[Congressional Record Volume 170, Number 115 (Thursday, July 11, 2024)]
[Senate]
[Pages S5083-S5085]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 2872. Ms. KLOBUCHAR (for herself and Mr. Grassley) submitted an 
amendment intended to be proposed by her to the bill S. 4638, to 
authorize appropriations for fiscal year 2025 for military activities 
of the Department of Defense, for military construction, and for 
defense activities of the Department of Energy, to prescribe military 
personnel strengths for such fiscal year, and for other purposes; which 
was ordered to lie on the table; as follows:

       At the end of subtitle H of title X, insert the following:

     SEC. 1095. PRESERVE ACCESS TO AFFORDABLE GENERICS AND 
                   BIOSIMILARS ACT.

       (a) Short Title.--This section may be cited as the 
     ``Preserve Access to Affordable Generics and Biosimilars 
     Act''.
       (b) Congressional Findings and Declaration of Purposes.--
       (1) Findings.--Congress finds the following:
       (A) In 1984, the Drug Price Competition and Patent Term 
     Restoration Act (Public Law 98-417) (referred to in this Act 
     as the ``1984 Act''), was enacted with the intent of 
     facilitating the early entry of generic drugs while 
     preserving incentives for innovation.
       (B) Prescription drugs make up approximately 10 percent of 
     the national health care spending.
       (C) Initially, the 1984 Act was successful in facilitating 
     generic competition to the benefit of consumers and health 
     care payers, although 88 percent of all prescriptions 
     dispensed in the United States are generic drugs, they 
     account for only 28 percent of all expenditures.
       (D) Generic drugs cost substantially less than brand name 
     drugs, with discounts off the brand price averaging 80 to 85 
     percent.
       (E) Federal dollars currently account for over 40 percent 
     of the $325,000,000,000 spent on retail prescription drugs, 
     and this share is expected to rise to 47 percent by 2025.
       (F)(i) In recent years, the intent of the 1984 Act has been 
     subverted by certain settlement agreements in which brand 
     name companies transfer value to their potential generic 
     competitors to settle claims that the generic company is 
     infringing the branded company's patents.
       (ii) These ``reverse payment'' settlement agreements--
       (I) allow a branded company to share its monopoly profits 
     with the generic company as a way to protect the branded 
     company's monopoly; and
       (II) have unduly delayed the marketing of low-cost generic 
     drugs contrary to free competition, the interests of 
     consumers, and the principles underlying antitrust law.
       (iii) Because of the price disparity between brand name and 
     generic drugs, such agreements are more profitable for both 
     the brand and generic manufacturers than competition and will 
     become increasingly common unless prohibited.
       (iv) These agreements result in consumers losing the 
     benefits that the 1984 Act was intended to provide.
       (G) In 2010, the Biologics Price Competition and Innovation 
     Act (Public Law 111-148) (referred to in this Act as the 
     ``BPCIA''), was enacted with the intent of facilitating the 
     early entry of biosimilar and interchangeable follow-on 
     versions of branded biological products while preserving 
     incentives for innovation.
       (H) Biological drugs play an important role in treating 
     many serious illnesses, from cancers to genetic disorders. 
     They are also expensive, representing more than 40 percent of 
     all prescription drug spending.
       (I) Competition from biosimilar and interchangeable 
     biological products promises to lower drug costs and increase 
     patient access to biological medicines. But ``reverse 
     payment'' settlement agreements also threaten to delay the 
     entry of biosimilar and interchangeable biological products, 
     which would undermine the goals of BPCIA.
       (2) Purposes.--The purposes of this section are--
       (A) to enhance competition in the pharmaceutical market by 
     stopping anticompetitive agreements between brand name and 
     generic drug and biosimilar biological product manufacturers 
     that limit, delay, or otherwise prevent competition from 
     generic drugs and biosimilar biological products; and
       (B) to support the purpose and intent of antitrust law by 
     prohibiting anticompetitive practices in the pharmaceutical 
     industry that harm consumers.
       (c) Unlawful Compensation for Delay.--
       (1) In general.--The Federal Trade Commission Act (15 
     U.S.C. 44 et seq.) is amended by inserting after section 26 
     (15 U.S.C. 57c-2) the following:

     ``SEC. 27. PRESERVING ACCESS TO AFFORDABLE GENERICS AND 
                   BIOSIMILARS.

