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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1499 Reported in House (RH)]

<DOC>

                                                  Union Calendar No. 30
116th CONGRESS
  1st Session
                                H. R. 1499

                      [Report No. 116-52, Part I]

  To prohibit brand name drug manufacturers from compensating generic 
   drug manufacturers to delay the entry of a generic drug into the 
     market, and to prohibit biological product manufacturers from 
 compensating biosimilar and interchangeable product manufacturers to 
 delay entry of biosimilar and interchangeable products, and for other 
                               purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                             March 5, 2019

   Mr. Rush introduced the following bill; which was referred to the 
 Committee on Energy and 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

                              May 10, 2019

 Additional sponsors: Mr. Pallone, Mr. Ruiz, Mrs. Dingell, Mrs. Craig, 
  Ms. Eshoo, Mr. Kennedy, Ms. Matsui, Mr. Van Drew, Ms. Clarke of New 
York, Mr. Khanna, Ms. Schakowsky, Mr. Pappas, Mr. Cohen, Mr. Welch, Mr. 
 Larson of Connecticut, Mr. Hastings, Mr. Neguse, Ms. Finkenauer, Mr. 
Case, Mr. Quigley, Ms. Wild, Mr. Langevin, Mr. Cooper, Mr. Raskin, Mr. 
     David Scott of Georgia, Ms. Mucarsel-Powell, Mr. Thompson of 
  Mississippi, Ms. Stevens, Mr. Cisneros, Ms. Kelly of Illinois, Mr. 
Casten of Illinois, Ms. Houlahan, Mr. Carson of Indiana, Mr. Carbajal, 
 Ms. Davids of Kansas, Mr. Smith of Washington, Mr. Connolly, and Ms. 
                               Underwood

                              May 10, 2019

  Reported from the Committee on Energy and Commerce with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                              May 10, 2019

  Committee on the Judiciary discharged; committed to the Committee of 
  the Whole House on the State of the Union and ordered to be printed
 [For text of introduced bill, see copy of bill as introduced on March 
                                5, 2019]

_______________________________________________________________________

                                 A BILL

 
  To prohibit brand name drug manufacturers from compensating generic 
   drug manufacturers to delay the entry of a generic drug into the 
     market, and to prohibit biological product manufacturers from 
 compensating biosimilar and interchangeable product manufacturers to 
 delay entry of biosimilar and interchangeable products, 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 ``Protecting Consumer Access to 
Generic Drugs Act of 2019''.

SEC. 2. UNLAWFUL AGREEMENTS.

