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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5133 Reported in House (RH)]

<DOC>

                                                 Union Calendar No. 578
116th CONGRESS
  2d Session
                                H. R. 5133

                          [Report No. 116-695]

 To amend the Federal Trade Commission Act to prohibit anticompetitive 
    behaviors by drug product manufacturers, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           November 18, 2019

Mr. Cicilline (for himself, Mr. Collins of Georgia, Mr. Nadler, and Mr. 
Sensenbrenner) introduced the following bill; which was referred to the 
                       Committee on the Judiciary

                           December 24, 2020

             Additional sponsors: Mrs. McBath and Mr. Cline

                           December 24, 2020

    Reported from the Committee on the Judiciary; committed to the 
 Committee of the Whole House on the State of the Union and ordered to 
                               be printed

_______________________________________________________________________

                                 A BILL

 
 To amend the Federal Trade Commission Act to prohibit anticompetitive 
    behaviors by drug product manufacturers, and for other purposes.

 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Affordable Prescriptions for 
Patients Through Promoting Competition Act of 2019''.

SEC. 2. PRODUCT HOPPING.

    (a) In General.--The Federal Trade Commission Act (15 U.S.C. 41 et 
seq.) is amended by inserting after section 26 (15 U.S.C. 57c-2) the 
following:

``SEC. 27. PRODUCT HOPPING.

