person against which
the claim is brought receives any unjust
enrichment from the effects of the violation
that gives rise to the suit in which the
Commission seeks the claim.
``(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.
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