,i #aafth ,,congress #ast ,session ,h4 ,r4 #acdd ,,in ,,the ,,house ,,of ,,representatives ,february #be1 #bjai,mr4 ,doggett 7for himself1 ,mr4 ,blumenauer1 ,mr4 ,cartwright1 ,ms4 ,judy ,chu of ,california1 ,mr4 ,cummings1 ,ms4 ,de,lauro1 ,mr4 ,de,saulnier1 ,mr4 ,grijalva1 ,ms4 ,hill of ,california1 ,ms4 ,kaptur1 ,mr4 ,khanna1 ,ms4 ,moore1 ,mrs4 ,napolitano1 ,ms4 ,ocasio-,cortez1 ,ms4 ,norton1 ,ms4 ,pingree1 ,mr4 ,pocan1 ,ms4 ,waters1 ,mr4 ,welch1 and ,mr4 ,langevin7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means1 and in addition to the ,committees on ,energy and ,commerce1 and the ,judiciary1 for a period to be subsequently determined by the ,speaker1 in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned ,a ,,bill ,to prohibit brand name drug companies from compensating generic drug companies to delay the entry of a generic drug into the market1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,competitive ,deals ,resulting in ,unleashed ,generics and ,savings ,act of #bjai or the ,competitive ,,drugs ,act of #bjai 4 #b4 ,clawback of research and development tax benefits for manufacturers engaging in pay-for-delay 7a7 ,in general ,section #da of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7i7 ,recapture 7#a7 ,in general ,if the ,federal ,trade ,commission determines under section #bg of the ,federal ,trade ,commission ,act that the taxpayer violated section #e of such ,act in connection with the sale of a drug product 7as defined in such section71 then the tax under this chapter for the taxable year which includes the date of such determination shall be increased by the sum of the product for each of the #b relevant years of-- 7,a7 the aggregate decrease in the credits allowed under section #ch for such relevant year which would have resulted solely from reducing to zero any credit determined under this section1 multiplied by 7,b7 the sales ratio for such drug product for such relevant year4 7#b7 ,relevant year ,for purposes of this subsection1 the term relevant year means1 with respect to any determination by the ,federal ,trade ,commission described in paragraph 7#a71 a taxable year in which the aggregate decrease in the credits allowed under section #ch which would have resulted solely from reducing to zero any credit determined under this section is one of the two highest such decreases during the #aj-year period ending with the last taxable year that ended before the date of such determination4 7#c7 ,sales ratio ,for purposes of this subsection1 the term sales ratio means1 with respect to a drug product sold by a taxpayer in a taxable year1 the ratio of-- 7,a7 the revenue from sales of such drug product by such taxpayer during such taxable year1 to 7,b7 the total revenue from sales of all drug products by such taxpayer during such taxable year4 7#d7 ,consent decrees deemed to be violations ,if a taxpayer enters into a consent decree with respect to any proceeding initiated by the ,federal ,trade ,commission under section #bg of the ,federal ,trade ,commission ,act1 such consent decree shall be treated for purposes of this subsection as if the ,commission had determined under such section that the taxpayer violated section #e of such ,act in connection with the sale of the drug product to which such proceeding relates4 7#e7 ,recapture not taken into account in determining maximum penalty ,the increase in tax under this subsection shall not be treated as a penalty for purposes of section #bg7;f7 of the ,federal ,trade ,commission ,act4 4 7b7 ,effective date ,the amendment made by this section shall apply to taxable years ending after the date of the enactment of this ,act4 #c4 ,tax on receipt of pay-for-delay payments2 denial of deduction for pay-for-delay payments 7a7 ,receipt of payment ,the ,internal ,revenue ,code of #aihf is amended by inserting after chapter #cf the following new chapter3 #cg ,pay-for-,delay ,sec4 #deja4 ,imposition of tax4 #deja4 ,imposition of tax ,there is hereby imposed1 on each taxpayer who is party to an agreement that is determined by the ,federal ,trade ,commission under section #bg of the ,federal ,trade ,commission ,act to be a violation of section #e of such ,act1 a tax equal to #ej percent of the amount paid to such taxpayer under such agreement4 4 7b7 ,denial of deduction ,section #afb7;c7 is amended by adding at the end the following new paragraph3 7#d7 ,pay-for-delay payments ,no deduction shall be allowed under subsection 7a7 for any payment under an agreement that is determined by the ,federal ,trade ,commission under section #bg of the ,federal ,trade ,commission ,act to be a violation of section #e of such ,act4 4 7c7 ,conforming amendment ,the table of chapters for the ,internal ,revenue ,code of #aihf is amended by inserting after the item relating to chapter #cf the following new item3 ,chapter #cg--,pay-for-,delay 4 #d4 ,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 ,violation 7,a7 ,in general ,subject to subparagraph 7,b71 in such a proceeding1 an agreement shall be an unfair method of competition in or affecting commerce and be a violation of section #e if pursuant to the agreement-- 7i7 an ,,anda filer receives anything of value1 including an exclusive or non-exclusive license1 an agreement regarding the marketing of a product1 or any other commercial opportunity or benefit2 and 7ii7 the ,,anda filer agrees to