,,ii #aacth ,,congress #ast ,session ,s4 #bad ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,february #d1 #bjac ,ms4 ,klobuchar 7for herself1 ,mr4 ,grassley1 ,mr4 ,durbin1 ,mr4 ,franken1 and ,mr4 ,johnson of ,south ,dakota7 introduced the following bill2 which was read twice and referred to the ,committee on the ,judiciary ,a ,,bill ,to prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market4 #a4 ,short title ,this ,act may be cited as the ,preserve ,access to ,affordable ,generics ,act4 #b4 ,congressional findings and declaration of purposes 7a7 ,findings ,congress finds the following3 7#a7 ,in #aihd1 the ,drug ,price ,competition and ,patent ,term ,restoration ,act 7,public ,law #ih-dag7 7referred to in this ,act as the #aihd ,act71 was enacted with the intent of facilitating the early entry of generic drugs while preserving incentives for innovation4 7#b7 ,prescription drugs make up #aj percent of the national health care spending but for the past decade have been one of the fastest growing segments of health care expenditures4 7#c7 ,until recently1 the #aihd ,act was successful in facilitating generic competition to the benefit of consumers and health care payers--although #fg percent of all prescriptions dispensed in the ,united ,states are generic drugs1 they account for only #bj percent of all expenditures4 7#d7 ,generic drugs cost substantially less than brand name drugs1 with discounts off the brand price sometimes exceeding #ij percent4 7#e7 ,federal dollars currently account for an estimated #ce percent of the #bfc1jjj1jjj1jjj spent on prescription drugs1 and this share is expected to rise to #db percent by #bjba4 7#f7 7,a7 ,in recent years1 the intent of the #aihd ,act has been subverted by certain settlement agreements between brand companies and their potential generic competitors that make reverse payments which are payments by the brand company to the generic company4 7,b7 ,these settlement agreements have unduly delayed the marketing of low-cost generic drugs contrary to free competition1 the interests of consumers1 and the principles underlying antitrust law4 7,c7 ,because of the price disparity between brand name and generic drugs1 such agreements are more profitable for both the brand and generic manufacturers than competition1 and will become increasingly common unless prohibited4 7,d7 ,these agreements result in consumers losing the benefits that the #aihd ,act was intended to provide4 7b7 ,purposes ,the purposes of this ,act are-- 7#a7 to enhance competition in the pharmaceutical market by stopping anticompetitive agreements between brand name and generic drug manufacturers that limit1 delay1 or otherwise prevent competition from generic drugs2 and 7#b7 to support the purpose and intent of antitrust law by prohibiting anticompetitive practices in the pharmaceutical industry that harm consumers4 #c4 ,unlawful compensation for delay ,the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #dd et seq47 is amended by-- 7#a7 redesignating section #bh as section #bi2 and 7#b7 inserting before section #bi1 as redesignated1 the following3 #bh4 ,preserving access to affordable generics 7a7 ,in general 7#a7 ,enforcement proceeding ,the ,federal ,trade ,commission may initiate a proceeding to enforce the provisions of this section against the parties to any agreement resolving or settling1 on a final or interim basis1 a patent infringement claim1 in connection with the sale of a drug product4 7#b7 ,presumption 7,a7 ,in general ,subject to subparagraph 7,b71 in such a proceeding1 an agreement shall be presumed to have anticompetitive effects and be unlawful if-- 7i7 an ,,anda filer receives anything of value2 and 7ii7 the ,,anda filer agrees to limit or forego research1 development1 manufacturing1 marketing1 or sales of the ,,anda product for any period of time4 7,b7 ,exception ,the presumption in subparagraph 7,a7 shall not apply if the parties to such agreement demonstrate by clear and convincing evidence that the procompetitive benefits of the agreement outweigh the anticompetitive effects of the agreement4 7b7 ,competitive factors ,in determining whether the settling parties have met their burden under subsection 7a77#b77;,b71 the fact finder shall consider-- 7#a7 the length of time remaining until the end of the life of the relevant patent1 compared with the agreed upon entry date for the ,,anda product2 7#b7 the value to consumers of the competition