    (a) Agreements Prohibited.--Subject to subsections (b) and (c), it 
shall be unlawful for an NDA or BLA holder and a subsequent filer (or 
for two subsequent filers) to enter into, or carry out, an agreement 
resolving or settling a covered patent infringement claim on a final or 
interim basis if under such agreement--
            (1) a subsequent filer directly or indirectly receives from 
        such holder (or in the case of such an agreement between two 
        subsequent filers, the other subsequent filer) anything of 
        value, including a license; and
            (2) the subsequent filer agrees to limit or forego research 
        on, or development, manufacturing, marketing, or sales, for any 
        period of time, of the covered product that is the subject of 
        the application described in subparagraph (A) or (B) of 
        subsection (g)(8).
    (b) Exclusion.--It shall not be unlawful under subsection (a) if a 
party to an agreement described in such subsection demonstrates by 
clear and convincing evidence that the value described in subsection 
(a)(1) is compensation solely for other goods or services that the 
subsequent filer has promised to provide.
    (c) Limitation.--Nothing in this section shall prohibit an 
agreement resolving or settling a covered patent infringement claim in 
which the consideration granted by the NDA or BLA holder to the 
subsequent filer (or from one subsequent filer to another) as part of 
the resolution or settlement includes only one or more of the 
following:
            (1) The right to market the covered product that is the 
        subject of the application described in subparagraph (A) or (B) 
        of subsection (g)(8) in the United States before the expiration 
        of--
                    (A) any patent that is the basis of the covered 
                patent infringement claim; or
                    (B) any patent right or other statutory exclusivity 
                that would prevent the marketing of such covered 
                product.
            (2) A payment for reasonable litigation expenses not to 
        exceed $7,500,000 in the aggregate.
            (3) A covenant not to sue on any claim that such covered 
        product infringes a patent.
    (d) Enforcement by Federal Trade Commission.--
            (1) General application.--The requirements of this section 
        apply, according to their terms, to an NDA or BLA holder or 
        subsequent filer that is--
                    (A) a person, partnership, or corporation over 
                which the Commission has authority pursuant to section 
                5(a)(2) of the Federal Trade Commission Act (15 U.S.C. 
                45(a)(2)); or
                    (B) a person, partnership, or corporation over 
                which the Commission would have authority pursuant to 
                such section but for the fact that such person, 
                partnership, or corporation is not organized to carry 
                on business for its own profit or that of its members.
            (2) Unfair or deceptive acts or practices enforcement 
        authority.--
                    (A) In general.--A violation of this section shall 
                be treated as an unfair or deceptive act or practice in 
                violation of section 5(a)(1) of the Federal Trade 
                Commission Act (15 U.S.C. 45(a)(1)).
                    (B) Powers of commission.--Except as provided in 
                subparagraph (C) and paragraphs (1)(B) and (3)--
                            (i) the Commission shall enforce this 
                        section in the same manner, by the same means, 
                        and with the same jurisdiction, powers, and 
                        duties as though all applicable terms and 
                        provisions of the Federal Trade Commission Act 
                        (15 U.S.C. 41 et seq.) were incorporated into 
                        and made a part of this section; and
                            (ii) any NDA or BLA holder or subsequent 
                        filer that violates this section shall be 
                        subject to the penalties and entitled to the 
                        privileges and immunities provided in the 
                        Federal Trade Commission Act.
                    (C) Judicial review.--In the case of a cease and 
                desist order issued by the Commission under section 5 
                of the Federal Trade Commission Act (15 U.S.C. 45) for 
                violation of this section, a party to such order may 
                obtain judicial review of such order as provided in 
                such section 5, except that--
                            (i) such review may only be obtained in--
                                    (I) the United States Court of 
                                Appeals for the District of Columbia 
                                Circuit;
                                    (II) the United States Court of 
                                Appeals for the circuit in which the 
                                ultimate parent entity, as defined in 
                                section 801.1(a)(3) of title 16, Code 
                                of Federal Regulations, or any 
                                successor thereto, of the NDA or BLA 
                                holder (if any such holder is a party 
                                to such order) is incorporated as of 
                                the date that the application described 
                                in subparagraph (A) or (B) of 
                                subsection (g)(8) or an approved 
                                application that is deemed to be a 
                                license for a biological product under 
                                section 351(k) of the Public Health 
                                Service Act (42 U.S.C. 262(k)) pursuant 
                                to section 7002(e)(4) of the Biologics 
                                Price Competition and Innovation Act of 
                                2009 (Public Law 111-148; 124 Stat. 
                                817) is submitted to the Commissioner 
                                of Food and Drugs; or
                                    (III) the United States Court of 
                                Appeals for the circuit in which the 
                                ultimate parent entity, as so defined, 
                                of any subsequent filer that is a party 
                                to such order is incorporated as of the 
                                date that the application described in 
                                subparagraph (A) or (B) of subsection 
                                (g)(8) is submitted to the Commissioner 
                                of Food and Drugs; and
                            (ii) the petition for review shall be filed 
                        in the court not later than 30 days after such 
                        order is served on the party seeking review.
            (3) Additional enforcement authority.--
                    (A) Civil penalty.--The Commission may commence a 
                civil action to recover a civil penalty in a district 
                court of the United States against any NDA or BLA 
                holder or subsequent filer that violates this section.
                    (B) Special rule for recovery of penalty if cease 
                and desist order issued.--
                            (i) In general.--If the Commission has 
                        issued a cease and desist order in a proceeding 
                        under section 5 of the Federal Trade Commission 
                        Act (15 U.S.C. 45) for violation of this 
                        section--
                                    (I) the Commission may commence a 
                                civil action under subparagraph (A) to 
                                recover a civil penalty against any 
                                party to such order at any time before 
                                the expiration of the 1-year period 
                                beginning on the date on which such 
                                order becomes final under section 5(g) 
                                of such Act (15 U.S.C. 45(g)); and
                                    (II) in such civil action, the 
                                findings of the Commission as to the 
                                material facts in such proceeding shall 
                                be conclusive, unless--
                                            (aa) the terms of such 
                                        order expressly provide that 
                                        the Commission's findings shall 
                                        not be conclusive; or
                                            (bb) such order became 
                                        final by reason of section 
                                        5(g)(1) of such Act (15 U.S.C. 
                                        45(g)(1)), in which case such 
                                        findings shall be conclusive if 
                                        supported by evidence.
                            (ii) Relationship to penalty for violation 
                        of an order.--The penalty provided in clause 
                        (i) for violation of this section is separate 
                        from and in addition to any penalty that may be 
                        incurred for violation of an order of the 
                        Commission under section 5(l) of the Federal 
                        Trade Commission Act (15 U.S.C. 45(l)).
                    (C) Amount of penalty.--
                            (i) In general.--The amount of a civil 
                        penalty imposed in a civil action under 
                        subparagraph (A) on a party to an agreement 
                        described in subsection (a) shall be sufficient 
                        to deter violations of this section, but in no 
                        event greater than--
                                    (I) if such party is the NDA or BLA 
                                holder (or, in the case of an agreement 
                                between two subsequent filers, the 
                                subsequent filer who gave the value 
                                described in subsection (a)(1)), the 
                                greater of--
                                            (aa) 3 times the value 
                                        received by such NDA or BLA 
                                        holder (or by such subsequent 
