I

106TH CONGRESS

2D SESSION H. R. 5313

To enhance competition for prescription drugs by increasing the ability of

the Department of Justice and Federal Trade Commission to enforce

existing antitrust laws regarding brand name drugs and generic drugs.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 27, 2000

Mr. ANDREWS introduced the following bill; which was referred to the Committee on Commerce, and in addition to the Committee on the Judiciary,

for a period to be subsequently determined by the Speaker, in each case

for consideration of such provisions as fall within the jurisdiction of the

committee concerned

A BILL

To enhance competition for prescription drugs by increasing

the ability of the Department of Justice and Federal

Trade Commission to enforce existing antitrust laws regarding brand name drugs and generic drugs.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Drug Competition Act

5 of 2000’’.

6 SEC. 2. FINDINGS.

7 Congress finds that—
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1 (1) prescription drug costs are increasing at an

2 alarming rate and are a major worry of senior citi3 zens and American families;

4 (2) there is a potential for drug companies own5 ing patents on brand-name drugs to enter in private

6 financial deals with generic drug companies in a

7 manner that could tend to restrain trade and greatly

8 reduce competition and increase prescription drug

9 costs for American citizens; and

10 (3) enhancing competition between generic drug

11 manufacturers and brand name manufacturers can

12 significantly reduce prescription drug costs to Amer13 ican families.

14 SEC. 3. PURPOSE.

15 The purposes of this Act are—

16 (1) to provide timely notice to the Department

17 of Justice and the Federal Trade Commission re18 garding agreements between companies owning pat19 ents on brand name drugs and companies who could

20 manufacture generic or bioequivalent versions of

21 such brand name drugs; and

22 (2) by providing timely notice, to—

23 (A) enhance the effectiveness and effi24 ciency of the enforcement of the antitrust laws

25 of the United States; and
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1 (B) deter pharmaceutical companies from

2 engaging in anticompetitive actions or actions

3 that tend to unfairly restrain trade.

4 SEC. 4. DEFINITIONS.

5 In this Act:

6 (1) AGREEMENT.—The term ‘‘agreement’’

7 means an agreement under section 1 of the Sherman

8 Act (15 U.S.C. 1) or section 5 of the Federal Trade

9 Commission Act (15 U.S.C. 45).

10 (2) ANTITRUST LAWS.— The term ‘‘antitrust

11 laws’’ has the same meaning as in section 1 of the

12 Clayton Act (15 U.S.C. 12), except that such term

13 includes section 5 of the Federal Trade Commission

14 Act (15 U.S.C. 45) to the extent that such section

15 applies to unfair methods of competition.

16 (3) ANDA.—The term ‘‘ANDA’’ means an Ab17 breviated New Drug Application, as defined under

18 section 505(j) of the Federal Food, Drug and Cos19 metic Act (21 U.S.C 355(j)).

20 (4) BRAND NAME DRUG COMPANY.—The term

21 ‘‘brand name drug company’’ means a person en22 gaged in the manufacture or marketing of a drug

23 approved under section 505(b) of the Federal Food,

24 Drug and Cosmetic Act (21 U.S.C. 355(b)).
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1 (5) COMMISSION.—The term ‘‘Commission’’

2 means the Federal Trade Commission.

3 (6) FDA.—The term ‘‘FDA’’ means the United

4 States Food and Drug Administration.

5 (7) GENERIC DRUG.—The term ‘‘generic drug’’

6 is a product that the Food and Drug Administration

7 has approved under section 505(j) of the Federal

8 Food, Drug and Cosmetic Act (221 U.S.C. 355(j)).

9 (8) GENERIC DRUG APPLICANT.—The term

10 ‘‘generic drug applicant’’ means a person who has

11 filed or received approval for an ANDA under sec12 tion 505(j) of the Federal Food, Drug and Cosmetic

13 Act (21 U.S.C. 355(j)).

14 (9) NDA.—The term ‘‘NDA’’ means a New

15 Drug Application, as defined under section 505(b) of

16 the Federal Food, Drug and Cosmetic Act (21

17 U.S.C. 355(b))

18 SEC. 5. NOTIFICATION OF AGREEMENTS AFFECTING THE

19 SALE OR MARKETING OF GENERIC DRUGS.

20 A brand name drug manufacturer and a generic drug

21 manufacturer that enter into an agreement—

22 (1) regarding the sale or manufacture of a ge23 neric drug equivalent of a brand name drug that is

24 manufactured by that brand name manufacturer.

25 and
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1 (2) which agreement could have the effect of

2 limiting the research, development, manufacture,

3 marketing or selling of a generic drug product that

4 could be approved for sale by the FDA pursuant to

5 an ANDA,

6 shall both file with the Commission and the Attorney Gen7 eral a notice that such an agreement has been entered

8 into, the text of the agreement, an explanation of the pur9 pose and scope of the agreement, and an explanation of

10 whether the agreement could delay, restrain, limit, or in

11 any way interfere with the production, manufacture, or

12 sale of the generic version of the drug in question.

13 SEC. 6. FILING DEADLINES.

14 Any notice, agreement, or other material required to

15 be filed under section 5 shall be filed with the Attorney

16 General and the Commission not later than 10 business

17 days after the date the agreement is executed.

18 SEC. 7. ENFORCEMENT.

19 (a) CIVIL FINE.—Any person, or any officer, direc20 tor, or partner thereof, who fails to comply with any provi21 sion of this Act shall be liable for a civil penalty of not

22 more than $20,000 for each day during which such person

23 is in violation of this Act. Such penalty may be recovered

24 in a civil action brought by the United States or brought

25 by the Commission in accordance with the procedures es-
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1 tablished in section 16(a)(1) of the Federal Trade Com2 mission Act (15 U.S.C. 56(a)).

3 (b) COMPLIANCE AND EQUITABLE RELIEF.—If any

4 person, or any officer, director, partner, agent, or em5 ployee thereof, fails to comply with the notification re6 quirement under section 5 of this Act, the United States

7 district court, for the district in which such person officer,

8 director, partner, agent, or employee thereof resides or

9 does business, may order compliance and grant such other

10 equitable relief as the court in its discretion determines

11 necessary or appropriate, upon application of the Commis12 sion or the Assistant Attorney General.

13 SEC. 8. RULEMAKING.

14 The Commission, with the concurrence of the Assist15 ant Attorney General and by rule in accordance with sec16 tion 553 of title 5, United States Code, consistent with

17 the purposes of this Act—

18 (1) may require that the notice of an agreement

19 described in section 5 of this Act be in such form

20 and contain such documentary material and infor21 mation relevant to the agreement as is necessary

22 and appropriate to enable the Commission and the

23 Assistant Attorney General to determine whether

24 such agreement may violate the antitrust laws;

25 (2) may define the terms used in this Act;
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1 (3) may exempt classes of persons or agree2 ments from the requirements of this Act; and

3 (4) may prescribe such other rules as may be

4 necessary and appropriate to carry out the purposes

5 of this Act.

6 SEC. 9. EFFECTIVE DATES.

7 This Act shall take effect 90 days after the date of

8 enactment of this Act.

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