from the ,,anda product allowed under the agreement2 7#c7 the form and amount of consideration received by the ,,anda filer in the agreement resolving or settling the patent infringement claim2 7#d7 the revenue the ,,anda filer would have received by winning the patent litigation2 7#e7 the reduction in the ,,nda holder's revenues if it had lost the patent litigation2 7#f7 the time period between the date of the agreement conveying value to the ,,anda filer and the date of the settlement of the patent infringement claim2 and 7#g7 any other factor that the fact finder1 in its discretion1 deems relevant to its determination of competitive effects under this subsection4 7c7 ,limitations ,in determining whether the settling parties have met their burden under subsection 7a77#b77;,b71 the fact finder shall not presume-- 7#a7 that entry would not have occurred until the expiration of the relevant patent or statutory exclusivity2 or 7#b7 that the agreement's provision for entry of the ,,anda product prior to the expiration of the relevant patent or statutory exclusivity means that the agreement is pro-competitive1 although such evidence may be relevant to the fact finder's determination under this section4 7d7 ,exclusions ,nothing in this section shall prohibit a resolution or settlement of a patent infringement claim in which the consideration granted by the ,,nda holder to the ,,anda filer as part of the resolution or settlement includes only one or more of the following3 7#a7 ,the right to market the ,,anda product in the ,united ,states prior to the expiration of-- 7,a7 any patent that is the basis for the patent infringement claim2 or 7,b7 any patent right or other statutory exclusivity that would prevent the marketing of such drug4 7#b7 ,a payment for reasonable litigation expenses not to exceed #g1ejj1jjj4 7#c7 ,a covenant not to sue on any claim that the ,,anda product infringes a ,united ,states patent4 7e7 ,regulations and enforcement 7#a7 ,regulations ,the ,federal ,trade ,commission may issue1 in accordance with section #eec of title #e1 ,united ,states ,code1 regulations implementing and interpreting this section4 ,these regulations may exempt certain types of agreements described in subsection 7a7 if the ,commission determines such agreements will further market competition and benefit consumers4 ,judicial review of any such regulation shall be in the ,united ,states ,district ,court for the ,district of ,columbia pursuant to section #gjf of title #e1 ,united ,states ,code4 7#b7 ,enforcement ,a violation of this section shall be treated as a violation of section #e4 7#c7 ,judicial review ,any person1 partnership or corporation that is subject to a final order of the ,commission1 issued in an administrative adjudicative proceeding under the authority of subsection 7a77#a71 may1 within #cj days of the issuance of such order1 petition for review of such order in the ,united ,states ,court of ,appeals for the ,district of ,columbia ,circuit or the ,united ,states ,court of ,appeals for the circuit in which the ultimate parent entity1 as defined at #af ,,cfr #hja4a7;a77#c71 of the ,,nda holder is incorporated as of the date that the ,,nda is filed with the ,secretary of the ,food and ,drug ,administration1 or the ,united ,states ,court of ,appeals for the circuit in which the ultimate parent entity of the ,,anda filer is incorporated as of the date that the ,,anda is filed with the ,secretary of the ,food and ,drug ,administration4 ,in such a review proceeding1 the findings of the ,commission as to the facts1 if supported by evidence1 shall be conclusive4 7f7 ,antitrust laws ,nothing in this section shall be construed to modify1 impair or supersede the applicability of the antitrust laws as defined in subsection 7a7 of the #ast section of the ,clayton ,act 7#ae ,u4,s4,c4 #ab7;a77 and of section #e of this ,act to the extent that section #e applies to unfair methods of competition4 ,nothing in this section shall modify1 impair1 limit or supersede the right of an ,,anda filer to assert claims or counterclaims against any person1 under the antitrust laws or other laws relating to unfair competition4 7g7 ,penalties 7#a7 ,forfeiture ,each person1 partnership or corporation 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 section1 but in no event greater than #c times the value received by the party that is reasonably attributable to a violation of this section4 ,if no such value has