       ``(a) In General.--
       ``(1) Enforcement proceeding.--The Commission may initiate 
     a proceeding to enforce the provisions of this section 
     against the parties to any agreement resolving or settling, 
     on a final or interim basis, a patent claim, in connection 
     with the sale of a drug product or biological product.
       ``(2) Presumption and violation.--
       ``(A) In general.--Subject to subparagraph (B), in such a 
     proceeding, an agreement shall be presumed to have 
     anticompetitive effects and shall be a violation of this 
     section if--
       ``(i) an ANDA filer or a biosimilar biological product 
     application filer receives anything of value, including an 
     exclusive license; and
       ``(ii) the ANDA filer or biosimilar biological product 
     application filer agrees to limit or forgo research, 
     development, manufacturing, marketing, or sales of the ANDA 
     product or biosimilar biological product, as applicable, for 
     any period of time.
       ``(B) Exception.--Subparagraph (A) shall not apply if the 
     parties to such agreement demonstrate by clear and convincing 
     evidence that--
       ``(i) the value described in subparagraph (A)(i) is 
     compensation solely for other goods or services that the ANDA 
     filer or biosimilar biological product application filer has 
     promised to provide; or
       ``(ii) the procompetitive benefits of the agreement 
     outweigh the anticompetitive effects of the agreement.
       ``(b) Exclusions.--Nothing in this section shall prohibit a 
     resolution or settlement of a patent infringement claim in 
     which the consideration that the ANDA filer or biosimilar 
     biological product application filer, respectively, receives 
     as part of the resolution or settlement includes only one or 
     more of the following:
       ``(1) The right to market and secure final approval in the 
     United States for the ANDA product or biosimilar biological 
     product at a date, whether certain or contingent, prior to 
     the expiration of--
       ``(A) any patent that is the basis for the patent 
     infringement claim; or
       ``(B) any patent right or other statutory exclusivity that 
     would prevent the marketing of such ANDA product or 
     biosimilar biological product.
       ``(2) A payment for reasonable litigation expenses not to 
     exceed--
       ``(A) for calendar year 2024, $7,500,000; or
       ``(B) for calendar year 2025 and each subsequent calendar 
     year, the amount determined for the preceding calendar year 
     adjusted to reflect the percentage increase (if any) in the 
     Producer Price Index for Legal Services published by the 
     Bureau of Labor Statistics of the Department of Labor for the 
     most recent calendar year.
       ``(3) A covenant not to sue on any claim that the ANDA 
     product or biosimilar biological product infringes a United 
     States patent.
       ``(c) Enforcement.--
       ``(1) Enforcement.--A violation of this section shall be 
     treated as an unfair method of competition under section 
     5(a)(1).
       ``(2) Judicial review.--
       ``(A) In general.--Any party that is subject to a final 
     order of the Commission, issued in an administrative 
     adjudicative proceeding under the authority of subsection 
     (a)(1), may, within 30 days of the issuance of such order, 
     petition for review of such order in--
       ``(i) the United States Court of Appeals for the District 
     of Columbia Circuit;
       ``(ii) the United States Court of Appeals for the circuit 
     in which the ultimate parent entity, as defined in section 
     801.1(a)(3) of title 16, Code of Federal Regulations, or any 
     successor thereto, of the NDA holder or biological product 
     license holder is incorporated as of the date that the NDA or 
     biological product license application, as applicable, is 
     filed with the Secretary of Health and Human Services; or
       ``(iii) the United States Court of Appeals for the circuit 
     in which the ultimate parent entity of the ANDA filer or 
     biosimilar biological product application filer is 
     incorporated as of the date that the ANDA or biosimilar 
     biological product application is filed

