[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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