                                        filer) that is reasonably 
                                        attributable to the violation 
                                        of this section; or
                                            (bb) 3 times the value 
                                        given to the subsequent filer 
                                        (or to the other subsequent 
                                        filer) reasonably attributable 
                                        to the violation of this 
                                        section; and
                                    (II) if such party is the 
                                subsequent filer (or, in the case of an 
                                agreement between two subsequent 
                                filers, the subsequent filer who 
                                received the value described in 
                                subsection (a)(1)), 3 times the value 
                                received by such subsequent filer that 
                                is reasonably attributable to the 
                                violation of this section.
                            (ii) Factors for consideration.--In 
                        determining such amount, the court shall take 
                        into account--
                                    (I) the nature, circumstances, 
                                extent, and gravity of the violation;
                                    (II) with respect to the violator, 
                                the degree of culpability, any history 
                                of violations, the ability to pay, any 
                                effect on the ability to continue doing 
                                business, profits earned by the NDA or 
                                BLA holder (or, in the case of an 
                                agreement between two subsequent 
                                filers, the subsequent filer who gave 
                                the value described in subsection 
                                (a)(1)), compensation received by the 
                                subsequent filer (or, in the case of an 
                                agreement between two subsequent 
                                filers, the subsequent filer who 
                                received the value described in 
                                subsection (a)(1)), and the amount of 
                                commerce affected; and
                                    (III) other matters that justice 
                                requires.
                    (D) Injunctions and other equitable relief.--In a 
                civil action under subparagraph (A), the United States 
                district courts are empowered to grant mandatory 
                injunctions and such other and further equitable relief 
                as they deem appropriate.
            (4) Remedies in addition.--Remedies provided in this 
        subsection are in addition to, and not in lieu of, any other 
        remedy provided by Federal law.
            (5) Preservation of authority of commission.--Nothing in 
        this section shall be construed to affect any authority of the 
        Commission under any other provision of law.
    (e) Federal Trade Commission Rulemaking.--The Commission may, in 
its discretion, by rule promulgated under section 553 of title 5, 
United States Code, exempt from this section certain agreements 
described in subsection (a) if the Commission finds such agreements to 
be in furtherance of market competition and for the benefit of 
consumers.
    (f) Antitrust Laws.--Nothing in 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 such section 5 applies to unfair methods of 
competition. Nothing in this section shall modify, impair, limit, or 
supersede the right of a subsequent filer to assert claims or 
counterclaims against any person, under the antitrust laws or other 
laws relating to unfair competition.
    (g) Definitions.--In this section:
            (1) Agreement resolving or settling a covered patent 
        infringement claim.--The term ``agreement resolving or settling 
        a covered patent infringement claim'' means any agreement 
        that--
                    (A) resolves or settles a covered patent 
                infringement claim; or
                    (B) is contingent upon, provides for a contingent 
                condition for, or is otherwise related to the 
                resolution or settlement of a covered patent 
                infringement claim.
            (2) Commission.--The term ``Commission'' means the Federal 
        Trade Commission.
            (3) Covered patent infringement claim.--The term ``covered 
        patent infringement claim'' means an allegation made by the NDA 
        or BLA holder to a subsequent filer (or, in the case of an 
        agreement between two subsequent filers, by one subsequent 
        filer to another), whether or not included in a complaint filed 
        with a court of law, that--
                    (A) the submission of the application described in 
                subparagraph (A) or (B) of paragraph (9), or the 
                manufacture, use, offering for sale, sale, or 
                importation into the United States of a covered product 
                that is the subject of such an application--
                            (i) in the case of an agreement between an 
                        NDA or BLA holder and a subsequent filer, 
                        infringes any patent owned by, or exclusively 
                        licensed to, the NDA or BLA holder of the 
                        covered product; or
                            (ii) in the case of an agreement between 
                        two subsequent filers, infringes any patent 
                        owned by the subsequent filer; or
                    (B) in the case of an agreement between an NDA or 
                BLA holder and a subsequent filer, the covered product 
                to be manufactured under such application uses a 
                covered product as claimed in a published patent 
                application.
            (4) Covered product.--The term ``covered product'' means a 
        drug (as defined in section 201(g) of the Federal Food, Drug, 
        and Cosmetic Act (21 U.S.C. 321(g))), including a biological 
        product (as defined in section 351(i) of the Public Health 
        Service Act (42 U.S.C. 262(i)).
            (5) NDA or bla holder.--The term ``NDA or BLA holder'' 
        means--
                    (A) the holder of--
                            (i) an approved new drug application filed 
                        under section 505(b)(1) of the Federal Food, 
                        Drug, and Cosmetic Act (21 U.S.C. 355(b)(1)) 
                        for a covered product; or
                            (ii) a biologics license application filed 
                        under section 351(a) of the Public Health 
                        Service Act (42 U.S.C. 262(a)) with respect to 
                        a biological product;
                    (B) a person owning or controlling enforcement of 
                the patent on--
                            (i) the list published under section 
                        505(j)(7) of the Federal Food, Drug, and 
                        Cosmetic Act (21 U.S.C. 355(j)(7)) in 
                        connection with the application described in 
                        subparagraph (A)(i); or
                            (ii) any list published under section 351 
                        of the Public Health Service Act (42 U.S.C. 
                        262) comprised of patents associated with 
                        biologics license applications filed under 
                        section 351(a) of such Act (42 U.S.C. 262(a)); 
                        or
                    (C) the predecessors, subsidiaries, divisions, 
                groups, and affiliates controlled by, controlling, or 
                under common control with any entity described in 
                subparagraph (A) or (B) (such control to be presumed by 
                direct or indirect share ownership of 50 percent or 
                greater), as well as the licensees, licensors, 
                successors, and assigns of each of the entities.
            (6) Patent.--The term ``patent'' means a patent issued by 
        the United States Patent and Trademark Office.
            (7) Statutory exclusivity.--The term ``statutory 
        exclusivity'' means those prohibitions on the submission or 
        approval of drug applications under clauses (ii) through (iv) 
        of section 505(c)(3)(E) (5- and 3-year exclusivity), clauses 
        (ii) through (iv) of section 505(j)(5)(F) (5-year and 3-year 
        exclusivity), section 505(j)(5)(B)(iv) (180-day exclusivity), 
        section 527 (orphan drug exclusivity), section 505A (pediatric 
        exclusivity), or section 505E (qualified infectious disease 
        product exclusivity) of the Federal Food, Drug, and Cosmetic 
        Act (21 U.S.C. 355(c)(3)(E), 355(j)(5)(B)(iv), 355(j)(5)(F), 
        360cc, 355a, 355f), or prohibitions on the submission or 
        licensing of biologics license applications under section 
        351(k)(6) (interchangeable biological product exclusivity) or 
        section 351(k)(7) (biological product reference product 
        exclusivity) of the Public Health Service Act (42 U.S.C. 
        262(k)(6), (7)).
            (8) Subsequent filer.--The term ``subsequent filer'' 
        means--
                    (A) in the case of a drug, a party that owns or 
                controls an abbreviated new drug application submitted 
                pursuant to section 505(j) of the Federal Food, Drug, 
                and Cosmetic Act (21 U.S.C. 355(j)) or a new drug 
                application submitted pursuant to section 505(b)(2) of 
                the Federal Food, Drug, and Cosmetic Act (21U.S.C. 
                355(b)(2)) and filed under section 505(b)(1) of such 
                Act (21 U.S.C. 355(b)(1)) or has the exclusive rights 
                to distribute the covered product that is the subject 
                of such application; or
                    (B) in the case of a biological product, a party 
                that owns or controls an application filed with the 
                Food and Drug Administration under section 351(k) of 
                the Public Health Service Act (42 U.S.C. 262(k)) or has 
                the exclusive rights to distribute the biological 
                product that is the subject of such application.
    (h) Effective Date.--This section applies with respect to 
agreements described in subsection (a) entered into on or after the 
date of the enactment of this Act.