[[Page S5084]]

     with the Secretary of Health and Human Services.
       ``(B) Treatment of findings.--In a proceeding for judicial 
     review of a final order of the Commission, the findings of 
     the Commission as to the facts, if supported by evidence, 
     shall be conclusive.
       ``(d) Antitrust Laws.--Nothing in 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 this Act to the extent that section 5 applies to unfair 
     methods of competition. Nothing in this section shall modify, 
     impair, limit, or supersede the right of an ANDA filer or 
     biosimilar biological product application filer to assert 
     claims or counterclaims against any person, under the 
     antitrust laws or other laws relating to unfair competition.
       ``(e) Penalties.--
       ``(1) Forfeiture.--Each party that violates or assists in 
     the violation of this section shall forfeit and pay to the 
     United States a civil penalty sufficient to deter violations 
     of this section, but in no event greater than 3 times the 
     value received by the party that is reasonably attributable 
     to the violation of this section. If no such value has been 
     received by the NDA holder, the biological product license 
     holder, the ANDA filer, or the biosimilar biological product 
     application filer, the penalty to the NDA holder, the 
     biological product license holder, the ANDA filer, or the 
     biosimilar biological product application filer shall be 
     sufficient to deter violations, but in no event shall be 
     greater than 3 times the value given to an ANDA filer or 
     biosimilar biological product application filer reasonably 
     attributable to the violation of this section. Such penalty 
     shall accrue to the United States and may be recovered in a 
     civil action brought by the Commission, in its own name by 
     any of its attorneys designated by it for such purpose, in a 
     district court of the United States against any party that 
     violates this section. In such actions, the United States 
     district courts are empowered to grant mandatory injunctions 
     and such other and further equitable relief as they deem 
     appropriate.
       ``(2) Cease and desist.--
       ``(A) In general.--If the Commission has issued a cease and 
     desist order with respect to a party in an administrative 
     adjudicative proceeding under the authority of subsection 
     (a)(1), an action brought pursuant to paragraph (1) may be 
     commenced against such party at any time before the 
     expiration of 1 year after such order becomes final pursuant 
     to section 5(g).
       ``(B) Exception.--In an action under subparagraph (A), the 
     findings of the Commission as to the material facts in the 
     administrative adjudicative proceeding with respect to the 
     violation of this section by a party shall be conclusive 
     unless--
       ``(i) the terms of such cease and desist order expressly 
     provide that the Commission's findings shall not be 
     conclusive; or
       ``(ii) the order became final by reason of section 5(g)(1), 
     in which case such finding shall be conclusive if supported 
     by evidence.
       ``(3) Civil penalty.--In determining the amount of the 
     civil penalty described in this section, the court shall take 
     into account--
       ``(A) the nature, circumstances, extent, and gravity of the 
     violation;
       ``(B) with respect to the violator, the degree of 
     culpability, any history of violations, the ability to pay, 
     any effect on the ability to continue doing business, profits 
     earned by the NDA holder, the biological product license 
     holder, the ANDA filer, or the biosimilar biological product 
     application filer, compensation received by the ANDA filer or 
     biosimilar biological product application filer, and the 
     amount of commerce affected; and
       ``(C) other matters that justice requires.
       ``(4) Remedies in addition.--Remedies provided in this 
     subsection are in addition to, and not in lieu of, any other 
     remedy provided by Federal law. Nothing in this section shall 
     be construed to limit any authority of the Commission under 
     any other provision of law.
       ``(f) Definitions.--In this section:
       ``(1) Agreement.--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 this Act.
       ``(2) Agreement resolving or settling a patent infringement 
     claim.--The term `agreement resolving or settling a patent 
     infringement claim' includes any agreement that is entered 
     into within 30 days of the resolution or the settlement of 
     the claim, or any other agreement that is contingent upon, 
     provides a contingent condition for, or is otherwise related 
     to the resolution or settlement of the claim.
       ``(3) ANDA.--The term `ANDA' means an abbreviated new drug 
     application filed under section 505(j) of the Federal Food, 
     Drug, and Cosmetic Act (21 U.S.C. 355(j)) or a new drug 
     application submitted pursuant to section 505(b)(2) of the 
     Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(b)(2)).
       ``(4) ANDA filer.--The term `ANDA filer' means a party that 
     owns or controls an ANDA filed with the Secretary of Health 
     and Human Services or has the exclusive rights under such 
     ANDA to distribute the ANDA product.