limit or forgo 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 may not presume-- 7#a7 that entry of the ,,anda product into interstate commerce 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 into interstate commerce 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 to the ,,anda filer as part of the resolution or settlement includes one or more of the following and nothing else3 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 payment1 not to exceed #g1ejj1jjj1 if based on reasonable litigation expenses4 7#c7 ,a covenant not to sue 7including any agreement to dismiss7 on any claim that the ,,anda product infringes a ,united ,states patent4 7d7 ,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 after the issuance of such order1 petition for review of such order in-- 7,a7 the ,united ,states ,court of ,appeals for the ,district of ,columbia ,circuit2 or 7,b7 the ,united ,states ,court of ,appeals for the circuit in which any party subject to such final order is incorporated on the date that the petition for review is filed4 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 ,construction 7#a7 ,antitrust laws and consumer protection laws ,nothing in this section shall be construed to modify1 impair1 or supersede the operation of-- 7,a7 the antitrust laws as defined in subsection 7a7 of the first section of the ,clayton ,act 7#ae ,u4,s4,c4 #ab7;a771 or any ,state law substantially similar to any of such antitrust laws2 or 7,b7 section #e of this ,act or any substantially similar ,state law4 7#b7 ,claims and counterclaims ,nothing in this section shall modify1 impair1 or supersede the right of an ,,anda filer to assert a claim or counterclaim against any person under any law referred to in paragraph 7#a74 7f7 ,penalties 7#a7 ,forfeiture ,each party that violates subsection 7a77#b77;,a7 shall forfeit and pay to the ,united ,states a civil penalty sufficient to deter such violation1 but in no event greater than #c times the value received by the party that is reasonably attributable to such violation4 ,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 commits such violation4 ,in such actions1 the ,united ,states district courts are empowered to grant mandatory injunctions and such other and further equitable relief as the courts determine to be 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 a violation described in subsection 7a77#b77;,a7 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 violation1 including the amount of commerce affected2 7,b7 with respect to the violator1 in addition to the value received1 the degree of culpability1 any history of violations1 the ability to pay1 and any effect on the ability to continue doing business2 and 7,c7 other matters that justice requires4 7#d7 ,remedies in addition ,remedies provided in this subsection are in addition to any other remedy provided by ,federal or ,state 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 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 before or after the resolution or the settlement of a patent infringement claim1 or any other agreement that can be shown to be contingent upon1 to provide a contingent condition for1 or to be otherwise related to the resolution or settlement of the claim4 7#b7 ,,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#c7 ,,anda filer ,the term ,,anda filer means a party that owns or controls an ,,anda filed with the ,commissioner of ,food and ,drugs or has the exclusive rights under such ,,anda to distribute the ,,anda product4 7#d7 ,,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#e7 ,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#f7 ,,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#g7 ,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 court1 that the ,,anda filer's ,,anda or ,,anda product may infringe any of the following held by1 or exclusively licensed to1 the ,,nda holder of the drug product3 7,a7 ,any patent4 7,b7 ,any filed patent application4 7,c7 ,any extension1 reissue1 renewal1 division1 continuation1 continuation in part1 or reexamination of a patent4 7,d7 ,any patent term restoration1 patents of addition1 or extensions thereof4 7,e7 ,any other patent interest4 7#h7 ,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 section #eje;,a 7pediatric exclusivity71 or section #eje;,e 7qualified infectious disease product exclusivity7 of the ,federal ,food1 ,drug1 and ,cosmetic ,act 7#ba ,u4,s4,c4 #cee7;c77#c77;,e71 #cfj;cc1 #cee;a1 #cee;f74 4 7b7 ,applicability ,section #bg of the ,federal ,trade ,commission ,act1 as added by this section1 shall apply to any agreement described in section #bg7;a77#b77;,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 #e4 ,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 after 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 with primary responsibility 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 #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 by inserting after subparagraph 7,e7 the following new subparagraph3 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 such ,act1 not later than #f years after the date on which the parties to the agreement file the other agreements under section #aaab7;c77#b7 or the certification required by section #aaab7;d7 of the ,medicare ,prescription ,drug ,improvement and ,modernization ,act of #bjjc 7#ba ,u4,s4,c4 #cee note74