    ``(a) Definitions.--In this section:
            ``(1) Abbreviated new drug application.--The term 
        `abbreviated new drug application' means an application under 
        subsection (b)(2) or (j) of section 505 of the Federal Food, 
        Drug, and Cosmetic Act (21 U.S.C. 355).
            ``(2) Biosimilar biological product.--The term `biosimilar 
        biological product' means a biological product licensed under 
        section 351(k) of the Public Health Service Act (42 U.S.C. 
        262(k)).
            ``(3) Biosimilar biological product license application.--
        The term `biosimilar biological product license application' 
        means an application submitted under section 351(k) of the 
        Public Health Service Act (42 U.S.C. 262(k)).
            ``(4) Follow-on product.--The term `follow-on product'--
                    ``(A) means a drug approved through an application 
                or supplement to an application submitted under section 
                505(b) of the Federal Food, Drug, and Cosmetic Act (21 
                U.S.C. 355(c)) or a biological product licensed through 
                an application or supplement to an application 
                submitted under section 351(a) of the Public Health 
                Service Act (42 U.S.C. 262(a)) for a change, 
                modification, or reformulation to the same 
                manufacturer's previously approved drug or biological 
                product that treats the same or a related indication;
                    ``(B) excludes such an application or supplement to 
                an application for a change, modification, or 
                reformulation of a drug or biological product that is 
                requested by the Secretary or necessary to comply with 
                law, including sections 505A and 505B of the Federal 
                Food, Drug, and Cosmetic Act (21 U.S.C. 355a, 355c);
                    ``(C) excludes such an application or supplement to 
                an application submitted under section 505(b) of the 
                Federal Food, Drug, and Cosmetic Act (21 U.S.C. 355(c)) 
                that has been granted New Chemical Entity exclusivity 
                (21 U.S.C. 355(c)(3)(E)(ii)) by the Food and Drug 
                Administration; and
                    ``(D) excludes such an application or supplement 
                submitted under section 351(a) of the Public Health 
                Service Act (42 U.S.C. 262(a)) that has been granted 
                exclusivity pursuant to section 351(k)(7) of such Act 
                (42 U.S.C. 262(k)(7)).
            ``(5) Commission.--The term `Commission' means the Federal 
        Trade Commission
            ``(6) Disadvantage.--The term `disadvantage' means to 
        impede the listed drug or reference product's ability to 
        compete on the merits with the follow-on product. This term 
        excludes actions that consist solely of--
                    ``(A) truthful, non-misleading promotional 
                marketing; or
                    ``(B) ceasing promotional marketing for the listed 
                drug or reference product.
            ``(7) Generic drug.--The term `generic drug' means a drug 
        approved under an application submitted under subsection (b)(2) 
        or (j) of section 505 of the Federal Food, Drug, and Cosmetic 
        Act (21 U.S.C. 355).
            ``(8) Listed drug.--The term `listed drug' means a drug 
        listed under section 505(j)(7) of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 355(j)(7)).
            ``(9) Manufacturer.--The term `manufacturer' means the 
        holder, licensee, or assignee of--
                    ``(A) an approved application for a drug under 
                section 505(c) of the Federal Food, Drug, and Cosmetic 
                Act (21 U.S.C. 355(c)); or
                    ``(B) a biological product license under section 
                351(a) of the Public Health Service Act (42 U.S.C. 
                262(a)).
            ``(10) Reference product.--The term `reference product' has 
        the meaning given the term in section 351(i) of the Public 
        Health Service Act (42 U.S.C. 262(i)).
            ``(11) Ultimate parent entity.--The term `ultimate parent 
        entity' has the meaning given the term in section 801.1 of 
        title 16, Code of Federal Regulations, or any successor 
        regulation.
    ``(b) Prohibition on Product Hopping.--
            ``(1) Prima facie.--Except as provided in paragraph (2), a 
        manufacturer of a reference product or listed drug shall be 
        considered to have engaged in an unfair method of competition 
        in or affecting commerce in violation of section 5(a) of the 
        Federal Trade Commission Act if complaint counsel or the 
        Commission demonstrates by a preponderance of the evidence in a 
        proceeding initiated by the Commission under subsection (c)(1), 
        or in a suit brought under subparagraph (B) or (C) of 
        subsection (c)(1), that, during the period beginning on the 
        date on which the manufacturer of the reference product or 
        listed drug first receives notice that an applicant has 
        submitted to the Commissioner of Food and Drugs an abbreviated 
        new drug application or biosimilar biological product license 
        application and ending on the date that is the earlier of 180 
        days after the date on which that generic drug or biosimilar 
        biological product or another generic drug or biosimilar 
        biological product referencing the listed drug or reference 
        product is first marketed or 3 years after the date on which 
        the follow-on product is first marketed, the manufacturer 
        engaged in either of the following actions:
                    ``(A) The manufacturer engaged in a hard switch, 
                which shall be established by demonstrating that the 
                manufacturer engaged in either of the actions described 
                in clause (i) or (ii):
                            ``(i) Upon the request of the manufacturer 
                        of the listed drug or reference product, the 
                        Commissioner of Food and Drugs withdrew the 
                        approval of the application for the listed drug 
                        or reference product or placed the listed drug 
                        or reference product on the discontinued 
                        products list; and
                            ``(I) the manufacturer marketed or sold a 
                        follow-on product.
                            ``(ii)(I) The manufacturer of the listed 
                        drug or reference product--
                                    ``(aa) withdrew, discontinued the 
                                manufacture of, or withdrew the 
                                application with respect to, or 
                                announced withdrawal of, discontinuance 
                                of the manufacture of, or withdrawal of 
                                the application with respect to, the 
                                drug or reference product in a manner 
                                that impedes competition from a generic 
                                drug or a biosimilar biological 
                                product, as established by objective 
                                circumstances, unless such actions were 
                                taken by the manufacturer pursuant to a 
                                request of the Commissioner of Food and 
                                Drugs; or
                                    ``(bb) destroyed the inventory of 
                                the listed drug or reference product in 
                                a manner that impedes competition from 
                                a generic drug or a biosimilar 
                                biological product, which may be 
                                established by objective circumstances; 
                                and
                            ``(II) marketed or sold a follow-on 
                        product.
                    ``(B) The manufacturer engaged in a soft switch, 
                which shall be established by demonstrating that the 
                manufacturer engaged in both of the following actions:
                            ``(i) The manufacturer took one or more 