been received by the ,,nda holder1 the penalty to the ,,nda holder shall be sufficient to deter violations1 but in no event greater than #c times the value given to the ,,anda filer reasonably attributable to the violation of this section4 ,such penalty shall accrue to the ,united ,states and may be recovered in a civil action brought by the ,federal ,trade ,commission1 in its own name by any of its attorneys designated by it for such purpose1 in a district court of the ,united ,states against any person1 partnership or corporation that violates this section4 ,in such actions1 the ,united ,states district courts are empowered to grant mandatory injunctions and such other and further equitable relief as they deem appropriate4 7#b7 ,cease and desist 7,a7 ,in general ,if the ,commission has issued a cease and desist order with respect to a person1 partnership or corporation in an administrative adjudicative proceeding under the authority of subsection 7a77#a71 an action brought pursuant to paragraph 7#a7 may be commenced against such person1 partnership or corporation at any time before the expiration of one year after such order becomes final pursuant to section #e7;g74 7,b7 ,exception ,in an action under subparagraph 7,a71 the findings of the ,commission as to the material facts in the administrative adjudicative proceeding with respect to such person's1 partnership's or corporation's violation of this section shall be conclusive unless-- 7i7 the terms of such cease and desist order expressly provide that the ,commission's findings shall not be conclusive2 or 7ii7 the order became final by reason of section #e7;g77#a71 in which case such finding shall be conclusive if supported by evidence4 7#c7 ,civil penalty ,in determining the amount of the civil penalty described in this section1 the court shall take into account-- 7,a7 the nature1 circumstances1 extent1 and gravity of the violation2 7,b7 with respect to the violator1 the degree of culpability1 any history of violations1 the ability to pay1 any effect on the ability to continue doing business1 profits earned by the ,,nda holder1 compensation received by the ,,anda filer1 and the amount of commerce affected2 and 7,c7 other matters that justice requires4 7#d7 ,remedies in addition ,remedies provided in this subsection are in addition to1 and not in lieu of1 any other remedy provided by ,federal law4 ,nothing in this paragraph shall be construed to affect any authority of the ,commission under any other provision of law4 7h7 ,definitions ,in this section3 7#a7 ,agreement ,the term agreement means anything that would constitute an agreement under section #a of the ,sherman ,act 7#ae ,u4,s4,c4 #a7 or section #e of this ,act4 7#b7 ,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 #cj days of the resolution or the settlement of the claim1 or any other agreement that is contingent upon1 provides a contingent condition for1 or is otherwise related to the resolution or settlement of the claim4 7#c7 ,,anda ,the term ,,anda means an abbreviated new drug application1 as defined under section #eje7;j7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;j774 7#d7 ,,anda filer ,the term ,,anda filer means a party who has filed an ,,anda with the ,food and ,drug ,administration4 7#e7 ,,anda product ,the term ,,anda product means the product to be manufactured under the ,,anda that is the subject of the patent infringement claim4 7#f7 ,drug product ,the term drug product means a finished dosage form 7e4g41 tablet1 capsule1 or solution7 that contains a drug substance1 generally1 but not necessarily1 in association with #a or more other ingredients1 as defined in section #cad4c7;b7 of title #ba1 ,code of ,federal ,regulations4 7#g7 ,,nda ,the term ,,nda means a new drug application1 as defined under section #eje7;b7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;b774 7#h7 ,,nda holder ,the term ,,nda holder means-- 7,a7 the party that received ,,fda approval to market a drug product pursuant to an ,,nda2 7,b7 a party owning or controlling enforcement of the patent listed in the ,approved ,drug ,products ,with ,therapeutic ,equivalence ,evaluations 7commonly known as the ,,fda ,orange ,book7 in connection with the ,,nda2 or 7,c7 the predecessors1 subsidiaries1 divisions1 groups1 and affiliates controlled by1 controlling1 or under common control with any of the entities described in subparagraphs 7,a7 and 7,b7 7such control to be presumed