       ``(5) ANDA product.--The term `ANDA product' means the 
     product to be manufactured under the ANDA that is the subject 
     of the patent infringement claim.
       ``(6) Biological product.--The term `biological product' 
     has the meaning given such term in section 351(i)(1) of the 
     Public Health Service Act (42 U.S.C. 262(i)(1)).
       ``(7) Biological product license application.--The term 
     `biological product license application' means an application 
     under section 351(a) of the Public Health Service Act (42 
     U.S.C. 262(a)).
       ``(8) Biological product license holder.--The term 
     `biological product license holder' means--
       ``(A) the holder of an approved biological product license 
     application for a biological product;
       ``(B) a person owning or controlling enforcement of any 
     patents that claim the biological product that is the subject 
     of such approved application; or
       ``(C) the predecessors, subsidiaries, divisions, groups, 
     and affiliates controlled by, controlling, or under common 
     control with any of the entities described in subparagraphs 
     (A) and (B) (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) Biosimilar biological product.--The term `biosimilar 
     biological product' means the product to be manufactured 
     under the biosimilar biological product application that is 
     the subject of the patent infringement claim.
       ``(10) Biosimilar biological product application.--The term 
     `biosimilar biological product application' means an 
     application under section 351(k) of the Public Health Service 
     Act (42 U.S.C. 262(k)) for licensure of a biological product 
     as biosimilar to, or interchangeable with, a reference 
     product.
       ``(11) Biosimilar biological product application filer.--
     The term `biosimilar biological product application filer' 
     means a party that owns or controls a biosimilar biological 
     product application filed with the Secretary of Health and 
     Human Services or has the exclusive rights under such 
     application to distribute the biosimilar biological product.
       ``(12) Drug product.--The term `drug product' has the 
     meaning given such term in section 314.3(b) of title 21, Code 
     of Federal Regulations (or any successor regulation).
       ``(13) Market.--The term `market' means the promotion, 
     offering for sale, selling, or distribution of a drug 
     product.
       ``(14) NDA.--The term `NDA' means a new drug application 
     filed under section 505(b) of the Federal Food, Drug, and 
     Cosmetic Act (21 U.S.C. 355(b)).
       ``(15) NDA holder.--The term `NDA holder' means--
       ``(A) the holder of an approved NDA application for a drug 
     product;
       ``(B) a person 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 subparagraphs 
     (A) and (B) (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.
       ``(16) Party.--The term `party' means any person, 
     partnership, corporation, or other legal entity.
       ``(17) Patent infringement.--The term `patent infringement' 
     means infringement of any patent or of any filed patent 
     application, including any extension, reissue, renewal, 
     division, continuation, continuation in part, reexamination, 
     patent term restoration, patents of addition, and extensions 
     thereof.
       ``(18) Patent infringement claim.--The term `patent 
     infringement claim' means any allegation made to an ANDA 
     filer or biosimilar biological product application filer, 
     whether or not included in a complaint filed with a court of 
     law, that its ANDA or ANDA product, or biosimilar biological 
     product license application or biosimilar biological product, 
     may infringe any patent held by, or exclusively licensed to, 
     the NDA holder or biological product license holder of the 
     drug product or biological product, as applicable.
       ``(19) Statutory exclusivity.--The term `statutory 
     exclusivity' means those prohibitions on the submission or 
     the approval of drug applications under clauses (ii) through 
     (iv) of section 505(c)(3)(E), clauses (ii) through (iv) of 
     section 505(j)(5)(F), section 527, section 505A, or section 
     505E of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     355(c)(3)(E), 360cc, 355a, 355f), or on the submission or 
     licensing of biological product applications under section 
     351(k)(7) or paragraph (2) or (3) of section 351(m) of the 
     Public Health Service Act (42 U.S.C. 262) or under section 
     527 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 
     360cc).''.
       (2) Effective date.--Section 27 of the Federal Trade 
     Commission Act, as added by this section, shall apply to all 
     agreements described in section 27(a)(1) of that Act entered 
     into on or after the date of enactment of this Act.
       (d) Certification of Agreements.--
       (1) Notice of all agreements.--Section 1111(7) of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003 (21 U.S.C. 355 note) is amended by inserting ``, 
     or the owner of a patent for which a claim of infringement 
     could reasonably be asserted against any person for making, 
     using, offering to sell, selling, or importing into the 
     United States a biological product that is