SEC. 3. NOTICE AND CERTIFICATION OF AGREEMENTS.

    (a) Notice of All Agreements.--Section 1111(7) of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003 (21 
U.S.C. 355 note) is amended by inserting ``or the owner of a patent for 
which a claim of infringement could reasonably be asserted against any 
person for making, using, offering to sell, selling, or importing into 
the United States a biological product that is the subject of a 
biosimilar biological product application'' before the period at the 
end.
    (b) Certification of Agreements.--Section 1112 of such Act (21 
U.S.C. 355 note) is amended by adding at the end the following:
    ``(d) Certification.--The Chief Executive Officer or the company 
official responsible for negotiating any agreement under subsection (a) 
or (b) that is required to be filed under subsection (c) shall, within 
30 days of such filing, execute and file with the Assistant Attorney 
General and the Commission a certification as follows: `I declare that 
the following is true, correct, and complete to the best of my 
knowledge: The materials filed with the Federal Trade Commission and 
the Department of Justice under section 1112 of the Medicare 
Prescription Drug, Improvement, and Modernization Act of 2003, with 
respect to the agreement referenced in this certification--
            ```(1) represent the complete, final, and exclusive 
        agreement between the parties;
            ```(2) include any ancillary agreements that are contingent 
        upon, provide a contingent condition for, were entered into 
        within 30 days of, or are otherwise related to, the referenced 
        agreement; and
            ```(3) include written descriptions of any oral agreements, 
        representations, commitments, or promises between the parties 
        that are responsive to subsection (a) or (b) of such section 
        1112 and have not been reduced to writing.'.''.