                        actions with respect to the listed drug or 
                        reference product other than those described in 
                        subparagraph (A) that unfairly disadvantage the 
                        listed drug or reference product relative to 
                        the follow-on product described in clause (ii) 
                        in a manner that impedes competition from 
                        either a generic drug or a biosimilar 
                        biological product, which may be established by 
                        objective circumstances.
                            ``(ii) The manufacturer marketed or sold a 
                        follow-on product.
            ``(2) Justification.--
                    ``(A) In general.--Subject to paragraph (3), the 
                actions described in paragraph (1) by a manufacturer of 
                a listed drug or reference product shall not be 
                considered to be an unfair method of competition in or 
                affecting commerce if--
                            ``(i) the manufacturer demonstrates to the 
                        Commission or a district court of the United 
                        States, as applicable, by a preponderance of 
                        the evidence in a proceeding initiated by the 
                        Commission under subsection (c)(1), or in a 
                        suit brought under subparagraph (B) or (C) of 
                        subsection (c)(1), that--
                                    ``(I) the manufacturer would have 
                                taken the actions regardless of whether 
                                a generic drug that references the 
                                listed drug or biosimilar biological 
                                product that references the reference 
                                product had already entered the market; 
                                and
                                    ``(II)(aa) with respect to a hard 
                                switch under paragraph (1)(A)(i), the 
                                manufacturer took the action for 
                                reasons relating to the safety risk to 
                                patients of the listed drug or 
                                reference product;
                                    ``(bb) with respect to an action 
                                described in item (aa) or (bb) of 
                                paragraph (1)(A)(ii)(I), there is a 
                                supply disruption that--
                                            ``(AA) is outside of the 
                                        control of the manufacturer;
                                            ``(BB) prevents the 
                                        production or distribution of 
                                        the applicable listed drug or 
                                        reference product; and
                                            ``(CC) cannot be remedied 
                                        by reasonable efforts; or
                                    ``(cc) with respect to a soft 
                                switch under paragraph (1)(B), the 
                                manufacturer had legitimate pro-
                                competitive reasons, apart from the 
                                financial effects of reduced 
                                competition, to take the action.
                    ``(B) Rule of construction.--Nothing in 
                subparagraph (A) may be construed to limit the 
                information that the Commission may otherwise obtain in 
                any proceeding or action instituted with respect to a 
                violation of this section.
            ``(3) Response.--With respect to a justification offered by 
        a manufacturer under paragraph (2), complaint counsel or the 
        Commission, as applicable, will prevail in its case if it 
        establishes by a preponderance of the evidence that--
                    ``(A) the conduct described in subsection (b)(1) is 
                not reasonably necessary to address or achieve the 
                justifications claimed under paragraph (2)(A)(II)(aa-
                cc), or such justifications could be reasonably 
                addressed or achieved through less anticompetitive 
                means; or
                    ``(B) the pro-competitive benefits from the conduct 
                described in subparagraph (A) or (B) of paragraph (1), 
                as applicable, do not outweigh any anticompetitive 
                effects of the conduct, even in consideration of the 
                justification so offered.
    ``(c) Enforcement.--
            ``(1) Enforcement by the federal trade commission.--Except 
        as provided in paragraph (2), the Commission shall enforce this 
        section in the same manner, by the same means, and with the 
        same jurisdiction, powers, duties, and remedies provided for by 
        all applicable terms and provisions of the Federal Trade 
        Commission Act (15 U.S.C. 45 et seq.).
            ``(2) Judicial review.--
                    ``(A) In general.--Notwithstanding any provision of 
                section 5 of the Federal Trade Commission Act, any 
                manufacturer that is subject to a final order of the 
                Commission that is issued in a proceeding initiated 
                under paragraph (1) may, not later than 30 days after 
                the date on which the Commission issues the order, 
                petition for review of the order in--
                            ``(i) the United States Court of Appeals 
                        for the District of Columbia Circuit; or
                            ``(ii) the court of appeals of the United 
                        States for the circuit in which the ultimate 
                        parent entity of the manufacturer is 
                        incorporated.
                    ``(B) Treatment of findings.--In a review of an 
                order issued by the Commission conducted by a court of 
                appeals of the United States under subparagraph (A), 
                the factual findings of the Commission shall be 
                conclusive if those facts are supported by the 
                evidence.
            ``(3) Rules of construction.--Nothing in this subsection 
        may be construed as--
                    ``(A) requiring the Commission to bring a suit 
                seeking a temporary injunction under paragraph (1)(B) 
                before bringing a suit seeking a permanent injunction 
                under paragraph (1)(C); or
                    ``(B) affecting any other authority of the 
                Commission under this Act to seek relief or obtain a 
                remedy with respect to a violation of this Act.''.
    (b) Applicability.--Section 27 of the Federal Trade Commission Act, 
as added by subsection (a), shall apply with respect to any--
            (1) conduct that occurs on or after the date of enactment 
        of this Act; and
            (2) action or proceeding that is commenced on or after the 
        date of enactment of this Act.
    (c) Antitrust Laws.--Nothing in this section, or the amendments 
made by 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 
the Federal Trade Commission Act (15 U.S.C. 45) to the extent that it 
applies to unfair methods of competition.
    (d) Rulemaking.--The Federal Trade Commission may issue rules under 
section 553 of title 5, United States Code, to carry out section 27 of 
the Federal Trade Commission Act, as added by subsection (a), including 
by defining any terms used in such section 27 (other than terms that 
are defined in subsection (a) of such section 27).
                                                 Union Calendar No. 578

116th CONGRESS

  2d Session

                               H. R. 5133

                          [Report No. 116-695]

_______________________________________________________________________

                                 A BILL

 To amend the Federal Trade Commission Act to prohibit anticompetitive 
    behaviors by drug product manufacturers, and for other purposes.

_______________________________________________________________________

                           December 24, 2020

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed
```