[[Page S5085]]

     the subject of a biosimilar biological product application'' 
     before the period at the end.
       (2) Certification of agreements.--Section 1112 of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003 (21 U.S.C. 355 note) is amended by adding at the 
     end the following:
       ``(d) Certification.--The Chief Executive Officer or the 
     company official responsible for negotiating any agreement 
     under subsection (a) or (b) that is required to be filed 
     under subsection (c), within 30 days after such filing, shall 
     execute and file with the Assistant Attorney General and the 
     Commission a certification as follows: `I declare that the 
     following is true, correct, and complete to the best of my 
     knowledge: 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.' ''.
       (e) Notification of Agreements.--Section 1112 of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003 (21 U.S.C. 355 note), as amended by subsection 
     (d)(2), is further amended by adding at the end the 
     following:
       ``(e) Rule of Construction.--
       ``(1) In general.--An agreement that is required under 
     subsection (a) or (b) shall include agreements resolving any 
     outstanding disputes, including agreements resolving or 
     settling a Patent Trial and Appeal Board proceeding.
       ``(2) Definition.--For purposes of subparagraph (A), the 
     term `Patent Trial and Appeal Board proceeding' means a 
     proceeding conducted by the Patent Trial and Appeal Board of 
     the United States Patent and Trademark Office, including an 
     inter partes review instituted under chapter 31 of title 35, 
     United States Code, a post-grant review instituted under 
     chapter 32 of that title (including a proceeding instituted 
     pursuant to the transitional program for covered business 
     method patents, as described in section 18 of the Leahy-Smith 
     America Invents Act (35 U.S.C. 321 note)), and a derivation 
     proceeding instituted under section 135 of that title.''.
       (f) Forfeiture of 180-day Exclusivity Period.--Section 
     505(j)(5)(D)(i)(V) of the Federal Food, Drug, and Cosmetic 
     Act (21 U.S.C. 355(j)(5)(D)(i)(V)) is amended by inserting 
     ``section 27 of the Federal Trade Commission Act or'' after 
     ``that the agreement has violated''.
       (g) Commission Litigation Authority.--Section 16(a)(2) of 
     the Federal Trade Commission Act (15 U.S.C. 56(a)(2)) is 
     amended--
       (1) in subparagraph (D), by striking ``or'' after the 
     semicolon;
       (2) in subparagraph (E)--
       (A) by moving the margin 2 ems to the left; and
       (B) by inserting ``or'' after the semicolon; and
       (3) inserting after subparagraph (E) the following:
       ``(F) under section 27,''.
       (h) Report on Additional Exclusion.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Federal Trade Commission shall 
     submit to the Committee on the Judiciary of the Senate and 
     the Committee on the Judiciary of the House of 
     Representatives a recommendation, and the Commission's basis 
     for such recommendation, regarding a potential amendment to 
     include in section 27(b) of the Federal Trade Commission Act 
     (as added by subsection (c)) an additional exclusion for 
     consideration granted by an NDA holder to a ANDA filer or by 
     a biological product license holder to a biosimilar 
     biological product application filer as part of the 
     resolution or settlement, a release, waiver, or limitation of 
     a claim for damages or other monetary relief.
       (2) Definitions.--In this section, the terms ``ANDA 
     filer'', ``biological product license holder'', ``biosimilar 
     biological product application filer'', and ``NDA holder'' 
     have the meanings given such terms in section 27(f) of the 
     Federal Trade Commission Act (as added by subsection (c)).
       (i) Statute of Limitations.--The Federal Trade Commission 
     shall commence any enforcement proceeding described in 
     section 27 of the Federal Trade Commission Act, as added by 
     subsection (c), except for an action described in section 
     27(e)(2) of the Federal Trade Commission Act, not later than 
     6 years after the date on which the parties to the agreement 
     file the certification under section 1112(d) of the Medicare 
     Prescription Drug Improvement and Modernization Act of 2003 
     (21 U.S.C. 355 note).
       (j) Severability.--If any provision of this section, an 
     amendment made by this section, or the application of such 
     provision or amendment to any person or circumstance is held 
     to be unconstitutional, the remainder of this section, the 
     amendments made by this section, and the application of the 
     provisions of such section or amendments to any person or 
     circumstance shall not be affected.
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