SEC. 4. FORFEITURE OF 180-DAY EXCLUSIVITY PERIOD.

    Section 505(j)(5)(D)(i)(V) of the Federal Food, Drug, and Cosmetic 
Act (21 U.S.C. 355(j)(5)(D)(i)(V)) is amended by inserting ``section 2 
of the Protecting Consumer Access to Generic Drugs Act of 2019 or'' 
after ``that the agreement has violated''.

SEC. 5. COMMISSION LITIGATION AUTHORITY.

    Section 16(a)(2) of the Federal Trade Commission Act (15 U.S.C. 
56(a)(2)) is amended--
            (1) in subparagraph (D), by striking ``or'' after the 
        semicolon;
            (2) in subparagraph (E), by inserting ``or'' after the 
        semicolon; and
            (3) by inserting after subparagraph (E) the following:
                    ``(F) under section 2(d)(3)(A) of the Protecting 
                Consumer Access to Generic Drugs Act of 2019;''.

SEC. 6. STATUTE OF LIMITATIONS.

    (a) In General.--Except as provided in subsection (b), the 
Commission shall commence any administrative proceeding or civil action 
to enforce section 2 of this Act not later than 6 years after the date 
on which the parties to the agreement file the Notice of Agreement as 
provided by section 1112(c)(2) and (d) of the Medicare Prescription 
Drug, Improvement, and Modernization Act of 2003 (21 U.S.C. 355 note).
    (b) Civil Action After Issuance of Cease and Desist Order.--If the 
Commission has issued a cease and desist order under section 5 of the 
Federal Trade Commission Act (15 U.S.C. 45) for violation of section 2 
of this Act and the proceeding for the issuance of such order was 
commenced within the period required by subsection (a) of this section, 
such subsection does not prohibit the commencement, after such period, 
of a civil action under section 2(d)(3)(A) against a party to such 
order or a civil action under subsection (l) of such section 5 for 
violation of such order.
                                                  Union Calendar No. 30

116th CONGRESS

  1st Session

                               H. R. 1499

                      [Report No. 116-52, Part I]

_______________________________________________________________________

                                 A BILL

  To prohibit brand name drug manufacturers from compensating generic 
   drug manufacturers to delay the entry of a generic drug into the 
     market, and to prohibit biological product manufacturers from 
 compensating biosimilar and interchangeable product manufacturers to 
 delay entry of biosimilar and interchangeable products, and for other 
                               purposes.

_______________________________________________________________________

                              May 10, 2019

  Reported from the Committee on Energy and Commerce with an amendment

                              May 10, 2019

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