,,ii #aaeth ,,congress #ast ,session ,s4 #abd ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,january #ab1 #bjag,ms4 ,klobuchar 7for herself and ,mr4 ,grassley7 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 approximately #aj percent of the national health care spending4 7#c7 ,initially1 the #aihd ,act was successful in facilitating generic competition to the benefit of consumers and health care payers1 although #hh percent of all prescriptions dispensed in the ,united ,states are generic drugs1 they account for only #bh percent of all expenditures4 7#d7 ,generic drugs cost substantially less than brand name drugs1 with discounts off the brand price averaging #hj to #he percent4 7#e7 ,federal dollars currently account for over #dj percent of the #cbe1jjj1jjj1jjj spent on retail prescription drugs1 and this share is expected to rise to #dg percent by #bjbe4 7#f7 7,a7 ,in recent years1 the intent of the #aihd ,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 patents4 7,b7 ,these reverse payment settlement agreements-- 7i7 allow a branded company to share its monopoly profits with the generic company as a way to protect the branded company's monopoly2 and 7ii7 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 competition 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 7a7 ,in general ,the ,federal ,trade ,commission ,act 7#ae ,u4,s4,c4 #dd et seq47 is amended by inserting after section #bf 7#ae ,u4,s4,c4 #eg;c-#b7 the following3 #bg4 ,preserving access to affordable generics 7a7 ,in general 7#a7 ,enforcement proceeding ,the ,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 and violation 7,a7 ,in general ,subject to subparagraph 7,b71 in such a proceeding1 an agreement shall be presumed to have anticompetitive effects and shall be a violation of this section if-- 7i7 an ,,anda filer receives anything of value1 including an exclusive license2 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 ,subparagraph 7,a7 shall not apply if the parties to such agreement demonstrate by clear and convincing evidence that-- 7i7 the value described in subparagraph 7,a77i7 is compensation solely for other goods or services that the ,,anda filer has promised to provide2 or 7ii7 the procompetitive benefits of the agreement outweigh the anticompetitive effects of the agreement4 7b7 ,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 procompetitive4 7c7 ,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 7d7 ,enforcement 7#a7 ,enforcement ,a violation of this section shall be treated as a violation of section #e4 7#b7 ,judicial review 7,a7 ,in general ,any party 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-- 7i7 the ,united ,states ,court of ,appeals for the ,district of ,columbia ,circuit2 7ii7 the ,united ,states ,court of ,appeals for the circuit in which the ultimate parent entity1 as defined in section #hja4a7;a77#c7 of title #af1 ,code of ,federal ,regulations1 or any successor thereto1 of the ,,nda holder is incorporated as of the date that the ,,nda is filed with the ,commissioner of ,food and ,drugs2 or 7iii7 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 ,commissioner of ,food and ,drugs4 7,b7 ,treatment of findings ,in a proceeding for judicial review of a final order of the ,commission1 the findings of the ,commission as to the facts1 if supported by evidence1 shall be conclusive4 7e7 ,antitrust laws ,nothing in this section shall modify1 impair1 limit1 or supersede the applicability of the antitrust laws as defined in subsection 7a7 of the first section of the ,clayton ,act 7#ae ,u4,s4,c4 #ab7;a771 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 limit1 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 7f7 ,penalties 7#a7 ,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 section1 but in no event greater than #c times the value received by the party that is reasonably attributable to the 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 ,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 party 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 party 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 party at any time before the expiration of #a 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 the violation of this section by a party 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 7g7 ,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 application filed under section #eje7;j7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;j77 or a new drug application filed under section #eje7;b77#b7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;b77#b774 7#d7 ,,anda filer ,the term ,,anda filer means a party that owns or controls an ,,anda filed with the ,commission of ,food and ,drugs or has the exclusive rights under such ,,anda to distribute the ,,anda product4 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 has the meaning given such term in section #cad4c7;b7 of title #ba1 ,code of ,federal ,regulations 7or any successor regulation74 7#g7 ,,nda ,the term ,,nda means a new drug application filed 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 holder of an approved ,,nda application for a drug product2 7,b7 a person 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 ,party ,the term party means any person1 partnership1 corporation1 or other legal entity4 7#aj7 ,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 addition1 and extensions thereof4 7#aa7 ,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#ab7 ,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 ,act 7#ba ,u4,s4,c4 #cee7;c77#c77;,e71 #cfj;cc1 #cee;a74 4 7b7 ,effective date ,section #bg of the ,federal ,trade ,commission ,act1 as added by this section1 shall apply to all agreements described in section #bg7;a77#a7 of that ,act entered into after ,june #ag1 #bjac4 ,section #bg7;f7 of the ,federal ,trade ,commission ,act1 as added by this section1 shall apply to agreements entered into on or after the date of enactment of this ,act4 #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 under subsection 7a7 or 7b7 that is required to be filed under subsection 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 certification-- 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 writing4 4 4 #e4 ,forfeiture of #ahj-;day exclusivity period ,section #eje7;j77#e77;,d77i77,v7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;j77#e77;,d77i77,v77 is amended by inserting section #bg 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 #bg2 4 #g4 ,statute of limitations ,the ,federal ,trade ,commission shall commence any enforcement proceeding described in section #bg of the ,federal ,trade ,commission ,act1 as added by section #c1 except for an action described in section #bg7;f77#b7 of the ,federal ,trade ,commission ,act1 not later than #f years after the date on which the parties to the agreement file the ,notice of ,agreement as provided by section #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 affected4