by direct or indirect share ownership of #ej percent or greater71 as well as the licensees1 licensors1 successors1 and assigns of each of the entities4 7#i7 ,patent infringement ,the term patent infringement means infringement of any patent or of any filed patent application1 extension1 reissue1 renewal1 division1 continuation1 continuation in part1 reexamination1 patent term restoration1 patents of addition and extensions thereof4 7#aj7 ,patent infringement claim ,the term patent infringement claim means any allegation made to an ,,anda filer1 whether or not included in a complaint filed with a court of law1 that its ,,anda or ,,anda product may infringe any patent held by1 or exclusively licensed to1 the ,,nda holder of the drug product4 7#aa7 ,statutory exclusivity ,the term statutory exclusivity means those prohibitions on the approval of drug applications under clauses 7ii7 through 7iv7 of section #eje7;c77#c77;,e7 7#e- and #c-year data exclusivity71 section #ebg 7orphan drug exclusivity71 or section #eje;,a 7pediatric exclusivity7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act4 4 #d4 ,notice and certification of agreements 7a7 ,notice of all agreements ,section #aaab7;c77#b7 of the ,medicare ,prescription ,drug1 ,improvement1 and ,modernization ,act of #bjjc 7#ba ,u4,s4,c4 #cee note7 is amended by-- 7#a7 striking the ,commission the and inserting the following3 8the ,commission-- 7#a7 the 2 7#b7 striking the period and inserting 2 and2 and 7#c7 inserting at the end the following3 7#b7 any other agreement the parties enter into within #cj days of entering into an agreement covered by subsection 7a7 or 7b74 4 7b7 ,certification of agreements ,section #aaab of such ,act is amended by adding at the end the following3 7d7 ,certification ,the ,chief ,executive ,officer or the company official responsible for negotiating any agreement required to be filed under subsection 7a71 7b71 or 7c7 shall execute and file with the ,assistant ,attorney ,general and the ,commission a certification as follows3 ,i declare that the following is true1 correct1 and complete to the best of my knowledge3 ,the materials filed with the ,federal ,trade ,commission and the ,department of ,justice under section #aaab of subtitle ,b of title ,,xi of the ,medicare ,prescription ,drug1 ,improvement1 and ,modernization ,act of #bjjc1 with respect to the agreement referenced in this certification3 7#a7 represent the complete1 final1 and exclusive agreement between the parties2 7#b7 include any ancillary agreements that are contingent upon1 provide a contingent condition for1 or are otherwise related to1 the referenced agreement2 and 7#c7 include written descriptions of any oral agreements1 representations1 commitments1 or promises between the parties that are responsive to subsection 7a7 or 7b7 of such section #aaab and have not been reduced to writing44 4 #e4 ,forfeiture of #ahj-;day exclusivity period ,section #eje7;j77#e77;,d77i77,v7 of the ,federal ,food1 ,drug and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;j77#e77;,d77i77,v77 is amended by inserting section #bh of the ,federal ,trade ,commission ,act or after that the agreement has violated4 #f4 ,commission litigation authority ,section #af7;a77#b7 of the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #ef7;a77#b77 is amended-- 7#a7 in subparagraph 7,d71 by striking or after the semicolon2 7#b7 in subparagraph 7,e71 by inserting or after the semicolon2 and 7#c7 inserting after subparagraph 7,e7 the following3 7,f7 under section #bh2 4 #g4 ,statute of limitations ,the ,commission shall commence any enforcement proceeding described in section #bh of the ,federal ,trade ,commission ,act1 as added by section #c1 except for an action described in section #bh7;g77#b7 of the ,federal ,trade ,commission ,act1 not later than #c years after the date on which the parties to the agreement file the ,notice of ,agreement as provided by sections #aaab7;c77#b7 and 7d7 of the ,medicare ,prescription ,drug ,improvement and ,modernization ,act of #bjjc 7#ba ,u4,s4,c4 #cee note74 #h4 ,severability ,if any provision of this ,act1 an amendment made by this ,act1 or the application of such provision or amendment to any person or circumstance is held to be unconstitutional1 the remainder of this ,act1 the amendments made by this ,act1 and the application of the provisions of such ,act or amendments to any person or circumstance shall not be affected thereby4