II

106TH CONGRESS

2D SESSION S. 2993

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 SENATE OF THE UNITED STATES

JULY 27, 2000

Mr. LEAHY (for himself and Mr. KOHL) introduced the following bill; which

was read twice and referred to the Committee on the Judiciary

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 to 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 branded drugs and companies who could

20 manufacture generic or bioequivalent versions of

21 such branded 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.

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.
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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.

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.

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

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

16 seq. of the Federal Food, Drug and Cosmetic Act

17 (21 U.S.C. 355(b) et seq.)

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 regarding the

22 sale or manufacture of a generic drug equivalent of a

23 brand name drug that is manufactured by that brand

24 name manufacturer and which agreement could have the

25 effect of limiting—
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1 (1) the research, development, manufacture,

2 marketing or selling of a generic drug product that

3 could be approved for sale by the FDA pursuant to

4 the ANDA; or

5 (2) the research, development, manufacture,

6 marketing or selling of a generic drug product that

7 could be approved by the FDA;

8 both shall file with the Commission and the Attorney Gen9 eral the text of the agreement, an explanation of the pur10 pose and scope of the agreement and an explanation of

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

12 any way interfere with the production, manufacture or

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

14 SEC. 6. FILING DEADLINES.

15 Any notice, agreement, or other material required to

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

17 General and the FTC not later than 10 business days

18 after the date the agreements are executed.

19 SEC. 7. ENFORCEMENT.

20 (a) CIVIL FINE.—Any person, or any officer, direc21 tor, or partner thereof, who fails to comply with any provi22 sion of this Act shall be liable for a civil penalty of not

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

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

25 in a civil action brought by the United States, or brought
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1 by the Commission in accordance with the procedures es2 tablished in section 16(a)(1) of the Federal Trade Com3 mission Act (15 U.S.C. 56(a)).

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

5 person, or any officer, director, partner, agent, or em6 ployee thereof, fails to comply with the notification re7 quirement under section 5 of this Act, the United States

8 district court may order compliance, and may grant such

9 other equitable relief as the court in its discretion deter10 mines necessary or appropriate, upon application of the

11 Commission or the Assistant Attorney General.

12 SEC. 8. RULEMAKING.

13 The Commission, with the concurrence of the Assist14 ant Attorney General and by rule in accordance with sec15 tion 553 of title 5, consistent with the purposes of this

16 Act—

17 (1) may require that the notice described in sec18 tion 5 of this Act be in such form and contain such

19 documentary material and information relevant to

20 the agreement as is necessary and appropriate to en21 able the Commission and the Assistant Attorney

22 General to determine whether such agreement may

23 violate the antitrust laws;

24 (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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